Rents are rising, even in cities where there is an excess of empty flats and houses, despite interest rates kept non-existently low. I might have discovered one reason why.
A friend moved from abroad to study in a northern city. After spending some time living London, where rent is ridiculous, she had limited time for flat-hunting in this new home-town, but found a room, decent but nothing special, slightly out of the centre but close to transport links (everywhere’s close to the bus train etc, but she didn’t know that.)
Her jovial landlady/flatmate set the rent at the same level as a small one bed flat, just thirty pounds under many local two-beds. My friend had no idea. I resented what the landlady had done, especially when she moved out and let her own room to another overseas student, who also knew no better and needed a home fast, thereby covering both her entire mortgage and her rent.
I met this woman a few months ago. She’s nice and everything – really friendly and tolerant, and allows her tenants use of her household nick-nacks knowing they are unlikely to have bought them across from overseas. We were discussing rents, and she asked me how much I paid. Whilst trying hard not stir up trouble for my friend (who was sitting next to her) I answered: the same as my friend pays for her room. She was aghast. I said it’s not in the best of areas, but neither is it in the worst. It’s the going rate for such a place.
She disagreed. She said she’s paid that for a flat five years ago, which was true, but her home then was an excellent flat in a really desirable area, where rents haven’t risen much as they were stratospheric to begin with. She’d never compared the cost with other local room rates, and I think that’s how landlords set prices: think of a number, double it, add some more and see what sticks: massive profit for them, misery for tenants.
There is no excuse for rocketing rents anywhere outside of London and even there rent rises are market rather than interest rate led. When interest rates rise, there will be further misery, as tenants – already squeezed – will be expected to cushion the same landlords who haven’t lowered rents when interest rates were low.
.
I checked again: the only flats rented out for as much as she was asking were genuine luxury flats with champagne fountains and lifts up to the sofa, not bog-standard two beds, no matter how near a train station.
It’s wrong that there is no rent officer to intervene when landlords are greedy, ripping off tenants who don’t know any better. How this woman looked my friend in the face every morning without falling to the floor and begging for forgiveness is a mystery to me. Amazingly, they are still mates. How tolerant of my friend. How cynical of her landlady.
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The flat next to mine in the same block, all owned by the same landlord, has been empty for weeks now. I just checked the agent's website and they are asking for £28 per month more than I am paying for my identical flat.
So it looks like the demand just isn't there in my Northern city.
As much as I agree that ridiculous rents are ridiculous it's not the government's job to regulate such things.
Researching rents is not hard, and anyone with an hour or two to spare and an internet connection can do it.
Phil, it absolutely is the governments job to regulate rents. They do not fall to a natural level, as greed and in London profiteering intervene. And also: time and an internet connection? It's common to have neither. And when all letting agents publish is deliberately high rents (that later they do not acheive) it's a waste of time anyway.
As a landlady who rents out houses by the room I'm shocked at the amount new HMO landlords are advertising their rooms. £75/85pw incl all bills used to be the norm, but I'm now seeing £400pm PLUS bills. My rents are kept affordable for my market as I don't want to spend every waking hour cleaning up and showing rooms due to transient tenants. Let's hope this bubble bursts and we can go back to decent rooms/homes for decent tenants!
Believe it or not there is still a rent tribunal going, to which people can take what they consider to be excessive rents but what is the point when your lanldord's response would be to simply terminate your contract and let to someone who wont challenge them?
You can go on the VOA website and get reasonably useful idea of rents in an area but only based on the LHA rate.
Market rents came in back in 1989 and the possibility of regulating them again hasnt even come up once on Hansard since that time so government wont be regulating any time soon. Their one brilliant idea has been to create what they call 'Affordable rents'. Which allows counicl's and housing associations to raise their rent to 80% of the market level, in return for some extra funding from Government.
We wont need all those extra homes to be built soon as most of us are going to be living in cardboard f***ing boxes, priced out by the greed of opportunist landlords
But this bubble will never burst as it is not being regulated is even seen as a good thing (oh and that renting bubble never did burst in London - only elsewhere). And yes Ben, you are right as always. When we have no security of occupation (and no - we don't) what's the point?
It has to burst RG, the market cant stand it much more of this bleeding.
I tweeted today figures showing that London rents are currently the highest in the world by 42%. Its getting ridiculous.
I think the bubble will burst. I know many people, londoners born and bread who are currently looking outside their home town for the first time, just so they can have a financial life again.
My missus and I can only just about cope, and we are what would be termed a stable professional couple, ideal tenants, but when our contract is up in March, if our landlords decide to jack up the rent, we will be heading out of London too. Its my bloody home and I hate being priced out of it but what can you do.
And when that happens, for people in our position what will happen to the smaller buy to let landlords, who comprise so much of the rental market? No longer able to meet their mortage because they killed the goose that laid the golden egg.
