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Housing market

Discussion in 'off topic' started by matt j, Feb 2, 2022.

  1. Brian

    Brian Eating fat, staying slim

    Borrowed from?
    wacko likes this.
  2. Ponty

    Ponty pfm Member

    Interesting development in Scotland. Aside from the govt running out of money, this certainly sends a message in terms of levels of state intervention post independence. I’d expect to see significant outflows of capital upon the possibility of indyref2!
  3. palindrome

    palindrome Thru a hedge, backwards and forwards.

    Emergency legislation to tackle an emergency situation. Sounds about right to me. Also don't agree the government is running out of money. Haven't you been paying attention to the many and numerous posts here relating how government funds spending and absorbs debt? Even that bastion of institutionalised Toryism J R-Smogg admitted as much.

  4. Ponty

    Ponty pfm Member

    Sturgeon is running out of money and fast. Unfortunately there will be tenants who stop paying rent as they know they can’t be evicted. Presumably it’s OK for the landlord to have to suck that up and be potentially repo’d. Hence I’d expect to see a reduction in rental supply.
  5. Brian

    Brian Eating fat, staying slim

    Scotland doesn’t have its own currency and seemingly doesn’t want its own currency even after independence.
  6. TheDecameron

    TheDecameron Unicorns fart glitter.

    Westminster will catch up at the end of this fixed term- if the Tories survive that long. It’s already over- can you smell it?
  7. palindrome

    palindrome Thru a hedge, backwards and forwards.

    You can also expect to see a reduction in tenants when they die of hypothermia because they can't afford to pay rent and food as well as stratospheric uncapped energy costs dressed up as . . . er . . . capped. The priority in the measures taken by Sturgeon and Westminster is to prevent that.

    I did not say nor imply that it's okay for landlords to suck up the differentials or be repossessed, but that's what you get when your government manipulates the finances and bamboozles the public with a sleight of helping-hand that leaves landlords exposed.

    Tories gonna Tory, I guess.

    Snufkin likes this.
  8. Ponty

    Ponty pfm Member

    Trouble is, it’s just the (Scottish) govt passing the problem to the private sector, who in turn will exit the market. If a potential labour govt suggests similar, I’d expect a stampede or at the very least, mass evictions so rents can be ‘reset’. Many landlords are happy to let below market value to decent long term tenants. If they can’t increase then many will want to catch up to market levels prior to any govt dictating terms.
  9. Kirk

    Kirk pfm Member

    Isn't it temporary?
  10. gintonic

    gintonic 50 shades of grey pussy cats

    ex PM looking for a new job?
  11. Mike Reed

    Mike Reed pfm Member

    I believe it's initially to next April. The gov't here imposed the no evictions rule during the first part of Covid, but not a rent freeze. I read that Ireland (Eire), which has imposed some draconian reg's on landlords in the recent past now has only 800 and sth (forgot the actual figure) rental properties in the country. Queues form when a vacancy is broadcast, I gather. So it's not just the U.K. then.
    Kirk likes this.
  12. Ponty

    Ponty pfm Member

    So they say…
    It’s more the tone and message it sends out. Will they underwrite the landlords mortgage when the tenant stops paying because they know they can’t be evicted? Scots can set their own income tax, council tax, all sorts of things yet they choose to stick it to private landlords. Good, many will say, but they haven’t got a solution when landlords inevitably get more picky over tenants or (those who can afford it) decide it’s too risky to enter into a new tenancy.
    Kirk likes this.
  13. TheDecameron

    TheDecameron Unicorns fart glitter.

    I’m sure it won’t affect the Airbnb market, so that’s something for hard pressed landlords.
  14. Ponty

    Ponty pfm Member

    Latest lettings update from Savills, in ‘those landlords who are more financially secure are going to be in a far better position than most to weather the economic challenges ahead’ shocker.

    The lettings picture
    • The ongoing imbalance between demand and supply in the rental market has continued to underpin rents. This was most clearly reflected in the RICS UK Residential Market Survey which reported:
    • A +36% net balance of surveyors seeing an increase in tenant demand in the three months to July.
    • A -8% net balance seeing a decline in new landlord instructions.
    • And a +57% net balance expecting to see further rental growth.

    A squeeze on affordability
    • This begs the question as to how far most tenants will be able to cut back on other expenditure before we see affordability act as a cap on rents. Further insight can be gleaned from the recently published ONS Family Expenditure Survey.
    • While this shows that there was little change in the total amount spent on housing, fuel and power by those in the private rented sector between 2019-20 and 2020-21, it did go from 33% to 40% of their total expenditure, as spending on transport and recreation was severely curtailed by successive lockdowns.
    • In general, tenants will now have limited ability to make equivalent savings on items such as transport. Furthermore they are unlikely to be prepared to make quite such dramatic cuts their discretionary spending as were effectively enforced by the pandemic.

    Curtailed growth ahead?
    • While we are likely to see a greater than normal proportion of tenants’ spend made up by rent and utility bills, there is likely to be a point over the next 6 to 12 months where this curtails rental growth for all but the most affluent tenants. Government plans to cap consumer’s energy costs, which are expected to be announced tomorrow, will soften the impact.
    • For those landlords with a mortgage, the recent burst of strong rental growth will have protected them from recent increases in interest rates. As a consequence, our analysis of monthly capital gains tax receipts shows we are yet to see a sustained pick up in landlords and second home owners selling and realising a capital gain - which continues to be around £12,000 per month at a national level.
    • In part, this reflects the extent to which the sector is dominated by older, equity rich landlords. Our analysis of the English Private Landlords survey shows that 69% of private rented stock is held by the over 55s, in which we estimate they hold £724bn of net wealth (as reported here by the Financial Times).
    • While we expect more indebted landlords (especially those with older less energy efficient housing stock) to come under more financial pressure over coming months, those landlords who are more financially secure are going to be in a far better position than most to weather the economic challenges ahead.
  15. hifinutt

    hifinutt hifinutt

    For those landlords with a mortgage, the recent burst of strong rental growth will have protected them from recent increases in interest rates. they are assuming that landlords have been able to increase rents. many cannot because of the lockdown and financial constraints on tenants which makes it very difficult to keep up

    looking at BTl rates yesterday its over 5% for a 5 year fix with fees with some major lenders which is very tricky
    Ponty likes this.
  16. Ponty

    Ponty pfm Member

    Yes, it also assumes landlords seek to continually pass on increase in market rents to existing tenants, which is simply not the case.
    Joco and hifinutt like this.
  17. dweezil

    dweezil pfm Member

    Looks as if that's contracting now that everyone can go abroad although there are some horrific flight prices coming up.

    The governments attack on BTL is predictably pushing up rents as BTL becomes uneconomic for anyone as an investment.

    Next thing will be a drop in house building as mortgage rates rise and new pensioners look for another vehicle.
  18. klfrs

    klfrs chill out

    A shock for the private sector as they are more used to government handing wealth to them.
  19. Ponty

    Ponty pfm Member

    Highly leveraged landlords could be hit in the short term. As will tenants in the medium term.
  20. klfrs

    klfrs chill out

    It's far from all negative. In Scotland legislation, and societal disposition to housing, is different to England. The policy should be considered in conjunction with new licensing of short-term lets. Hopefully this combination will lead lower house prices, improved standard of dwellings, councils/housing associations increasing their rental stock, etc.

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