Will high-rise rents now weaken?

westernpromise

In the wake of Grenfell Tower I wonder how keen people will be on living in such buildings?

The building regulations for high-rise are exactly the same whether for private sector or public. A high-rise that's just had £10 million spent on it would, until a week ago, have probably seemed like quite an attractive proposition. But if as seems likely the refurbishments have quite legally made the things very risky, you'd expect to see this in the price almost immediately.

If rents for high rise fall, and rents for low rise increase, then you will have evidence that consumers prefer low rise.

But here's the thing: even if that happens, the market will still clear. The high rises will still be filled, because at a certain rent difference people will choose to live in the high rise. There is a price for risk, even if we don't admit it to ourselves.

Herzlos

Nah, the people in high rises tend not to have much choice in the matter.

The rent already seems disproportionate to the rent (£2k/month on a £250,000 property, when a £250k mortgage would be about £700-1000 a month), so I don't imagine they'd be in a position to go elsewhere or they would have.

Is anyone likely to prefer a high rise over a low rise? Does it provide any perks at all (beyond the view)?

westernpromise

people in high rises tend not to have much choice in the matter

In LA high rises, true, although plenty of them seem to be illegally sublet. But for those renting privately, there's location. If you work in Docklands, high rise is all there is. But if you work near Paddington it's high rise in Paddington Basin or low rise in somewhere like Lancaster Gate or Little Venice.

padington

Does everyone know what Jeremy corbyns pet members bill project was ... ?

lisyloo

Won't owners be trying to offload these before they get told they have to spend millions on sprinklers/cladding etc.

GreatApe

lisyloo wrote: »

Won't owners be trying to offload these before they get told they have to spend millions on sprinklers/cladding etc.

Aren't most the owners of these blocks social landlords?

Since they operate at cost it will mean social tenants rents go up. If the social landlords can't put up rents they will have to cut back on maintenance elsewhere probably from their non high rise stock

Maybe they could be innovative and just sell a few units privately to pay for the upgrades to the whole unit. That might work in high price London.

economic

GreatApe wrote: »

Aren't most the owners of these blocks social landlords?

Since they operate at cost it will mean social tenants rents go up. If the social landlords can't put up rents they will have to cut back on maintenance elsewhere probably from their non high rise stock

Maybe they could be innovative and just sell a few units privately to pay for the upgrades to the whole unit. That might work in high price London.

thats a really good idea although it would mean some people will have to be rehoused.

Owain_Moneysaver

lisyloo wrote: »

Won't owners be trying to offload these before they get told they have to spend millions on sprinklers/cladding etc.

And haven't we often warned people on this forum who think about right-to-buy their council flat 'at a sizeable discount' about the cost of future repairs.

westernpromise

You'd be crazy to buy in an LA block unless it had only just been done up.

At any time they could decide to spend £10 million doing up 80 flats and hand you a bill for £120k. You'd have no way of stopping it. Huge risk (which as we all know no landlord has ever taken).

PixelPound

westernpromise wrote: »

You'd be crazy to buy in an LA block unless it had only just been done up.

At any time they could decide to spend £10 million doing up 80 flats and hand you a bill for £120k. You'd have no way of stopping it. Huge risk (which as we all know no landlord has ever taken).

There has been stories, though often of low-rise flats, where an owner has been forced to sell due to a large bill for improvements to communal areas. Councils are not known for cost-efficient improvements/ Last year we had a road improvement that was turning two junctions with mini-roundabouts on into raised platform junctions (effectively a speed bump) and said it would cost £100K to do!!!

PixelPound

Herzlos wrote: »

Nah, the people in high rises tend not to have much choice in the matter.

The rent already seems disproportionate to the rent (£2k/month on a £250,000 property, when a £250k mortgage would be about £700-1000 a month), so I don't imagine they'd be in a position to go elsewhere or they would have.

Is anyone likely to prefer a high rise over a low rise? Does it provide any perks at all (beyond the view)?

It has long been the case for decades. You get on a council waiting list and will be offered a high rise flat first, as no one opts to move into these given the choice.