There should be an upper limit on rental prices

[HereLiveIAmNotACat]

Am I the only one that thinks the property investment industry is horrendous and shows how awful, greedy and selfish mankind can be? Surely there should be laws around this? Or caps on the maximum profit a homeowner can make per month relative to any mortgage on the property?
How can it be right that rental prices are ludicrously above mortgage prices purely for the homeowners to benefit from someone else paying off their mortgage and make a pretty penny on top.. then moving on to their third, fourth houses etc..meanwhile renters are stuck forking up more than they can afford with little chance of ever making it onto the property ladder due to the impossibility of saving up whilst paying rent.
Unless you were fortunate enough to have a property in the 80s before inflation/money from family you’re screwed really.
Just means less and less rental properties being available. The rich getting richer the poor getting poorer. And it’s always ‘oh it’s brilliant we’ve paid that mortgage off and are making such and such per month renting out..we’re now moving to a much larger house in a much nicer area’ as if that’s something to be proud of?!

(Yes- bitter renter here)

Ah the old supply and demand law used to justify landlords. And the competition chestnut too.

The basic market law of supply and demand does apply, but it is what forces house prices up. Landlords increase demand: they mean that there are far more people who want to buy the same number of houses. Empirically, house prices went up directly in line with demand for buy-to-lets. I know of whole estates of two-up-two-downs now that are nearly all buy-to-let - imagine if all of those were returned to private owner-occupiers. 1 buyer, 1 house, reduces demand and not just by a little - prices would HAVE to fall to what the individual buyer can afford.

@WomanStanleyWoman

Do you think there aren’t products in M&S that make a loss?

Presumably you understand that M&S and other retailers sell more than one product? Some products are deliberate loss leaders; others just haven’t sold as well as hoped and get reduced. No one is going to make a property a loss leader, but if the market drops, then yes, they’ll have to drop the rent to limit their losses. However, why would you expect landlords to charge below market rate so that they merely break even? If you continue with your retail analogy, M&S have a lot more products that make a profit than a loss - that’s how they have a business.

Presumably you understand that M&S and other retailers sell more than one product?

And landlords can have more than one source of income.

However, why would you expect landlords to charge below market rate so that they merely break even?

please read my posts. I have repeatedly said I expect LLs to charge market rate.

If you continue with your retail analogy

It wasn’t my analogy, and I don’t think it works in this context.

@ForPingsSake property is different from food. Its easy to increase the supply of food. Import from more countries. Technological innovations increase crop yield. Changing tastes- so price of bread and pasta goes down as wealthier people switch to quinoa and brown rice. Even for water, we don't have a need for that in the UK, but back in my native Singapore, we have a greater supply of water now than in the 1960s because we don't need to completely rely on buying water from Malaysia, we have the technology to recycle waste water which supplies 40% of our water needs.

Property is different, there is limited amount of land and there is huge opposition to building on greenbelt land. Therefore it is harder for us to increase the number of properties. An easy way is to build vertically but people here like houses with gardens. The supply problem is exacerbated by the fact that many jobs are in cities like London and in the SE so everyone wants to live there and so the housing shortage is worsened.

During the pandemic, the price of anti bacterial gel and masks shot up because some idiots were hoarding them. It went back down again because the producers made more anti bacterial gel and masks, everyone who wanted a mask got one and then there wasn't the demand anymore after the panic. however, it is a lot easier to hoard property and as lifespans increase (fewer people vacating properties), there are more and more people who need them.

I'm sure that some landlords are awful ... but there are many who are not (you just never hear about them). My old landlord (in. my university town) owned 40+ properties and kept a team of electrician, plumber and a couple of builders. It was his business - he owned (and maintained) assets and rented them to people in return for an agreed income. He was pleasant and responsive.

Do you feel that there should be a cap on the rents charged to commercial properties or factories? Or is it only residential property?

"So what?" People are forever unable to get on the property ladder due to parasitic investors. Prices are driven up so many people have no chance.

