Prvate Rents In England Unaffordable Says Shelter

[wheels]

Article at

http://www.bbc.co.uk/news/uk-15284892

Private rents are now unaffordable in 55% of local authorities in England, the housing charity Shelter has said.

Homes in these areas cost more than 35% of median average local take-home pay - the level considered unaffordable by Shelter's Private Rent Watch report.

The charity said 38% of families with children who rent privately have cut back on buying food to help pay rent.

Area wise

England's regional divide

• Average monthly rent for two-bedroom home in London is £1,360 - almost two-and-a-half times more than the rest of England
  
• Kensington and Chelsea is the highest at £2,714 a month
  
• Burnley in Lancashire the lowest at £394 a month
  
• Oxford is the least affordable area outside London
  
• Blackpool is the least affordable in north of England
  

[The Dalby Spook]

I bet that they all have mobile phones, sky tv, coke cola, new clothes, jewellery, computers, i-pads, bottled water, booze, cigarettes, european holidays, 2 cars, credit cards, bought lunches, etc etc

 

I agree that rents are high; it is unavoidable when people are not able to buy houses. Rather than winging about it, i would try and cut down on some on the above...

[La_Dolce_Vita]

Rents aren't just high - they are extortionate. For something that is a necessity (just having a roof over one's head) a person on a low wage could end up paying half or more than half their salary. That enough to demonstrate that something is very wrong about the set up of society.

 

I think it bad enough, really bad enough that people have to waste their money on rental because they cannot own a home. To have a situation where even renting is becoming more difficult is unacceptable.

 

And no, I don't think they all buy bottled water, have ipads, 2 cars, and are buying new clothes. And of course they have mobile phones - they aren't luxury items. What a stupid thing to say. I imagine many are trying to do their best getting themselves cheaper clothing in Primark and Peacocks, etc., buying cheap fruit cordials, getting jewellry, and don't holiday at all. I also imagine that given how little disposable income they do have they are trying to make the best with their money.

 

I don't really know what people can do if it gets worse. If rent is now rising well over half their salary and there is no much disposable income left then I wonder what potential there is to squat? My only concern with that is that it could lead to new legislation to deal with new squatters or more landlords could require references.

[ballaughbiker]

Rents aren't just high - they are extortionate

 

Bit of a broad statement innit? Or is that just the IOM you're on about?

[Chinahand]

In my mind the survey isn't of much use because it only explores median incomes and average rents.

 

These measures on their own are pretty useless - its the spread you need to know.

 

Basically you are trying to match those on the lowest income with the lowest cost rent - you can't presume that because an area's average rent is 50% of the areas average income, its cheapest rentals are also 50% of the lowest incomes - that's a huge assumption.

 

Without knowing some idea of the range in rentals, and the range in incomes in an area the survey is basically useless.

 

That's a real shame as they've probably collected most of the data.

 

They should put it into quartiles or whatever.

 

The trouble is life is complicated - alot of the lowest income people will be in subsidized local authority housing - its the second quartile in incomes who will probably be looking for the lowest quartile in rentals in the private market.

 

All in all I don't think a lot can be said from this survey. A lot more detail is needed to really know how the poorest are being effected.

 

No doubt the changes to housing subsidy are having a huge effect on the private market - how that's playing out I don't know, but I don't think this survey is particularly helpful in finding out.

[VinnieK]

All in all I don't think a lot can be said from this survey. A lot more detail is needed to really know how the poorest are being effected.

 

Unfortunately, it's in the interests of lobbyists (including charities) to push such flawed and vague 'research' because it typically has more impact on the public consciousness with its simplicity, and it's in the interests of the media to report and exaggerate their conclusions to new heights (or lows) in the name of chasing readers with headlines.

 

Although it's always been thus, it seems to be becoming more prevalent: it's not that uncommon these days to see policy announcements quickly challenged and/or supported by various aligned think tanks, charities, lobby groups or various other interests, each providing their own set of ropey stats and dubious conclusions. For instance, after Labour announced their plans to cut tuition fees in England, a nominally independent think tank with connections to David Willetts, Vince Cable and Nick Clegg almost immediately produced a 'report' into how poorer students would actually be worse off under the plans.

 

One thing that's notable about these announcements is how often the actual research is conducted by in-house teams or supposed 'research', 'intelligence' or polling companies (market research people by a different name in most cases), rather than the abundance of people with a genuine scholarly interest and expertise in these matters, and whose methodology and results are actually properly peer reviewed and challenged.

 

Sadly, decent analysis has been largely and prominantly undermined by PR and competing interests, with us and the truth falling in the crossfire.

[P.K.]

Having a stagnated market doesn't help. But some of the reasons are worth explaining. We know of a now-retired couple who want to sell up and move to Wales (ok - they're not so clever) and I was chatting to the rather elderly bloke who came round from the local estate agents. Now I lump estate agents in with other untrustworthy leeches on society like solicitors, accountants, politicians and so forth. Anyway, he told me they were really suffering, laying off staff etc and it was a long time since he had to go out of the office but they had pared down the operation so much he had to - my heart bled for him! He told me he didn't expect them to sell because of unrealistic expectations. It seems a lot of properties have slid over the intervening years and are being realistically valued at LESS than the original purchase price. And it would seem a part of human nature dictates that to sell for less than you paid for it is just impossible. The fact that the property they intend to purchase has also lost value making it a better deal for them just doesn't enter into the equation...

