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)

Rented properties have to meet higher standards than a non rented property

Do you think this is a bad thing?

[quote caringcarer]@TinselTitsAndGlitteryBits, it depends if you are prepared to move to afford to buy. My son moved to Hull where property is cheap, taking a huge pay cut, but can buy a 2 or 3 bedroom terraced there cheaper than he can rent for.

@Tabitha005, how exactly do you rig an independent energy rating? I would love to know.[/quote]
I don't know which post you're referring too, but that's what I said.

I chose to move up north, but only because I managed to save up enough for a deposit. Some can't even manage to do that.

@S2617 Social housing isn't free? People in work can access social housing, it's a more stable way of renting a home.

The tenants still need to pay rent.

Some of the posts on this thread are pretty shocking. Makes me realise just how right-wing and capitalist Britain has become, and I don't know how it happened

My son moved to Hull where property is cheap, taking a huge pay cut, but can buy a 2 or 3 bedroom terraced there cheaper than he can rent for.

Do you think this is a good thing? Did he want to move? Is he close to family?

I would not like this for my dc.

No more social housing. Give people more education and force them to work. All this free stuff is beyond a joke.

I know quite a few people, friends and family members, in social housing. Every single one of them works, most of them full time. Unfortunately most of them are on a low income and could not afford to rent privately. It's all well and good saying people need an education but lower paid jobs do exist and someone has to do them.

@MaryAndGerryLivingInDerry

Rent not only has to cover mortgage but insurance, agents fee if managed by an agent, maintenence.

Err no- rent covers the market rate or thereabouts of the property. The mortgage, insurance, agents fees and maintenance are the landlords costs. The rent does not have to cover them.

Erm... do you understand how a business works?

Rent: £2200 x 12 £28600
Less managing agents' fees £4,000 ish
Allow for 6-8 weeks fallow each year 4400
Paint and inventories £1000
Safety checks/certs, boiler checks £200
Buildings insurance £500
Maintenance allowance for white goods/mattress replacement £1000
End of tenancy clean £200

28600 - 10,800 = 17,600 x 45% tax = 7600.
Net Profit £10kish without a mortgage.
Property is worth about £450,000/500.
Not much difference between BTL and other investment returns tbh. We have been lucky vi's a vi's tenant continuity but that's because properties are well maintained and we do actually care.

When the present tenants leave we will not get top market rent without replacing the kitchen and bathroom which have been on for 10 years. So that's probably another £1k per annum.

We have a rare gem of a managing agent who is worth their weight in gold and the cost of the agent in our case has been counterbalanced by very few fallow periods and the longest was 3 weeks.

If people have mortgages on BTLs there is very little income in it. We do of course have the capital gain but that is taxable of course.

I no longer pro ide a microwave. I have no idea what renters do with them! They also never appear to clean an oven!

But although there's not masses of immediate profit, at the end of the day its an investment because when you sell the property you previously get the money for the house, which will have largely been paid by tenants. Yes its given then somewhere to live, but if you own a house every month you pay the mortgage is essentially an investment as well as a place to call home, so there is a disparity. Not down to landlords to solve, and not saying its their fault and they're greedy or whatever, but the reality is really unfair.

Obviously*

@lupad

No more social housing. Give people more education and force them to work. All this free stuff is beyond a joke.

And how does this policy work in practice?

Easily. Go get educated, work, work hard. Don’t rely on the state. Make informed choices.

Too many people taught the government will help them.

[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]
Not saying people don’t have rights. Read the answer properly.

To clarify, I am saying people don’t have a right to be housed. It’s your responsibility, not the states, not your parents or anyone else’s.

@TinselTitsAndGlitteryBits to be honest they do not seem to be stressed at all, he just told me, a month before xmas that he was out of work again, I work part time, so having to find another 450 a month is hugely worrying. He really does not seem to be trying very hard.

[quote TinselTitsAndGlitteryBits]@S2617 Social housing isn't free? People in work can access social housing, it's a more stable way of renting a home.

The tenants still need to pay rent.[/quote]
It’s a rubbish concept. Doesn’t work in reality. Social housing should be made affordable housing. No more freebies!

As has been said again and again, comparisons between mortgage and rent amounts on properties are not the full picture. A fairer comparison is rent v mortgage + service charges (if a flat) + agents fees + tax + repairs + insurance + time for management (either personal or agents) + mortgage fees. After adding up all that, the disparity between rent amount isn’t so great.

