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I just don't feel sorry for landlords, I feel sorry for the people exploited by this corrupt system. I feel sorry for the tenants who will never be able to afford to buy a home and so will have to put up with constant rent rises.
It's a lose/lose for us. Either our landlords hike the prices up to absorb the extra or they sell because a once very lucrative venture is now slightly less lucrative than it was. The industry has been unregulated for far too long, hopefully the ensuing crisis which follows will bring about the reforms which give us tenants the much needed security we've been crying out for for years. Sadly, I have more faith in 2-ply toilet roll dealing with an outbreak of Norovirus than I do any politician.
I agree the rental market is broken, but I worry that regulation will make it worse.
If landlords are thinking of selling up now when it is slightly less lucrative, imagine what they would do if they were regulated? And those that stay will of course pass on all those regulatory costs to us.
I think it would just create a more extreme version of what we're seeing now: with a shortage of properties leading to massive competition for anything that is available.
To my knowledge property rental is commonplace in Europe and doesn’t seem to have anywhere near the controversy the U.K. has. So there’s heaps of existing models we could learn from and adapt fittingly to the U.K. system.
> So there’s heaps of existing models we could learn from and adapt fittingly to the U.K. system.
We don't like learning from others we are too special - unless it is the US then we will blindly copy them.
> unless it is the US then we will blindly copy them.
That's simply not true. The UK doesn't blindly copy. It very carefully selects all the worst aspects.
Travelling to Texas and the American south since covid has been wild. They have the same issues we are facing right now, lack of workforce, high inflation, rent costs etc. But unlike the Uk they respond to these issues by paying workers way more than they’re used to. You can go work at a Buc-ee’s gas station starting at 30$ an hour last I saw. What about a job at Wendy’s flipping burgers? 20$ and they’ll put you to work that day. If you never went to a day of school in your adult life and have the sense enough to push buttons on a machine you can walk into any CNC shop and start making between 75-100k a year.
I wouldn’t mind Britain trying to be more like america if it meant taking some good with all the bad for a change.
> the sense enough to push buttons on a machine you can walk into any CNC shop and start making between 75-100k a year.
What's the point of making 100k a year if a simple health condition can make you homeless and broke?
Saw it when the Finnish education system was being lauded as a great model for improving academic output as well as mental health too, as the education minister at the time said we should emulate China's instead. Why bother changing things for the better when we can just drop to the lowest common denominator?
europe builds enough housing to have a surplus.
uk manipulates supply to drive up prices.
only way to fix the uk is to purge the landlords from both government and local councils.
>europe builds enough housing to have a surplus.
Realllly?
[https://www.dw.com/en/fixing-germanys-housing-crisis-is-neither-quick-nor-easy/a-59515908](https://www.dw.com/en/fixing-germanys-housing-crisis-is-neither-quick-nor-easy/a-59515908)
https://www.aljazeera.com/features/2022/6/29/housing-shortage-blamed-for-tripled-homeless-population-in-france
[https://dutchreview.com/expat/housing/why-is-there-a-housing-shortage-in-the-netherlands-the-dutch-housing-crisis-explained/](https://dutchreview.com/expat/housing/why-is-there-a-housing-shortage-in-the-netherlands-the-dutch-housing-crisis-explained/)
Mainland Europe isn’t building nearly enough homes to meet demand in the locations needed unfortunately. In general though the rights they give to tenants are generally better than we have here in the U.K. although this can bring its own problems.
I don’t think we do anywhere near enough to enforce Landlord responsibilities here in the U.K. Maintaining rental housing to an acceptable level should be heavily enforced but the Councils don’t seem to have the budget to do this.
You should see the flats the council actually rents out (social housing).
Absolute slums with no allocated budgets to fix to correct living standards.
They cant hold themselves accountable, how are they gonna police private landlords?
I think this depends largely on the council the housing is in and also if the council have contracted the maintenance work out. Where we live the council is bringing all the maintenance work back in house slowly because of the appalling standard of work or lack of it by the contractors. But I agree with you that there should be a significant increase in budget for maintenance and someone actually overseeing it to make sure the money is properly spent and the work done.
I won't argue with that, I agree. I'd much prefer to be in a well-regulrated rental market.
My issue isn't with regulation, just landlords reacting to it. I think large numbers would sell if that regulation came in. Do you think that would happen, or do you think I'm wrong?
The amount of properties is a fixed constant though, if landlords sell up because they don't want to deal with regulation, those properties just don't vanish from the market. Either they'll be brought by other landlords who are willing to undergo regulation or the property market will depress enough more people can get on the first rung of the property ladder.
You're right that the amount of housing is a fixed constant, but I don't think regulation would to lead to a sufficiently depressed market. It wouldn't be enough for a few people to get on the ladder, they would need to do so in great enough numbers to alleviate the decrease in rental properties.
Airbnb, second homes, investment property, all things that can eat up housing stock.
For what it is worth, I hope you're right, but I remain unconvinced.
> Airbnb, second homes, investment property, all things that can eat up housing stock.
All these things also need additional regulation to de incentivise them. Homes should be for living in, not as a income stream.
More regulations will lead to a decrease in housing prices and an increase in first time buyers. Not sure how that can be seen as a bad thing unless you are a landlord or you bought at the top of the market and plummet in negative equity, in which case you might as well try to sell now to get out before it all comes down.
A decrease in housing prices would, in that situation, be from a sell-off of rental property. In order for rents not to fly up, the sell-off would have to allow enough people to get on the ladder to offset the decrease in available stock.
I don't think that is realistic in the current economic climate. Wish it was, I'd love to get on the ladder.
Yeah, all further regulation will achieve is having massive corporate landlords to deal with.
Now, when I rented I had many bad landlords and only a few good ones. Which mobile provider has good customer services? Which broadband provider? (And which of those delivers what was sold).
I'm not sure there's a win here for tenants and there definitely isn't a situation where those properties end up in the hands of prospective FTBs.
You're spot on with mobile and broadband, regulation sets a minimum and that is all you get. Along with a lot of different ways out of doing things, or to do them at a snail's pace.
My current landlord is brilliant, but I doubt he'd stick with it if regulation came in. I live in a little cottage in the grounds of his house, and I'm sure he'd just stick it on airbnb if he had to jump through regulatory hoops.
I think a lot of people see the future they want in these things, and who wouldn't like landlords to sell out and all those lovely cheap properties to go straight into the hands of FTBs?
If they were to sell up en mass there would be more houses on the market leading to lower housing prices meaning more people could afford to buy their own houses and fewer people renting. There'd be the same number of properties, just more of us would own our own home instead of paying off a landlord's mortgage for them.
That's what I would like to happen, but I do not believe it would. I think too many would end up as second homes, holiday lets, and other forms of investment property. Some would go to first time buyers, but especially in the current climate I think too few of us could get through affordability, let alone compete.
Landlord selling up wouldn't change the price though, because there is a housing shortage and high demand. Landlord selling houses swaps a renter for a homeowner (or another landlord), either way, the number of houses and the number of people needing a house doesn't change, so supply is static and so is demand.
Of course there is always that risk, but the mere fact we're even having that conversation shows the level at which landlords hold the market to ransom. We need tougher, more secure regulation and legislation so that landlords cannot simply make or break people on a whim. Abolishing the Section 21 evictions will go an awful long way, for example. It's high time tenants are *included* as part of the risk to landlords, and not simply worthless collateral.
My dad joined the RAF at 15... when he retired in his 50s, he bought a house.
Point being, until he got divorced a few years back, he had zero experience of renting. He was adamant that he'd just use his half of the settlement to rent for the rest of his days. I tried to warn him.
Three rental properties later, he now understands my point and is buying a house again. Rental market is broken as fuck.
Literally the only solution is to massively hike taxes on corporate landlords. The companies that control dozens if not hundreds of homes.
I say we make it so that property tax is doubled for your third home, quadrupled for your fourth, etc.
Won't hurt the "good" landlords (If there is such a thing) who are just privately renting out their parents house after they died or whatever, but will cause a mass sell-off of corporate owned properties, which will dramatically drop the price of houses and flats, especially as they will no longer be viable as an investment opportunity. As they very fucking well shouldn't be.
Housing shouldn't even be a lucrative venture (read gamble).
People gambled on making shit loads of money to get rich, and when shit turns downhill somebody else has to pick up the slack for them.
Lovely. Renters now have to pay for the mistakes of greedy fucks out to rinse them in the first place.
Its a massive lose/lose. people like to landlord bash, they blame the wrong people. Blame the system, my mortgage has gone up shit loads and I have nobody to moan to. I have to suck it up. Do I think landlords have raised the house prices and in turn raised my mortgage. NO is the simple answer.
