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)

Well everywhere I look, people have new cars and are spending freely…. Choices.

@lupad

I wasn’t suggesting it was only property that attracts CGT, I was pointing out that if the goal is to get more properties on the market to bring prices down, lowering CGT on property might be a good way to do it. It would certainly make my sums change to a point where selling would be worth it, and I’ve made nowhere near the gains others have.

Ah but do they own those cars or are they PCP/leased? Is the spending on credit?

It's shit but it's really the basis of capitalism so I'm not sure a mumsnet thread is going to change anything.

Housing shouldn't be treated like a commodity because it's a basic right. We treat it as if it was the same as tins of beans or whatever to be traded on an open market and landlords respond by maximising their returns, regardless of the human cost.

If you owned a rental house, would you charge less than you could, just for the sake of society?

@MaryAndGerryLivingInDerry

MN is hilarious. On this thread we have people saying the solution is more social housing, rather than a rent cap, on another thread the OP is saying that social housing (or what they refer to as ‘tax payer’ housing) is not the solution and tax payers shouldn’t have to pay for someone else to have cheap housing. Love it.

I'm happy for as much good housing to be built on redeveloped urban land as possible, and I believe tower blocks can provide good housing, so that would be a lot of extra housing. However, I don't want the population of the UK to expand, and I would like most of the country to remain green. I do believe that just continously building more houses will create induced demand, so it's not the ultimate/correct solution. (Induced demand is like the phenomenon of building more roads causing more car journeys. Building more houses will ultimately result in more people.)

No matter how much housing you build, there will always be people who can't afford it. The solution is not cheaper houses, or controlled rent. We need to have market rates for both, even if these are driven up by green belt restrictions, and pay housing benefit so the poor have reasonable housing. There will always be poor, and they will always need subsidising.

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
The alternative is to expect private landlords to become social landlords with all the risks. Investments are always risky, and although property has always been relatively safe, there is no guarantee at all it will remain so.

It's amazing how many people argue that they make hardly any money but yet they still hang onto it
They don't! A very large numbers have sold up hence the current crisis. I will most likely sell when my tenants go, despite yet more tax I'll have to pay. I haven't yet because I know there no properties at the same rent available in the area and hasn't been for 12 months. There are nice people who've only paid late once.

I think the whole system should be overhauled so that there are fewer private landlords, and that being a buy-to-let landlord is a less appealing way of amassing a fortune.

Being a landlord is not something that large-scale business are generally interested in. To do well at it, you have to operate on a small scale with local knowledge. (I say business, but I guess the same thing applies to non-profits, if they're going to be economically efficient.)

So I think the solution is not banning small landlords, but regulating them to the right degree.

If we replaced profit-driven small-scale private landlords with non-profit large-scale corporate ones, I doubt rents would fall. There isn't that much profit on rents in the first place.

My profit is £4000 a year to pay towards the mortgage repayment of £80k. Out of this £4,000 I also need to account for all repairs, refurbishment and maintenance, as well as rental loss. So some years, I manage to pay a bit towards the repayment, some years, I am in deficit.

I pay 80% of the mortgage repayment from my professional income.

Yes I benefit, at the moment from the capital growth, just as any home owner does.

@Accidentgirlfriend

Here a 3 bed house used to be £525 / £550 pm now you can’t get even the roughest of houses for less than £750 some are £900 pm which is a ridiculous amount of money . 3 bed houses on a nice estate £1200 ! That’s more than I earn a month add on deposits and fees and the prices are just shocking . We need to move so I can have my children living with me but we are stuck in a one bed flat because we can’t afford the rent ! I don’t know how people who are claiming benefits are getting on finding properties because we both work and can’t afford to save for deposit and fees so I feel for people who don’t work . No wonder there are so many people on the social housing lists .

We paid £2,400 a month for a 2 bed apartment. Ok that's in Sydney but that's just life - prices are going up every year because of demand. Really no point comparing prices to "what they used to be".

@lupad, my son has no family in Hull. He does have good friends there from uni. He is an adult now and even though I would love for him to be closer to me I accept his decision and have helped him all I can. No different to my dd living in Bristol with sil and dgc. I would love them closer but as adults they choose where they want to live and I support their decisions. I visit them and they visit me. Lots of DC move away to live as adults. I am pleased for him getting onto the property ladder and calculating it was worth taking a massive pay cut to move to Hull, but still realised if he stayed where I am he could not afford a mortgage even earning more money as property prices so high. Yes I am pleased he is independent and brave enough to make the move.

Nothing to stop you saving up deposit and buying your own house. No one is forcing you to rent from LL.