And what happens when people who do get on the ladder want to move up a rung? Will they still be so anti-BTL investors when they realise the market for their biggest asset would shrink without them? And when they do sell their first home, will they only use any profit they absolutely need to upsize and donate the rest to other first-time buyers to help them out?

BTL investors might create more competition for properties, but they do not stop first-time buyers from being able to get a mortgage. That’s a far bigger problem. Plus, any buyer has to get a deposit from somewhere - and for BTL investors, it’s always higher. Maybe that’s not a problem if you’ve got a dozen properties and are making profit on every one, but for people just looking for a second property to give themselves a nest for the future don’t tend to have 25% of the purchase price down the back of the sofa. It takes work.

I’ve also yet to see a good answer to the question of what happens to people who want to rent, rather than renting because they can’t buy. What do people who want to relocate for work, or to try a new area before committing permanently? What about people who do want to buy, but are still saving for a deposit - where do they live in the meantime? Staying with their parents isn’t an option for everyone. ‘More social housing is the answer’ is usually trotted out on these threads, but even if it could happen within a reasonable timescale, that only helps people who want to rent long-term. I moved 100 miles for a job a few years ago when I already owned a home - no way could I have sold up and bought a new one in time to move. I needed both somewhere a rent and someone to rent to - not being able to do that would have seriously damaged by career prospects.

Student accommodation is ridiculously expensive too and also pushes up rents for the rest of the area. £650 for a room in a shared house ( admittedly with bills). That leaves my granddaughter £200 for the year from her maintenance grant. ( Highest available based on parents income). I don’t think it is a coincidence that I’ve rent seems to follow the amount of the grant.
In a separate point, I think the failure to provide enough local authority homes is the root of the rent rise. Thatcher quite rightly allowed tenants to buy their homes but their should have been stricter controls on how long you had lived in said homes and also how long after you could sell it without repaying proportion to council. ( I know there were measures but they should have been higher).
Furthermore, the money from the sales should have been reinvested in creating more council housing stock. Instead of being subsumed elsewhere.

@S2617

I'm hard working, a single parent, own my house and yet I still believe in social housing, a secure tenancy for those who are unable/unwilling to buy a home.

It's not 'free', there's no freebies in life anymore. Don't believe everything the Daily Mail tells you.

Being hard working doesn't directly correlate to earning a high salary.
There are people working 3 jobs and all the hours god sends, just to get by.

Are you a landlord? You seem to be very upset by the idea of property not being a commodity.
Housing is a basic human right.

I wish I had proof read the above. Apologies for the grammatical errors in THERE and the rest!

UK population in 1989 when I bought my first flat 57 million, UK population today 68.5 million.

One of the biggest issues is the rise of single person households. This is barely mentioned. This is taken from the Jospeh Rowntree Foundation , a very respected charity that fights poverty published over a decade ago. I used to do research on poverty, housing was not my specific area but it obviously crossed over.

‘ODPM estimates that the rise will continue over the next 15 years at least such that, by 2021, a third of all households will be one person households.
In terms of absolute numbers, there are currently almost 7 million one person households compared to 3 million in 1971 and the number is projected to increase to around 9 million by 2021’

I live in a big three bed house, a sort of ideal family home for a couple with two children, there are eight houses that are the same. Three of them have a single occupant until recently four of them had a single occupant and that was for 15 years.

The rise in demand means exploitation can take place. It’s very much due to a huge societal shift with how people live. An ageing population, the bigger numbers of single parents and single people.

Housing is a right and also a business. Food is also a right but Tesco is a business. We aren't expecting Tesco to make healthy food affordable right? There are so many in food poverty and Tesco isn't pressured to lower the food prices. However, there is a lot of anger at the government for cutting free school meals during the pandemic, removing UC uplift so families have to choose between heat or eat etc.

