Why is there a shortage of property to rent?

[TwinklingFairyLightz]

This seems to be a post pandemic phenomenon. Rental prices are increasing due to a shortage in available properties to rent and there are bidding wars on properties that do come up.

Why is there a sudden shortage? Is it demand ie an increase in people looking to rent or supply ie less available properties?

In my area there is hardly anything for sale or to rent.

Oh that is interesting.

it just seems so sad doesn’t it that it’s turned into such a shitshow

there are enormous problems with the quality do a lot of housing association places and the money to fix those will
be enormous.

@loveisagirlnameddaisy - Section 24 is the restriction of mortgage interest. So it effects the way profits are calculated but they are still taxed the same as all other non-savings income @20/40/45%. No idea where your 60% comes from other than the quirk I described above which is uncommon.

The rents on social housing were paid for by tenants out of their salaries, so although council housing was not for profit, it was sustainable. The rot set in with the 1979 change to needs based allocation - priority was given to those out of work etc. That's when council estates started to get a reputation for anti social behaviour and also, a lot of the voting public know they'll never get a council house, so building more council houses isn't a vote winner because the perception is they'll be built and given to the unemployed, migrants etc. This last bit probably isn't a popular point.

A place I rent out in London is currently rented at £1350. If I put it on the market to rent now it would be on for £1900.

see and this is the dilemma - either you have landlords who have so much money that a few hundred pounds doesn’t make a difference so they can leave it withou an increase. But that doesn’t seem fair either does it.

the people living there are from Eastern Europe over for a few years no internet in buying here.

£550 even after taxes etc etc would still make a noticeable difference to me. But then there is also the risk that they’d move and I’d get a void and then bad tenants. So I’ll probably only do a small increase.

and it’s been quite stressful over the years having it.

I think people think landlords are this personality less grey uniform group of people but it’s just bot

o have properties because I move around and rent myself and I wanted to have money still in property. It’s a solid asset class.

people are never as outraged about timpsons making money from fixing shoes or dentists making money from essential health care.

my view is that a good landlord provides - at risk and stress to themselves - a valuable service.

but I also think there should be more and better regulation - it not what they have done and are going tondo

As I said, I was too short. I've been on Twitter for a while and am not used to long posts. I did explain in a later post that 60% lost to fees, taxes etc was the experience of one landlord who is trying to fully retire.

Whatever the nitty gritty of the tax, fees, other losses to landlords when they sell, it must be quite onerous for some as he isn't the only one I have heard of. But I am a clerk, not an accountant and am happy to be corrected on the detail.

Oh that’s also interesting

I think one of the challenges that the uk has is that there is so much sociaL and class history behind so much that it is difficult to creat new and forward looking innovations that aren’t i helpfully compromised by all the history and the social relationships surrounding it all.

it can be baffling to an outsider

@SamphirethePogoingStickerist - I see about 150 landlords tax returns a year. They are overwhelmingly in the black. The very few who make a loss it is a short term thing, normally in the first few years. None of them are looking to sell. Of the thousands I have ever seen, I’ve only ever seen 1 have one of the sorts of tenants you’d see on one of those Channel 5 shows. The odds are very much in the landlords favour.

@Onandupw - houses are a finite and expensive resource. The lack of NHS dentistry is front page news today.

I'm waiting for my tenants to leave before I sell. Mostly long-term & I'm very aware that it's people's homes.

Problem is that my mortgages will need repayment before anyone goes, at this rate. If there's no supply, there's no turnover.

@Onandupw

Timpsons probably not a good example. They're quite an altruistic company.

But that’s the point - private companies can be altruistic. And government regulation can set minimum standards so they aren’t awful.

wirh innovation property does not need to be finite or expensive.

But the problem is that governments don’t seem terribly keen to set necessary minimum standards or to establish a regulatory framework thst encourages innovation.

woth the current uk lot it seems to me that this is because most of those in power directly or kinda indirectly but close enough benefit feel having a housing and rental system
that fosters exploration and inequity

Air BNB, student housing in university cities and towns.

@TwinklingFairyLightz - oh yes that’s very true, last time I was having my shoes reheeled the woman serving was telling me how amazing the company had been when she was having mental health issues and what great employers they were. It was heartening.

Post war until Thatcher - the working classes had it good. It was because there weren't enough people to fill all the jobs. Apparently you could walk out of one job at lunch time and have a new one by the end of the day.

It was also the period of mass free education and health for all. Grammar schools (not everyone agrees with these). My dad was a beneficiary of one though, generations of quarry workers and he passed the 11 plus and ended up at Uni - this just wasn't an option for previous generations of his family. Free university as well.

All started being dismantled due to globalisation and neo liberalism. Paul Mason writes well about how the western working classes lost most to globalisation.

There is a shortage as people hate landlords until they realise they serve a need.

I am a landlord myself and I am glad I am able to buy more and charge below market rate to tenants to have safe and comfortable housing. Couldn’t give a monkeys what society or MN users think to that.

@Plumtreebob

Working with prisons to give leavers jobs too.

Utter rubbish.

tax returns tell you bugger all. If that’s your compass on what a landlord is doing than you’re looking at it with one eye shut.

*The population is increasing much faster than the housing stock.

Illegal migration has tripled over the past 4 years, while the government is falling well behind on building (thanks to the rocketing cost of materials and labour shortages).*

This is probably one of the reasons but be prepared to be called racist for saying it.

@Zeus44 - pray tell, how else would one discern the profitability of a landlord than rental accounts and tax returns. There aren’t many altruistic landlords around, if any.

The problem is the government has never sought to develop a proper professional private rented market, as other countries have. Instead the market consists of a lot of individual landlords, often with one or a small number of properties.

Successive governments has colossally failed in every area of the housing market. It sucks.

UK population in 1954 was just under 51 million. Population in UK in 2021 just over 67 million. I think this explains why housing, education and the NHS are struggling to meet the needs of the population.

To be clear I think Timpsons are great and an aspirational corporate model

I'm a landlord and often frequent landlord forums where there is a lot of chat about people getting out of the game. Many are doing so for all the reasons listed above - EPC, removal of S21, change to tax. My dad's a landlord and he is selling up - although that's motivated by his age too. I also have a friend who has just sold up.

I think there have been properties on the market - certainly near me there has been a lot of activity, lots of places for sale - and it's now starting to slow. I believe that properties aren't being bought by smaller landlords who want ongoing tenants. Many houses near me are in a bidding war - mainly people wanting to buy it to live there based on what I have heard. I suspect far fewer people are starting out in BTL at the moment or adding properties. Plenty of AirBnB activity - the tax regime for this is a lot better than for ordinary letting.

I don't really care if people bash me for being a landlord. Bit unfair though, you don't get bashed for putting more in your pension or making other investments. I'm a good landlord - follow all the regs, charge a fair rent, these days I self manage and have a good relationship with tenants. I'm just offering a service and like many, I'm an accidental landlord, I rent out my old home in another city and although it's a great investment the reason I do that is because I believe I will move back there some day.