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.

Housing Associations have mortgages too

@Babyroobs

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

Well they provide an individual/family the opportunity of a place to live in a specific area - something which may be of vital importance. And who isn’t greedy? Surely any family earning above median income - let’s call it 25k in the North or 35k in the South is greedy. Surely they should be sharing all their excess income with those who are working equally hard but have just been less fortunate in one way or another? Lots of greedy people about.

One of the big changes the government brought in two years ago was around mortgage interest - it used to be tax deductible so that landlords only paid tax on the profit on their rental but now mortgage interest is no longer tax deductible. This means someone could be receiving rent of £1,000 p/m after other costs and paying £500 p/m on their interest only mortgage and still having to pay tax on the full £1,000. So that has been a big change in costs and hit those with one property to rent particularly hard as they are not likely to be big companies or super rich in the first place.

Don't agree with people saying there is no such thing as accidental landlords, I consider myself to be just that. I inherited DGran's house 18 months ago when she passed away.

We live in a tourist town where there are more second homes, Air B&Bs & holiday cottages than permanent residences. House prices are completely insane. Young people are moving away in droves.

I want my own DD (currently age 9) to have the chance to remain in her hometown, should she wish to, so I am hanging on to DGran's house for her future.

Obviously it's not feasible to leave the house stood empty for 10 years+ so we rent it out to a local family. I'm a good landlord, fully renovated it prior to them moving in & charge them below market rent in the hope that they stay there until their own DCs fly the nest.

Watch everyone avoid answering your comment. Because LLs are greedy but anyone not sharing their surplus isn't. Double standards much?

@Moraxella - yes there is. It’s taken as a basic rate deduction. So you get 20% of the interest cost deducted from your tax liability. This can be limited to the total rental profits or total income if they are lower than 20% of the interest costs.

So it's greed to earn a living? Bizarre.

earning a living is working for it

renting property is investing and living on the proceeds

So many ex local authority houses in our city,bought by the tenants back in the day,tenants die ,family rent out to people who would be much better off on every level if the house was still in local authority ownership

People have been saying this for years. Landlords predominantly are only selling those properties that need work which wouldn’t be mortgageable and this flooding the market has never happened.

All landlords aren’t awful by any means, but seeing LLs complain about not making a profit each month is infuriating

I think you are thinking that landlords operate as a non profit charity. They are a business and businesses need to make money each month otherwise how would they keep going.
Where would the money come from to do repairs to the property if there was no money being made.

When the government decided that landlords couldn’t put their mortgage interest against tax it was thought that there would be landlords selling up because it would eat too much into their profits and there would be a flood of properties hitting the market.

All that happened was Landlords either changed their properties to have a holiday let mortgage and got rid of their tenants so making fewer rentals available or passed the losses onto the tenants.
If the existing tenant couldn’t pay then there were people who could because demand outstripped supply.

Each time the government comes up with new ways to help tenants and penalise the landlords it just ends up penalising the tenants as more and more landlords stop renting out their properties and changing them to short term rentals.

Well they provide an individual/family the opportunity of a place to live in a specific area - something which may be of vital importance

Oh please don't trot that out. That's far from the primary motive for letting out a property.

My cousin CAN'T work - she is ill. But the rental income replaces her wage. So should she sell to her own detriment?

Personally I think local authority housing should exist but more on a lease scheme

Obviously those who can’t work should be looked after
But for the majority of people they have to decide whether they want a shorter term lease which gives you a much cheaper rent and at the end you move out to go into the private sector or because you have had the cheaper rent you have managed to save a deposit and be able to buy. Or if you want to stay more long term then the rents are higher.
Council properties are no longer properties for life and can be passed onto children.

Choosing to rent a house out for decades, for nothing but profit is not even remotely "accidental".
Do what you want with the house but don't try and pretend like you're doing some public service.

Hahahaha.
No its not first time buyers who buy these properties. Its usually overseas conglomerates some of which are very dodgy. They can afford to let them stand empty until prices rise, which they often do, or let them out and the properties often soon fall into squalid disrepair.

I’m finding these comments really bizarre.

My rental property is a 1 bed flat in a 10 year old block, in a fairly uninspiring part of East London with good access to the tube. It’s been occupied over the years by a succession of young professionals in their early careers in London, none of whom would be remotely interested in owning such a flat, because they will either be planning to leave London or the UK in a few years, or they will be aiming to buy something that they can grow into. I’ve had a few young couples live in it as their first place together, people who were obviously not at the stage of wanting to commit to buying.

I can’t see that flat being a good buy for someone on a low income who plans to live permanently in London, and it would be a real faff to sell in for someone who wants to move up the property ladder. When I eventually sell it (likely when I retire) I fully expect it to be bought by someone else who will rent it out.

I lived in a similar place myself in my twenties, as did most of my colleagues.

I struggle to see what is socially unacceptable about what I am doing.

Don’t forget a lot of young adults don’t want to buy at the moment. They may be students or in their first job. My 2 DDs are 24 and 25 and don’t want to buy yet. They don’t know where they plan to live in the longer term and are just finishing graduate schemes / training contracts. We need private landlords.

These threads always go the same way. Easier to blame landlords than shit governments.

Fascinating article in the times a while ago Harringay council sold off a piece of land to developers who put in planning for 40 flats and got it. Council were asked why didn't you do that. Their answer.

Those 40 flats would have cost us to build. We'd have seen zero return because at the top of the housing waiting list were economically inactive families who wouldn't be paying rates nor rent to the authority.

Harsh but factual

@Catnary @hellsbells99 I’m completely with you . Neither of my 20 something kids see any sense in buying in a falling market with higher mortgage rates. Who would?! Therefore they rely on us wicked landlords to ….err…. Actually have a place to live. All my tenants fall into this kind of category due to the type and location of my properties. I absolutely see myself as a service provider

My twenty something son and girlfriend are in a rental they see it as a stepping stone. They're in Leeds for now, post university. They will move on. Another son rented in Bermuda for six years. There's freedom in renting. Italian and Belgian families we know all rent. They think we're a bit obsessed with owning

No its not first time buyers who buy these properties. Its usually overseas conglomerates some of which are very dodgy. They can afford to let them stand empty until prices rise, which they often do, or let them out and the properties often soon fall into squalid disrepair.

So you have rigorous foreign buyers taxes, empty homes policies and punitive repair standards. A proper, very quick landlord:tenant Court with arbitrators who could mediate swiftly would help both good tenants and landlords.

There are ways to improve the system. Tories don't rent so don't care.

Property is theft!

I absolutely see myself as a service provider

Not very accurate.

And that may be how you see yourself, but it wasn't the motive behind you renting out your property.

People with jobs that provide services still get paid!

I have just sold my rental property. In short because I have made a massive loss two
Years running and the stress of dealing with it was making me ill. I was also worried about all the new regulations coming in.

I made a £7k loss for the last tax year. It will be more this year.

The reason I made a loss is because my tenants didn't pay the full rent. For various reasons I couldn't throw them out and there were some massive expenses, for example a £6k heating repair bill.

The tenants did not report problems to me in a timely manner so once I found out about them, small issues had become massive expensive jobs.