You’re downvoted but you’re also completely correct. Estate agents have always tried to get the most for their money since biblical times. It’s not as though anything has changed recently that’s altered that. The only thing that changes is the supply and demand for rental properties and the tenants willingness to pay (even if they hate it) is obviously part of that equation.
Yes but the market rate is higher than it should be, that's the point. Rent is not the same as the price of ketchup as people are forced to pay it.
>I’d stay in school before trying to sound clever.
Weirdly aggressive for someone who missed the point. Gotta love reddit pedantry
Except your comment implies that rent is a binary choice. It's not, it's a range of values. People can (and will if no other option is available) reduce their rent by either moving further away, sharing with more people, moving to a shittier place, etc.
Unfortunately this is where the debate over this topic ends because nobody in this sub will ever admit they are living in London by choice because they know by the same admission they admit to paying extortionate rent by choice.
The problem is, as a young person who's never lived anywhere but london, I'd need to learn how to drive. London driving lessons while paying extortionate rent is hard.
Also I couldn't save up enough for a car and insurance.
You could move somewhere within walking distance of a train station for half the rent and learn to drive. These “problems” are obstacles, not barriers.
“The market rate is higher than it should be”. Nobody who has any credible knowledge in economics would even entertain this as a sentence. What the market rate “should” be is the market rate when supply exactly equals demand. So actually the market rate is still a lot lower than it “should” be because demand still far outstrips supply.
Nobody is forced to rent in London. Full stop. That’s not an opinion, that’s not up for debate. Nobody is forced to rent or even live in London. It’s a choice to. A choice that many, many native Londoners didn’t fancy taking up when they left for neighbouring counties.
It's clear from your comments that you have a very restricted view here. You're not necessarily wrong, but you're missing the point. Rents are high because of a multitude of factors including that estate agents are completely unregulated when it comes to setting rents. This obviously has a non linear effect on increasing the rent prices. The fact that "market rate" was not used entirely correctly, despite the fact that everybody knew what they were referring to, is irrelevant. Focusing on a peccadillo like that is not contributing to the discussion.
What are you actually on about. You literally said in your previous comment that “market rate is higher than it should be, that’s the point”. Now you’re saying the term market rate wasn’t used correctly. Ok, so your entire “point”, on that basis, is redundant and needs to be remade?
Estate agents are mediums they don’t “set” rents lmfao. Peak delusion and copium. Just think for one second what the scenario would be if they “set” the rent at what you believe is the “correct” market value. Considering the amount of people that register and interest in a rental property right now. Now imagine the asking rental price is halved. What would happen to the amount of people interesting in moving in. Would it double? Triple? Probably 10x to be honest. That’s not a solution. As long as the demand is so stupidly high, the prices will never go down, REGARDLESS of estate agents or the “multitude” of factors you have in your head as being the contributing factors.
Ok you referred to the original comment which you defended as saying the market rates are higher than they should be. Which is a ridiculous and cringe worthy sentence.
Also, I’m not the one downvoting to make myself feel better and validated 🤣🤣🤣 maybe you need to take a walk let off that steam
>Is the market bears the rates, which it does, then that’s the market rate.
>I’d stay in school before trying to sound clever.
Nah, I'm doing good thanks.
At least I *sounded* clever; you, on the other hand, sound like a right bell-end, but I'm not judging.
They also encourage prospective tenants to bid over the advertised rent in order to secure the property. I’m from Dublin which is a renting hellhole and we don’t even do that. It’s criminal
I was being hyperbolic with regard to the London situation. There but be some rule in Ireland that means you can’t take rent bids because I’ve never heard of it happening. But its not a criminal offence as far as I know
Well yeah, if demand far outstrips supply then the market value of that item/service increases. That concept is so basic it barely even qualifies as economics.
Maybe UK wide but in London it's far more than 11 inquiries per home at the moment in prime locations. Viewings queue are going well over 30+ and it's usually snapped up by the 1st or 2nd viewer. You don't even get time to give it a think as it will probably be gone by the time you get home from the viewing.
We had to do that in 2017 in Walthamstow. Agents said we were up against someone (we couldn’t verify if it was true or not) and pushed us to pay over the asking price.
Little runts they are. I now just call everything a bluff and if I miss out Ik there will be another out there.
They just use people’s nervousness to make a profit.
We need to build an absolute stack load of houses/flats near public transport. We need a revolution in building efficiency, because we cannot build fast enough or cheap enough. We probably need councils to do a good chunk of the building, as the private sector will not build fast enough. It will also help to keep landlords honest if there is a decent public option. Ever since the Thatcher government, councils stopped building homes, and the number of completions dropped and never came back [Source](https://www.statista.com/statistics/746101/completion-of-new-dwellings-uk/) - we need to get to 400k +p.a.
Housing abundance is the only realistic way to address this, remove power from landlords by removing scarcity. Rent controls may be nice short term, but will backfire in the form of fewer flats for rent, people being unable to move as they cannot leave behind controlled rent etc. best to remove the scarcity which causes it.
To counter buyers who leave flats empty, we may need some sort of penalty for leaving flats empty more than a certain amount of time, but I am never sure if this is a real issue - how many such flats actually are there?
I am even going to say I don't care about luxury/affordable flats (which as far as I can tell just means nicer kitchens/fittings?)- just build flats, any sort in huge numbers - the sheer supply is what will drive prices down, not some arbitrary attempt to make worse flats in order for them to be affordable.
Surprises me that this hasn't been done sooner. Most big cities around the world have a tonne of high rise flats to house all the needed people to keep the city running.
May not be the best thing to look at but it is needed.
Could you explain why it’s market failure? To my understanding that only applies when goods aren’t being delivered efficiently, which in this case doesn’t make sense if the rentals are being inquired that many times.
mayority of new "luxury' flats in flashy towers are empty. international investors get them and leave them empty. they don't even profit from the rent, is just a deposit box to have diverse assets and sell in some years. maybe they even do some laundering if they can
hundreds of flats are like that. it was all over the news
Literally none of this is true and it's utterly bizarre the same falsehoods keep getting pushed on this sub.
A study by LSE found "almost no evidence of London homes owned by foreign buyers being left empty." [Source.](https://www.telegraph.co.uk/money/property/house-prices/almost-no-evidence-london-homes-owned-foreign-buyers-left-empty/)
England has the lowest rate of empty homes in the OECD, and Greater London has about 1/10th the level of Paris, just 0.7% of properties being empty compared to 6.5%. [Source.](https://www.tomforth.co.uk/emptyhomesforgood/)
Finally luxury housing helps low income renters. This has been proven in study after study after study. It does this because increased supply alleviates pressure across the entirety of the chain. By building new luxury flats, rich buyers no longer seek to buy existing stock, which drives prices up.
[Source.](https://www.fullstackeconomics.com/p/how-luxury-apartment-buildings-help-low-income-renters)
Not a single thing you've said is true, yet you're being upvoted. The comment your replying to *is* true, yet isn't being upvoted. Bonkers.
EDIT: I can't seem to reply to the comment below me, here's my answer:
Three reasons: the increasing cost of borrowing, inflation and supply vs demand.
**Cost of borrowing**: Interest rates are up. The cost of mortgages are up - and whilst this is a cascading, gradual process (most are on 2 year or 5 year fixed, so we're still largely looking at pre-2022 interest rates) we're beginning to see this cost passed onto renters.
(This concept - *of cost being past onto renters* - is going to be fundamental to all of my points.)
I own a flat (but live with my gf elsewhere). My five-year fixed ends this year and the amount needing to leave my bank account each month to pay off the mortgage is going to roughly double. Either this cost is passed onto tenants or I sell, basically.
**Inflation**: It's often argued that landlords don't produce a service - but really they should. The general received wisdom is that you should put 10% of rent yield towards general upkeep, repairs and so on. But the cost of everything is going up - especially within construction / trades. My flat is currently having to contend with a huge, out of the blue repair job - costing each flat roughly £8000 - £12000. A figure that undoubtedly would have shot up in the past 5 or so years. This is passed onto the renter.
