Rents going up: another westernpromise prediction comes true

westernpromise

http://www.rics.org/uk/news/news-insight/press-releases/uk-housing-sales-remain-subdued-as-rent-expectations-continue-to-heat-up/
Looking at the lettings data, new instructions coming through to agents has dropped again (a net balance reading of -22%). This is the twenty first consecutive month in which the feedback has pointed to lower supply of rental properties coming to market. Anecdotal remarks, unsurprisingly, draw attention to role the change in tax treatment on investment property has played in driving this trend. The Rent Expectations series is pointing to a cumulative average rise of around 15% over the course of the next five years.

I've been pointing this out for quite some time:
https://forums.moneysavingexpert.com/discussion/5173696/if-house-prices-fall-rents-will-rise-why-dont-crashtrolls-get-this&highlight=crashtrolls

When I speak, crashtrolls should listen. It's free advice and I'm a lot more reliable than other crashtrolls.

sal_III

There is a subtle difference between falling number of sales and falling prices. So not sure what this RICS article has to do with price crash.

It's only natural to have increased demand for rented accommodations, when there are fewer sales. The number of people looking for a new home is still growing and if they don't buy, obviously they have to rent.

PasturesNew

I don't see why rents should go up ... there are still the same number of houses. If people have bought some to live in, then they reduce the number of people renting.

Somebody's added up 2+2 and decided it's 8½

westernpromise

PasturesNew wrote: »

I don't see why rents should go up ... there are still the same number of houses. If people have bought some to live in, then they reduce the number of people renting.

Somebody's added up 2+2 and decided it's 8½

Occupation density.

A 2-bedroom flat that lets to two couples gets bought by one couple with perhaps one child.

Three renters are now owner occupiers but a fourth still needs to rent from a shrinking supply.

With HMOs it's even starker. I know of a 6-bed 4-reception house that used to house 5 people and is now an HMO housing 18. If that were to be sold and reconverted it would house at most a third as many as it now houses.

Renters are about to get what they wished for and it's going to be rather bad for them.

Crashy_Time

westernpromise wrote: »

Occupation density.

A 2-bedroom flat that lets to two couples gets bought by one couple with perhaps one child.

Three renters are now owner occupiers but a fourth still needs to rent from a shrinking supply.

With HMOs it's even starker. I know of a 6-bed 4-reception house that used to house 5 people and is now an HMO housing 18. If that were to be sold and reconverted it would house at most a third as many as it now houses.

Renters are about to get what they wished for and it's going to be rather bad for them.

Fantasy. If it really got that bad for renters JC will be in No.10 (he is in anyway IMO) and then it will get really really bad for landlords and the over-leveraged (don`t even think about what will happen to over-leveraged landlords :rotfl:) The reality is that after Brexit a lot of EU nationals are going to be leaving and not coming back.

kinger101

Prices of stuff going up. No !!!!. I predict it will rain this year.

Graham_Devon

Rent expectations are different to actual rent increases.

It's all down to how much it goes up by anyway. You'd expect inflation. What matters is whether rental prices exceed inflation and by how much.

sal_III

Graham_Devon wrote: »

Rent expectations are different to actual rent increases.

It's all down to how much it goes up by anyway. You'd expect inflation. What matters is whether rental prices exceed inflation and by how much.

Yeah currently looking at the EA leaflet for the new builds in my development, promising the prospective LLs rents in the region of 1900 pcm for 2bed, when in reality 95% of the 2beds in RM are for around 1600.

The key word here is not inflation, it's wage stagnation. It doesn't matter how much a person wants to rent a property if he can't afford it, he is not generating demand. In London in particular it's close to a breaking point, since the rents are close to double the rest of the country, while the wages are like 20-30% higher on average. Not everyone works in the city for 6 figures...

kinger101

This time next year we'll all be millionaires.

Cakeguts

Of course if there is an introduction of 3 year tenancies and the removal of no fault s 21 rents will go up a lot as the number of properties available to rent will fall. With fewer properties to rent people will not be able to move to get a job.



People won't be able to come from the EU or anywhere else to work in the NHS because there won't be anywhere for them to live. The only reason why there is so much rental property available at the moment is because of the shorter tenancies and the no fault s21. Making these two changes will mean that the numbers of rental properties will fall and the homes of people working abroad or just away will remain vacant. They won't be able to let them in case they can't get them back when they need to move back in.



Having fewer rental properties won't mean that more people will buy. There is a fair percentage of the population who don't want to save for a deposit they want to spend what they earn on things they can see rather than tie it up in a house.

Herzlos

Cakeguts wrote: »

Having fewer rental properties won't mean that more people will buy. There is a fair percentage of the population who don't want to save for a deposit they want to spend what they earn on things they can see rather than tie it up in a house.

Or will just never earn enough to buy.