Tears beforer bedtime,mark my words RG
Hi RenterGirl,
Your anonymous friend again, thank you for another interesting post.
As you quoted in response to an earlier thread's comment...
"Landlords cannot expect a guaranteed income, no matter what. Theirs is a business. They should have insurance for voids etc"
This is a BUSINESS...take for example car insurance, premiums have doubled for many in the last year for no apparant reason. Government have not stepped in to this or set a cap...so why do you feel renting is different?
Unfortunately it is the cost of living, and while tenants will pay these rents, why should Landlords charge less and make less money? Now that would be ridiculous.
Hi again Anon!
Cars are different. And governments do intervene - and will have to - when food prices rocket. Housing is a neccessity, and supermarkets are investigated but not controlled as much as they should be. Ben, you might be right. good luck with the landlord!
Anon I hear this argument a lot but it is too simplistic to equate cabbages with homes. The law and the economics dont transfer over at all.
If your mortgage lender decided to jack up the rate, like they did in the early 1990s when I seem to remember it went up to 15% you would be screaming blue murder and do you know what? I would be adding my voice to yours, because my job is to stop banks repossessing people's homes as well as do landlord/tenant law work.
Landlord/tenant relationships are 2way streets. I'm sorry Anon but I dont buy the cost of living argument. Landlords are squeezing tenants dry and creating much misery in the process and creating an unsustainable market for themselves, which is myopic in the extreme. Rents may be high but mortgage rates are exceedingly low and the banks are too scared of collapse to raise them.
Rents in my area have gone up around £300 a month this year alone and if projections can be believed rents in London will have gone up by another £60 a month by Christmas. Has your mortgage expense risen by £400 this year? I think not.
Undisputed statistics show that rents across the UK have risen ^.7% this past year, 3 times the artae of inflation and in the same period late payments by tenants and rent arrears have climbed by over 10%. Surely that is a call to a bit of self restraint? Even if you dont take a moral view on this look at it from a business viewpoint. If your tenants cant meet the rent how are you going to meet the mortage
My flatmate moves out at the end of this week. My live-in landlord has gone and put the rent up - from 100pw to 105pw. He rakes in 1300pcm + from 3 rooms and still he puts the price up. Whilst continuing to turn the hot water timer to OFF ('forgetting to turn it back on) and keep the front door unlocked at all times. Most landlords are fucking selfish. End of.
Well said Ben. And Space Cadet, even that fiver will make a difference to you. I've said it before, bring back rent officers (I know Ben - but with the power and respect they used to have) and enforce tenants rights in retaliatory evictions.
I should clarify - the rent increase is for the renewed let of my flatmate's room (not mine). The landlord's overheads have not increased. He puts the rent up because - and not for any other reason than - he can.
The British rental 'market' (the use of that word itself indicates a problem in the way we view housing) is not a closed system: if the richest people in the world are moving to London, then they are competing for housing with other people in London who are not the richest people in the world. This causes an over-heated market where unrealistic expectations for income are set, and therefore landlords are prepared to take on greater debt.
It's a bubble. Raise interest rates, let them go bust and stop encouraging borrowing at the expense of saving.
Space Cadet - I hope he doesn't put yours up too.
And Dazzla...what are the chances of that happening with too big to fail banks, regulation a dirty word and Millband's assertion today lumping in 'bad tenants' with the bankers who bought this country to its knees by gambling with the economy like they were playing bingo with someone else's money.
Well said guys and gals, I do agree that rents are becoming increasingly and scarily high. Something I don't agree with on paper, we should all be able to afford to live.
It's that fine line between business and morality, I'd rather a good tenant paying below market value and staying longer - rarely happens though.
And with the previous mentioned legal system meaning it takes 3+ months to evict a non paying damage causing tenant, (thanks to the friendly local authorities advice) whilst racking up extremely large legal fees in the process...When losing £5000+ suddenly the guilt of charging more lessens somewhat...
p.s I know cars, cabbages and even candles are different to houses, but the same principles apply...If you can't afford a Mercedes, buy a Ford.
If you can't afford the rent, move further out or spend less on your Friday night out.
Hello 'Anon,'
The same principles don't apply. To suggest that people can't afford soaring rents as they are drinking too much at the weekend is offensive and ridiculous, and contradicted by your admission that rents are soaring. There is, because of Housing Benefit changes (or rather, its abolition) a race for those mythical low priced, affordable rented homes.
Glad you admit rents are scarily high anon. I read here http://bit.ly/qbP44y that average rent in London has reached £1,202.
I also agree with you that the legal process to evict people is too long in many cases as well But that is not down to you "Friendly local local authroties advice'. I am the man in the friendly local authority who works with landlords and tenants and gives that very advice and I dont think I am being obstructive for simply advising people what the law says on the matter. You may not like the advice that I give but that is a different matter. If you go to a lawyer you expect them to provide advice on the correct legal position.
