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

My property is near a hospital. Lots of staff rent because they're on rotation. The tenants at the moment came from abroad on a recruitment drive for medical staff.
Where do you suggest they live?

Have you looked at any figures to back this up?

So a property that might be worth 500k, 200k, a million perhaps?

How much do you think its coming down to?

The same tenants that dont have a deposit/credit availability/pass affordability checks?

Except for when I come along and buy all the milk in the shop so there's none left and sell it to you for double.

Yes, you'll pay it because you need milk ( In this scenario) but doesn't make it right

Then someone will chime in

"If I don't sell the milk, how will people who need milk be able to get milk?"

And it goes on...

Some things should not be a commodity to make profits and drive up costs. Housing is a basic human need and should be protected

Purely from a numbers basis, the average rent for new lets has increased by 8-10% on an annual basis since mid 2021. So if you moved in two years ago & it was priced fairly then, an 18% increase is probably just keeping it in line with what else is on the market.

Tenant demand has been dropping pretty steeply in the last few months though, and rental growth ha been decelerating, so hard to justify even more increases in June. Keep an eye on new listings to see what else is out there to gauge market comparables and try to negotiate with your landlord (https://www.zoopla.co.uk/discover/property-news/rental-market-report/ this is a good resource if he tries to claim it's just what everything else in the market is doing). If there is no budging, look for another property - come April/May I think you'll be able to find better options elsewhere.

Yes, I don't think rent should be covering 100% of sky high mortgages.
Greedy people buy lots of houses they can't afford, rent house sky high.
Someone decent will buy one extra property if they can afford to pay some of the mortgage themselves (let's say 15-20%), knowing fine we'll the tenant is covering most of the mortgage, thus the LL is benefiting already.
If LLs sold tens of houses they can't afford (like someone here saying how she owns 8 and had to put rent up and how she's helping the OP by trying explain why the costs have gone up, oh bless her heart), there would be more houses available for people who need them.

Where I lived, rich people from Middle East bought lots of flats, are maintaining them to an absolutely terrible standard and increased the rents. Because they bought and own so many flats now, tenants have nothing to do other than pay what they ask for for these absolutely disgustingly maintained properties. That should not be allowed.

Just so we're clear....
If I've only got 80% of the mortgage covered and the boiler breaks leaving a family with no heating or hot water in the middle of winter, where do i find the money to pay for that? Because that's my responsibility.... to change the boiler, say a 3 bed semi, say 3k.. where is that money coming from? I've already paid a hefty deposit, I've already done the place up to standard, I'm already paying 20% of the mortgage. Where should i magic this 3k from?

Yes, I don't think rent should be covering 100% of sky high mortgages.

Landlords won't stay in business if they're having to subsidise other people's rent.

We need to disconnect having a mortgage of any size with the rent that can be charged as they are independent of each other. The rent is dictated by market forces (supply / demand etc) and has nothing to do with the mortgage the landlord does or does not have.

That said, a buy to let mortgage will be offered by a lender if the rent exceeds the mortgage by a certain amount, so it is likely (albeit coincidental) that the rent pays the mortgage or the mortgage interest. At least that was the situation until the interest rates changed but even that does not trump market rates even though it does influence them to a degree. You can't buy a house you can't afford, but what can happen is that interest rates change whether a house that was affordable remains so. This is not exclusive to landlords.

Your argument about landlords selling to make more property available also doesn't stack up as it would only make the property available for someone wanting to buy, and not for someone wanting to rent unless it was sold to another landlord. I don't believe there are any people who buy houses and then rent back to themselves.

The simple solution is to make the maximum rent a landlord can charge be fixed as a proportion of their mortgage payment. If say landlords could only charge 90% of their mortgage payment it would get a lot of the amateur landlords out of the game. No mortgage = no rent chargeable. For the serious property speculator it still could work, they'd lose money each month but would still build up equity. It'd get rid of those who just have an interest only mortgage for a start.

No mortgage = no rent chargeable?
So let's say i got to the end of my mortgage on my rented property are you saying i would no longer be able to charge rent? Am i reading that correctly?

