Why Rents Will Rise In 2017

Why Rents Will Rise In 2017

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

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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 steve watt

12:35 PM, 21st April 2018, About 4 years ago

As of April 2018, Folkestone BTL market quite healthy, easier to find good tenants, rents holding up well, not many tenants leaving.

by Gromit

14:10 PM, 21st April 2018, About 4 years ago

True for Tenants who then buy, but not so if the place they are moving from is not then used to house people e.g. they move from a parent\'s spare room/sofa surfing.
My recollection of the report I read said, I think, 2/3rds of FTBs came from parents home/friends home. I\'ll try and recall the report. With 300k+ FTB sales in 2016 that would be about 200k fewer properties available.

by Mick Roberts

16:42 PM, 21st April 2018, About 4 years ago

Reply to the comment left by sam at 21/04/2018 - 11:40
They don't have to vacate another property if they leaving parents or sisters brothers etc.

You'll have to put your question u mean in here direct.
As I'm on holiday at moment reading this thread from small screen and months behind on me emails, so don't know who I'm replying to and what.

by sam

16:42 PM, 21st April 2018, About 4 years ago

Reply to the comment left by Barry Fitzpatrick at 21/04/2018 - 14:10
I wud hv thought a fair number of them FTBs bought new builds under the Help To But schemes. So still leaving a sizeable proportion of BTLs in the market as LLs sell to exit PRS. Plus new builds coming on the market all the time. I hear, Birmingham, where we operate, has 30-50 new units every week. Agents r saying price reduction, especially at the high end, is the order of the day. However, the couple of responses here seem to indicate differently elsewhere.

by sam

16:53 PM, 21st April 2018, About 4 years ago

Reply to the comment left by Mick Roberts at 21/04/2018 - 16:42
Plse see my original posting 5 days ago : More than 1 year has passed. Where are we with all the predictions n comments on this articles ?
U hv already answer my question for Nottingham which is different from what I m experiencing for Birmingham.
Hope u r enjoying your holidays.

by Mick Roberts

17:05 PM, 21st April 2018, About 4 years ago

Reply to the comment left by sam at 21/04/2018 - 16:53
I was surprised what I heard earlier I think it was this thread. Someone was it u said Birmingham struggling with finding tenants?
Anyone know why that is the case?
When Nottingham my tenants can't get anywhere at all. I used to get maybe 4 people leave a year be closer to their Mum Sister etc. But last 2 years they just ain't going.
I was hoping through natural wastage eventually tenants would go and then get Letting Agents take the houses over and I can stop doing 70 hours a week. But if no one going I'm a bit stuck. I can't keep doing what I'm doing when I'm 70. Nor am I one for giving people notice when they've been there years and they've not been an utter bas___d.

by H B

17:15 PM, 21st April 2018, About 4 years ago

This ONS data shows what happened to rents in 2017 - they ended the year about 1% higher than a year earlier, although some areas will be rising and some falling. Rents in London appear to be falling a bit, but so are property prices.
https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/indexofprivatehousingrentalprices/december2017

I can't add any anecdotal evidence because I haven't increased the rent and no one has moved out.

by sam

17:31 PM, 21st April 2018, About 4 years ago

Reply to the comment left by Mick Roberts at 21/04/2018 - 17:05
I don’t know if Birmingham is struggling. I only know that for the first time ever, we had 11 vacancies (all for very good reasons) within a 3 month period n we hv bn struggling to fill them - 3 of them still vacant after a month or so. Seems like rent also falling. I hv not experienced this situ in 30 yrs. Hence checking to see what other areas r like.

by sam

17:56 PM, 21st April 2018, About 4 years ago

Reply to the comment left by H B at 21/04/2018 - 17:15
Thanks for the info HB.
Whilst some places wud see rising rent n others falling, I think b hard put to attribute a 1% overall rent increase to S24 etc causing the predicted exodus from PRS. (N rather contrary to the experience of other LLs here.)

by H B

18:09 PM, 21st April 2018, About 4 years ago

Reply to the comment left by sam at 21/04/2018 - 17:56
No. Rents are flat. Obviously some have been putting up rents in response to S24, but it's not materiel in terms of the whole market.

Actually a friend of mine mentioned that he had to drop the price of a studio flat in outer London by £50 p/m.


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