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This was discussed at length here - FYI:Changing landlord dynamics & rent rises
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Thanks for the reminder, I had forgotten about this thread.
This is only one persons perspective but my tenant of 4 years moved out yesterday after paying £625 per month and for years before I've always achieved £625
Spoke to my letting agent today who advised me to advertise at £750!
A bit shocked I went on to Rightmove and lo and behold, 2 other identical houses in the same estate, advertised for .....£750!
Of course that's not necessarily how much it will actually rent for once the tenant signs on the dotted line but even advertising at £750 is way higher - from memory it used to be £650
So from my perspective the market is telling me to put the rent up!
Rents will creep up
It will be insidious, but in 4 years times those rents you quote will be at £900!!!
Had S24 not occurred then in 4 years rent would be about £825.
Irrespective of supposed ability to pay, there will always be tenants that will choose to afford the rent.
Those that can't or refuse to pay increased rents will have to move.
It won't mean they escape increasing rents as they will increase across the piece.
For many tenants the pragmatic response will be to bite the bullet and save on moving and upheaval costs.
A £50 pcm increase per year for the coming 4 years is easily manageable for the tenant with the rent increases reducing by £25 after full S24 has been enacted.
This will give the LL a normal rent increase plus the extra to pay for S24.
Please explain how a group of tenants motivated to move down the market as prices rise do not simply pass voids up the chain Paul? Or how priced out single tenants becoming lodgers doesn't do the same?
If rent goes from say 28% of income to 33% of income that's a significant reduction in what can be spent into the economy - highly deflationary and probably enough to cause a recession, recessions cause job losses. Job losses cause arrears and costly evictions.
Because there are always other tenants bringing up the rear.
There will be no shortage of tenant demand for decades.
If all immigration stopped today it would take at least 20 years for supply to match demand.
With the UK economy in rude health and few signs of the feckless unemployed getting off their a###s to take vacancies there will be a requirement for continuing immigration.
Immigrants are required to do the jobs our feckless refuse to do.
Only a radical reduction in welfare will force the feckless to do the jobs the immigrants are prepared to do.
I would like to see the OBC reduced to £15000 which is equivalent to a £21000 Gross wage which is what most workers earn.
Housing supply will never meet demand and getting rid of mortgaged sole trader LL will not solve the supply problem.
Any idiot can see that!
Rents will increase despite contentions to the contrary.
I quite agree with you on benefits. I suspect the Tories do as well. Wouldn't do the rental market any favours though?
I'm still really not convinced that rents can go up much.
If I look at somewhere like Milton Keynes which has seen rising rents, the fiercest competition for rental seems to be in the £900 a month zone for 3 bed property. Step up to £1100 a month and the quality of the property goes up hugely.
In the £900 zone...
I know these properties. Ex-council. Communal parking that is perennially overcrowded these days. Plenty of nuisance neighbours and petty crime. One of only 9 properties listed between £800 & £900 with 3+ beds. None have been on that long and only one showing as reduced, which has been dropped into that bracket at £900 from a higher price.
In the £1100 zone...
So much nicer, better area, off road parking etc...
Yet, there's 47 properties listed £1000- £1100. Several are detached and the only sink estate stuff is 4 bed. Some reductions offered and plenty hanging about.
Theres a vacant detached house at £1050 that has been listed for 97 days. That's quite a void.
This is my favourite though "expected to let fast" says the advert, and it's been on the market 167 days at that price.
If there IS an ability to meet higher rental demand, why does this seem to be telling me that tenants seem to be climbing over one another to get the £900 houses instead of moving slightly upmarket and reigning in their spending a little for a much nicer house?
Of course I picked the £200 a month / £2400 a year increase to dovetail with my earlier example that tenants paying £10k a year cannot simply be readily squeezed for an additional £2400.
We clearly won't agree on this so I'm simply presenting my own analysis.
I'm not suggesting you may be wrong.
But as rental stock reduces the small numbers of properties hanging around will disappear.
Once this occurs then the higher price rental properties will be in demand as there won't be many of the cheaper ones remaining.
This is why I reckon tenants will pay an extra £2400 for example especially if they acquire a slightly better property.
I do take the Irish experience as a sort of guide as to what will happen in the UK accepting that it isn't exactly the same situation.
But it is a fair guesstimation as to what will happen.
For me, I'm upping the rent because everything else has gone up. If every one else had stayed at £650 I'd happily have continued doing the same.
Annual private rent inflation across Great Britain was 2.2% in the 12 months to Jan 17 according to the ONS
There are, of course, big variations that make up that average
England 2.3%, Wales 0.4%, Scotland 0.1%, London 2.1% and, within regions, South East 3.3%, North East 0.9%
Unreported (and probably impossible to collect the data for) there will be considerable variations around any of these aggregated percentages at the individual property level