Totally shocked at the cost of rental properties

[Bumfluff29]

I had no idea the cost of rentals now are so high. We’ve been thinking of selling our house and moving into rented accommodation to break any chain if needed. I’ve looked at the cost of rents and can’t believe how much they are: much more than our mortgage payment. What’s shocked me most is the condition of some of these properties- they look like they haven’t been updated since the 70s in some cases. Has the rental market been like this for a while or is this a recent thing? Maybe I’m totally naive but before we (luckily) managed to get our mortgage we rented an enormous 3 bed house for 550 a month (2016) with all new appliances etc. A lot of the properties I’ve seen look like they desperately need new kitchens and bathrooms at the least, yet the rent is at least 900 a month.

3 bed unfurnished flat with ancient kitchen and bathroom is on for £1900 here. There are only 3, 3 bed rentals in entire postcode area and 2 in the adjoining one. Edge of zone 6. Houses with 3 beds are on at around 2.2k starting price. Nuts.

3 bed property to rent is around 1700 - 2000 pcm in the south east. It rose when agents were getting people to sell and move into rental, after the stamp duty reduction frenzy.

if you have a mortgage my advice would be to not move into rental. It’s so hard to get back to buying again and will cost so much.

We did this last year - moved into rented so we could sell, relocate and then buy.

It's been tough and very expensive. When we initially looked online it looked like we could get a 3/4 bed for about £1500 pcm. It was very hard to get viewings - houses were let within a couple of days. Letting agents were very fussy and wouldn't have even allowed us a viewing if we'd been claiming benefits or had pets. One wouldn't let us view a 'family home' because we had a child under 10

Got some viewings - found the £1500 houses weren't actually very big and we'd have had to put stuff into storage. There were queues of people lined up to view. We eventually found one for £2k which we could just about stretch to for a while. We then had to prove we were worthy of renting it with intrusive questions and forms. Oh and no letting agent would contemplate less than a 12 month tenancy without an earlier break clause.

We hoped going a bit more upmarket would mean better service from the letting agent (we've rented before and it was dreadful) but they've been just as bad. Very slow to make any repairs (we've had water through the ceiling from a poorly installed boiler) and they hadn't checked things in the house worked before we moved in which meant lots of chasing for basic things like a working oven! The house technically has a good EPC but the double glazing is poor quality and draughty so we are spending a lot on heating.

It also took ages to find somewhere to buy and we are now renovating so it'll be 18 months of £2k rent before we can move in!

@Onnabugeisha exactly this.
Whenever you see a thread saying: private landlords, the government has to do something! Well the government has, and because of that, the situation is worse and is only going to get worse.
Interest rates have been this high before, and rents were much lower (I appreciate house prices were lower too, but in my area we're talking 20% lower, not 300%). But now that landlords can't get bad tenants out of their house easily, charge to do credit checks, put a decent deposit on for pets, and are getting taxed a hell of a lot more, where's the incentive? Have to put the rents up so that you can cover some of those costs.

Our street is all five bedroom townhouses, they rent for about £6,000 per month.

London commuter belt.

And that's an opinion of the general tactics, not what I do by the way.

And you can’t blame the private landlords at all. I private rent due to losing my home due to sudden disability causing job & career & all ability to work. So I’m one of the ones these costs are being passed down to. It’s frustrating because the government are a bunch of clowns and every time they try and help tenants, they only make it worse for tenants through half-baked ideas. And most people do not get it, you’re the first person I’ve found who agreed with me that banning tenant fees was a bad idea and would lead to higher rents costing more in the long run than the fees ever did. Now it is a proven fact as it has happened. But at the time I just got deer in the headlight expressions.

So true.
Our tenant has skipped rent, refused inspections and 7 months later were spending a lot on legal fees and he’s still in our house. We thought accelerated possession would mean he would go quickly, no he’s just getting away with not paying rent.
This means that we are very wary of reletting when he’s finally gone.
A beautiful 4 bed house (well it was, the kitchen, wiring and bathroom were all new in 2009) is likely to sit empty now. There are people who would love our home and we don’t care much about the rent as we just want to keep the house. We never increased the rent in 4 years and I would be happy to charge the same if we got a good tenant. Unfortunately the law is weighted too much against a good LL now and dodgy LL’s will be the only ones left soon.

