Rents to soar again in 2012...

the_flying_pig

IveSeenTheLight wrote: »

To try and keep you on track, the discussion was surrounding rents and how they have inflated in the last few years...

This line gets bandied about quite a lot but I do always wonder how much of it is just bluster & assertion - I'm not really aware of any rental indices that are of en even remotely comparable data quality to the various house price ones [e.g. LR, Haliwide to some extent].

The December 2011 ‘London Housing Strategy’ says that since 2002 [so almost 10 yrs ago] private rents, “were static between 2002 and 2005, rose between 2005 and 2007… fell slightly until 2009… rose in the 12 months to july 2011”.

Figure 2.18 shows the following for rents:

4-beds about 10% above 2007, 30% above 2002.
3-beds about 0% above 2007, 20% above 2002.
2-beds about 0% above 2007, 25% above 2002.
1-beds maybe slightly higher than 2007, about 20-25% above 2002.

In other words the 9-year increases are all around 2-3% compound, so a little less than average inflation.

So, hype aside, rents have only arguably “inflated in the last few years” & certainly not on a scale that’s in any way comparable to rampant early noughties HPI or even average inflation.

http://www.london.gov.uk/sites/default/files/Housing%20in%20London%20Dec11.pdf [see page 38]

These figures are for London only but I doubt that the rest of the country has been much more inflationary.

It'd be useful to bear these facts in mind sometimes.

drc

I find it fascinating that even with all the apparent shortage of housing, housing benefit and millions of people needing a place to live in London, we have no mass homelessness (as in families living on the streets) and rents have only really gone up in London over the past year.

A relative of mine was in 2000 renting a 2 bed in London in the same area I live now paying £200 pw. In 2005 he was renting a bigger 2 bed in a nicer area for £215 pw. In 2010 he was renting a similar size but better maintained 2 bed flat for £235 and now he is renting a flat that is approx 20 sq m bigger than that for £290 pw. Considering all the variables, rent doesn't seem to have gone up that much especially as the area he lives is a very nice middle class area etc.

geneer

IveSeenTheLight wrote: »

If you hold stocks, do you make profits or losses on your assets before you sell them?

You don't make your profit or loss when you sell.

Of course you may get a dividend depending on the conpany performance, but then again so does the LL get rent.

If you want, let's compare your stock investments, profit losses, with my property portfolio profits and losses.

What on earth are you banging on about Lite.

The value of your asset, as with shares, can and does change regardless of whether you choose (are are able;)) to sell.

If you are in agreement with this, then agree.
As opposed to launching another one of your diversionary gambits.

yertiz_2

If rents are predicted to increase could this be because first time buyers can't afford to buy a house so they are renting instead therefore creating more competition?

joguest

Rents are up 1.59% over the last year according to this index:

http://www.rentindex.co.uk/

the_flying_pig

joguest wrote: »

Rents are up 1.59% over the last year according to this index:

http://www.rentindex.co.uk/

does 1.59% count as SOARing?

nembot

It does when you have a major vested interest in the housing market (buying at peak, that is - ouch) or a very small wotsit...

the_flying_pig

nembot wrote: »

It does when you have a major vested interest in the housing market (buying at peak, that is - ouch) or a very small wotsit...

well, quite.

even the planet pwoperdee blog which hamish quotes [which incidentally reports on its front page that "[URL="http://www.planetpropertyblog.co.uk/2012/01/03/78-of-postcodes-saw-price-falls-in-2011/"]78% of postcodes saw price falls in 2011[/URL]" - see http://www.planetpropertyblog.co.uk/2012/01/03/78-of-postcodes-saw-price-falls-in-2011/] shows increases of:

2009: zero
2010: 4.5%
2011: 4.3%

average: 2.9%, a long way short of SOAR territory IMO.

HAMISH_MCTAVISH

the_flying_pig wrote: »

2009: zero
2010: 4.5%
2011: 4.3%

average: 2.9%, a long way short of SOAR territory IMO.

Oh right..... so when you go back three years and add in the crash year with zero inflation, and then take an average, rents are only increasing twice as fast as current average wage inflation.

Instead of nearly three times as fast as current average wage inflation.

Good to know.;)

crash123

HAMISH_MCTAVISH wrote: »

.

Instead of nearly three times as fast as current average wage inflation based on this year's rise.

Good to know.;)

How long can that continue? If it is correct.
straw and camel`s back anyone.