To think private rent increases should be limited to inflation only

[Fancymice]

We are currently applying to rent a 2 bedroom house for £785 a month. The same house was up for rent previously 2 years ago for £695.

The seems like a massive increase, and other houses for rent on the area seem to have gone up by the same or even more. We're currently in a 3 bed for £850, but it has a dreadful damp problem. No doubt our landlord will paint it and put it back up for £900/£950.

Aibu to think private landlords should be limited in how much they increase rent? I understand that there is limited supply, so landlords are taking advantage of this to put up prices, but like most people my wages are not increasing on real terms and having a somewhere to live is quickly becoming unaffordable!!

You're not wrong but as long as so many older Tory voters are relying on unearned income from buy to lets proper rent controls aren't looking likely.

The rent increase stuff you've seen will be about existing tenancies - unfortunately there's nothing to stop landlords advertising to new tenants at a higher rent than the last ones. In Scotland councils have the power to bring in rent controls in high pressure areas but I'm not aware of any of them having had the balls to actually do it yet.

@Chloemol

YABU. For some it is a business , therefore they need a profit to live of themselves

For some they fell into being a landlord, may only have one property they are renting out as a investment for retirement. They may not be able to afford to ‘absorb’ the costs mentioned, and why should they?

Rent needs to cover not only the mortgage, but also to be able to save towards costs of replacement boilers, repairs and maintenance, why should the6 be out of pocket to let you live there?

If you don’t like it then don’t rent, but your own place, live with family, other options are out there

Why should I foot the bill for the landlord to replace the boiler in the future when I possibly don't even live there anymore? The landlord owns the house, and it is theirs to maintain as an asset that they can cash in for a huge profit.

Also do you honestly think I'd be private renting if I had a choice!?

If rent levels rise to the point that they become unaffordable then landlords wont be able to find tenants and prices will fall again.

All businesses pass their running costs on to their clients @Maverickess

The especially good thing about restricting rent rises to inflation is that it prevents landlords chasing the market too. When other landlords see how fast rents are rising, by quite large amounts, they are currently incentivised to evict their current tenants who will normally have a contract that limits annual rises and get new ones in at the new rate. There is no lack of people looking for rental property so they can do it easily without fear of being left tenantless.

I agree that being a LL is a business venture and so it needs to generate some income for the LL. So rent should be at a level to cover any mortgage, insurance, and operating costs- to include savings towards long term repairs (new roof, boiler, etc).

Many LLs lost money due to tenants not paying rent during the pandemic, and I think that some of the rent increases are an attempt to recoup these past losses. This I think is monumentally unfair. A new tenant should not be paying extortionate rent to make up for a prior tenant who did not pay their rent. The tenants that have been paying their rent during the pandemic have often struggled very hard and home without to do so. Many have seen their savings for a home deposit dwindle to nothing. To punish these tenants for other tenants’ inability to pay is plain wrong. LLs take on the risk of a nonpaying tenant, they should not be passing those costs on to a later paying tenant.

In any business you generally set your prices at the cost of provision plus target profit.

In a rental business the cost of provision includes the myriad of things listed above - i.e. capital improvements, void periods, repairs, insurance, cost of debt, etc. so of course any sensible private landlord will factor those into the rent they set. If they don't it is not a viable business proposition. It is not a case of not accepting the risk of being in that line of business but mitigating them by pricing appropriately.

We live in a market driven society. Prices are linked to demand.

But even if we didn't, the amount LLs charge has to cover all their costs, so for example, if his mortgage has risen, and his buildings insurance has risen, and the cost of boiler servicing has risen, then the rent has to cover all of those costs.

Or suddenly we wouldn't have any private landlords and people who don't want to buy, or who can't buy due to credit problems etc, would all be out on the streets.

Some kind of compromise with rent controls is long overdue in the UK.

Why should I foot the bill for the landlord to replace the boiler in the future when I possibly don't even live there anymore? The landlord owns the house, and it is theirs to maintain as an asset that they can cash in for a huge profit.

But they can't necessarily cash it in for a huge profit.

You're not paying for a new boiler. You're paying for the luxury of a fully functioning home.

Why should they let you live in their property, and risk you trashing it, with absolutely no incentive for them?

Rents are going up because there is more competition for rental properties at the moment, so some people are willing to pay more to secure a property and therefore landlords will put up their prices to capitalise on this.

Questions about fairness about who pays for void periods or replacing the boiler or whatever are irrelevant, because even if the landlord has comfortably covered all their costs at a rent of £800/month say, they are not going to rent it out at that price if there are people out there willing to pay £900/month or £1000/month or more.

The root problem is that we have a housing shortage in ths country and unless we embark on a programme of mass house building then housing costs are going to continue to go up and up.

@MintJulia

We live in a market driven society. Prices are linked to demand.

But even if we didn't, the amount LLs charge has to cover all their costs, so for example, if his mortgage has risen, and his buildings insurance has risen, and the cost of boiler servicing has risen, then the rent has to cover all of those costs.

Or suddenly we wouldn't have any private landlords and people who don't want to buy, or who can't buy due to credit problems etc, would all be out on the streets.

Some kind of compromise with rent controls is long overdue in the UK.

“We live in a market driven society. Prices are linked to demand.”

We certainly do and the main problem is housing supply controlled as it is by and in the vested interests of large developers and landowners. Landlords don’t create the rising prices caused by insufficient supply, they simply ride the wave to profit from it.

Neither rent controls nor monstering landlords actually solves the problem, but agreed, it is necessary to have controls to prevent the profiteering going too far as it compounds an already dangerous problem.

If youve been in the property some time and are a good paying tenant you can always attempt to bargain.

