Landlords are selling up in droves

[MNisMyGuiltyPleasure]

I am a landlord. Not full time but I have a couple of flats I let out. I have been for many years and bar twice, have always had good tenants. I am still friendly with a few of them who moved out to buy their own place, in fact. I go above and beyond what's expected of me because I want my tenants to enjoy living in my flats. However I am getting more and more concerned about the hike in costs related to letting properties. This has already started driving many, many LLs to sell up, with the result that the number of private rentals is dropping, driving rents up. And I'm serious thinking of selling up and finding somewhere else to invest my pension.

This morning another landlord shared this article www.property118.com/property118-founder-selling-his-best-property/ and this started a conversation about the risks of letting, which are only making more people get out of the lettings market.

So to all those people calling landlords greedy, and saying they shouldn't put rents up: if they are, it's likely they are because their costs related to letting are going up, and they need to cover themselves to meet additional costs should tenants not pay (cost of living or whatever other reason). My accountant last year told me to assume I will only make money from my flats when I come to sell them, and to budget to break even at best until then.

I get that shelter is something everyone should have, but please don't blame landlords for the hike in cost of private rents. Because if they all left the market (which may well happen at some point), the situation would be worse, not better, for tenants.

I am sure I will get a few people to flame me for the above, of course. If they do, I'd love to hear if they are renting, letting, or if they own their homes.

New Labour didn’t help either. I am interested in what Starmer’s Labour housing policy will be in the run up to the next general election. I truly hope a commitment to building more housing.

Wow there are so many bitter people commenting on this post. I bet most of you would buy and rent out a property if you could afford to. If you knew it would make you money.

If you don’t want to rent off of a private landlord, don’t!

If you don’t want to rent out a property, don’t!

But stop bloody complaining about it. Many people would be homeless if there weren’t any private landlords. Blame the government for not providing enough social housing and selling a lot of it.

They built them and then sold most of them. They should never have allowed tenants to buy the properties. There wouldn’t be a social housing shortage now if they didn’t

If you don’t want to rent off of a private landlord, don’t!

For those who cannot (yet) afford a mortgage, or who wouldn't qualify for social housing, what housing options would you suggest, other than private landlords?

"If you don't like X then don't buy X" is an argument that can only sensibly be made for truly discretionary purchases - like diamond rings, books or flowers.

It's not an argument that can be made where the purchases are one of the fundamental necessities of life. You presumably wouldn't say "if you dislike water companies policies on discharging raw sewage into the sea then stop drinking water and washing".

Safety critical things which are fundamental basics - like food, water, electricity, gas and shelter - must be heavily regulated because people have no practical alternative to purchasing them from one of the providers on the market. Without regulation, providers have a tendency to allow standards to drop, especially if there is inadequate competition and so consumers lack sufficient choice between providers.

Wow there are so many bitter people commenting on this post. I bet most of you would buy and rent out a property if you could afford to.

I own a home, and I am a live in landlord. I was also a tenant in the recent past. This isn't about being bitter, it's about empathy.

My thoughts are that governments shouldn’t have tried to help the “poor tenants” paying hard earned cash to private landlords because all they have done is made the “poor tenants” even poorer

Why do you think private landlords don’t run their properties as a business whether or not it is a retirement fund.

It seems ok to take new build properties off the market if they are “sold” under the guise of part buy part rent and it’s a large company that is being propped up by peoples pension schemes and retirement funds

But not ok for an individual to actually own a few properties that are run as a business for their own retirement fun

I think that this manipulation of the laws around btl is quite fishy. The governments seem hell bent on taking out private landlords without anything to help the tenants or would be tenants they say they
to want to help

I wouldn’t be surprised if they get the situation to a fraught state then introduce laws and a “new” company that will sort out the private rental system and in time you will see those in charge of making the rules on the board of the company. Or being paid to advise the company.

I find it hilarious that private renters think that we need to get rid of private landlords
It’s similar to those that were celebrating when they thought that the landlord not being able to write off the mortgage interest amount against tax was only going to affect the landlord

It’s like turkeys voting for Christmas

The way people seem to think that landlords = Bad,
BTL = Bad

Solution = get rid of landlords
But then forget without a landlord they wouldn’t have a place to live

I get the impression that people think that large companies operating btl is ok as it is a business. As opposed to an individual operating a btl as a business is not a business.

I own now but rented privately for 12 years. Some small time landlords can be awful. No idea what they are doing, financially overleveraged, slow to do repairs, view the tenant as a convienient way to pay the mortage not a customer and in the case of "accidental" landlords emotionally over invested in the property they are letting out.

The private rented sector is valuable part of the housing mix, but it needs much better regulation. I would not shed a tear if a fair few crap small time landlords were pushed to leave the market and found an investment more suited to their abilities.

You don’t agree with us so you are just jealous! Are you 12? No, even if I had the money or inherited another property, I can honestly say I wouldn’t rent it out because I am fundamentally opposed to the concept. Just because your moral compass is different, doesn’t make me “jealous”.

I would never buy and rent out a property even if I was a billionaire. I don't want that responsibility!

@ChilliBandit out of interest, what would you do if you inherited a property? You say it's against your principles to be a landlord, so you would sell it and then invest it in..what? What is there to invest in that is as safe as houses? I can see the argument from both sides, but I do understand why people become 'accidental' landlords. The most obvious, and safest, thing to do with hundreds of thousands of pounds is to put it into property. I suppose part of the answer is educating people more about finances, so if they are ever lucky enough to inherit a property they don't really 'need' they know what the other options are, rather than just letting it out. I would want a return on the money, and to save it for retirement, but would have no idea about stocks and shares, for example.

