Rents to soar over next 3 years

[Twiglets1]

As reported in the Telegraph today, the Resolution Foundation has calculated that rent will rise at almost double the rate of earnings between now and 2027. The think tank said tenancies for new and existing lets are expected to grow by 13% over the next three years – almost double the 7.5% growth in average earnings, as forecast by the Office for Budget Responsibility.

The cost of rent for new tenants has increased by 18% since January 2022, but this burst of growth is yet to work its way through the whole private rental sector.

Cara Pacitti, senior economist at the Resolution Foundation, said: “Millions of families agreeing new tenancies across Britain have faced surging rents in recent years, as we have emerged from the pandemic.
“Those rises for new tenancies are starting to slow but how much renters actually pay will continue to outgrow how much they earn for some years to come as those not yet exposed to higher prices are hit.
“With more families renting privately, and renting for longer too, these rent surges are a bigger problem for Britain, and require bolder solutions from policymakers.”

The question is, with mortgages & rents both becoming unaffordable to many, could the next election be won or lost on the issue of the property market crisis?

https://www.telegraph.co.uk/money/property/buy-to-let/tenants-face-three-more-years-of-soaring-rents/

I apologise that my earlier post appeared to attack landlords, I didn't mean to imply that all landlords are bad. I know that there are many decent ones out there too and have seen posts on Mumsnet and elsewhere from landlords such as yourself that do like to be more than fair to their tenants.

Yes, just that ie we've been braineashed into thinking buying you own is better when its not. Its becuse our gov makes billions from stampduty, IHT etc etc etc e t

My apolohgies if I came across like that. True what you say but as in life, people are different.

As I've, we've grown older, I find that I'm more caring towards more people and people that when i was younger may not have cared about too much

The way we look at it, our propeties are mortgage free via hard grat/prudent spending etc - therefore, we try to rent what we feel will be people that will respect our property as their own and rent it out below market rates and if they keep the house nice, we keep rents low. We actually encourage them to report any problems via LA's as the sooner we learn about it the easier and cheaper to repair

The few T's we've had over the years - all have given us hugs when leaving and said something like "you are very nice people and best LL's we have ever had." We thank them for them being nice, honest, decnet and happy they enjoyed their stay

Works both ways😀

Actually more regulations wasn't and isn't needed, they just need to have an effective enforcement regime to enforce current law. Local authorities are failing in enforcement action of most except the very worst properties.

I stand corrected

That is not my belief. People should pay tax, people dont pay enough tax in this country

My belief is that its often better to own, as do most people in the world seemingly agree with this where the system allows.

It should be possible to rent at affordable prices, as above in the thread, the big problem in this country is not a housing shortage, its an affordable housing shortage. There should be a buoyant market for social rentals, private rentals and purchases. That way everyones needs can be met. That benefits society

@KestrelMoon they are not (industry estimates are between 10-30%) and how would the government pay for that? I'm a landlord and it's my income. Instead of investing in stocks I invest in property. I get it from providing a home for people. I am an excellent landlord, though not denying there are poor ones - the government being one of the biggest bad landlords looking at the awful state of some social housing - by its own survey over half a million social housing units are sub standard.
@DistinguishedSocialCommentator rents are but just high here - Paris is high too and same complaints about LLs. And @Twiglets1 of course people are much more vocal when they have a complaint to make.
Market forces rule with rents too - my expenses have gone up, my device charges have gone up, my mortgages have at least doubled. These costs have not been passed on in full as it would take me over the agreed increases, so my income is down. Still, I take care of my tenants. They don't always take care of me (not paying - not due to job loss but to being a con artist. destroying property, antisocial behaviour).

So why is it not put into prectice?

Because we have had largely a fairly right wing (despite the Labour years) outlook on social economics whereby its seen that the 'market' runs itself. Well thats fine if you're selling cars or goods that are not necessities, but housing is a necessity.

So private rentals were seen as on a par with social rentals, problem number one. Problem number two was right to buy and very little new social housing being provided despite a growing population. Problem number three was rent controls being done away with, so the market got naturally skewed.

I didnt put my link in a post above, forgot.

https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate

I don't know what the answer is for this issue...
But honestly if any party promised a solution to this crisis they would win my vote. I am on my own with two DC and if my rent goes up anymore and my salary doesnt (NHS) I have no idea what we would do.

I think it would be a real vote winner, but I haven't heard solutions being suggested by any of the political parties.

We need key workers! We need young people to be able to afford to leave home & to start families. But it all seems depressing at the moment like the rich just get richer and the poor get poorer.

Most LL's buy houses interest only and on tracker mortgages because there have been more of those available to LL's. Trackers have gone up 14 times over the last 2 years. I'm a LL and if my mortgages go up I pass on some of the additional costs to my tenants. Last year inflation went up 11 percent. I put my rents up 6 percent. This did not cover the increases I had to pay. This year inflation is 3.4 percent so I'll increase 3 percent on mortgages on trackers but not on 3 mortgages still in a fix. If I can jump on to a 5 year fix I wouldn't need to put rents up for 4 years. Some years I have left rents the same for 3 or 4 years then increased by that year inflation. I know almost identical houses to the ones I rent are rented for about £100-£150 pcm more. I always stay a little under market value because then my tenants don't want to move. I'm a good LL and carry out maintenance and repairs in a timely manner. I provide extras like fire blankets and first aid kits in my houses. If a tenant can't pay or wants to pay late I let them because I've got good tenants and know they would only ask to pay rent late if they really needed too.

