Renting. Does this sound right??

[Happyluci]

Since I’ve moved in 2 years ago my rent has increased around 18%. It’s set to go up again in June and this will be around 28% higher rent than when I got the keys to the house.

My landlord says his mortgage has doubled and has gone up 14 times in a year.

does this sound right or does it seem an unfair increase?

I know about inflation and mortgage rates going up but 28% higher rent in a year seems a lot to me but I could be wrong so just looking for advice. Thank you

You still get the capital gain of the value of the property. Coupled with the decrease in the value of money over time, it is the main benefit these days. Until the housing market crashes and interest goes up that is.

In answer to the OP's question which has been ignored amidst all the bun fights, a LL can raise the rent once every 12 months. Rent rises aren't capped in England (if that's where you are?) but they are supposed to be in line with market rates.

If you are unhappy with the increase you can take your case to a rent tribunal. Shelter will have plenty of information about this on their website.

@Densol57 no necessarily.
You can have a repayment mortgage as a landlord.
I know as we did that for a couple of years.

That does seem like a huge increase and I do think it’s not good practice to increase it so many times in a year. Mines going up at the annual review, by 4% which is very reasonable. I was offered a 2yr deal where it was £50 a month more, and guaranteed to not increase in that time. I declined though as I’m trying to buy and hoping I won’t be here for that whole 2yrs. Mortgages have gone up obviously a lot, the places I’m looking to buy 4yrs ago when I started saving my deposit was £800 repayment per month, now more like £1600 plus. I’d be paying half my salary on mortgage and it’s so stressful knowing what to do. My biggest plan is to leave the south east (even though I love it here) as I can buy back where I grew up in the north for half the cost. But I’ve got 2.5yrs to wait and I’ll be 50 by then

Advice to OP is always shop around don’t accept automatic hikes without seeing the market.

As for the inevitable LL debate, consensus is they aren’t charities but society is supposed to be grateful they provide a public service.
The gravy train of exploiting a basic human need is coming to an end- now we just need to build some homes and only allow U.K. tax payers/ residents to purchase homes.
imagine if someone bought up say all a shops baby formula and charged 6 times the price to parents to feed their child, there would be uproar.

Given that food and shelter are the most basic needs a human has, do you believe that food should not be a business either?

supermarkets/restaurants should all be government provided or something?

Im a big believer that the private rental market and home ownership market have failed in terms of housing on their own, not that they are failures in themselves because there is a market for them, they are needed. But that the failure to have a social housing market is what has caused the problem. Theres nothing wrong with private landlords until/unless society ONLY has that as an option and at the moment thats where we are

However when people come out with 'housing shouldnt be a business', you lose all credibility as an argument.

You can choose to have a repayment mortgage if you wish, its not obligatory to have an interest only, lots of lanldords do have repayment and lots of landlords own properties outright, theres a mixture

This happened to me. Rent increase of 50%. I'm a lone parent and it increased from 1000 to 1500. I just didn't have it. Nobody would rent to me so ended up nearly getting evicted. No council housing so if I was evicted I would've ended up in a council house miles away from my son's school. Found an amazing landlord who buys properties outright and charges under the market rent. Lots of single mums and dads on his books. He grew up on poverty and wants to make a different. I'm so bloody lucky and I'm so sorry OP. The rental market needs a severe overhaul.

soupfiend do you think it’s right that a foreign National who pays nothing to the U.K. economy can buy a property and leave it empty on purpose?

My friend's landlord is selling up and kicking her out - she can't find anything similar for less than double her current rent.

I rent out my old house - I own it outright (no-where that helps my friend), and my policy is not to increase rent on a sitting tenant (who's taking care of the property) - my rent is way below market rent, which is a bit of a double bind, as it means my tenant can't sensibly move out, because where will she find something similar for the same price.

It's not free money though - I'm responsible for all the maintenance, and anyone who owns a house knows that that's no small amount of work!

So sorry to hear this but glad you found your landlord.

The whole housing market needs an overhaul! This has all come from allowing overseas investors to buy up so much London housing which drove house prices up and had a knock-on effect throughout the country.

Now we have a combination of crazy house prices + crazy interest rates. Totally unaffordable for many people to buy their own place and unaffordable for many landlords to keep prices down.

Oh the fairy land you live in! The shit that landlords have to put up with no one would do it if you didn't make some money.

My mum has one property which she used to live in and has now rented out for many years. Over the years she has had some awful tenants.

Last year my mum inspected her property and the tenant had let the garden completely over grow. So the point you couldn't even get out there. It was part of the contract that she maintain the garden. Mum went and cleared the garden as a gesture of good will and it took her days of very hard graft. The person was home the whole time and didn't even offer her a cuppa.

Another time the renter let the kitchen get so mouldy the whole thing hand to be ripped out and a new one fitted. She has bailiffs come to the property because of bad tenants, she had people just up and leave without paying rent. She's left people pay reduced rent in exchange for doing work in the home which they haven't done and then just left. So many bad renters. She has talked about selling up many time because you now can't even claim the tax back on your mortgage payments. This sort of thing is what is destroying the rental market and making. With this sort of shit they have to put up with they definitely deserve to make a profit

No.