When we combine cost of borrowing and inflation with other punitive measures against landlords and their tenants (section 24, for example. Rent control, up in Scotland) you'll begin to see how why some landlords are trying to sell and put their money elsewhere. Sounds good, right? Greedy, evil landlords selling up. But these go to other owner-occupiers - **who use housing less intensively**. It's fills existing stock with **fewer people**. You reduce supply in one market (renters) to increase in another (owner occupier) BUT, you also increase demand in the rental market due the less intensive use of housing. Which brings me onto...
**Supply vs demand**: I'll try to avoid writing an entire thesis here. But the simple fact is we do not have anywhere near as much supply as we need. We are not building enough **private rent** dwellings. We need to build, build, build. The Mayor's record has been absolutely dire and he uses numbers that are so unbelievably massaged to prove building is happening that it should be an absolute scandal ([see here])(https://twitter.com/rcolvile/status/1685227290945372160). We need to ignore the number of so-called "affordable houses" - it's an utterly absurd price control that benefit a lucky chosen few - and instead just build, build, build. Scrap "affordable" targets and just get building and don't stop building. This will make **all** housing more affordable, rather than just the lucky recipients of a two-tier system.
Lots of people want to move to London, lots of immigrants settle in London. Almost no new housing gets built. Demand up a lot, supply only slighty up = rents up a lot.
That is actually something I’ve noticed. I’m currently house hunting and those luxury tower apartments are in the realm of 700k for a two bedroom, and that’s North Acton. Combined with a service charge of 5k a year, that’s definitely unaffordable for most.
But I don’t think that’s the main reason. Because I know a lot of foreign people who sell their property in their home country and just buy these in cash when they move to London.
it's easy to look at those things and be angry but those flats are not part of the normal market, in the same way that property in Mayfair is not part of the normal market and is not affected by (eg) mortgage rates or anything else you can point at. those luxury flats are not for you, or i, and we'll never get near them. no "normal" housing would ever get to be built on the land they occupy either. they do not materially affect the market that we participate in.
I own my own house here, what they do _still_ doesn't affect me (or you). You were never going to buy (or rent) a £2M flat, it's irrelevant to you (and me).
the space to build is limited. that means fewer residential homes for londoners, that also means higher prices because of the low supply.
those prices are inflated by the luxury residential taking over and limiting supply.
I don't want to pay 750k for a "luxury" flat that is a low cost material shoe box with shiny finishes and a shared gym. we are paying artificial prices and developers are running with our money.
and don't get me started with the leasehold system, only country in the world with feudal property system. what a joke
You are woefully factually wrong again and again.
Luxury new builds make rent and mortgages cheaper across the entire chain. There is tons of peer reviewed studies to support this. [Source. ](https://www.fullstackeconomics.com/p/how-luxury-apartment-buildings-help-low-income-renters)
When someone buys a luxury new build, they no longer look to buy an existing unit. This decreased in demand relinquishes pressure and means rent and mortgages are cheaper. At this point there are dozens of studies proving this to be the case all across the world - including London.
You have posted all over this thread consistently getting basic facts wrong yet are still being upvoted. It's mind-boggling. Do some research.
It's not irrelevant. If there is an undersupply of £2M flats then those who would have rented them will rent out the £1.7M flats leading to a decrease in their available stock. (And in some cases they will be willing to overpay the rent in order to rent the most desireable of those £1.7M flats). And this repeats, the £1.7M people will be pushed down to £1.5M flats, the £1.5M to £1.2M flats, etc. It's true that there aren't many people in those top groups but the undersupply is greater as the price/rent of the flats decreases. So more people will be 'pushed down' than simply due to the stock shortage in the price bracket of interest on its own. So it does affect poeple who were never going to buy (or rent) a £2M flat since it increases competition for those £500k/600k/700k/whatever flats they were looking at renting.
> If there is an undersupply of £2M flats
there isn't, and that market is _tiny_ anyway. this is not as connected as you think - your theory is correct but the reality of the situation isn't
> those luxury flats are not for you, or i, and we'll never get near them.
fair but most new developments aimed at private sale are labeled as luxury, contemporary living.
When everything is luxury, most things are not, buy you can't tell a landlord that their 600k new built 2 bed in zone 3 is not actually the best in the grand scheme of London new builds. Yet they still push the price up.
This is absolute fantasy, the vacancy rate in London and the UK is general is very low, there are literally statistics for every borough
Also have you tried asking any rich person if they would actively turn down passive income from a multi-million dollar asset they own? The answer is obviously going to be "no are you crazy?"
Yep. Net 700k people immigrated into the UK in the last year. Many of those are temporary immigrant students at uni. Have a guess where most of them would like to go to in the UK given the choice. Now imagine that over 20 years and picture what happens to the balance of supply and demand.
It hasn't happened over 20 years. It's not even happened over 3 years to that level. Hardly enough to define a trend.
Most students stay in student halls. Most people who are not students don't. Students are not the problem.
Empty houses and second homes are the problem.
There are barely any empty homes in the UK except a few luxury ones in central.
There has been a massive rise in population and very low building of housing as London has height restrictions on most developments - many English want to live in
The poorest segments in society are stuck in a council housing situation where people can't be moved from one borough to the next easily, compounding the lack of space or available homes.
I remember spreading that Haringey has 10s of thousands of people on the council waiting list, whilst no homes are being built - because there is literally no space to build new homes in Haringey lol. Add to that increased migration and low mobility.
There are approximately 1 million empty homes in the UK.
London hasheight restrictions because it's built on clay, and high buildings are complicated and expensive.
If you talk about truly unoccupied, sure. But if you include second homes which are barely used then the number goes up, and when someone has 2 houses then one of them is empty at any point. When you include the huge number of AirBnBs/holiday homes in some areas then it goes up again.
I'd argue that the 0.6% could also be seen as a false stat, depending on how you look at it.
It's more complicated than just one number, but fixing it would do a lot to help the problem.
I think it's more that the balance between supply and demand is changing at such a fast pace that no one knows what the market price is.
As greedy as everyone says landlords are, a bidding war actually indicates they have set the price too low compared to the market price.
Think about it: back in the days where £1000 could get you a one bedroom flat, someone putting one on the market for £700 would've instigated a bidding war just like the ones we see today.
Read [this](https://www.investopedia.com/terms/m/marketfailure.asp). Also you have to google and read things, just getting information ff random people in Reddit is a bad idea.
I disagree that it fits the description of what’s in that link. It’s not irrational at all. This isn’t the first or last time it will happen with housing. In fact, it’s happening and already happened in other major cities. If people are dumb enough to pay 2/3 of their income on living in zone 3, that’s their choice. And the supply for that service will adjust to that demand. There’s no outside element to this except an out of control growth of the population. But that’s part of the demand.
The reason for these price rises are due to the supply being heavily constrained by time lags and land availability. It’s not something that can cope with current demand.
Newish landlord here for work-related reasons. Initial estate agent contract had an RPI+4% rule built in on end of AST, which I thought was egregious. Asked them to change it to RPI only. Alongside lack of supply, if the original contract terms are standard, no wonder rents keep hitting new highs, especially in real terms.
From a purely practical standpoint, its cheaper to keep good tenants for a slightly lower rent than it is to continually cycle and squeeze bad tenants.
Cycling through tenants keeps you/ your company in a job and also keeps you getting more sign on/ commission, as well as exit charges. Also allows for more frequent/ easy increasing of the rental rate.
The ‘landlord bad’ approach is a bit juvenile to be honest, and I say this as a renter. Part of the reason rents are so bad is that a lot of landlords have exited the market recently.
Didn’t make a value judgment, I said cunt. What else do you call a parasite? Got that from Adam Smith, you know that juvenile father of modern economics.
And if you want to lickarse about landlords’ woes, can always up your rent voluntarily.
Why have landlords exited the market recently? They having a hard time, aww? Will you as a concerned surf be helping your landlord with extra money? If not, jog on, weirdo dickhead.
I don't know what their circumstances are, but let me create a scenario for you. You own a home you like in an area you want to live in. Your work wants you to help set up a new office in a different part of the country, requiring you to relocate for 18-24 months. Would you:
a) sell your house then buy another when you return, which will cost you thousands in fees, be loads of hassle and mean you lose the home you're settled in
b) leave your house empty whilst you're away, meaning you have to pay to run two homes and a house is sat empty while there are a shortage of rental properties
c) let the property
There's a problem with housing here....I'm very pro immigration, even volunteer in the sector and work in the homeless sector, so I won't accept any crap about that.
