> I'm one of those who is in the middle and work; I rent in an up-and-coming area (i.e. people look down on it until they come here) and rent is going up 8 times salary. We are already at rent being 30% of combined salary.
Ditto (Brixton). Flats in my area are already at the £350k (2 bed) mark, with landlords upping their rent accordingly (having bought the flat for < £200k 9yrs ago). My solution is moving further South (Surrey) near a good train line which gets you into Victoria/London Bridge in 30 mins. The rent on a flat/house out there is ~50% of what it is in London, not to mention cheaper council tax/insurance/etc.
>>As usual here, my impression is that it comes down to housing costs: we don't have rented accommodation that is small and cheap any more
You can, it's always a question of how much you want to sacrifice for it. A friend of mine is renting a room in a 5-bedroom house for 350/month, all bills and council tax included. I pay about 950/month for a 3-bedroom house with a double driveway and a garden. To me, the reduction of utility is not worth the 600/month saving, but it's absolutely not a problem to find a house to rent for 500-600/month, you just have to move further away from the city.
(unless, of course, you are talking about London - then this entire conversation falls apart)
> I was talking about buying - why throw rent money away.
London has some of the lowest rental yields in the UK, especially as you move towards the higher end of the market.
Renting is merely "very expensive", compared to buying which is "very, very expensive".
> I mean you can't increase rent past the point people are able to pay.
You can increase them past the point that people on lower wages/basic income can pay, driving them out of desirable or semi desirable areas to cheaper areas. See London as an example.
>I wonder how many renters are actually aware of this difference, versus just spending their extra disposable income on fancy clothes, booze, and gadgets.
Where I live (London), rent is more expensive than mortgage repayments.
> Now you don’t have to worry about installing good appliances or even nice carpet. The air condition doesn’t work well? Too bad, as long as it meets regulations (if any) then that’s good enough. Why would you if your tenants aren’t choosing based on competition? The tenants suffer, too.
I'm totally against rent control, but London's rogue landlords and its very low quality housing are world famous and people coming from all over the world spend the first 6 month adapting to crazy stuff like carpet, old carpet, 10 year old carpet, fucking carpet, windowless toilets, wooden walls, decaying electrical systems, holes in the walls, carpet (I can't get my head around the idea of having carpet in a flat), etc... and carpet (unless they are in the top 5% of the income distribution and can afford to pay 2-3K£ per month in rent). Air conditioning and half-decent insulation are for the top 1%.
Said that, I don't think London's problem is lack of rent control, but rather it is lack of development of the rest of the country and the government artificially inflating the housing market.
> Think of it as a plumbing problem. Your primary people flow is between cheap rent and good jobs.
That's an interesting idea. Just thinking out loud, I wonder how one affects the other. I.e cheap rent -> create better transport links -> increased rent -> etc etc.
I know this is true with tube stations raising the cost of certain areas in London.
> House price problems are down to landlords being able to earn a living by doing nothing other than owning land.
Only 21% of the UK rents. I rented for ages because houses were too expensive to buy. Then I inherited some money from my grandmother and was finally able to buy the fourth cheapest flat in the set of all in every town, city, or village within 45 minutes cycling distance of work. This was only a few years ago, and I moved out because of Brexit and became a landlord myself because the alternative was selling and I still don’t think I understand enough German to know what my responsibilities would be as a property owner here in Germany.
Rents are exactly what the market bears. Charge a million a month and nobody rents your place, charge a hundred a month and you fire your estate agent. House prices follow rather than lead rental rates: follow, because if it’s cheaper to rent then people are less interested in buying (and vice versa); not lead, because rental rates are always and solely
about maximising revenue and therefore influenced only about what the competition charges, not how much the assets are “worth”. Build more houses, get more competition, rent and prices both go down.
On the other hand, speculative house purchases and people who buy with the expectation of selling for more, they did raise house prices; indeed, that’s pretty much what “speculative bubble” means.
> oh, I could spare 500$ a month by moving in the middle of nowhere, let's do it
For $500/mo sure. But if it's like people say and landlords try to raise rent $2k/mo like people are saying, then yes people would definitely move.
Also you could easily save $500/mo right now by moving from a big city to somewhere small. Right now, without UBI being a thing. The rent difference under a hypothetical UBI rent increase would be far more than $500/mo.
> One of the strangest things about rent increases in my area is that everybody complains about them, but few people ever bother moving out.
Why would they move out when everyone is increasing rents?
