Anyone Know What’s Happening To Rents?
The Association of Residential Letting Agents has just published a new report on the Private Rented Sector.
Its author, Professor Michael Ball, argues that rents could rise by 10-15 per cent in 2008 and 2009.
Rents, he claims, will be especially strong in London and the South East where demand is highest, but will slide in northern cities which have an oversupply of new-build properties.
Far be it for me to cross swords with a fully paid up Professor of Urban and Property Economics, but did he, by any chance, take a look at the latest ARLA report on the buy-to-let market?
Here’s a direct quote:
Compared with three months ago, weighted average rents for houses are down by seven per cent as a result of decreases of 16 per cent in Prime Central London, five per cent for the Rest of the UK and one per cent for the Rest of the South East.
Average rents for flats are also down overall, by nine per cent, as a result of decreases for all the broad geographical areas.
Ball makes the point that rents will rise because supply will be cut off by fewer landlords buying. But RICS recently noted that supply was on the rise because lots of vendors unable to sell are letting the place out instead.
He also argues that landlords will be keen to make up for the impact of higher interest rates and inflation. But bigger bills hit tenants too, and there must, surely, be a limit to how far they can be pushed?
Is the good professor right? I’d like to hear from all you landlords, tenants and letting agents out there – what’s happening to rents in your area?
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I notice rents are getting higher and higher every week in Brighton and Hove. My partner and I have decided to arrange a share with some co-workers, but we cannot find a property to afford.
If more people are letting out their property because they cannot sell, then all of us who rent are in for a rude shock.
Maybe it’s not such a good thing that this credit crunch is happening, the effect is such that renters are been “raped” with high rents.
My flatmate moved down to Brighton with her boyfriend in December, and they are renting a flat in a new development in the centre. They are paying around £900 per month rent, and an identical, unsold flat was up for sale for £300K at the time they moved in. The rent that they’re paying would cover about half of a repayment mortgage, which shows how far out of line some of the prices down there are.
My brother is in the process of fixing his house up for sale, and has been keeping an eye on the local market. He’s been of the opinion that not much has been moving for a while. In general, good properties will sell quickly, whilst the rest hang around on the market for months. There’s a house that I like the look of, and it’s been for sale for getting on for a year now.
I think that prices peaked in Brighton sometime in the middle of last year. I don’t know if they’ve come down a great deal yet, though the Hometrack survey suggested around 5%