Renting and Prices

becky_rtw

Hi There,

I was just wondering if anyone had seen a reduction in rents in the areas where they live re: prices dropping on house sales.

I'm thinking it will probably take longer to drip down to rentals, but everything in my areas (Cambridge) seems to be going up all of a sudden, even though properties are hanging around for ages (about 2 weeks which is an age here) and two agents have told me the market is very quiet at the moment.

Any ideas whats going on? Should I hold on for a few months?

Biggie

economics say that rents normally rise when property prices fall
as there's more demands for rental in this climent.


Similar to other asserts i.e When intreast rate rises bond prices fall...

scrummy_mummy_2

If house prices fall, it is usually as result of an economic period of flux/uncertainty...thus rents tend to rise, not fall, as people at the lower end of the ladder face reposessions, people who have successfuly sold decide to rent and those who are undecided take a watching view.

If you are intending on renting...haggle, you'll easily be able to get a cheaper price..if you don't ask, you won't get..
If you are intending on buying....think VERY carefully at the minute.

pinkshoes

An unstable housing market can often be worse for those in private rental accomodation than those wholive in an owned property!

For starters, rents can potentially go up rather than down due to more rental demand (people's homes being repossessed), and then there's the risk of being given your notice if your landlord decides to sell, or gets repossessed!

For anyone who's never had the stressful situation of being handed notice on property you love living in, then only have 2 months to find somewhere else, pack, unpack etc... it really sucks!

Scrummy mummy, I would rephrase your last line to "if you're thinking of buying as an investment at the moment, rather than a home, think very carefully"

carolt

Bear in mind the last poster only bought very recently and so is willing the market up! Rents are unlikely to rise because properties get repossessed - after all, they don't just 'disappear' out of the housing stock, they are sold to someone else - either an owner occupier or a landlord. So they should have no net effect on amount of rental property available versus number of potential tenants - the amount of housing stock remains the same. It only shrinks when prices are rising and people sit on empty properties in the hope of 'flipping' the property for a higher price. Or when people buy one or more second homes as an 'investment'. Both less likely to happen at the moment. Of course recent immigration has increased demand for rental properties but whether that will continue rather than reverse if the economy goes into recession as well, remains to be seen.

That said, I would agree with pinkshoes that it's better not to rent off a recent landlord who may have bought at the top of the market, as s/he may well face repossession, leaving you out on your ear. A tell-tale sign that a would-be landlord is over-stretched (or just greedy - not an ideal quality in a landlord...) - they charge over-market rents.

A serious, long-term landlord will charge lower rents as they are in it for the long term and value stability of tenure over making a quick buck.