Paragon Mortgages, which as a specialist buy-to-let lender has a huge interest in keeping landlords sweet, says that rents across Britain have risen by an average 11.7% in the past year.
As ever, the villains are the banks. Higher rates and stiffer deposit requirements are preventing tenants from breaking into home ownership, driving more people into renting and trapping those already there.
Letting agencies are apparently crying crocodile tears at queues of homeless couples begging to rent and being gazumped into even higher rents by landlords overwhelmed by demand but eager to help.
And yet an auction at London’s Café Royal last week was reportedly littered with former buy-to-let properties that had been repossessed by banks because the sums no longer added up for the cash-strapped owners.
Can both pictures be accurate? Yes, but they show how fragile the housing market has become. Paragon’s 11.7% rental increase disguises large disparities across the UK. Rents on houses have jumped by a third, while those on flats are, well, flat.
The ONS rental data says otherwise
1 comment:
It seems to me that what is going on is frantic price pumping by landlords desperate to cover their outgoings - those that are finding tenants may succeed in screwing a bit extra from them - but it looks to me like the numbers of rental properties sitting on the market and failing to find tenants is rising (certainly in the town where I live they are).
BTL landlords will end up in a Catch 22.
You can't let at market rate because if you do you won't be able to cover the repayments and the property will be repossessed.
You can't let at the 120% of the market rate you need as tenants aren't forthcoming and the property will be repossessed.
Catch 22a:
Once you have lost your investment the bank will still be after you for money.
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