How are people affording the increases in rent?

[stmawes]

How on earth is everyone expected to keep up with the rent increases? Like, where is the money coming from?

I am a young teacher, earn about 30k a year. Which is a decent amount. I live in Zone 3 in a rented flat with two others. I am trying to scrape together a deposit for my own place one day, so I picked a cheaper flat.

My rent is currently £650 a month. My landlord has just informed us that she is increasing the rent to £800 a month next year, "to reflect changes in the market". I offered to meet her half way, and pointed out that I am a good tenant. This was rejected.

Mortgage rates have gone up due to interest rate rises.
According to the bbc:
1/3 privately rent
1/3 are mortgages
1/3 are owned outright.

its supply and demand that have driven the rise as the interest rate rise has only happened in the last week or so.

supermarkets are a good example of managing things that are essential in life. They could have put all the prices up during the pandemic and really cashed in. However, they just limited what people could buy so everyone has enough.

That was the exact position I was in. When I questioned the increase they gave me a section 21. We will be homeless soon

Mine's 320/month

Exactly, all this talk about 'landlords need to make money on their business' -- they will get a whole entire paid-for house someday! Which they can sell for ginormous money, making hundreds of thousands in profit depending where they are.

Reasonable rises are fine, shafting your tenants because their Zone 3 neighbourhood is getting gentrified is such a shitty thing to do.

Thank you to all the nice landlords on this thread

OP I would suggest moving, if your landlord does this once they will do it again. Try to find an area that isn't gentrifying or hotly tipped to, that's where you see the biggest hikes.

The OP is in a flat share with 2 others so total rent is currently £1950 a month with an increase to £2400.

@Whisp3r - I was possibly not clear, the monthly rent payment from the tenant has to cover 150% of the current monthly mortgage payment - that applies to most BTL mortgages; the lenders won't lend otherwise as they are not protected enough. It's to ensure all legal costs, repairs, void periods etc. will not impact their repayments

Of course the landlord has to contribute something substantial - usually a 25% deposit, stamp duty, all repairs and a hefty annual tax bill

, @Whisp3r For any business to be viable, though, the business owner needs to cover all their overheads and make a profit, especially if the business (the house in this case) periodically needs money investing in it. Otherwise they can’t repair the roof, buy new appliances, etc. Where would that money come from if they’re not making any profit?

Yes, they’ll eventually own the property in 25 years but it has to be paid for and maintained in the meantime. That’s the problem that @EvilPea highlighted-for the landlord it’s a business, for the tenant, it’s a home. They’e viewing the property from completely different perspectives.

Traditionally landlords (back when people had a choice and we had council houses so 70’s- 99ish) didn’t make money on the monthly, they made money on the bricks and mortar when they sold it.
theory being the renter just about covered the mortgage, the repairs and costs were just part of the cost of a long term investment. Over the long term (10+ years) the property would increase in value and t that’s where they make the money.

ita only been the last 20 odd years people have expected to make money monthly.
also coincided with a lack of council housing and the real rise of the private landlord.

@EvilPea But all those ongoing expenses needed to be covered, right? Like the full mortgage payment and money for repairs?
I thought @Whisp3r was suggesting they shouldn’t be-perhaps I misunderstood.

Yes they needed to be covered. But it was just part and parcel of the long term investment. As the bricks and mortar would increase over time that was the profit along with the majority of the mortgage being covered, or all of it by the renter.
Which is why it wasn’t as attractive as an investment as it was long term profit not an immediate monthly income

The other issue for renters with the rise in living costs is the lack of autonomy over things like changing your supplier, getting rid of prepay meters, even more expensive permanent things like installing solar panels, insulation, boiler changes, rain water toilets etc.
yes big investments, but things that save you money over time.

Changing supplier is the tenant's choice, the landlord cannot dictate that

Solar, insulation etc. yes, the landlord has final say. Not sure exactly what applies now but the previous warm front scheme used to provide certain insulation if tenants met the criteria and landlord agreed. I had a couple where they wanted to increase loft insulation from legal level to higher and I had no issue with that so signed it off

Have also let them change flooring, wall tiling, decor and landscaping to suit them as long as they asked first

My landlord kicked us out to turn the 650pm into student housing, he now gets 1600pm from students. The new house is 875 a month, the house is shit, but similar houses are now over 1000, so within two years my rent has doubled. I already moved north from my home town which I couldn’t afford, I don’t see why I should have to uproot my whole life, kids schools, my career, because landlords are greedy wankers. I hate it.

All my tenancy’s have said I’m not allowed to change plans or get rid of pre payment meters.

Realistically a renter will not want to spend thousands on a house they could be out of in, best way, a year, worse way 2 months.
they won’t see the benefit of the money saving.

same with changing appliances, an old oven (or any inbuilt appliance) is not energy efficient, the landlord won’t bother changing it, it works,. a renter won’t see the return in changing it if they have to move after a year. Or you don’t have a choice in what rating you get.

it’s a catch 22 with good reasons on all sides, however it leaves the renter potentially paying more to cook a jacket potato, put a wash on etc than an owner.

