Rents set to fall?

Turnbull2000

Seems quite plausible. People can't sell their (often overpriced) house, so they choose to let it out instead. I'm seeing this not just on MSE, but with colleagues at work too. Two sitting near are having no luck selling and are eager to move - so why not "rent it out" instead. Simple! Maintenance, voids (ie. paying two mortgages), landlord obligations. What's those!

Here's what's happening in Ireland

http://www.daft.ie/news/2008/daft-rental-report-q1-2008.daft

20th May 2008, Rents are falling for the first time since 2004, according to the latest report published by property website, Daft.ie. Rents have fallen consistently since the start of the year and are now on average 2% lower than in January. The average rent nationwide now stands at €1,369.

The report also found that there has been a dramatic increase in the number of properties available to rent nationwide - doubling from over 6,000 in May 2007 to almost 12,000 now. This increase has been consistent across the country and is likely to be a major factor in the recent fall in rents.

Ronan Lyons, economist at Daft.ie and author of the report notes that the latest findings should be good news for tenants: "the over-supply of available property is likely to mean that rents will continue to fall and at a time when main costs of living such as groceries and energy are rising rapidly, the news that rents are falling should be a welcome relief for renters."

Gorgeous_George

For years we have been complaining that there are not enough houses.

Now there are too many?



GG

Mac_Sami

This is certainly a possibility - but surely there will be more "buyers" looking to rent as well as more "sellers" looking to be landlords? Therefore prices would stay around the same.

It's an extremely simplistic view I've taken, but would be interested in your take on this.

eco-friendly_2

http://www.daft.ie/news/2008/daft-re...t-q1-2008.daft


Many, many people don't want to drop the price of their properties, and sitting tight.

At the moment, house at the end of my road has been on the market for at least 6 months, another one round the corner even longer, if no one drops their price, maybe they could rent to each other!..........




sorry, just being daft.

Gorgeous_George

I fixed the rent that I charge at last year's price because my tenant has paid on time and has kept the house in good condition. Just weeks after doing so, I note that asking prices (on RM) have risen by approximately 12%.

Falling house prices should lead to lower rents as LL's cost fall. However, as has been mentioned many times on these forums, some LL's have been 'subsidising' their tenants for years. That, coupled with the fact that tenants are less able to secure a mortgage, may see double-digit rises in the short term.

I will be looking at the rent that I charge more carefully next April. I plan to spend £4K on improvements this summer so will feel justified in increasing the rent in line with market conditions. If this means a double-digit rise, I'll break it into two smaller rises - one in April and one in October.

GG

MissMoneypenny

What I have noticed round here with at least one rental house, is that when a LL tries to sell his BTL, the tenant moves out into one of the other many rentals. The LL is then looking for a tenant at the same time as he is trying to sell.

I still think that welfare will be the ones who set the rents over the next few years, if the recession kicks in.

Turnbull2000

My workmate has finally given up on trying to sell his home after many, many months on the market and no viewings. Reducing asking price never crossed his mind.

He's still buying his new place though, and will... you guessed it... simply "rent out" his unsellable home until prices rise again! If that's what he wants, then fair enough. But what scares me is that he's already letting out his very first home, and has a huge mortgage (over 250K I believe) on this new place. I know roughly what he and his wife earns. If he experiences any voids, he'll go straight into arrears unless he has considerable savings set aside.

But Tyneside "rents are up by a quarter" apparently. I wonder which letting agent told him that?

0writer

According to a local agent (close friend also), they say that the rental market is hot and the price he feels he could let out our two bed flat is exactly the same as this time last year.

We have had our property on the market since Jan 2008, had many viewings but also recently a withdrawn offer due to the buyer not having enough funds for the increased deposit by their lender. We have a rent free property available to us so are considering renting ours out.

We've been told by our agent friend that he could have our flat rented out within less than a week as things stand currently.

dopester

I think this is mostly for London / South, using Association of Residential Letting Agents (Arla) figures.

Rental market booms as house prices slide By Lawrence Conway
Monday, 9 June 2008

Despite the boom, rents fell slightly during the three months to the end of May, with average rents for houses falling by 7 per cent, while the level of income landlords can expect from flats dropped by 9 per cent.

Meanwhile it was only last month Rics reported a big increase in new landlord instructions.. and if this site is anything of an indicator.. more and more coming to market. Bring on the oversupply.

Rics: Rental demand rising

Thu 22nd May 2008

The Royal Institute of Chartered Surveyors (Rics) has reported that the net balance of chartered surveyors reporting a rise in new landlord instructions, which is an indicator of supply, rose to 29 percent in the first quarter of 2008.

In the previous quarter the balance stood at minus two per cent.

The institute suggests the change is due to sellers turning to the rental sector following a significant drop in demand in the housing market.

Meanwhile, 28 per cent more chartered surveyors reported a rise than a fall in tenant lettings, up from 17 per cent in the last quarter.

Austin_Allegro

Don't forget also that as people feel the pinch economically, they will start renting out their spare rooms to lodgers, thus increasing rental supply and keeping rents down.

prudryden

The Inland Revenue called me wanting to know why I haven't raised my rents - they say they are losing out on their 40% cut!!! How dare they!!!