Stupid Q re. supply of rental property
Discussion
Guys,
This may be a really stupid Q and I am sure there is a simple answer but I still need to ask it.
We are being told that more and more landlords are leaving the private rental market, and this is meaning that there are fewer and fewer properties available for tenants to rent thus pushing up rents. But the number of properties out there isn't changing, so what is happening to the properties that these landlords are selling? Who is buying them? If they aren't being removed from the national property portfolio (i.e they aren't being knocked down/made into shops/something else) then why does this lead to rents increasing?
There. I told you it was a stupid Q. I await an education. Thanks.
This may be a really stupid Q and I am sure there is a simple answer but I still need to ask it.
We are being told that more and more landlords are leaving the private rental market, and this is meaning that there are fewer and fewer properties available for tenants to rent thus pushing up rents. But the number of properties out there isn't changing, so what is happening to the properties that these landlords are selling? Who is buying them? If they aren't being removed from the national property portfolio (i.e they aren't being knocked down/made into shops/something else) then why does this lead to rents increasing?
There. I told you it was a stupid Q. I await an education. Thanks.
2Btoo said:
Guys,
This may be a really stupid Q and I am sure there is a simple answer but I still need to ask it.
We are being told that more and more landlords are leaving the private rental market, and this is meaning that there are fewer and fewer properties available for tenants to rent thus pushing up rents. But the number of properties out there isn't changing, so what is happening to the properties that these landlords are selling? Who is buying them? If they aren't being removed from the national property portfolio (i.e they aren't being knocked down/made into shops/something else) then why does this lead to rents increasing?
There. I told you it was a stupid Q. I await an education. Thanks.
I think that there are a lot of houses for sale but they aren't selling because renters can't afford to buy (so I assume they're standing empty).This may be a really stupid Q and I am sure there is a simple answer but I still need to ask it.
We are being told that more and more landlords are leaving the private rental market, and this is meaning that there are fewer and fewer properties available for tenants to rent thus pushing up rents. But the number of properties out there isn't changing, so what is happening to the properties that these landlords are selling? Who is buying them? If they aren't being removed from the national property portfolio (i.e they aren't being knocked down/made into shops/something else) then why does this lead to rents increasing?
There. I told you it was a stupid Q. I await an education. Thanks.
2Btoo said:
Guys,
This may be a really stupid Q and I am sure there is a simple answer but I still need to ask it.
We are being told that more and more landlords are leaving the private rental market, and this is meaning that there are fewer and fewer properties available for tenants to rent thus pushing up rents. But the number of properties out there isn't changing, so what is happening to the properties that these landlords are selling? Who is buying them? If they aren't being removed from the national property portfolio (i.e they aren't being knocked down/made into shops/something else) then why does this lead to rents increasing?
There. I told you it was a stupid Q. I await an education. Thanks.
Many LL's will be leaving the rental market because of things such as high interest rates making mortgages unaffordable. Others might not choose to let in say ScotGov areas with rental licensing and rent controls.This may be a really stupid Q and I am sure there is a simple answer but I still need to ask it.
We are being told that more and more landlords are leaving the private rental market, and this is meaning that there are fewer and fewer properties available for tenants to rent thus pushing up rents. But the number of properties out there isn't changing, so what is happening to the properties that these landlords are selling? Who is buying them? If they aren't being removed from the national property portfolio (i.e they aren't being knocked down/made into shops/something else) then why does this lead to rents increasing?
There. I told you it was a stupid Q. I await an education. Thanks.
Properties might be left empty, bought by overseas buyers to use as second homes, sold to people to use as primary homes, bought by investors to let etc etc. Another example would be Hong Kong residents, who have British citizenship. If the ruling Communist party does something to spook people - crackdown on this, that and the other - that can spook people to buy overseas homes as a safety net.
The US rental market is a bit different, but there was a good youtube video from Cash Jordan a few weeks ago about New York having hundreds/thousands of properties sitting empty because of rent-stablization laws there and restrictions on how much landlords can increase the rent on these properties, which makes the cost of renovation (to make them habitable) unsustainable for the landlord. It's all business at the end of the day.