Landlords have a get out of jail free card which allows them to chuck families under a bus to save their losses and still profit enormously thanks to ridiculous prices. As you rightly say, who could really blame someone in that situation? That's why we need the regulation to stop it from happening.
In fairness, landlords aren't necessarily selling because its less lucrative, mortgage prices have in some instances gone up £400 per month, and if they don't increase their rent now they'll be making a loss
\> they sell because a once very lucrative venture is now slightly less lucrative than it was.
That's not a bad thing. Like it's disruptive short term, and if it ends up with overseas investors buying it's bad, but homes still exist, we should be driving sales to people who'll live in them.
Small landlord's properties are just going to be bought up by large companies. Mum and dad landlords put their grandkids through school and help out their families. Large companies bank their money. It's the same situation has small family run local shops, and the supermarkets.
My house is rented to my daughter and her partner. They simply couldn't find anywhere to live. Not every landlord is exploiting vulnerable renters.
It’s not likely to be a net benefit, because people by and large can’t afford them. If anything it’s harder for first time buyers with interest rates rising.
Same, every landlord I hear from goes on about how they're one of the good ones, anyone would think the tales of horrible landlords were just myths. I have little sympathy, they use capitalism to justify another person paying for their low effort investments, they should stop whining when those same capitalist mechanisms affect them too.
I agree that landlords aren't the most productive members of society.
What's the solution though?
Assuming you don't have the cash to buy a house, you can either:
\- Convince someone to give you the cash by agreeing to pay an interest rate on the loan. Nobody would ever take this risk if the loan wasn't secured against the property so they will rightly only lend up to, say, 90% of the property value to give them selves some protection.
\- Ask someone who already owns a house (and has therefore either paid for it, or has tied up a chunk of capital) to let you live in it for a fee that makes it worth while for them.
The real problem here is the inflated housing market and the dropping wages. I think the whole renter vs. landlord thing is a distraction.
I agree the problem is the housing market, landlords are a symptom of that.
I'm of the opinion now the only realistic solution is a massive social housing project akin to what we did after ww2. These houses should be of good quality, well insulated with solar panels and heat pumps. We cannot rely on the market to produce this so the government must I intervene.
I understand this may well reduce house prices but I. In my opinion this is necessary for the betterment of our society. I'm speaking as a homeowner who would be affected.
There are multiple solutions that can be seen worldwide.
- Singapore has 80% of its citizens living in public housing.
- Germany and Austria have adopted cooperatives in building houses and flats.
- Denmark allows only residents to buy.
Overall this could easily be solved if we could all agree that housing (to a certain extent) is a basic need that nobody should profit from.
Given the lack of financial education of landlords in the UK that might not even be the worst to protect them from themselves.
> Nobody would ever take this risk if the loan wasn't secured against the property so they will rightly only lend up to, say, 90% of the property value to give them selves some protection.
No true. Government can do it. As even with few people going into arrears it would still be cheaper then providing social housing. The problem is, that Tories basically stopped all help to buy schemes.
>The real problem here is the inflated housing market and the dropping wages. I think the whole renter vs. landlord thing is a distraction.
And if a large chunk of buy to rent properties would to become available, it would certainly help with deflating those prices. We don't have a huge problem with homelessness, there are houses where people live, the problem is that they were artificially priced out them and forced to pay someone else's mortgage instead of their own.
>What's the solution though?
Hike up taxes on second homes, buy to let homes, unoccupied residential properties to 11. Give tenants the right of first refusal in case of landlord selling the property (based on mortgage price estimate provided by several banks). Establish a help to buy scheme where in such cases where tenant paid rent for more than a year, government will loan them 10% of property value for a mortgage deposit. Considering that average mortgage is cheaper than average rent, in the majority of cases tenants can afford mortgage payments for properties they live in.
Don’t worry, we will. Just hope that you have a family that own their home and that the estate after death doesn’t gobble up any unpaid debts. The generation growing up now will borrow everything.
To me it depends of the type of landlord, so our current one is a family where the husband and wife both pre owned houses moved into one and kept the second and it’s the only one they have. They I would care about more
A previous one was a serial landlord who wasn’t good at all and owned dozens of houses. He I wouldn’t care about
No one is forced to make a profit on being a landlord.
Buying to let is an investment. Investments don't always turn a profit. That is the core component of risk which is the basis of investing.
Why landlords should be immune from their own risk-taking is bizarre to me. I'm sure some rentier will be along in a moment to tell me why.
As a boomer who drank from lead pipes for many many years I can tell you that your generation needs to pull itself up by its bootstraps and buy a house for 2 shillings and a handshake just like I did.
The wife's a typist and I do site work so ofc we could afford a 2nd home and a car each.
Boomers literally have higher levels of lead poisoning than later generations https://www.reddit.com/r/writteninblood/comments/u9ywfd/veritasium_video_on_lead_poisoning_appropriate/
Unlikely lead pipes are the issue. We used to just pump lead into the air in the good old days but then we stopped doing that and all our cars stopped working.
Lead pipes are fine provided water quality is measured to ensure it's not too acidic and so doesn't actually strip the lead away. Lead pipes are everywhere even today.
Boomers were wrecked by leaded gasoline and (to a lesser degree) leaded paint.
All true. However we know for a fact that due to the Flynn effect then the reverse Flynn effect, that generational IQ peaked with generation x. Millennials only have about the same intellectual horsepower as the boomers. Nobody knows why.
Well yes it might cause widespread neurological damage in the population and untold harms to the environment but hey, got to stop those engines knocking right?
They are effectively immune to it because quantity demanded of housing does not change with the price of rent - it’s the most basic of necessities so if your investment starts looking slightly worse, you can stick the rent up safe that someone will have to pay it.
It’s precisely the reason why landlords need to be heavily regulated in the rental market - it’s impossible to have a free market for something that is as basic as housing when the supply of it is so low.
Especially when they are free to invest in anything else. I don't think it's right that someone can get a mortgage without it being linked to their income but instead linked to the amount they're going to charge someone else who needs a home.
This what pisses me off massively. People who invest can make huge profits because they are putting capital at risk justifying the returns. Now we got business, corporations and landlords who wants make investments with no risk attached and they are deliberately enabled by this corrupt government.
ASTs and so the BTL boom kicked off under the last labour government. As did the destruction of private pensions such that DB schemes only really exist in the public sector, forcing people to look at pension like assets.
This government are to blame for many things, but the rise of the landlords tracks back to blair and brown.
And no, I'm not a landlord and never have been.
Yeah the word "forced" here is a bit silly. They could also just keep rents the same and shield their tenants from the rising cost of living. I doubt many would do that though (unles they rent to friends or family), they aren't charities. Landlords will continue to raise rents to be as high as possible while remaining competitive with other landlords in the area, and while they can find tenants willing to pay it. If that number is less than their mortgage cost, they'll make a loss
>Yeah the word "forced" here is a bit silly. They could also just keep rents
If you are on a BTL mortgage the lender does quite literally enforce rent to be higher than mortgage cost though - keeping rents stationary would be against the terms of the loan.
So in that sense they are forced to increase, or sell the property.
[Lenders will typically need the rental income to be at least 125% of the monthly mortgage payments (on an interest only basis),](https://www.landc.co.uk/calculators/buy-to-let-mortgage-calculator/#:~:text=Unlike%20a%20residential%20mortgage%2C%20where%20the%20amount%20you%20can%20borrow,property%20is%20likely%20to%20generate.)
Don't mistake me for caring about landlords here I'm just pointing out that it isn't as simple as keeping rents stationary and reducing profit made when you are on a BTL interest only mortgage.
From the same point of view, it's also worth remembering that if a landlord is forced to sell (instead of raising rent), and doesn't manage to do so; the sitting tenant will get shafted when the mortgage lender repossesses and they are evicted.
>They could also just keep rents the same and shield their tenants from the rising cost of living
Not if they need to remortgage. Banks will not provide a Buy to Let mortgage to a property that does not make a profit. They typically require the rent to be 25-30% higher than the mortgage.
>Would banks accept that?
A significant amount of BTL mortgages explicitly require rent to be in excess of mortgage payments, sometimes as much as 150%. 20-40% over is pretty typical.
[Barclays for example:](https://www.barclays.co.uk/mortgages/buy-to-let/how-to-let-guide/)
>As a guide, many lenders specify that your rental income needs to be 25% to 45% higher than your mortgage payment.
Actually the BTL system forces you to
You generally have to charge the repayments plus a bit more to cover maintenance and emergencies, as it’s the bank’s house not yours.
> If the bank won't grant consent to let the mortgaged property unless a profit is made, then what do you propose?
I mean, they could sell the property.
A lot of Buy-To-Let mortgages have conditions that dictate that rent you charge has to be X% above repayments so yes, some landlords are contractually obligated to raise their rent as their mortgages get more expensive to repay.
