If you are a landlord are you thinking of selling up?

[Didyousaysomethingdarling]

Are you reassessing your continued role as a landlord, due to the changes to tax (S24), proposals regarding EPCs, the recently published private rented sector white paper, along with interest rate rises and increased maintenance costs, etc? I'm having to let one of my properties go and my tenants can't find anywhere. Is it because lots of landlords are issuing section 21s at the same time? It looks like there's a bottleneck. How do you see it playing out in the short/medium term?

We’re looking to buy our first (East Midlands), but we’ve found hardly any for sale with sitting tenants. Is it just the accepted thing to sell properties vacant to achieve the best sale price?

@whatatanker
Yes. But mainly as a result of successive poor tenants. We've just had bad luck I think but its so costly each time. In an affluent area, too. Even with careful insurance and supportive agents, the experiences have really put us off.

Gosh this scares me, especially if the tenants were carefully checked. Was it covid related nonpayment perhaps? Did the insurance cover the costs without quibbling?

@onmywaytooblivion if you read further down that the page & follow the links - as long as you don't sell it you won't have to pay the tax BUT when you go to sell there is (further down page & follow links) a section which deals with percentage of time you didn't use it (aka rented it out) & the working out of how many years (percentage of time) you lived in it.
its complicated (understatement of year/century)

@Didyousaysomethingdarling yes the first tenant was due to covid reasons (he worked in hospitality and simply couldn't afford the rent) Insurance covered some of the costs, but not all. Agents did background checks but of course people and their circumstances change.

We'll be selling when the EPC changes come in: we own Victorian terraces that will cost around 10k per house to get to a C. Rental income is average £450 per month. It's just a no-brainer to sell. I looked on the EPC register and the entire street is below a C - most are rentals so I wonder if there'll soon be a glut of houses for sale.

I feel for our tenants, especially one couple who've been there for years and are now retired. But we just don't have 10k per house to pay out.

We won’t. Our tenants have been in it 14yrs (!) and we haven’t put up the rent ever and doesn’t cover the mortgage. It was worth it to have reliable tenants long term maybe. I think the house is paid off in 3years, it’s part of our pension plan and college (US) funding for the D.C.

We were accidental landlords, due to Brexit uncertainty and then Covid. I’d always rather fancied investing in rental property (not using a mortgage, just capital ) as I like houses, and I thought it would be a good thing to do , providing a home for someone.

so we rented out our house to some very highly recommended tenants, at less than the market rate because they had a sob story. Cue the moaning, vituperation, breakages ( including a patio window, how do you do that?) , unannounced ‘redecoration’, attempt to steal the cooker, fridge, dishwasher and washing machine from the kitchen on their departure…..

we aren’t buying another house to let out.

yes selling one...no mortgage etc as sister wants to take out her share of the cash etc....i will buy again as better than cash in the bank....

I would happily sell all of mine but they are flats with cladding/fire safety issues so are not sellable at present. They are also not mortgageable and are all now on SVRs so my mortgage payments are going through the roof. I’m not increasing rents as it’s not the tenants faults, but with the increased service charges (doubled this year on most of them) I’m at the stage of subsiding some of the properties each month. And I get taxed on the mortgage payments. Joy.

@GoldenMalicious
Our plan would be to begin to divest in a few years, hopefully making best use of whatever capital gains allowance might exist at that time.

I think CGT will eventually be brought inline with salaries. Which is another reason to sell up and crystallize the capital gain. This article is a few months old but explains what I mean.

www.theguardian.com/politics/2021/oct/26/uk-shares-property-capital-gains-tax

Don’t all jump on me if I’m being a bit dim…but what specifically are the rising costs that are hurting landlords? Because I haven’t noticed anything?? Am I missing something?

@Allthegoodnamesarechosen
...attempt to steal the cooker, fridge, dishwasher and washing machine from the kitchen on their departure…..
Lol, one of my tenants managed to take a fridge freezer when they left, they'd been great until then.

No plans to sell. Hoping they will be an inheritance for our adult children, but not yet.

