Thomas wrote:
Hopefully the economic downturn (with the prospect of capital gains seemingly far into the future) will encourage landlords to be a bit more flexible in their rents.
But landlords need to pay the bills too, and in the current economic climate that ain't easy for them either.
I'm sure there are plenty of landlords out there struggling with increased mortgage payments, etc. Not that I'm defending them, my point is just that it's probably unlikely to see any increased flexibility in rental charges....
They shouldn't have taken out huge mortgages with variable interest rates then should they?
Its their short-termist speculation thats caused the problem. Over-supply of rental property will cause a steep spike in rental prices but then the market readjustment will cause the bottom to fall out with rental prices plummeting in a year or even less.
bensonby wrote:
They shouldn't have taken out huge mortgages with variable interest rates then should they?
Its their short-termist speculation thats caused the problem. Over-supply of rental property will cause a steep spike in rental prices but then the market readjustment will cause the bottom to fall out with rental prices plummeting in a year or even less.
Over-supply = lower prices.
Absolutely agree on the first point Bensonby, which is why I said I wasn't defending them! But things are the way they are, and at the end of the day landlords have to look out for themselves. That's capitalism for you.
As for the second point.. well, this depends on how many landlords continue to try to force prices up to cover costs surely? If all of them keep prices up, and tenants continue to pay them, then there is no demand to force them to drop.
The opposite is true.... when there is a glut of rental property the rents go DOWN.. because there's then a lot of competition. In places like Leeds and Manchester there are properties sitting empty because there are too many of them. Landlords have to lower their rents to compete. Its not as bad as that in London but in my experience rents are not going up.