Are most landlords under charging?

Reply to the comment left by "michael fickling" at "27/11/2015 - 10:25":

Michael: all true, and the first step would be . . .?

The status of 'landlord' seems to fall between two stools, depending on who is looking at it.

HMRC regards 'small' landlords with limited activities as investors, and not as 'in business'. I guess that is the government view. HSE (see legionella debates) says they are all (4 million apx) 'in business' and therefore 'self-employed' even though this is also patent rubbish.

Whilst the position of full-time landlords being 'in business' is valid, there is still the 'sticky' perception of it being 'investment' rather than a 'proper' business.

Incorporation can be the way forward (if not already there) for these, but such 'business landlords' are a minority against the 95% or more 'investor landlords'.

Being compared, as is the case, to owner-occupiers is negative, we all know that.
So what about campaigning to make ALL landlording a 'business', persuade HMRC to see it that way, and every landlord liable for National Insurance contributions, and do all the other businessy things (including H&S compliance)?

It is likely too late in the BTL day now, but that is the root of much of this messy government thinking.

Reply to the comment left by "michael fickling" at "27/11/2015 - 10:25":

I agree Michael. Although nobody will have any sympathy for our case, I feel this has to be contestable under some sort of discrimination or human rights legislation.

I would like to share an anecdote that makes some of the decisions these politicians make laughable and had quite an impact on me:
This concerns a tenant, a single mum with 2 children and I rented my 3 bedroom terraced house in Liverpool to her for £650/month - which was well below what I could have achieved. I know that because I was renting 2 identical houses in the same area for £850/month. This was a break from my usual MO of renting to 3 working sharers. So why did I do that? - I knew she was a good tenant (from her previous landlord), she was looking for a stable long term let and she was very houseproud and kept the house immaculate. She made many decorating improvement to the house herself. She was working, but relied on some benefits to make ends meet. I figured that as I normally let to working sharers and had been lucky with great tenants and had no voids for many years - it was a worthwhile arrangement for both of us. Problem started when her daughter turned 17, felt school was no longer a route for her, so started work at an accountancy practice on a relatively low 'apprentice rate' - something like 16 hours per week at £2.50 an hour - the small hours/pay were dictated/allowed by a government apprentice scheme - I guess so she could also do the academic study outside work to gain qualifications to enable her to work in some way in accountancy. That's when it all came crashing in for my tenant - her daughter now that she was 'working' was no longer a dependent in the eyes of the government - so along came a bedroom tax (the house she was in was now 'too big' for her and her son) - withdrawal of child benefit - reduction in working tax credit - you name it seemed this tenant copped the lot.
Even the DSS must have felt sorry for her - as they made the useful suggestion of her daughter not trying to better herself, just going back to school to put up with it and then on benefits so the situation would not effect her so much. It was a bit of a loophole she got caught in. As good person - she explained the situation, how the changes meant she could not make ends meet and that she had no choice but to move to a smaller 2 bedroom flat on a much lower rent before she got into difficulty. Still remember her really sobbing when she handed the keys to the house back to me. So I now rent the same house out for £975/month to working professionals. OK my rent went up but would not want to lose a tenant like that ever again.

On another topic I have had 3 bedroom terraced house for 25 years, which has been rented out in that time to many happy tenants. Prior to that it would have been there for over 100 years so I imagine many families were brought up there. I had an assessor look at the property today and shock horror I guess I am now one of those rogue landlords you read about in the paper, victimising my tenants and taking advantage. Turns out that one of the bedrooms in this house has a bedroom which is just too small to be a bedroom - supposedly the government decided that 6.5 square meters is now the minimum size for a bedroom....so is it now a 2 bedroom house? So does that mean the bedroom tax should not apply here (maybe the tenant I lost through the bedroom tax could afford to move back in?) - or maybe a reduction in my council tax is due? Should I take retrospective legal action against the estate agent for selling me a property under false pretenses? Perhaps I can track down the building firm that erected this house and thousands like it in Liverpool for botching the build.
Anyway, not to panic - all is easily solved - I was advised I could just knock down the bedroom wall and move it six inches to the right making the big bedroom in the house a little bit smaller and Hey Presto I am suddenly OK again and not one of those evil Landlords we keep reading about in the Daily Express....crazy!!

I have tenants in one property that have just given notice as they are buying under the help to buy scheme they have been renting the property for 4.5yrs and the rent has not changed in the time
In another there have been insitu for 27 months with no change
Another property where tenants have been instu for 54, 40 and 36 months without rent increases
Another property where the tenant has been insitu for 27 months with no change and previous tenants have been insitu for 29 months without increase and they too left as they bought their own place
And another where the tenant has been insitu for for 39 months with no change and she's a single parent that works but does qualify for housing benefit - her and her 3 children love the place and really look after it. Previous tenant have been in this property for 39 and 20 months without increases
Unfortunately I will not be able to retain this stance going forward as I'm not a charity and need to make a profit to live off

I have five properties which are let on an individual Household basis. When they become vacant,I assess the current market demand for the properties and price the rent accordingly. This has meant that for the last three contracts, the rent has gone down. I was getting £1200 for one of them and the new rent is £1050; the other I was getting £1100 and am now getting £1050 On one property that has been let for three years, I initially let it at a lower rent than the previous one (£1200 instead of £1400); I have not increased it in that time as the tenants are superb. (Sadly , this is the first casualty of the Section 24 rules and it is now on the market - the returns being very marginal and I would be taxed out of my income if I keep it until 2018. ) In the fifth property, I initially charged a low-ish rent to get it let, and have gradually increased the rent by 3% each year. But it's still low compared to other rents for similar properties.

I have another property let on a room-by room basis - I have never increased the rent during a tenancy but have to re-assess the situation as rooms become vacant. One room that I let for 575 six months ago, now lets at £560.

If I don't have to sell all my properties, maybe I can let them out at higher rents next time they become vacant!!