Landlords response to Labour proposal

[Stellaris22]

Surely it’s becoming increasingly difficult to defend landlords.

In response to proposals to make renting fairer and better for tenants landlords have responded with typical ‘we’ll increase rents’.

Yes there are good and bad tenants just as there are good and bad landlords. LLs need to stop the saviour attitude of thinking they’re helping people who can’t afford to buy. They can’t afford to buy because of their high rents!

Good to see Labour (hopefully) tackling the private rental sector.

There are the same number of people needing housing, and the same number of houses. There are also a lot more people wanting to buy than wanting to rent.
So either there needs to be a rebalance to release more currently private rented housing to be sold to owner occupiers, OR, it needs to be made more attractive to rent long term. People are only so keen to buy because renting is so insecure and unpleasant. If a rented home was yours as long as you wanted, you could decorate, it was well maintained, rents were protected from sudden increases, you didn't have intrusive inspections every few months, it would be a much better option. This is the case elsewhere. In Belgium the standard rental term is 9 years. It's 6 months here.

Former small landlord - sold up. It became too difficult to rent, I didn’t come out with much profit, weighing it all up it there was too little benefit after mortgage, tax, improvements to property, insurances etc I think I made about £1500 a year! all the rights are with the tenant. It was too risky - only needed a tenant to not pay for a few months and I would be hugely out of pocket. I’m afraid you’ll only be left with the more ruthless landlords now, the ones who run proper businesses. And this fixation with owning your own home in the UK, not a single one of my tenants ever wanted to own their own home, they either could never get a mortgage or were very happy renting.

@Firenzeflower you’ve had a tenant pay your mortgage for 29 years? Lovely.

Would you be willing to sell to them? They’ve effectively paid your mortgage for 29 years.

New landlord/rental property registers are being brought in under the new law - but no detail as yet as to the cost or information a landlord will have to provide. Tenants will be able to give notice from day one, when landlords will have had new tenancy set up costs. Tenants will be able to challenge every proposed rent increase, with no risk of the rent tribunal setting a higher rent and potentially delaying having to pay the increased rent. The list goes on for new “downsides” for decent landlords.

i know of at least one area that I lived in after university where local employers will struggle to recruit anyone not already in the region if all the private landlords sell their rental properties there - not everyone is eligible for social housing, or a mortgage, or wants to house share.

Nope, I served my tenants a section 21 because they weren’t paying their rent and because they thought the council would help them if they had proof they were being evicted. They ASKED for an S21 to be served. They were a family with small children. The council just told them to stay put and wait for me to take them to court and get bailiffs involved which would take around 6 months. I didn’t do that - too expensive and time consuming and they were still there 12 months later in thousands of pounds of arrears which I never got back.

I agree with this. Tories and now labour have made being a small time landlord completely pointless. So the LLs all sold up. What we have now is LL with larger portfolios they put through a LTD company and far fewer rental properties available. Supply and demand - fewer houses to rent means the rents become more expensive. Around here, any estate agent can expect to receive 60odd enquiries per property and several applications. The LL that are left can rent out shit properties for a fortune. You need more small time LL not fewer.

As a poster up thread pointed out ATM if a tenant is asked to leave a property on a section 21 the council has to re-home them, even if in temporary accommodation.

To add to Errors post just now. This quoted above is not true. The council only has to re-home a tenant served with Section 21 if they're classed as 'priority need'. If there's children that's automatic priority need (but doesn't include families where young adult children are still living with their parents). Childless/child free tenants are often not rehoused unless ill or disabled. That's very wrong imo. The UK needs more social housing - for all household sizes (and including homes appropriate for the elderly and the disabled).

Even when a tenant is priority need, as Errors says many councils gatekeep, which is distressing for both tenant and landlord. I should also add that the temporary accomodation is often highly substandard.

If LL's now have to use section 8 for rental arrears then the council will no longer have to rehouse the tenant because by not keeping up with rent the tenant made themselves homeless.