The other factor to be considered is capital gain - for those saying the landlord wouldn’t leave a property empty if there were rent caps - not necessarily true. They would have to do the sums, and see if any cost associated with leaving it empty (eg council tax, insurance) would be worthwhile to service an appreciating asset. You only have to look at the vast swathes of London developments that are like ghost towns because investors buy them just to appreciate, leaving them empty of tenants.

Fixing the rental market is not as simple as capping rents.

1. we need more housing stock of the right tenure - endless luxury tower blocks are not the answer. Near me (‘cool’ London) flats lie unsold 2 years after being built and thousands more are planned. Instead of allowing these developments with their ever-shrinking ‘affordable’ options (not that 80% of market value is affordable to those in the most need), there should be more social housing held at a fair price.

1. If there was enough housing provided by the state for those on lower incomes, private rents would likely fall because there wouldn’t be as many renters scrabbling for the properties. There has been a fall in rent near me thanks to fewer people being around during CV19 (migrant workers, students etc). The state already covers huge bills for housing via benefits (which end up with private landlords) so if the government restructured the way it allows councils to borrow money, this could go from being a massive drain on resources to being (after some time) a money maker for councils. Rather than selling public land to developers that then build and rent back to the council, the councils should be able to build their own stock and rent it out.

1. Much more important is ensuring a fair and appropriate wage for everyone. No zero hours contracts, no unrealistic minimum wage - living wages and proper employment protection.

On a final note, how many of you homeowners who support a rent cap because ‘no one should make money from a human right’ extend that to your own properties? Do you sell at below market rate to help the first time buyer? Or sell at 1990s value because you disagree with the current state of the housing market? Of course not. You sell to the person who will pay you the most money, or close to with a better situation in terms of chain. It’s easy to be altruistic with someone else’s assets.

Easily. Go get educated, work, work hard. Don’t rely on the state. Make informed choices.

I'm questioning your education tbh.

One of the main reasons that rentals have gone up is because the government changed the tax rules massively for landlords. Lots have sold up as it's just not as profitable so there is a shortage of rental properties. It's supply and demand. Plus there are more people than ever looking for homes, so again more demand. Ironically the government have made renting more expensive and reduced the supply of houses which is not what the intention was. Landlords are in the main not greedy money grabbers but just people trying to make a living, like anyone else.

It's amazing how many people argue that they make hardly any money but yet they still hang onto it.

Too many people taught the government will help them.

Do we scrap state pensions & the NHS then?

(Responding to the OP, have not read thread yet.)

Am I the only one that thinks the property investment industry is horrendous and shows how awful, greedy and selfish mankind can be?

Interpretation: you would like a better deal even though every pound you gain would be someone elses loss. To be fair, the losers are probably a better-off minority, many people will be on your side because they identify more easily with you. That does not make it right though.

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?

It's been proven over and over that rent controls make it harder for renters to get a rental property, so no.

How can it be right that rental prices are ludicrously above mortgage prices

It's simple economics that renting has to cost more than owning, otherwise there would be no owners willing to rent. Zero.

On a wider note, this paragraph can be interepreted as a rant about some people having more money than others. All I will say is that communism has been tried and failed, and that in general the absolute wealth of the poor is highest where wealth inequality between them and the local rich is highest, so be careful what you wish for.

Unless you were fortunate enough to have a property in the 80s before inflation/money from family you’re screwed really

Although it feels economically incorrect, I've thought similar. It's hard to doubt that in future the only people who will afford to live in expensive areas are people whose parents did. I wonder if higher property taxes in London would encourage people with inherited wealth but low-earning ability to move out, making room for those with high earning ability but no inherited wealth. That would be more meritocratic. (It would also cause wages for low-earners to be higher, in cases where their jobs really need to be done.)

Interpretation: you would like a better deal even though every pound you gain would be someone elses loss.

That's too simplistic. I own a home & I don't think it's a good thing that prices keep going up. It's not good for society or the economy.

How can it be right that rental prices are ludicrously above mortgage prices

To add to my response to this, although rental prices must usually be higher than mortgage interest, the correct rent bears no relation to mortgage prices. If two properties are identical, they should rent for the same price, even if one landlord has no mortgage and the other has a 100% mortgage. The thing that changes with the size of mortgage payments is the landlords profit, not the size of the rent.

@lupad

It's amazing how many people argue that they make hardly any money but yet they still hang onto it.

What should they do to the money instead?

On a wider note, this paragraph can be interepreted as a rant about some people having more money than others

So you see nothing wrong with the global 1% owning so much of the worlds wealth? I do.