Rents down again.

shortchanged_2

http://www.bbc.co.uk/news/business-17769758

I'm on a bit of a Hamish roll today.

News out today show a reduction in rents across England and Wales. That's 2 months on the trot now.

But don't worry the huge surge of FTB'ers trying to beat the stamp duty holiday is now over so rents are expected to rocket again soon.

Overall rents are still up 2.7% on a year ago.........that'll be lower than the rate of inflation then.

ILW

MrJonathanRee wrote: »

That's strange, because we have just whacked our tennants up. They weren't happy but who cares as living expenses are all up year on year.

I take it you run an off license.

madnessofBruno

MrJonathanRee wrote: »

That's strange, because we have just whacked our tennants up. They weren't happy but who cares as living expenses are all up year on year.

Reported for usual rubbish, expect they will be return with a new ID tomorrow.

Mr_Terrific

shortchanged wrote: »

Overall rents are still up 2.7% on a year ago.........that'll be lower than the rate of inflation then.

Comparing price increases relative to inflation only makes sense if wages are rising in line with inflation. As they aren't, comparing the increase in rents with the average increase in wages would be a more valid comparison.

PasturesNew

I just checked my specific postcode and compared it to 2010 and 2001.

Shared Room: down by 5p/week since 2010
1-bedroom: down by £7/week since 2010
2-bedroom: down by £10/week since 2010
3-bedroom: down by £5/week since 2010
4-bedroom: down by £12/week since 2010
5-bedoom: down by £47/week since 2010 (mostly because it's removed, so is now the 4-bed rate)

shortchanged_2

chucknorris wrote: »

Different story in London though:

"However, the capital has still experienced the fastest annual growth in rents of any region, up by 4.9% compared to March last year."

Which again means I suppose London is skewing the rent figures, just as it is the house price figures.
Maybe BTL isn't too hot after all in most parts of the UK.

chucknorris

shortchanged wrote: »

Overall rents are still up 2.7% on a year ago.........that'll be lower than the rate of inflation then.

Different story in London though:

"However, the capital has still experienced the fastest annual growth in rents of any region, up by 4.9% compared to March last year."

Which more or less mirrors my personal experience.

Rent inflation however is almost insignificant to any landlord on a low margin BOE tracker mortgage, the extra profit generated from reduced mortgage interest payments dominates the financial picture.

shortchanged_2

chucknorris wrote: »

Rent inflation however is almost insignificant to any landlord on a low margin BOE tracker mortgage, the extra profit generated from reduced mortgage interest payments dominates the financial picture.

But surely if rents are going down profits are reducing. (Outside of London that is)

chucknorris

shortchanged wrote: »

Which again means I suppose London is skewing the rent figures, just as it is the house price figures.
Maybe BTL isn't too hot after all in most parts of the UK.

Well as my investment properties actually are in London if that's the case it isn’t my problem. But as I said above any landlord on a low margin tracker mortgage (again as I am) this is far more significant than the rent inflation at the moment.

shortchanged_2

chucknorris wrote: »

Well as my investment properties actually are in London if that's the case it isn’t my problem. But as I said above any landlord on a low margin tracker mortgage (again as I am) this is far more significant than the rent inflation at the moment.

Yes I see what you are saying but surely as I said any reduction in rent equals a reduction in profits.

chucknorris

shortchanged wrote: »

But surely if rents are going down profits are reducing. (Outside of London that is)

The fall is a minor one, the additional profit due to low interest rates is MASSIVE, so anyone on a low tracker margin is still well ahead of the game.