Laugh or cry? I don’t know which to do. Laugh. It has to be a joke.

It’s supply and demand op. Private Renting usually covers the cost of insurance, maintenance, tax etc, hence why it’s above mortgage costs. Plus it’s a business like any other, only social housing differ in this. Private landlords are not providing a charitable service.

I don't understand why, instead of building more social housing, why doesn't the council buy back housing? surely developers could buy old property and do it up for council tenants?

@Phineyj, actually that was the case during Covid lockdown but now section 21 is back to 2 months no fault notice and section 8 back to 2 weeks.

The reason I have btl is for mainly capital growth on the property. Property prices went up 11 Percent last year. Stock market about 3 Percent unless you are a wizz at picking out favourable stocks and shares.

@saveourtrees I've heard in some LA's they're actually plannin on doing this, I may be wrong though

As far as LL's go I don't have any positive experience. Waited ages for my council flat in a private rented house with no central heating system, cost £550pcm and my landlord did absolutely 0 repairs, the house was absolutely grim but I'm on UC and work so I had to take where would accept me.

I do browse rightmove and I do agree the rental prices have soared even in the last 12 months. The same houses that were up for £550-£600pcm are now on for around £700/£800! That's in the northwest as well so it's not just London and the south

Renting is a business and like all businesses it would not be done if there was no financial gain or profit.
The landlord needs to return a profit after, paying for the property loan, buildings insurance, tenant insurance, letting agent fees, maintenance and upkeep costs, and also to cover for period of vacancy during tenants and tax on the whole amount of rent before deductions.
You cannot simply compare just the cost of a mortgage against your rent this does not taking into account many other expenses incurred as a landlord.

Private rentals have to account for the cost of void periods. And this could differ hugely based on housing type/location. A flat with private/communal garden in London might have very few void periods while a terrace in a deprived part of Middlesbrough with few jobs and a mortgage that doesn't allow the landlord to rent out to social tenants might be empty for months at a time. Thats why the cost of being a landlord can hugely differ for properties. There are many london properties where it is cheaper to rent than to buy on a 25 year mortgage (such as my property), but I still bought it so that I wouldn't have to pay rent during retirement and also as I am young, I can spread the mortgage over more years (though I overpay by £1k every month, hence i spend £2k on housing per month excluding service charges which is far more than rent).

I don't think rent caps are the answer as it still doesn't solve the large housing benefit bill if many people can't afford to own at retirement age. I would support government built housing for middle income and low income people like in Singapore so they would not need to pay rent in old age.

So you think a landlord should be out of pocket for having someone live in their house?

Comprehension fail.

I'm not a LL or a renter (well kinda renter coz I have a mortgage so renting from the bank in a way, although if I pay off the mortgage I will eventually own my own home, feels like a long way off)
But surely if banks didn't loan money for BTL then most of this wouldn't be an issue, as I would have thought very few people would have the capital to buy a property for rent outright?

I also think as a landlord you have to pay more for repairs as opposed to being an owner occupier. My oven broke down during the lockdown and it was hard to get anyone to fix it, so I didn't fix it as I don't really use the oven. If I was a landlord, I would have had to get someone to fix it within the week no matter the cost.

And I am sat there in a jumper, running a borrowed space heater from the neighbour. My combi boiler is broken and the gas engineer is hopefully coming at 2 pm to fix it. I have to pay for that no matter the cost. The renter doesn't need to worry.

At the end of the day private landlords are businesses

Oh and for anyone who needs it pointed out, this^ is the problem.

@RandomLondoner, I charge under market value as I like to be picky about my tenants. Most of the tenants I have in 6 btl properties stay for 7 or more years. I am making money by capital growth. I am Godmother to one of my tenants DC. I have been invited to several tenants weddings as well. Don't think that would be the case if they thought I was a bad LL. I cannot understand LL who let their property asset fall into disrepair. If the property needs work for maintenance you can take the cost of materials and labour off of your tax bill. I can only assume the rough LL who never do maintenance and allow their property to fall into disrepair don't pay tax.

@lupad

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

I hang on to mine because I moved in with my partner. If it doesn't work out , I'll have somewhere to go back to. I'm too old and earn less now so wouldn't be able to start again if we split. No rent increase for 3 years , any repairs done immediately. I make about £100 a month so not really profitable it's my future security.

@saveourtrees

I don't understand why, instead of building more social housing, why doesn't the council buy back housing? surely developers could buy old property and do it up for council tenants?

Councils can’t afford it, they instead pay golden hellos to landlords if they give their property to them so the council can give it to undesirable social tenants.