Why Rents Will Rise In 2017

Why Rents Will Rise In 2017

14:42 PM, 11th January 2017, About 5 years ago 65

Text Size

The fact that landlords want/need to increase rent to cover increased costs isn’t necessarily evidence that rents will actually rise.

However, there are a number of other important factors to consider, not least of which is supply and demand. Why Rents Will Rise In 2017

Government policy to reduce investment into property for business purposes (letting) is working. The surcharge on SDLT for second properties has had the biggest impact and I have no doubt that many rental business owners are selling at least some of their properties due to the changes to mortgage interest relief. The will grow exponentially when the real effects of the tax begin to bite.

Whilst the supply of quality rental accommodation has slowed, and may even be going into reverse, the polar opposite is happening to rental demand. It is increasing, and at quite a pace too.

There has been talk of glass ceilings for rents however, whilst the number of people wanting to rent properties continues to grow the outcome is inevitable. Those that can afford to pay more will win. The losers will be those who cannot afford to pay more. If all of those tenants who cannot afford to pay more are displaced by those who can we might ask ourselves where they will live. Will they miraculously be able to afford to buy the properties from those landlords who have simply had enough and chosen to sell?



Comments

by NW Landlord

8:58 AM, 21st April 2018, About 4 years ago

Put a house up for rent on Birkdale near Southport on openrent had SIXTY FOUR calls in 24 hours and it went for 100 PCM over asking most of the calls saying same thing my landlord is selling. It’s a crime what these Tory’s have done to our industry

by sam

9:09 AM, 21st April 2018, About 4 years ago

Reply to the comment left by NW Landlord at 21/04/2018 - 08:58
Wow ! That must b causing a terrible storm up your way for tenants n local councils alike.

What I don’t understand is what happens to the properties being sold by LLs getting out. One of LLs arguments abt not affecting FTBs is that BTL properties not same as what FTBs looking for. So most wud probably b bought by other LLs n stay as BTLs. If bought by a FTB, then that probably frees up 1 unit of supply. So shld b no/little decrease in supply.

by Gromit

9:54 AM, 21st April 2018, About 4 years ago

Reply to the comment left by sam at 21/04/2018 - 09:09
I read some research somewhere (can't remember where) that the majority of FTBs weren't previously renting but living with parents/relatives (which makes sense as they'd be in a better position to save for a deposit). So it's not the zero-sum game that many claim, especially as the spare room at the parents will in all probability not be re-occupied by anyone.

by Mick Roberts

9:57 AM, 21st April 2018, About 4 years ago

And also the HB tenants that wasn't gonna buy anyway.

by terry sullivan

10:20 AM, 21st April 2018, About 4 years ago

Reply to the comment left by NW Landlord at 21/04/2018 - 08:58
they are not Tories--libdims in reality

by sam

11:32 AM, 21st April 2018, About 4 years ago

Reply to the comment left by Barry Fitzpatrick at 21/04/2018 - 09:54
What is your current experience in terms of the predictions in the original post ?

by sam

11:35 AM, 21st April 2018, About 4 years ago

Reply to the comment left by Barry Fitzpatrick at 21/04/2018 - 09:54
I agree that it’s mot a zero sum game. But surely it’s not a strictly 1 - 1 relationship ?

by sam

11:40 AM, 21st April 2018, About 4 years ago

Reply to the comment left by Mick Roberts at 21/04/2018 - 09:57
Sure. But they still hv to vacate a property to move to ano property. The nett effect on supply/demand is still zero.
More important to my original question : what is your current experience in terms of the original post ?

by sam

11:56 AM, 21st April 2018, About 4 years ago

Reply to the comment left by terry sullivan at 21/04/2018 - 10:20
U r probably right. If it is not one party, it is the other. I attach no importance to political ideology persuasion of any of them as they r all self serving rather than what’s good for the country as a whole - they r probably all happy LL bashing in any case just bcos it is trending currently n let’s face it, LLs r convenient n easy targets. Always will b.
B more interesting to see how other LLs current situation compared with what’s predicted in the original post n future trends.

by NW Landlord

11:58 AM, 21st April 2018, About 4 years ago

In terms of expanding these new PRA rules are just as damaging as s24 its a nightmare trying to complete purchases and remortgages 7 months and counting for me with Fleet


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

BECOME A MEMBER

Landlord Tax Planning Book Now