Rent increase - fuck fuckity fuck!!!

[BlondeWaves]

Moved into my house 2.5 months ago and now having to move as had a letter from the landlord to say rent is going up by 150 a month. I KNOW I am being unreasonable but I am sat here sobbing because I've just settled here with my young child and the thought of having to go through all that upheaval again is so stressful. I can't afford the extra 150, I'm already stretched with the way everything has increased. This could happen again and again and I just hate our government and the way things are at the moment. I have no resentment towards my landlord as I know his mortgage has realistically gone up by more than 150 a month, but fuck, I'm so stressed. Don't even know what I want from this thread, maybe a handhold, maybe to be told I need to suck it up (weirdly I respond well to tough love) but I need something. Anyone there? 😭

@MXVIT... yeah, apparently covid resulted in some hastily enacted laws designed to prevent landlords from jacking up the rent because they lost their job or whatever. At least in Australia. Covid changed the status quo in many, many ways.

But prior to that... if the mortgage price went up, the landlord could raise the rent anytime as long as they gave appropriate notice. 30 or 60 days, I think (although that could vary between countries if you live elsewhere).

Others have made excellent suggestions about talking with the landlord and trying to work out a compromise - they're right that the process of filing for eviction and finding a new tenant will be a certain level of hassle for the landlord that some would wish to avoid. So the OP should definitely have that conversation - you don't ask, you don't get, and it's perfectly reasonable for people to at least attempt to compromise on conflicting priorities.

@rangagirl how do you feel about the money you pay in tax being paid out as housing benefits which go to landlords who pay off spiraling mortgage costs? Do you think that this should just increase indefinitely so landlords don't lose out and their investment properties are paid for by public money? Do you not think there is a point where landlords need to sell up rather than pass the costs onto others?

30 days seems a very low amount of notice. It's basically your next pay cheque!

My mortgages have gone up by about 350£ each but I wouldn’t dream of passing on the whole whack to the tenant—what tenant could stand that anyway?
More to the point, everyone can lock in a deal at least 4 sometimes 6 months before their current fixed rate ends. This means that you should know 4-6 months ahead what the mortgage will be and, if it’s a new let, set the rent accordingly. The mortgage increase didn’t just creep up on the landlord and take him/her by surprise.
It does look like they got the op in as a tenant with the intention of soaking them for the new rent down the line. My only problem with this theory is that why would you think that someone in the op’s position could bear the increase?
Mind you, it could just be that the LL suddenly got wise to how rents had gone up in the area (here in London it’s astonishing, and I watch the market closely) and decided he was “robbing himself.”
Whatever, it’s still shitty behaviour. I’ve never had anything to do with rolling one month contracts so don’t know what protections there might be, but surely there are some.

Suggest working out a way - someway - to find £150 and staying where you are; it's tough to move and tougher to find somewhere good. I'm a landlord - with a House in Multiple occupancy. My mortgage just went up from £490 per month to £930. The energy bills (which I pay as part of the rent) are up from £80 per month to £500 after the subsidy is removed next March.

I didn't 'lock' into a good mortgage deal earlier because I had sold the house 2x since Jan. Both sales collapsed.

Over the past 5 years as utilities went up I froze the rent to keep the tenants happy - it reduced my profits but they're not well off.

But now my overall my profit on the house has disappeared and I'm going to be subsidising the rent/lives of my tenants by about £100 per month. I just had to pay £800 to renew my HMO license, and £800 for all the certificates to get the license. Currently I also have to fund a £5000 bathroom refurb.

OK in the past 5 years the house went up in value but now it's going to crash and end up below what I paid for it.

I sold the house 2x since January but both sales fell through and now the market is crashing. If I fix the mortgage I'll get a £9000 early repayment penalty.

500,000 landlords are selling rental property; this will probably revert to owner-occupier. All past governments from the past 40 odd years needed to invest in social housing and always had a reason not to do this, letting private landlords fill the gaps. But now we have to leave the market.

The 4 volume house builders (Barret, Wimpey, Persimmon etc) have enough land to supply all the houses we need but they're sitting on land with planning permission as that goes up in value it pays them more not to build on it. The government might crack down on this and remove planning permission if they fail to build after 1 year.