It's a net neutral result. If you're upset that rent is going from $1200 to $1500, then voting with your wallet and moving somewhere else doesn't work when rent is $1500 everywhere.
Apartment complexes don't compete on price. They don't have to, since every basically needs a place to live, and so they will charge as much as they possibly can. If minimum wage goes up $2, you can bet the landlords will be salivating over how they'll be able to increase rents by $300/month and capture the money, and renters will be stuck paying it because the alternative is to go homeless.
> it takes a lot of new housing to make a noticeable dent in rents
Eh. My landlord is already stuck unable to raise rent because there are ~4 brand new mid-rise complexes within a 3 block radius.
Why would I agree to their rent increase, if for that same price I can just move to a brand new managed property? So every year we negotiate and rent stays about sameish. Actually lower now than when we moved in pre-pandemic.
>> "Nope. If you were sensible you would put the money you saved by renting into investments, and you would have at least a year of runway before being on the streets. With a mortgage (assuming your mortgage is higher than rent, and you can't save much) you will have about 90 days before being kicked out."
That's assuming your rent would be cheaper than your mortgage. My impression is that it's the other way around and that's what my assumption was based on. Also, if you lose your job you can probably re-negotiate mortgage payments. That's not going to be possible when renting and if you have a family finding somewhere suitable (still close to schools/doctors etc.) and less expensive is going to be difficult - especially considering you'll need to come up with another deposit.
>> "Belfast is completely different to London in terms of commuting. Also, house prices haven't gone up the same way they have in London."
You must have missed the sentence before what you quoted: "Also, outside of London I don't think commuting is as big of a thing here."
>Also, the burden of being rooted, and of having to maintain a house, could be such a significant detraction to quality of life that it totally makes up the difference.
Yea, so I'm renting a house where my agreement states that I am not allowed to fix or improve the flat myself. All changes must be agreed and made by agency. Current faults in the flat include: leaking water from toilet flush since seal is broken, reported 2 weeks ago, reminded 3 times. Water bill is on me. I would be happy if I could fix it myself, I would save money on water, calls made to the agency and not have the noise of leaking water, it's annoying. Aver salary in my city is ~£22k, and average rent just hit £720 per month, if we add bills and council tax, it's ~£850 which is more than halt of average salary. Hopefully I work in IT-financial sector and my salary is higher. I would be much happier to buy a house and be rooted to this city than to depend on renting agencies and increasing population which pushes renting prices a lot.
I'm making savings now to save for a house, if I get a mortgage for 20 years, my average cost of it will be £440 which is 2/3 of my rent...
> So maybe rent control's effect on supply is vastly overblown.
Just because rent control negatively affects supply doesn't mean bad supply is only caused by rent control.
I live in London too and I'm baffled by the lack of tall buildings in pretty central parts of the city. The real solution is more supply.
> Rent control is a band aid while that happens to keep long term (especially elderly/vulnerable) renters housed.
At the expense of people who don't currently live in London but could, such as immigrants or people from poorer parts of the country finding a good paying job here.
>In the UK at least a mortgage tends to work out about half the price of renting in my experience
It depends where you live. It is only in London that house prices have risen to silly heights compared to income, so I assume that is what the article is referring to:
If you look at rental yields in the above graph, they have been sharply dropping in London in recent years. This makes sense if people are buying houses as investments: unless they're going to be sitting empty, they will be rented out and that will increase supply and reduce demand.
Essentially these London real-estate investors are subsidising cheap rents. So it's really a great way to save money by renting instead of buying, and investing your money in the stock market instead.
>If I had a family, lost my job, and was renting instead of owning/paying a mortgage, I would be on the street much, much quicker
Nope. If you were sensible you would put the money you saved by renting into investments, and you would have at least a year of runway before being on the streets. With a mortgage (assuming your mortgage is higher than rent, and you can't save much) you will have about 90 days before being kicked out.
>At least when I lived in Northern Ireland I didn't know anyone who commuted more than 60 mins to work and these people also owned houses in the suburbs.
Belfast is completely different to London in terms of commuting. Also, house prices haven't gone up the same way they have in London.
Ditto (Brixton). Flats in my area are already at the £350k (2 bed) mark, with landlords upping their rent accordingly (having bought the flat for < £200k 9yrs ago). My solution is moving further South (Surrey) near a good train line which gets you into Victoria/London Bridge in 30 mins. The rent on a flat/house out there is ~50% of what it is in London, not to mention cheaper council tax/insurance/etc.
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