Rent Price Crash

Crashy_Time

"rents have been falling in any case since September 2015. "

cells

chucknorris wrote: »

The legislation wasn't introduced for the sake of the tenants, it is to do with helping to meet the gov's long term commitment/targets to reduce carbon.

I see, but there is an unfairness as me as an owner can live in the lowest grade energy housing and i'm not forced to upgrade while tenants are forced to upgrade to their cost.

There is also a very good argument in spending that money on the supply side rather than the demand side. That is to say instead of society spending £20k to insulate a solid brick wall 100 year home they spend that £20k on wind/solar/nuclear instead but thats a different topic.

cells

Crashy_Time wrote: »

"rents have been falling in any case since September 2015. "

its normal for rents to fall a bit in the winter months and to rise in the summer months. The current falls in rent are abnormal especially the magnitude.

There could also be more pressure over the next month or two because agents are reasonably acting as market makers and holding some back for the time being

Crashy_Time

cells wrote: »

its normal for rents to fall a bit in the winter months and to rise in the summer months. The current falls in rent are abnormal especially the magnitude.

There could also be more pressure over the next month or two because agents are reasonably acting as market makers and holding some back for the time being

Can`t see much benefit for agents and landlords in "holding back", the need to make money will trump any notions of "making" or "controlling" the market IMO.

mwpt

cells wrote: »

I was at my perfered agent yesterday and they were very happy that they have had a flood of businesses but they are now at a point of not enough tenants to properties. They are even holding back listing some properties for a little while.

Would you an agent hold a listing back? What is the benefit for the agent of doing this? Or is this at the request of the landlord?

tom9980

I live in one of the places in the bbc link. I monitor prices and rents and have done for 7+ years. Rents have been rising and prices of the lower end properties have risen faster than the more expensive properties. Over the past 6 months i have seen a lot more rightmove alerts coming for rental property however a large amount of these are student/HMO properties indeed a third of those listed on rightmove are of that type, not to mention the fact a lot are advertising for next years students and wont be empty for months.

A further third of property listed is actually let agreed, the best/more expensive properties don't seem to stay listed for long at all while the properties in the worst areas or that are small seem to hang around for quite awhile.

In short there are too many HMO/student properties but not enough family 3-4 bed properties around.

cells

mwpt wrote: »

Would you an agent hold a listing back? What is the benefit for the agent of doing this? Or is this at the request of the landlord?

to some degree agents act as market makers (although I would be surprised if many actually knew what that meant).

Instead of flooding the market in a time of excess they will more slowly feed properties into the market. Of course they only have so much power over this. There are various ways to do this but one might be to advise landlords to take this lower price higher void period as a time to do any major works or refurbishments especially as we are starting to enter the busier period of the summer months. Or if a property a landlord is residing in is going to come up for let they might advise them to hold off for two months or if tenants are leaving now and dont want a new contract but would like to say a month or two longer to accept that etc

It isn't much in their interest to list many more properties than they can let. If they can let 20 a month listing 80 would be silly. It would depress prices and landlords would be quite !!!!ed off waiting 3 months to fill the property.

michaels

We are of course back to the normal question - did people live in all these extra rental properties before they were sold to the latest BTL landlord and where are these people living now? After all the tax change has prompted a change in ownership not a change in people you would hae thought?

mwpt

cells wrote: »

to some degree agents act as market makers (although I would be surprised if many actually knew what that meant).

Instead of flooding the market in a time of excess they will more slowly feed properties into the market. Of course they only have so much power over this. There are various ways to do this but one might be to advise landlords to take this lower price higher void period as a time to do any major works or refurbishments especially as we are starting to enter the busier period of the summer months. Or if a property a landlord is residing in is going to come up for let they might advise them to hold off for two months or if tenants are leaving now and dont want a new contract but would like to say a month or two longer to accept that etc

It isn't much in their interest to list many more properties than they can let. If they can let 20 a month listing 80 would be silly. It would depress prices and landlords would be quite !!!!ed off waiting 3 months to fill the property.

So landlords are ok with taking voids during these periods rather than rent at a slightly lower rate? I'm trying to understand the mechanism here, who is driving this "holding back", agents or landlords. It just seems odd behaviour and trying to understand it.

chucknorris

mwpt wrote: »

So landlords are ok with taking voids during these periods rather than rent at a slightly lower rate? I'm trying to understand the mechanism here, who is driving this "holding back", agents or landlords. It just seems odd behaviour and trying to understand it.

My policy would be to let it out at what rent you can get, if I use one of my properties as an example:

3 bed flat let for £1,900/month, if I had to rent it out at its previous rent of £1,800/month (instead of receiving an additional £100/month which we did achieve last month).

With a 2 month void, but assume that we do get £1,900/month, over the year we have gained £1,000 (10 months x £100), but lost £3,600 (2 months x £1,800). I would be £2,600 better off to rent it at the lower rate, sure going forward you might be worse off, BUT if you could rent it 2 months later at £1,900, it is reasonable to assume you could do so 1 year later. Also the bird in the hand (£1,800 immediately) has less risk than the bird in the bush (£1,900/month in 2 months time). Supposing you didn't get £1,900 2 months later, and rents fell even more, what then?