2Btoo said:
Guys,
This may be a really stupid Q and I am sure there is a simple answer but I still need to ask it.
We are being told that more and more landlords are leaving the private rental market, and this is meaning that there are fewer and fewer properties available for tenants to rent thus pushing up rents. But the number of properties out there isn't changing, so what is happening to the properties that these landlords are selling? Who is buying them? If they aren't being removed from the national property portfolio (i.e they aren't being knocked down/made into shops/something else) then why does this lead to rents increasing?
There. I told you it was a stupid Q. I await an education. Thanks.
Pretty stupid Q, yes.This may be a really stupid Q and I am sure there is a simple answer but I still need to ask it.
We are being told that more and more landlords are leaving the private rental market, and this is meaning that there are fewer and fewer properties available for tenants to rent thus pushing up rents. But the number of properties out there isn't changing, so what is happening to the properties that these landlords are selling? Who is buying them? If they aren't being removed from the national property portfolio (i.e they aren't being knocked down/made into shops/something else) then why does this lead to rents increasing?
There. I told you it was a stupid Q. I await an education. Thanks.
If landlords take them off the market and they sit vacant then supply has decreased.
If landlords sell their rentals then supply decreases unless they're sold to another landlord and immediately re-let.
What they really mean is that the current market has less properties advertised as available for rent, so prices are increasing.
A fair few will end up as AirBnB's (I know of several locally), some will sit empty, some will be kept as second homes, some will be sold - but not necessarily to someone from the area, or to someone who was previously renting. A small number of previous tenants may buy them, but the numbers will be tiny.
As someone said above, some will be for sale but unable to sell, maybe this will bring the prices down a little over time, but there is not going to be a step-change in affordability.
Apparently just bullying the private landlords into leaving the sector does not result in lots of dirt cheap properties available for renters to buy, and even worse, the smaller rental pool and increased costs on remaining landlords have pushed up the prices of what is left. Who could possibly have foreseen this result? oh, yes, that's right, everyone apart from the pitchfork-wielding anti-landlord mob.
As someone said above, some will be for sale but unable to sell, maybe this will bring the prices down a little over time, but there is not going to be a step-change in affordability.
Apparently just bullying the private landlords into leaving the sector does not result in lots of dirt cheap properties available for renters to buy, and even worse, the smaller rental pool and increased costs on remaining landlords have pushed up the prices of what is left. Who could possibly have foreseen this result? oh, yes, that's right, everyone apart from the pitchfork-wielding anti-landlord mob.
Edited by TriumphStag3.0V8 on Friday 6th October 13:18
nuyorican said:
I think the ‘landlords selling up’ reason is mostly just sour grapes from the LL’s themselves. Yes, I’m sure it’s not helping, and making a chronic problem even worse. But at the end of the day it’s too many people, not enough housing. Genuinely affordable social housing needs to be built on a large scale in this country. But it won’t.
But in answer to your question: I don’t know to be honest. I guess they’re just bought up by investors or young people financed by BOM&D?
You don't think Landlords are selling up? How else do you account for the declining number of rental properties?But in answer to your question: I don’t know to be honest. I guess they’re just bought up by investors or young people financed by BOM&D?
I sold 2 of mine before Covid. One was to a Landlord, one to an owner occupier. My brother has sold all but one of his, and they went to owner occupiers. There are pretty much no properties for rent in my area now. I have an alert on right move so that I can see what current rents are. It rarely sends me anything.
There are now 30 people chasing each rental property. In 2019 that was 6 people.
Thread on how bad it is out there if you're looking to rent...
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Edited by 98elise on Friday 6th October 13:54
2Btoo said:
Guys,
This may be a really stupid Q and I am sure there is a simple answer but I still need to ask it.
We are being told that more and more landlords are leaving the private rental market, and this is meaning that there are fewer and fewer properties available for tenants to rent thus pushing up rents. But the number of properties out there isn't changing, so what is happening to the properties that these landlords are selling? Who is buying them? If they aren't being removed from the national property portfolio (i.e they aren't being knocked down/made into shops/something else) then why does this lead to rents increasing?