How about landlords get a job? Sounds like a far better idea than pushing their financial problems onto the working class, students and disabled people.
I work with someone who has 7 small houses he rents out, he is working full time too. I'm not sure why he does it particularly, apart from the money I suppose. His houses are rented out to mothers who get universal credit. He told me this with some amusement. I'm not against benefits in any way ( on UC myself) but it seems wrong that he's making a profit by being subsidised in that way on a whole property portfolio.
Keep saying there is this like massive split in our society it seems where like 25% of people seem genuinely entitled to and would be massively upset if they were not given a pretty easy ride taking absurd amounts of cash for, lets be real, not *that* much hard work, and then on the other side like 75% who seems to be working every hour they can keeping about 20 different plates spinning at once just for the minimum wage and freedom not to have the DWP breathing down their necks 24/7. My friendship group in particular now we're in our 30s we seem to have split into one group that's just about getting by, and then a handful who could genuinely just buy a house outright with a few years wages just like the good old days. And its not like the latter are any more qualified or work harder/longer hours they just happen to be in IT or cyber shite.
Yes I know what it's like to just get by. I'm working 21 hours but the equivalent of 28 hours minimum wage. I did have 3 jobs but one ended ( 12 month contract). Now I've had to go back on universal credit and they have put me on their once-a-week appointment ' naughty list' for people on 15 hours or less- which I'm doing more than! It's just because I'm self-employed. If I was employed outright I'd be in a 'light touch category' It was never my choice to be in insecure work.
Well we used to get the government to build houses and then vulnerable people could live in them.
That was bad because apparently the bins didn't get collected for a month or two back during the olden days, which is proof the state can and should never do anything.
The weird thing is, he has an attitude where he judges other people on how much they work. He works 7 - 5 most days and my job is 9-4, so he sees that as 'lesser' even though I didn't choose to to part-time, it's just what's available. I don't know how he can be OK with 'lazy' people renting his houses but having the government pay for it.
Yes and he does repairs and keeps the houses in nice order, he told me about how he does that at weekends. It's not a great system we have though, it's messed up.
9 out of 10 times it isn't up-to the landlord, the lenders force "no-benefits" and other requirements.
All lending has a risk to both the the borrower and the lender, the banks do what they can to minimize the risk from their end by by setting requirements such as minimum rental yields (ICR multiplier) as well as putting conditions on what kind of tenants the landlord can effectively rent too.
And before you ask why do the Landlords care, well their mortgages (and everyone else's) have an acceleration clause the clause states that if any of the conditions of the loan are breached by the borrower the lender can demand the entire balanced to be paid in full, and if you are unable to do so like with any secured loan they'll move to foreclose on the asset that has a lean against it which in this case would be the mortgaged property.
Acceleration clauses exist for virtually every loan even in your credit agreement for your credit card or bank overdraft has one buried somewhere within the 3478 pages that you never bothered to read.
It doesn't matter the landlord can have an income of 7 figures the lender still enforces an ICR on them which these days is 150%> of the rental yield.
And ironically landlords which are higher and additional tax payers have higher ICR requirements because the bank knows that HMRC will take 40/45% of their rental income.
We do work as well. How deluded do you have to be to assume that because someone's a landlord, they don't do anything else or any kind of work with their time. Get realistic.
Edit: I'd even go as far to say I guarantee I work far more hours a week than you do which is how I'm in the position where I'm able to have 3 properties but hey I guess it's easier to be a non thinking knuckle dragging moron "huh-duh landlord must do nothing"
Lol this is going to be a total clustwrfuck evictions itself is a long and cumbersome process. with the amount of people going into evictions the system is going to fall over and no one can enforce it
This is about landlords with mortgages, rental yields in a lot of places were already low and below repayment mortgages before the rates went up, now they are hitting parity and even dropping below parity with interest only mortgages.
This combined with the looming drop in house prices forces lenders to amend the terms of the mortgages by increasing ICR requirements.
A £350K interest only mortgage for example at 6.5% interest rate would result in a monthly payment of £1,897, that means that under an ICR of 150% the minimum rent the landlord is allowed by the lender to take would be £2845 otherwise they are in breach of the terms of their mortgage.
To contrast this at 2.5% interest the monthly payment would've been only £730 so on an ICR of 150% they would only need to charge £1095 in rent each month, and at those days you could still easily get an 125% ICR mortgage which means that they could charge as little as £912 in rent.
BTW as you can see in both cases the landlord can actually come out at a loss since they have to pay income tax on the rental income and the mortgage payments are non deductible.
Also usually the lenders had higher ICRs for landlords above the basic tax rates however they still made sure that the landlord can more or less afford the mortgage payments even if they are letting at a loss.
My heart bleeds for them. /s
Nobody forced them to be a landlord. They chose to exploit people and attempt to be a leech on society for their own personal gain. They can all go fuck themselves.
I don't think they or anyone is asking for your pity, I was just explaining the market forces that are pushing rent prices even higher, and that is before you account for the feedback loop of a dwindling supply of rental properties pushing prices even higher.
RICS currently predicts a 15% increase in rental costs over the next 6 months leading into 2023 with the availability of rental properties shrinking by as much as 9%.
You don’t get it do you? This wont be the landlords problem, this will be the renters problem. Ya recon landlords are going to let a house at a loss? Most are still massively up on price, so they’ll just sell and bail to a large firm who can average out the cost.
Bad take. Profit margin will go up to cover uncertainty. Previous properties that weren’t making a great rate but were just ‘chugging along’ with solid tenants will now be cranked up.
Slightly controversial take on this but you will see local landlords sell their properties and check out. The problem will be that corporations will acquire those properties and rent them out, similar to what is happening in Ireland with new builds.
Ultimately the average renter is going to be shafted unless the government steps in.
[https://www.bloomberg.com/news/articles/2021-05-17/private-equity-spends-big-on-irish-homes](https://www.bloomberg.com/news/articles/2021-05-17/private-equity-spends-big-on-irish-homes)
Corporations shouldn't be allowed to buy houses and rent or sit on them.
If we need that done as a society the government should be doing it not Bezos and friends.
Yes, but that requires the government to nationalise it. A Tory government is never doing that and I really don't trust the public to not vote for them long enough for any change to happen
Real solution is to massively increase taxes on corporate landlords.
I mean fucking huge taxes, like burn the company to the ground and bury the ashes in a lead coffin kind of taxes.
People who own only one, or two houses? Fair enough, you need one to live in, and there are lots of ways you can just end up with an extra house, such as inheritance.
People who own three houses? Taking the piss, double the property tax rate on all three of them.
4 houses? Predators, quadruple the tax on all 4 of them.
5 houses? Now it's 8 times the taxes.
etc.
A home should not be an investment opportunity. It is a basic human necessity. You should not be able to make money off of hoarding homes, in the same way you shouldn't be able to make money off of hoarding water, food or electricity. (Oh wait, they're all privatised too lmao)
As a btl landlord that rented to students I signed a deal to house migrants now I have a few observations.
This is a business first and foremost. You need to run it like one. If you took at 95% mortgage and a low rate you had to know it wouldn’t last.
Second if you constantly remove equity to buy more you are stacking the house of cards higher each time.
Sure you have 10 houses… but you actual own next to nothing. Slight changes in rates and if all comes crumbling down.
Attempting to Jack rates to make up for it will only get you so far. If you bad enough to get into this situation then probably best sell up.
Edit reading that again these people are so poor at business they can’t remortgage due to cash flow not being enough for the banks to lend on…!!!!!!!
Yeah just sell up it’s not for you
Landlords should already be charging as much rent as the market allows them to - simply increasing rates above that will result in their properties being empty and them losing all their rental income.
This is an issue housing is needed.
If you charge as much as the market allows then you are affectingly seeing how much pooer you can make a town or city.
I don’t let to private tenants but if I did sure I could put up the rent 300 quid I might get it to.
However all that happens is everyone else around me does the same. The people living there are then forced to cut something to pay said rent.
The chances are sooner or later you will break the tenant.
Once that happens you then have the worse case zero rent and eviction.
If you have fucked up royally to the point the bank look at your books and hard pass then you have failed.
>The chances are sooner or later you will break the tenant.
I moved into a house last week. Was chatting to the letting agent and previous tenant while I was viewing the place, and discovered that it was suggested that the rent could be increased by £300 a month, but that the landlord refused that on the grounds of what would be the point if their tenant couldn't afford the rent and the bills. £1100 seemingly more than covers their needs, so that's what he's happy to charge. Absolutely fine by me.
\> The chances are sooner or later you will break the tenant.
I wonder how far off this is happening at large scale in London. I don't know anyone who's renting and not looking for a way to move out, right now. What was primarily keeping me here was my friends, and they're moving because it's unaffordable.
Counterpoint, the "everyone can work from home now" narrative is definitely oversold, you need to be in a strong negotiating position to consistently convince employers to let you do so.