I thinks absolutely disgusting, I have 2 HA houses empty near me for 2 years which accept does not help however just using to point out that yet again local councils are not dealing with the huge demand & frankly don’t care, how in earth can tenants keep up with this rise when wages are not reflected by the cost of living, I sympathise with you entirely. You’re at the mercy of landlords.

They don’t care because by shrugging their shoulders they hope 99% of people find a way through themselves, which often leaves people in precarious or uninhabitable situations.
Which leaves them with a tiny proportion they have to deal with.

near me we’ve family’s paying over £1000 a month to live in static caravans all year. How has it come to that??

They aren’t going up with inflation. They are going up because a lot of landlords have taken advantage of the house prices going up and have sold. So there’s now a huge supply and demand issue.

Its not just that they are selling bc house prices have gone up but because for a lot of people, especially those with just one or two rental properties, it simply isn't worth the hassle any more. The amount of hoop jumping and red tape to make a property suitable for rent now far outweighs the chance to make a decent profit - not to mention the fact it is nigh on impossible to remove bad tenants (during covid you couldn't even begin to process a section section 8 for tenants not paying their rent until 18 months of non-payment had passed).

"Charities" like shelter must shoulder some of the blame. If you campaign to make it impossible to get rid of bad tenants/tenants who can't pay their rent then obviously there will be a breaking point when private landlords say " this isn't feasible any more". The property is then sold into the buyers market making far less rental properties available. So yes, there is far more demand than supply.

Landlords are not runnning a charity. If you owned your home and could sell it for 20% more you would wouldn't you?
Why are landlords held to standards that no one else is?
Should supermarkets allow people who can't afford it to go in and fill a trolley for free?
Or should we be forced to give a spare room to a homeless person bc we have the space?

The simple solution would be to build more social housing but that is a long-term goal that no leader is willing to seriously take on, so I instead they impose more vote-attracting rules against landlords who are now leaving the private rental market in droves.

Landlords have to raise rents to meet their rising costs and to make it worth while dealing with the absolute minefield it now is to remove bad tenants.

It is very lazy thinking to just shout "greedy landlords!".

Supermarkets could have profiteered by putting up tins of food in the pandemic.

they didn’t.

I’ll say it again. I’m not landlord bashing. The issue is it’s a business for them, it’s a home to the tenant. That’s a hard line and a very hard difference.

Landlords have to raise rents to meet their rising costs and to make it worth while dealing with the absolute minefield it now is to remove bad tenants.

id purposefully kept away from this subject. It’s fair to say there’s shit on both sides.

If you owned your home and could sell it for 20% more you would wouldn't you?

it’s a business to them. It’s a home to the renter.

it’s an unjust situation.

Why are landlords held to standards that no one else is?

because a home is a families entire life.

your kids catchment for school, will they get to move up with their friends or will they have to go to a different one because you can’t afford to stay within the catchment anymore.

its commutable for your work, more so if you rely on public transport.

it’s near your childrens friends, clubs, etc.

maybe round the corner from your elderly mum you pop into see. or she does a bit of free childcare for you.

it’s stability for your kids through school and exam years.

a home, is everything.

that’s the problem, business does not mix with all that.

I don't disagree it's sad evilpea but what is the solution? As I said, one would be enough social housing to go around - a very long term problem though that no one seems willing to tackle.

And so the onus goes on private landlords to house people - but they are expected to do so without ever increasing rents (despite their own costs rising) and with much insecurity. People often seem great at first meeting, then after 6 months they haven't paid the rent and the landlord is up shit creek.

Who pays the landlords mortgage/mortgages? As I always say to people when questioned "If it's that easy, why don't YOU do it then?".

I understand what you’re saying & as a landlord previously (not in the last 2 years) of course it’s necessary to increase rent plus make a small profit but ultimately pay the mortgage off as in investment. I did always keep my eye on market value & local rent costs however house prices (in my area) increased by nearly 150% over a 4 year period, I could not & would not make the same relative rent increase as costs as a landlord did not reflect that increase. It is absolutely selfish and money grabbing and I disagree with landlords who do this to tenants. It’s a disgrace

No one has bashed landlords for selling their houses to take advantage of the price rise.

but that is where the rise is driven from. A lack of social housing and now private rents

as for who pays the landlords mortgage. I’m really trying not to bite on that one, having paid over £250,000 out in rent over 14 years. I’m really trying not to bite. I wasn’t born into a family who could loan me the money for a deposit when houses were affordable and now The wage vs mortgage borrowing calculation doesn’t add up. I did buy a house at 18 with a financially, sexually, physically abusive man. He still has that home, he bullied me to sign it over.

but as I say. I’m trying not to bite on the “if it’s that easy”