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Robert Powell reports on the escalating level of rental rates and finds out what can be done to solve this new housing crisis...
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23Lack of Population Control. Time to follow my friends and emigrate to NZ...
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600It is a serious problem when combined with obscene rises in energy costs and higher food prices. It seems before long half the population will be better off not working and on benefits; housing benefit in particular rather than working for the minimum wage. This could be why the government is cutting benefits and restricting housing benefit. They also raised the minimum wage but that was too little, too late.
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31Those on benefits with HB now called LHA, will see a huge prejudice from landlords (in some cases with good reason) that will not under any circumstances rent there homes to anyone on benefits.
Also another thing the need for a guarantor to secure a place to rent is becoming the usual.
Housing in this country is in a huge crisis, for those that are OK and have a mortgage etc they will not see this side of life for the majority.
Wages in this country need to be at least 30%-50% higher just to keep up with energy and rental market and the hugely over bloated housing mortgage market.
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21I agree with previous posters, the current housing situation is utterly unsustainable. In the 1960s in my old home town in the South East a terraced house was at most 3 times the earnings of an artisan such as plumber or electrician. The same house today at around 350,000 is probably 10 times their current earnings and around 30 times someone on (full time) minimum wage. The gap between the haves and the have-nots is moving in seismic mode and unless addressed, the weekly shopping trip to Tescos for the haves will be for guns, not butter.
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19When hubby & I first wanted to live together we had no choice but to rent because it was impossible to get a mortgage. You needed a minimum of 10% for a house and 20% for a flat because you could only buy on a lease. Then money became more available and we were able to get a mortgage for 95% of the cost of the flat. We've had to keep working our way up the chain to obtain a house and it has not been easy, we've struggled and finally got there.
Yet I cannot imagine my children being able to buy anything unless we remortgage and lend them the money and most other people know are in a similar position.
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274What people are missing is the fact that there is no economy in the UK to support the high standard of living people expect. We cannot all live of benefits as thet does not work, someone has to pay in sufficient tax to fund the welfare budget. Also of course many see renting houses as their 'work' it is a way of generating income without having to find an employer. Large mortages aided this and it was called BTL . What is required is to control rents as they used to be controlled many years ago and this kept the renting sector within reasonable levels. It would reduce house prices to as teh economics would not allow you to pay more than you could get back in rent. Unlikely that this givernment would look at that - nor a 'new labour' type government either who are really tories with a silly grin.
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4I think the whole economy needs to shift downwards. By that I mean we need to ALL stop living above our means. I agree the gulf between rich and poor has been widening obscenely but that's not the only problem. All of us at the lower end also have some ridiculous expectations about our standards of living and our perceived 'rights to consume'. Even the poorest in this country are not poor compared to most of the world's poor. I'm not saying that UK poverty and inequality is ok rather we need to keep perspective on it and there is no solution in only pursuing a one case solution ...it has to work across the board and be as fair as possible across the board. The gulf between rich and poor needs to close steadily and never get this big again (which probably means the rich taking a bigger numbers hit) but at the same time we all need to stop taking for granted our unrestrained expectation to consume consume consume disposable goods and rubbish processed foods ( to name only 2 categories). We need to cooperate more in our communities, pooling resources (human and other)... not for Cameron's Big Society spurious cut back reasons but because it's good for us a humans and we will benefit, materially, socially and mentally.You just need to look and see the truth of that where it is happening.
I think we should also be lobbying against excessive price rises seriously... if not, then the shareholders carry on still expecting their their percentage returns and those are getting subsidised by the poorest consumers with no choices (eg energy, telephony and fuel). That just simply is not fair. Price setters should be taking some of the hits of cost increases to spread the pain. (this is eg f the richer taking their hits)
As for rents well again it's not all as straightforward as it first appears. Not all landlords are 'baddies' or ruthless. It's a service to provide like any other and there is a lot of regulation now to protect tenants and keep standards of safety and provision up. I know it doesn't all work smoothly all the time but I think the future may have to be in renting because we can't all own and bequeath ever bigger and bigger houses...it doesn't make sense and won't add up. Why shouldn't aging house owners use some of their house capital towards their care in one way or another? Makes sense to downsize and pass some on as deposit or other help to the young...or to support our young in caring for us.