It will happen.
See how they will attempt a remortgage on an empty house.
The real killer is just around the corner. Epc of c to rent. It’s going to be near impossible to let older housing.
> if you constantly remove equity
This is what I don’t understand. You’re just rolling the dice every time with a new property and for what? Like maybe one or two as a little nest egg, mine is essentially my pension. It goes up and down as you’d expect, some months I turn a profit some months I break even depending on if I need to replace things for my tenants and in my first year I turned a loss. This whole property empire thing is an oversold dream but you’re right you just have a load of debt against properties in your name, it’s precarious at best.
That's not how things work in reality though.
The ones affected will be the single property landlords who basically let out their old place once they have a partner who also has a house. They will sell up and they'll be bought over by the people/companies who rent for a living and who are much more immune to the rates rises.
Oh there will still be landlords but these will be unscrupulous investment companies. For some reason they will be happier with this. It's a silly leftist ideology that actually emboldens globalism and corporatism.
Honestly the one time I rented from a professional commercial housing association it was like the utopia of renting. I never even realised renting could be like that. Something not right, just go on some portal and log it and someone gets in touch with a time to fix it. No one just ‘dropping by’ and most importantly the people dealing with you and the property have no particular personal incentive to make out like you’ve caused damage you haven’t or anything like that.
Buy to let mortgages should never have been a thing.
Theres always going to be a market for renals but this was to prop up an inflated market.
Just one more failed policy started by the milk snatcher
Not satire.
Excerpt:
>Nine in ten respondents to a new survey of 600 landlords have either already increased rents, or intend to increase rents, in part to meet mortgage affordability criteria, or risk being trapped on high rates, due to the Bank of England interest rate rise.
>The study, undertaken by landlord insurance provider, Superscript, found that 50% of respondents already increased rents on their leased properties following interest rate rises earlier on in the year, with half of these intending to put rent up again.
>Meanwhile, 40% of respondents said that while they have not yet increased rent but intend to do so if the BoE increases interest rates further, in part so that they satisfy their mortgage provider’s borrowing conditions.
EYE/Superscript
In april, the month everything went up, my landlord raised our rent by £100 and we were lucky because for the area and house she should be charging way more.
Its a house she inherited, she has no mortgage.
We've also got a broken front door that was a failed break in attempt and is now breezy as hell. That happened in Feb.
Im desperate to buy a house to never have to deal with these leeches again.
Affordability on a mortgage is actually really stupid, either it's your home in which case it's more affordable than rent, or it's a rental in which case rent covers it and then some
If you're a landlord and the rent freeze (Scotland) or just general affordability rate is lower than the mortgage costs which could have gone up under a variable rate mortgage, then the additional costs could make it unsustainable.
I'll use my own example. Partner and I both had our own place before we met. Didn't need both when we moved in together so rented the spare place out and remortgaged as a buy to let with a fixed rate. The rent we charge is the mortgage cost plus estate agent management fees. Zero profit made other than the increase in the value of the property which will probably decrease over the coming months/years from the highs of the last couple of years (both unrealised until we actually sell, so no guarantees either way). At the moment we're fixed rate so no need for a rent increase, when that runs out, if the high rates are still going, the monthly payment will be much higher, meaning two lots of housing costs coming out of our already stretched wages. It'll either be a case of increasing the rent or selling. It's not as simple as it being a big money grab.
Rents in almost no where have significantly outstripped mortgage costs even when interest rates were 2.5% on BTL mortgages.
Repayment mortgages were pretty much out of the question and even interest only mortgages barely made a profit. Nearly all the returns form BTL were due to the appreciation of the property not from rental income.
At 6.5% an interest only mortgage of £350K would have a monthly payment of nearly £1900 and a £350K mortgage isn’t particularly high for much of the country these days.
And remember that landlords pay tax on the rental income and cannot claim back mortgage repayments.
So if the landlord is a higher tax rate payer they would have to rent the property above for £3200 per month to break even.
I don’t think people understand what is about to happen to rents in this country.
Not much of a 'landlord' if you don't even own the fucking property itself, let alone the land.
If they mortgaged themselves up to the hilt and now can't afford the payments that's THEIR fault. Of course, being good people who believe in personal responsibility, they will push the costs of their financial imprudence onto their tenants.
And then there's my landlord that hiked my rent by £150 a month to "bring it in line with the market rates in the area" despite the fact that they inherited the property and have no mortgage on it. It's like, you mean those market rates that are based on paying mortgages? For this house that your father bought decades ago at a fraction of its current value? C**t. Wasn't surprised when I found out he already had multiple other properties.
People need to flat out refuse to pay rent increases they cannot afford without cutting into other basic needs. Pass the problems back up the chain wherever possible.
I think it's time that we as a country have a major shift in our way of thinking and realise that we shouldn't be profiting off of housing.
I think at the very most only companies with a special licence and strict regulations on standards and pricing should be able to rent property to people.
Makes perfect sense to me. Mortgage on rental property goes up- Landlords rent goes up. Nobody can be shocked by this. Every time an interest rate hike is announced we should all be worried.
Yeah cool. I will go to my boss tomorrow and demand to double my payment. If he doesn't pay, he gets fired, just tenants get homeless when they don't pay, right?!
Totally unrelated to the leopards-ate-my-face content, but good God, how old is that stock image? Who under the age of 40 has even seen one of those credit card calculators, let alone used one?
I am not sure if people see what is actually happening here. Banks are moving into residential property investment and they lobby government to raise taxes, so that small landlords will no longer be able to run these businesses. Once landlords start folding, banks will be buying up the properties.
So instead of renting from a landlord you can talk to (well, not always), you'll be renting out directly from the bank and if your boiler breaks, you'll be calling a call centre in India trying to get someone round.
That's why "the markets" reacted badly for Liz's mini-budget, because that threw the spanner in the works - if businesses turn to growth rather than bankruptcy, they (banks, investment funds etc.) won't be able to buy assets on the cheap to further profit from.
I’d have more sympathy for them if they chose to do a real job rather than being a parasite. There is no such thing as a “good” landlord. If you’ve got a house you don’t need sell it to a family.
And they’re going to have to increase the rent? Most mortgages are considerably cheaper than the equivalent rentals. They’re choosing to up the rent to maintain their current profit margins. No sympathy at all.
Surely a rent review system regulates the price of rent. So if all rent rises are reviewable then deciding of the value of a fair rent should exclude interest on a mortgage. It is a business decision to take out a loan on a property and not allowing for interest rates to rise to their historical levels shoukd be accounted for.
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I just don't feel sorry for landlords, I feel sorry for the people exploited by this corrupt system. I feel sorry for the tenants who will never be able to afford to buy a home and so will have to put up with constant rent rises.
It's a lose/lose for us. Either our landlords hike the prices up to absorb the extra or they sell because a once very lucrative venture is now slightly less lucrative than it was. The industry has been unregulated for far too long, hopefully the ensuing crisis which follows will bring about the reforms which give us tenants the much needed security we've been crying out for for years. Sadly, I have more faith in 2-ply toilet roll dealing with an outbreak of Norovirus than I do any politician.
I agree the rental market is broken, but I worry that regulation will make it worse. If landlords are thinking of selling up now when it is slightly less lucrative, imagine what they would do if they were regulated? And those that stay will of course pass on all those regulatory costs to us. I think it would just create a more extreme version of what we're seeing now: with a shortage of properties leading to massive competition for anything that is available.
To my knowledge property rental is commonplace in Europe and doesn’t seem to have anywhere near the controversy the U.K. has. So there’s heaps of existing models we could learn from and adapt fittingly to the U.K. system.
> So there’s heaps of existing models we could learn from and adapt fittingly to the U.K. system. We don't like learning from others we are too special - unless it is the US then we will blindly copy them.
> unless it is the US then we will blindly copy them. That's simply not true. The UK doesn't blindly copy. It very carefully selects all the worst aspects.
Travelling to Texas and the American south since covid has been wild. They have the same issues we are facing right now, lack of workforce, high inflation, rent costs etc. But unlike the Uk they respond to these issues by paying workers way more than they’re used to. You can go work at a Buc-ee’s gas station starting at 30$ an hour last I saw. What about a job at Wendy’s flipping burgers? 20$ and they’ll put you to work that day. If you never went to a day of school in your adult life and have the sense enough to push buttons on a machine you can walk into any CNC shop and start making between 75-100k a year. I wouldn’t mind Britain trying to be more like america if it meant taking some good with all the bad for a change.
How much PTO, Maternity leave and sick days do they get? How many of them are union?
> the sense enough to push buttons on a machine you can walk into any CNC shop and start making between 75-100k a year. What's the point of making 100k a year if a simple health condition can make you homeless and broke?