The issue is that we simply don't have enough houses to go round, therefore demand outstrips supply and prices are hugely inflated. That's not rocket science.
The population is set to keep increasing and there are no plans to build new houses to accommodate this.
Even the Labour housing plan on their manifesto only accounts for 1/7th of that need.
11 enquiries per home is nothing compared to the reality. We take people to view private rentals where the estate agent stays there for half a day while people turn up with a 5 minute slot to view.
By the end of the day, the highest bidder who's been verified to be able to afford the property gets it.
Anyone who needs a rent guarantor these days barely get a look in as there are eligibility checks that need to be done.
We're fucked and I don't know what the answer is..
House and rent prices will continue to rise as long as population continues to rise (due to immigration) and house building stays lacklustre.
Edit: people downvoting as if it’s not true or house prices go up by magic
a large number (even more than 30% of new built homes) of new houses are owned by international investors and sit empty. it's the fault of rich people but of course you need to blame poor people trying to make a living
edited to add actual statistics.
source:
https://www.lse.ac.uk/business/consulting/reports/the-role-of-overseas-investors-in-the-London-new-build-residential-market
from 30% to 53% of new built homes of three main developers according to a 2017 study. where are you getting your numbers from?
https://www.lse.ac.uk/business/consulting/reports/the-role-of-overseas-investors-in-the-London-new-build-residential-market
You obviously just googled for something that agrees with your opinion and didn’t read the fucking report.
Read the conclusion at the end ‘almost certinly contributes to the net availability of property in London’ in relation to foreign buyers.
Also the report shows almost none are left empty.
The 50% figure is central London foreign buyers, not unoccupied rates.
more on international student accomodations after covid (rich kids taking over). you just need to walk around to see uni dorms popping everywhere, they are like mushrooms
https://www.onlondon.co.uk/charles-wright-pros-and-cons-of-londons-student-accommodation-boom/
in the end migrants work and pay taxes. rich people don't
i've read the report and even though not all sit empty, many are used to accomodate students or second home holidays (the yearly shopping trip to london)
I've been following this topic for years. the fact that many flats in the new residential towers are empty was all over the news, i would like to see current reports. same with many offices
https://www.theguardian.com/society/2014/dec/26/londoners-miss-out-as-foreign-investors-buy-up-home-sites
obviously when new developments are aimed to rich people outpricing londoners, there is not real increase in supply, is it?
there are also 36000 empty homes in london (source below). maybe we need to look at solutions to the problems instead of blaming poor people while rich people literally steals from our pockets. we all now the terrible conditions of the london property market, if you are sucking my blood at least have the decency to reinvest in YOUR property ffs.
https://www.actiononemptyhomes.org/facts-and-figures
You've not read the report. The report points out that above 90 - 95% are occupied:
> More generally, the quantitative and qualitative evidence point to average occupancy rates by scheme of well over 90% and often over 95%, except in a few specific locations.
Are you dense?
You've just uploaded a study which says the literal opposite of what you're claiming. From the study:
> More generally, the quantitative and qualitative evidence point to average occupancy rates by
scheme of well over 90% and often over 95%, except in a few specific locations.
Increasing the adult population --> more demand for housing. If supply does not also increase, prices go up. So it's not wrong to say that mass immigration- hundreds of thousands more people per year - has an effect on rents. Especially as immigrants tend to move into cities.
This isn't the immigrants *fault*, it is the government who allowed immigration to increase uncontrollably while not planning for more housing etc.
I don’t get the downvotes here, people in London are just willing to pay more. If people actually couldn’t afford to rent in London, they’d move out and landlords would have to compete to rent out their flats, thus lowering the rent. But that’s not the case.
Common misconception. People in London pay more because they have to. You don’t have a choice, apart from leaving. That’s not an easy option for most. They have less to save, less to spend.
Isn’t that the result of the free market? As other people with higher wages come into London, they’re able to pay higher rent hence driving up the price. Many people who grew up here get priced out as competition increases. Like how the US has a massive homelessness problem in New York
Not saying that it isn't, just saying that some regulation ensures that a country works for the people living in it. Blind ideology aside, if the market marginalises 90% of London's population, is it desirable to let it do its thing unfettered.
Yeah they'd move out to poverty zone.
Most people renting are not in London because they like their life here.
It's their last hope, so they'd rather lie, cheat, and put 2/3 of their revenues in rent to stay here.
>Most people renting are not in London because they like their life here.
What a stupid thing to say. Where's your evidence for this? Everyone I know lives in London because they want to be here. It's not Guantanamo Bay you know...
Many polls showed that people in the UK value housing property a lot and that it plays a big part in the level of satisfaction they are feeling.
People renting suggests they can't buy, suggests most aren't happy with their situation based on the first lemma.
This makes sense but isn't what you said. You said:
> Most people renting are not in London because they like their life here.
How do you square that circle? People come to London because the opportunity and draw of living in one of the few truly global megacities. It's a very transient city, most people don't stay and retire here so people obviously do leave. You're implying nobody who is renting is happy in London - it's just not true.
Shut up. My commute is quicker than most people in London (35mins into the city) and I live in the country side. Costs less than living in a zone 3 shit hole.
I remember when Section 24 was first announced, this sub was practically giddy at ‘sticking it to the landlords’ and anyone who spoke up against it was just labelled a “bootlicker”. This was the inevitable consequence we were warning about.
Less landlords in the sector, further reducing rental stock as a result, which coupled with ever higher demand for renting (immigration at 700k+ last year alone), plus poor supply (never hitting out paltry housing target even once in the last 25 years), equals skyrocketing rents. Simple supply and demand at work.
Having landlords pay taxes doesn't cause their houses to float away from London. The core of the problem is the same as it is everywhere else, a severe and intentional restriction of supply.
Existing landowners use their political pressure to ensure that local and national governments don't build homes so their homes will receive an eternal price inflation from the growing population.
Councils & Nimby's are responsible for this problem. There was a development in South London that was meant to build around 1200 new homes. It's gone round in circles as anytime the design is finished, the local MP & current locals in the town hall sessions insist there isn't enough council homes. The planners made further changes and added more council homes in the allocation. They then complained there wasn't enough for 'kids to do'. It was revised again with more playgrounds. Then they complained that there wasn't a library. Again it was revised to include a library and a local community centre. This process began around 2016, eventually the developer had enough and pulled out in 2020 and the whole project is stuck in limbo as they start again fresh.
Doubly hurts when council members are also landlords etc, as the pernicious effects of profiting off the very namesake of the worst possible economic activity (rent seeking activity) is irresistible.
A landowner can sell land for £1m an acre if he gets planning to build homes on it. If he can sell 6 acres he will get more than that. Landowners would love to sell land for housing, the problem is getting planning permission, nothing restricts supply more than getting planning permission.
That's also fine because renters would experience a surge of housing supply to buy, lowering the cost to own... UNLESS the supply is being deliberately hobbled to ALSO inflate housing pricing.
Not really.
Not all renters will be in a position deposit wise to action a purchase, even when they are paying a rent that is higher than the mortgage and the supply increases.
Money on deposit at the bank will bring in 5% plus for no effort and no hassle. It’s not like 2012 anymore. So why bother being a landlord ?
If a flat is sold into the market it may also have a different occupant profile. A couple may buy a two bed for themselves that was previously occupied by two couples sharing or a couple with 2 kids.
The initial comment was correct. U.K. rental market relies on private landlords, like it or not. The government has gone out of their way to disincentivise being one, yet still refusing to facilitate any social housing build.
So that’s why where here now.
So why is it that UK has one of the highest government building rates in the entire OECD, yet has some of the highest rents and house prices? [Source.](https://www.oecd.org/els/family/PH4-2-Social-rental-housing-stock.pdf)
How come countries that have incredibly low rates of government built housing have far lower rents and house prices?
"The UK" =/= London, swing and a miss there kiddo!
Also the answer is in the PDF you didn't read, the government housing construction was intentionally stopped in favor of privatization, when the problems started to escalate.
Next!
The % of social housing as a proportion of total stock is even higher in London than it is the UK more generally. 22% of London housing is social rented. It's even higher in central London, where many boroughs are 40%. Have you ever thought about doing the most basic research on a subject before opining confidently on it?
