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by mytailorisrich
1755 days ago
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We'd need to look at demand versus supply, including new builds before we can point the finger at "investors", which may be convenient but not necessarily useful. Ultimately, market forces are what they are. If demand exceeds supply then some people will always miss out. There is also the problem of the amount of liquidity available. Since 2008 and even more since Covid mountains of cash have been created at zero interest rate and that partly explains assets' price inflation. Let's also not forget that many people cannot afford to buy, and don't want to for whatever reason, so decimating the private letting sector is not great, either, and will only cause rents to skyrocket. |
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It's not clear at all that changing the market forces to increase access to ownership by occupiers would lead to increasing rents, even with reduced supply of rentable properties.
At the moment, a lot of tenants would rather buy if they could, and are paying the same or more in rent than they would pay on an equivalent mortgage, plus rents are rising faster than a mortgage would if they had one. Rents are also rising faster than their salaries. So they would gain location stability and financial stability by owning, but they can't get a mortgage. Mortgages, like anything in a competitive market, are preferentially offered to the best-looking customers, and property speculators are better-looking than ordinary working folks struggling to make ends meet on their current and rising rent.
If those people could buy properties like the ones they are currently renting, rentable supply would go down. But demand would also go down by the same amount, and mostly from those competing to pay the higher end of rents currently. I think this would reduce average asking rents for the remaining tenants.