It’s not an analogy that works. For starters food is a right, but Tesco don’t only sell one food. A landlord only sells (lets) housing. If vegetables are too expensive, someone can walk round the store and find something cheaper. If your home is too expensive you can’t walk round and select something else from your landlords portfolio. Secondly, there isn’t a shortage of food. There is a shortage of housing. Thirdly, if everything Tesco sell Is too expensive, there are other, cheaper stores. This may be true of property, but who can really be expected to move their family around the country every time rents increase? Lastly, supermarkets are forever competing to put price each other to bring in customers. You can go to several different shops in grocery day and make use of all their offers. Can’t really be done with your home.

Do you feel that there should be a cap on the rents charged to commercial properties or factories? Or is it only residential property?

Now that's another interesting angle. It's well known, or I thought it was, that high commercial rents are driving shops and people out of business. High land prices are strangling the entire country.

They don't have to be a landlord. That's their choice. If it's so expensive perhaps they should just sell the property and give someone else a chance to own a property
And that is exactly what has happened in the last 2 years. Property prices have not failed to reduced but gone sky high. In the meantime, people who need and want to rent have to battle to get a rental property.

More and more often, it's desperate renter's who offer more than asking price just to get the property because supply is now so low.

You can't have it both ways, landlords selling but still plenty available to offer their property at a loss.

How can it be right that rental prices are ludicrously above mortgage prices purely for the homeowners to benefit from someone else paying off their mortgage and make a pretty penny on top.

You are overlooking the fact that maintaining a building costs more than the mortgage. As a landlord you also have to maintain the property, pay tax on the income, cover yourself for periods when the property is empty/tenant decides they aren't going to pay rent, tenant trashes house etc

If you put people off being landlords then there will be less supply

Will their properties vanish into thin air? Or will they sell them meaning there are more houses available for people to buy and live in, at a more affordable price meaning fewer needing to rent and this reducing demand v supply that will reduce rental prices?

@WomanStanleyWoman as someone who wants to buy a bigger flat and who already owns a flat, I would say I am fine with the value of my asset dropping as the next rung would also have dropped.

I am fine with owner occupiers renting out their properties after they have lived with them for some time, I am fine with landlords buying properties that are above the value of an average property in any given region i.e. properties that would never have housed or be meant to house any poor, vulnerable or struggling people. Its the fact that a private business is responsible for housing people who have no choice and no power that I have a problem with.

We don't tend to feel sorry for expats in Dubai but we do feel sorry for maids and construction workers in Dubai. Money often gives you a measure of security and power so you can fend for yourself in a less regulated sector (whether its housing, employment etc). So landlords can charge them whatever they deem fit, they can make 500% profit for all I care. But the state should ensure that landlords are not allowed to make money off the backs of the poor and vulnerable.

[quote WanderingFruitWonderer]@S2617 do you really believe that human beings don't have rights?!
Do you not agree with The Universal Declaration of Human Rights?[/quote]
Well our lovely leaders don't twitter.com/ScottBentonMP/status/1464192920760860699?t=FcAXviB14YeDb2psmYympg&s=19

@Viviennemary, that is an excellent point. Council houses should not be for life. A family with 3 children might get offered a 3 bedroom house, but when those children grow up and leave home and only 1 or 2 occupants left they should be relocated to a smaller property. This happens in Jersey, Channel Islands. If you are lucky enough to be given a state House you must relocate into smaller property as a child leaves home. Friends of ours had a 2 bedroom flat and once their dd went to uni they had to relocate to 1 bedroom flat. This would be stop as bout 7 people trying to live in 2 bedroom house or flat.

[quote caringcarer]@Viviennemary, that is an excellent point. Council houses should not be for life. A family with 3 children might get offered a 3 bedroom house, but when those children grow up and leave home and only 1 or 2 occupants left they should be relocated to a smaller property. This happens in Jersey, Channel Islands. If you are lucky enough to be given a state House you must relocate into smaller property as a child leaves home. Friends of ours had a 2 bedroom flat and once their dd went to uni they had to relocate to 1 bedroom flat. This would be stop as bout 7 people trying to live in 2 bedroom house or flat.[/quote]
There is a shortage of 1 and 2 bedroom properties, not just in social housing but in the private market as well, otherwise this would work very well.