But overall I don't know the solution, either. We're not all evil bastard landlords out to grind the money out of the less well off. It's an exchange: if we provide a good, well maintained home, the tenants get housed, we make a profit for our efforts.

If we get to make the effort (trust me, I've dealt with a tenant eviction for indecent exposure, tenant disputes, monthly maintenance issues etc etc) and just lose money, they'll be no rental property left.

I was really confused reading these messages. So many seem to have variable rate mortgages. Are they easier to get or do the banks really push them on you? No way would I get a variable rate mortgage. Interest rates always go back up, usually 2-3 times during an average mortgage length. I mean, unless I was pushed into it or denied anything else. Owning with a variable rate is still better than renting. I guess landlords do get them a lot since they just assume that the costs can be passed on.

mandle usually a fixed rate only lasts 2 or 5 years (whereas abroad it can be even up to 30 years in some countries). Mine is fixed for 5 years for example.

What is the latest @BlondeWaves ?

Hiw can you possibly compare the percentages without knowing how much their mortgage borrowing is? And increase in the mortgage rate of say 2% doesn't equate to a 2% increase in payments. 🤦🏻‍♀️ It could be many, many times that, and in many cases the landlords mortgage payments will increase in nominal value by far more than even 10% rises being passed on to tenants. Some mortgage payments are doubling or more. Do you understand how interest works?

Would you explain it to me please. I would like to understand.

Further to my answer above, I am presuming you work out the interest rate increase on the whole amount you owe which as you say will be more than calculating an increase on the monthly payment? So I do see that someone who still has a high buy to let mortgage with a lot to pay off or on interest only will be paying more than a 10% monthly increase, so I see why they may increase their rent.

If a landlord wouldn’t lose money and break even then I don’t think they should increase their rent as they will still have an asset at the end of it, but I highly doubt unless the state make them they would do that. Those who have paid off a lot though will not see such big increases and I hope they are not increasing rent regardless.

Personally I think banks being allowed to sell buy to let mortgages from the mid 90s has contributed to rising house prices and I would be happy to see the buy to let market shrink in the long term as long as the houses are not sold to big corporations which is a risk. Long term the govt really do need to increase social housing.

I personally feel the landlord is a shark. I would never do that, it's totally unreasonable. It's obvious that the average person cannot manage such a massive increase, especially so early into the tenancy. It's a business decision that's gone sour for the landlord and he's passing that on to the tenant (no fix, poor financial planning or simply jumping on the bandwagon and being greedy). I have just told our tenant we won't be increasing the rent for the next 6 month period as we know things are tough, and even if we did, it would have been £25, a 4% increase. Are you in benefits? Maybe he's looking for his cut of your crisis payment. I feel sure there should be some legal challenge to this, as others have said.

Surely buying to let as a means of paying your own mortgage and then putting rent up is no different to hiring people to feed you grapes.

If you are claiming UC and any of it is housing / council tax related the rent can only go up by a fixed percentage. Check with Shelter or citizens advice about claiming housing benefit if you’re already on housing list. Good luck & best wishes

My mortgage was locked at 5% for 5 years in 2017. When I sold the house (2x) since Jan this year I did not want to re-join another locked interest deal because then I'd pay a big penalty when the house completed. Now the house sale fell through and interest rates are up. The buyer dropped the purchase on Oct 1 and my interest rate went variable Nov 1. Thus the jump from £490 to £930 per month.

The rates for buy to let are higher than for private purchase with more fees attached (I paid a £5000 arrangement fee on this mortgage at the start); most landlords also have interest-only mortgages.

I tried to get back into a locked deal - best rate £650 per month - but the mortgage co is not returning calls right now - probably wants to hike the rates again.

The fact that many buy to let landlords will have to sell up may be a positive - more houses on the market to sell...and there's going to be a big property crash...

Ironic that when property crashes the talk of 'not enough houses' usually disappears for a few years (having been through 2 previous big crashes).

Typical buy to let loan might be 75% of the property value. Assume a little house in the SE costing £350k (which is what my son bought and lets out - he lives at home in my house).
So in this example £262,500 borrowed at let us say 3%,. So that is 7875 or 656 a month. Rent is £1100 a month. Landlord of course also pays for repairs letting agent fees smoke alarms, annual checks, budlings insurance and costs of deposit schemes and much else - let us say about £3000 a year, may be 5k in bad years. Landlord might well have a month of the property empty in a year the tenants move out. So say expenses £3k a year to be on the low side = 250 a month.