Whats this got to do with this OPs query and what I answered?

It really depends where you are in the UK. For example there's a cap of 3% every 12 months on rental increases in Scotland at the moment, not sure of the rules in England if that's where you are, must be some sort of cap surely?

Because that’s the open market you see no issue with- turning property into a portfolio asset. Regulation is needed.

I think I mentioned private rental market and home ownership market, its assumed within that term Im talking about people buying a house to live in

However, although I dont think its right that person x from country x buys one of those luxury flats somewhere and it just sits there, I can tell you this is not what is fuelling the problem in this country

The problem is that there has been a decimation of social housing availability. We need a huge, huge mass building programme of social housing, not 'affordable' housing, social housing, millions of them. Thats what is needed and there is no political will for this. Voters wouldnt even want this either.

Russian or Chinese or whoever buying up bits of London or other big cities is really neither here nor there, they're not buying the house next door to you.

We need rent control, (could set at current market rates but then freeze to gradually limit public expenditure), housing benefit to cover market rents, an end to s21, and mass investment in social housing (could include compulsory purchase of empty/landbanked property.

I’m just about to sell my flat for this reason. It’s put up the rent a lot and deal with the fallout or cut loose.
I never planned to be a landlord, it wouldn’t sell a while ago and I ended up renting it.
I’m dreading the idea of having to tell a family to move, I feel quite sick. I’ve never put the rent up while they were there, always tried to be decent but it’s become unmanageable. I feel sick as I know they can’t buy and rents in our area are insane. The same flats are at least a third more

The housing situation in the UK is utterly fucked imo.

Rents are massively unaffordable for people on an average wage in much of the country, so the taxpayer has to subsidise the rent via UC/HB. A 2-bed flat in my part of the SE, 50 miles from London, is likely to cost £1,300 a month or more.

Many LLs are expecting tenants/taxpayers to just fork out more to cover the costs of their BTL mortgages, which are enabling them to buy a valuable asset which is likely to increase significantly in value over the medium to long term.

And homelessness is crippling local authority budgets, because it costs so much to keep homeless families in temporary accommodation, and there are far more of them because of the lack of affordable housing.

We absolutely need a massive programme of building social housing, and it would be great if there were incentives for building on brownfield sites to minimise pressure on the green belt.

But back to the OP's question: a 28% increase over 2 years would just be keeping up with market rates here, so if average rents in your area have seen a similar rise, I'd say it's reasonable. It's worth checking if you're entitled to any help from UC. If not, check again in April as the cap on the amount that can be covered by UC is going up for the first time in about 3 years, so you may well be entitled to some help then.

I have to admit to having had a chuckle at 5% interest rates being described as "crazy" though. That's still lower than rates were during most of my mortgage paying years, where at one point I was lucky enough to remortgage at a mere 12.5% just before they shot up to 14% and then 15%. I know the capital amounts were a lot lower, but so were wages, and the increases were totally unaffordable for many. At one point, my local county court was granting more than 100 repossession orders a week to banks and building societies.

Not true.

There is a good section in the book 'How to Own the World' on this.

When Chinese, Russian or Arab investors come to London with their millions, they drive house prices up. Massively. This means that the same UK residents who could have bought in Central London a little while back can no longer afford it. These people are subsequently pushed to less desirable areas of London. They then drive the prices up there, meaning people in a lower income bracket move to the outskirts of London.

This keeps up. Less money, move to the home counties. Locals outpriced, so now they are moving to the Midlands/up North. Each group is displacing the other and driving up property prices outside what should be reasonably expected.

There is a reason that my granny, a single mother on a low income, could buy a four storey house in Kensington 40 years ago, but the same property would be worth £4 million pounds today. That's not just the natural passage of time and appreciation of the housing market. It's the recent abnormal forces of foreign investment in London, which has had detrimental effects in the rest of the country too.

Why does he feel you need to cover his mortgage?
Grabby landlord buying multiple flats and raising rent to no end to cover their mortgages. If you expect your tenants to cover the mortgage, don't be a landlord.

if you have a standard mortgage then pay the extra fee to let it out when you move, then you’re stuck on the most expensive variable rate as the bank won’t let you get a new fixed deal while it’s rented out. So your landlord may be acceptable rate increases to avoid having to evict you

I'm a bit confused. How do you think renting works? The renter pays rent and with that money the landlord pays the mortgage.

....and with that money landlord pays some of the mortgage.

It is true that the rates have risen, but in this case the LL says his mortgage has risen 14 times in year - which seems very unlikely, even on a variable rate mortgage. As you mentioned further down, most BTL mortgages are interest only (mine is too) and generally are fixed for a good amount of time. It should also be considered that rates are starting to come down slightly. I am lucky that I was able to rent my property out when I moved in with DP, albeit I am just about to complete on selling it as we want to buy on together, but you have to factor in greed here - 28% increase in rent in two years is not proportionate to how much the LL's mortgage/costs could possibly have increased by.