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Rental property predictions 2022


Sugarlips

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Opening a thread for those that rent.

https://www.rightmove.co.uk/property-to-rent/find.html?locationIdentifier=OUTCODE^196&minBedrooms=3&maxPrice=2000&radius=5.0&sortType=2&index=48&propertyTypes=detached%2Csemi-detached%2Cterraced&primaryDisplayPropertyType=houses&includeLetAgreed=false&mustHave=&dontShow=&furnishTypes=&keywords=

Ive been away from ‘home’ for nearly 20 years but given the state the world is in, its prudent to consider all my options.

There is no way I would buy in Dorset at these insane prices but these days that doesn’t mean renting is a great option either.

What has thrown me though is the crazy number of regular family homes that can only be let as student digs. I appreciate the BTL scourge is everywhere but I’m struggling to find anything but student houses atm.

I know there has been a huge amount of dedicated student accom built around the local uni and college, I presumed more than enough to accommodate the demand but this suggests otherwise, except they are all listed as available not leased.

Is this the international students that CoVID has pretty much killed and the landlords are yet to twig?

Will they be getting converted back to family homes or is that just hopium?

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It depends on hard UKGOV treats the EUers and others.

UK has picked up 15m-20m migrants since 2000.

Majority are low paid and if they dont directly rely on benefits, do rely on free at use public services.

It cant just be me who realised that there were a lot more than '3m EUers, mainly working in the UK'

 

The cost of low skilled migrants is huge.

Unlike the Labour  spin, they are more like to be driving Pizza than 'working for the NHS'

Heres what I guess will happen  -

- Removal to access of all bennies bar JSA.

- Removal of free access to public services  mainly NHS and schooling. I can see migrants needing to pay for schooling upfront then claim it back.

 

 

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One of the specialities of the last decade of so is the rapid conversion of family homes to HMOs.

I can only guess at the factors driving this but in London IMO there are a few takers for these. Immigrants, those moving to the city without friends, maybe even those who don't want social interaction. They are affordable for those even on mininum wage (although it would not be a very nice life).

The yield is quite attractive if you can manage to occupy most of the rooms (don't know how likely that is). Also assisting that is that the privately built student digs is quite expensive.

However looking at the Bournemouth ones they appear to be just regular houses with the living room converted into a bedroom and charging above market rate. 

Maybe I've lost touch but the student thing is amazing nowadays, are parents financing it? Assuming a kid staying in one of those houses, the rent is £450, bills might be £100, transport £100, food £100 before you even get to the cost of going out and getting drunk.

Even £1,000 a month might not be sufficient for a student down there....

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12 minutes ago, Boon said:

Maybe I've lost touch but the student thing is amazing nowadays, are parents financing it? Assuming a kid staying in one of those houses, the rent is £450, bills might be £100, transport £100, food £100 before you even get to the cost of going out and getting drunk.

 

Plus rental contracts are now typically 48 / 49 weeks rather than the 30 weeks I had with college rooms.

The parents I know with kids at college, in both cases more than one, are struggling to fund the additional costs and in both cases the husband has a good job.

If you don't have parents with money then you're having to take a part time job to cover the costs.

Like my peers I was alway skint at college but the basic requirement of accommodation, whilst the biggest cost, was still affordable out of the grant.

From memory grant per term was £660 and rent may have been £350, £35 a week, leaving £310 for everything else for ten weeks.

You may have been skint but you didn't have to detract from your studies by taking a part time job in order to meet basic living expenses.

That "elitist" university system was actually far more equal than the current deregulated system.

Though I've heard that if you go to a top US university you can end up graduating with debts of half a million dollars. Which puts our £60k into some perspective.

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Basically the purpose built student accommodation [with mini-cinemas, gyms, chill zones etc] are aimed at Asian students [mainly Chinese/Indian] whose parents with newly found wealth can afford; ~£1000-1200 pcm. The student HMO's are aimed at UK/European students; £500-700 pcm, who the majority also need to take part-time jobs alongside their studies [mainly supermarket/bar work]. Finally you have the mainstream HMO's traditionally aimed at immigrant European labour [mainly Eastern European].

The first two groups are still expanding; UK Tertiary education is cheap in comparison to the USA especially for Asians, although the Chinese are quickly developing their home-based market with massive expansion in the last 2-3 years, and the UK policy of 'University education for all' is a business within itself; forget the idea of improving the base level education of the UK population as enrolment requirements have dropped to fit recruitment levels. As for the third group, obviously Brexit initially had an impact on this, but as we can see this is about to be rescinded upon with 'essential' workforce visas now that a) business still want cheap labour and are not prepared to pay the 'going rate' to the UK workforce, and b) government has 'shot itself in the foot' with their authoritarian approach to mandatory vaccination in the healthcare market. Although initially proposed as 'short-term'/duration visas, these will quickly be amended to long-term via 'extensions' when the government find that even Eastern Europeans are not prepared to sacrifice they social happyness for a 6/12 month contract.