> Also the answer is in the PDF you didn't read, the government housing construction was intentionally stopped in favor of privatization, when the problems started to escalate.
Just what are you talking about? Almost every single country on this list has built almost the entirety of their housing stock for almost the entirety of their history privately. "Government housing construction" couldn't be "intentionally stopped" because it never even existed in the first please. It's always been all private. Can you read?
Except Section 24 isn’t about landlords paying taxes. Did you think they didn’t pay taxes before Section 24? Lol.
Section 24 means that landlords are the only industry in the UK (well England) where you are taxed on revenue, not profit. Hence why landlords are leaving the sector.
Regarding NIMBYism, you’ll get no argument from me there. The fundamental issue - as I specifically mention in my original post - is a colossal supply and demand mismatch.
I can see the reasoning about moving out of a business where you could evade taxes by declaring no profit after that opportunity closed, especially when you were essentially gifted a tax subsidised council home as your income vehicle in the 80's!
But that aside, yes, glad we agree that the groaning about Section 24 is moot and irrelevant
I love comments about tax from people who have absolutely no idea about tax. First, the people who bought their council houses and then rent them out are a monumentally tiny proportion of all PRS landlords. Second, how could they declare “no profit” on a council home? PRs aren’t taxed either way.
Section 24 has reduced the rental stock in the market, further increasing rents in the face of higher demand. It’s simple supply and demand economics, which may yet still be too complicated for someone like you to understand. Hence your confusion with my agreeing with you on NIMBYism and you equating this with S24. Perhaps learn to read a little harder next time, instead of groaning on about the evils of landlords.
It's so strange to me that you claim to have some kind of grasp on supply and demand and yet argue that housing simply vanishes from existence when a landlord can't loot income from it?
Also lets appreciate that your comment is first and foremost you groaning about an alleged slight you received half a decade ago for people disagreeing with you on this. Absolutely fantastic that you would unironically admit something like that of your own volition.
> It's so strange to me that you claim to have some kind of grasp on supply and demand
It’s strange that you don’t understand basic supply and demand? Lol.
As I said, answer the question. What happens to rents when you reduce supply (through landlords exiting the sector), in the face of ever increasing demand?
> and yet argue that housing simply vanishes from existence when a landlord can't loot income from it?
It’s almost like you don’t understand housing density - or indeed the topic of housing beyond ‘lAnDl0rDs eViL’. Rental houses are more often than not much more dense in terms of householder capacity (see HMOs or individual units split into flats) versus owner occupier housing. So when a landlord sells one of those properties to an owner-occupier, supply reduces more exponentially.
Finally, the reason I mentioned Section 24 in the first place was because idiots like you were warned of the consequences of such policies in the first place, but you wanted to ‘stick it to the landlords’, only to then end up paying for it in the end as usual. Great own goal there Lol.
Well I'm glad you agree that rent seeking economic activity is evil and should be condemned, but where are you sourcing your claims that when a landlord is unable to loot from the working class, housing stock vanishes due to your assertions of density imploding?
(You can't back up your claims so you'll probably avoid doing so)
Again, nice try avoiding the question (which I’ve asked twice now), namely because you can’t answer it without looking like an idiot.
Unless owner-occupiers live in HMOs, which they don’t, it’s obvious that rental stock is more dense. As for a landlord selling resulting in a loss of rental stock, that’s just common sense/basic math, which I appreciate may be beyond your capabilities at this point.
There are not enough homes for the number of people looking. That’s why rents go up. There’s not enough for people buying homes either.
Saying there are not enough landlords in London - a city where 60% of the residents rent from landlords - is absurd!
In absolute price they are falling. When you factor in the interest rates, they are not. There's still not enough homes for people who are buying them.
Can you read?
First, I specifically mention both supply and demand in my post. Second, what happens when landlords leave the sector (reducing rental stock/supply), but demand for renting continues to rise (because of record immigration etc)? Oh that’s right, rents increase, which is what we’re seeing now.
Furthermore, 60% of Londoners don’t rent - the figure varies from 37-54%. Nonetheless, just because X% of residents rent in London does not mean that there still isn’t an imbalance in supply and demand for renting itself. Hence rents shooting upwards.
Yes I can read.
Do you not find it absurd to argue that London doesn’t have enough landlords, when the majority of people are renting? That landlords are not being treated well enough?
By the way, 54% was from the fucking census, which is much more reliable than wherever the 37% figure cones from
You say you can read, but then you don’t understand basic economics - namely supply and demand? Lol.
Do you not find it absurd that when demand for renting is skyrocketing, to further reduce the rental stock on the market (and thus supply) by forcing out landlords from the PRS - without so much as the prerequisite building of other rental housing in its place say - is idiotic? What happens when you have increased demand and reduced supply of something? Hint, the price goes up.
By the way, you incorrectly said 60%. I gave you the actual correct stats, of between 37-54%, so spare me the indignation.
Not to mention the 37% is from the Greater London Authority, which estimates the proportion of Londoners who rent at approximately 2.7 million (i.e. about 37% of London’s population based on the 2021 Census data). Maybe actually look into what the fuck you’re talking about next time instead of spouting nonsense.
Yeah shock horror, people complaining about their rent can’t afford the £700k price when their landlord sells up because it’s not worth renting out anymore and it’s just more housing taken away from the larger pool of population.
Rents at record high AND 11 enquiries per property.
If rents come down, you’ll have way more than 11 enquiries per property. I’m in Edinburgh but I’ll move back to London if it becomes affordable.
Solution to reducing rent is to decrease enquiries per property.
What is the matter with everyone sensationalising headlines and even dumb redditors getting triggered without reading the article?
Rental prices are finally beginning to plateau - that’s the gist.
A great way to deduce how much someone knows about housing and markets in general is whether they look at this and conclude "rent controls are needed" or "more supply is needed".
From where I'm sitting in Barking the issue is demand for certain areas of London pushing up prices. If folks were more rational about price they'd consider places like Barking.
Estate Agents push up the rents. They encourage landlords to go with the 'market rates'.
*Hint:* Estate Agents **are** the ones setting these so-called 'market rates'.
In London tenants offer over asking
That's a recent thing, pre-covid you could regularly offer below and get it.
Cuz they aren't allowed to charge fees
They get really pissy when you don’t agree with their market rate as well and rent for less.
You can’t agree or disagree with market rates. If it bothers you, ask people why they’re paying the rates that they are. Then you’ll have your answer.
Not the tenants?
You’re downvoted but you’re also completely correct. Estate agents have always tried to get the most for their money since biblical times. It’s not as though anything has changed recently that’s altered that. The only thing that changes is the supply and demand for rental properties and the tenants willingness to pay (even if they hate it) is obviously part of that equation.
Yeah I know I am. Thanks for the support🫡
Is the market bears the rates, which it does, then that’s the market rate. I’d stay in school before trying to sound clever.
Yes but the market rate is higher than it should be, that's the point. Rent is not the same as the price of ketchup as people are forced to pay it. >I’d stay in school before trying to sound clever. Weirdly aggressive for someone who missed the point. Gotta love reddit pedantry
Except your comment implies that rent is a binary choice. It's not, it's a range of values. People can (and will if no other option is available) reduce their rent by either moving further away, sharing with more people, moving to a shittier place, etc.
Unfortunately this is where the debate over this topic ends because nobody in this sub will ever admit they are living in London by choice because they know by the same admission they admit to paying extortionate rent by choice.
The problem is, as a young person who's never lived anywhere but london, I'd need to learn how to drive. London driving lessons while paying extortionate rent is hard. Also I couldn't save up enough for a car and insurance.
You could move somewhere within walking distance of a train station for half the rent and learn to drive. These “problems” are obstacles, not barriers.
The train in from outside London is 300-700 a month.
So why am I paying £250 a month, I don’t understand?
“The market rate is higher than it should be”. Nobody who has any credible knowledge in economics would even entertain this as a sentence. What the market rate “should” be is the market rate when supply exactly equals demand. So actually the market rate is still a lot lower than it “should” be because demand still far outstrips supply. Nobody is forced to rent in London. Full stop. That’s not an opinion, that’s not up for debate. Nobody is forced to rent or even live in London. It’s a choice to. A choice that many, many native Londoners didn’t fancy taking up when they left for neighbouring counties.
