Small landlords selling off isn't a great news after all

[Goingindrain]

My landlord is a small landlord, just owns his house and the one where we live. He is a nice man and charges us below the market rate rent.
He is fed up of all the anti landlord rules and has decided to sell. It seems he had an offer from FTB and then a big corporation put in an offer 10k over and he's selling it off to them via the agents.
I am worried about the rent going up and it's not a great news for tenants.

As far as I understand it, in places like Germany they have cheapish rents, vast tenant protection, large companies in it for decent long term returns which are externally financed on a portfolio basis. People who want to invest in property can invest via buying company shares. Tenants who pay reasonable market rents and look after the property should never be evicted. However, for large companies that rely on external finance, rents do have to go up in line with lending risk and external finance costs aka interest rates. Some hedging can be done but not much. Business is never in it without a reasonable long term return as money can work harder elsewhere. As cash in bank currently yields 4 per cent plus that will be the equivalent cost of renting (and for individual landlords there are taxes and penalties on top- taxed at highest marginal tax rate). In uni towns it may still pay to be a landlord but even there kids are rethinking uni cost benefit en masse so there will be an exodus for risk averse landlords. I think the transition phase could be painful to large corporate landlord, but equally immigration is currently down so it might end up all ok. Lots of demographic changes too with young people moving back home can translate to les demand as well.

Nrft but the Renters Rights bill is not actually new. It was a Tory bill in the last Gov, and had progressed quite far through governance.
The new Gov just re badged it, but it’s basically the same. It’s was obviously going to have a negative knock on affect to the tenants.
WTF happened to all these low cost houses Labour were going to build anyway??

There aren’t enough builders and other trades and building supplies are too expensive. And finance is expensive on top of that.

What is a little crazy is that some people actually just need to rent their house or flat out temporarily eg move abroad for a few years, or purchase a downside property years in advance or a property for a kid which previously would have been rented out and given someone somewhere to live. That whole segment is now removed. I think it is stupid because there should be a carve out for temporary renting and should be in the price. As long as people are honest and upfront about it it can work well. Lots of people want to rent temporarily before buying in a new location too and this kind of thing completely removes that option for both sides as landlords chicken out of doing that.

For temporary eg 6-9months etc will people just move to Airbnb and is that going to be legal?

Pie in the sky! another lie, to go along side Dentistry & Fixing UK roads.

Housing Associations/Councils cannot afford to buy these properties once built or commission new ones.

Why? because the money they have got is being spent on upgrading existing stock to the new EPC reg's of a C and further changes coming down the track, such as ASHP and Solar.

People still pretending to themselves that Big Corp is going to bail them out of their bad BTL decisions I see? Big corporations don"t want random BTL flats in AnyTown, the banks just pretended those flats were going to be a goldmine so people would take the loans. If Big Corp was going to do rental in the UK they would do a deal with their mates the Big Developers who are seeing new-build sales down by 60%, so many empty units! Big Corp can see the political winds change though, and immigration down by about two thirds, they didn"t get to be Big Corp by being stupid!

We have just one rental, a 2 bed m’ette with a little garden. It was a truly disgusting hovel when we bought it - we spent a lot to make it somewhere we’d be very happy to live ourselves, so no cheapest old kitchen and carpets. We’ve always had very good tenants and the rent is now very low for the type and area.

But I’m thinking of selling up once current tenants leave (I wouldn’t give them notice) largely because dh and I are getting on a bit and I dread the thought of any more major maintenance issues, like a former major bathroom leak - not the money so much as all the hassle. We’ve always fixed anything very promptly.
IMO it’s not the type of property to attract corporate investors, though - more likely to go to FTBs.

Strongly suspect they've ended up in some slum tenancy with a dodgy landlord.

I think you're right and I imagine the new laws have been welcomed by dodgy slum landlords. Everybody knows loads of renters are unable to buy and there's a social housing shortage. Dodgy landlords don't care about regulations though and they know many renters have no alternative.

Wrt big corporates. My colleague is struggling to find somewhere partly because the minimum income asked for by landlords is above his salary. Maybe I'm wrong but I doubt the big corporates will lower the threshold?