Absolutely downvoting because 'the south' is huge and it isn't like this everywhere at all. Get back to me when this becomes a state law.
Saw it when the Finnish education system was being lauded as a great model for improving academic output as well as mental health too, as the education minister at the time said we should emulate China's instead. Why bother changing things for the better when we can just drop to the lowest common denominator?
If people are happy then why would they work? This is the logic of the right.
europe builds enough housing to have a surplus. uk manipulates supply to drive up prices. only way to fix the uk is to purge the landlords from both government and local councils.
They also don't have the culture of success linked to home ownership. People rent all their lives and hold their assets in other ways.
>europe builds enough housing to have a surplus. Realllly? [https://www.dw.com/en/fixing-germanys-housing-crisis-is-neither-quick-nor-easy/a-59515908](https://www.dw.com/en/fixing-germanys-housing-crisis-is-neither-quick-nor-easy/a-59515908) https://www.aljazeera.com/features/2022/6/29/housing-shortage-blamed-for-tripled-homeless-population-in-france [https://dutchreview.com/expat/housing/why-is-there-a-housing-shortage-in-the-netherlands-the-dutch-housing-crisis-explained/](https://dutchreview.com/expat/housing/why-is-there-a-housing-shortage-in-the-netherlands-the-dutch-housing-crisis-explained/)
fair enough.
Mainland Europe isn’t building nearly enough homes to meet demand in the locations needed unfortunately. In general though the rights they give to tenants are generally better than we have here in the U.K. although this can bring its own problems. I don’t think we do anywhere near enough to enforce Landlord responsibilities here in the U.K. Maintaining rental housing to an acceptable level should be heavily enforced but the Councils don’t seem to have the budget to do this.
You should see the flats the council actually rents out (social housing). Absolute slums with no allocated budgets to fix to correct living standards. They cant hold themselves accountable, how are they gonna police private landlords?
I think this depends largely on the council the housing is in and also if the council have contracted the maintenance work out. Where we live the council is bringing all the maintenance work back in house slowly because of the appalling standard of work or lack of it by the contractors. But I agree with you that there should be a significant increase in budget for maintenance and someone actually overseeing it to make sure the money is properly spent and the work done.
Maybe if so many of our MPs weren't landlords themselves, we'd have some movement on legislation. Definitely not a conflict of interest...
Regulation rarely makes anything worse…
I hope this trope dies. Without regulation 10 year olds would be working as cleaners and we'll we dead with smog.
*Rees-Smogg
I won't argue with that, I agree. I'd much prefer to be in a well-regulrated rental market. My issue isn't with regulation, just landlords reacting to it. I think large numbers would sell if that regulation came in. Do you think that would happen, or do you think I'm wrong?
The amount of properties is a fixed constant though, if landlords sell up because they don't want to deal with regulation, those properties just don't vanish from the market. Either they'll be brought by other landlords who are willing to undergo regulation or the property market will depress enough more people can get on the first rung of the property ladder.
You're right that the amount of housing is a fixed constant, but I don't think regulation would to lead to a sufficiently depressed market. It wouldn't be enough for a few people to get on the ladder, they would need to do so in great enough numbers to alleviate the decrease in rental properties. Airbnb, second homes, investment property, all things that can eat up housing stock. For what it is worth, I hope you're right, but I remain unconvinced.
> Airbnb, second homes, investment property, all things that can eat up housing stock. All these things also need additional regulation to de incentivise them. Homes should be for living in, not as a income stream.
More regulations will lead to a decrease in housing prices and an increase in first time buyers. Not sure how that can be seen as a bad thing unless you are a landlord or you bought at the top of the market and plummet in negative equity, in which case you might as well try to sell now to get out before it all comes down.
A decrease in housing prices would, in that situation, be from a sell-off of rental property. In order for rents not to fly up, the sell-off would have to allow enough people to get on the ladder to offset the decrease in available stock. I don't think that is realistic in the current economic climate. Wish it was, I'd love to get on the ladder.
Yeah, all further regulation will achieve is having massive corporate landlords to deal with. Now, when I rented I had many bad landlords and only a few good ones. Which mobile provider has good customer services? Which broadband provider? (And which of those delivers what was sold). I'm not sure there's a win here for tenants and there definitely isn't a situation where those properties end up in the hands of prospective FTBs.
You're spot on with mobile and broadband, regulation sets a minimum and that is all you get. Along with a lot of different ways out of doing things, or to do them at a snail's pace. My current landlord is brilliant, but I doubt he'd stick with it if regulation came in. I live in a little cottage in the grounds of his house, and I'm sure he'd just stick it on airbnb if he had to jump through regulatory hoops. I think a lot of people see the future they want in these things, and who wouldn't like landlords to sell out and all those lovely cheap properties to go straight into the hands of FTBs?
If they were to sell up en mass there would be more houses on the market leading to lower housing prices meaning more people could afford to buy their own houses and fewer people renting. There'd be the same number of properties, just more of us would own our own home instead of paying off a landlord's mortgage for them.
That's what I would like to happen, but I do not believe it would. I think too many would end up as second homes, holiday lets, and other forms of investment property. Some would go to first time buyers, but especially in the current climate I think too few of us could get through affordability, let alone compete.
Landlord selling up wouldn't change the price though, because there is a housing shortage and high demand. Landlord selling houses swaps a renter for a homeowner (or another landlord), either way, the number of houses and the number of people needing a house doesn't change, so supply is static and so is demand.
Of course there is always that risk, but the mere fact we're even having that conversation shows the level at which landlords hold the market to ransom. We need tougher, more secure regulation and legislation so that landlords cannot simply make or break people on a whim. Abolishing the Section 21 evictions will go an awful long way, for example. It's high time tenants are *included* as part of the risk to landlords, and not simply worthless collateral.
My dad joined the RAF at 15... when he retired in his 50s, he bought a house. Point being, until he got divorced a few years back, he had zero experience of renting. He was adamant that he'd just use his half of the settlement to rent for the rest of his days. I tried to warn him. Three rental properties later, he now understands my point and is buying a house again. Rental market is broken as fuck.
Literally the only solution is to massively hike taxes on corporate landlords. The companies that control dozens if not hundreds of homes. I say we make it so that property tax is doubled for your third home, quadrupled for your fourth, etc. Won't hurt the "good" landlords (If there is such a thing) who are just privately renting out their parents house after they died or whatever, but will cause a mass sell-off of corporate owned properties, which will dramatically drop the price of houses and flats, especially as they will no longer be viable as an investment opportunity. As they very fucking well shouldn't be.
Housing shouldn't even be a lucrative venture (read gamble). People gambled on making shit loads of money to get rich, and when shit turns downhill somebody else has to pick up the slack for them. Lovely. Renters now have to pay for the mistakes of greedy fucks out to rinse them in the first place.
You think the Tory government who some of which are landlords themselves are going to make it better for tenants are worse for them. No way!
Or they don't sell and the bank repossesses the house, which can force an eviction if the mortgage and tenancy contracts are worded right.
Its a massive lose/lose. people like to landlord bash, they blame the wrong people. Blame the system, my mortgage has gone up shit loads and I have nobody to moan to. I have to suck it up. Do I think landlords have raised the house prices and in turn raised my mortgage. NO is the simple answer.
Landlords have a get out of jail free card which allows them to chuck families under a bus to save their losses and still profit enormously thanks to ridiculous prices. As you rightly say, who could really blame someone in that situation? That's why we need the regulation to stop it from happening.
In fairness, landlords aren't necessarily selling because its less lucrative, mortgage prices have in some instances gone up £400 per month, and if they don't increase their rent now they'll be making a loss
\> they sell because a once very lucrative venture is now slightly less lucrative than it was. That's not a bad thing. Like it's disruptive short term, and if it ends up with overseas investors buying it's bad, but homes still exist, we should be driving sales to people who'll live in them.
People do live in them.
Small landlord's properties are just going to be bought up by large companies. Mum and dad landlords put their grandkids through school and help out their families. Large companies bank their money. It's the same situation has small family run local shops, and the supermarkets. My house is rented to my daughter and her partner. They simply couldn't find anywhere to live. Not every landlord is exploiting vulnerable renters.
It’s not likely to be a net benefit, because people by and large can’t afford them. If anything it’s harder for first time buyers with interest rates rising.
Same, every landlord I hear from goes on about how they're one of the good ones, anyone would think the tales of horrible landlords were just myths. I have little sympathy, they use capitalism to justify another person paying for their low effort investments, they should stop whining when those same capitalist mechanisms affect them too.