The bottom line is we all need to think beyond our own pain and look at what works best across society not just be nimbys...that way lies division and disatisfaction. Once you face the truth that the capital in your home was actually a freak of economic manipulation and greed (fuelled particularly by Thatcher's sell off of Council Houses and 'me' economics) it is a lot easier to see that it is not really 'your' loss at all, more a reversal or a rebalancing... and as for houses ...a house is worth a house is worth a house so if you need to move sell for what you get and you will also be able to buy elsewhere at a lower rate... stop counting the noughts and look at the big picture. we do not each exist in a vacuum we are all part of the whole and life is much better when we live like that's true.
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277Demand outstripping supply. In Cornwall here, there are over 1000 rentals on the market and they are not flying off the shelves.
More chancers trying to make easy money from the housing market, now that slaes and values are beginning to crumble.
Don't fall for it. Off 10% less on the rental. Think about it, they only need a void for a couple of months and they are well down in percentage terms.
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1This isn't too surprising really, demand outstrips supply in most metropolitan areas so it's a classic case of basic economics: scarcity+demand=higher prices.
There isn't going to to be an easy solution to this unless policy makers start forcing developers to make more blocks of affordable flats, since not everyone needs a house.
The knee-jerk reaction of banks hasn't helped but I think that the housing market in this country has been over-priced for nearly 10 years now anyway.
However, as incomes slowly rise and the house-buying market stagnates then things will level out in my opinion.
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70Surprise, surprise, a few so called housing market VI's say that rents are going up. Most of the evidence for increasing rents is for London and hotspots in the south, it is not shared evenly across the country. Although I suspect some agents and landlords will try to impose high London type increases elsewhere, mainly on the basis that they have seen reports in the media that "rents are going up", they will be lucky to get an increase anywhere near inflation levels. Still, some want the property bubble to live on and we need to remember that these VI's who are now telling us that rents are increasing are the same people that said there was no property price bubble because of all those generous banks queuing up to give money to anyone back in 2007. As long as interest rates stayed low, etc, everything was going to be ok - apparently. Why would anyone take these people seriously anymore?
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24This nomally happens 3/4 years after most downturns (property crash off 1990 3/4 years later the same thing happened) I am a self-employed electrician and certainly enjoying a boom in work at the moment. As last time cash buyers are purchasing property at very low prices with the veiw to rent....the really bad properties are then sold off in the next upturn of the property market...which is 4 years away....or 1997 if glance back to the last downturn.
There are a number of factors for a high demand of rental property, but like all 'booms' it will not last forever, so if you are involved in this market, enjoy it while it lasts
North Manchester Electrician.
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2As a landlord, some of the comments for controling rents seem to be unaware that it is a difficult and risky move to make to purchase a house to rent out..
Tenants have all the conttol.. They can move at 2 months notice, can not pay rent and stay in the house for months rent free before they can be removed, do not have any of the high maintentance costs associated with home ownership.
In a situation of over-supply there is no demand for minimunm rents, the better you can bargain and the more deperate the landlord, the lower the rent.
So now we have under-supply the call comes to cap rents.
What about capping fuel cost? Or lets ask Tesco to cap all food cost rises. And as for energy? Oh and what about asking the banks to cap interest rises?
On the food chain of household costs, you will find most lanlords to be just normal people tyring to secure a future for themselves. Aim the guns a bit higher thanks.
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0Tennants have far more right than landlords, I have experienced tennants who cause damage to the property dont pay and cause mayhem. I am just a normal women who rents a property as a pension, not some fat cat who sit back and skims the cream off the poor like the energy and oil companys. The rent I charge on my property has not increased in the last three, unlike the cost of energy, fuel and food. Landlords are a soft target . Margaret Thatcher sold off all the community housing which has caused this problem. There always has been and always will be section of society who are unable to buy a property, even more so now with house prices being beyond majority of young peoples reach. This situation will also esculate with the increase in University fees, with the average Uni debt being 50 K , more than a average house was a few years back. The governemnt , banks and big companys have created this mess, 'Broken Britian' . If they deported criminals to Australia now we would all be linning up to break the law.