There. I told you it was a stupid Q. I await an education. Thanks.
There is a lack of supply in both the rental and owner occupier market. More landlords are leaving market leaving, and fewer are buying so the excess is being bought by owner occupiers.This may be a really stupid Q and I am sure there is a simple answer but I still need to ask it.
We are being told that more and more landlords are leaving the private rental market, and this is meaning that there are fewer and fewer properties available for tenants to rent thus pushing up rents. But the number of properties out there isn't changing, so what is happening to the properties that these landlords are selling? Who is buying them? If they aren't being removed from the national property portfolio (i.e they aren't being knocked down/made into shops/something else) then why does this lead to rents increasing?
There. I told you it was a stupid Q. I await an education. Thanks.
The reason this is happening is the numbers no longer make any sense. Rents are typically 4-5% but a mortgage will be 6-7% (so negatively leveraged) and can't be offset for tax. If you have the money for a deposit, it can make more money in a savings account and tax free. A savings account isn't going to ring you in the night with a burst pipe, or get trashed by someone at the bank.
Edited by 98elise on Friday 6th October 13:55
A few things have happened, the frankly nicer rental properties have gone to owner occupiers at the market rate.
This reduces liquidity from the market, I dont remember exactly but the average owner occupied property comes on the market about once in 15 years, the average rental once in 2.
So a lot of property that would be in the rental "churn" is not, great for stability, terrible for those looking to rent now.
"Rental Only" property is sitting vacant for months and months and months until the vendor runs out or patience and takes an offer or puts it into auction. Very few first time buyers are looking to buy places needing refurbishment or above shops, small places, odd layouts, etc quite understandably with all the costs of buying, so these places, that underpin the market are sitting empty whilst the owner hopes to find a buyer.
The purpose of the rental market reforms were largely because "first time buyers were priced out the market by greedy landlords," this was never the case, it was always a mendacious misrepresentation of the situation, for political reasons.
A lot have taken the short term rental route, I have, it takes a lot of the risk of "AST" rental out so airbnb, etc. I am lucky my properties are in a seaside town with tourist demand, and significant industry so a large demand for short term lets. I make less money but its worth it.
Where my rentals are would always have had 150-200 2 bed and about the same 1 bed flats up for rent on right move (Retirement, shares and student excluded), pretty consistently from 2009 just looked now... 74 2 bed flats & 35 1 bed.
Its so sad how a market that worked pretty well for the VAST MAJORITY has been brought to its knees by some very loud people motivated by politics.
This reduces liquidity from the market, I dont remember exactly but the average owner occupied property comes on the market about once in 15 years, the average rental once in 2.
So a lot of property that would be in the rental "churn" is not, great for stability, terrible for those looking to rent now.
"Rental Only" property is sitting vacant for months and months and months until the vendor runs out or patience and takes an offer or puts it into auction. Very few first time buyers are looking to buy places needing refurbishment or above shops, small places, odd layouts, etc quite understandably with all the costs of buying, so these places, that underpin the market are sitting empty whilst the owner hopes to find a buyer.
The purpose of the rental market reforms were largely because "first time buyers were priced out the market by greedy landlords," this was never the case, it was always a mendacious misrepresentation of the situation, for political reasons.
A lot have taken the short term rental route, I have, it takes a lot of the risk of "AST" rental out so airbnb, etc. I am lucky my properties are in a seaside town with tourist demand, and significant industry so a large demand for short term lets. I make less money but its worth it.
Where my rentals are would always have had 150-200 2 bed and about the same 1 bed flats up for rent on right move (Retirement, shares and student excluded), pretty consistently from 2009 just looked now... 74 2 bed flats & 35 1 bed.
Its so sad how a market that worked pretty well for the VAST MAJORITY has been brought to its knees by some very loud people motivated by politics.
nikaiyo2 said:
...
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Its so sad how a market that worked pretty well for the VAST MAJORITY has been brought to its knees by some very loud people motivated by politics.
The market was an unsustainable pig trough for landlords for a long time, now it's swung the other way....
Its so sad how a market that worked pretty well for the VAST MAJORITY has been brought to its knees by some very loud people motivated by politics.