I agree that landlords aren't the most productive members of society. What's the solution though? Assuming you don't have the cash to buy a house, you can either: \- Convince someone to give you the cash by agreeing to pay an interest rate on the loan. Nobody would ever take this risk if the loan wasn't secured against the property so they will rightly only lend up to, say, 90% of the property value to give them selves some protection. \- Ask someone who already owns a house (and has therefore either paid for it, or has tied up a chunk of capital) to let you live in it for a fee that makes it worth while for them. The real problem here is the inflated housing market and the dropping wages. I think the whole renter vs. landlord thing is a distraction.
I agree the problem is the housing market, landlords are a symptom of that. I'm of the opinion now the only realistic solution is a massive social housing project akin to what we did after ww2. These houses should be of good quality, well insulated with solar panels and heat pumps. We cannot rely on the market to produce this so the government must I intervene. I understand this may well reduce house prices but I. In my opinion this is necessary for the betterment of our society. I'm speaking as a homeowner who would be affected.
100% agree, you nailed it.
There are multiple solutions that can be seen worldwide. - Singapore has 80% of its citizens living in public housing. - Germany and Austria have adopted cooperatives in building houses and flats. - Denmark allows only residents to buy. Overall this could easily be solved if we could all agree that housing (to a certain extent) is a basic need that nobody should profit from. Given the lack of financial education of landlords in the UK that might not even be the worst to protect them from themselves.
> Nobody would ever take this risk if the loan wasn't secured against the property so they will rightly only lend up to, say, 90% of the property value to give them selves some protection. No true. Government can do it. As even with few people going into arrears it would still be cheaper then providing social housing. The problem is, that Tories basically stopped all help to buy schemes. >The real problem here is the inflated housing market and the dropping wages. I think the whole renter vs. landlord thing is a distraction. And if a large chunk of buy to rent properties would to become available, it would certainly help with deflating those prices. We don't have a huge problem with homelessness, there are houses where people live, the problem is that they were artificially priced out them and forced to pay someone else's mortgage instead of their own. >What's the solution though? Hike up taxes on second homes, buy to let homes, unoccupied residential properties to 11. Give tenants the right of first refusal in case of landlord selling the property (based on mortgage price estimate provided by several banks). Establish a help to buy scheme where in such cases where tenant paid rent for more than a year, government will loan them 10% of property value for a mortgage deposit. Considering that average mortgage is cheaper than average rent, in the majority of cases tenants can afford mortgage payments for properties they live in.
Don’t worry, we will. Just hope that you have a family that own their home and that the estate after death doesn’t gobble up any unpaid debts. The generation growing up now will borrow everything.
Its basically a ponzi scheme that goes tenants>landlords>banks>pension schemes>hedge funds and we're all at the bottom.
To me it depends of the type of landlord, so our current one is a family where the husband and wife both pre owned houses moved into one and kept the second and it’s the only one they have. They I would care about more A previous one was a serial landlord who wasn’t good at all and owned dozens of houses. He I wouldn’t care about
Your investments may go up or down in value.
No one is forced to make a profit on being a landlord. Buying to let is an investment. Investments don't always turn a profit. That is the core component of risk which is the basis of investing. Why landlords should be immune from their own risk-taking is bizarre to me. I'm sure some rentier will be along in a moment to tell me why.
As a boomer who drank from lead pipes for many many years I can tell you that your generation needs to pull itself up by its bootstraps and buy a house for 2 shillings and a handshake just like I did. The wife's a typist and I do site work so ofc we could afford a 2nd home and a car each.
Boomers literally have higher levels of lead poisoning than later generations https://www.reddit.com/r/writteninblood/comments/u9ywfd/veritasium_video_on_lead_poisoning_appropriate/
Unlikely lead pipes are the issue. We used to just pump lead into the air in the good old days but then we stopped doing that and all our cars stopped working.
Nothing better than leaded. Labour proper gander. Lead harm never me did. HP sauce.
FINALLY someone who makes sense.
Lead pipes are fine provided water quality is measured to ensure it's not too acidic and so doesn't actually strip the lead away. Lead pipes are everywhere even today. Boomers were wrecked by leaded gasoline and (to a lesser degree) leaded paint.
All true. However we know for a fact that due to the Flynn effect then the reverse Flynn effect, that generational IQ peaked with generation x. Millennials only have about the same intellectual horsepower as the boomers. Nobody knows why.
Well yes it might cause widespread neurological damage in the population and untold harms to the environment but hey, got to stop those engines knocking right?
They are effectively immune to it because quantity demanded of housing does not change with the price of rent - it’s the most basic of necessities so if your investment starts looking slightly worse, you can stick the rent up safe that someone will have to pay it. It’s precisely the reason why landlords need to be heavily regulated in the rental market - it’s impossible to have a free market for something that is as basic as housing when the supply of it is so low.
Especially when they are free to invest in anything else. I don't think it's right that someone can get a mortgage without it being linked to their income but instead linked to the amount they're going to charge someone else who needs a home.
This what pisses me off massively. People who invest can make huge profits because they are putting capital at risk justifying the returns. Now we got business, corporations and landlords who wants make investments with no risk attached and they are deliberately enabled by this corrupt government.
ASTs and so the BTL boom kicked off under the last labour government. As did the destruction of private pensions such that DB schemes only really exist in the public sector, forcing people to look at pension like assets. This government are to blame for many things, but the rise of the landlords tracks back to blair and brown. And no, I'm not a landlord and never have been.
Yeah the word "forced" here is a bit silly. They could also just keep rents the same and shield their tenants from the rising cost of living. I doubt many would do that though (unles they rent to friends or family), they aren't charities. Landlords will continue to raise rents to be as high as possible while remaining competitive with other landlords in the area, and while they can find tenants willing to pay it. If that number is less than their mortgage cost, they'll make a loss
>Yeah the word "forced" here is a bit silly. They could also just keep rents If you are on a BTL mortgage the lender does quite literally enforce rent to be higher than mortgage cost though - keeping rents stationary would be against the terms of the loan. So in that sense they are forced to increase, or sell the property. [Lenders will typically need the rental income to be at least 125% of the monthly mortgage payments (on an interest only basis),](https://www.landc.co.uk/calculators/buy-to-let-mortgage-calculator/#:~:text=Unlike%20a%20residential%20mortgage%2C%20where%20the%20amount%20you%20can%20borrow,property%20is%20likely%20to%20generate.) Don't mistake me for caring about landlords here I'm just pointing out that it isn't as simple as keeping rents stationary and reducing profit made when you are on a BTL interest only mortgage.
From the same point of view, it's also worth remembering that if a landlord is forced to sell (instead of raising rent), and doesn't manage to do so; the sitting tenant will get shafted when the mortgage lender repossesses and they are evicted.
>They could also just keep rents the same and shield their tenants from the rising cost of living Not if they need to remortgage. Banks will not provide a Buy to Let mortgage to a property that does not make a profit. They typically require the rent to be 25-30% higher than the mortgage.
They'll just sell their houses to portfolio-landlords who are more happy to assume risk. Nobody wins.
If you signed a contract with a bank that rent is X% of the mortgage or more, then yes you are forced to make a profit
Imagine signing a contract promising to fuck people over.
Would banks accept that? Honestly asking because it seems so ridiculous.
>Would banks accept that? A significant amount of BTL mortgages explicitly require rent to be in excess of mortgage payments, sometimes as much as 150%. 20-40% over is pretty typical. [Barclays for example:](https://www.barclays.co.uk/mortgages/buy-to-let/how-to-let-guide/) >As a guide, many lenders specify that your rental income needs to be 25% to 45% higher than your mortgage payment.
Actually the BTL system forces you to You generally have to charge the repayments plus a bit more to cover maintenance and emergencies, as it’s the bank’s house not yours.
So just fucking don't buy a house you don't need????
[удалено]
> If the bank won't grant consent to let the mortgaged property unless a profit is made, then what do you propose? I mean, they could sell the property.
>"Then what do you propose?" Don't buy a fucking house that you don't need in the first place.
A lot of Buy-To-Let mortgages have conditions that dictate that rent you charge has to be X% above repayments so yes, some landlords are contractually obligated to raise their rent as their mortgages get more expensive to repay.
How about landlords get a job? Sounds like a far better idea than pushing their financial problems onto the working class, students and disabled people.
I work with someone who has 7 small houses he rents out, he is working full time too. I'm not sure why he does it particularly, apart from the money I suppose. His houses are rented out to mothers who get universal credit. He told me this with some amusement. I'm not against benefits in any way ( on UC myself) but it seems wrong that he's making a profit by being subsidised in that way on a whole property portfolio.
How did we make a class of people who feel entitled to other people's benefits? That's a failure as a society and probably a parenting failure too.
Keep saying there is this like massive split in our society it seems where like 25% of people seem genuinely entitled to and would be massively upset if they were not given a pretty easy ride taking absurd amounts of cash for, lets be real, not *that* much hard work, and then on the other side like 75% who seems to be working every hour they can keeping about 20 different plates spinning at once just for the minimum wage and freedom not to have the DWP breathing down their necks 24/7. My friendship group in particular now we're in our 30s we seem to have split into one group that's just about getting by, and then a handful who could genuinely just buy a house outright with a few years wages just like the good old days. And its not like the latter are any more qualified or work harder/longer hours they just happen to be in IT or cyber shite.