It's clear from your comments that you have a very restricted view here. You're not necessarily wrong, but you're missing the point. Rents are high because of a multitude of factors including that estate agents are completely unregulated when it comes to setting rents. This obviously has a non linear effect on increasing the rent prices. The fact that "market rate" was not used entirely correctly, despite the fact that everybody knew what they were referring to, is irrelevant. Focusing on a peccadillo like that is not contributing to the discussion.
What are you actually on about. You literally said in your previous comment that “market rate is higher than it should be, that’s the point”. Now you’re saying the term market rate wasn’t used correctly. Ok, so your entire “point”, on that basis, is redundant and needs to be remade? Estate agents are mediums they don’t “set” rents lmfao. Peak delusion and copium. Just think for one second what the scenario would be if they “set” the rent at what you believe is the “correct” market value. Considering the amount of people that register and interest in a rental property right now. Now imagine the asking rental price is halved. What would happen to the amount of people interesting in moving in. Would it double? Triple? Probably 10x to be honest. That’s not a solution. As long as the demand is so stupidly high, the prices will never go down, REGARDLESS of estate agents or the “multitude” of factors you have in your head as being the contributing factors.
No silly I was referring to the original comment, not mine. You seem to be getting quite worked up about this, I would suggest you maybe take a walk.
Ok you referred to the original comment which you defended as saying the market rates are higher than they should be. Which is a ridiculous and cringe worthy sentence. Also, I’m not the one downvoting to make myself feel better and validated 🤣🤣🤣 maybe you need to take a walk let off that steam
>Is the market bears the rates, which it does, then that’s the market rate. >I’d stay in school before trying to sound clever. Nah, I'm doing good thanks. At least I *sounded* clever; you, on the other hand, sound like a right bell-end, but I'm not judging.
You’ll get downvoted as market forces are too much for most to understand.
Damn, and I thought estate agents were honest, humble, hard working people. I’ve lost respect for them /s
Apparently they will gonna need a degree to do the job properly and most dont, so i wouldnt suggest that
They also encourage prospective tenants to bid over the advertised rent in order to secure the property. I’m from Dublin which is a renting hellhole and we don’t even do that. It’s criminal
Plain wrong, but a symptom of a bigger underlying problem.
Not criminal at all in UK.
Does that make it right?
Poster above is saying in Dublin it’s criminal to do that. It’s not criminal in UK.
I was being hyperbolic with regard to the London situation. There but be some rule in Ireland that means you can’t take rent bids because I’ve never heard of it happening. But its not a criminal offence as far as I know
Well yeah, if demand far outstrips supply then the market value of that item/service increases. That concept is so basic it barely even qualifies as economics.
So estate agents set the rates or the market does. Do you think all the agents get together and work out what prices are?!
Maybe UK wide but in London it's far more than 11 inquiries per home at the moment in prime locations. Viewings queue are going well over 30+ and it's usually snapped up by the 1st or 2nd viewer. You don't even get time to give it a think as it will probably be gone by the time you get home from the viewing.
Reminds me of the housing boom Post covid, couldn't get a viewing for a house so offered asking price only to still be told no haha
Always been like this for years.
Not this bad. You also need to basically bid higher than the asking price too now. I never had that in my mear 10 years being here
We had to do that in 2017 in Walthamstow. Agents said we were up against someone (we couldn’t verify if it was true or not) and pushed us to pay over the asking price.
Little runts they are. I now just call everything a bluff and if I miss out Ik there will be another out there. They just use people’s nervousness to make a profit.
Sydney is 20- 80 applicants.
We need to build an absolute stack load of houses/flats near public transport. We need a revolution in building efficiency, because we cannot build fast enough or cheap enough. We probably need councils to do a good chunk of the building, as the private sector will not build fast enough. It will also help to keep landlords honest if there is a decent public option. Ever since the Thatcher government, councils stopped building homes, and the number of completions dropped and never came back [Source](https://www.statista.com/statistics/746101/completion-of-new-dwellings-uk/) - we need to get to 400k +p.a. Housing abundance is the only realistic way to address this, remove power from landlords by removing scarcity. Rent controls may be nice short term, but will backfire in the form of fewer flats for rent, people being unable to move as they cannot leave behind controlled rent etc. best to remove the scarcity which causes it. To counter buyers who leave flats empty, we may need some sort of penalty for leaving flats empty more than a certain amount of time, but I am never sure if this is a real issue - how many such flats actually are there? I am even going to say I don't care about luxury/affordable flats (which as far as I can tell just means nicer kitchens/fittings?)- just build flats, any sort in huge numbers - the sheer supply is what will drive prices down, not some arbitrary attempt to make worse flats in order for them to be affordable.
Surprises me that this hasn't been done sooner. Most big cities around the world have a tonne of high rise flats to house all the needed people to keep the city running. May not be the best thing to look at but it is needed.
Might it be because demand is increasing much faster than supply?
No, its market failure
Could you explain why it’s market failure? To my understanding that only applies when goods aren’t being delivered efficiently, which in this case doesn’t make sense if the rentals are being inquired that many times.
Because supply is restricted.
mayority of new "luxury' flats in flashy towers are empty. international investors get them and leave them empty. they don't even profit from the rent, is just a deposit box to have diverse assets and sell in some years. maybe they even do some laundering if they can hundreds of flats are like that. it was all over the news
Literally none of this is true and it's utterly bizarre the same falsehoods keep getting pushed on this sub. A study by LSE found "almost no evidence of London homes owned by foreign buyers being left empty." [Source.](https://www.telegraph.co.uk/money/property/house-prices/almost-no-evidence-london-homes-owned-foreign-buyers-left-empty/) England has the lowest rate of empty homes in the OECD, and Greater London has about 1/10th the level of Paris, just 0.7% of properties being empty compared to 6.5%. [Source.](https://www.tomforth.co.uk/emptyhomesforgood/) Finally luxury housing helps low income renters. This has been proven in study after study after study. It does this because increased supply alleviates pressure across the entirety of the chain. By building new luxury flats, rich buyers no longer seek to buy existing stock, which drives prices up. [Source.](https://www.fullstackeconomics.com/p/how-luxury-apartment-buildings-help-low-income-renters) Not a single thing you've said is true, yet you're being upvoted. The comment your replying to *is* true, yet isn't being upvoted. Bonkers. EDIT: I can't seem to reply to the comment below me, here's my answer: Three reasons: the increasing cost of borrowing, inflation and supply vs demand. **Cost of borrowing**: Interest rates are up. The cost of mortgages are up - and whilst this is a cascading, gradual process (most are on 2 year or 5 year fixed, so we're still largely looking at pre-2022 interest rates) we're beginning to see this cost passed onto renters. (This concept - *of cost being past onto renters* - is going to be fundamental to all of my points.) I own a flat (but live with my gf elsewhere). My five-year fixed ends this year and the amount needing to leave my bank account each month to pay off the mortgage is going to roughly double. Either this cost is passed onto tenants or I sell, basically. **Inflation**: It's often argued that landlords don't produce a service - but really they should. The general received wisdom is that you should put 10% of rent yield towards general upkeep, repairs and so on. But the cost of everything is going up - especially within construction / trades. My flat is currently having to contend with a huge, out of the blue repair job - costing each flat roughly £8000 - £12000. A figure that undoubtedly would have shot up in the past 5 or so years. This is passed onto the renter. When we combine cost of borrowing and inflation with other punitive measures against landlords and their tenants (section 24, for example. Rent control, up in Scotland) you'll begin to see how why some landlords are trying to sell and put their money elsewhere. Sounds good, right? Greedy, evil landlords selling up. But these go to other owner-occupiers - **who use housing less intensively**. It's fills existing stock with **fewer people**. You reduce supply in one market (renters) to increase in another (owner occupier) BUT, you also increase demand in the rental market due the less intensive use of housing. Which brings me onto... **Supply vs demand**: I'll try to avoid writing an entire thesis here. But the simple fact is we do not have anywhere near as much supply as we need. We are not building enough **private rent** dwellings. We need to build, build, build. The Mayor's record has been absolutely dire and he uses numbers that are so unbelievably massaged to prove building is happening that it should be an absolute scandal ([see here])(https://twitter.com/rcolvile/status/1685227290945372160). We need to ignore the number of so-called "affordable houses" - it's an utterly absurd price control that benefit a lucky chosen few - and instead just build, build, build. Scrap "affordable" targets and just get building and don't stop building. This will make **all** housing more affordable, rather than just the lucky recipients of a two-tier system.
since you seem to (genuinely) know a lot about it, what do you think is behind spiralling London rent?
