Could the UK housing rental market be about to crack?

DannyRadclif

chucknorris wrote: »

Rent bubble? I've owned investment property in London since early 1991 and I haven't noticed anything other than steady rises and the odd dip, overall I would say that it probably wouldn't be too far from inflation (maybe marginally over inflation but certainly nowhere near a bubble).

Rents could go up with real inflation sure, but unless wages do as well which they are not then rents have to come down or not many will be able to afford the rent. The situation is screwed up at the moment because the government still pays out large amounts for house benefit, but it will come to an end next year.

chucknorris

DannyRadclif wrote: »

Rents could go up with real inflation sure, but unless wages do as well which they are not then rents have to come down or not many will be able to afford the rent. The situation is screwed up at the moment because the government still pays out large amounts for house benefit, but it will come to an end next year.

I wasn't talking about what may happen in the future! You said that there was a rent bubble. That's why I was talking about the last 21 years from 1991 to the present date.

There is no rent bubble as I said in my post above rents haven't risen much more than inflation.

DannyRadclif

Are you one of these people who say property is not in a bubble? I suppose you are one of those who say that gold and silver are in a bubble and it will pop soon? When in fact gold and silver are not yet in a bubble it is fiat currency that is the bubble and what is causing inflation.

Do you think property is a bubble, or just because it has risen with real inflation it is not a bubble?

chucknorris

DannyRadclif wrote: »

Are you one of these people who say property is not in a bubble? I suppose you are one of those who say that gold and silver are in a bubble and it will pop soon? When in fact gold and silver are not yet in a bubble it is fiat currency that is the bubble and what is causing inflation.

Do you think property is a bubble, or just because it has risen with real inflation it is not a bubble?

I was answering your post in which you said RENT was a bubble, I responded by saying that it is not and I have explained why it is not.

Am I to assume that because you are now deflecting by avoiding answering my point and attempting to change the subject that you now accept that you were wrong?

DannyRadclif

No I am not wrong, and I am not deflecting at all. Lets clear this up nice and simple, I think property and rents are in a bubble. I.E to use wikipedia's explanation a popular mania. This was brought about by many factors like cheap easy money and government paying up to 4grand a week for some families to live in expensive areas. I think the bubble will pop when the government stops paying out so much because they can no longer afford to.

You do not think property and rents are in a bubble?

chucknorris

DannyRadclif wrote: »

No I am not wrong, and I am not deflecting at all. Lets clear this up nice and simple, I think property and rents are in a bubble. I.E to use wikipedia's explanation a popular mania. This was brought about by many factors like cheap easy money and government paying up to 4grand a week for some families to live in expensive areas. I think the bubble will pop when the government stops paying out so much because they can no longer afford to.

You do not think property and rents are in a bubble?

You were deflecting by trying to introduce property prices into the argument and avoiding answering my point about rents and inflation (which you are still doing).

No I do not think rents are in a bubble (how many more times do I have to say it?) because they have not risen much more than the rate of inflation during the last 20 years. So how can rents be a bubble?

You seem to have some trouble in differentiating between the rent and property price markets. Look at the information below on my first rental property:

Date RPI Rent Property price
Jan 91 130.2 £800 £70,000
Jan 12 238 £1,711 £370,000

From the above you can see that:
the RPI has risen 82.8%
the rent has risen by 113.9%
the property price has risen by 428.5%

Look at the difference between the property price and rental markets performance since 1991.

DannyRadclif

How can property and rents go up by about the same amount, (yes that is right by about the same percentage, depending on who's numbers you look at) and one be in a bubble but the other not? They are related there is no avioding this issue.

As I said BTL is in a bubble compared to the mean average the long term norm. The BTL market is both about the property market and about the rental market. When the BTL bubble pops next year when the big housing benefit cuts come in, it will affect both the property market and the renal market.

chucknorris

DannyRadclif wrote: »

How can property and rents go up by about the same amount, (yes that is right by about the same percentage, depending on who's numbers you look at) and one be in a bubble but the other not? They are related there is no avioding this issue.

As I said BTL is in a bubble compared to the mean average the long term norm. The BTL market is both about the property market and about the rental market. When the BTL bubble pops next year when the big housing benefit cuts come in, it will affect both the property market and the renal market.

There you go again deflecting from the fact that you said earlier that the rental market was a bubble! They haven't gone up by the same percentage, where are you getting that from? Rents have not risen anywhere near to the same extent that property prices have.

We are not talking about the property price market OR the future of the rental market we were talking about the last 21 years of the rental market which you said was a bubble!

How can it be a bubble if over the last 21 years the RPI is 82.8% and the rents (approx) have only risen marginally above that at 113.9%. That is not a significant enough difference to be labelled a bubble.

DannyRadclif

chucknorris wrote: »

There you go again deflecting from the fact that you said earlier that the rental market was a bubble! They haven't gone up by the same percentage, where are you getting that from?

We are not talking about the property price market OR the future of the rental market we were talking about the last 21 years of the rental market which you said was a bubble!

How can it be a bubble if over the last 21 years the RPI is 82.8% and the rents have only risen marginally above that at 113.9%. That is not a significant enough difference to be labelled a bubble.

You are deflecting from what we were talking about, I was not talking about the last 21 yrs or whatever I am sorry Im not really interested.

All I am saying is that BTL has been and is still in a popular mania, the definition of a bubble. And that the government paying thousands per week for low income families to live in expensive areas has added to this bubble along with cheap easy credit for BTLers.

This is what I thought we were talking about, well this is in fact what we were talking about. If you want to talk about something else then start another thread and see if someone else wants to talk about it. Im sorry I don't I just want to stay on topic.

chucknorris

DannyRadclif wrote: »

You are deflecting from what we were talking about, I was not talking about the last 21 yrs or whatever I am sorry Im not really interested.

All I am saying is that BTL has been and is still in a popular mania, the definition of a bubble. And that the government paying thousands per week for low income families to live in expensive areas has added to this bubble along with cheap easy credit for BTLers.

This is what I thought we were talking about, well this is in fact what we were talking about. If you want to talk about something else then start another thread and see if someone else wants to talk about it. Im sorry I don't I just want to stay on topic.

LOL but everyone can see that you are now lying from our exchange of posts above which started by me saying to you that rent was not in a bubble and used the last 21 years to demonstrate this! :rotfl:

This was my post:

Rent bubble? I've owned investment property in London since early 1991 and I haven't noticed anything other than steady rises and the odd dip, overall I would say that it probably wouldn't be too far from inflation (maybe marginally over inflation but certainly nowhere near a bubble).