10:44 AM, 6th December 2024, About a month ago 7
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With not a lot to do I read the publication of the English Private Landlord Survey and found it was an eye-opening and sobering experience.
In recent years, landlords have often been at the receiving end of criticism, with stereotypes painting us as profit-driven and neglectful.
However, the survey provides a more nuanced picture, shedding light on the diverse roles landlords play in the rental market and the challenges we face.
The likes of Generation Rent and Shelter won’t like it, but I found the survey’s report to be enlightening.
Which means it will be ignored by Labour who won’t believe a word of it.
That’s a shame because I’m even more angry at how we are portrayed and vilified.
(Read it here and make up your own judgement).
So, let’s nail the first big lie that landlords are greedy and loaded, sleeping on pillows stuffed with £50 notes. (If only!).
It turns out that the median gross income for a landlord without accounting for rent is £25,000.
That’s up from 2018’s figure of £20,000 in 2018 and 2021’s £24,000 in 2021.
Leaving aside that the income figure has only risen by £1,000 in three years, how do we explain this?
The survey says that 41% of landlords picked up less than £20,000 – does that mean lots of landlords are now retired? Are they reliant on their rental income?
The landlord survey also calculates that the median gross rental income is £19,200 for landlords – up from £17,520 in 2021.
That’s not a huge figure considering the amount of stress and work needed.
Also, around half earned under £20,000, though 17% earned £50,000 or more. To stress that is gross rental income and does not consider the pernicious effects of Section 24 mortgage interest relief restrictions.
Obviously, the tenant activists will point to this last figure without realising that it will be for a portfolio landlord.
A lot also depends on where you are – landlords in London have a median rental income of £24,500, while landlords in the North East earn £12,000.
So, there you have it – the vast majority of landlords are not wealthy property moguls.
That’s underlined by the fact that 45% of us have just have one property – which is a big chunk of the market.
And most of those landlords will be looking at a retirement income, be ‘accidental’ landlords having inherited a property or simply want to boost their income.
It’s also telling that most landlords don’t have huge portfolios either – just 17% own five or more properties.
But the real problem for the government, tenant activists and renters is something I’ve touched on before – landlords are getting older.
We, as a country, need more younger landlords to enter the market but I doubt they’ll like the work or the lack of appreciation.
Not only are landlords selling up to avoid the Renters’ Rights Bill, they will also be retiring.
The survey found that the average landlord age is 59 and 64% are aged over 55.
Big portfolio landlords tend to be older than average.
I have a friend who is 60 with four flats and he’s not sure whether to bail out now to avoid the punitive RRB or sit it out.
He doesn’t need the money – but he’s sick of the hassle too.
I imagine this is a quandary facing many landlords as we face negative, untrue and unfair headlines from the media.
Why should we bother?
Landlords are essential to the rental market, providing housing for millions of individuals and families across the UK.
There are more women landlords now than in 2021 and around three in five landlords have some form of borrowing on at least one property.
That makes the movement of interest rates a tetchy and stress-inducing issue.
Along with higher BTL mortgage costs, we also face maintenance costs, agent fees and voids.
We aren’t asking for gold medals to reward our commitment to the rental sector – just some honesty and appreciation.
Honesty that not all landlords are criminals out to fleece tenants.
And appreciation that we provide quality, comfortable homes for a big chunk of the population.
I’ve said it before and I’ll say it again, you’ll miss us when we’re gone.
Until next time,
The Landlord Crusader
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Cider Drinker
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Sign Up10:43 AM, 6th December 2024, About a month ago
Inflation’s great isn’t it?
£17,520 would be £21,205 today using the Bank of England’s inflation calculator.
So, if the median gross rental income is now £19,200, that is actually a FALL in real terms. This indicates that landlords are not charging enough rent.
Marlena Topple
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Sign Up12:26 PM, 6th December 2024, About a month ago
Great piece. The ticking time bomb of landlord retirement due to age and/or anti landlords policies and sentiment is being ignored. We are in exactly this situation. We have sold 2 and have 4 left. We are due to receive our state pensions in less than 24 months and once we are less dependent on LL income we will give up completely.