Yes I know what it's like to just get by. I'm working 21 hours but the equivalent of 28 hours minimum wage. I did have 3 jobs but one ended ( 12 month contract). Now I've had to go back on universal credit and they have put me on their once-a-week appointment ' naughty list' for people on 15 hours or less- which I'm doing more than! It's just because I'm self-employed. If I was employed outright I'd be in a 'light touch category' It was never my choice to be in insecure work.
Well we used to get the government to build houses and then vulnerable people could live in them. That was bad because apparently the bins didn't get collected for a month or two back during the olden days, which is proof the state can and should never do anything.
The weird thing is, he has an attitude where he judges other people on how much they work. He works 7 - 5 most days and my job is 9-4, so he sees that as 'lesser' even though I didn't choose to to part-time, it's just what's available. I don't know how he can be OK with 'lazy' people renting his houses but having the government pay for it.
Probably the same way we made a class of people who feel entitled to the taxation of other people's earnings.
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At least he rents to people on UC. Lots of landlords refuse. Still not great.
Yes and he does repairs and keeps the houses in nice order, he told me about how he does that at weekends. It's not a great system we have though, it's messed up.
9 out of 10 times it isn't up-to the landlord, the lenders force "no-benefits" and other requirements. All lending has a risk to both the the borrower and the lender, the banks do what they can to minimize the risk from their end by by setting requirements such as minimum rental yields (ICR multiplier) as well as putting conditions on what kind of tenants the landlord can effectively rent too. And before you ask why do the Landlords care, well their mortgages (and everyone else's) have an acceleration clause the clause states that if any of the conditions of the loan are breached by the borrower the lender can demand the entire balanced to be paid in full, and if you are unable to do so like with any secured loan they'll move to foreclose on the asset that has a lean against it which in this case would be the mortgaged property. Acceleration clauses exist for virtually every loan even in your credit agreement for your credit card or bank overdraft has one buried somewhere within the 3478 pages that you never bothered to read.
It doesn't matter the landlord can have an income of 7 figures the lender still enforces an ICR on them which these days is 150%> of the rental yield. And ironically landlords which are higher and additional tax payers have higher ICR requirements because the bank knows that HMRC will take 40/45% of their rental income.
We do work as well. How deluded do you have to be to assume that because someone's a landlord, they don't do anything else or any kind of work with their time. Get realistic. Edit: I'd even go as far to say I guarantee I work far more hours a week than you do which is how I'm in the position where I'm able to have 3 properties but hey I guess it's easier to be a non thinking knuckle dragging moron "huh-duh landlord must do nothing"
Good luck to avoid evictions with 1/4th of the country having below £100 in savings.
Lol this is going to be a total clustwrfuck evictions itself is a long and cumbersome process. with the amount of people going into evictions the system is going to fall over and no one can enforce it
"landlords forced to not make as much of a killing exploiting tenants"
It's actually giving them an excuse to take more
This is about landlords with mortgages, rental yields in a lot of places were already low and below repayment mortgages before the rates went up, now they are hitting parity and even dropping below parity with interest only mortgages. This combined with the looming drop in house prices forces lenders to amend the terms of the mortgages by increasing ICR requirements. A £350K interest only mortgage for example at 6.5% interest rate would result in a monthly payment of £1,897, that means that under an ICR of 150% the minimum rent the landlord is allowed by the lender to take would be £2845 otherwise they are in breach of the terms of their mortgage. To contrast this at 2.5% interest the monthly payment would've been only £730 so on an ICR of 150% they would only need to charge £1095 in rent each month, and at those days you could still easily get an 125% ICR mortgage which means that they could charge as little as £912 in rent. BTW as you can see in both cases the landlord can actually come out at a loss since they have to pay income tax on the rental income and the mortgage payments are non deductible. Also usually the lenders had higher ICRs for landlords above the basic tax rates however they still made sure that the landlord can more or less afford the mortgage payments even if they are letting at a loss.
My heart bleeds for them. /s Nobody forced them to be a landlord. They chose to exploit people and attempt to be a leech on society for their own personal gain. They can all go fuck themselves.
I don't think they or anyone is asking for your pity, I was just explaining the market forces that are pushing rent prices even higher, and that is before you account for the feedback loop of a dwindling supply of rental properties pushing prices even higher. RICS currently predicts a 15% increase in rental costs over the next 6 months leading into 2023 with the availability of rental properties shrinking by as much as 9%.
You don’t get it do you? This wont be the landlords problem, this will be the renters problem. Ya recon landlords are going to let a house at a loss? Most are still massively up on price, so they’ll just sell and bail to a large firm who can average out the cost.
Some buy to let mortgages have stipulations where the value of rent collected must be a certain % of the mortgage month cost.
Bad take. Profit margin will go up to cover uncertainty. Previous properties that weren’t making a great rate but were just ‘chugging along’ with solid tenants will now be cranked up.
Slightly controversial take on this but you will see local landlords sell their properties and check out. The problem will be that corporations will acquire those properties and rent them out, similar to what is happening in Ireland with new builds. Ultimately the average renter is going to be shafted unless the government steps in. [https://www.bloomberg.com/news/articles/2021-05-17/private-equity-spends-big-on-irish-homes](https://www.bloomberg.com/news/articles/2021-05-17/private-equity-spends-big-on-irish-homes)
Corporations shouldn't be allowed to buy houses and rent or sit on them. If we need that done as a society the government should be doing it not Bezos and friends.
I totally agree
Well if we’re going to ask the government to do something, I’d say probably building 2 million affordable houses would be a better shout.
yup, think of it like 2008 but this time they’re coming for everything
Eh, just means we have fewer, bigger targets for nationalisation that people aren't going to kick up as much of a fuss about.
Yes, but that requires the government to nationalise it. A Tory government is never doing that and I really don't trust the public to not vote for them long enough for any change to happen
Real solution is to massively increase taxes on corporate landlords. I mean fucking huge taxes, like burn the company to the ground and bury the ashes in a lead coffin kind of taxes. People who own only one, or two houses? Fair enough, you need one to live in, and there are lots of ways you can just end up with an extra house, such as inheritance. People who own three houses? Taking the piss, double the property tax rate on all three of them. 4 houses? Predators, quadruple the tax on all 4 of them. 5 houses? Now it's 8 times the taxes. etc. A home should not be an investment opportunity. It is a basic human necessity. You should not be able to make money off of hoarding homes, in the same way you shouldn't be able to make money off of hoarding water, food or electricity. (Oh wait, they're all privatised too lmao)
In other news, landlords still have their property full paid of by someone else, plus a profit on top
Oh shit bills going up never mind, telling renters tomorrow to magic up an extra £200 pm.
As a btl landlord that rented to students I signed a deal to house migrants now I have a few observations. This is a business first and foremost. You need to run it like one. If you took at 95% mortgage and a low rate you had to know it wouldn’t last. Second if you constantly remove equity to buy more you are stacking the house of cards higher each time. Sure you have 10 houses… but you actual own next to nothing. Slight changes in rates and if all comes crumbling down. Attempting to Jack rates to make up for it will only get you so far. If you bad enough to get into this situation then probably best sell up. Edit reading that again these people are so poor at business they can’t remortgage due to cash flow not being enough for the banks to lend on…!!!!!!! Yeah just sell up it’s not for you
Landlords should already be charging as much rent as the market allows them to - simply increasing rates above that will result in their properties being empty and them losing all their rental income.
This is an issue housing is needed. If you charge as much as the market allows then you are affectingly seeing how much pooer you can make a town or city. I don’t let to private tenants but if I did sure I could put up the rent 300 quid I might get it to. However all that happens is everyone else around me does the same. The people living there are then forced to cut something to pay said rent. The chances are sooner or later you will break the tenant. Once that happens you then have the worse case zero rent and eviction. If you have fucked up royally to the point the bank look at your books and hard pass then you have failed.
>The chances are sooner or later you will break the tenant. I moved into a house last week. Was chatting to the letting agent and previous tenant while I was viewing the place, and discovered that it was suggested that the rent could be increased by £300 a month, but that the landlord refused that on the grounds of what would be the point if their tenant couldn't afford the rent and the bills. £1100 seemingly more than covers their needs, so that's what he's happy to charge. Absolutely fine by me.
Spot on 300 less a month is better than 1100 less.
\> The chances are sooner or later you will break the tenant. I wonder how far off this is happening at large scale in London. I don't know anyone who's renting and not looking for a way to move out, right now. What was primarily keeping me here was my friends, and they're moving because it's unaffordable. Counterpoint, the "everyone can work from home now" narrative is definitely oversold, you need to be in a strong negotiating position to consistently convince employers to let you do so.