No we won't sell any of ours. Long term tenants in them all. About to do Property inspections though so that we can get a programme for refurbishment sorted (new kitchens and bathrooms)

I have 8 btl houses and currently have 6 let out. Some tenants have been with me for almost 10 years, had their kids there and it is their home. They always pay rent on time and look after house. In turn I fix any issues quickly, get boiler serviced each year and only increase rent every 3 years or so. I charge about £100 pcm under market value initially but now it is more like £125 under market value. I would not want to put these good tenants out. I have upgraded and these 6 all meet Energy targets of a C grade. 1 house I am having a full renovation.including having downstairs toilet put in, new kitchen, new good quality laminate downstairs and carpets upstairs. New tiles in kitchen on floor and in bathroom. I am going to sell to my youngest son for £100k so about £75 under value. I will have to pay cgt at full value but will suck that up for son. That is what he can afford once he has paid his deposit of £15k. I have one that bad tenants have finally left and I am glad to see back of them. It will need a total renovation. So far I have ripped old kitchen out and taken delivery of new kitchen. I need floor tiles, kitchen painted, before kitchen put in, then wall tiles and blind. Every room needs doing new bathroom suite with shower cubicle, new tiles in bathroom, same in downstairs cloakroom. Every room paper taken off, stripped back and skimmed walls, 2 ceilings skimmed over, then painted. New laminate downstairs, new carpets upstairs. Then I want to let to a family as three double bedrooms and large back yard which also needs leveling and walls painted. DH and I are thinking about selling one each year or as tenants leave. Can't sell more than 1 in a tax year as would be hammered for CGT. I don't mind new reforms except I don't agree with proposed section 8, tenant allowed to be in 2 months arrears 3 times in 3 years before an eviction order can be gained. That means bad tenants will just get away with not paying at least 6 months rent. Then could apply for section 8 but courts may not set hearing for up to 6 months so basically bad tenants will get free 1 year with no rent. That is what will make me sell mine. They will all go over next 8 years unless government improve that section 8. If a tenant has not paid any rent in 3 months then I think it is fair a LL can repossess.

Increased cost are to do with general increases in gas certificates, electrical certificates and maintenance cost plus the cost that will come from having to make each house at least a C rating on EPC. A Victorian terrace can't have cavity wall filling so have to have internal wall filling, cladding and very expensive. Individual thermostats fixed to every radiator,ore loft lagging until 270mm thick. If a tenant has a small electric heater it has to go as LL will be rated as having mixed heating instead of just gas heating. Mixed is lower points. Some double glazing will need replacing. Little brushed under doors and on letter boxes to stop drafts. Boiler within 8 years old. If older won't get enough points for EPC C. That is before anything cosmetic.

Yes, l have sold mine one a year as there has been virtually no profit since the tax changes (thank you Gov) and the so called protections for tenants, have made the risks of a bad tenant much more likely and problematic. Regulation is ill thought out and doesn't achieve its aims.

What sucessive governments fail to realise is that most LL actally bend over backwards to keep good tenants as demonstrated here..(.see no increases in rent etc) we only look to evict bad tenants or to sell...

I wish our landlord would sell ours .. we are finally in a position to buy but theirs nothing on the market round by us that suits .

I think it’s all hyperbole it’s all sound bites the government seen to be doing something rather than nothing like saying tenders can get a mortgage on UC it may change some of the rules but the rogue landlords won’t care it’ll be the responsible ones that do

@caringcarer
Boiler within 8 years old. If older won't get enough points for EPC C.

Please can you point me in the direction for confirmation of this? Thank you.

Trying to get my head around the economics of this. If lots of BTL landlords start to sell, surely this is good ? More of the existing housing stock comes onto the market, prices steady or fall slightly and more families can look at buying their own, without the need to build masses.

(Don't jump on me as I'm not a property expert, but we are first time buyers).

With the mortgage review underway and set to report in the autumn, this trend could start to turn the tables for people. Going from renters to buyers?

@knickersniff

I wish our landlord would sell ours ...

Have you asked them? I suspect a lot of landlords would be please to be asked.

@knickersniff have you asked your LL if they'd be interested in selling to you? They may want to sell up but waiting for you to leave

Not at the moment, but considering turning one of them into a furnished holiday let, which I do have mixed feelings about from a moral point of you, but owning property is the only way I'll ever get to retire! Of course with Michael Gove gets his way that won't be an option anyway. Also looking with my accountant at ways to transfer into a limited company via a deed of trust, which would get round section 24. The shortage of rental housing has been entirely caused by the governments misguided policies targeting private landlords over the past few years in my opinion. No one in their right mind would be getting into buy to let at the moment.

Most renters simply cannot afford to buy. Especially ‘families with children’ who need houses and not a 2 bed starter home and are likely to have a part-time parent. Because it’s very hard to save for for a deposit while paying rent

Rising interest rates will also prevent many people from getting a mortgage so even if proper prices drop only those with a very large deposit will benefit.