Rent rises could soon outpace house prices, warn surveyors

mystic_trev

The cost of renting in the UK could rise faster than house prices over the next five years, surveyors have warned.

At the end of that period tenants could find themselves having to pay at least 25% more than they do now, according to the Royal Institution of Chartered Surveyors (Rics).

Simon Rubinsohn, Rics chief economist, blamed government moves to discourage buy-to-let landlords.

http://www.bbc.co.uk/news/business-35154420

Looks like the upward trend continues.

Generali

Is RICS really trying to suggest that house prices will rise by less than 25% in the next few years? They are saying prices will rise 6% next year alone. At that rate prices will rise by 33%+ in the next five years.

wymondham

Housing cost is a real issue and getting worse... what can be done about it other than ask the Government to stop trying to fix it as it always makes it worse..?

caronoel

Strangely the wise old owls on HPC haven't yet shared the good news.

Vi propaganda, you see ....

Generali

wymondham wrote: »

Housing cost is a real issue and getting worse... what can be done about it other than ask the Government to stop trying to fix it as it always makes it worse..?

Build more houses. Normally, forumomics means providing simplistic solutions to complex problems but the solution to the UK's housing market is very simple: build more houses where people want to live, i.e. London and the South East. To do that, building on the Green Belt will have to be allowed I suspect.

It is a real shame that Labour didn't force this through when they had power. Let's face it, the good people of Guildford and Sevenoaks are not going to be voting Labour any time soon and they had the perfect opportunity to solve the very real problem of housing in the UK. They bottled it though and it's much harder for the Tories to solve as to do so they have to upset their own constituents.

Labour were too busy trying to create a massive client group in order to keep themselves in power via the huge extension of the welfare state and placating the Left with ever more votes on fox hunting to actually solve the problems of the country.

chucknorris

mystic_trev wrote: »

http://www.bbc.co.uk/news/business-35154420

Looks like the upward trend continues.

As I posted on another thread Trev, I recently increased the rent on a 3 bed flat (after a long term tenant moved out after about 12 years, it was so long, I can't remember when he moved in, but we usually reward long staying tenants with lower rent rises) from £1,545/month to £1,800/month. But last week I noticed another 3 bed flat (very similar and in the same block) is on the market at £2,300/month, which surprised me, and I initially thought that it might be over priced, but then I spotted a 4 bed flat (again in the same block) on at £2,708/month. Rents do seem to be going ballistic again.

MPD

Generali wrote: »

It is a real shame that Labour didn't force this through when they had power. Let's face it, the good people of Guildford and Sevenoaks are not going to be voting Labour any time soon and they had the perfect opportunity to solve the very real problem of housing in the UK. They bottled it though and it's much harder for the Tories to solve as to do so they have to upset their own constituents.

So incur the wrath of the Daily Mail and its loyal readership for no gain, or leave it to the Tories to look useless or damage its support base when it tries to act. An astute political decision or a happy side effect of bottling it.

HAMISH_MCTAVISH

This should not be a surprise to anyone.

mayonnaise

mystic_trev wrote: »

http://www.bbc.co.uk/news/business-35154420

Looks like the upward trend continues.

The article is a bit vague. It doesn't mention that key indicator we all care about so much, Aberdeen rents.

caronoel

chucknorris wrote: »

As I posted on another thread Trev, I recently increased the rent on a 3 bed flat (after a long term tenant moved out after about 12 years, it was so long, I can't remember when he moved in, but we usually reward long staying tenants with lower rent rises) from £1,545/month to £1,800/month. But last week I noticed another 3 bed flat (very similar and in the same block) is on the market at £2,300/month, which surprised me, and I initially thought that it might be over priced, but then I spotted a 4 bed flat (again in the same block) on at £2,708/month. Rents do seem to be going ballistic again.

I usually put mine up 4 to 6% annually.

I may well need to increase them by 10% this year to keep in line with the market

Given that the government are jacking up taxes on landlords, I think a lot of tenants will see big rises this year

HAMISH_MCTAVISH

caronoel wrote: »

Given that the government are jacking up taxes on landlords, I think a lot of tenants will see big rises this year

The pressure is certainly on landlords to increase rent in a way it hasn't been until now.

From the calculator that's now available online to measure the changes, a typical landlord would need to get rent up by around 25% to 30% by 2020 to retain their current profit position.

So that means landlords who might previously have been content to leave a long term tenant in on an lower rent will feel pressure to start raising rents to market level more quickly.

And with the new measures discouraging BTL new entrants, existing landlords will have the upper hand as the shortage of rental properties grows.

I sort of see the point in Osborne's thinking re a tax grab, landlords are an easy target, but from an economics and housing shortage perspective this is little short of madness.