Oh Dear: Rents fall as properties flood the market

[milanbenes]

http://www.telegraph.co.uk/finance/e...he-market.html



and our survey said....


'The buy-to-let market is being flooded with properties that desperate home owners are unable to sell, triggering a fall in rents for the first time in more than five years, a survey has revealed.
'


Milan.

[eliquant]

Aha, so that's why my ex-land lord (I left the property 1 and 3/4 years ago) is trying to off load very recent utility bill payments onto me by claiming that I never informed him that I had ever left the rental propertly. (ie becoming an 'assured tennant' or whatever it is).

Pity for him that I have it in writing from my then local Council that he had actually informed them that my tennancy agreement precisely ended 1 and 3/4 years ago !

I don't know whether I should sue him.

[d000hg]

Just recently, the news was rental prices were rising since more people wanted to rent. So now, house prices and rental prices are BOTH falling?

[Bagpuss]

Just recently, the news was rental prices were rising since more people wanted to rent. So now, house prices and rental prices are BOTH falling?

The same reason why interest rates are falling and property prices are falling.

[Cyberman]

Rents will never reach zero, but my mortgage will do. It just proves that in the long run it pays to be a house buyer.

[Mehmeh]

Just recently, the news was rental prices were rising since more people wanted to rent. So now, house prices and rental prices are BOTH falling?

Uh oh....if they continue to rise and fall at the same time and meet in the middle the world could implode....doomed

[sunnysan]

Buying

As a person renting now, I have a few opinions myself.

a) It is always better to buy. The risk being that you are unable to service the payments on the asset. You timing will affect the short term value of the asset but over 30 years you would be better off buying.

b) The rental sector could do with some hard times. Renting especially in London is a nightmare with dishonest penny pinching landlords and faceless beaurocratic "mis" management companies who do as little as possible to maximise their profits and the landlords. More selection would mean that tenants are not forced into paying exorbitant adminitration costs and have to put up with unfair rental contracts, shoddy maintenance and poor quality fixtures and fittings. On a cost/value matrix I would say London offers some of the poorest accomodation I have ever encountered.

Before I get all you free market advocates jumping down my throat, if you have ever tried to rent a property in London in the last 4 years, if you dont pay the fees and sign the contract, there is always some other mug that will. A "free market" correction will work better than any kind of regulation.

I believe that an improvement in standards and cost of rental accomodation in London will make it a more attractive propostion for employment as at present it makes more sense to go and work somewhere with a lower salary as expenses in London, especially for those with families are prohibitive.

If a BTL crash means that you will be retiring in Ormskirk instead of Cannes, tough sh1t. Investing in property has and always will be an "investment" with the associated risks, not the common perception that it is an automatic passport to prosperity

.

[KentPhilip]

Rents will never reach zero, but my mortgage will do. It just proves that in the long run it pays to be a house buyer.

Rents will never reach zero, but interest on your sell-to-rent fund might also not fall to zero, and may in time exceed rent in the medium term. So in the medium term it pays to be a renter.

[expat]

Rents will never reach zero, but my mortgage will do. It just proves that in the long run it pays to be a house buyer.

Yeah and a stopped watch is better than one that runs 2 mins fast, because it does show the correct time twice a day.

[Francko]

As a person renting now, I have a few opinions myself.

a) It is always better to buy. The risk being that you are unable to service the payments on the asset. You timing will affect the short term value of the asset but over 30 years you would be better off buying.

This if based on the assumption that you can stay in the place you have bought for the rest of your life (or at least for 10-20 years).
If you instead change job/town every 2-3 years then you might be forced to lose quite a lot of money because of the market cycles. Also each time you buy a new flat/house you pay taxes and solicitors (which in some countries are quite high).

But even so, buying at a peak is never a good thing to do, even if your house is going to increase in 30 years time. If prices are falling or reached unstastainable levels (i.e. they are much higher than rental as it was in 2005-2007), it makes sense to wait a couple of years renting and see what happens.

b) The rental sector could do with some hard times. Renting especially in London is a nightmare with dishonest penny pinching landlords and faceless beaurocratic "mis" management companies who do as little as possible to maximise their profits and the landlords. More selection would mean that tenants are not forced into paying exorbitant adminitration costs and have to put up with unfair rental contracts, shoddy maintenance and poor quality fixtures and fittings. On a cost/value matrix I would say London offers some of the poorest accomodation I have ever encountered.

Also as an owner you have to deal with service companies and penny pinching administrators.