Lack of rental properties in London sees asking prices rise

westernpromise

https://www.telegraph.co.uk/property/renting/lack-rental-properties-london-sees-asking-prices-rise-first/
The rebound has been fueled by a lack of new rental properties in the city, which has pushed prices upwards as competition grows. Average rents are now 3.4pc higher in London than this time last year, according to Rightmove's rental tracker.

Outside London, average asking rents have risen by a more modest 0.7pc over the past year

As I've previously noted, when house prices go down, rents go up, and to some extent vice versa (or rents may flatline when house prices rise). This is exactly what this story is reflecting.

If falling prices make owning unattractive, more people want to rent. But if house prices are falling because landlords are selling up, not only is there the aforesaid greater demand to rent. This greater demand is happening just as rental supply is falling. So crashtroll renters wishing for a property crash get whipsawed; they still can't afford to buy but they can't afford to rent either.

This is what happens when vote-seeking piIIocks interfere in the property market.

Abolish SDLT and give BTL landlords a CGT holiday. Sorted.

Rich2808

Isn't this asking prices for rent - not actual rental levels agreed.

And the government wants more first time buyers not renters - so falls in house prices help to achieve that.

So seems the government is achieving what it intended by its buy to let and stamp duty changes.

caronoel

I've reluctantly had to put my rents up by 5% this year for sitting tenants. I had no choice but to increase rents to recoup profits stolen by the Tenant tax.

padington

I did a 4.5% increase because I needed to get the cheaper mortage.

caronoel

padington wrote: »

I did a 4.5% increase because I needed to get the cheaper mortage.

Was that to get the required rental coverage for the interest payments?

westernpromise

This is the most reliable indicator of the direction of rental prices, as it is derived from actual lettings agreed and is compiled by someone with no skin in the game. It reports continuing rises, with London basically flatlining - the 0.2% reported fall is almost certainly within the accuracy of the methodology.

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/indexofprivatehousingrentalprices/june2018
1. Main points
Private rental prices paid by tenants in Great Britain rose by 1.0% in the 12 months to June 2018; unchanged since April 2018.

In England, private rental prices grew by 1.0%, Wales saw growth of 1.1% while Scotland saw rental prices increase by 0.6% in the 12 months to June 2018.

London private rental prices decreased by 0.2% in the 12 months to June 2018; unchanged from May 2018.

Over-geared landlords may try to hike rents, but the market rent is not determined by the landlord's costs. Personally I have found in 20-odd years of letting that the way to maximise the rent is to look after the property, treat the tenants well and ensure that they stay as long as possible with minimal and infrequent voids.

Graham_Devon

Foxtons said income from its lettings business slipped by only 1% in the first half of 2018, falling to £31.7m from £32.1m, although the typical rent achieved for landlords was 2% down over the period.

Different angle!

https://www.theguardian.com/business/2018/jul/30/foxtons-slips-to-loss-amid-weak-london-property-market

bobbymotors

'Over-geared landlords may try to hike rents, but the market rent is not determined by the landlord's costs. Personally I have found in 20-odd years of letting that the way to maximise the rent is to look after the property, treat the tenants well and ensure that they stay as long as possible with minimal and infrequent voids.'


ALL DAY LONG, YES