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To worry that poor renters will not be able to afford the rent rises

(29 Posts)
skustew Thu 02-Nov-17 12:18:09

With the bank of England doubling the base rate value this will mean lots of landlords will need to increase the rent to make a profit.

Some are barely affording rent as it is, how will they cope with an increase?

Gromance02 Thu 02-Nov-17 12:20:37

The same way that people that have a mortgage on their own home will have to manage.

hidinginthenightgarden Thu 02-Nov-17 12:21:07

They will have to make even more cutbacks and hope they survive. I don't know how but some may have to look at moving to cheaper areas etc and others will probably be pushed to needing foodbanks.
I worry what happens to renters when they retire? Many unless they have a private pension will not be able to afford to continue renting.

BarbarianMum Thu 02-Nov-17 12:21:14

I don't think that's how it works. You can only rent a property for what someone is willing/able to pay - if the rent goes to high, the property sits empty. More likely is that By-to-let landlords will make lower profits. Some may find their properties uneconomical and will put them on the market. Whether this is good or not depends on where you live.

skustew Thu 02-Nov-17 12:25:02

Once you retire you can get full housing benefit and no bedroom tax, so retirment will be ok but it will be a struggle for people to reach it!

londonrach Thu 02-Nov-17 12:25:33

Doesnt work like that. If rents too much property doesnt let. Rent is set at price unless its reviewed by ll has to give notice etc and renters dont have to accept. We turned a rent increase down once (ok risk leaving but ll gives 2 months notice) but we weregoing to leave soon anyway. Was just kept on the original price

whatsthebestoutc0me Thu 02-Nov-17 12:44:44

Yes if rents get too high people just won't/can't pay them. Not necessarily a problem for all landlords, just those mortgaged to the hilt. Also the banks have got stricter in the last few yrs.

Awwlookatmybabyspider Thu 02-Nov-17 12:48:07

YANBU. Its all very well people banging the "cut back drum", but a lot of people are just about existing as it is. What do they cut back on food gas electricity.

skustew Thu 02-Nov-17 12:49:07

But what if all landlords increase them where will people go?

Im not worried about people with mortgages as they have gone through stress controls. I still plan for 6% interest in my mortgage when I was buying it to make sure I could still afford it

SloeSloeQuickQuickGin Thu 02-Nov-17 12:49:31

Once you retire you can get full housing benefit and no bedroom tax, so retirment will be ok but it will be a struggle for people to reach it!

Can you qualify that statement please. Because there are forever threads about pensioners living in penury.

specialsubject Thu 02-Nov-17 12:50:13

doubling - from tiny to not quite as tiny. It isn't actually going to make much difference. Landlords whose business model can't stand this will have to sell up. Which is what MN wants so where's the issue?

It certainly won't make any difference to savings, vanishing with inflation about 5% (30% on fuel bills).

Cantspell2 Thu 02-Nov-17 12:50:40

Do you also feel sorry for the pensioners who have seen their retirement income disappearing over the last 8 years with bank rates being so low?

Stringofpearls Thu 02-Nov-17 12:55:41

I don't think you are being unreasonable, but I believe there are quite strict rules about the introduction of a rent rise, so perhaps that will help in the short term.

whatsthebestoutc0me Thu 02-Nov-17 12:55:52

But what if all landlords increase them where will people go?

From my understanding people will move further out & commute. Perhaps move in with parents if possible, rent a room in a family house. Or just relocate, I've read that the numbers of people leaving the capital is at a record 5 yr high (people in the 30s being the most likely to leave).

doomlands Thu 02-Nov-17 12:56:15

SloeSloeQuickQuickGin I get pension credit as a pensioner on a low income and it passports me to full housing benefit and council tax reduction.

www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/housing-benefit/

Pension credit is low, but we manage on it as we've always been on a low income - overall our income is similar to what it was with one earner, once you take into account the council tax reduction and no commuting costs.

DJBaggySmalls Thu 02-Nov-17 12:56:26

YANBU. People will be made homeless, there isnt enough social housing to cope.
Abstract economic concepts such as the market setting limits on rent increases are a separate issue from the effect on people.

Bombardier25966 Thu 02-Nov-17 13:00:45

Once you retire you can get full housing benefit and no bedroom tax, so retirment will be ok but it will be a struggle for people to reach it!

In the private sector full housing benefit (local housing allowance) is set at the 30th percentile, so rarely covers full rent.

As you mention bedroom tax I'm assuming you're referring to social housing (it doesn't apply to the private sector). Many people are not able to get social housing.

thecatneuterer Thu 02-Nov-17 13:04:37

It's not how it works. Rents are set, generally speaking, according to supply and demand. Just like all other prices. If LL's costs go up they may try to increase rents, but if the market doesn't support it they won't be able to.

Rents in London at least appear to be falling (well they are in the market I'm in). If LLs are so close to the edge this will make a big difference to them then they may have no choice but to sell up or to swallow making no profit/a loss for a while. But it doesn't mean that rents will rise.

fpurplea Thu 02-Nov-17 17:16:04

Think you're being a touch overdramatic tbh. It's going back up to what it was before the EU referendum, and they're aiming to get back up to 1% for 2020. That isn't in any way unreasonable. They used to change multiple times in a year. ichef-1.bbci.co.uk/news/624/cpsprodpb/17F59/production/_90673189_baserate_chart1976_2016.png

I'm firmly of the belief that they should have been raised 4 or 5 years ago.

specialsubject Thu 02-Nov-17 17:57:28

Also worth noting that many landlords don't have mortgages - a fact that escaped Osborne and his monkeys. So interest rate change makes no difference.

ChelleDawg2020 Thu 02-Nov-17 18:10:21

People will fail to pay and be evicted. They will have to move somewhere cheaper and/or somewhere smaller. (This usually passes the problem on of course, because the people living in the cheaper/smaller places are forced down the system too.)

The best thing to do is start looking around now, before landlords start increasing rents and interest rates rise further. Look for somewhere a step down on the ladder from where you are now (2 bed > 1 bed, 1 bed > studio, studio > bedsit, bedsit > shared house, shared house > shared room). Find somewhere cheap enough so that you are "only" paying 20% of your income, so that you have some wriggle room when rents rise.

I don't think someone who is barely making payments now has much choice. Find a way to get more money coming in, or spend less.

Life's a cunt, as they say.

expatinscotland Thu 02-Nov-17 18:17:35

It's a bloody 0.25% hike up from 0.25%! It's still nowhere near 1 and people are acting like the sky is falling.

Happyhappyveggie Thu 02-Nov-17 18:20:00

Two words - Rent controls!

Biggreygoose Thu 02-Nov-17 18:28:11

For the average mortgage the rise is about £10 a month so let's not go crazy just yet.

I imagine most landlords will just swallow the decrease. By the time you have farted around sending letters and instructing agents etc it probably isn't worth it.

Biggreygoose Thu 02-Nov-17 18:30:37

And of course the rate rise will only immediately affect tracker mortgages. Won't make a blind bit of difference to a fixed rate atm .

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