Guardian - UK Residential Rents Tumble 16.3% Year-Over-Year

Can't help but wonder if we will start to see similar moves in New York. A glut of unsold properties hitting the lettings market since the beginning of the year has pushed rents down by as much as 25% across Britain. The figures will heighten concerns about the fragile buy-to-let market, where arrears and repossessions are running at double the level in the conventional residential market. Average... [more]

Can't help but wonder if we will start to see similar moves in New York. A glut of unsold properties hitting the ­lettings market since the beginning of the year has pushed rents down by as much as 25% across Britain. The figures will heighten concerns about the fragile buy-to-let market, where arrears and repossessions are running at double the level in the conventional ­residential market. Average rents dropped to £795 a month in February compared to £950 in May last year, a fall of 16.3%, according to property search engine Globrix, with the biggest declines registered by larger properties. It estimates that the number of new properties for let has jumped by 88% over the past year, with the biggest increase occurring since the start of 2009. Separate figures from website Finda­Property and estate agency chain ­Cluttons will add to landlord's woes. FindaProperty said that the number of rental properties advertised on its site almost doubled between September 2008 and February 2009, causing an "inevitable impact on rental prices". It said average rental prices fell from £872 a month last year to £830 in February this year, and that landlords are offering lures such as free satellite TV and free weekly cleaner in a desperate attempt to secure new tenants. Meanwhile Cluttons, a London and south-east estate agency, said rents have dipped across the board. "A surge in property supply, caused by the flood of home owners who are unable to sell and are choosing to let instead, is fuelling the supply/demand imbalance and driving rents down. This is good news for tenants, who are finding there is a vast choice of property available within their budget." Zaza Patterson, lettings manager, at Dreweatt Neate, a south west of England chain, said: "Over the past year or so, rents have been driven down by a rise in the number of accidental landlords, a rise in the number of repossessed homes, which are subsequently let, and units in new developments that just won't sell and so are also being let." The fall in rents or loss of tenants caused by unemployment will push greater number of buy-to-let landlords into repossession – and result in the widespread eviction of tenants. Properties are also taking much longer to let – on average 70 days compared with 55 days a year ago, according to FindaProperty.com. The number of buy-to-let mortgages more than three months in arrears increased from 7,500 at the end of 2007 to 26,800 at the end of last year. Figures from the Council of Mortgage Lenders last week revealed that a total of 4,000 buy-to-let homes were repossessed in 2008, compared with 2,000 the previous year. Graham Kinnear of Landlord Assist, a nationwide "tenant eviction and rent collection company" said newly unemployed tenants are as big a problem as a surge in property supply. But Andrew Smith, head of research at FindaProperty said he did not expect buy-to-let investors to ­abandon the property market and propel prices down even further. "Gross yields remain stable and could improve as house prices continue to fall." [less]