Hoard property? Seriously?

25% deposit minimum, 3% premium SDLT and next to no tax benefits? Hardly.

Stop all the migrants coming in, get the British to actually go to work and curb benefits making it worthwhile to work and all these problems would reduce.

A lot of these comments are stemmed by jealously.

@Viviennemary, that is an excellent point. Council houses should not be for life. A family with 3 children might get offered a 3 bedroom house, but when those children grow up and leave home and only 1 or 2 occupants left they should be relocated to a smaller property. This happens in Jersey, Channel Islands. If you are lucky enough to be given a state House you must relocate into smaller property as a child leaves home. Friends of ours had a 2 bedroom flat and once their dd went to uni they had to relocate to 1 bedroom flat. This would be stop as bout 7 people trying to live in 2 bedroom house or flat.
THIS ^ hits the nail on the head.

families desperately in need for family housing should not be prevented by single people in a three bed property.

If you have had 20 years of lower than market value rent and a secure tenancy, to bring up your family in, then you should not keep a larger than necessary asset from a bigger family in need.

And we need to build many more council houses.And manage them much better and more cost effectively than most councils do.

Any kind of business owner can be called a "greedy" business owner. Anyone who earns a profit can be called "greedy." So could someone who goes to work and expects to be paid for it beyond the basic necessities of food and basic shelter. Why should your employer pay you enough to buy a cell phone, TV, or expensive holiday? There should be a cap on wages by your logic.
We were landlordswe had at times one, or two tenants in our first house. It was not easy. We were always on call if something went wrong. Repairs and maintenance could cost thousands of dollars. We had one tenant who refused to pay or move out for monthsfinally he did (without payingwe never got those thousands back). A year after we bought the house, the market crashed and the property lost forty percent of its value. It did not rise up to the level we bought it at for at least fifteen years. We got lucky with one long-term tenanthe stayed until we eventually sold the house. He was actually an entrepreneur who was filthy rich, but didn't like the hassle of home ownership! But we kept the rent very reasonable because we didn't want to lose him. When you're a landlord, you're always nervous something is going to go wrong, you're always waiting for calls you don't want to get, and you never feel as if you're off duty. It's a lot of risk. And it isn't that much money for most people.

Will their properties vanish into thin air? Or will they sell them meaning there are more houses available for people to buy and live in, at a more affordable price meaning fewer needing to rent and this reducing demand v supply that will reduce rental prices?
Except that's not what is happening.

In the town I live, there are quite a few flats available but not one house. If I were to sell, the family current renting would need to move to a flat or move away. They can't afford to buy yet. Should those renting never allowed to live in a house with a garden?

@S2617

Stop all the migrants coming in, get the British to actually go to work and curb benefits making it worthwhile to work and all these problems would reduce.

A lot of these comments are stemmed by jealously.

We have two properties, one the partner buggered off leaving tenant with a baby, she works but gets credits on top.

Other house husband has nervous problems now on disability, wife has physical health problems works when she can only the daughter is fit to work. They get various government allowances.

Should I kick them out after six years??

@vivainsomnia Well house with garden isn't really a human right, but shelter is. The problem with renting in the UK is mainly very few people can afford to rent as a pensioner and unlike in countries like Germany with more generous pensions, it is not compatible with most people's finances to rent.

I mean, I am a home owner and I don't live in a house with garden. Probably never will as I intend to stay in my area. And to be fair, if your tenants want a house with garden, they probably can't afford to buy your house so would have to move away anyway. I could have afforded to rent in zone 2 London based on what I am paying for my mortgage but I live in zone 3. you generally tend to rent in better locations than you buy these days.