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1 hour ago, Boon said:

One of the specialities of the last decade of so is the rapid conversion of family homes to HMOs.

I can only guess at the factors driving this but in London IMO there are a few takers for these. Immigrants, those moving to the city without friends, maybe even those who don't want social interaction. They are affordable for those even on mininum wage (although it would not be a very nice life).

The yield is quite attractive if you can manage to occupy most of the rooms (don't know how likely that is). Also assisting that is that the privately built student digs is quite expensive.

However looking at the Bournemouth ones they appear to be just regular houses with the living room converted into a bedroom and charging above market rate. 

Maybe I've lost touch but the student thing is amazing nowadays, are parents financing it? Assuming a kid staying in one of those houses, the rent is £450, bills might be £100, transport £100, food £100 before you even get to the cost of going out and getting drunk.

Even £1,000 a month might not be sufficient for a student down there....

If you think BMouth is bad, have a walk around Soton.

Slumification is really is unbelievable.

And not a single one of these houses is paying ctax, so theres fuckall money going to the town.

16a51f12-80ed-403d-89c0-d6fb2f9f807e.png

Its not going to last, in these times of higher IR and costs.

 

 

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36 minutes ago, spygirl said:

And not a single one of these houses is paying ctax, so theres fuckall money going to the town

I think this is a really good point.

Wherever the student is based, if they are living away from the parental home/in a student only house they will pay nothing but draw on the resources of local councils. As for overseas students, once again those living in HMO's will not be contributing for services they have access to; not sure if the purpose built block owners have to pay a levy, but if they don't they should.

As for money going into the town, this is not the case, as students bring money into the town. This does however mean that local councils have to rely on the increase benefits of students i.e. spending on food/clothes/entertainment, and employment of locals [and their spending] within the university [and its spending] outweights the cost of providing these services free of cost. Personally I believe that these costs for overseas students should be covered by a) health insurance as part of a visa application, and b) provided/paid for by a levy on the university.

Edited by MrXxxx
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Animal Spirits
1 hour ago, spygirl said:

If you think BMouth is bad, have a walk around Soton.

Slumification is really is unbelievable.

And not a single one of these houses is paying ctax, so theres fuckall money going to the town.

16a51f12-80ed-403d-89c0-d6fb2f9f807e.png

Its not going to last, in these times of higher IR and costs.

 

 

One of the universities has accomodation recently constructed or ongoing, Stanley Studios being one of them where it looks like you can enjoy falling asleep to your cooking odours.

Plenty of HMO's around areas like St Deny's and near the hospital in the Northam area, probably beds in sheds as well for the undocumented workers. Much the same in most university cities/towns? Reading is similar in the surrounding areas of the university.

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12 minutes ago, Animal Spirits said:

One of the universities has accomodation recently constructed or ongoing, Stanley Studios being one of them where it looks like you can enjoy falling asleep to your cooking odours.

Plenty of HMO's around areas like St Deny's and near the hospital in the Northam area, probably beds in sheds as well for the undocumented workers. Much the same in most university cities/towns? Reading is similar in the surrounding areas of the university.

Id say that Rdg + Soton have the same feel - mainly as theres little else going on in the town.

Leeds, where theres a lot of students tend to not feel so overwhelmed slummy. And theres been a lot of hi ri student building going on.

I saw the Soton Debs building is earmarked for students.

 

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Just now, spygirl said:

Id say that Rdg + Soton have the same feel - mainly as theres little else going on in the town.

Leeds, where theres a lot of students tend to not feel so overwhelmed slummy. And theres been a lot of hi ri student building going on.

I saw the Soton Debs building is earmarked for students.

 

Leeds also have the advantage of UniPol - a charity that manages a lot of student accommodation so its mainly of a decent standard and students are protected from being ripped off. 

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Bobthebuilder
18 minutes ago, Sugarlips said:

That's the one. I'm guessing Dave must be an old boy by now. I rented a flat off him for a short while in the early 90s. Had a reputation as a bit of a hard man, but I thought he was OK. He must have made an absolute fortune out of bennies these last 30 years from the local council taxpayers.

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4 hours ago, spygirl said:

If you think BMouth is bad, have a walk around Soton.

Slumification is really is unbelievable.

And not a single one of these houses is paying ctax, so theres fuckall money going to the town.

16a51f12-80ed-403d-89c0-d6fb2f9f807e.png

Its not going to last, in these times of higher IR and costs.

