This seems to come up regularly in the "consumer sentiment" thread. However, I thought it might be worth a thread of its own to keep the arguments together.
The consensus from what I can gather is that rents will at worst remain static but they may even fall.
The reasons given are generally:
- Currently idle housing stock may be put on the rental market if it cannot be sold so the owner can reduce monthly losses
- Recent purchasers may rent rooms to help with increasing mortgage payments
- There is an oversupply of housing, even if houses currently let are sold, the rental demand will reduce (because someone has to buy) and the oversupply remains in place.
However, I think rents may increase. There will be less buyers and more renters. Even if there is no major shortage of rental supply, many of those renters will be willing to pay higher costs because:
- They will have no desire to buy no matter what the rental costs
- If they were previously homeowners, even vastly inflated rates will seem cheaper than the mortgages they escaped from.
The consensus from what I can gather is that rents will at worst remain static but they may even fall.
The reasons given are generally:
- Currently idle housing stock may be put on the rental market if it cannot be sold so the owner can reduce monthly losses
- Recent purchasers may rent rooms to help with increasing mortgage payments
- There is an oversupply of housing, even if houses currently let are sold, the rental demand will reduce (because someone has to buy) and the oversupply remains in place.
However, I think rents may increase. There will be less buyers and more renters. Even if there is no major shortage of rental supply, many of those renters will be willing to pay higher costs because:
- They will have no desire to buy no matter what the rental costs
- If they were previously homeowners, even vastly inflated rates will seem cheaper than the mortgages they escaped from.