On paper the eviction process shouldnt take as long as it does in reality. The problem is in 2 areas, overstretched courts who cant set early enough dates (In May one of my cases was adjourned for the first available date after 28 days....which happened to be October)and landlords oblivious of the requirements of the eviction procedures who cock up the paperwork and end up playing snakes and ladders.
s frustrating and expensive as that obviously is people are allowed to be advised of their rights. And speaking personally whenever I can I sit down with the landlords and help them to get it right, not just get on their case. despite being a prosecution officer for the council I have several landlords who come to me for advice on these things all the time and readily help out.
I cant help the law being what it is
One Scottish council now bars evictions for arrears. And France bans evictions in the winter months, as one woman froze to death on the streets.
I'm so sick of hearing from out-of-touch landlords on this site. Please spare us all your patronising rhetoric, and make a concerted effort to start informing yourselves. That "guys and gals" intro rather sets the tone.
If you really can't imagine what it's like to be in our shoes, then please, sell up and piss off to some remote island with your nest egg. In fact, i suggest you go now, before property prices really drop. Just make sure you tell your tenants what a big favour you did them on their way out.
Blimey space cadet that was a tad harsh. From now on I will ensure my comments are very formal, I was under the impression this was an open blog where both sides could air their views, if not I will 'piss off' (that really set your tone) and leave you to moan and not see it from MY point of view.
Unfortunately I am nowhere near old enough to dash off to my remote island, nor have I made enough cash to do so.
If prices go down it'll take me longer, but maybe then you will be able to afford to buy / want to do so and stop complaining about renting.
I used to rent so I understand, you have to keep moving on, things don't get fixed blah blah blah. But I'm also a bloody good landlord - didn't personally 'kick' out the tenant I had unwilling to pay rent despite having a better car than me leaving me with a total loss of £6500. I've also had to pay for an electrician to go round and change a lightbulb as my 'dim' tenant didn't realise this could be the problem (hope they never own their own property it'd be carnage).
What I'm trying to get at is there are always two points, I just wanted to express mine.
I'm not a landlord to help tenants or the housing crisis, nor do I think I'm doing anyone a big favour, it's for selfish reasons - I want some money when I retire.
If being a landlord doesn't give me the right to moan then fair enough. Without us though tenants would have no where to live.
"hope they never own their own property"
It's logically impossible not to own your own property. Unless you're arguing in favour of some sort of kleptocratic state in which the government can seize possessions permanently, at will and without any justification or process?
No? So I assume that you're talking about my home.
This might sound pedantic, but I'm tired of landlords and agents automatically referring to my home as a 'property' as if they had any kind of continued right of access over it. They don't. It is legally my home and anyone wishing to enter must provide 24 hours' written notice and receive permission to do so. Is it any wonder that some tenants treat the places they live with such contempt? Have you ever thought that it might actually just be reciprocation?
"Without us though tenants would have no where to live."
I almost missed this bit. It's so hilariously circular that I almost suspect it to be a parody.
I think landlords and homeowners should start bitching before the rest of us catch on to how we've been subsidising them for years via low interest rates.
When that happens, *then* you'll see something.
Dazzla,
I totally agree with you. Speaking of it as 'the property' encourages the sense of detachment experienced by tenants. Landlords do not build the houses Anon. How on earth can you mean without you tenants would have nowhere to live? You make money from them, you deign to let tenants have something necessary for life for no other reason than to make money out of it. And yes, that means you profit out of something that might be better provided, well-managed and properly constructed by local authorities. When landlords had any say in home design the result was twat-flats/dovecots euroboxes (call them what you will) not sustainable family homes.
Rentergirl:
Yes, especially when your dovecot (as happened to me in Manchester) contains units that are rented out to stag parties who spend the weekend trashing the place, running up and down the corridors shouting and kicking doors. I had thought that was illegal under zoning and land use laws, but I'm not sure.
If you look even at the terrace houses in the Midlands and North that were constructed by local authorities, you see buildings that were built to last and to house people. My grandmother lived in a terraced house in Derbyshire with an outside toilet, but it's still standing and, after a modernisation program, a far better place to live than a lot of the Barratt boxes that people are being conned into going into massive debt to buy.
The only thing that the profit motive drives is greed for profit. Sound tautological? It is. But look at the number of people who think otherwise.
we've been lied to. It's all unravelling at the seams now.
Dazzla,
It sounds pedantic, and wrong. Check the Oxford Dictionary: the place where one lives permanently, especially as a member of a family or household.
Permanently being key, it's my property, not yours, you're renting it for a period of time determined by myself, the owner.
As a side issue I was simply pointing out if the tenant I had was an owner occupier then the cost of repairs in their property/home would be phononemal as they couldn't even change a lightbulb.
