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Original poster

There should be an upper limit on rental prices

479 replies

HereLiveIAmNotACat · 28/11/2021 21:34

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)

OP posts:
Original poster
HereLiveIAmNotACat · 04/12/2021 00:15

@S2617

Some ways you can save money :

Ditch your iPhone and expensive coffees and nails and whatever other junk. Save money you are given. Live with parents, cut the credit and focus on raising your first 1,000. Then it will snowball.

This is the most out of touch comment I have read on here yet…

I pay £10 a month on my phone, I only drink instant coffee. I work full time in a professional job whilst studying a degree. My parents live in another country. Sorry please tell me how to get the money snowballing as I’m struggling to cover the basics?! Possibly as almost 3/4 of my wages is spent on rent for someone else’s property..

OP posts:
Fidgetty · 04/12/2021 00:17

That’s why I think it just shouldn’t be allowed to start with as unfortunately the consequence is people are suffering directly from the gainings of others.

I do agree with you OP. If it was outlawed I'd fully accept it with no complaints... but as it isn't yet illegal I'm unfortunately not selfless enough to bow out.

Ylvamoon · 04/12/2021 00:22

That’s why I think it just shouldn’t be allowed to start with as unfortunately the consequence is people are suffering directly from the gainings of others

At what point would you like to give up the freedoms that a market economy gives us?
And why only put a cap on rent? What about clothes? Decent fresh fruit & vegetables? Phones & Internet access? Cost of electricity? (As recently shown, caps on energy prices backfired big time!)

MurielSpriggs · 04/12/2021 01:03

I pay £10 a month on my phone, I only drink instant coffee. I work full time in a professional job whilst studying a degree. My parents live in another country. Sorry please tell me how to get the money snowballing as I’m struggling to cover the basics?! Possibly as almost 3/4 of my wages is spent on rent for someone else’s property..

Hi @HereLiveIAmNotACat

There's something very wrong if you are paying 75% of your wages in rent (any wages, never mind full-time professional wages). Apologies if I've missed something explaining your circumstances. It may be that the system is deeply iniquitous and unfair, and your landlord is awful. Or it may be that you have made some choices which are not very sensible.

PrincessNutella · 04/12/2021 01:34

That's crazy, 75 percent of your wages. I have never heard of anyone paying 75 percent of their wages for housing. You must know that this is far beyond the scope of what the law should do with the country. I am very concerned for you, HereLive, because you are living far beyond your means. You either need more roommates, a cheaper flat, or more money. The way you are allocating your budge makes no sense.

PrincessNutella · 04/12/2021 01:35

*budget

S2617 · 04/12/2021 06:39

You can rent a room instead of a house.

S2617 · 04/12/2021 06:39

Agreed. You clearly are not earning enough based on where you live. Should always be no more than 40% of wage on essentials.

S2617 · 04/12/2021 06:41

When I was out of uni, I rented a 4 bed house above market rate and rented each room out with permission. This meant I could save for a house deposit as I lived for free in essence (rent wise). Didn’t have an expensive phone and didn’t go out.

Sacrifices meant I got on the housing ladder and then through absolute hard work kept going.

LethargicActress · 04/12/2021 08:07

I pay £10 a month on my phone, I only drink instant coffee. I work full time in a professional job whilst studying a degree. My parents live in another country. Sorry please tell me how to get the money snowballing as I’m struggling to cover the basics?! Possibly as almost 3/4 of my wages is spent on rent for someone else’s property.

If you’re paying almost three quarters of your wage on rent, why is your main complaint directed at landlords? Do you think you are paid adequately for your professional full time job, or are your wages too low to reflect what you actually do?

The problem isn’t simply landlords charging market rate to rent their properties, it’s that wages are too low in comparison to housing costs.

Fair enough to blame landlords for problems if they aren’t meeting their obligations, but the vast majority of landlords are doing nothing wrong and are just trying to provide some financial security for themselves and their families like anyone would if they could. Blame your employer for not paying you enough. They are more likely to be profiting from you than your landlord.

DiscoGlitterBall · 04/12/2021 09:06

I have such sympathy with your point but it just wouldn't work at all and couldn’t be enforced. Whilst I appreciate your talking about standard family homes, I live in a part of the country where some houses are rented out for 6 figures - a week. The owners probably don’t have a mortgage so the question is in this instance, should they rent for free to other equally wealthy people because they don’t have a mortgage.

Also you have to remember it is a business and not a social enterprise.

The fundamental problem is that there isn’t enough houses and people don’t want new houses built near them. I haven’t rented for a long time (£450 a month for a 1 bed house in se England in the early 00’s), and only managed to get on the ladder via shared ownership, so I really get it.

vivainsomnia · 04/12/2021 09:20

the old system of moving out at 18, living in flatshares until you saved up enough for a starter 2 bed terrace is dead
Of course it isn't dead. It's just that expectations have changed. I rented for 12 years before being able to buy. I know very well what it is like to be a tenant. During those years, I rented places that were less than ideal in areas that were not great. It was ok, no kids so didn't matter that the local schools were poor. I didn't have a car, took the bus everywhere even though I had a license and could have afforded a car. All my furniture was second hand. I remember how happy I was when my parents got me their friends sofa and I finally could get rid of the bean bags!

