Rents to soar again in 2012...

HAMISH_MCTAVISH

Generali wrote: »

Something has to give although that something needn't be rents.

As housing is a primary need, then rents are likely to be the last thing to give.

HAMISH_MCTAVISH

Generali wrote: »

Rents rising from £660pcm to £720pcm in 3 years is a rise of 2.95% pa.

At the same time the RPI has increased from 216 to 238.5, a rise of 3.3% pa. Average (median) earnings rose from £388.80 to £403.90 (according to ASHE, the Government study of earnings), an increase of 1.4%pa.

Yeah, I see what you're saying, but the reality is that rents have risen by 10% in three years. More than double the rate of wage inflation in the same time frame.

Rents rose 10% despite a recession, house price crash, rising unemployment, global financial crisis, squeezed wages, etc.

Also pretty much the exact opposite of what the bears predicted would happen. :cool:

geneer

HAMISH_MCTAVISH wrote: »

Yeah, I see what you're saying, but the reality is that rents have risen by 10% in three years. More than double the rate of wage inflation in the same time frame.

Rents rose 10% despite a recession, house price crash, rising unemployment, global financial crisis, squeezed wages, etc.

Also pretty much the exact opposite of what the bears predicted would happen. :cool:

The bears predicted that rents wouldn't increase by inflation when wannabe first time buyers were forced out of the market by the expected reintroduction of sensible lending criteria?

I'm going to call B*lls**t on that one. :rotfl:

I do love your weekly "rent watch" Hamish.
Shame you're not a landlord.
Otherwise it could have been a perfectly mediocre fall back position.

DaddyBear

HAMISH_MCTAVISH wrote: »

http://www.planetpropertyblog.co.uk/wp-content/uploads/2011/12/rents2.jpg



With total rent arrears falling markedly in 2011 despite rents rising, clearly there is room for more rent rises in 2012.

Although admittedly there was a tiny uptick in the numbers in serious arrears from 1.9% to 2.2% of tenants, this is nothing other than the market rationing scarce supply by raising prices until demand reduces.

As we create 150,000 more households each year than we build houses, rents will surely rise again to price out the bottom rung and free up housing for the higher earners who should be buying houses but cannot due to mortgage rationing.

I'd hardly describe a below inflation rise as 'soaring'. You obviously went to the Daily Express school of headline writing.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Also pretty much the exact opposite of what the bears predicted would happen. :cool:

Can you find this prediction? One that doesn't revolve around housing benefit discussions?

I doubt it, as I don't think it's ever been a "prediction" I have seen. Rather a prediction you are making up to suggest you were right. Easy to be right when there was no one else saying otherwise.

shortchanged_2

IveSeenTheLight wrote: »

Of course that means if properties are empty at that time (and there are an abundance of them), it bodes well for the tenant to negotiate.

Hang on. I thought there was a shortage of rental properties available.

geneer

graham_devon wrote: »

can you find this prediction? One that doesn't revolve around housing benefit discussions?

I doubt it, as i don't think it's ever been a "prediction" i have seen. Rather a prediction you are making up to suggest you were right. Easy to be right when there was no one else saying otherwise.

hamish is not in right now but if you leave your name and your number he might get back to you on another subject in another thread

IveSeenTheLight

Generali wrote: »

Rents rising from £660pcm to £720pcm in 3 years is a rise of 2.95% pa.

At the same time the RPI has increased from 216 to 238.5, a rise of 3.3% pa. Average (median) earnings rose from £388.80 to £403.90 (according to ASHE, the Government study of earnings), an increase of 1.4%pa.

Rents are rising faster than wages but more slowly than the average basket of goods Britons buy. I wouldn't count that as soaring personally although clearly that is subjective.

Maybe not soaring, but if you consider what rents are doing with regards to outstanding mortgage debts.

Many LL's have seen their mortgage interest reduce whilst also seeing their rent received increased.
This means a better return than the 2.95%pa suggests

IveSeenTheLight

shortchanged wrote: »

Hang on. I thought there was a shortage of rental properties available.

In some area's there are, in others maybe not so.
Rental markets have different strengths throughout the country.

I've just completed and am upgrading a 4 bed house, where there are currently only 5advertised 4 bed properties within a 5 mile radius.
In a 10 mile radius there is only 15.
Even those are being snapped up such as
http://www-g.aspc.co.uk/cgi-bin/public/LiveProperty/294744?ID=FBMIOBGD#picture

The estate agents are advising us that they have customers on lists waiting for proeprty to become available.

I've even accepted viewings on the property whilst the new kitchen and carpets are being replaced so they can hope to agree a move in as soon as completed.

I'm sure there are other area where the market is more depressed and there are more rental properties available.

As I understand it, generally, there is a shortage of rental properties.

Graham_Devon

IveSeenTheLight wrote: »

Maybe not soaring, but if you consider what rents are doing with regards to outstanding mortgage debts.

Many LL's have seen their mortgage interest reduce whilst also seeing their rent received increased.
This means a better return than the 2.95%pa suggests

Many landlords are on interest only mortgages too, and something you appeared to have overlooked is that many will have seen the asset reduce in value too.