Rents Up Again

paulmapp8306

£720 is HUGH !!

Renters tend to be lower paid, often minimum wage earners, who cant afford to buy (obviously some exceptions).

Min wage, full time, works out at £840 pm after tax. That makes the average rent cost pretty much one adults full wages once they have paid (either public transport or car running costs) to actually get to work. As a % of earning, rents are completely ludicrouse.

Obviously a single person isnt going to be in the average rental property, it will be a couple plus kids I guess, but that still means its not affordable without government aid. If housing benefit is cut, or a ceiling put on it, or social housing is built, then rental prices will plummet.

c-m

How is it that rents are so expensive when mortgages are so much cheaper.

for example. I rented a room a few years ago in a 2 bed house. I know that the mortgage on the how house was just £350 per month. My rent was £360, so the landloard was getting in double the amount of their mortgage (2 bedroom).

A studio in my city is £425 pcm to rent. I know the mortgage on the place is £300 a month.

Going4TheDream

paulmapp8306 wrote: »

£720 is HUGH !!

Renters tend to be lower paid, often minimum wage earners, who cant afford to buy (obviously some exceptions).

Min wage, full time, works out at £840 pm after tax. That makes the average rent cost pretty much one adults full wages once they have paid (either public transport or car running costs) to actually get to work. As a % of earning, rents are completely ludicrouse.

Obviously a single person isnt going to be in the average rental property, it will be a couple plus kids I guess, but that still means its not affordable without government aid. If housing benefit is cut, or a ceiling put on it, or social housing is built, then rental prices will plummet.

I bet in London £720 only gets you a room in a shared house? Even madder!

Thrugelmir

joguest wrote: »

What is hilarious is that LSL are putting out 'press releases' that are depserately trying to ramp rental prices in the hope that it will instill fear in first-time buyers and increase their desire to purchase, and to appeal to the blind greed of speculators thinking of buying into BTL. The funny bit is that rents only rose by 0.2% despite their best attempts to talk up the rental market over the last few months.

Reading the full press release "ramping up" doesn't seem to be the case. If anything there seems a high degree of caution.

Thrugelmir

c-m wrote: »

How is it that rents are so expensive when mortgages are so much cheaper.

Why is hiring a car so much more expensive than renting one.

Who is providing a service, doing the maintenance, investing the capital, taking a business risk and paying the tax on any profit.

chucknorris

ironwolf wrote: »

think you need to work on your maths, its about 2.4% annualised.

1.02^12 = 1.268 = 2.68%

EDIT: Missed a decimal point 1.002^12 = 2.43%

joguest

chucknorris wrote: »

1.02^12 = 1.268 = 2.68%

1.002^12 = 1.0243 = 2.43%

joguest

According to LSL, rents are up a whopping ~6.5% over the period of the last three years, which is almost exactly equal to wage inflation in the economy (which isn't negated by anyone's anecdote about their own wages).

reweird

wotsthat wrote: »

http://www.bbc.co.uk/news/business-15777807





The article also says 10.1% of rent was paid late which was lower than the 12 month average but higher than September's figures.

Oh dear, this just confirms the torrid year the bears have had. but no doubt one of the deluded pack will be along shortly to say that this is all part of their STR plan.

joguest

Thrugelmir wrote: »

Reading the full press release "ramping up" doesn't seem to be the case. If anything there seems a high degree of caution.

Fair point - the press release is quite balanced. It's the BBC and journalists from other news outlets that appear to like sensationalising the rising rent 'story'.