When my LL attempted to raise my rent by £50 a month I told her that I couldnt afford that and offered £20 a month. I had done my homework and looked on the land registry to find out how much the original morgage had been and knew it was paid off. I did remind her that the kitchen and bathroom were below standard in decor and little had been spent on the house over all. If I left she would have to spend a lot of money on the house to relet or sell it. I was prepared to throw the information about the mortgage into the pot too, but we settled on £30.

@girlmom21

Why should I foot the bill for the landlord to replace the boiler in the future when I possibly don't even live there anymore? The landlord owns the house, and it is theirs to maintain as an asset that they can cash in for a huge profit.

But they can't necessarily cash it in for a huge profit.

You're not paying for a new boiler. You're paying for the luxury of a fully functioning home.

Why should they let you live in their property, and risk you trashing it, with absolutely no incentive for them?

They can sell the house, with the mortgage having been covered by tenants. In what world is that not a profit?

Having a home is not a 'luxury', it is a basic need that I am happy to pay for on a reasonable manner, where I am not being exploited. At the end of a tenancy, the tenant should only have paid for the use of that property, not for future repairs and to pad out the landlords savings.

Your attitude is foul. I, like the majority of tenants, have never trashed a house I have lived in.

I also think vacant property taxes are crucial. Some landlords (mostly the large entities) will happily hoard loads of empty properties in order to lessen availability and make people desperate (and thus willing to pay huge rents). This should not be possible.

The luxury of a fully functioning home

That's not a luxury, it's a basic human right to have a roof over your head and for the rental property to be maintained to standard. Christ.

Your attitude is foul. I, like the majority of tenants, have never trashed a house I have lived in.

Fair - I'll take take back the comment about the luxury of a fully functioning home. That is a basic right.

However this ^ about tenants trashing houses isn't foul. Just because you haven't done it doesn't mean thousands haven't. I know lots of people who've spent a lot of money on repairs due to damage caused by tenants.

4 years ago, I paid just over £1.2k in tax in my property. I now pay over £5.5k. I have not increase the rent and appear to be letting the property £250 a month under market rate. I am make no profit on it when I account for all the costs and it would take the tenants not to pay for one month for it to become a liability.

You are naive OP to make it a war against landlords. 4he one party that gains from the arrangement is the government with the money, hopefully, being redistributed to society.

You mention selling. Well that is exactly what many landlords have done recently, causing a serious problems with demand being much higher than supply. How is that helping tenants?

There are no winners in this, except to hope that indeed, a fraction of this tax is redistributed to the NHS, social care and housing.

Also a bug bear of mine. Rent payments should count as proof of being able to pay for a mortgage.

If I can afford £800 or whatever a month rent I can afford the £400-£500 mortgage and stash the rest for repairs/extra insurances.

But on £800 I can’t afford to save for a deposit.

They can sell the house, with the mortgage having been covered by tenants. In what world is that not a profit?

LL will have paid the deposit.
The house may well also not have any equity in it.

What is needed is a plentiful supply of decent social housing, a good size with gardens, and secure tenancies and without the right to buy.

YABU. It’s often a myth that LLs are rolling in money. Many are just breaking even after paying all the insurances, interest, tax, maintenance etc. Especially those with 1 or 2 properties- which are the majority of landlords.
BTL is a business. Like all businesses, all expenses are calculated and rent set accordingly. Sorry you seem to have no idea about the costs of being a LL and what your property is costing them.

It costs a lot of money to keep a home in good repair and have everything working. Although I know most renters would rather not be renting it is easy to make the comparison between the monthly rental cost and the mortgage cost but it is not a valid one.

If you rent you are generally not paying for things like a new roof, new carpets or the various insurances and safety checks that may be required. You are paying not to have to worry about these things.

Whether making money from rental property is morally right is another issue altogether. It has however been going on since humans owned property and looks set to continue. Crying unjust or unfair isn't going to improve the situation and forcing landlords to restrict potential profit (when they are a business) is only going to reduce the available housing stock.

@Fancymice The central heating is as much part of a house as the roof. A typical boiler cost about £1800, it will last about 10 years. So the annual cost of the boiler is £180 + £75 annual service = £255 a year. The landlord covers his costs by including an annual boiler amount in the rent.

A tenant contributes the cost related to how long they used the thing for. Then if the landlord sells the house, it's in roughly the same condition it was in when he first rented it out. He hasn't gained or lost on the boiler. You've just paid for the bit you've used.

@SionnachRua youre right, a fully functioning home should be a basic requirement for a rental property. It's a luxury for a lot of home owners though. And I do think quite a few renters are naive about the costs associated with keeping a home fully functional, hence the posts claiming that rent doesnt need to cover more than mortgage payments.

@dameofdilemma

Other countries manage to have rent controls and better protections for tenants without the entirety of capitalism breaking down and melting into a puddle of communism.

Take a long hard look at housing in this country - houses have become an investment vehicle rather than a home.

Noone forces a landlord to become a landlord but everyone needs (and deserves) safe, adequate, long term shelter.

This ^^ and nothing more needs to be added to the conversation.

There are many other ways to run a society. The vested interests in this country are keeping us locked into this madness and have convinced the majority of the population that it has to be this way.

It does not.

If I can afford £800 or whatever a month rent I can afford the £400-£500 mortgage and stash the rest for repairs/extra insurances
You could now, because interest rates are so low and been for a while. Many forget that it wasn't always like that and might indeed not remain so for the next 25 years.

Noone forces a landlord to become a landlord but everyone needs (and deserves) safe, adequate, long term shelter
So why are you complaining now that so many landlords have sold up. Has it made it better? Can renters get better or cheeper accommodation? Oh wait, no, it's got worse.

You can't kick landlords for running a business and then kick them again when they give it up!