Rents soar to (another) record high

Crashy_Time

cells wrote: »

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%

How much of the population do you think can take advantage of buying at higher prices?

wotsthat

Crashy_Time wrote: »

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.

I don't serously believe you haven't checked Rightmove sold prices to see whether he sold or not. You do test credulity sometimes - you're all over Aberdeen but a landlord kicks you out after 7 years and you're not interested in whether he sold or not?

Pull the other one.

Crashy_Time

wotsthat wrote: »

I don't serously believe you haven't checked Rightmove sold prices to see whether he sold or not. You do test credulity sometimes - you're all over Aberdeen but a landlord kicks you out after 7 years and you're not interested in whether he sold or not?

Pull the other one.

Why would I be interested, I had another (cheaper) flat within days? Again you duck the question, why do you think the rent never got above £450 p.m?

wotsthat

Crashy_Time wrote: »

Why would I be interested, I had another (cheaper) flat within days? Again you duck the question, why do you think the rent never got above £450 p.m?

My guess is your landlord was enjoying a great yield, had seen some nice capital appreciation plus you'd been living there long term and not causing a problem which is probably atypical around your way - I might let a few rent rises slide too.

Anyway why duck the obvious? Why not post real figures - when you left you were paying £450/ month - what did he buy for and what did he sell for? It's the simplest thing to find out and that might help to form an opinion.

Why might you be interested? You're too funny - are you really expecting anyone to believe you spend so much time 'worrying' about the poor owners of Aberdeen but have a disinterest in how much your landlords have been coining in?

dharm999

http://www.theguardian.com/money/2016/may/05/rents-continue-rise-uk-london

No slowdown in rent rises. It will be interesting to see, what the reaction is to the tax changes for BTL landlords.

mwpt

dharm999 wrote: »

http://www.theguardian.com/money/2016/may/05/rents-continue-rise-uk-london

No slowdown in rent rises. It will be interesting to see, what the reaction is to the tax changes for BTL landlords.

Rents are set by supply and demand and I don't think the highly leveraged landlords command enough of the market to set the marginal rent.

So rents will continue to rise by as much or little as they would have anyway.

I find the 7.7% figure a little hard to believe but perhaps I am out of touch.

wotsthat

mwpt wrote: »

Rents are set by supply and demand and I don't think the highly leveraged landlords command enough of the market to set the marginal rent.

So rents will continue to rise by as much or little as they would have anyway.

The only thing supply and demand will do is to decide how those costs will be shared. Your position is effectively saying that every single penny of tax revenue raised will come out of landlord margins for ever. It's inconceivable that this will be the case.

As this will affect every landlord with a mortgage plus a combined rental and other income that puts them over the 40% tax threshold they're hardly at the margin.

In London surely any landlord with a BTL, a job and a mortgage will be affected.

If renters are lucky their landlords will try and mitigate these changes in some way.

mwpt

wotsthat wrote: »

The only thing supply and demand will do is to decide how those costs will be shared. Your position is effectively saying that every single penny of tax revenue raised will come out of landlord margins for ever. It's inconceivable that this will be the case.

As this will affect every landlord with a mortgage plus a combined rental and other income that puts them over the 40% tax threshold they're hardly at the margin.

In London surely any landlord with a BTL, a job and a mortgage will be affected.

If renters are lucky their landlords will try and mitigate these changes in some way.

The system is too complicated to dumb down like this. The least complex answer is that, as always, rents are a function of supply and demand and will continue to be so.

Here are scenarios to consider:
- When BTLs biggest cost dropped, what has happened to rents? Risen.
- As more BTL enter the system, so providing "more" rental property, what has happened to rents? Risen.
- If BTLs biggest cost rose by several percent, what will happen to rents? According to this board, they will rise.
- If BTL exit the market, according to this board this decreases rental supply and rents must rise.

So rents just always rise, no matter what changes, according to this board.

I see no way to truly quantify the effects of trying to raise rents, risking voids, some landlords selling up, prices dropping so new entrants can make a viable business at current rents, and so on and so on.

So, my assumption is, since rents did not drop when landlords biggest expense dropped, they will not rise (by more than they would have) when a marginal percentage of landlords tax relief is changed and they have the ability to exit their business selling to someone who can make a return (or more hopefully, an OO).

wotsthat

mwpt wrote: »

The system is too complicated to dumb down like this. The least complex answer is that, as always, rents are a function of supply and demand and will continue to be so.

Here are scenarios to consider:
- When BTLs biggest cost dropped, what has happened to rents? Risen.
- As more BTL enter the system, so providing "more" rental property, what has happened to rents? Risen.
- If BTLs biggest cost rose by several percent, what will happen to rents? According to this board, they will rise.
- If BTL exit the market, according to this board this decreases rental supply and rents must rise.

So rents just always rise, no matter what changes, according to this board.

I see no way to truly quantify the effects of trying to raise rents, risking voids, some landlords selling up, prices dropping so new entrants can make a viable business at current rents, and so on and so on.

So, my assumption is, since rents did not drop when landlords biggest expense dropped, they will not rise (by more than they would have) when a marginal percentage of landlords tax relief is changed and they have the ability to exit their business selling to someone who can make a return (or more hopefully, an OO).

It's not dumbing down to say (a) an increase in costs must be paid for by someone and (b) the market will decide who and/or whether behaviour will change.

Other factors may determine rents fall or rise but I don't think it's that difficult to consider this logically in isolation. Adding costs to rental provision for, say, 50% of the private rented sector can only make it more likely that some of these costs will be paid for by tenants. I also think it's unlikely these measures will reduce rental demand in proportion to landlords exiting the market so demand for remaining rented will increase.

It will be interesting to see how all these recent changes play out. I'm glad my position as bystander is as an owner occupier rather than landlord or tenant though.

mwpt

wotsthat wrote: »

It's not dumbing down to say (a) an increase in costs must be paid for by someone and (b) the market will decide who and/or whether behaviour will change.

Other factors may determine rents fall or rise but I don't think it's that difficult to consider this logically in isolation. Adding costs to rental provision for, say, 50% of the private rented sector can only make it more likely that some of these costs will be paid for by tenants. I also think it's unlikely these measures will reduce rental demand in proportion to landlords exiting the market so demand for remaining rented will increase.

So why did rents go up when the opposite of these actions happened? Lower costs to landlords and more landlords entering the market?