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.

TBF in my very last rental (before we bought) I was baffled by how to change the recessed spot lights in the bathroom and I was the grand old age of 32.

I eventually worked out you needed to pop off a metal collar which then let the light hang down. You changed the bulb, pushed it back in to the recess and replaced the collar. It was a very fiddly job, so I can imagine inexperienced or nervous tenants might have called the landlord for advice.

God you have such a low opinion of renters/tenants.

@MNisMyGuiltyPleasure I also think it is unfair to accuse renters of not knowing how to run a household. Many haven't been given the chance to learn. I have taught myself a lot of DIY and decorating skills through experimenting in my own home (sometimes less than sucessfully!), in a situation where in some parts of the country people rent until their mid thirties and are not even allowed to do as much as put up a picture in thier rental, how are they meant to learn these skills?

@Ginmonkeyagain - you are forgiven for not knowing, they are a right pain and some of the LED bulbs can’t be changed either, the whole unit has to be changed. Spent ages trying to work out how to change the spotlight in my kitchen, gave up and called the electrician who explained it was an integrated unit and he gets lots of people calling about them.

Ha ha - they are horrible aren't they. When we redid the bathroom in our current flat I put in one of those single "flying saucer" type lights rather than recessed spots as I hate changing them so much.

Agree with both your points.

Sounds easy, doesn't it?
Maybe not so easy in reality though.

Unless they have an agent, LLs are on call 24/7. They're the first person called if a tenant loses their keys, for example. Or if the washing machine stops working. Or if anything stops working. Remember that most tradespeople charge hefty call-out fees, but it's all included in the rent for a tenant - even if the problem is one of their own making ( the aforementioned lost keys).
Just trying to give a balanced picture, we all tend to see things from our own point of view, but there are two sides to every story.

Tighter regulations means driving more of the good landlords away from the market and increasing demand with a smaller and smaller pool of properties and so driving up rents

The crap landlords and those landlords that rent out sheds in back gardens and overcrowded rooms with mattresses on the floor will take no notice of any regulations or legislation brought in. It will be business as usual
There isn’t enough people or time to prosecute or bring them into line when the landlord will just change the ownership of the company to a different business name or to a relative.

If you want a choice of good rental properties with cheapish rents then scrap all legislation and open up the market.
If there are too many rental properties then cost will come down and tenants will have their pick of places that have nice kitchens and bathrooms that suit them at an affordable rent otherwise if your property isn’t attractive to them then there are 150 other properties to look at.

Make a list of what the legislation would have made a landlord provide i.e smoke and carbon dioxide alarms, (although these I think should be a given) insulated walls, double glazing etc and people can decide what for them are necessities or non necessities and make it a tick box list for when they are viewing.

It will then mean at a cheaper rent rate people can save for their first place and the market will level out.

I think what is happening is we seem to be going backwards and making getting a rental property harder and harder as landlords eventually will leave the market.
When I rented my first property the amount on the market was minuscule and non were very pleasant as landlords took a risk in renting to you as to get your out was incredibly hard and the rents didn’t leave much over for any repairs or renovations. Not that they would spend money on something they might never see again.

The change in legislation in 1980 opened up the rental market and landlords did spend money on their properties to get a better return and the amount of rentals meant that the cost was lower than to rent.

It has only been since all these new regulations (like the ban on counting interest against tax etc) have come in that rents have been rising with each new rule.

Nice try Milton Friedman but an open market without regulation will make things 1000x worse. Tighter regulations and enforcement of those regulations are needed. If the good landlords are providing a good standard of housing they have nothing to fear do they.

I don't think fear is an issue, it's more that for some years landlords have been leaving the market to chase easier returns elsewhere. It's creating a real crisis in (I can only speak for London) with crazy levels of desperation for what private-rental stock there is (and consequently rent inflation a long way above other price inflation).

The policy has advantages for tenants but also disadvantages, but I don't think that this has been explained.

Apart from getting fed up of jumping through more and more hoops and leaving and taking their properties with them

We can see that more and more regulations = Less choice of properties and = higher rents.