If the rent arrears are solely due to unaffordability and the tenant genuinely hasn't the money, eg. housing benefit is often lower than market rents (as opposed to deliberately not paying), it's not 'intentionally homeless' and the council does still have a legal duty to rehouse tenants classed as priority need.

And when there's children, even if the tenants have done something deemed to be intentionally homeless (deliberate rent non payment, trashing the property, serious anti social behaviour etc) there's still a legal duty for social services to ensure the children are housed.

It's often (although not always) in the best interests of the child for them to be kept with their parents. Councils know it's also cheaper than putting the children into care. So they often (except certain circumstances) will rehouse the family. it might be substandard temporary accommodation though.

I’ve rented considerably and so have most of my friends in and outside of London. The reality is that most landlords are not great, many are terrible, and the good ones are the exception ime. Never mind the actual properties themselves which are often subpar and dirty. Lls charging a fortune whilst expecting tenants to live in hovels!

It’s unfair to push people out of the housing market. Often if you challenge a landlord for not holding up their end of the bargain their answer is to threaten eviction. Worse still many properties are not well maintained and landlords do the bare minimum whilst charging as much as they can. I’ve seen holes in floors and walls, electrical wires hanging out…

I recall seeing a HMO, 10 rooms, no communal area, a shared kitchen with 1 tiny cupboard each. The ensuite bathroom was a shower over a loo, and the room was small. 5 years ago, the landlord was asking for £1100+! The other rooms weren’t much cheaper, let’s do the maths on that 🤯

The reality is most of the ll’s properties are already paid off so the majority of the rent is income.

Capital appreciation/housing going up in price was also a benefit in the 00s and 10s.

So long as the house price was going up the rental income was an extra bonus on top of that.

Now not only do you have increasing legislation to deal with as a small landlord, but also house prices are appreciating nowhere near as fast as they have been previously and there does not look to be that much energy in the marketplace.

If Labour actually get their act together and build houses then this will further undermine price increases (I am not holding my breath though).

The reality is most of the ll’s properties are already paid off so the majority of the rent is income.

What is your source for that? I am looking at the English Private Landlords 2021 survey that says 57 per cent of landlords have a mortgage on the property and only 36 per cent have no debt on it at all.

Honestly I think you would be crazy to rent out a property with a mortgage. The risks regarding bad tenants / interest rates / legislation are so high. It could go horribly wrong and you could end up losing all your equity.

When it comes to landlords without a mortgage they have to consider the alternative uses of that money when deciding if it is worth it.

How much would that money earn if invested in shares or bonds or used to buy an annuity? How does that compare to the returns and the work required in being a landlord?

Quite. If you borrowed hundreds of thousands of pounds to purchase shares many would send you off to have your head examined. That's gearing, an extremely high risk investment strategy.

Why is every one so down on landlords they provide a great service. Many of us can't/don't want to buy. I know a landlord is making money from me but so are Tescos etc. Any one providing a service deserves a profit for their efforts and landlords often have to put up with so much hassle

Major difference between private landlords and Tescos is that Tescos don't refuse customers whose income is a low paid job or on benefits. They don't insist on only selling their products to people earning a specific income multiple. They also don't ban people from their shops for making justifiable complaints about gone off/other valid product issues.

Landlords on the other hand do discriminate against the poorest and most vulnerable and refuse to let to them, and the few who do will evict if a tenant has a valid complaint, eg. repairs request.

That said, I'm not "down on all landlords". Some are decent, and absolutely there's a need for some. Not everyone is ready to buy. Young people yet to settle in a particular area or job, students, people on temporary work secondments in away from home, people in-between house moves etc.

The issue though is private renting is inappropriate for long-term living in the majority of cases. So, older people, families ready to settle down, disabled people, etc.

It's also completely inappropriate for the poorest and most vulnerable. Unless housing benefit was increased to meet market rents (and/or rent controls and assured tenancies). However that would be more expensive than building more social housing, and also doubtful that many landlords would stay in the business if rent capped assured private tenancies were reintroduced?

