What is happening in the rental market?

RHemmings

ProDave said:

Another issue that savvy landlords thinking ahead will have worked out, is minimum EPC requirements for rental properties coming down the tracks.  Tenants may say "good an end to cold damp expensive to heat rental properties"

But who pays for it?  To properly upgrade an old house is very expensive and very disruptive, i.e. the property would have to be vacated.  What landlord wants to evict his tenants, have the property sit empty with no income and spend £1000's on it to improve it before he can let it again?

So I expect those that have realised this will be selling up their old poor houses, while the market of house buyers are still largely oblivious of EPC's and energy costs and will haplily pay as much for an old cold house as a new warmer house.

It reminds me of a game of pass the parcel, I would not want to be the one owning an old house when crunch time comes and it HAS to be upgraded at great cost.

The people that make these rules sit at a desk and proclaim how all houses will be a certain EPC rating by a certain date, without a thought to what will actually happen as a result of what they have just written.

If landlords rent to the 'right' people, then there may be grants available for upgrades. E.g. at one point one of my family (adult child) was receiving benefits. We informed the letting agents of the potential for free insulation upgrades and said that we would be cooperative with building work for upgrades, so the whole lot would have been free to the landlord. But, ..., no response. 

I'm not sure all tenants will 'happily' pay for a cold hard to heat house - at present it seems to be get what you can. 

While I bought my new house for myself, I did note the 'C' rating on the EPC, and thought that given that I plan to incrementally upgrade the energy efficiency, if I ever did decide to let it out (we plan to have a house in Bali too), then that may be easier to achieve in a future requiring better EPC ratings. The C rating is more important for us now - so that we can be warm. But, I did think of potential future renting as well. 

hugheskevi

ProDave said:

hugheskevi said:

• £475 Replacement fuseboard to meet latest regulatory standards (fuseboard was fairly new and if I was continuing to live there would not have been replaced).

I will pick up on that one item as I think you were scammed.

You say it was a recent CU so I am guessing a split load dual RCD plastic consumer unit, and your electrician told you it had to be metal

If that was the case it was unecessary work.  a plastic CU as long as it is in good order should only be a C3 on an EICR so would not make the EICR unsatisfactory.  It is both surprising and disappointing how many electricians will gladly tell you it must be replaced.

I think that sounds about right 😞 It was a couple of years ago now, but I recall being told it had to be metal as it was located next to a boiler.

At least the company who fitted the new fuseboard wasn't the one that did the initial EICR.

Albermarle

BobT36 said:

I'd have also thought that more landlords selling up, less rentals & rental price going up, would mean more up for purchase, and avg sale price going DOWN? But that doesn't seem to have happened that much, despite all the interest rate rises.. 

Just where are all these houses going? 

There's a point that for rentals they can just HMO it (officially or otherwise..) and bung loads of people in one dwelling whereas purchased houses will likely be single family, but still..

AIUI, although there is a lot of talk about landlords selling up, the actual hard numbers doing that are limited ( so far anyway)
So the effect on the housing sales market is hard to notice.

However having worked in an industry that was very sensitive to supply and demand, I know that a small increase in demand and a small reduction in supply, both at the same time, can turn an orderly market into a chaotic one.
I suspect something similar is happening in the rental market, making the shortage of rental properties look worse than it really is, as people book multiple viewings of properties whilst there is a whiff of panic in the air.

Mr.Generous

Albermarle said:

However having worked in an industry that was very sensitive to supply and demand, I know that a small increase in demand and a small reduction in supply, both at the same time, can turn an orderly market into a chaotic one.
I suspect something similar is happening in the rental market, making the shortage of rental properties look worse than it really is, as people book multiple viewings of properties whilst there is a whiff of panic in the air.

Yes, last time I advertised a house that was swamped (pulled of rightmove after day3 with 100+ applicants) the agent said when he filtered through them quite a few couples had enquired twice online, once in each name and then phoned too. They sent me a list of the best 30 or so (in agents opinion) and we picked about a dozen for viewings. A far cry from my first effort in 2013 when a fully modernised and renovated terrace sat empty for a month waiting for a single viewing.

RHemmings

Mr.Generous said:

Albermarle said:

However having worked in an industry that was very sensitive to supply and demand, I know that a small increase in demand and a small reduction in supply, both at the same time, can turn an orderly market into a chaotic one.
I suspect something similar is happening in the rental market, making the shortage of rental properties look worse than it really is, as people book multiple viewings of properties whilst there is a whiff of panic in the air.

Yes, last time I advertised a house that was swamped (pulled of rightmove after day3 with 100+ applicants) the agent said when he filtered through them quite a few couples had enquired twice online, once in each name and then phoned too. They sent me a list of the best 30 or so (in agents opinion) and we picked about a dozen for viewings. A far cry from my first effort in 2013 when a fully modernised and renovated terrace sat empty for a month waiting for a single viewing.

