Updating post from Reddit.
I feel that the cost of living crisis has impacted people so much. I just can’t see how people could afford levels higher than what they are given a lot of salaries aren’t keeping up.
Also in the area near me, Canary Wharf, I don’t see rents going up in last 2 years. So I’m thinking maybe this is it and they will stop there?
At the same time I see a lot of flats on the market for sale but very few for rent. That makes me think the shortage will put pressure on prices further.
On top of this, the Labour proposals effectively have a clause that landlords can always match inflation for price rises. That makes me think that landlords that previously kept prices fixed will now start matching inflation to be sure not to miss the opportunity for the price rise.
Full disclosure, I’m a homeowner, but a lot of my friends still rent and I can see how once they hit over 30 people struggle to keep compromising on quality of life, which tends to mean they max out the rent the pay. I struggle to understand how people are supposed to start families when rent keeps them so far away from getting their own place.
Yes. Local and central government policies and reforms over the last few years guarantees this.
I rented near Canary Wharf (New Atlas Wharf) for 4 years, moved in during covid at £1,700 (a steal for the 2 bed waterfront apartment), went up to £2,000 (fixed for 2 years) then they asked for £2,500 Feb '24. Negotiated to £2,300 as that was a steep hike. Then the construction works started. Awful. We were in core 1 so work started there, activated the break clause immediately and moved out in October. I looked at rent prices recently and they were about £3k. For a basically uninhabitable flat due to the (3 year works), owners and tenants have been moved out. Outside of the works, you're still 20 mins from the tube or Liz line, £3k and rising just isn't sustainable. The housing market for flats is always shifting, I can't see the growth continuing in the same was as salaries are not increasing at the same pace.
Are you taking about the Printworks construction?
Cladding remediation in NAW
printworks is in Canada Water, not Canary Wharf !
Westferry Printworks is across the road from New Atlas Wharf
Yes, it is needed to ensure the profitability of all build to rent companies.
They always owned tory benches, and there was a bit of uncertainty on the beginning, but now it looks like they also own Labour benches.
Keep rising prices and you're going to end up having no one to sell too.
That's why peple left New York in droves. Milk is over $7 there too.
Greed is not profit.
Yes, greed is kind of the essence of capitalism, as the main reason for all companies (and investments) to exist is that they can provide returns to their shareholders.
Rents in NY are higher than London, so not sure what exodus of people you are talking about. Surely there is still a lot of people in there.
Many people in NY are also earning more... I know people who live in the area... earning $250k for jobs that pay £80k in average in London.
It's also why companies die.
No it's not the essence of capitalism. It's the expense of neo-capitalism. This is a form of capitalism that eats itself at the expense of itself. It's cancerour not prosperous in nature. Mean not gregarious. Poisonous not generous. Taking not giving. One way not two way. I win not win win. It's neo-capitalism, and people need to stop fucking doing it, or it'll eradicate the modern nation state.
I agree the best is a win-win scenario, but all "for profit" companies have the main goal to make money, at the expense of everything else. And by definition, that's greed... and I am not saying it is wrong, but it is capitalism (and it has always been), and I don't think it is bad...
In my view, the other win that provides the equilibrium for a healthier system comes governments that can use tax effectively to maintain a comprehensive framework of regulatory and social policies, aiming at protecting and supportting sectors and individuals found in disadvantage.
I will give an example: some time ago, I worked for one of the largest house builders in the UK. At the time, they knew they were building houses that could be much more energy efficient with wider gaps in the walls for more insulation, but still, they preferred not to do it in order to protect their profit margin. Wider gap and more insulation would reduce some 0.something percentage of the profit margin...
So they had in their "investor pack" a full strategy on how they would stay ahead of future competition by waiting for their houses to become more expensive, materials getting cheaper and land more scarce around their sites, to increase their profit margins every year and at some point, after 5 years start to build the houses more energy efficient with a little bit more insulation.
They understood their negative social impact, but they still gave priority to their financial gain. As a company, their ultimate goal is to provide profit for the shareholders. If profits are thin, they risk losing cash flow from future investors, which in turn can compromise future profit and, at some point, lead to loses until the company folds (as it happened to some competitors).
In that case, the win-win has to come from the government by improving its rules on how houses should be built while also working in other policies to favour more competition, and surely spend on social housing for people who cannot afford.
Supply and demand. If there’s no demand, rents will drop.
(Demand isn’t dropping anytime soon).
Want to talk about supply? Then let's talk about limited resources. Do you think houses are the only factor? The world is bigger then a single house.
In fact, there are times money no longer has a use at all. If all you see is money then you're doing it wrong.