The B of E could reduce mortgage rates for trackers and this would mean many LL's don't increase the rents. Also many LL's have left the market which is what many posters seem to want. This means the ones that do remain are more picky about tenants and can charge more as less alternatives available.

You were one of the good LLs on Mumsnet I was thinking about @caringcarer so I'm glad you've found this thread to give your viewpoint.

I suppose what irritates many people on Mumsnet including myself is how many LLs on here describe themselves as "accidental". It seems a strange thing to happen accidentally because at some point they made the choice to let out a property rather than sell it. They don't always seem to operate very professionally or know the legal requirements they ought to have researched when they became LLs which is a reason why you sometimes see posters on here encouraging them to sell up.

If I were renting I would prefer to rent from an experienced LL who maybe lets out several properties than from one of these amateur LLs.

I think you mean 'including the Labour years'. They could have reversed some of the sell off of social housing but, in fact, continued it.

The main problem with most of the issues is that we pay too little tax in the UK for the level of service we all desire, and that the government (successive governments) do not administer what they do receive properly, thus compounding the problem.

We are now in such a state that it would take several government cycles to resolve over a multi year plan. As far as I can see, neither current side could run a bath, so we don't stand much chance of anything sensible happening any time soon.

I was very disappointed in the Labour government when they did nothing to reverse the selling off of social housing.

That policy - introduced by Thatcher of course- was very detrimental to future generations (though good for those that benefitted of course so I don't blame them for exercising their Right to Buy).

Yes totally agree. A great disappointment to be honest. Im a life long labour voter, who on earth do I vote for these days.

Politics in this country is dire at the moment. It is like a choice between syphilis or gonorrhoea.

Lol very eloquent

We were at one time "amuture" renters but we bought the place to rent out
As we both worked, it was hard to get our head around it but we looked for a really nice semi in greater london that was close to where we lived and would not mind living

The property was being sold with a sitting T of 3 years. As far as info went the R paid rent on time. We were cash buyers. We chose a LA, picked their brains it was the exiting LA that sellers were using - the sellers, one half ie the sister was desprate to sell the EA told us - we made three offers of cash, one really low, the second low and the third was a low plus a few k and no survey etc chain free - we got the place signed over in a 4/5 weeks

The T was ok, we met him and he had a big jag, XJ i think you call them but was was full of deluded dreams. After the first year having paid rent on time he started messing around - if it was not for the lies and lying promises we wuold have let him stay - so we told him to go but as we were nice people we said he did not have to serve his notice but we'd like a few days notice - he upped sticks and left owning us 2 months rent - we found out where he lived and sent a solictors letter and we knew the guy knew we ment business as we talked about integrity and cheats in one of the long chats we had about people cheating people - he paid up quickly - he could afford it as he had that massive car and i recall him showing us his watch collection.

From that incident - we refubished the place top to bottom inc all writing, roof, CH, new kithcn bathroom etc and used LA's we trust and wanted ones that were fair to us and the T and the LA was hot on rules and regs as we wanted our T's to be safe and fell well - we've not looked back since

My BiL oens many properties and thinks we are throwing money down the drain using LA's after the first year of a goot T/family - we dont as we can afford it and its a peace of mind for us and T's - we also inc in the fees legal cover etc for removing T if they refuse to move out when noticesd served save a lot of stress should it come to that

We will not rent out to those with pets, smokers and the people must have a good earing track record no defualts etc - the last time we changed T's was some years ago so rules may have changed but ideally thats what we look for

During Covid, we were walking past the place on a monring walk saw the husband and wife - we chatted re covid, people being laid of and mu OH diplocatically let it be known that if they were laid off, we were there for them

There, IMO, newcomers like us can by good for T's - just saying not having a go at you

@Twiglets1 whilst I see your point it's not always as clear cut as that. We rented a house between 2015 and2020 from a company that own vast amounts of rentals. In fact he's a huge donor to the Tory's- this wasn't a slum landlord, they own masses of quite high end rentals as well as pub and barn conversions etc- Trying to get any repairs /maintabance done was like pulling teeth and incredibly rude, snooty people in the office (in London) we are not in London

Whereas current landlord owns just our very lovely family sized house in Bath as they bought a bigger place with a lot of land but more rural and kept ours as an investment- ( must be nice to be in that position) but no issues whatsoever with them.

The problem is that landlords are selling. Over the last few years there's been increasing controls on landlords, and changes have been made to make it less attractive as it was a vote winner however rising rents is the net result.

Yeah, sorry. I can't think of anything else that portrays how much I don't want either of them.

I'm going to have to choose at some point though. I've been spoiling my ballot paper for the last few years, but we can't have another term of Conservatives screwing up the country.

Not wanting to derail the thread but the latest hilarity is that they've granted several people asylum recently as the country they came from is deemed to be unsafe. Which country did the asylum seekers come from? Oh, yes, Rwanda. The country that is allegedly safe enough to send asylum seekers to. You just couldn't make it up. It would be funny if it wasn't so serious.

I feel like abstaining from voting altogether but that doesn't seem right either.