@Bumfluff29 We did exactly that this year OP. Some estate agents in our area weren’t even letting you view properties unless you were chain free 😳🙄 so we sold and rented until we found somewhere to buy. Small Scottish seaside town which definitely is NOT usually the most expensive area to buy/rent in but the choices we had for rental were horrendous 😳

• 3 bed bungalow that was in truly awful condition. Extremely old boiler/heating system - £1400 pcm
• 2 bed bungalow that had been renovated - £2200 pcm as Air B&B 😳
• Tiny 2 bed mid terrace that needed full renovation. Threadbare carpets with no underlay or anything underneath. Old electrics and heating. £1000pcm

We were incredibly fortunate that we only ended up having to rent for 6 months in total. Had a horrendous experience with a terrible landlord. I really feel for people that have no choice but to pay there extortionate rents etc

The points raised by @Onnabugeisha and @anon2022anon describe precisely why the rental market in England is in such a mess. But most tenants are unaware of the extent landlords are being penalised and all we hear is how greedy we are.

I'm an 'accidental' landlord and I've always charged less rent than I could have and kept the property in good order. Now I'm seriously considering selling up if/when my current tenants leave. So that'll be one less property available to rent.

And this situation is being replicated everywhere.

Supply and demand
The UK is hugely overpopulated

And, as @Fireballxl5 indicated, soon the only landlords that will be left are the dodgy ones who don't care about the multitude of laws that are supposed to protect tenants...

I live in London, mortgage for a 2 bed flat bought in 2019 is £1020. I was looking for a studio in north london for my disabled/seriously mentally ill friend. She would be reliant on UC/PIP as she can't work and also her savings are running out. The rents are all around that level too. DH and I are a dual income household with DH paying higher rate tax. Why is someone on benefits paying the same amount as us on housing? The government can't even cover the full amount and even if they did, its just a massive waste of our taxpayer's monies.

My advice to any landlord is to create a shell LTD company for the property or properties you rent out. It’s totally legal. So instead of the rental income being classed as part of your personal income and taxed regardless of expenses, the income is now business income and you can deduct all your expenses and then only pay 19% corporation taxes on profits. You can then pay yourself dividends from this business also at much lower tax rates.
www.freeagent.com/rates/dividend-tax/

You would need to set up a free business account for the rent income to be paid into either from the tenant(s) or estate agents. It’s best to do this to keep things clean accounting and tax wise. You’d pay around £300/Yr for an accountant to do the company house filings and tax return for the business- which is a business expense and totally deductible reducing your tax bill.

Even in London, there are more bedrooms than residents. I come from another country and all my mum's colleagues owned an apartment in London for their children or for investment. They didn't live here.

Certain areas are very popular and there is inefficient allocation of housing i.e. a lot of older people living in houses too big for them but its too expensive to downsize or no suitable properties. Planning permission is hard to get. A featureless field is suddenly a national monument when they want to build on it.

Btw, note that the cap on housing element of UC/housing benefit for those on legacy benefits has not changed.

Average price for a pokey 2bed where I am is £1200, housing element capped at £850.

I'm on the probably unusual position of having been a landlord for a while, and also rented whilst various fees were allowed and now renting when they're not. So I can see both sides. The advantage now is that I know how much I pay. Yes, it's a lot of money but the lack of predictability previously was fairly grim and made budgeting difficult - we had fees for doing random photocopies, fees for checking documents, fee for doing the inventory at the end of the tenancy(!).
When I was a landlord I rented via a very ethical independent letting agent who treated her tenants well (I asked around for recommendations from people who were tenants) but most of them don't seem to be like that.

I live in not so up market part of North London rental prices for a 3 bed house range from £1900 to 2300 a month. Ridiculous.

I looked the other day and couldn't believe it!
We have just bought a house in Kent because it's where we could afford leaving a rented 3 bed house is south London which was £1500 a month.

The house I lived in is now up for rent for £2250 and the rents in Kent for a similar size house are £1500!!

Agree they're not very high spec either, dated decor and old fashioned kitchens without white goods. Insane.

In 2010 you could easily rent a modern 2 bed 2 bathroom fully furnished high spec apartment with a parking space in my home city for 750 a month
That same apartment now is around 1700 a month unfurnished

My son is buying and with his mortgage/rent as it’s Shared ownership and service charge it’s around £800 a month 2 bed 2 bathrooom huge apartment with a parking space and private gym 24 -7 security

To rent it it’s around £1500

Which is fair enough; the state shouldn’t be subsidising people who choose to live in parts of the country that they can’t afford.

Yes, moving somewhere new is hard, but that’s part and parcel of living according to your means.

I’d quite like to live in the Boltons, but I can’t afford so, so I don’t.

€3,300 for a two-bed apartment around my part of Dublin.

Madness. No idea how people are expected to save and try to get away from the insecurity of renting in a market that’s not designed for long-term renters.

Probably by moving out of Dublin to somewhere cheaper, and commuting in.

@FarFromTheStart - what will happen to all the 'expensive' areas when all the essential workers leave because they can no longer afford to live there?