Rents soar to (another) record high

Crashy_Time

Jack_Johnson_the_acorn wrote: »

£450pcm is the lowest price available.....

I've just completed a little market research for you Crashy. There are 237 1 bed Edinburgh based flats listed on rightmove, 9 of them are listed @ £450pcm. Bare in mind I have no idea how many are central or on the outskirts. So that's only 3.8% available on the market @£450..... its lucky you are able to get your rental properties from the back of a rag that no one else has access to. :rotfl::rotfl:

http://www.rightmove.co.uk/property-to-rent/property-50642195.html

Jack_Johnson_the_acorn

Crashy_Time wrote: »

http://www.rightmove.co.uk/property-to-rent/property-50642195.html

Let agreed.... so it's not available. Doh

wotsthat

Crashy_Time wrote: »

http://www.rightmove.co.uk/property-to-rent/property-53957110.html


450 p.m seems to be where Aberdeen landlords with basic flats are clustering in their panic to get tenants, although anything with the bed in the living room isn`t worth even that, my last flat in Edinburgh went up to 450 p.m (from 400) for about the last year of a seven year run, but that was one bed and a box-room, plus large kitchen and living room.

Maybe landlords with basic flats will panic in the future but your analysis doesn't seem to show its happening now. Half a dozen flats around £450 out of a couple of hundred isn't prices clustering around£450 - far from it.

Your description of your last flat in Edinburgh demonstrates you're struggling to tell the difference between price and value. £34k to live in a one bed flat with a space to put your bicycle seems a bit pricey vs buying. If you bought it instead of renting you'd pretty much own it by now.

Your fearful landlord was making around 8-9% and when he discovered he could get more than £450 it was goodbye Crashy.

Keep using each tea bag twice though so you can harness the magic of compounding.

economic

wotsthat wrote: »

Maybe landlords with basic flats will panic in the future but your analysis doesn't seem to show its happening now. Half a dozen flats around £450 out of a couple of hundred isn't prices clustering around£450 - far from it.

Your description of your last flat in Edinburgh demonstrates you're struggling to tell the difference between price and value. £34k to live in a one bed flat with a space to put your bicycle seems a bit pricey vs buying. If you bought it instead of renting you'd pretty much own it by now.

Your fearful landlord was making around 8-9% and when he discovered he could get more than £450 it was goodbye Crashy.

Keep using each tea bag twice though so you can harness the magic of compounding.

Hahaha

I think some people are just scared of taking risk and investing. So rather stay in cash. They don't realise that staying in cash can be far riskier.

chucknorris

economic wrote: »

Hahaha

I think some people are just scared of taking risk and investing. So rather stay in cash. They don't realise that staying in cash can be far riskier.

For years I was guilty of not investing in shares and keeping my other money (excluding that invested in property) in cash. It really annoys me that I was so ignorant for so long, and don't get me started on pensions (on the same theme).

economic

chucknorris wrote: »

For years I was guilty of not investing in shares and keeping my other money (excluding that invested in property) in cash. It really annoys me that I was so ignorant for so long, and don't get me started on pensions (on the same theme).

Yeh my dad is like that and still continues to be but he's close to retirement age. He doesn't like risk whatsoever.

I guess I was/am like that to some extent however I have learnt cash is not everything over the years and done something about it with still more to do.

economic

The other interesting thing about property is that there are people who do not buy as prices are too high and prefer to wait for a 50% crash. I wonder if these people will still actually buy if that happens. I feel with a move like that there would still be a lot of uncertainty and you would have to ha e guts to buy into the decline. The other thing is if there is a 50% drop what does that say for the state of the economy and jobs? One may not even want to stay in the country let alone buy. Therefore buying as soon as you can in an area you want to live makes perfect sense and is absolutely a no brainier.

westernpromise

economic wrote: »

The other interesting thing about property is that there are people who do not buy as prices are too high and prefer to wait for a 50% crash. I wonder if these people will still actually buy if that happens.

Often not, because someone who has spent 20 years thinking the market needs to crash is highly likely to keep thinking that after it has done so. You don't just change a 20-year prejudice overnight. A lot crashtrolls are actually crash deniers, who refuse to accept that outside the south-east there has been a price correction going on for 8 years now. It's not a rational POV, it's a neurosis.

Also, of course, your crashtroll is no better equipped - in fact in many ways worse equipped - than rational folk to recognise when a crash has in fact ended. Prices come down 10%, he wants 20%; 20%, he wants 30%; and so on. A crashtroll wouldn't buy in at 50% down because he'd think if he waited prices would be 60% down. When instead they start to recover he gets angry and insists they're about to crash again. I have posted before a link to a Usenet thread from 1996 in which people insisted the market had not yet crashed enough.

I feel with a move like that there would still be a lot of uncertainty and you would have to ha e guts to buy into the decline. The other thing is if there is a 50% drop what does that say for the state of the economy and jobs?

Leaving aside the question of whether in a 50% crash the crashtroll would actually hold onto his job or savings, there's also the small problem that lenders want higher deposits and lower salary multiples in a crash. Someone who could borrow 4x a £25k salary today and who has a £10k deposit can buy a £110k house. If lenders limit borrowing to 2.5x salary and want a 40% deposit, then that would-be homeowner is less able to buy after a crash than before.

Which is why, if you want to know who'll own property after a crash, look at who owned it before.

cells

economic wrote: »

The other interesting thing about property is that there are people who do not buy as prices are too high and prefer to wait for a 50% crash. I wonder if these people will still actually buy if that happens. I feel with a move like that there would still be a lot of uncertainty and you would have to ha e guts to buy into the decline. The other thing is if there is a 50% drop what does that say for the state of the economy and jobs? One may not even want to stay in the country let alone buy. Therefore buying as soon as you can in an area you want to live makes perfect sense and is absolutely a no brainier.

It is impossible for a significant proportion of the population to take advantage of a crash.

Only about 3% of the housing stock transacts each year and most of those buyers/sellers would have bought/sold irrespective of boom or bust.

As a guess only 0.3% of the population can take advantage of buying at lower prices and if it lasts 3 years thats a top of about 1%

Crashy_Time

wotsthat wrote: »

Maybe landlords with basic flats will panic in the future but your analysis doesn't seem to show its happening now. Half a dozen flats around £450 out of a couple of hundred isn't prices clustering around£450 - far from it.

Your description of your last flat in Edinburgh demonstrates you're struggling to tell the difference between price and value. £34k to live in a one bed flat with a space to put your bicycle seems a bit pricey vs buying. If you bought it instead of renting you'd pretty much own it by now.

Your fearful landlord was making around 8-9% and when he discovered he could get more than £450 it was goodbye Crashy.

Keep using each tea bag twice though so you can harness the magic of compounding.

So you seriously think that it took the landlord 7 years to figure out if he could get more than £450? :rotfl: He decided to try and sell, realised that BTL was a mugs game going forward no doubt, and I have no idea if he sold or not TBH as I was out of there and into a slightly cheaper flat within days of his telling me.