So you think that in an inflation crisis, cost of living and reducing employment crisis Big Corp are going to buy up loads of property then make it hard for people rent them?

Yes but I'm in an AST with a tenancy I can't just break. So yes this bill will allow me to move sooner.

We have damp, mould, mice and a leaky roof and the landlord/letting agency are using every trick in the book to stall and avoid dealing with it. I'm out of energy trying to fight it so yes I'm glad the bill is coming in.

Is there more available around you for less rent?

We rent our old flat and DH said he’d think about selling when the current tenants move on. He’s a great LL and we charge a bit less than market rate too. Depends how much capital gains there would be to pay.
Btw we drive a regular car, live in a 3-bed semi and our dc went to state school. Not rolling in it, but rent has provided a good income over the years - obviously it is liable for tax as well.

I do not think good professional tenants with good income have ever struggled to get rentals. Most landlords are chasing the same type of tenant.

The tenants that struggle are those with kids, pets, on benefits, self employed etc - also then mostly subjected to rogue landlords as they could not get access to the best/fairest landlords. Corporate landlords won’t care if the Government guarantees the rent via eg benefits/UC etc. and the tenants are not antisocial. So if the Government wants the corporate landlords to set the price and the taxpayer to basically guarantee it, that is where we are going to end up.

@Bluegrassdfly I agree that large investment companies aren’t always terrible, everything will be up to code and repairs completed quickly. One aspect that I think will be different from smaller landlords is that there’ll be no allowances for individual circumstances. Rents won’t be kept below market rates for years because the landlord/tenant has a good relationship, for example, or the landlord has sympathy with someone’s situation.

It'll be more like going to a supermarket- a product costs x and that’s what you have to pay, on time and with no negotiation. The landlord provides a service and the consumer knows exactly what they’re getting. This will give tenants security, but any deviation from the rules and I imagine you’ll be out.

People who rented below market for their own pension - they could just buy and rent to their children and grandchildren at a discounted rate instead. I reckon we will see more of that as that actually makes sense. They cannot force you to rent out to your own at a market rent.

I hope you are right. My concern is that large corporations will behave badly unless they are regulated in such a way which prevents them from so doing.

If the majority of rental accommodation is owned by large corporations then they are likely to act as a cartel, controlling prices and controlling the quality of the premises.
The only option for renters will be high rents for cramped apartments; the kitchen is in the living room, no window in the bathroom etc ☹️
Not that I am in favor of buy to let, it has been a significant factor in driving prices up beyond the rich of normal people.

Not to change your mind but just in case others see and are interested - if your home is relatively new (15 years) and well insulated, then with the government grant, then installing a heat pump shouldn’t cost any more than a new boiler.

@KeepPumping They’ll have their pick of tenants and will increase rents exactly in line with what the law allows. @Yesnomaybeyes’s colleague might be lucky and find something affordable and secure, but will need to budget for regular rent increases (I think they can be raised once a year under the new law).

Yes. Thankfully. Seem to be more on the market than I was expecting.

We are selling the house we rented. Too much hassle, not economical. Essentially the rent covered the mortgage, upkeep and tax. We took out the mortgage when rates were low, and so the rent we charged was in line with that cost. We would make money only when we sold, and we were happy with that.

But mortgage rates have rocketed and regulations have become more onerous. Unless we double the rent - which would of course be terribly unfair - we are losing money each month.

So we have to sell the property.

I'm not saying this is unjust or that we should be sympathised with. It's simply that circumstances have changed and we can no longer afford to offer that family home to the rental market.

Because they want to maximise their yields, and they have higher operating costs than a small, private landlord. So costs will be higher. Plus there's potential for them to monopolise the markets, just like how it's become with vets and petrol stations.

I think a lot of small time landlords didn’t increase rents regularly and only did so on change of tenant/when finance costs up. I reckon it’s true that a corporate landlord would increase rents every year in small increments, a bit like council tax etc it’s just going to keep going up and if the market actually tanks then tenants will still need to move to get a better deal.

You can install a new boiler for about 3k

Is that the price for retro fitting a heat pump?