So 250 plus 656 interest = 906 - landlord is making about £200 over the costs, a month in a good year. As soon as the property is empty for a month or the boiler goes he goes into a loss. However we then bring in income tax. Nowadays many landlords cannot get the interest against the rent much at all so he is taxed as if he was not paying interest by and large so is making a loss. This is the main reason there are not many properties to rent because thes tate decided to tax landlords on profits they don't make. This is no surprise as the aim was to make these houses available to first time buyers or cash buyer landlords with no mortgages.

Mortgage doubles to 6% so all those costs double. Landlord is well into a monthly loss and leaves the market.

If the property goes up in value he might hold on but given today's CGT changes - CGT free band of 12k or so just about all going it becomes less and less worth bothering.

You’ve so gone off tangent in your desperate attempt to garner empathy for your landlord son - yes we’ve dutifully noted how he’s losing money in his efforts to be a decent BTL property owner - that you’ve completely ignored the plight of the OP and explained something no-one asked you to.
It’s not all about you..

Finally got to the end of this thread. @TolnfinityAgain has managed to brag about their assets, belittle people who haven’t accumulated similar wealth, and spit bile all over the thread. I can only assume it is a parody poster.

Mine went up £300 so I sympathise. I don’t think you’ll find something else very easily, they have all gone up. A three bedroom where I live is £2000 per month, it’s madness

@Xenia @Mandy80 shes explaining what her sons situation is. The outlook is that corporates will take over BTL and not in a social housing way and if you think that’s a good thing I wait to be convinced. Hampton estimate at the beginning of the year that 28000 landlords are exiting the BTL market and with the campaign by Shelter to abolish the section 21 more are predicted to go as it stands now 40 people are going after every rental
property. As a landlord - soon to be not I cannot see how this situation will be resolved. I am all for social housing there isn’t enough atall but abolishing the BTL landlords will magnify a chronic situation 10 fold. We are the only business that cannot claim legitimate costs - mortgage interest hence making a business model unsustainable. Resulting in an exodus of landlords and exacerbating a crisis don’t blame landlords blame the electorate for not investing in reasonable housing

My son isn't losing money on the buy to let as there is no mortgage interest on it although as his tax rate increases to 40% probably next year the game will not be worth the candle I would image other than I and he want him to have a foot in the property market for the future so he will probably just keep it to "wash its face" as it were until he is certain where he wants to live (he currently lives at home).

I was just pointing out what the impact has been on the state choosing to make landlords leave the market has been - of course it also maeans more properties for first time buyers to buy if, in the SE, they can afford £300k+

As Parsley says lots of landlord are selling up. The interest rate changes for those with a m ortgage was the major death blow. EPC rule changes is another big issue if it goes ahead. I a old enough to remember the Rent Acts an nothing being available other than from landlords breaking the law; then the assured shorthold came out in the 1980s and it was a whole new world of being able to find properties to let.

One of the biggest issues is we have 18m more people in the UK than when I was born and the planet has now reached 8 billion people. the UK has never had has high net immigration in its history ever and all these people need to be housed.

I'm a LL too but would never raise a rent until a tenant had been in the property for a year. My mortgages have gone up but I wait until a new annual contract to increase the rent and give the tenant 2 month's written notice so they can move out if they did not want to rent at the increased rental level. OP has only been there 2 month's.

Every sympathy but its not LLs fault mortgage costs have rocketed, that interest payments are not longer tax deductible, that EPC ratings will soon change, adding even more cost to the LL, a weird idea as ordinary non rental homes aren't being forced to have higher insulation standards are they?

My friend is renting to a woman with 2 young kids, 600 pm, her mortgage pm is now 825 and the house value is dropping back, she hasn't put the rent up but she will have too OR sell, who is this helping.

Around me, there are so many houses for sale that say "No onward chain" you ring up and its ex rental, number of sect 21 s that have been issued has soared, so supply down = rents up.

Now we also have the chance of getting 4% saving rate on instant access or 6% fixed rate, so cash buyers are also avoiding BTL too.

No party seems to be acknowledging the issues both LLs and renters face, let alone putting forward any solutions.

There’s no solutions being given by any party it’s absolutely shambolic !!! X