Rent rises could soon outpace house prices, warn surveyors

mystic_trev

Crashy_Time wrote: »

My rent has hardly moved since the late 90`s pal,

How we all wished we lived in the Magical Kingdom of HPC. It truly is wonderful place and the land of milk and honey.It's a pity we can't post there, but then it's only reserved for 'special' people.

ukcarper

Crashy_Time wrote: »

My rent has hardly moved since the late 90`s pal, a BBC ramping piece isn`t going to make much difference to my beliefs. This sort of rubbish is just designed to keep people from panic selling BTL flats and spoiling the tax stream the government want to set up. Seriously, any one with BTL`s holding off on selling up on the basis of nonsense like this deserves all they get.

What's your flat like Crashy as people on housing benefit can afford to spend 25% more than you are it must be nice.

mayonnaise

ukcarper wrote: »

What's your flat like Crashy as people on housing benefit can afford to spend 25% more than you are it must be nice.

A while back he lived in this one. Nice house.
His room was above the window to the right. Basically, he was living in someone else's roof.
He's nearing his 50's. #livingthedream :rotfl:

Crashy_Time wrote: »

This is one I lived in a while back, my room was above the window to the right (not a shop in sight!)
http://www.helenlucas.co.uk/project/oswald-edinburgh-extension/all/

westernpromise

Graham_Devon wrote: »

Which creates huge demand for the grotty areas.

But a void in the better areas. Who fills this void if the void is created by renters not being able to afford the rent?!

No, no. The better areas get bid up so that where previously £1000 a month got you 2 bedrooms, now it doesn't; now that 2-bedder can be let to someone who's prepared to pay £1500 a month for it.

The existing tenant either pays up of, if he can't, leaves and takes a 1-bedder in the same area or 2 beds in a grottier one.

This ripples right down to the bottom, where more people squeeze into the same space. Those who can't afford it become homeless.

This is all quite well documented. Carts 4 and 6 in the BoE's latest quartterly review show measures of renter and owner stress in meeting housing costs going back 25 years. The graphs are exactly the same shape from 1990 to about 2005, which tells you that what renters spent on renting and what OOs spend on mortgages is intimately linked.

The biggest myth house price crash trolls are bought into is that if one happens, they as renters will be sitting pretty, They won't - they'll get crucified worse than anyone, because they will be endlessly getting bid out of their accommodation by people exiting the OO sector - people who think it;s worth it to pay up to rent rather than accept unknowable further capital losses from owning,

So yes, these tax changes will in some cases get passed on. The only really bearish things for rental costs I can see on the horizon are Brexit and MIFID II from 2017, either of which could cause much of European finance to decamp to Asia.

westernpromise

Graham_Devon wrote: »

Agreed.

We also need to consider that rents never fell when the costs of mortgages fell for BTL landlords. It can't be all one way continually. With the exception of a couple of landlords (Chuck, you are included!!), it appears to be morphing into Propery118 around these parts and the landlord appears to be immortal to everything other business has to cope with.

There should be some slack due to the fall in costs thousands of landlords experienced when interest rates fell to the floor, unless they have gone all out on the leverage.

Rents fell in the early 90s when interest rates did.

mwpt

westernpromise wrote: »

This is all quite well documented. Carts 4 and 6 in the BoE's latest quartterly review show measures of renter and owner stress in meeting housing costs going back 25 years. The graphs are exactly the same shape from 1990 to about 2005, which tells you that what renters spent on renting and what OOs spend on mortgages is intimately linked.

I've conjectured this would be the case. Which shows just how responsible loose and cheap credit is for stimulating effective demand and pushing prices up by far more than rents rise. I think this should be well known by now but some people still disagree for some reason.

The biggest myth house price crash trolls are bought into is that if one happens, they as renters will be sitting pretty, They won't - they'll get crucified worse than anyone, because they will be endlessly getting bid out of their accommodation by people exiting the OO sector - people who think it;s worth it to pay up to rent rather than accept unknowable further capital losses from owning,

Wait, what? That doesn't make any sense to me. You admit in the first paragraph that rents and mortgage payments are tightly coupled. If I had sat out instead of buying and the market crashed, I don't believe I'd be crucified at all because I'd be sitting on a big pile of equity waiting to buy at lower prices and much higher LTV. Mortgages didn't cease to exist in 2008 especially for those with a bigger deposit.

Crashy_Time

ukcarper wrote: »

What's your flat like Crashy as people on housing benefit can afford to spend 25% more than you are it must be nice.

Many landlords here won`t touch HB, but the council do put people up in sometimes very nice flats they have bought in new "executive" blocks from distressed developers. The "Problem Tenant" gets a nice pad all paid for so they are happy but the bozo next door who paid 500k+ for his at the peak tends not to like it so much.

Crashy_Time

mayonnaise wrote: »

A while back he lived in this one. Nice house.
His room was above the window to the right. Basically, he was living in someone else's roof.
He's nearing his 50's. #livingthedream :rotfl:

Well myself and two others rented the whole house so not sure how it is someone else`s roof, but I suppose technically it was the owners roof really. They gave us such a nice cheap deal, and the garden was so big and well laid out with gardener supplied that we didn`t bother arguing about the roof too much, best leave that to idiots on the internet I always say


Oh, to put your mind at rest, later in the tenancy after someone moved out I took a large en-suite room downstairs at the same rent, which as I say was nice, certainly wouldn`t have wanted to pay the mortgage on that house back then (Pre-crash)

Crashy_Time

The rent we paid wouldn`t have covered a mortgage on that property back then.