Property Inspector: Generation rent: Madrid vs. London
The state of the UK buy-to-let market is no secret: even as Help to Buy helps people climb the property ladder, tenant demand stays strong. But how does Britain´s rental sector compare to Spain? TheMoveChannel.com´s podcast compares the experiences of a Madrid renter to a London letter.
- Buy-to-let booms in Britain
- Spanish housing crisis good news for tenants?
- 9.1 per cent of Madrid rents reduced in October 2013
- Rents in London up 4.9 per cent year-on-year in October 2013
TheMoveChannel.com´s Property Inspector: taking a closer look at global real estate each month.
The housing crisis has left a lot of UK house hunters stuck as tenants, with landlords able to snap up the houses that are available and charge high rates. For Spanish renters, though, the housing crisis may have been a good thing, judging by the Property Inspector´s chat with Silvia Platero Peña, as large supply and low prices appear to produce favourable conditions for tenants.
Indeed, according to idealista.com, 6.3 per cent of all homes listed for rent in Spain reduced their rates in October 2013, 11.5 per cent higher than the previous month. In Madrid, 9.1 per cent of rental prices were reduced.
In London, meanwhile, rents jumped 4.9 per cent year-on-year in London, according to LSL Property Services, while the number of new tenancies also increased – that demand has helped to push up rents throughout 2013. Help to Buy is helping to slow down that demand and stabilise rents, according to other indexes, but the broad conditions remain the same.
In terms of investment, another idealista.com report shows that the gross return on a rental property in Madrid was 4.2 per cent in the second quarter of 2013. In London, rising property prices have offset rental incomes, leaving the UK capital outside of HSBC´s top 10 buy-to-let hotspots in April 2013. Even so, the highest yields available in the UK capital were 6.15 per cent in the borough of Southwark, much higher than Spain´s capital.
The head of research at idealista.com, Fernando Encinar, says the discounted rental rates “clearly shows that property owners are aware that price remains the determining factor in closing a deal”.
Are Spain´s landlords more sympathetic to growing numbers of cash-strapped tenants amid high levels of unemployment?
Silvia´s friend recently moved flat in Madrid. Steve recently moved flat in London. We record a conversation between them discussing their experiences of renting property.
Click here to listen to the full discussion.
How hard was it to find a place to rent?
Silvia: It was easy for her. She wanted to move but she didn’t spend much time looking – finally, she found it by chance!
Steve: It was quite tough, mainly because there were so many people looking at the same time. Our specific budget, below £1,000 per month, is also pretty rare in London, which made it tougher.
Are there many homes/flats available on the market?
Silvia: Yes, there are many flats available on the market.
Steve: It depends on location and price. I think the main problem is competition for the supply that there is, with a lot of people renting because they can´t buy.
Are there lots of people fighting over the same rental property?
Silvia: People don’t fight over the same home, because there are many places to live.
Steve: Yes, competition is high. If we viewed a home one day, it could be gone by the time we made an offer.
Did you have to be quick to sign a contract before someone else moved in?
Silvia: No
Steve: Yes. To secure the flat, we made an offer on the spot while at the viewing and also paid a deposit to reserve it.
Was your landlord willing to negotiate on how much you pay?
Silvia: Yes, he let me negotiate but not too much.
Steve: Yes, he was willing to negotiate, although not by a huge amount.
Are rents more expensive now, in your opinion?
Silvia: No, the cost of renting rooms has dropped €100.
Steve: Yes, I think so. Our landlord is now trying to increase our rent when we renew the contract next month to keep in line with rising prices around the area.
Was it harder to move flat now than when she last moved?
Silvia: No, now it is easier because prices are cheaper and there are more houses available because of the crisis.
Have you ever considered moving to another city or country?
Steve: No.
Silvia: Yes, she would like to move to any country, she doesn’t care where.
Notes to Editors
Founded in 1999, TheMoveChannel.com is the leading independent website for international property, with more than 800,000 listings in over 100 countries around the world.
The website address is http://www.themovechannel.com and the office address is 24 Jack´s Place, Corbet Place, Spitalfields, London, E1 6NN.
Contact Dan Johnson on 0207 952 7650 for further information.