What sort of things could applicants do to make it more likely that they'll get onto your shortlist? Or are the factors you are looking for things that are pretty much fixed for them such as career, salary, etc.?

I'm thinking of things like the advice to attach proof of funds etc. to an email offering to buy a house. That sort of thing where how the offer is made improves their chance of being selected. 

Did you have multiple offers, and if so did you end up choosing the highest offer? If not, what factors did you base your decision on? 

ProDave

Mr.Generous said:

Albermarle said:

However having worked in an industry that was very sensitive to supply and demand, I know that a small increase in demand and a small reduction in supply, both at the same time, can turn an orderly market into a chaotic one.
I suspect something similar is happening in the rental market, making the shortage of rental properties look worse than it really is, as people book multiple viewings of properties whilst there is a whiff of panic in the air.

Yes, last time I advertised a house that was swamped (pulled of rightmove after day3 with 100+ applicants) the agent said when he filtered through them quite a few couples had enquired twice online, once in each name and then phoned too. They sent me a list of the best 30 or so (in agents opinion) and we picked about a dozen for viewings. A far cry from my first effort in 2013 when a fully modernised and renovated terrace sat empty for a month waiting for a single viewing.

It was over 20 years ago when we bought our first BTL and I do indeed remember on change of tenants it could be empty many weeks, sometimes months before a new tenant came along.

Of course if market forces were allowed to solve the problem, there would be a massive rise in rents until number of applicants matched the number of properties.

Gavin83

theartfullodger said:

Tory government: Largely don't care about those who rent.

Others will hold alternative views.

Best wishes to all.

I agree it’s the fault of the Tory government, although ironically it’s by enacting some of their more socialist policies. Maybe they should stick to the right wing stuff.

For this reason I very much doubt it’ll be any better under a Labour government. In fact, if anything I expect it’ll be worse.

BungalowBel

We have had our BTL flat for 7.5 years.

We first let it out for £550 pcm.

Then after a couple of years, we increased it to £560.

Then three years after that, we increased it to £595 and that is what it is now.

Similar properties are now renting for £850-900 pcm.

So, if you have lived in a place for several years, and the LL has not increased the rent in line with the market, then you will get a shock when you try to find something else.  

We are selling up this year; our tenants do know this and are looking for alternative accommodation.  I sincerely hope they can find something suitable at a decent price, I really do, they have been such good tenants.

The reason we are selling is twofold.  Firstly, we are in our 70s and don't want to have to bother with it any more and secondly  (and what finally pushed us over the edge), the changes in legislation have been bad enough under a Tory government, heaven knows what it will be like under Labour.  We are worried about never being able to get our property back.

I suspect many LLs feel the same, so therefore the PR stock is reducing, another reason why rents are rising.

Olinda99

I can try and explain why rents have gone up

a few years ago say 10 you would let out your property and would get some rent - the return at least for me was about 5% on the cost of the flat

however over time the following changes came in necessitating me increasing the rent from 1200 a month to 1900 a month


you used to be able to claim 10% of the rent as an allowance for depreciation of furniture for example beds and sofas etc they abolished this

the tenant used to pay for drawing up the letting contract, referencing, right to rent, financial assessment etc - now the landlord has to pay for it

you always required a gas safety certificate but now you require an electrical safety certificate as well

when the tenant moved out professional cleaning was always paid by the tenant now it has paid by the landlord

tenants have always paid a deposit but now it has to be protected and this costs the landlord's money each month to protect this

selective licensing has come in so a landlord needs a licence to let out a property this is quite expensive several hundred pounds

mortgage interest was always allowable as an expense against letting income now only 20% notional credit is allowed

PAT testing is pretty much required for all plugs in the property for example on fridges, vacuums etc and this costs each year

CO and fire alarms have to be certified and tested each year

checkin and checkout inventories. is used to be that the agreed way was the landlord paid for checking inventory and the tenants the checkout inventory - now the landlord has to pay for both

All of these together add up and at the end of the day the person who pays of course is the tenant.

if with all these expenses the return does not a match what you can get in for example a notice account then the landlord will consider selling up

Which is what I have done

gazfocus

The first house we rented out, 10 years ago, was a modern 3 bedroom semi detached house that had been freshly renovated with brand new high spec conservatory, new high end kitchen, etc. We struggled to get £650 per month rent and our mortgage was nearly £620 per month (we rented more out of need than choice). 

The same house now (we don’t own in now) would be renting for around £850 per month. 

When we advertised our current rental property last summer, we had around 30 enquiries within 2 days. We did find that most people either don’t read the advert properly or chance their arm that you didn’t really mean certain things in the advert.