In this emerging housing crisis, one sector of the property world remains upbeat, even cocky. Surprise, surprise, it’s the letting agents, who claim that – yes, purchase prices are falling, but rents are up, up and away, soaring off into the stratosphere.
Before moving to Dovecot Towers, I noticed how agents would delicately, coyly, mention a price, but on catching quizzically raised eyebrows indicating:
‘HOW MUCH!!?? Oh, do behave; how much is it really?’ they would backtrack.
Estate agents are chancers, seeing how much they can prise out of naïve, desperate, daft-as-a-brush tenants. It didn’t work. We’re not that gullible, and it’s a renters market now.
Here’s what’s really going on. In affluent, desirable areas like Edinburgh, Brighton, and Notting Hill, where large, well-constructed, traditional homes are rare and space is at a premium, demand is permanently high and rents are constantly edging upwards. But elsewhere across the country, prices are homogenising. Locally, rents on previously less expensive un-improved flats and slighter downmarket ex-council houses are also rising, albeit slowly. They are converging with newbuild rents, which have lifted, but subsequently capped levels wherever they are built.
But where inner city brownfield sites have been carpeted with those newbuild shoeboxes, bought as buy to let investments, demand is dead. Prices there were initially higher than the rest of the locale, but are now static or falling slightly. There are too many little boxes, and they all look just the same.
Rents are still too high though. Newbuilds raised local levels: interest rates were escalating, and inexperienced owners had unreasonable expectations of profit, but agents persist in setting rents at stupidly high amounts. I’ve been checking, however: visiting agents, asking about bargains, wondering if anyone has a newbuild with a buy to let owner who can’t sell, and might therefore be willing to accept a more reasonable rent. All of them said yes.
Agents have rightly surmised that selling property will not maintain their profits. Publicly, they talk up rental rates, hoping theirs is a self-fulfilling falsehood. They are scrambling to let flats they cannot sell, when major developers have stopped construction, so flooded is the market with poky little hutches. As things stand, developers can’t offload what they’ve already built.
Apart from anything else, owners have realised that letting agents are parasites (so many landlords say this) raking in an undeserved percentage for little action. Many owners now let privately online, so asking agents about prices is misleading as they don’t necessarily have the relevant numbers to hand, and anyway have a vested interest in telling porkies.
One landlord advertised his flat with an ad on the main door of Dovecot Towers. The rent was risibly inflated, and rude words were quickly added to his sign. By noon, the money requested had fallen. By night time, the price had sunk to a reasonable level, and included parking. He’d got real. There was no alternative.
So, if you meet a letting agent crowing about rising rents, take a small step back and sniff the air. What’s that nasty smell? Why, that’ll be the whiff of soiled pants on fire.