NewYorkie
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Sign Up13:43 PM, 6th December 2024, About a month ago
I'm now 70 and have been selling since 2016, when I was earning a decent salary and my rental income was about to hit £55k with high mortgage values. S24 did it for me, and then I got covid badly at the very start of it, and a feckless tenant ended my 25 year PRS love affair with a £20k bill. I now have one BTL remaining because the tenant has been pretty good over 7 years and her daughter has a young child.
Why, when the rental income barely covers my costs, and there are plenty of better places to invest for better returns for zero effort, should I have to expose myself to tenant hassle [she's started to complain about little things since I increased her rent to near market rent!], the risks of the RRB, and the constant vilification from Labour, shelter, et al?
Cider Drinker
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Sign Up16:22 PM, 6th December 2024, About a month ago
There can be no doubt that many private landlords are being systematically driven out of the private rental sector. That’s bad news for their tenants and eviction is highly likely.
Now, imagine a housing market without the PRS.
We will have…
Owner occupiers. Anyone that can secure a mortgage will be forced to become owner-occupiers. They’ll be responsible for repairs, damp, mould, gas safety, electrical installation safety, smoke alarms, CO alarms, EPC Ratings. They may even need to wipe their own bums.
Social Housing tenants. SH providers don’t want drug addicts and needy tenants. They have sold off their poorest quality housing and don’t want to own property in problem areas. They allocate housing based on a points system. Those with insufficient points will wait a long time.
Build to Rent will fill some of the gap but only the best tenants will qualify for a tenancy agreement. Their rents will not be competitive with the old PRS or SH.
The future is grim for anyone that don’t have sufficient points to compete for SH and don’t have the attributes to be attractive to
Dennis Leverett
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Sign Up16:32 PM, 6th December 2024, About a month ago
I'm 74 currently selling my last property. Cost £205,000 in 2014 and paid cash. Using B of E inflation tool that value is now £276,891. I'm having difficulty in selling it at £280,000 vacant possession even though in immaculate condition probably gonna drop now to £270,000. In real terms losing money on it, but will still have to pay capital gains tax etc. With purchase/selling costs and taxes that is a considerable loss but still being taxed. The net rental over that period gave a 4.7% pre-tax profit. The property has been empty since May 2024 so still have ins., council tax etc. costs ongoing. Am I a greedy Landlord ?
Marlena Topple
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Sign Up16:57 PM, 6th December 2024, About a month ago
Reply to the comment left by Cider Drinker at 06/12/2024 - 16:22
Exactly so. What a depressing picture created by successive governments who don't understand the rental market and put ideology above political reality. Who will suffer most? Of course it is the poor and the needy.
Mr Blueberry
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Sign Up6:45 AM, 7th December 2024, About a month ago
Looking at the UK's housing crisis from outside our own shores I was recently in China gently berating a retired politician friend of my wife for their housing policy that allowed too many high-rise flats to be built. In short a bubble of a sort was created by building and selling new flats that were not actually required - the problem being there was money to make while the bubble lasted. In The UK, my politician friend suggested the reverse was happening - the UK needed more housing but there was increasingly insufficient money to build them and sell them at a profit. The Chinese govt is lending local authorities money to buy unfinished and unsold properties and rent them to poorer families. He suggested the problem the UK faces is one of cost vs affordability. Neither the government / local authorities or private developers can afford to build 1.5M homes without the guarantee of a profit... Therefore older homes will drop in price to meet salaries.
He suggests the UK should subsidise developers by 20% and build radically differently designed homes of 60m Sq or less.
Where do UK landlords fit in to all this? As smaller, cheaper to run new homes are built older, larger and more expensive homes will become redundant. England and parts of Europe are in serious decline financially leading to social unrest.
Rents are a reflection of affordability coupled with supply and demand. It is suggested by my Chinese analyst that it is impossible to see growth in England as its industry is in decline and overtaxed leading to low profit margins and larger more flexible industries leaving the UK. The UK government are aware only the PRS can save the lower income families from homelessness - hence the diatribe of abuse and subsequent control of landlords properties aided by a sinister accompaniment of left wing media outlets and socially funded charities.