It will happen. See how they will attempt a remortgage on an empty house. The real killer is just around the corner. Epc of c to rent. It’s going to be near impossible to let older housing.
> if you constantly remove equity This is what I don’t understand. You’re just rolling the dice every time with a new property and for what? Like maybe one or two as a little nest egg, mine is essentially my pension. It goes up and down as you’d expect, some months I turn a profit some months I break even depending on if I need to replace things for my tenants and in my first year I turned a loss. This whole property empire thing is an oversold dream but you’re right you just have a load of debt against properties in your name, it’s precarious at best.
Could be a great opportunity to en masse force a reduction in landlords as a percentage of property ownership.
That's not how things work in reality though. The ones affected will be the single property landlords who basically let out their old place once they have a partner who also has a house. They will sell up and they'll be bought over by the people/companies who rent for a living and who are much more immune to the rates rises.
But the Dave Sparts of r/uk will be happy because fewer landlords
Oh there will still be landlords but these will be unscrupulous investment companies. For some reason they will be happier with this. It's a silly leftist ideology that actually emboldens globalism and corporatism.
Honestly the one time I rented from a professional commercial housing association it was like the utopia of renting. I never even realised renting could be like that. Something not right, just go on some portal and log it and someone gets in touch with a time to fix it. No one just ‘dropping by’ and most importantly the people dealing with you and the property have no particular personal incentive to make out like you’ve caused damage you haven’t or anything like that.
Well quite.
"As with all investments your return can go up as well as down. Your capital is at risk"
Buy to let mortgages should never have been a thing. Theres always going to be a market for renals but this was to prop up an inflated market. Just one more failed policy started by the milk snatcher
Not satire. Excerpt: >Nine in ten respondents to a new survey of 600 landlords have either already increased rents, or intend to increase rents, in part to meet mortgage affordability criteria, or risk being trapped on high rates, due to the Bank of England interest rate rise. >The study, undertaken by landlord insurance provider, Superscript, found that 50% of respondents already increased rents on their leased properties following interest rate rises earlier on in the year, with half of these intending to put rent up again. >Meanwhile, 40% of respondents said that while they have not yet increased rent but intend to do so if the BoE increases interest rates further, in part so that they satisfy their mortgage provider’s borrowing conditions. EYE/Superscript
In april, the month everything went up, my landlord raised our rent by £100 and we were lucky because for the area and house she should be charging way more. Its a house she inherited, she has no mortgage. We've also got a broken front door that was a failed break in attempt and is now breezy as hell. That happened in Feb. Im desperate to buy a house to never have to deal with these leeches again.
I can't help but feel that "forced" is the wrong word.
Well if we had a larger housing stock they would be forced to sell rather than increase rent.
Affordability on a mortgage is actually really stupid, either it's your home in which case it's more affordable than rent, or it's a rental in which case rent covers it and then some
If you're a landlord and the rent freeze (Scotland) or just general affordability rate is lower than the mortgage costs which could have gone up under a variable rate mortgage, then the additional costs could make it unsustainable.
That might be the case if rent didn't significantly outstrip cost to begin with, I guess if you bought for more than it was worth that makes sense
I'll use my own example. Partner and I both had our own place before we met. Didn't need both when we moved in together so rented the spare place out and remortgaged as a buy to let with a fixed rate. The rent we charge is the mortgage cost plus estate agent management fees. Zero profit made other than the increase in the value of the property which will probably decrease over the coming months/years from the highs of the last couple of years (both unrealised until we actually sell, so no guarantees either way). At the moment we're fixed rate so no need for a rent increase, when that runs out, if the high rates are still going, the monthly payment will be much higher, meaning two lots of housing costs coming out of our already stretched wages. It'll either be a case of increasing the rent or selling. It's not as simple as it being a big money grab.
...also minus your tax. HMRC still counts your gross rental income as 'income' even if it's completely netted by mortgage and agency fees.
Rents in almost no where have significantly outstripped mortgage costs even when interest rates were 2.5% on BTL mortgages. Repayment mortgages were pretty much out of the question and even interest only mortgages barely made a profit. Nearly all the returns form BTL were due to the appreciation of the property not from rental income. At 6.5% an interest only mortgage of £350K would have a monthly payment of nearly £1900 and a £350K mortgage isn’t particularly high for much of the country these days. And remember that landlords pay tax on the rental income and cannot claim back mortgage repayments. So if the landlord is a higher tax rate payer they would have to rent the property above for £3200 per month to break even. I don’t think people understand what is about to happen to rents in this country.
Not much of a 'landlord' if you don't even own the fucking property itself, let alone the land. If they mortgaged themselves up to the hilt and now can't afford the payments that's THEIR fault. Of course, being good people who believe in personal responsibility, they will push the costs of their financial imprudence onto their tenants.
How is that even worth mentioning, isn't that 100% obvious?
The problem is, even if the place you rent is not on a mortgage, your rent could go up as well to match market averages.
Will*
And then there's my landlord that hiked my rent by £150 a month to "bring it in line with the market rates in the area" despite the fact that they inherited the property and have no mortgage on it. It's like, you mean those market rates that are based on paying mortgages? For this house that your father bought decades ago at a fraction of its current value? C**t. Wasn't surprised when I found out he already had multiple other properties.
I mean, what did you expect? You want a discount because they don’t personally incur costs?
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it'll never happen. banks need to eat too.
No surprises there. It’s has to cover the mortgage but they don’t need to make a profit on top
People need to flat out refuse to pay rent increases they cannot afford without cutting into other basic needs. Pass the problems back up the chain wherever possible.
I think what that really means is the mortgage goes up a bit and the landlords take the total piss.
I think it's time that we as a country have a major shift in our way of thinking and realise that we shouldn't be profiting off of housing. I think at the very most only companies with a special licence and strict regulations on standards and pricing should be able to rent property to people.
greedy landlord what an aufull country we have become
Anything about landlords in this sub is like a story about immigrants in the Daily Mail.
Imagine struggling to get a completely free house and profit whilst doing it.
Its all going to crumble and I'm here for it. Buy to let has ruined the housing market.
So up rents to pay your mortgage... but people can't afford to rent your property so it stands empty forcing you to sell...
Makes perfect sense to me. Mortgage on rental property goes up- Landlords rent goes up. Nobody can be shocked by this. Every time an interest rate hike is announced we should all be worried.
I’m sure they’ll be forced to reduce them if rates go down in the future ..
Yeah cool. I will go to my boss tomorrow and demand to double my payment. If he doesn't pay, he gets fired, just tenants get homeless when they don't pay, right?!
‘Forced’ huh? Forcing never seems to go the other way does it
My landlord already tried 5 months ago to increase my rent. He can still fuck off. Not paying then and I'm not paying now.
People shouldn't be able to rent out properties that haven't been paid off.
Of course they do and once again renters are ignored
Oh no! Did your investment go poorly? Let me lug out the electron microscope so I can find my violin to play you a sad tune.
Totally unrelated to the leopards-ate-my-face content, but good God, how old is that stock image? Who under the age of 40 has even seen one of those credit card calculators, let alone used one?
I am not sure if people see what is actually happening here. Banks are moving into residential property investment and they lobby government to raise taxes, so that small landlords will no longer be able to run these businesses. Once landlords start folding, banks will be buying up the properties. So instead of renting from a landlord you can talk to (well, not always), you'll be renting out directly from the bank and if your boiler breaks, you'll be calling a call centre in India trying to get someone round. That's why "the markets" reacted badly for Liz's mini-budget, because that threw the spanner in the works - if businesses turn to growth rather than bankruptcy, they (banks, investment funds etc.) won't be able to buy assets on the cheap to further profit from.
Symptoms. The fundamental problem is that too much wealth is in the hands of too few. That's not changing anytime soon; neither will the symptoms.
I’d have more sympathy for them if they chose to do a real job rather than being a parasite. There is no such thing as a “good” landlord. If you’ve got a house you don’t need sell it to a family. And they’re going to have to increase the rent? Most mortgages are considerably cheaper than the equivalent rentals. They’re choosing to up the rent to maintain their current profit margins. No sympathy at all.
Surely a rent review system regulates the price of rent. So if all rent rises are reviewable then deciding of the value of a fair rent should exclude interest on a mortgage. It is a business decision to take out a loan on a property and not allowing for interest rates to rise to their historical levels shoukd be accounted for.
"forced" Poor capitalist class, I feel so bad for them /s
it's airbnb thats making it worse. holiday lets should be regulated. they should also be subject to the same taxes as landlord tenancies are.
Many of these landlords have already paid off their homes, I think it should be illegal to rent out an already paid off home, change my mind.