Do you know how bad food restructions were in WW2? It came to using food stamps. Not money. Considering the current state of the world that could happen again. One way or another it's important to be prepared. China is making moves. People complan about houses, but they built a massive fort. And are loading tanks onto ships. Probably preparing for Taiwan/Japan. But if Russia and China turns it's attention towards us then what? America might back us up, but controlling the sea isn't a guarantee. Much more high tech these days. So let's say UK waters get surrounded to the point trade ships/planes struggle with reaching us.
In that situation, are we prepared to sustain ourselves? Because I for one don't want WW2s strict food stamp rations. Money was redundant at that point. You can't eat that. Money doesn't grow on trees. Apples do.
The smart person will have a house next to a farm. And have the means to defend that farm. The real enemy is your own country when it tries to send soldiers to take what's yours. History has proven this. It's why a lot of deaths happen in wars actually. This is why people will stress being prepared for end of the world situations. What they're basically stating is "Prepare for the worst". Because it's not a matter of wherever "If" it happens. It's more that it "has" happened.
In other words, have a plan B.
Might be why people join PMCs. At least you have your own faction there. Blackwater get their own men out of prison and likely intimidated Trump to do so. It's about looking after your own. Is it the government that has the power, or is it the people with the means to defend themselves?
If you build a house, have a farm, and have the people to defend it, then do you need money at that point? That does mean a more simple lifestyle, but if you have shelter and food and the means to defend yourself then that seems to cover the basics. This is how people have been surviving before money was even invented. There's a reason ruch people prepare for the worst. And the army.
The reason inflation is an issue is because of trade being more dangerious. Sea trade routes get attacked more. That's going to result in lost cargo. Pirates never went away. Weapon and food shipments get targeted. More so now. They say war is good for business. What they don't tell you is that it applies to those taking the resources. Be it by trade or through force. Where trade fails, use force.
If you have your own resources then inflation becomes less of an issue.
At some point money becomes redundant (Again, WW2 had to resort to food stamps instead of money). But the recources themselves never will. Hence why people grow their own food more.
People most often only focus on short term (rat race). But that comes at a long term cost. Most peoples perspective is very limited. They don't plan ahead. They might think they like too, but if all you see is money then you're not. How can you solve a problem without money?
It's the desperation that will get ya. That's what greed is. I said greed before, not money. And even money becomes redundant at some point. Then what do you do?
That's what it is to problem solve. To prepare for the worst. To not only survive it, but thrive in it.
Money isn't the only currency. It's just the most common.
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Conisdering the crime rates? Could be happening.
Does greed matter more when it means a dystopian city?
Learn to problem solve without money and you're harder to manipulate. Otherwise you don't make money work for you. You work for it.
plz stop putting rent up we are dying here :(
The law shifted to be very landlord unfriendly, to the point that many are selling and only corp landlord are really buying. It just means that there will be more renters chasing fews rentals.
It also means there is a downward pressure on prices, and some of those renters will switch to owner occupier earlier than they otherwise would have
Which will only be people who already have a deposit lined up, which is virtually none.
If house prices drop, deposit requirements drop…
And on top of deposit you need legal fees, surveys, moving costs, searches etc.
So yes, deposits will drop a bit. It will still probably fall short of the 3-4k you'll need for the rest of it for the vast majority of people.
Hence, you'll basically need to have the deposit already if that happened.
So what? It’s not relevant when considering marginal effects. There are people on the margin who would be able to buy who previously couldn’t, regardless of fees.
The degree of the marginal effect is absolutely relevant when discussing the impact of something.
Explain how please
Replied to wrong comment
"we should do this thing, because it could help people"
"I dunno it's a pretty upheaval, and will result in stresses and difficulties for millions people .. how many will it help, and how much?"
"Irrelevant, it's a good idea regardless!"
If the benefit affects 1 person by a couple of months, it's nowhere near as good as affecting 10m people by a few years.
If the drawbacks affect 1 person for a few months, they're nowhere near as bad as affecting 10m people for a few years.
If you can't understand that, you need to listen and learn a bit more before forming opinions. It's ok to not understand something, and it's ok to not have an opinion on something you don't know much about.
It's why I don't have an opinion on the supposed Uighur concentration camps in China, because I don't know about, well, anything, around it. Why I don't have an opinion on the impact of the Arab spring on the current issues in the middle east, on tax policy in Russia, corruption in Luxembourg etc..
I don't know anything about them really. So I can't really have an opinion.
By the same point, if you don't really have a clue what a change in policy would do, how can you have an opinion on it?
The scale of impact matters.
That's why there was outrage about cuts to disability, because people felt the disabled were expected to take a disproportionally large impact of the cuts.
It's why cuts to the NHS concern people, because of the large impact it will have.
