# Will reduced lending to buy push up rents



## z104 (27 Jan 2009)

If the banks are not lending as easily will this force more people to look for rental accomodation as they cannot or do not want to buy just yet. Will this have the effect of pushing up rents?


And if the argument is that people will be out of work and unable to pay rent; does this not just mean that the state will pay their rent for them in the form of rent supplement?


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## foghorn (27 Jan 2009)

Niallers said:


> If the banks are not lending as easily will this force more people to look for rental accomodation as they cannot or do not want to buy just yet. Will this have the effect of pushing up rents?


 
No, because there's a glut of houses out there and there'll probably be net emigration from the country.


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## PaddyW (27 Jan 2009)

I can't see the rent prices going up. As foghorn says, already a glut of houses out there and any landlord who attempts to raise the prices will quickly have empty houses.


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## z104 (27 Jan 2009)

There is a glut of house in the suburbs miles from the city centre but there isn't a glut of decent houses in our around city centres.

People also have inertia when it come to moving home. I don't see people moving from their home that easily to go to a cheaper property. They have to come up with a deposit and move all their belongings, set up gas, electricity, inform banks and job and so on of their new address. Anybody that has moved before knows that it's a pain in the back side.


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## polaris (27 Jan 2009)

Saving a couple of hundred euro a month in these recessionary times will be a big incentive to move.


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## z104 (27 Jan 2009)

True but I don't see how a landlord can reduce rent by this much unless they own the property outright or have been making supernormal profits all along.


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## Howitzer (27 Jan 2009)

Niallers said:


> True but I don't see how a landlord can reduce rent by this much unless they own the property outright or have been making supernormal profits all along.


If the property lies empty and you've a mortgage to pay you'll reduce by whatever needs in order to fill the place. And if you don't the landlord down the road will. These are different times. Yesterdays rules don't apply.


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## Irishchappie (27 Jan 2009)

Rents are actually going down for a number of reasons.



Mass exodus of foreign workers heading home due to lack of work, so rental market demand dropping
Less mortgages being given out due to banks increasingly cautious approach to lending in the aftermath of the current financial crisis, so houses that were build are not being sold. And people are renting for longer to see what happens.
Uncertainty in the job market, so less people who can afford mortgages unwilling to take them until they know their jobs are secure
Huge amount of properties unsold are now being rented to cover mortgages. According to a Daft.ie, the amount of rental properties on their site has doubled in the last 3 months
We negotiated a rent reduction in our house with the letting agent last month, they dropped it by over 10% as we basically said, either do it or we leave for another identical property a few doors down that was going for a lot cheaper.

I.C


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## Irishchappie (27 Jan 2009)

Niallers said:


> True but I don't see how a landlord can reduce rent by this much unless they own the property outright or have been making supernormal profits all along.



True, but landlords may have to bite the bullet and supplement their mortgages by contributing to their shortfall from rental rates dropping as with the glut of new rental properties now on the market, 
I can see people paying over the odds unless they have a particular reason for having to, such as moving families etc.. 

A big chunk of the rental market is single people or young couples and they will talk with their feet by moving as soon as leases expire..


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## JohnBoy (28 Jan 2009)

Niallers said:


> True but I don't see how a landlord can reduce rent by this much unless they own the property outright or have been making supernormal profits all along.


 
The landlord is a price taker in this market because the supply of properties for rent appears to outstrip demand. Whether the landlord is actually making or loosing money on their BTL is of no interest to the renter.


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## cjh (30 Jan 2009)

Second graph...

http://daftwatch.atspace.com/



Niallers said:


> True but I don't see how a landlord can reduce rent by this much unless they own the property outright or have been making supernormal profits all along.


 
Then those landlords who don't reduce their prices will have empty properties.


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