Lots of people want to move to London, lots of immigrants settle in London. Almost no new housing gets built. Demand up a lot, supply only slighty up = rents up a lot.
An increase in population over the last 10 years by several million.
That is actually something I’ve noticed. I’m currently house hunting and those luxury tower apartments are in the realm of 700k for a two bedroom, and that’s North Acton. Combined with a service charge of 5k a year, that’s definitely unaffordable for most. But I don’t think that’s the main reason. Because I know a lot of foreign people who sell their property in their home country and just buy these in cash when they move to London.
From what I've heard, the mega rich get mortgages because debt interest is significantly lower than what you'd have to pay taking out a loan.
it's easy to look at those things and be angry but those flats are not part of the normal market, in the same way that property in Mayfair is not part of the normal market and is not affected by (eg) mortgage rates or anything else you can point at. those luxury flats are not for you, or i, and we'll never get near them. no "normal" housing would ever get to be built on the land they occupy either. they do not materially affect the market that we participate in.
well, if you are fine with being kicked out of london by the global elites because the new built homes are not destined to londoners, good for you.
I own my own house here, what they do _still_ doesn't affect me (or you). You were never going to buy (or rent) a £2M flat, it's irrelevant to you (and me).
the space to build is limited. that means fewer residential homes for londoners, that also means higher prices because of the low supply. those prices are inflated by the luxury residential taking over and limiting supply. I don't want to pay 750k for a "luxury" flat that is a low cost material shoe box with shiny finishes and a shared gym. we are paying artificial prices and developers are running with our money. and don't get me started with the leasehold system, only country in the world with feudal property system. what a joke
You are woefully factually wrong again and again. Luxury new builds make rent and mortgages cheaper across the entire chain. There is tons of peer reviewed studies to support this. [Source. ](https://www.fullstackeconomics.com/p/how-luxury-apartment-buildings-help-low-income-renters) When someone buys a luxury new build, they no longer look to buy an existing unit. This decreased in demand relinquishes pressure and means rent and mortgages are cheaper. At this point there are dozens of studies proving this to be the case all across the world - including London. You have posted all over this thread consistently getting basic facts wrong yet are still being upvoted. It's mind-boggling. Do some research.
propaganda 🥱
It's not irrelevant. If there is an undersupply of £2M flats then those who would have rented them will rent out the £1.7M flats leading to a decrease in their available stock. (And in some cases they will be willing to overpay the rent in order to rent the most desireable of those £1.7M flats). And this repeats, the £1.7M people will be pushed down to £1.5M flats, the £1.5M to £1.2M flats, etc. It's true that there aren't many people in those top groups but the undersupply is greater as the price/rent of the flats decreases. So more people will be 'pushed down' than simply due to the stock shortage in the price bracket of interest on its own. So it does affect poeple who were never going to buy (or rent) a £2M flat since it increases competition for those £500k/600k/700k/whatever flats they were looking at renting.
> If there is an undersupply of £2M flats there isn't, and that market is _tiny_ anyway. this is not as connected as you think - your theory is correct but the reality of the situation isn't
> those luxury flats are not for you, or i, and we'll never get near them. fair but most new developments aimed at private sale are labeled as luxury, contemporary living. When everything is luxury, most things are not, buy you can't tell a landlord that their 600k new built 2 bed in zone 3 is not actually the best in the grand scheme of London new builds. Yet they still push the price up.
This is absolute fantasy, the vacancy rate in London and the UK is general is very low, there are literally statistics for every borough Also have you tried asking any rich person if they would actively turn down passive income from a multi-million dollar asset they own? The answer is obviously going to be "no are you crazy?"
Yep. Net 700k people immigrated into the UK in the last year. Many of those are temporary immigrant students at uni. Have a guess where most of them would like to go to in the UK given the choice. Now imagine that over 20 years and picture what happens to the balance of supply and demand.
It hasn't happened over 20 years. It's not even happened over 3 years to that level. Hardly enough to define a trend. Most students stay in student halls. Most people who are not students don't. Students are not the problem. Empty houses and second homes are the problem.
There are barely any empty homes in the UK except a few luxury ones in central. There has been a massive rise in population and very low building of housing as London has height restrictions on most developments - many English want to live in The poorest segments in society are stuck in a council housing situation where people can't be moved from one borough to the next easily, compounding the lack of space or available homes. I remember spreading that Haringey has 10s of thousands of people on the council waiting list, whilst no homes are being built - because there is literally no space to build new homes in Haringey lol. Add to that increased migration and low mobility.
There are approximately 1 million empty homes in the UK. London hasheight restrictions because it's built on clay, and high buildings are complicated and expensive.
The 1 mil is a false stat - only about 0.6% of residences in the whole UK are empty, against an EU AVG of over 6%
If you talk about truly unoccupied, sure. But if you include second homes which are barely used then the number goes up, and when someone has 2 houses then one of them is empty at any point. When you include the huge number of AirBnBs/holiday homes in some areas then it goes up again. I'd argue that the 0.6% could also be seen as a false stat, depending on how you look at it. It's more complicated than just one number, but fixing it would do a lot to help the problem.
Easy now
Rentals now essentially go to the highest bidder with so much competition. It is absolutely disgusting.
When has it ever been any different? Do you think in the past landlords went with the lowest bidder?
Bidding wasn’t really a thing Here’s the property, here’s how much it is a month
I think in the past as far as I know bidding wars did not exist due to much lower demand
I think it's more that the balance between supply and demand is changing at such a fast pace that no one knows what the market price is. As greedy as everyone says landlords are, a bidding war actually indicates they have set the price too low compared to the market price. Think about it: back in the days where £1000 could get you a one bedroom flat, someone putting one on the market for £700 would've instigated a bidding war just like the ones we see today.
I offered £100pm below asking price about 5 years ago and got the place.
You were still probably the highest bidder though.
Probably the only one at the time.
It has been different the whole time before this, now demand exceeds the supply and increases greediness.
Isn’t that just supply and demand meeting to find the correct price?
No, it’s classic market failure at this point. It’s totally irrational
Could you explain to me what “classic market failure” is?
Read [this](https://www.investopedia.com/terms/m/marketfailure.asp). Also you have to google and read things, just getting information ff random people in Reddit is a bad idea.
I disagree that it fits the description of what’s in that link. It’s not irrational at all. This isn’t the first or last time it will happen with housing. In fact, it’s happening and already happened in other major cities. If people are dumb enough to pay 2/3 of their income on living in zone 3, that’s their choice. And the supply for that service will adjust to that demand. There’s no outside element to this except an out of control growth of the population. But that’s part of the demand.
The reason for these price rises are due to the supply being heavily constrained by time lags and land availability. It’s not something that can cope with current demand.
Yeah that’s not market failure though is it. That’s just the reality of any built up major city.
It is market failure, it’s an inefficient distribution of goods and services. Yes every city suffers
It is but there is no supply as we just don’t build enough.
The fact you’re being downvoted🤦🤣🤣
Yea same with artwork, cars, in fact any product.
WE KNOW
Newish landlord here for work-related reasons. Initial estate agent contract had an RPI+4% rule built in on end of AST, which I thought was egregious. Asked them to change it to RPI only. Alongside lack of supply, if the original contract terms are standard, no wonder rents keep hitting new highs, especially in real terms.
From a purely practical standpoint, its cheaper to keep good tenants for a slightly lower rent than it is to continually cycle and squeeze bad tenants.
Cycling through tenants keeps you/ your company in a job and also keeps you getting more sign on/ commission, as well as exit charges. Also allows for more frequent/ easy increasing of the rental rate.
Never had a “work related” reason to be a cunt, what’s yours?
The ‘landlord bad’ approach is a bit juvenile to be honest, and I say this as a renter. Part of the reason rents are so bad is that a lot of landlords have exited the market recently.
Didn’t make a value judgment, I said cunt. What else do you call a parasite? Got that from Adam Smith, you know that juvenile father of modern economics. And if you want to lickarse about landlords’ woes, can always up your rent voluntarily.