So, whilst you're right that some private landlords are needed and not all landlords are bad, there is a need for more social housing across the UK asap.

I am not down on landlords, what I am down on is landlords feeling that they are some special class of investor, aggrieved when tax allowances are withdrawn, aggrieved when house priced fall, aggrieved when interest rates rise, and to some degree, aggrieved when a poor tenant fails to pay rent (as shitty as that is). Sorry folks, I don't see why your investment into residential property deserves any additional protection or tax benefits to my Glaxo shares.

No but they won't sell you a bar of chocolate for buttons.

@Windchimesandsong I've said my peace about landlords, but I don't think it is discrimination, in the way in which we use it now as a loaded negative term, to take steps to validate a person that they are providing the use of their property can afford the fee. Same as if you were a company offering any kind of finance agreement. Tesco, as that is the example you use, would not look for proof of income when you buy a mars bar, but they sure as hell would check your credit history if you were to take out a £65 per month phone contract with them!

Landlords on the other hand do discriminate against the poorest and most vulnerable and refuse to let to them, and the few who do will evict if a tenant has a valid complaint, eg. repairs request

Strictly speaking it isn’t the landlord who discriminates against the poorest, it is the landlord’s mortgage company who set the terms and conditions of the contract

I don’t see how, if a tenant has a contract with a landlord, the landlord can kick a tenant out.

As a renter I have had some great LLs and some awful ones.
My SF is now a LL and he has just had to spend ridiculous amounts on getting a section 21 to remove his tenant after non payment of rent. The state the tenant left his property in was disgusting. Our local council told him to wait until bailiffs showed before they would rehouse him. The man owed thousands by this point (not just to my SF but to debt collectors). The real kicker was the damage to the property. Carpets ruined, blinds fucked, doors destroyed, sofa ripped, draws cracked etc why do all that? Then to add insult to injury the tenant wanted to know if he could get his deposit back!
My step father wasn't a big bad landlord. When his tenant claimed to have mental health issues and stopped paying his rent, he gave him time. (Which the tenant then abused). The estate agent also took advantage of the fact my SF was out of area and didn't do inspections as promised.
The whole thing has been an awful experience for him. He doesn't live in the home he bought as he looks after his elderly DF (and if anything happens he does plan on moving back there one day).

I have a couple of properties that I refurbished and let to families. I had originally intended to live in both of them at different points in my life. They are high standard properties, lead crystal chandeliers, solid wood floors, range ovens. They are lovely houses. Id live any of them happily myself.

I used a letting agency and I haven't increased rent for some time. I have long dated mortgages at low rates.

I don't really make a profit on them because of tax and basically paying for whatever the tenants want. The profit would have been the capital gains.

The labour party change to rules on eviction has made it quite risky to own and let residential property.

I have unfortunately given notice to the families that live there that I will be selling the properties. Selling them now is badly timed as the market is slow and so effectively I will make less profit on the value of the property (in one case no gain because I spent a fortune on upgrading a total shack of a house).

The outcome of the proposed change by Labour is some families have to move house and the houses will be empty until I sell them at a price that makes sense to me.

I don't see that I did anything wrong. I built new homes for families by renovating old knackered buildings, they were lovely when I finished with lots of period features and I treated the tenants well.

I had been spending about £120k-£150k a year on renovations and tradesmen. Not a fortune but paid some salaries and made some homes but I won't invest it in the UK as I don't trust this government.

@Yalta any mortgage company that has terms banning a landlord from accepting tenants on benefits is now breaking the law. Several court cases a couple of years ago decided that was was illegal sex and disability discrimination.

You're right, that if a tenant needs to claim benefits mid-contract it would be illegal for the landlord to evict for that reason alone (and the tenant is under no obligation to inform the landlord). Obviously if there was rent arrears, that would be grounds for a Section 8 eviction but solely being on benefits isn't grounds.

FWIW I realise things have changed over the years and also I was lucky perhaps but when I was younger and renting I mostly had decent landlords.