I'm giving you the benefit of the doubt that you're genuinely asking, but if you're not, you really need to have a think about why you think blindly taking a stand on a non beneficial issue is more important than actually driving the impact you would like it to have.
Not sure what the misunderstand here is exactly, maybe lack of intuition on economics?
Prices are what they are, and all factors such as fees are priced in already. Prices are determined by the willingness to pay in the market.
If you enact a policy which disincentivises landlordism, you make x number of landlords sell.
Supply of non rental housing increases by x, leading to a reduction in prices.
Previously, x buyers were on the margin of buying a house, ie just under the threshold of being able to afford a house at the previous market price. This must be the case, otherwise the previous market price wouldn’t have been what it was, it would have been lower.
After the reduction in prices, x number of buyers are now able to purchase a house.
So there isn’t a world where supply increases and prices fall but people still cannot afford a house. Prices are a representation of what people can and are willing to pay for a house, and people are in the margins at all times. Unless the fees are changing for whatever reason, they have exactly 0 impact on the value of x.
House prices haven't really drop. Issue is that without many landlord there is less funding for building new houses. The group that buy off plan are mainly investors and landlord. Without them less houses will be built as builders use the deposit to fund the build.
You said above that many landlords are selling, surely that will put downward price on property? May not go down but stagnate?
No, because although the number of ex rental properties on the market is significant compared with the number of rental properties still available, it is too small a proportion of the total number of properties for sale to make any noticeable difference to selling prices.
In which case, the value of new builds will have to fall to meet the new lower demand, so the tradable value of land with planning permission will fall to make that possible.
It doesn't fall if it doesn't get built. No sane investors are going to fund something that they won't make a profit on
Which means the price of the land falls...and gets sold to another developer who can build the houses for a lower costs and sell them cheaper.
It all comes out in the wash
People aren’t building houses for a loss.
With lower land costs they won't have to
There are lots of plots of land available for cheap. In some cities there are sites for development for free for Social Landlords. They are still not taking them on. They are simply not prepared to borrow against assets in the current economic climate to finance construction.
Yes, but housing developers know that, so they just delay building to lower the supply as demand slows. They just build up their land bank and then ramp up building once demand increases again.
Some will, some won't.
The vast vast majority will.
You might not want them to, it might not be moral but this is exactly what they will do.
House building rates are always artificially low.and carefully calculated to ensure maximum profits.
Company A buys land, they apply for permission for a block of flats.
Company B guys this from them and then applies for permission for two blocks.
Company A or C will buy this with the new permissions being worth more.
This will continue until no more permission can be granted OR it is profitable to build based on the market and THEN they build.
I've been renting since 2012 and have always hoped for rents to decrease. They never have.
I always look and wait for the housing market to go tits up but it doesn't. We're stuck in this situation. I hope your friends are able to inherit a deposit or something
Yeah I can see rents rising, don’t know your specific area, but rents tend to rise with inflation, wage increases. I can see everything ticking up…and along. People need places to live government will tinker…oh how they tinker.
Rents will continue to rise at least by inflation rate just to maintain parity. Unless there is a sudden recession / big job loss or something like COVID, where people move out of cities.
Canary Wharf is probably a unique case in UK. Rents haven’t gone up as much because it’s an high budget area and 8x 55/65 floors towers have completed in the last 3 years. It’s 4k homes which effectively doubled the capacity of the area and there’s another 6 towers coming.
I’m based here and don’t plan to go anywhere else, but I hope they did the math really well with public transport capacity because I can’t see the already massively overcrowded DLR dealing with a doubling/tripling in the population density.
agree, CW is super dense like you said, massive residential towers recently completed flooding the rental market in that area so increased supply means rental pricing is very competitive, basic economics.
Hopefully, many residents are working in CW itself so won't need to rely on DLR / Jubilee during peak rush hour.
Short answer is yes. People should be aware that a lot of landlords are still on pre covid low interest rates. If they were fixed for 5 years most will me remortgaging soon with much higher rates adding hundreds onto their mortgages.
If UK increases ILR requirements to 10 years, we will see big drop in immigrants coming here. Witg even just a 100k loss of skilled workers, it will have significant impact on housing market
I suspect even the ones on their way to ILR but not quite there might leave if it goes from 5 to 10. Would be easier to move to Canada time wise.
Oh absolutely - the discussion is ongoing, but change to 10y would be a big deterrent for skilled migrants. Currently those who have lived here 2-3 years, try to stay for another 3y so that they get citizenship, but not anymore. They will think about moving to US for better economic opportunities
They can't just move to the US. Requirements are much more stringent.
I can speak for the people from india - either most of them will move to US, or just remain in india (as uk doesn't represent as good economic opportunities as it used to). 6y for citizenship is a big factor for staying here.
