Rents rise as house prices fall?

Mac_Sami

Interesting article from the BBC News web site about rents rising as house prices fall, supposedly because of a lack of BTLers and more demand for rental properties:
http://news.bbc.co.uk/1/hi/business/7404947.stm

Will this become a trend as more people save up for deposits, and BTL'ers become fewer in number?

Muppit_2

Most people on this forum seem to be considering selling now to rent so they can buy back at a later date, so I can see why owners would be putting rental prices up.

Supply and demand and all that!

subjecttocontract

Supply of rental property available remains the same but demand increases so therefore rents will rise.

If demand decreased then rents would fall.

Basic economics.

borntobefree

Also rental yields are currently low (5%) as LL rely on capital gains. If the capital gains go LLs have to make money through rent.

Mac_Sami

As I thought. Thanks for confirming, guys

Oliveru

I prefer to look at it this way, in a severe downturn of the economy like we are facing now people will get poorer and a lot of them will have to move back in with their parents or downgrade- whether that be from a house to an apartment or an apartment to a room!

Seems to me like there are just some BTL'rs with vested interests hoping for rent rises to help protect them from the housing market crash we are witnissing- sorry folks isn't going to happen!

MissMoneypenny

This same article is being discussed on the house prices sub board too, as the article talks about the predicted 20% drop in house prices in 2008/2009.

http://forums.moneysavingexpert.com/showthread.html?t=924817

clutton_2

LHA has increased rents in many areas - maybe private landlords are following suit

ryandeean

I am one of the people in the unfortunate position of renting in London. I have seen my monthly rent rise from £433 (in 2006) to nearly £600. It's absolutely outrageous but what can I do about it?

moneysavinmonkey

I'm not sure what will happen with rents, in my local market midlands, I have noticed a slight rise in asking prices but froma very low base.. not sure what rents are actually being achieved as AFAIK there is no way to check up on this like there is with house prices.

I can see the argument that many people are now getting out of BTL or selling to rent, but also have seen plenty of people on these forums who have been unable to sell due to the slow market who are thinking about putting there house up for rent instead.. so i'm not sure what the overall affect on supply would be.

ryandeean - have you tried... renting with friends, move in with parents/girlfriend, move out of london or negotiate with your landlord - threaten to leave or alternatively decorate.... probably most of these option won't suit your circumstances though