Landlords generally don’t make any money from rent. BTL mortgages are interest only, so the mortgage will never be paid off (Contrary to what people claim about renting means you’re paying someone else’s mortgage off). If the mortgage rate has gone from say 2% to 6%, the repayments triple which is what most landlords are facing right now. Landlords will make their money when they sell the house, because house prices will usually have risen.

So you think people should buy property to subsidise other people's (strangers) housing cost? What a fantasy.

Whose housing are you subsidising by 20%? If you're not doing so, why not?

I don't expect my landlady to subsidise my housing. This is pure wishful thinking and I'm a realist. Like someone pointed out, rent is dictated by market forces.

Oh so properties owned outright would be free to rent?

I keep seeing this claim that the mortgage will never be paid off

Really

So all those interest free mortgages home owners took out on their own homes, never got paid off? Of course they did, because either there was another product running alongside or they changed to a repayment mortgage

The mortgage gets paid off in the end, it might not be via the repayment method but it gets paid off, otherwise whats the point of buying the thing

The point is that you make a huge gain when you sell. You can’t rent out a property long term with a repayment mortgage (some mortgage lenders may allow it for a few months but most will make you switch to a BTL). If you borrowed £100K and rented it out for 20 years you’d still owe £100K to the bank after 20 years. But in that time the house you bought for £200K would now be worth £600K, so when you flog it you get back your £100K deposit, pay the bank off, and you’ve made £400K profit.

For many years, landlords could offset the tax payable on the income against the interest payable on the mortgage, but not the capital. This is the reason why many landlords have interest only loans which will only be paid pff when the property is sold. The government stopped this a few years ago. For this reason, most landlords with a mortgage are unlikely to make any money on a monthly basis, especially with maintenance costs etc.

This is why many are selling as it is only very efficient if you have a small mortgage or no mortgage at all. That has the impact of making the available pool smaller and driving rent prices higher.

As someone else said, the hidden benefit is that the value of the property increases, however that is also not free money as capital gains tax has to be paid on it. It is also reliant on there not being a market crash.

This isn't a bleeding heart story for landlords as they will either make money (in the short or long term), or they will sell up. It might be better thinking about it another way in that the higher rates of tax being paid by landlords (income tax and capital gains tax) contributes significantly to government coffers.

Its your choice to have your BTL mortgage as interest only. It doesnt have to be

It's not subsidising someone's rent.
It's paying 20% of THEIR OWN mortgage for property they own that will eventually get paid off, mostly by tenant. LLs can then sell and take a stack of money if they wish or continue renting for a good profit.
If you ask me silly questions like that, you clearly don't understand what I'm trying to say. I have no desire in chatting to you and won't be replying beyond this message.

And people say on here that those on council houses should absolutely go into private rents. Sounds mint it does....

That is working on the assumption the property will be worth more when it's sold. Which is no guarantee. Factor in the price of upkeep and repairs, the landlord might be worse off when they sell.

Like it's been pointed out to you before, it's about market forces. I would love to pay 20% less on my rent but that's hardly going to happen given the area, and with demand outstripping supply. It's up to me to be a responsible adult and move to a more affordable area if I want a more affordable property, not the practical stranger who is my landlady to subsidise it because she may or may not profit once the property is sold.

You really do have a simplified outlook on the world

Ha ha you really have to love the nonsense MNs come out with ! Living in cloud cookoo land about the rental market !🤣

MN has given me a huge insight into the potential "entitled" potty potential tenants that walk amongst us

But not potential to me ! Instructed agent when dealing with a potential renter the following :-

Tenant - Hi Im calling about the house for rent ?
Agent - Oh fantastic, good morning. Its a lovely house. As a screening question, can I ask, do you post on Mums Net ?
Tenant - well yes I do .....hello hello ?? Are you there agent ?

[ line goes dead ] 🤣😂

Love this. I have another for you...

Tenant: I see all the houses for rent in this area are out of my price range. Do you perchance have one where the landlord is mortgage free and can let me live there at either a lower than market average, or even better, for free? I realise that there are queues of people wanting rental properties, but I read on Mumsnet that this isn't how it should work.

Agent: click

😂😂

Lol , yea, some deluded ones alright .

Well no, you don't have properties worth '2 mil', because as you said yourself, they're on I/O mortgages...that would only be a brag if you'd been paying down the capital, and therefore had potential to make significant money on increasing equity!