The expectation that a landlord can 100% fund his property on debt, make a profit on the rent and also benefit from real capital gain could never last forever.
It's not a simple problem, there is a lot going on, a lot of things have changed over the past 40 years.
We've had too much immigration pushing up demand for housing and suppressing a lot of people's wages.
We have too many people in rubbish jobs which don't pay enough to buy a house.
I think the VAST MAJORITY didn't benefit from the renting bubble. Certainly not the majority of younger households.
The current situation is bad, but it's the inevitable fallout of the last 25/30 years or so.
For completeness, the current situation also may be influence by less 'Let to Buy' cases, where people used to rent out their current home and buy bigger. People who would previously have done that, maybe buying a brand new house, are sat on their hands now.
OutInTheShed said:
The market was an unsustainable pig trough for landlords for a long time, now it's swung the other way.
The expectation that a landlord can 100% fund his property on debt, make a profit on the rent and also benefit from real capital gain could never last forever.
It's not a simple problem, there is a lot going on, a lot of things have changed over the past 40 years.
We've had too much immigration pushing up demand for housing and suppressing a lot of people's wages.
We have too many people in rubbish jobs which don't pay enough to buy a house.
I think the VAST MAJORITY didn't benefit from the renting bubble. Certainly not the majority of younger households.
The current situation is bad, but it's the inevitable fallout of the last 25/30 years or so.
For completeness, the current situation also may be influence by less 'Let to Buy' cases, where people used to rent out their current home and buy bigger. People who would previously have done that, maybe buying a brand new house, are sat on their hands now.
Eh?The expectation that a landlord can 100% fund his property on debt, make a profit on the rent and also benefit from real capital gain could never last forever.
It's not a simple problem, there is a lot going on, a lot of things have changed over the past 40 years.
We've had too much immigration pushing up demand for housing and suppressing a lot of people's wages.
We have too many people in rubbish jobs which don't pay enough to buy a house.
I think the VAST MAJORITY didn't benefit from the renting bubble. Certainly not the majority of younger households.
The current situation is bad, but it's the inevitable fallout of the last 25/30 years or so.
For completeness, the current situation also may be influence by less 'Let to Buy' cases, where people used to rent out their current home and buy bigger. People who would previously have done that, maybe buying a brand new house, are sat on their hands now.
Rents are up by over 10 percent because of supply. Given that it’s lower income people who tend to rent I don’t think you can assert that it’s swung the other way.
The net effect of taking landlords out of the market is fewer properties to rent, but as housing supply is barely rising it means tenants now have less choice.
OutInTheShed said:
The market was an unsustainable pig trough for landlords for a long time, now it's swung the other way..
In what way has it swung the other way? Are things better for tenants now? Has the demonisation of landlords made things better for tenants? If anything it has made things better for those landlords still in the market and really shafted tenants. OutInTheShed said:
The expectation that a landlord can 100% fund his property on debt, make a profit on the rent and also benefit from real capital gain could never last forever.
When have Landlords been able to fund with 100% mortgage? I presume 1999 -2008 maybe? certainly not post 2009.OutInTheShed said:
It's not a simple problem, there is a lot going on, a lot of things have changed over the past 40 years.
We've had too much immigration pushing up demand for housing and suppressing a lot of people's wages.
We have too many people in rubbish jobs which don't pay enough to buy a house.
100% agree. The other thing is student accommodation, certainly here the amount of capital gone into to building student accommodation. Why are councils allowing this? Why allow all this building then only allow a tiny section of society to live there? We've had too much immigration pushing up demand for housing and suppressing a lot of people's wages.
We have too many people in rubbish jobs which don't pay enough to buy a house.
OutInTheShed said:
I think the VAST MAJORITY didn't benefit from the renting bubble. Certainly not the majority of younger households.
The current situation is bad, but it's the inevitable fallout of the last 25/30 years or so.
No, I would agree, but younger households were better off in the previous manufactured "rental crisis" when some pressure groups forced government to act.The current situation is bad, but it's the inevitable fallout of the last 25/30 years or so.
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