@FatOaf , I stupidly got it arse about face. What I meant was of course that mortgage interest tax relief was retained for BTL, but scrapped for owner occupiers. Which was grossly unfair.
Memo to self, check before posting!

It does seem weird that it was a Tory chancellor who started to redress the balance, and also scrapped the automatic 10% (of rental income) ‘wear and tear’ allowance - LLs can now claim only for expenses actually incurred.

As a LL myself (one small property) I do wonder how many LLs fail to declare their rental income. If you have no mortgage, don’t use a letting agent, and don’t live in an area where you are obliged to register with the council, there is nobody you are legally obliged to tell that you are renting out a property. The self assessment tax form doesn’t ask for addresses - only how many properties.

A friend of a dd, a hospital doctor, moved for work and rented out her flat elsewhere. During a conversation with two fellow doctors, a married couple, she was told she was ‘mad’ to be declaring her rental income: ‘We never have!’

It did make me wonder how rife it is - perhaps especially among the worse type of LL, failing to bother with maintenance and repairs, and often (I dare say) demanding rent in cash.

If I inherited a property I would sell it and use the money to pay off our mortgage or move somewhere bigger. Anything left would be put in to my pension pot.

That is rather moot as neither mine or Mr Monkey's parents are/were homeowners.

Totally agree. Rents will just get higher. I actually expect most private landlords will give it up in time and we will end up with only commercial landlords. Indeed i wonder if that’s the long term aim.

@ohyouknowwhatshername - what an odd question. I would sell it and do what the millions of people who aren’t landlords do? Stocks and Shares, savings accounts, buy a nicer house for my family. Or if my child is an adult by then gift it to them if they want it. The housing market has only been a “safe investment” since the last crash, there will likely be another. Even so, my right to a safe investment doesn’t give me the right to hoard the finite essential resource that is housing. My DH is more likely to inherit property than me and he is even more anti private landlords than I am, so rest assured there will be no landlords over here.

I think the point that many are failing to see, is what is already happening in Scotland, where we have increased legislation & regulation, better tenants rights.

Private LL are increasingly risk-averse & won't take on certain categories of tenants, such as those on any sort of benefits, students, single parents, those with pets - with the property shortage, LL can pick & choose. There is massive competition for rentals, and some can't compete.

Many LL have sold already & more are planning to once the current rent freeze stops at the end of March. The Scottish government has prevented LL increasing rents.

So where are those "undesirable" tenants going to go?

There isn't enough housing, full stop & no solution from the SG in terms of building more homes.

If only the concept of social housing existed.

I agree OP. Its really strange in every other area of business conpetition is encouraged on the premise that it keeps costs down. I'm starting to seriously think that the idea is to get private landlords (and private homeowners) out all together and then we will all be at the mercy of the big corporates.

I would be interested in any research/info into exactly which type of landlords are giving up. I suspect that they are the "accidental", pension for the future & small portfolio ones.

The extremely wealthy people who own very large land & property portfolios, managed through multiple companies?

I suspect they will probably be continuing to increase their portfolios...especially if property prices do drop as some suggest.

Its all about having somewhere to put all that lovely money that you don't actually need.

Wealth that most of us can't comprehend. Wealth that means they NEVER have to touch their capital.

Yeah, this is a fallacy promulgated by free-market liberals. Things that are a social good, such as housing, healthcare and building are not amenable to a fully open free-market, ‘competition-is-king and will always provide the best outcome’ approach. The value of peoples’ lives has to be regulated for, and protected. Look at the free-market US healthcare industry, you can hardly say it’s doing the best for everyone through open competition. Or look at the fucking awful insulation companies that cheated a lax regulatory testing system and installed flammable cladding on the outside of Grenfell. Profit and people’s lives don’t have the same goals at heart, much as it would be convenient to believe that. Until the post-war period we had people living in hovels, social housing revolutionised that. If we aren’t careful, the free market will suck all of the value out of housing and have it go back the same way.

There is a grown in pension funds investing in private residential rented accomodation again.

If they are decent landlords I don't have an issue.

I will also always support the right of renters to have decent landlord and secure homes over the right of individuals to invest in property. Some small time investors are good landlords, toi many are completely unprepared and a bit shit.

Not an odd question at all. It's good that you understand stocks and shares, but I expect most people don't. So putting money into housing is seen as the easy option.

How is it the easy option? You have to pay to maintain the property, run the risk of bad tenants, the asset is illiquid, you ha e to do a lot of hard day to day work or pay someone to do it.

It sounds rubbish compared to an investment fund.

Well, people understand it. You know you're going to get a monthly income, you know even you've paid off the mortgage that monthly income will be all yours. That can be part of your pension income. You know at the end you can sell the property or leave it to your children. I know nothing about returns on stocks and shares.

@ohyouknowwhatshername - I only have a rudimentary understanding of stocks and shares. That’s what managed investment portfolios are for. The likes of Hargreaves Lansdown, Fidelity, Quilter Cheviot etc.

Indeed. That post explains so much about amateur landlords 😬 property really really isn't an easy investment.

How patronising!
My brother is a landlord. He uses a letting agency. They deal with everything. He gets income for doing nothing each month. And yes, I am jealous!