Tech market is completely in shambles and indians can't just migrate to the US legally. India also has immense competition for jobs and very high pollution.
The job market in india is much better than it is in the UK.
Living in a tech area of the US that has taken off over the last 10 years I can confirm that all the new neighborhoods are full of skilled Indian tech workers. Seems to be plenty of visas available
If they lose their job they are deported. US wait for green card is very long.
Not sure this is a particularly good take. I’m an immigrant and know a ton of immigrants who came here for a ton of reasons the legal bit being the last. I qualify for citizenship since 2021 but haven’t bothered yet - I’m gonna stay regardless.
Landlords continue to squeeze renters till the pips come out.
Due to government squeezing landlords until there's nothing left
More like because they can
Seems like a skill issue in the south east you can get renter's to Reverse Dutch bid for how much rent they can pay above the advertised amount.
Then it's time for a riot.
That's the only way they learn. History has proven it. If they worry more about long term damage because of upsetting the people then they have to yield. That's how taxes got decreased once. They fear it because it works.
My landlord is good. My rent is fixed for the next 16 months at £675. The market rate for my flat is £850.
Not all of them are rats
I can see the South having a market crash in the near future, while the opposite occurs in the North. A lot of people are moving out of London in favour of cheaper areas further North because it is becoming more and more un-affordable as rents are rising faster than wages.
Yes
Buyers and renters are pretty much at peak and spend close if not maximum they can afford, so increases are unlikely to be anything like we have seen last 10 years.
Prices can go up by supplying less. Expect shrinkflation
Wish the rent didn't go up so drastically and we had some sort of rent control. I'm struggling now and it's even harder to save up to buy my own place. I love greater London but despise the housing market be it rent or buying 😩
Yes, rents will increase.
The demand for housing is increasing: population is increasing due to net migration of 500,000 or more every year. New homes built (about 300,000 per year) is consistently lower than government targets (about 400,000 per year) and we currently have a shortfall of over 4 million homes.
Due to increase risks/liabilities/costs, many landlords are leaving or planning to leave BTL. When rental properties are bought for owner occupation, they will typically have lower occupancy than when rented.
What's needed is a massive programme of home building, in many parts of the country - especially, social housing.
There should also be moves to renovate derelict homes (and shops, post offices, etc.). Many are in areas without jobs but these can house long term unemployed and refugees.
Successive governments (regardless which lot) have been utterly useless in this respect.
The Building safety regulator is strangling development in London, they are running months behind in approving projects. The second staircase rule for buildings over 18m is adding cost. The average length of time to approve a housing project with more than 10 units has increased from 250 days in 2014 to 750 days today. If supply does not increase faster than population growth then rents will rise.
Rents everywhere will continue to rise indefinitely.
Yeah, and the crime rate will rise right alongside
Absolutely
In the UK, I would expect rented properties to increase rents. Everything is going up.
There is a big push to get rid of section 21 leases, ie the landlord can give the tenant 2 months and the tenant has to go. When this idea was first floated, the number of landlords who sold up was large. Suddenly there was a huge increase in the number of tenants looking for property and the number of rental properties went down. Got so bad, Durham university told students without accommodation, to not bother coming back and not to enrol in university.
Rental prices increased 10-15% in 6 months. And have continued upwards, as everything else increased.
Still got section 21 leases, but landlords are aware it is coming. So expect more landlords to evict tenants, and sell up, which will put up rents.
I live in Stratford, 90% of the students in the building are from Asia on student visas and they are paying 12 months upfront
I pay £3k a month for 1bed, granted it’s a high floor, lower floor is around £2,700
I’m a single person, most people can’t afford to live here and it’s dominated by the ovreases students and professionals
I don’t see rents decreasing in London ever. Lots of wealth abroad and students.
The rich students do not do student accommodation
That’s a crazy level of rent…
We do have a spa swimming pool sauna etc it’s a b2r
Not a landlord but unless people make change then yes rents will continue to rise
Not a landlord but unless people make change then yes rents will continue to rise
London (and the surrounding area) is a very different market to rural Cheshire (assuming CW is the CW postcode area).
Ah no I meant Canary Wharf. Will clarify in post.
It's not so much greedy landlords, it's Savage taxation and Savage rules towards landlords, such as not being able to offset mortgage costs, it's discrimination
I think the rate of average rent increase will decrease significantly with the fall in immigration numbers. In addition, the increased rate of house building, more mortgage products that are first time buyer friendly (increase loan to value, family backed mortgages etc) will mean more people will be trying to get a house as opposed to going for a better house to rent.
True, but don't forget that there are many people unable to save a deposit and many others who, for various reasons, are unable to get a mortgage.
Seems unlikely, there is huge demand for rent and the UK already has a smaller rental sector than peer nations.