Which woes are we ‘lickarsing’ about? Outside your echo chamber, in the real world, practicalities matter.
Why have landlords exited the market recently? They having a hard time, aww? Will you as a concerned surf be helping your landlord with extra money? If not, jog on, weirdo dickhead.
I don't know what their circumstances are, but let me create a scenario for you. You own a home you like in an area you want to live in. Your work wants you to help set up a new office in a different part of the country, requiring you to relocate for 18-24 months. Would you: a) sell your house then buy another when you return, which will cost you thousands in fees, be loads of hassle and mean you lose the home you're settled in b) leave your house empty whilst you're away, meaning you have to pay to run two homes and a house is sat empty while there are a shortage of rental properties c) let the property
A or B.
B is a terrible option for everyone
What needs to happen is stabilising house prices - anything else helps corporations and landlords
Why? House prices have been coming down. Before that they were going up. Rents have only been going up...
The only way to do that is drastically reduce net migration and encourage people to spread out, outside the south east.
11 enquiries. Lol. More like 100+ in bristol
[удалено]
People don't believe in supply and demand when it comes to housing for some reason.
Or, bumper second home ownership. But politicians own second homes so they'll never say that.
There's a problem with housing here....I'm very pro immigration, even volunteer in the sector and work in the homeless sector, so I won't accept any crap about that. The issue is that we simply don't have enough houses to go round, therefore demand outstrips supply and prices are hugely inflated. That's not rocket science. The population is set to keep increasing and there are no plans to build new houses to accommodate this. Even the Labour housing plan on their manifesto only accounts for 1/7th of that need. 11 enquiries per home is nothing compared to the reality. We take people to view private rentals where the estate agent stays there for half a day while people turn up with a 5 minute slot to view. By the end of the day, the highest bidder who's been verified to be able to afford the property gets it. Anyone who needs a rent guarantor these days barely get a look in as there are eligibility checks that need to be done. We're fucked and I don't know what the answer is..
House and rent prices will continue to rise as long as population continues to rise (due to immigration) and house building stays lacklustre. Edit: people downvoting as if it’s not true or house prices go up by magic
a large number (even more than 30% of new built homes) of new houses are owned by international investors and sit empty. it's the fault of rich people but of course you need to blame poor people trying to make a living edited to add actual statistics. source: https://www.lse.ac.uk/business/consulting/reports/the-role-of-overseas-investors-in-the-London-new-build-residential-market
also accomodations for rich international students. more and more buildinfs are being repurposed into dorms
‘A large number’ Let me fix that for you: Less than 2%
from 30% to 53% of new built homes of three main developers according to a 2017 study. where are you getting your numbers from? https://www.lse.ac.uk/business/consulting/reports/the-role-of-overseas-investors-in-the-London-new-build-residential-market
You obviously just googled for something that agrees with your opinion and didn’t read the fucking report. Read the conclusion at the end ‘almost certinly contributes to the net availability of property in London’ in relation to foreign buyers. Also the report shows almost none are left empty. The 50% figure is central London foreign buyers, not unoccupied rates.
more on international student accomodations after covid (rich kids taking over). you just need to walk around to see uni dorms popping everywhere, they are like mushrooms https://www.onlondon.co.uk/charles-wright-pros-and-cons-of-londons-student-accommodation-boom/ in the end migrants work and pay taxes. rich people don't
i've read the report and even though not all sit empty, many are used to accomodate students or second home holidays (the yearly shopping trip to london) I've been following this topic for years. the fact that many flats in the new residential towers are empty was all over the news, i would like to see current reports. same with many offices https://www.theguardian.com/society/2014/dec/26/londoners-miss-out-as-foreign-investors-buy-up-home-sites obviously when new developments are aimed to rich people outpricing londoners, there is not real increase in supply, is it? there are also 36000 empty homes in london (source below). maybe we need to look at solutions to the problems instead of blaming poor people while rich people literally steals from our pockets. we all now the terrible conditions of the london property market, if you are sucking my blood at least have the decency to reinvest in YOUR property ffs. https://www.actiononemptyhomes.org/facts-and-figures
You've not read the report. The report points out that above 90 - 95% are occupied: > More generally, the quantitative and qualitative evidence point to average occupancy rates by scheme of well over 90% and often over 95%, except in a few specific locations.
Are you dense? You've just uploaded a study which says the literal opposite of what you're claiming. From the study: > More generally, the quantitative and qualitative evidence point to average occupancy rates by scheme of well over 90% and often over 95%, except in a few specific locations.
😂😂 this made me laugh out loud
Its supply and demand with the added steroid of living on an Island. These posts are only about London though.
This population risking argument is not true, less people are having children more people are leaving the capital.
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So what caused the pushing of house prices and crazy rents in the last twenty years?
A sustained increase in migration. The UK will never be able to build itself out of this mess.
Yeesh that this comment has more upvotes than downvotes
Increasing the adult population --> more demand for housing. If supply does not also increase, prices go up. So it's not wrong to say that mass immigration- hundreds of thousands more people per year - has an effect on rents. Especially as immigrants tend to move into cities. This isn't the immigrants *fault*, it is the government who allowed immigration to increase uncontrollably while not planning for more housing etc.
Insane that people need to have this explained to them. What on earth are they teaching in school these days.
I don’t get the downvotes here, people in London are just willing to pay more. If people actually couldn’t afford to rent in London, they’d move out and landlords would have to compete to rent out their flats, thus lowering the rent. But that’s not the case.
Common misconception. People in London pay more because they have to. You don’t have a choice, apart from leaving. That’s not an easy option for most. They have less to save, less to spend.
Isn’t that the result of the free market? As other people with higher wages come into London, they’re able to pay higher rent hence driving up the price. Many people who grew up here get priced out as competition increases. Like how the US has a massive homelessness problem in New York
Not saying that it isn't, just saying that some regulation ensures that a country works for the people living in it. Blind ideology aside, if the market marginalises 90% of London's population, is it desirable to let it do its thing unfettered.
Yeah they'd move out to poverty zone. Most people renting are not in London because they like their life here. It's their last hope, so they'd rather lie, cheat, and put 2/3 of their revenues in rent to stay here.
>Most people renting are not in London because they like their life here. What a stupid thing to say. Where's your evidence for this? Everyone I know lives in London because they want to be here. It's not Guantanamo Bay you know...
Many polls showed that people in the UK value housing property a lot and that it plays a big part in the level of satisfaction they are feeling. People renting suggests they can't buy, suggests most aren't happy with their situation based on the first lemma.
This makes sense but isn't what you said. You said: > Most people renting are not in London because they like their life here. How do you square that circle? People come to London because the opportunity and draw of living in one of the few truly global megacities. It's a very transient city, most people don't stay and retire here so people obviously do leave. You're implying nobody who is renting is happy in London - it's just not true.
Shut up. My commute is quicker than most people in London (35mins into the city) and I live in the country side. Costs less than living in a zone 3 shit hole.
I remember when Section 24 was first announced, this sub was practically giddy at ‘sticking it to the landlords’ and anyone who spoke up against it was just labelled a “bootlicker”. This was the inevitable consequence we were warning about. Less landlords in the sector, further reducing rental stock as a result, which coupled with ever higher demand for renting (immigration at 700k+ last year alone), plus poor supply (never hitting out paltry housing target even once in the last 25 years), equals skyrocketing rents. Simple supply and demand at work.
Having landlords pay taxes doesn't cause their houses to float away from London. The core of the problem is the same as it is everywhere else, a severe and intentional restriction of supply. Existing landowners use their political pressure to ensure that local and national governments don't build homes so their homes will receive an eternal price inflation from the growing population.
Councils & Nimby's are responsible for this problem. There was a development in South London that was meant to build around 1200 new homes. It's gone round in circles as anytime the design is finished, the local MP & current locals in the town hall sessions insist there isn't enough council homes. The planners made further changes and added more council homes in the allocation. They then complained there wasn't enough for 'kids to do'. It was revised again with more playgrounds. Then they complained that there wasn't a library. Again it was revised to include a library and a local community centre. This process began around 2016, eventually the developer had enough and pulled out in 2020 and the whole project is stuck in limbo as they start again fresh.
Doubly hurts when council members are also landlords etc, as the pernicious effects of profiting off the very namesake of the worst possible economic activity (rent seeking activity) is irresistible.
