Extra tax for landlords

I don't see why running a rental property shouldn't be taxed - you are getting money from that, your property has value because of the infrastructure around it, it is recognised as yours thanks to land register and justice system, it's protected by the police.

Why shouldn't you participate on funding it?

@HoskinsChoice , the big corporations are the ones raking in the profits; not so much small private landlords. We are generally people who worked very hard all our lives and have scrimped and saved to provide ourselves with an income in our retirement. There are rogue landlords of course but we can offer a much more personal service and many of us do. I live 5 minutes drive from all but 1 of my properties and that one is only 20 minutes away. If our tenants have issues our phone is answered 24/7/365. We aim to rectify any issues the same day or as soon as humanly possible. Our properties are modern and regularly updated. We even had 1 tenant who was with us for over a quarter of a century he became very unwell and we were in contact with his GP and helped her by encouraging him to accept help. We kept an eye on him, got shopping and prescriptions for him and it was us who found him dead in his bed. We even went to his funeral.
Most of us are not monsters.

These corporate landlords who will be ‘swooping in’ to ‘snap up’ the bargains will be doing nothing of the sort.
They are not interested in 100+ year old solid wall terrace houses, 1930’s semis, a flat above a shop, nor individual flats with onerous service charges. They won’t buy a place that needs a new kitchen, or a rewire etc etc.
Yes they will buy/commission a new block of flats, or buy a row of brand new terraces, or even a new estate, but they won’t be touching the old dross out there. That’s not their game.

Boiling frogs.

Not only the unfavourable legislation, increased taxes and maintenance charges but the old "capital appreciation will bail me out" is well and truly up the swanny as interest rates have risen.

Easy come easy go I guess.

My heart sank on reading about this. Our LL has only 4 properties and we already know that he struggles to keep up with it all on top of working full time. He's a bit crap as a LL (slow and forgets things but is a nice person) but we are paying a bit below market rate but I strongly suspect that he will now sell. We will probably have to pay £200+ more a month and it looks like we'll have to leave the area that we've lived in for more than 20 years.

@Another2356 completely agree. I was lucky enough to inherit a property that was already rented out. I haven’t sold as the tenants have been in well over 10 years, I have kept the rent as low as I can and charge to cover my costs, well below market value. When these tenants choose to leave I am considering selling but then I will be hit with more tax.

yes I am lucky to have inherited a property but my family member worked hard and hard work should be rewarded. Unfortunately it seems to be case it’s not and not working or having children is.

They can’t just refuse to pay
the increase; they need to challenge it through the legal process and a tribunal will make a determination.

LLs on MN always seem to say they charge “below market rent” but obviously that’s not true of most LLs who do charge market rent.

Either way, it’s obvious that the solution is to charge more if the asset costs more to maintain. Not very nice for tenants I agree but it does seem like the government wants to actively dissuade smaller landlords. Whether that will help or hinder the housing market I have no idea. There did used to be a lot of amateur landlords and many of them weren’t great at meeting their obligations legal or moral so it’s good that those just playing at being LLs are discouraged.

However, there are good, smaller LLs too so it’s a shame for them & ultimately for their tenants who will end up shouldering the additional costs.

If a landlord wants to sell the property, that is valid grounds for ending the tenancy under Section 8 of the Renters' Rights Act.

How will you do that if your renters don't want to leave and dont want to pay more? Short of a section 21, which you won't be able to at all soon, if your renters simply say no to increases will they not just go to a rolling contract at the current rate if no compromise is found?

Large investors (eg pension companies) want long term stability. That means keeping good, reliable tenants and looking favourably on long term contracts. Much like how the rental market works in much of Europe.

“accidental” landlords will hopefully sell up, as will those who see providing homes as a short term profit. In many cases this frees up properties for first time buyers - I was a beneficiary of this when I bought my (ex-rental) first home a few years ago. One less house to rent was one more house for a renter to buy.

It is a shame that smaller landlords are being forced out of the market due to taxes being so much higher for invididuals vs corporates. Corporates and overseas investors are not a good thing for tenants - they can force up rents due to owning so many properties.

I’d encourage you to sell up OP. There won’t be fewer properties overall, but there will be fewer people hoarding the property we have for profit and more owner occupiers. Good stuff.

I have also earned money and paid PAYE tax on it. I have invested it in cash ISAs, savings accounts and premium bonds as I am risk averse at the moment.

If my appetite to risk was different, I would have invested differently.

You have made an informed decision to make an investment which carries with it a level of risk. And some of that risk is now being realised. I struggle to see what else can be said.

I will increase rent by about 5% next year having frozen the rent this year.
No doubt my tenant won’t be happy but I have little choice.

Can I rent from one of you lot please 😭
Only years our rent hasn't gone up was Covid.
Im antisipating another 100quid hike this Jan!

Same with us. I don't feel the need to put the rent up every year. Tennants was there for almost two decades and we only put the rent up by 200 in all that time. Because it's cheaper to do that then keep on changing tennants. Even one month empty wipes Out a rent increase. My profit has been in the house price increase which was always the point. To be on the property ladder and not let inflation price us out. The reason you don't meet many landlords like us is because tennants don't move out. They are happy. I'd rather have happy long term tennants. Churn costs a lot in renting. It's not all 100% ulteristic.

If we sell we have to pay capital gains tax.

We will probably sell as our current tenants move out. It's becoming less and less worth the amount of effort it takes to manage them. The new tax could have been worse though. We'll cope.

In common with many landlords, we charge the going rate when we advertise an empty house but then don't keep increasing the rent to keep up with the going rate. Good tenants are worth looking after and holding on to so we deliberately keep it cheaper than what they could find elsewhere.

Corporate LLs do not mange better. They are faceless organisations who will use box standard low quality fixture and fixings and work on a cost recovery basis. They don’t care how much is paid on maintenance or the quality as they will just recharge it to the tenant the following year as part of the rent structure:

Yes, I hear you.
Still, there are some people here asking if I'm going to blow up my property or why I want to increase rent. 🙄

I have 3 properties. I don’t welcome an increase in tax but it seems fair enough and I can’t seriously argue against it. We are in a fortunate position. It’s passive income, why should you get to pay less tax/NI than you would through a job?
I will have to review rents now anyway due to the renters rights changes, but I won’t be trying to screw over my tenants.

Keep telling yourself that.

If places are ‘shitholes’ it’s because the tenants have no respect for the property.

Wait and see what happens when the market dries up and investors steadily increase the rents so only high earning professionals have the capacity to repay.

Students, families and those in lower paid jobs will be sleeping in cars.

Exactly.

Landlords are making an income through rentals. The boom days are over. If so many hadn’t been slum landlords for so long it wouldn’t have come to this. Some of the best family homes in my city are carved up into HMOs, if more go back on the market there is a chance families can own them again.

This ^
Sell up if your investment is no longer making you enough money. You haven't lost money, you've got the value of a house 🤷

Im amazed at the amount of 'below market value' landlord I read about on here. After 30+ years of renting we've never met one!
Thinking that us renters will lose the personal touch of a local landlord compared to a big company is laughable.
My landlord lives in the next street and won't come amd fix our fence til it 'Blows down completely' 🙄