Nowadays, most youngsters have higher expectations they call needs. Cars (even if not new, cost a lot), places in nice areas, second bedrooms, nice furniture etc...which indeed makes it hard to save.

onlychildhamster · 04/12/2021 11:17

@vivainsomnia i still don't have a car. Furniture isn't particularly nice either. Just cheap things. £10 a month on phone. But my deposit was £58k, savings in total was £70k as we saved £60k in 3 years from living at home. I bought our flat at 27 and 29 respectively. Our flat is £400k so that's below average for London too. Area is quite nice but honestly living further out means more transport costs and it is harder to live without a car! And a small terrace in the home counties wouldn't be much cheaper than £400k either! My DH also goes to his office in Canary wharf 5 days a week so living outside London would be fairly prohibitive and also hard to manage childcare when we do have a child (MIL lives in London too)

onlychildhamster · 04/12/2021 11:23

@vivainsomnia what I am saying though is I would not have been able to buy a property if not for the fact that my DH is a Londoner and has a mum with a London house. I was lucky in that respect! She saved us so much in rent!

PrincessNutella · 04/12/2021 15:56

Housing prices are cheap in the UK compared to the US!

Phineyj · 04/12/2021 16:19

In real terms compared to wages princess? Your wages are higher. Also I think the home loan system is different - you can walk away from a mortgage in the US? Not here. Although maybe that's changed since the sub-prime scandal.

Phineyj · 04/12/2021 16:20

I also suspect you get a much larger square footage in the US, parking etc. Just not very comparable.

vivainsomnia · 04/12/2021 17:34

@onlychildhamster, £58k is quite a bit deposit though. Many people could get on the ladder with a much smaller one. London is always going to be much more expensive.

WalkingOnTheCracks · 05/12/2021 00:06

75% of your wages?

Most landlords want to see some evidence that a potential tenant can afford the rent. At 75%, I would never have rented to you, because it would be unfair on you - even if you wanted to do it - and a risk for me.

How are you in this position? Was the the rent that proportion of your income when you took the place on? If so, you shouldn’t have.

Or has the rent been unreasonably raised? If so, you have legal resource.

Or has your income dropped? In which case you’re in the same position you’d be if you had a mortgage - that is, you can no longer afford to live there.

WalkingOnTheCracks · 05/12/2021 00:07

‘Recourse’, not ‘resource’.

onlychildhamster · 05/12/2021 00:19

@WalkingOnTheCracks except that it is much worse if you can't afford a property that you bought. You would have to sell it and it is much harder to find a buyer than to find a replacement tenant (when my flatmate wanted to bail on the tenancy in university and I advertised her room on facebook, I had at least 25 people message me within a day). Worse if you are in negative equity, you could potentially lose your life savings by losing your house and have to start all over.

I believe the ballpark for a mortgage is 30% of income (plus maintenance- I just spent £500 in 3 days on boiler repairs). It would be very hard for OP to service a mortgage even if she had the deposit from not paying rent. I had an ok deposit for a FTB- 15% from not paying rent for 3 years (my very kind 'landlord' who was my MIL' and my mortgage is already 24% of our net income after tax. This flat would rent out for £1400-£1600 so nowhere near 75% of our net income after tax. I don't want to be harsh but even if OP's landlord gave her a rent holiday for 3 years, i don't think she could afford a mortgage on her current property on the basis of these figures.

Cameleongirl · 05/12/2021 00:42

Most landlords want to see some evidence that a potential tenant can afford the rent. At 75%, I would never have rented to you, because it would be unfair on you - even if you wanted to do it - and a risk for me.

That's a good point, @WalkingOnTheCracks. I've completed rental applications in the past and there's no way a landlord would accept a tenant who'd need to spend 75% of their salary to cover the rent. It's far too precarious for both sides.

Something must've happened to put @HereLiveIAmNotACat in this position, either a substantial drop in income or a massive rent increase (or perhaps a roommate moving out)?

EightWheelGirl · 05/12/2021 00:50

How would this work though?

Would I be able to rent a castle for the price of a large house?

XingMing · 05/12/2021 14:53

I do think that each LA area ought to set range guidelines for price per square foot private rentals, as in basic, medium and luxury, based on facilities, fixtures and furnishings.

Not that it would help much here in Cornwall, because every one with a spare room or a rental property does holiday lets and AirBnB. Friends who do this (retired, for their pension income) let from early November to just before Easter as winter lets, at market rates.

XingMing · 05/12/2021 15:09

Some areas of the UK are cheap compared to some parts of the US, @NutPrincess, but you need to compare Appalachia with NY or LA and the respective earnings expectations to those cities/regions to derive a realistic comparison. When I moved back to London from the TriState area in 1986, I took a 35% pay cut and my rent doubled. To say nothing about ticket prices and public transport (higher in London; my subway train cost 30c per trip flat rate). And that was then. It was only thanks to my US savings and a favourable exchange rate that I had a deposit for an apartment in London.