Well, at least for renters. The times reports that rents in London are falling.
"Savills, the estate agent, has revealed that prices for prime London homes are now 12.1 per cent lower than a year ago, after falling 3.7 per cent in the third quarter. But in a shock reversal — the first fall since the financial downturn after the September 11 attacks — rents are now 1.8 per cent lower than three months ago.
Falling rents will depress yields and further discourage any investors who may have been drawn in by higher relative returns as property values dropped. Lucian Cook, a director of research at Savills, says: “It will be very hard for investors to pin the tail on the donkey while rents are falling.”
Does anyone remember those Paragon inspired stories telling us how London rents were rising at double digit rates. The story went someting like this; as the housing bubble crashed, many potential buyers were sitting it out, waiting for prices to fall further. As a result, demand for rental properties had soared, meaning that there were only good times ahead for the "mature and seasoned buy to let investor".
Yeah right.....
2 comments:
The largest determinant on rents is income. It was pretty clear the credit crunch would lead to recession which would lead to job losses which would lead to falling income. Ergo lower rents.
If I seem like Captain Obvious, it's because this was clear as day twelve months ago.
Nick
No, the largest determinant on rents is supply and demand, and how attractive your offer is in relation to others on the market. Hence the fact that in some parts of the country rents are rising and in some falling.
Alison
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