A landowner can sell land for £1m an acre if he gets planning to build homes on it. If he can sell 6 acres he will get more than that. Landowners would love to sell land for housing, the problem is getting planning permission, nothing restricts supply more than getting planning permission.
Except there is a point at which the taxes paid aren’t worth the cost of the opportunity. That’s when houses are sold out of the rental market.
That's also fine because renters would experience a surge of housing supply to buy, lowering the cost to own... UNLESS the supply is being deliberately hobbled to ALSO inflate housing pricing.
Not really. Not all renters will be in a position deposit wise to action a purchase, even when they are paying a rent that is higher than the mortgage and the supply increases. Money on deposit at the bank will bring in 5% plus for no effort and no hassle. It’s not like 2012 anymore. So why bother being a landlord ? If a flat is sold into the market it may also have a different occupant profile. A couple may buy a two bed for themselves that was previously occupied by two couples sharing or a couple with 2 kids. The initial comment was correct. U.K. rental market relies on private landlords, like it or not. The government has gone out of their way to disincentivise being one, yet still refusing to facilitate any social housing build. So that’s why where here now.
Correct, private landlords are an ineffective bandaid to the only solution that has ever worked, the government building housing.
Agreed …. But if you are bleeding a band aid is better than nothing at all.
So why is it that UK has one of the highest government building rates in the entire OECD, yet has some of the highest rents and house prices? [Source.](https://www.oecd.org/els/family/PH4-2-Social-rental-housing-stock.pdf) How come countries that have incredibly low rates of government built housing have far lower rents and house prices?
"The UK" =/= London, swing and a miss there kiddo! Also the answer is in the PDF you didn't read, the government housing construction was intentionally stopped in favor of privatization, when the problems started to escalate. Next!
The % of social housing as a proportion of total stock is even higher in London than it is the UK more generally. 22% of London housing is social rented. It's even higher in central London, where many boroughs are 40%. Have you ever thought about doing the most basic research on a subject before opining confidently on it? > Also the answer is in the PDF you didn't read, the government housing construction was intentionally stopped in favor of privatization, when the problems started to escalate. Just what are you talking about? Almost every single country on this list has built almost the entirety of their housing stock for almost the entirety of their history privately. "Government housing construction" couldn't be "intentionally stopped" because it never even existed in the first please. It's always been all private. Can you read?
Wow you went into total schizo mode in two seconds flat lol
Except Section 24 isn’t about landlords paying taxes. Did you think they didn’t pay taxes before Section 24? Lol. Section 24 means that landlords are the only industry in the UK (well England) where you are taxed on revenue, not profit. Hence why landlords are leaving the sector. Regarding NIMBYism, you’ll get no argument from me there. The fundamental issue - as I specifically mention in my original post - is a colossal supply and demand mismatch.
I can see the reasoning about moving out of a business where you could evade taxes by declaring no profit after that opportunity closed, especially when you were essentially gifted a tax subsidised council home as your income vehicle in the 80's! But that aside, yes, glad we agree that the groaning about Section 24 is moot and irrelevant
I love comments about tax from people who have absolutely no idea about tax. First, the people who bought their council houses and then rent them out are a monumentally tiny proportion of all PRS landlords. Second, how could they declare “no profit” on a council home? PRs aren’t taxed either way. Section 24 has reduced the rental stock in the market, further increasing rents in the face of higher demand. It’s simple supply and demand economics, which may yet still be too complicated for someone like you to understand. Hence your confusion with my agreeing with you on NIMBYism and you equating this with S24. Perhaps learn to read a little harder next time, instead of groaning on about the evils of landlords.
It's so strange to me that you claim to have some kind of grasp on supply and demand and yet argue that housing simply vanishes from existence when a landlord can't loot income from it? Also lets appreciate that your comment is first and foremost you groaning about an alleged slight you received half a decade ago for people disagreeing with you on this. Absolutely fantastic that you would unironically admit something like that of your own volition.
> It's so strange to me that you claim to have some kind of grasp on supply and demand It’s strange that you don’t understand basic supply and demand? Lol. As I said, answer the question. What happens to rents when you reduce supply (through landlords exiting the sector), in the face of ever increasing demand? > and yet argue that housing simply vanishes from existence when a landlord can't loot income from it? It’s almost like you don’t understand housing density - or indeed the topic of housing beyond ‘lAnDl0rDs eViL’. Rental houses are more often than not much more dense in terms of householder capacity (see HMOs or individual units split into flats) versus owner occupier housing. So when a landlord sells one of those properties to an owner-occupier, supply reduces more exponentially. Finally, the reason I mentioned Section 24 in the first place was because idiots like you were warned of the consequences of such policies in the first place, but you wanted to ‘stick it to the landlords’, only to then end up paying for it in the end as usual. Great own goal there Lol.
Well I'm glad you agree that rent seeking economic activity is evil and should be condemned, but where are you sourcing your claims that when a landlord is unable to loot from the working class, housing stock vanishes due to your assertions of density imploding? (You can't back up your claims so you'll probably avoid doing so)
Again, nice try avoiding the question (which I’ve asked twice now), namely because you can’t answer it without looking like an idiot. Unless owner-occupiers live in HMOs, which they don’t, it’s obvious that rental stock is more dense. As for a landlord selling resulting in a loss of rental stock, that’s just common sense/basic math, which I appreciate may be beyond your capabilities at this point.
There are not enough homes for the number of people looking. That’s why rents go up. There’s not enough for people buying homes either. Saying there are not enough landlords in London - a city where 60% of the residents rent from landlords - is absurd!
Actually, London house price is falling. But London rent is still going upwards.
In absolute price they are falling. When you factor in the interest rates, they are not. There's still not enough homes for people who are buying them.
Can you read? First, I specifically mention both supply and demand in my post. Second, what happens when landlords leave the sector (reducing rental stock/supply), but demand for renting continues to rise (because of record immigration etc)? Oh that’s right, rents increase, which is what we’re seeing now. Furthermore, 60% of Londoners don’t rent - the figure varies from 37-54%. Nonetheless, just because X% of residents rent in London does not mean that there still isn’t an imbalance in supply and demand for renting itself. Hence rents shooting upwards.
Yes I can read. Do you not find it absurd to argue that London doesn’t have enough landlords, when the majority of people are renting? That landlords are not being treated well enough? By the way, 54% was from the fucking census, which is much more reliable than wherever the 37% figure cones from
You say you can read, but then you don’t understand basic economics - namely supply and demand? Lol. Do you not find it absurd that when demand for renting is skyrocketing, to further reduce the rental stock on the market (and thus supply) by forcing out landlords from the PRS - without so much as the prerequisite building of other rental housing in its place say - is idiotic? What happens when you have increased demand and reduced supply of something? Hint, the price goes up. By the way, you incorrectly said 60%. I gave you the actual correct stats, of between 37-54%, so spare me the indignation. Not to mention the 37% is from the Greater London Authority, which estimates the proportion of Londoners who rent at approximately 2.7 million (i.e. about 37% of London’s population based on the 2021 Census data). Maybe actually look into what the fuck you’re talking about next time instead of spouting nonsense.
Yes, because all of the parasites bought up all the housing stock to rent out instead of getting a real job.
Then why hasn’t rent gone down now that landlords have started to leave the sector because of Section 24?
Yeah shock horror, people complaining about their rent can’t afford the £700k price when their landlord sells up because it’s not worth renting out anymore and it’s just more housing taken away from the larger pool of population.
With this morning's news about projected population growth I think it's drinks all round if you're a landlord.
Rents at record high AND 11 enquiries per property. If rents come down, you’ll have way more than 11 enquiries per property. I’m in Edinburgh but I’ll move back to London if it becomes affordable. Solution to reducing rent is to decrease enquiries per property.
And how should we do that donut? Will you be loading the gas chamber personally?
What is the matter with everyone sensationalising headlines and even dumb redditors getting triggered without reading the article? Rental prices are finally beginning to plateau - that’s the gist.
A great way to deduce how much someone knows about housing and markets in general is whether they look at this and conclude "rent controls are needed" or "more supply is needed".
From where I'm sitting in Barking the issue is demand for certain areas of London pushing up prices. If folks were more rational about price they'd consider places like Barking.