Wednesday, 11 June 2008

Rents falling by 7 percent

For understandable and self-centred reasons, I am always interested in stories about rent inflation. The interest has heightened in recent weeks, as Paragon and other BTL advocates have pushed the myth that rents are going through the roof right now. So this firstrung story about rents falling 7 percent definitely attracted my attention. The story claimed:

  • Despite high levels of demand, rents actually fell sharply during the three months to the end of May, with average rents for houses falling by 7 percent,
  • The level of income landlords can expect from flats dropped by 9 percent.

  • Although I was happy to hear about collapsing rents, I do not believe that rents are falling. I reckon that rents are increasing by around 4 percent a year. I did not pick that number out of the air. That is the number recorded by the Office of National Statistics in their monthly survey of rents, which is included in the retail price index


    simon said...

    maybe they are falling for new build flats but otherwise..nah

    aSteve said...

    Alice, I think you might be seeing a London thing... I've been toying with working in London for about 18 months now... and I am yet to see any improvement in what I can get for my money.

    Conversely, in my area, when forced to move a year ago by a neighbour buying up my rented flat then using underhand methods to force me out in order to flip it... my rent went up by 15% and the quality of the accommodation I moved into halved... Today, I can find several places to rent of an apparent quality I accept for the price I used to pay. Moving a year ago was a nightmare - there was almost nothing habitable on the rental market in my area.

    I've noticed some spectacular reductions using property-bee too... including one 4-bed detached cottage reduced from £1200/month to £800/month. Other good places I've found simply aren't shifting - in spite of me finding their price and accommodation significantly preferable to that which I occupy.

    From the other side of the coin, a 3-bed terraced property in the North has just re-let for £675... after a two-month void when the occupants vacated unable to pay their rent. This is the same price as in 2001... so, in real terms, it is approximately equivalent to a 25% drop.

    Rental prices definitely are falling - at least outside London.

    Anonymous said...

    Rents are dropping in London. A colleague of mine has been tracking rents in a condo complex on the South Bank for a couple of months. Same units are being relisted at ever lower prices and the building is half empty.

    Give it time.