I do have a continued right of access over my property, subject to the terms we both agree on in the contract. And I bet when your heating breaks down suddenly you're not so worried about this right you can deny me (especially as I foot the bill). Works both ways.
I have wondered on why the contempt exists, and I think it could be down to continued poor management of property and being asked to move on every 6 months when a landlord needs to sell for their own reason.
And renter girl - If there was no such thing as buy to let mortgages, then who would you rent off?
L.As don't own enough property by a country mile to supply the ever increasing demand. And with the increase in cuts and limited budgets how will L.As buy up the needed stock let alone service them properly.
Therefore I'm pretty certain without private landlords, you'd have nowhere to live.
M.
Apologies for lowering the tone. I was angry. Probably as angry as you were at changing that lightbulb, Anon. Given your chosen path and the profit you make (a hunch) I might suggest you likewise "stop complaining" or even mentioning lightbulbs. This is not a competition of ills, damn it. Please, stop taking things so personally, and start understanding the bigger picture here.
You know your point is strong when you're reduced to quoting dictionary entries. And when you do it in a sentence in which you've accused someone else of pedantry, it's hilarious.
As for the rest of it: obvious troll is obvious.
This is an interesting take (from 1933, the last time our economy was humped:
"It is utterly impossible, as this country has demonstrated again and again, for the rich to save as much as they have been trying to save, and save anything that is worth saving. They can save idle factories and useless railroad coaches; they can save empty office buildings and closed banks; they can save paper evidences of foreign loans; but as a class they can not save anything that is worth saving, above and beyond the amount that is made profitable by the increase of consumer buying. It is for the interests of the well to do – to protect them from the results of their own folly – that we should take from them a sufficient amount of their surplus to enable consumers to consume and business to operate at a profit. This is not “soaking the rich”; it is saving the rich. Incidentally, it is the only way to assure them the serenity and security which they do not have at the present moment."
http://www.nakedcapitalism.com/2011/09/marriner-eccles-on-the-need-to-save-the-rich-from-themselves.html
If rents rise too high, you're welcome to sit on your empty flats.
Strongly agreed, its very much an Anglo-american problem though. Rents seem to be almost flat-rated, and many landlords prey on the large number of migrants or movers who are stuck for somewhere to go.
Another one is flat size: a lot of seemingly slightly cheaper flats are only so because the slumlord had brutally subdivided rooms at double the normal rate, with ugly, cold and dark "extensions" jutting out the back.
I suspect a lot of rents are really based on the mortgage rate that the landlord is paying, plus whatever tax he/she is paying.
Hello,
I rent a room in the home of a couple. They have a mortgage on the place and, having built it up from a shell, are understandably house-proud. My own attitude toward hygiene and general conviviality is definitely adequate, but tends to fall short of their standards, and they are not shy about letting me know it.
An example: I was sitting on the couch watching television after a hard day's work with the diffidence one can't help but feel when living with almost perfect strangers when I was summoned to the kitchen.
There stood male flatmate/landlord, pointing at an infinitesimal of pasata that had escaped the chilli I was earlier preparing, and found itself on the wall behind the cooker.
"What is this?" But he asked it in a sort of befuddled, calmly incredulous voice, as if in all his years upon this earth he had never seen a splattered bit of tomato sauce. I explained to him what it was as well as the phenomenon that led to it being there and he said to me, with the same calm senility, "what are you going to do about it?" I reached for a sponge and made the appropriate circular motion. Then I apologised. It is an act of contrition that I regret more every time I think about it.
That is an example of the day to day badgering and passive aggression one puts up with when living with a bad sort of landlord. The real problem for me is that they will not put the heating on, save for twice a day for half an hour. It's winter but they seem to have psyched themselves into not feeling discomfort: one will say "you cold?" and the other will reply quickly "no". They do that all of the time.
I guess my general point is that as a renter I have to put up with that kind of rubbish. In other flats I have had to put up with patronising, almost psychopathically self-interested, strongly paranoid, landlords. The only good one I have ever had was a lady of indeterminate near-eastern origin who was happy as long as I paid her. She insisted on a flat inspection once every six months, which she never once undertook, and was always in a good mood.
There is, of course, another side to the rent cheque. Landlords must be worried about their investment and some of them are making next to nothing out of their properties so there is that element of frustration.
I think an obvious thing to do would be for tenants to behave themselves and look after their places and for landlords to not expect something for nothing. If you treat people like animals and put them in these awful bedsit things then they will behave accordingly.
In all I think 9 out of ten times landlords want to squeeze as much as they can from their tenants and this is not in itself condemnable, it's the way of the world, we're told. So state regulation is probably called for.
RENTER
You are a lodger, not a tenant and as such if landlords have a bad attitude can be made to feel like vermin in the home you pay to live in. I have written about this in other posts. One friend was eventually bullied/cold-shouldered out of the lounge, and moved house.
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