Generation Rent says rent hikes to market levels aren’t justified

Generation rent and shelter and all the other charities that don't actually house anyone, have sown the seeds and now tennants are reaping what was sown.
These Woke Marxists have helped politicians crucify PRS Landlords with excessive taxes and the removal of reasonable business expenses tax relief.
Section 24 is such a totally unfair tax. No other business could exist if it had to pay tax before expense deductions. Its just hammers the tennants, because the landlord has to pass on that cost as higher rents or sell up and exit the PRS entirely, and many landlords have had to do just that, or go bust/bankrupt.
Remember many PRS landlords have to pay mortgages for the properties they rent out. Not being able to count the investment expenses such as the mortgage costs for tax relief makes it impossible to run a rental property business for most investers.
Add to that the removal of section 21, and 140 other pieces of new legislation that landlords have had to suffer and you have a
Investors realising that the PRS is not a viable nor profitable investment anymore.
Of course businesses registered with HMRC as Ltd companies are not subject to section 24, and can still offset their morgage costs and get tax relief. Some landlords have therefore incorporated their business and become Ltd companies. This is not easy to do for most small landlords due to the CGT and stamp duty that would need to be paid during the incorporation process. It simply is unaffordable for most small PRS landlords, as an option.
So the small PRS landlord is caught out. Most have no other choice but either put the rents up, or sell up and get out of the PRS.
Thanks Generation Rent, Shelter, politician's and the rest of you useless lot of Marxist idiots, may you rot in hell for the misery you have caused all the PRS tennants and landlords, with your medling that is causing the collapse of the PRS, and the ever increasing rents tennants have to pay. Why don't you do something to actually help the homeless, like house them for example, or does that go against your Woke sensibilities?

Would suggest that all tenancy agreements have an additional clause such as
“Rents will be set at the prevailing market rent for the property at the time of the commencement of the tenancy and as the area and property market rent prevailing at each renewal or annually for tenancies that continue as Periodic Tenancies unless mutually agreed.”

Please stop giving these idiots oxygen.
No one except Property 118 is bothering to report this drivel.

Potential Jaguar purchasers?

I've got some sympathy with this. I will use market rent as a guide when advertising a new property and of course that is not an exact science, but do not routinely chase that value with annual 'market' increases once the property has been let. My tenants' incomes may or may not have increased accordingly since commencing their tenancy and as long as my margin is more or less maintained I'm happy to make reasonable ad hoc increases over time which are related to the costs I'm incurring (mortgage rates, maintenance, service charges, ground rents etc). This may or may not be annually and will be discussed with my tenants to ensure that otherwise good tenants are not lost due to financial difficulty. Most of my tenants had increases last year but will not this year even though market rents locally have increased.

Rising rents aren't just about mortgages (calls for all properties to be Band C+ and other rising costs also play a part), but if this quote is correct, then according to Generation Rent:

“It’s important to note that just 42% of landlords claim mortgage costs in their tax returns.”

So if that figure is correct then 58% of landlords do have mortgage costs. And the majority of small landlords (unincorporated with only 1-2 properties) can no longer offset these mortgage costs against their rents, which means that they have to push rents up even more when the BoE raises interest rates. if Generation Rent wanted to decrease the inflationary pressure on rents then they should be arguing for landlords to be able to offset their mortgage costs against rental income.

And if this other quote is correct:

"The tenant group is calling on the government to ban bidding wars and implement a policy similar to New Zealand’s, where landlords are prohibited from encouraging tenants to bid above the asking price, but renters are allowed to offer higher prices as long as they are not pressured."

Then agreeing that tenants should continue to be permitted to bid above the asking price is the first reasonable thing that I have ever seen come out of Generation Rent: Of course tenants should be free to offer more than the asking price. As a landlord, if somebody offers you more than the asking price then you can weigh that up along with all the other criteria you use when assessing a potential tenant for your property, including the tenants' ability to pay.

This of course is one of the inflationary pressures driving rents up as a consequence of lack of supply.
Tenants who have the ability to pay higher rents and are prepared to offer them will out-compete other tenants who have lower earnings.

If Generation Rent wants to help renters then they and the likes of Shelter need to stop lobbying government to persecute small landlords. Big incorporated landlords are good at maximising their rents. Historically, small landlords tended to hold them down to reduce the risk of void periods.

Assuming Generation Rent people have jobs, it follows that they should be happy to accept salaries at sub market value, and don't expect to receive rises to reflect inflationary pressures...or have I got that wrong?

I agree with others that through their vilification of PRS LLs and the threat of rent controls, many more LLs are ensuring their rents keep pace with market levels, which didn't used to be the case. You reap as you sow.

“landlords raising rent to market levels is not a valid reason for a rent hike”

Why not? They rent private property not social housing. If the tenant does not wish to pay the going rate then they are free to legally end the contract (and move somewhere cheaper presumably?), pay the market rate, or apply to the rent tribunal.

End of.

Did GR even check to see how market rate is determined before they go off on one?

AI suggests..
Market rent is determined by several factors, including:
Demand: When there are many people looking for a place to rent, the market rent is higher. When there are many rental apartments available, the market rent is lower.
Location, size, and condition: The price a property would command in the open market is based on these factors.
Local wage levels: Market rents are determined by local wage levels.
Balance of supply and demand: Market rents are determined by the balance of supply and demand.
Market rent is also known as "private rent". It's based on the average private rent level for similar properties in a specific area.
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Reply to the comment left by Freda Blogs at 25/11/2024 - 13:18
You are absolutely right: Rent controls are a particular evil because even the PROSPECT of the introduction of rent controls mean that landlords have no option but to raise rents now, in case they can't do it later. The advice that I receive from my agent has shifted from advising me to hold rents down slightly to minimise the risk of void periods to raising rents.

People like Shelter and Generation Rent don't seem to realise that their opinions and pronouncements actually harm tenants. It would be helpful if more tenants actually realised this.

In the words of Dr Evil..
"Boo frickin hoo Generation Rent. Now run along to Mommy Shelter.....