 

Impasse.

[il buono]

Like many things a property is worth what someone is willing (or able) to pay for it. Therefore if no-one comes forward to take it up its too dear.

Obviously there are a lot of factors influencing this, but in these times people need to adjust their expectations.

as for rentals the same applies too. eg. a typical Dandara flat (sorry apartment) on the prom, say the Spectrum for a 2 bed pad of 600 sq/ft ish, with parking is £900+ p/m

, a similar property in Salford Quays nr. Manchester is around £700 p/m but for 7-800 sq/ft (Ok, no sea views but some have water views of the canals), head towards the centre of town and they come down to around £500

You could argue the Quays is disproportionately higher than other parts of Manchester but if demand is there (ie. BBC) then prices will rise to suit. The IOM should be the same but I feel prices have been over valued by the agents in relation to current market/economic conditions.

[ballaughbiker]

Unfortunately, it's in the interests of lobbyists (including charities) to push such flawed and vague 'research' because it typically has more impact on the public consciousness with its simplicity, and it's in the interests of the media to report and exaggerate their conclusions to new heights (or lows) in the name of chasing readers with headlines.

Agreed. Outside London, rents are not extortionate although we can all cherry pick examples to suit either side of the argument, especially in the island . There should be considerably more social housing ( and to replace that which was unfortunately sold in the UK) but that will take time and public money which isn't (for a variety of reasons) available.

 

Many landlords are seeing returns of less than 5% for an ever increasing responsibility and many are getting out as a result further reducing the availability.

[ScotsAlan]

Rents aren't just high - they are extortionate

 

Bit of a broad statement innit? Or is that just the IOM you're on about?

 

Try divorce.... then you will realise how extortionate rents are all over the UK.

 

A few years of struggling to pay private rent, lawyers fees and child support may make you think different :-)

 

The problem, as I see it, is that it is the bankers who own the houses. They are using the mortgaged landlords to line their own pockets.

 

It's the person at the bottom who has to pay most.

[ballaughbiker]

A reasonable point scots but even at the historic low interest rates, generally speaking, achievable rents don't come close if its near a 100% mortgage.

[ScotsAlan]

I think I see what you mean BB.

 

So, if the banks had been sensible when giving out mortgages, rents (and house prices) would have been more sensible because not everyone would have been jumping on the buy to let bandwagon.

 

And of course, it was the buy to let mortgage lenders (and borrowers) who were in effect forcing house prices up, increasing the rental market demand because less people could not afford to get on the housing ladder.

 

Until it all fell apart that is, and taxpayers had to bail the lenders out.

 

I think it should follow that the inflated housing market collapes, but it hasn't of course.

 

I am with LDV on this one. Housing is a basic need. And the basic level of housing should not be seen as a way of making a buck.

[ballaughbiker]

I don't think 'everyone' has jumped on the buy to let bandwagon but many who did have got their fingers burned. They took a business risk and it didn't pay off. The general buy to let principle coupled with daft lending has no doubt contributed to the present situation but I doubt that house prices will collapse as many would wish. Inflation seems to be taking off again which always has an impact on house prices.

 

Housing is a basic need (in fact a human right) and there should be adequate provision of rented accommodation from non private landlord sources but that unfortunately that will now not happen. We are left with private renting with its proportion of various excesses but in general I don't think rents are too high. Some obviously are but most are comparable to places where the UK property excesses of the last decade did not happen.

 

Whilst I agree that property price inflation is a bad thing and buying a house shouldn't be seen as a way of making a buck, do you extend that to private landlords not making a profit on their business? Just wondered.....

[ScotsAlan]

I have no problem with private landlords making a profit on their business at all. But it is more than just the landlord making money on buy to let. It's an inverted triangle of people taking their share with the poorest guy at the bottom paying the money out.

 

I do believe people should be limited in how many properties they can own. Say, two houses per person ( or couple even ) max.

 

But now my thoughts become a little confusing. What would my definition of a renting business be, against an individual buying a few houses to rent out? I honestly don't have an answer to that.

 

But what strikes me is that high rents have an impact on everyone. Because we taxpayers (even if we own our own house) have to pay it for DHSS tenents. A speculator can buy a few flats off plan and charge stupid rents for the social services to house people. We have to pay for that. And ultimately most of that money makes it's way into the bankers pockets.

 

If rents were controlled, then some of the money saved by government in not having to pay high rents could maybe then put into a pot for building more social housing?

[ballaughbiker]

Agreed except for the max number of houses owned . Not sure how that would be workable as there would be many ways to get round such a rule. I would have no objection to controlled rents as long as it didn't follow the ludicrous controlled rent of the present statutory tenants which usually is around 50% of market value. If they were controlled to that degree, most landlords who could would find a way out exacerbating the situation. Rents might come down but if the numbers available at these lower rents decreased, it wouldn't be much help.

 

What's a renting business? That is a difficult one to define...My son's landlord who allegedly owns 60 houses in geordie land definitely does have a renting business but is likely to have bought them as buy to let.