To think rental policy is stifling the market

[Bunny44]

I'm wondering if all this rental regulation is actually doing more harm than good to the supply of rental homes. I say this as someone who rented for years before buying and definitely suffered at the hands of bad landlords, but now I think that there is maybe too much regulation and it could be putting potential landlords off. In London where I live, demand is outstripping supply and pushing up prices.

For personal reasons I'm having to move out my home which I own and I was considering putting it on the rental market to cover my mortgage. I got quotes from estate agents which sounded insanely high, but when I tabled the rough costs:
40% tax on total rent minus the below costs:
Estate agency management fees
Electricity & gas safety certificates
EICR
Inventory & Check In
Tenancy agreement cost

I was only just going to break-even (n.b. you cannot offset your mortgage anymore).

While I was weighing up this and working out, my area has introduced new licencing for landlords which costs £900 and could be denied! Now at this point I felt like it wasn't worth the headache.

There's also the consideration that other new regulation makes it hard to give tenants notice, so if I need to move back into my property or sell it then I might not be able to easily. And that's if you don't encounter problematic tenants.

I can totally see why landlords are being put off and this probably isn't helping supply.

I'm not sure if the purpose is to force landlords to sell, but for instance I can't sell as I'm in the middle of a 5 year mortgage term and I'm not ready to buy another place yet.

Instead I'm looking at doing Air bnb or something like that which I've done before and found it easy and profitable.

I rented out a flat before and think I'm a good landlord - I make sure everything is taken care of super quick and look after my tenants. My house would have made a lovely long term rental and I know there is demand, but I just don't think I can afford to do it and I'm worried about the hassle as well.

Its an issue because, like your doing and quite a few others, is using AirBnB short term holiday style rentals instead of long term renting to working people.

Don't blame people for doing this but it doesn't help those who cannot afford to buy.

Govt policies are fucking useless.

@Cecilia When you say 'only just break even' what you mean is that someone else is covering all of your costs and you will still profit at the end

But nobody else IS covering all a LL's costs.

If a property is damaged/needs repaired/rewired. redecorated, new carpets, the perosn whom pays for that is the LL,

If there's a gap between tenants, the loss of rent affects the LL.

Whenever property is vacant, undergoing work, despite there being no income the LL still has to insure it, pay the council tax, stop it freezing,pay the contractors, pay the fuel bills so the contractors working in it have access to power and water to do their work. Maintain the roof and security, pay charges for communal areas etc.

They want stable communities which housing associations and charities provide but fewer private landlords can as they might want their house back or to sell it. House price rises are pricing and hoc landlords as well as potential owner occupiers out

Also there is going to need to be a lot of updating to housing to make them fit for climate change so landlords need to be able to afford to update. Also appears to be a lot of shoddy new builds which will need work

They actually want large corporate providers to move into the PRS because they think this is more 'professional'. The idea that these will create stable communities is laughable. I'm not saying the PRS sector is perfect by any means but this government with its revolving door of housing ministers are quite clearly not capable of developing a fit-for-purpose housing strategy.

As someone who is going through an absolute nightmare trying to get my family home back from tenants who are behind with the rent and can only be contacted through lawyers, please only rent out your property if you can afford to be without rent for at least a year, as that is how long it will take to get before a judge and get the possession order/ warrant you will need, certainly in London.

All we want to do is move back in to our family home, which was always the plan, and these were tenants who came recommended through someone my mother had known for 60 years. No one gives two hoots that me and my family are stuck in a property that is not suitable for our needs, whilst these people have actually bought a family property and are now doing it up (!), presumably to move into. My experience of the system is that it is utterly broken.

I live on a small 1950s housing estate that is very close to a University, a research park and a hospital. Standard semi detached houses - there's about 100 houses on the estate and approximately half are currently rented out.

When we bought here in 2022 there were only 2 houses on the market, both of which were clearly owner-occupied. We viewed both, bought our favourite. Just checked Rightmove and there are currently 6 on there, all added to Rightmove in the last month when the university term came to an end.

Selfishly I'm sort of hoping they'll be bought up by young families and the area will revert to what it was designed to be (rather than student central, they can go live in the town centre where it's acceptable to have loud music at 2am!) but once I put my NIMBYism to one side I can absolutely see that this is going in a really bad direction for renters. I'm 34 and we got on the ladder 6 years ago (and only 'thanks' to an inheritance from a parents' untimely death) - renting is recent enough in my memory. It was fairly crap then and it sounds really crap now. The gap between the 'haves' and 'have nots' is just getting bigger.

I'd rather rent to working people long-term, but like I said it's not feasible due to government policies making it harder and harder.

I'm not a commercial landlord, I just need to cover myself so I don't default on my mortgage while on mat leave.

@Bunny44 - you mention not being able to sell because of your existing mortgage (presumably early repayment fees?). Does this mortgage actually allow you to rent out your property? Most standard residential mortgages don’t.

I've requested a consent to let which my mortgage provider allows. Doesn't allow Air bnb but to be honest I'm not sure how they'd find out. Sure their priority is me not defaulting on my mortgage anyway.

Honestly sometimes feels there are just so many hoops to jump through and as I mentioned I'm only doing this temporarily to ensure I have a have a home for myself and my child when I return to work.

That sounds awful and exactly the sort of situation I want to avoid! Hope everything thing turns out OK in the end for you.