Less regulations = More choice and of properties= Lower rents

Can you explain the advantages for tenants all this new legislation brings if you get riced out of renting anywhere.

You forgot less regulation also equals landlords being able to take more advantage of tenants. It will be a race to bottom as with anything that lacks regulation. People find the easiest way to make the most money.

Hi Kenny,

An example: the Domestic Minimum Energy Efficiency Standard (MEES) Regulations mean that landlords are required to bring the coldest and worst-insulated flats (those with an Energy-Performance certificate rating of F or G) up to band C.

How if you have the choice to go elsewhere.

When we tried to get a rental we were looking over a vast area and we found 2 places.

The first viewing the rental agent took off the market as he was nearly vomiting at the state of the place. The 2nd wasn’t great. It’s all electric plug in radiators which are 40 years old don’t work. The house is freezing in the winter with mold everywhere and nothing has been replaced since it was a new build in 1982 but that was the choice.

Would have loved more options

I pay over £2000 per month on the rent for a terraced house in a cheap area in the south east (not in London) and my energy bills.

And all this tightening of controls around renting is for my benefit.

All I can say is if this is for my benefit. Please don’t do things for my benefit

Ah yes, because deregulation really drove up standards in Peter Rachman's property empire, didn't it?

While we're at it, let's do away with regulation in other areas - scrap hygiene inspections for restaurants, the requirements for a Gas Safe registration for gas engineers, and drinking water standards. Cheaper food, cheaper property repairs with less waiting for tradesmen, and maybe even cheaper water bills.

What could possibly go wrong?

🤣🤣🤣

I think it is in the wording

”Expected”

it doesn’t mean they have to.

Some landlords will and charge accordingly
The rest like my landlord couldn’t give a shit

I drive around in my van to get warm

The landlord won’t do anything and the places I can afford are all the same.

Well we have seen what could go wrong with more regulations

@LastOfTheChristmasWine - I know right?! The regulations aren’t working, so let’s not try and enforce those, no, the best thing to do would just be to give up and deregulate.

Hi Kenny, it's true that the landlord isn't under any obligation to upgrade. But if he doesn't he (and his lender) lose the right to a no-fault eviction under s.21.

This really isn't a very good example for your cause!

The whole Rachman scandal was only possible because of regulation - rent control in particular. He used violence and intimidation to exploit the huge market distortions caused by regulation and rent control - the difference in value between a flat subject to rent control and one where the tenant has been bullied out and can be let at the market rent.

Regulation makes rich men out of those who are prepared to ignore it.

Unless they have an agent, LLs are on call 24/7. They're the first person called if a tenant loses their keys, for example.

being on call is a bit different from working, if you are renting out a property having a handyman and gas registered plumber is something you’d really have sorted. Unless it’s an emergency situation you’d not get the work done out of hours either. As for lost keys, the tenants can call a lock smith for entry.

or as you suggest, just let an agent sort it all, which may work out cheaper in the long run. A decent agent will have contacts with their own plumbers, locksmiths and handymen and get it done, they’ll just ask permissions.

it’s not going to be masses of work each month

Why would he want anyone out. I think after 40 years he probably owns the place and as long as he gets his money each month then why would he want to sell the cash cow.

He isn’t bothered.

When we go it will rent again immediately at probably more money because there isn’t anything else to rent because legislation has meant that houses that would have been competition have been removed from the long term rental market because the property fell short on not being profitable when other legislation came in and the owner can get more money with less hassle from turning it into an Airbnb or short term rental.

You miss the point spectacularly if you think that Rachman’s way of operating was because of no regulation.

It was precisely because there was so much legislation that sort of thing happened.

He wasn’t the only landlord who operated like that. We were no where near to London yet I know it was a common occurrence in my area.

As for lost keys, the tenants can call a lock smith for entry.

Exactly - and who do you think will have to pay? The tenant??? The tenant who lost those keys? As for using agents, they cost a lot in fees and the trades they use are really costly. With little to no profit, how would LLs afford them? There you go - rents must go up. Bingo!