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.

This

And this 🎻

I wonder how much rents would be if the government hadn’t got involved to save the poor renters

I speak as someone in rented.

All the government has done is drive up rents and create a market where there are more people chasing fewer properties

Every bit of legislation that is passed to the landlord to sort out, the cost is then passed to the tenant in the form of rent rises or the landlord takes the property off the rental market and it is reborn as an Airbnb. Or sold if it needs a lot of work doing and then the cost if rents rise because the demand is outstripping supply

i wonder what the rents would be if the government hadn’t got involved

I was a private tenant for years and it’s a horrible position to be in, I was lucky enough to be in well maintained homes in a nice area, but the stress of never knowing when you’re going to be given a month to move out is awful, worse when you have kids settled in school.

The system needs reform, we need a massive house building program and we need to see houses as a human right, not a cash cow.

Ive no issue with most LL, I’ve had a couple who were unpleasant to deal with, but mostly I feel we should hate the game and not the players. I have a friend who lets a flat and she’s had an unbelievable time evicting a tenant who didn’t just not pay rent but started harassing her, her case is incredibly rare I’m sure but it isn’t just that the law and tax system favours LL, it’s not working brilliantly for anyone.

I nearly became an accidental landlord when I inherited a property from my grandmother. Looking at the costs though, even without a mortgage it would have just paid for the maintenance, agents fees, insurance etc., with nothing over for emergencies. If the tenants caused issues or refused to pay I’d have been out of pocket, so I sold up and reduced my own mortgage. It’s a shame as it was in a part of the country where locals desperately need affordable rental property. I was able to sell to a local, albeit at less than to a B2L investor, but if I’d let it be turned into another flipping AirBNB my family would have disowned me!

All landlords aren’t awful by any means, but seeing LLs complain about not making a profit each month is infuriating. You are sitting on a pot that is increasing in value and you ultimately hold all cards in your hand as to whether that tenant has a roof over their head or not. There is no situation here where I’d feel sorry for a LL because they are ‘only’ breaking even.

My sympathy will always be with the tenant. I live in the poorest city and looking in a 5 mile radius rents are around £1k+ for a standard terrace 3 bed in poor condition. Yet still they have to pay to have a home whilst LLs complain that they are profiting- what exactly do you expect?

And I hate the term ‘accidental landlord’. Seriously just own it. You made a choice to rent it out - that didn’t happen by accident.

Not all landlords are Champagne swigging millionares.

I agree, though I don't think anyone said that. Most, going by threads here, own one modest property and don't have a personal high income.

Landlords do not pay tax on gross rents, they just can’t deduct the full cost of mortgage interest. They still get some relief for interest plus full relief for a wide range of allowable expenses.

I deal with lots of individual landlords. They are making lots of money.

The super wealthy own pretty much everything anyway and there are plenty of other investment options for "middle of the pile people" aside from rental property. There would be no issue if the very concept of social housing hadn't been all but obliterated by successive governments. There have always been private landlords, but back when there was a half-decent supply of council houses there was at least some competition in the rental market. This current generation of BTL landlords have been milking a badly flawed system for years and now they are all bent out of shape because the golden goose isn't laying quite such big eggs.

Agree absolutely!

Yes, so a good thing...

... except for the landlords selling, although it has been said in the past that with many landlords 'buying' properties on interest-only mortgages they were causing house prices to rise rapidly. Perhaps any drop would just re-balance the market?

@ChilliBandit there’s no relief for mortgage interest now. It was staggered down to zero

But surely lots of landlords selling up = lots of houses on the market = lower house prices, which is good for buyers.

Landlords used to expect to get 10% return on their money.
Savings rates at banks were about 6% back in 2000 (www.finder.com/uk/inflation-vs-savings for reference)
So people with money looked for other options.

Soft and stupid lending has allowed more people to get into the game and to the detriment of house prices and therefore rents.

The current pressure on rentals though comes in part from internal demand and the increased demand from refugees needing housing.

None of this is good for the UK economy. High house prices = insane debt personal and business. Remember 2008? High rents = less money to spend on the other things people need like electricity and food, further reducing discretionary spending that fuels the shopping consumeristic economy.

Solution?
You can't build your way out of this, or have more HMO. Quality of life overall goes down for everyone.

HMOs are a specialist type of renting out though. The costs relating to this Edina’s impact the average landlord renting a small flat to a couple/single or a house to a single family. We’ve always had to pay agents’ fees, insurance, maintenance etc.

I have a small flat I rent out. I’ve paid off about half of the mortgage. It’s not got massively more expensive as a result of any recent changes; I still make a modest profit on letting it (if I didn’t, I’d just keep it vacant and allow friends, colleagues and family visiting London to use it occasionally, but it’s still worth renting).

Edina’s ?? Doesn’t!

Good, lmao. F landlords.

Absolutely agree. We need to build more social housing that is affordable and secure, force the greedy landlords out. It's not going to happen unfortunately much as I would love it to.

I despise them. Done nothing but contribute to forcing up house prices for the average person. Just greed first and foremost.

I've been a LL, tenant & home-owner - in Scotland where there is more regulation.

Air bnb now needs planning permission.

LL's are selling up.

There is massive competition for the few private rentals left. To the extent that no/one will rent to students now, as there is no minimum contract here.

There is an accommodation crisis, with LL refusing "riskier" tenants eg single parents, one or low income renters.

There is no-where near enough rental accommodation, full stop. Nowhere near enough social housing being built.

When I rented, it was because we couldn't get a mortgage (due to being self-employed), despite having a good income.

Not everyone wants to or is able to buy.

Whilst the council will accommodate those who meet the criteria, what about the rest?

Where are the renters going to go?

It can't be that bad, my LL isn't selling anything. Rent's gone up on some properties due to increasing landlord insurance, but that's it. Can't see any panic there. Happy as a dog, few properties is nice pension investment, isn't it but yet you're making yourself so miserable.

I find buy to let immoral. It’s stealing houses from first time buyers. If there were more houses available we wouldn’t need so many rentals.

No sympathy here

Like the way they provide high quality education, health care, public transport etc?

@Daftasabroom as if private landlords provide high quality accommodation?! A tiny minority may do, but the vast majority provide extortionately priced crap holes.

@ProseccoOnIce exactly. But those who want LLs to go, seem to be unable to see the long-term picture. They just see it to 'LLs gone. Hurray' - they don't seem capable of grasping the fact that there would be an immediate lack of suitable housing stock because the government wouldn't step in and help. At least not for a long time. Those people seem happy to scream outrage but fall short of offering a realistic solution.

I think the Airbnbs of this world are the worse parasites, personally. And I'm glad to see some of them packing up and selling up in my neck of the woods

what annoys me about airbnb is they don't have to pay council tax, there is a loop hole

Landlords are like scalpers, but worse - profiting from people on lower incomes who cannot afford to buy a house themselves, because they are too expensive as greedy rich people have increased demand and prices by buying multiple properties to make easy money out of. Now that things are getting just a little bit harder they start complaining.

Oh no you only make money when you sell your multiple flats - making only several hundred thousands of pounds? Poor you, you must have it really hard.