Periodic contracts – financial nightmare for landlords?

Reply to the comment left by Jack Jennings at 17/01/2025 - 16:28
Anything the government touches or get involved with always gets sour. They have no idea of investments or how to manage their citizens. Just on a whim or jealousy of great living by good tenants, they want to upset the carts. They listen to so called charities, who think they are there just to be against landlords' voice. Neither the charities nor the government can see that they have not got sufficient housing for the social tenants or the homeless. Instead of working with landlords and allow them to thrive, they are working against the landlords. Let us see how many good landlords will remain or how many properties will remain in 4 years. I am hoping to sell 6 more within the next 3 years, including our own residential and move into one of the rented properties. I hope to sell as many of them to owner occupiers. I have noticed some landlords do wish to increase the stock despite the legislation.

Reply to the comment left by Peter Merrick at 17/01/2025 - 17:38
Some of my properties are based in university towns and as such they are seasonal. If tenants are found in the summer, that is great but as the tenancy eventually comes to an end in September and tenants are not found or a group let's you down, waiting for them to send the right document for references and then don't send, it becomes October. The properties can remain empty for 20 months. I always ask tenants that if they wish to stay 9 or 10 months that will be ok. But even students wish to stay a full 12 months, so far. Now the agents have said they may only stay shorter time. However, the rents have gone up very high to allow for this. The way to go forward is to sell some properties and reduce or pay off mortgages. Now that most lenders are charging higher rates if you have more than 4 mortgages, as portfolio landlords. You can have 11 properties, but only 4 with mortgages to get the best possible rates.

Some of my properties are based in university towns and as such they are seasonal. If tenants are found in the summer, that is great but as the tenancy eventually comes to an end in September and tenants are not found or a group let's you down, waiting for them to send the right document for references and then don't send, it becomes October. The properties can remain empty for 20 months. I always ask tenants that if they wish to stay 9 or 10 months that will be ok. But even students wish to stay a full 12 months, so far. Now the agents have said they may only stay shorter time. However, the rents have gone up very high to allow for this. The way to go forward is to sell some properties and reduce or pay off mortgages. Now that most lenders are charging higher rates if you have more than 4 mortgages, as portfolio landlords. You can have 11 properties, but only 4 with mortgages to get the best possible rates.

Reply to the comment left by Vibha Spal at 19/01/2025 - 17:48
I think rents really will just go up and it will be a competition between those who can a) afford the rent and b) present the best case to the landlord to be allowed to rent their property. So ironically landlords could be in a more powerful position than when they had to compete for tenants and make sure they didn't find a better option.

Higher rents should mitigate higher mortgage rates to some extent at least until they cool down, but I must admit I have also considered selling some and using the money to pay down the others. Trouble is, most of my tenants have been with me for years and I really wouldn't want to evict them.

Another option is to increase the mortgage on your larger properties and use the released capital to pay off other mortgages, leaving fewer mortgages overall.

If students do leave early you can be sure of a double whammy as the council will come looking for council tax.

Reply to the comment left by LaLo at 17/01/2025 - 11:25
Goodness help us all, how on earth this is all going to work well is hard to see, just builds more and more problems for landlords who are being legislated out of existence and the good jobs most have done for years either not seen as important or just being taken for granted, seriously I am no longer stressed I am becoming traumatised.
And to be told that we do not work is quite frankly amusing, just wish I found it funny.

Reply to the comment left by NewYorkie at 17/01/2025 - 13:00
These are some of the real concerns which many landlords share but are of no concern to Governments who do not care or give any acknowledgement whatsoever to the risks we take

Reply to the comment left by Slooky at 19/01/2025 - 09:05
Correct, not to mention if you have to manage contractors as well but . . . . . we don't work according to the Government do we?

I don't think rent will increase that much as most tenants are already near their limit. Increasing rents ALWAYS increases the number of non payers.

What is likely to happen, as is now, landlords with mortgages will realise running on a negative or near zero profit margin is just not worth it and will sell.

Landlords like myself who have no mortgage will either hand in there or like myself sell (when the tenants leave).

Corporate landlords are welcome to the tenants, but they are unlikely to take on anyone but the very best.

The result of all this action will be more homelessness and increasing council taxes.

I have never taken deposits because as I have previously said I gut and repaint when a tenant leaves.

If a tenant is in arrears and leaves you are unlikely to get the money anyway and a deposit is more hassle than it is worth.