My mortgage is absolutely buttons. I could happily leave it empty or use it as storage facilities or just when I go up to visit family.

Or, alternatively, it could house a family.
Just depends on how much hassle is doesn’t it?

My neighbours houses are both rented from ad-hoc (older) landlords and the tenants much prefer it. Their landlords keep everything in check, don't raise the rents for years and are friendly to deal with. If it was commercialised they'd be squeezed for every penny and made to feel much more uncertainty.

Both of my neighbours could afford to buy but for personal reasons prefer not to. It doesn't suit everyone.

Well if they’ve bought a house, your best bet is to get a CCJ against them. They will be very keen to clear that. Otherwise they won’t be able to reMortgage or get any further loans to fix up their own house.

Yanbu. It was obvious this was going to happen when they proposed all these regulations.

Add in the fact that you can barely evict bad tenants and its hardly rocket science.

Obviously it's a hassle for people such as you. But ultimately the market doesn't need people such as you. It will be better for everyone all round, tenants included, if we can get rid of hobbyist landlords. Maybe there will still be a place for you all on Airbnb.

I agree with you OP. I ended up having a flat empty for 2 years while I was trying to sell it, as I didn't want the risk of tenants making the sale more difficult than it already was.

My parents have an empty granny annex, which they used to rent out but now find the cost and risks not worth the money they would earn.

This is not helping renters.

I think saying we are 'hobbyist' landlords is condescending and negates what I said about many individual landlords often being better to deal with. I disagree with your POV on this also from my experience as a renter. Legislation seems to suggest the government wants no rental properties at all, "hobbyist" or otherwise anyway.

Also not sure what are people supposed to do when they need to rent out their property temporarily for various reasons (relocation, change of circumstance).

@clarebear111 We went through similar a few years ago and it was one of the most stressful times of my life.

You will get there eventually and the nightmare will be over, but I will never ever let a tenant step a foot across my threshold ever again regardless of circumstances.

I thought that renting in other European countries was more regulated than in the UK and more secure for tenants?

Why is that such a problem for the UK?

It seems to the same with lots of things in the UK - people complaining about having a welfare state but European countries have more generous benefits (do European countries have government propaganda about benefit ‘scoungers’?), the strain on the NHS but European countries have a much better standard of medical care, free nursery places but again European countries have DC in full time nursery earlier and it’s much cheaper.

How come they can do all that but not us?

Different mentality perhaps? The ‘I don’t want to share, I’m alright Jack’ classist society we still have here?

I've rented in Europe myself in several countries and it's not all roses either. E.g. In Spain the tenant until very recently was responsible for paying huge upfront, and quite unjustified costs (much bigger than we've ever had in the UK) and they also have an issue with spiralling rental costs, although the good part is that you get longer tenancy terms which are more secure.

Even in Germany, which is often hailed as the gold standard, there are cities like Munich which are pretty unaffordable for most.

One thing that is difficult in the UK to most other countries is our mortgage system- in most countries the interest rate is set for the whole mortgage term and also rent increases are in turn controlled more. In the UK, neither are controlled leading to market fluctuation for buying and renting.

Aside from all of this, my post is about how current rental regulation in the UK isn't helping anyone - but especially the average person buying or renting.

We are intending to do this but it’s a complicated process. The priority is to get the property back. All a CCJ will do is encourage them to clear the arrears which, whilst welcome, won’t get us our family home back.

Yeah everyone always mentions rights in Europe (big place, different rulea tho so...) , but have usually no idea about responsibilities in individual countries.
I can totally imagine how even small things like daily airing or monthly drain cleaning in contract would go down here... I had people 😱 at me here because I air daily even in winter (especially in winter). My native country, small repairs are usually done by tenant, eg wobbly door handle, kitchen cupboard door etc. No one bothers landlords with small stufg. Yes, the security is often better, but it also comes with more responsibilities. Not paying? Unless rules changed, I would not want to deal with bailiffs there after court eviction. They will take everything fom you.

Re difficult mortgage, we have 5% deposits here. Many can dream about it and 25% is standard.

@JudgeAnderson sorry to hear you’ve experienced similar. It’s been incredibly stressful and an eye opener for me in terms of how the system operates.

Can I ask, what condition was your property in when you got it back? I’m expecting them to have trashed it because that just seems to be the sort of people they are. If your property wasn’t in a good condition, what were you able to do (if anything)?

I sold a BTL a few years ago that I’d owned for over 12 years and never made a profit from. I sold it for £1k more than I paid for it so whoever said you’d always make a profit on sale isn’t correct.

bad tenants are horrendous. My friend just managed to evict one who hadn’t paid rent for over 2 years and indeed they have turned the loft into a cannabis farm and trashed the house. Over £10k worth of damage plus all the lost rent.

someone else I know has been trying to evict a non paying tenant for getting on for 4 years now.

i am all for ensuring landlords are held accountable and behave well, and they shouldn’t be allowed to push rents up to ridiculous levels but I’m currently cursing the Scottish situation. I have a Glasgow tenant paying 30% below market value and I can’t put the rent up more than 3%. The mortgage is now more than the rent but there’s nothing I can do. The property is worth less than I paid for it due to issues with the development it’s in so I can’t sell it at present.

being a landlord sucks.