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38robzrob: you're being simplistic. End housing benefit and you'll have families with children sleeping on the streets. I agree with capping HB rates to force people on benefits to move to cheaper areas - they are living for free off everyone else's taxes and they have no right to live in expensive areas that the rest of us can't afford. I also agree with an element of workfare, even if it's only part-time voluntary work for a single mother with school-age children: at least it gets them out of the house, used to working, and giving something back for all this free money they're getting. For couples who are both on benefit, or single people, or people on incapacity benefit but capable of something as simple as picking up a phone as an at-home part of a call centre, they should be made to work or, if they genuinely can't find work relevant to their skills, they should be made to do unskilled work as well as accept training in exchange for their benefit. People on benefit should not get something for nothing.
I am a parish councillor and there are a myriad of unskilled and low-skilled jobs round the parish that need doing, but we just don't have the money to pay for it. At the same time there are hundreds of people in our area on benefit who could be made to work and do something productive with their lives. I say put the people and jobs together, and everyone benefits. We should also get rid of silly rules that say a parish or borough council can't give work to people serving community service punishments, because it is undermining an employed person who might otherwise be paid. For example, we can't give grass-cutting contracts to the Probation Service because this means a proper landscaper will lose out. I accept this for grass-cutting, but there are lots of jobs that we can't afford to pay for and never get done, so I see no reason why someone on benefit or community service can't do this work.
Rent control is a failed idea: it killed off the rental sector before 1988 and it will do so again. We need to build more houses, make it more profitable for large corporations to consider building to let, and encourage houseshares: if people can't afford the rents, they should move to a cheaper area or live at greater densities. And anyway, renting is still cheaper than buying for the vast majority of people, once you factor in maintenance costs and ignore the temporary phenomenon of 0.5% base rates.
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2in my experience, there are far more unscrupulous private landlords than private tenants out there - due in no small part to the property boom of the early 2000s fueled by buy-to-let. The vast majority of these jumped onto the bandwagon, lapping up Phil and Kirsty et al and believing the propaganda that house prices would go up forever. Now that house prices aren't continually going up, they see another route to making money - increasing rents beyond inflation. My previous landlord (a buy-to-let landlord who purchased a block of eight 2 bedroom flats in 2007) wanted to increase my rent by 15% once my six month assured short tenancy ended. I didn't take him up on his offer but there are plenty out there who would feel they had no choice. For example, uprooting children, moving away from your support network and so on. My experience is far from unique. I know people who have had rent increases of 20-25% once their assured short tenancies have ended. Rent control may not be the answer but some form of regulation for private landlords certainly is.
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38Interesting, but when I reflect back to 1958 when my earnings were £1000 pa (a tad less than average earnings) I could have purchased a newly built 2 bedroom terraced house with living/dining room, bathroom, modern kitchen, and with a nearby lockup garage for £1000, yes, just a year's earning. Today, to buy this same house in that area would cost 10 times the average earnings. A similar house in 1938 cost less than £350 (nice area too) just about double a tradesman wage while today those houses would be in the region of £350,000 about 10 times a tradesman's wage! A small new family car then would have cost about the same as average earnings while today a similar car cost less than a third of average earnings but then few people possessed a car in those days. Additionally, the average annual rate of murder throughout the UK in the mid 20c years was 5 yes, just 5 when capital punishment was in force. Here is another interesting bit of information, the penalty, hanging, drawing, and quartering, was abolished as recent as 1947! Just around 20 years later hanging was abolished when since the annual rate of murder for the UK is probably around 350 (which is a conservative estimate) say an increase of at least 70% yet some fools still advocate that capital punishment is not an effective deterrent! Advance society backwards!
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8Er I hope Our Wullie doesn't manage his own finances as he might get into difficulties. The murder rate in the UK in 1950 was 7.9 PER MILLION of population or 328. The figures are now 12.4 and 650 its not much of a rise in 50+ years given all the other factors involved.
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