Any day now, the 6pm bulletin will announce: “…news just in. We’re all completely screwed. Try not to panic!”
But there is one positive story: rents are falling. Well, at least, that’s what they say, but here, on the ground, I’m afraid it’s not quite so straightforward. Letting agents would rather die (no; really - they’d choose death) than admit that rents are shrinking, which is why they are still clinging to astronomical asking prices.
There are legions of flats, and increasingly, renters are opting to be a little more choosy, especially where there are masses of empty newbuilds. Even where it's nicer - close to town, away from the nastier developments - prices are still dropping. You can find a medium spec flat (solid but nothing fancy) and some of them are approaching fair to realistic levels, because wise, more experienced landlords are requesting down to earth prices.
Elsewhere, there’s no denying the overwhelming evidence for a freefall, but everything depends on where the flat is situated. On arterial routes out of town, close to an area of relative deprivation things are harrowing. Many of these flats were built using the extremes of developer greed, with disastrous cost cutting in room size, management standards and build quality. Rents here are plummeting, but you wouldn’t want to live there at any price.
Even in well designed, higher spec flats, prices have fallen. There are stories about landlords with empty newbuilds trying to lure tenants by offering cleaners, Playstations, inclusive internet and payment holidays to those sign up for a long term stay. Beware landlords bearing gifts, however. If they seem desperate, they could turn out to be behind with mortgage payments. You might not be there for long.
My own current landlord initially consulted some Letting Agents (collective noun: a plague?) who insisted he could demand £150 over what I am paying. Fortunately, he is a decent, straightforward man (so far…) astute enough to realise that the market is contracting. He’d rather deal with tenants himself, as agencies will elevate rents and he’ll still do all the work. Clever landlords have grasped that if they ask for too high a rent, tenants in a shrinking market will quickly find somewhere cheaper and leave, causing those dreaded voids.
Remember the old days, when buy-to-let was new and exciting, when investing in property promised riches or at least financial security for landlords (and renters paid the price?) Those heady dreams of giddy profits sent prices for a rabbit hutches racing skywards. Easy mortgages have vanished and house building is in stasis. Meanwhile, rents are either moribund, falling, or actually so low that eventually, landlords will find themselves subsidising tenants to live in their property.
This is a welcome, and necessary adjustment. Rents are hitting the actual level ground on planet earth, where real human beings (i.e. actual people) live, as opposed to fantastical, imaginary ciphers created for an Inside Track seminar. But what if letting agents, landlords and developers had asked for fair prices to begin with? Would there have been so many evictions, repossessions and bank crashes?
Ah, what if.