 

 

Maybe no council tax, but they have to pay a licence fee to hmo to the council. Which is usually around the same as the ctax. The councils dont miss a trick. The additional requirements of obtaining a licence, electrical fire, room sizes, no of bathrooms, usually mean new entrants, conversions are thin on the ground. Most of the hmos were converted before rule tightening. As usual the additional fees are purely a cash grab. 

Edited by Green Devil
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5 minutes ago, Green Devil said:

Maybe no council tax, but they have to pay a licence fee to hmo to the council. Which is usually around the same as the ctax. The councils dont miss a trick. The additional requirements of obtaining a licence, electrical fire, room sizes, no of bathrooms, usually mean new entrants, conversions are thin on the ground. Most of the hmos were converted before rule tightening. As usual the additional fees are purely a cash grab. 

No, HMO fees are tiny and dont apply to blocks of flats.

HMO for a house is ~50% of ctax.

 

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10 hours ago, Sugarlips said:

What has thrown me though is the crazy number of regular family homes that can only be let as student digs. I appreciate the BTL scourge is everywhere but I’m struggling to find anything but student houses atm.

I know there has been a huge amount of dedicated student accom built around the local uni and college, I presumed more than enough to accommodate the demand but this suggests otherwise, except they are all listed as available not leased.

Is this the international students that CoVID has pretty much killed and the landlords are yet to twig?

Will they be getting converted back to family homes or is that just hopium?

 

I don't know. There's loads in Worcester that are student HMO. Utterly horrid for anyone wanting to buy a nice family house around St Johns.

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17 hours ago, Green Devil said:

Maybe no council tax, but they have to pay a licence fee to hmo to the council. Which is usually around the same as the ctax. The councils dont miss a trick. The additional requirements of obtaining a licence, electrical fire, room sizes, no of bathrooms, usually mean new entrants, conversions are thin on the ground. Most of the hmos were converted before rule tightening. As usual the additional fees are purely a cash grab. 

Not all councils require a licence for HMO,s, and it is only mandatory for those that have 5 or more unrelated people living together, so get a three bed house, convert the living room into a bedroom and you have your 4 bed non-HMO student house...that you rent out on a 12 month contract although most students are only there for 9 months of the year. Also, use one of the University Letting agents and you don't have fees or they are substantially reduced.

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Rental prices next year are going to be very location dependent.

The changes over the last 18 months have broken the connection between local wages and rents down here.

It is highly likely we could have another 40% increase next year for anything above shitty homes. It is also likely that HMOs will become much more frequent. (They are very rare currently)

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Joncrete Cungle

HMO have exploded in my area over the past few years, with a lot on a copper bottomed deal with Serco to house single male asylum seekers.  One local landlord has evicted all her families and turned all her properties into pooly done HMO on the Serco contract.

The students have largely abandoned the older style HMO in the city in favour of the new expensive student apartments and a lot of those landlords have also been bailed out by getting Serco asylum seeker contracts.

The place we rented upto buying in 2017 has gone from £400pcm to £650pcm without any visible interior improvements. A couple of friends have been trying to get private rentals after their landlords evicted them to go Serco HMO. Anything half decent that comes on the private rental market is gone in a day.

It's utter madness in this part of the NW and sadly I don't see that changing in 2022.

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5 minutes ago, Joncrete Cungle said:

No a 2 bed terrace in a small semi rural village in Lancashire. It was only £400pcm when we rented it 4 years ago.

That would have gone from £850 to £1100 here in central Wiltshire over the same time-frame.

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1 hour ago, Joncrete Cungle said:

a copper bottomed deal with Serco to house single male asylum seekers

kinnel, no wonder the UK is fooked xD

I had a run in with a Serco worker a number of years ago cos someone (not me) pulled out of buying his house.....I was just telling him to get his head out of his arse and go lobby his local MP when I was rudely pulled away ¬¬

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Joncrete Cungle
31 minutes ago, nirvana said:

kinnel, no wonder the UK is fooked xD

I had a run in with a Serco worker a number of years ago cos someone (not me) pulled out of buying his house.....I was just telling him to get his head out of his arse and go lobby his local MP when I was rudely pulled away ¬¬

The rate Serco are paying for HMO is so generous a couple of landlords I have spoken to reckon they can buy a property, convert it and the rate Serco pay them will pay off the mortgage in 7 years.

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With a crooked smile
5 hours ago, Joncrete Cungle said:

It's utter madness in this part of the NW and sadly I don't see that changing in 2022.

We rented this place from Jan until Dec this year while we looked for a new home. It's only gone up by £25 a month. The landlord takes pets as well. I'd have been happy paying 1k a month so I think he's missing a trick. 

https://www.rightmove.co.uk/properties/117439376

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