Should Landlords Capitalise On Sky-Rocketing Rental Demand?

Should Landlords Capitalise On Sky-Rocketing Rental Demand?

10:40 AM, 22nd August 2022, About 2 years ago 41

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Whether or not landlords should capitalise on sky-rocketing rental demand is a political hot potato. There are polarised opinions even among the Private Rented Sector’s leading centre’s of influence.  For example …

Eddie Hooker, CEO of Hamilton Frazer (the owners of MyDeposits, Landlord Action and several other well known brands in our sector) is advising landlords -..

“Don’t be tempted to put the rent up”

“We are starting to see landlords putting the rent up; they want the same yield,” he says. “If they are coming out of a fix on a mortgage they are probably likely to see a threefold increase in the interest rate, and therefore their yield will drop, and so they will be tempted to put the rent up – and obviously there is a lot of demand out there, because a lot of landlords have been tempted to exit the market.

“I think landlords would be better to look at the long term and not be tempted to suddenly whack the rent up, which would exacerbate the problem for the tenant, causing arrears.”

However, Mark Alexander, Founder of Property118.com disagrees. He said …

“Landlords have an obligation to themselves and their own families to maintain their own household incomes. They are feeling the financial squeeze on even more levels than their tenants. The mass exodus of so many landlords is caused by Government policy but it is creating demand for the landlords with properties still available to let. If they are able to sustain their own finances by letting to people who are ready, willing and able to pay higher rent that’s exactly what they should do. It is not their moral obligation to swallow the burden of Government failings and the anti-landlord policies that are driving so many landlords to sell up.”

He went on to say …

“The plight of tenants is not the fault of landlords. We are all in the same rat race and those who run the World are responsible for that. What do they expect is all to do? Maybe they expect tenants to get a second job and for their landlords to build, rent and manage more properties to solve the housing crisis and to pay the extra taxes and increasing costs of living, but we all need to live a little too don’t we? There has to come a time when we all say enough is enough!”

What are your thoughts?


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Glyn Jenkins

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13:25 PM, 23rd August 2022, About 2 years ago

I'm going to stop selling prestige, sports and 4x4 vehicles as I feel the fuel these use is unfair to the end users.

Mick Roberts

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13:46 PM, 23rd August 2022, About 2 years ago

Reply to the comment left by Mark Alexander - Founder of Property118 at 22/08/2022 - 22:32
Well said Mark.

We only have to look at what's happening in Scotland & Wales with their more stringent rules & how their lack of supply is affecting tenants.

Simon Orr

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14:48 PM, 23rd August 2022, About 2 years ago

Well be careful what you wish for should have been the word here. Hammer the Land Lords for tax , then section 21 ...can anyone be surprised of the effect , and the words I heard was section 21 which is in force in Scotland had no real backlash I think not over one thousand applications for one flat...26% is a huge exodus of LL , I am one of them

Mick Roberts

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15:12 PM, 23rd August 2022, About 2 years ago

Reply to the comment left by Simon Orr at 23/08/2022 - 14:48
Yes Shelter said the new rules were working well in Scotland. They were for that one tenant that was just about to be given Section 21.
But then the new rules hurt the next 10,000 tenants wanting to rent a property.

Paul Feeney

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15:21 PM, 23rd August 2022, About 2 years ago

I agree with absolutely everything Mark Alexander was saying. It's as though he read my mind.
It is the government fault that the private rental sector is shrinking. Where do they expect people to live....in hotels? .....as my last 2 HMO tenants were doing whilst trying to find somewhere to stay. Both carers.... one for 3 months, the other for 6 months.
The policies are a shambles and only likely to make things worse.
If I have 20 people begging to have the property and a bidding war....why would I give it to the poorest??? We all live in the real world and don't have the government 's vast mismanaged resources.

Sam Addison

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15:57 PM, 23rd August 2022, About 2 years ago

I really appreciate Forever Tenant coming on here with a tenant's viewpoint and carefully considered points too.
As a landlord I have put rents up recently but not to what the market will bear. I want my tenants to stay long term and am fortunate to be not so overburdened with mortgage that s24 is killing me.
Increased taxation and regulation does have a cost to LLs and the increased risk of future legislation has to be allowed for as well. It would be foolish not to put up rents to cover these but balanced against other risks such as higher likelihood of arrears and subsequent eviction problems.

Mick Roberts

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16:22 PM, 23rd August 2022, About 2 years ago

Reply to the comment left by Sam Addison at 23/08/2022 - 15:57
Same here, I have many tenants been with me over 20 years, some paying 70% of what their neighbours are paying.
I can do this cause I paid 14k 16k 20k for my houses years ago. But like Mark says, why should we?
I never started this to be a charity, but it appears we getting that way.

The Forever Tenant

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16:50 PM, 23rd August 2022, About 2 years ago

I would not want anyone to have to lose money on their investment and have to have their assets go down to keep someone in a place.

I think the main concern of the public is that rents are increasing at a higher amount that is actually needed to cover those additional costs. As with supply and demand, you charge more because you can. Simple market economics right?

It can also however be seen as an issue if you would expect a tenant to take on all of those extra costs themselves. The arguments for what a tenant would have to do to pay the additional rent (work more hours, cut down on costs, etc) could be pointed at landlords and asked why are you not doing the same?

I am one of the fortunate ones. I have a landlord that has chosen to not increase my rent to market rates. There was another article on here today about how the amount of property you get for your money is getting smaller. 2 beds now costing the same as a 3 bed a couple of years ago. In Bristol it has very much become that situation. To use myself as an example, when I first started renting the house I am in four years ago (3 Bed Semi) the rent was £1,000 a month. Looking at the market rates for a similar property today in the same area and it is £1,700 a month. A 2 bed first floor flat would cost me £1,200 a month. My landlord has thankfully only increased the rent to £1,075 for the place I am in right now, even though he could go right to £1,700 and I would have little argument against it.

The hardest argument will be justifying why there is the need for that extra £9,000 a year. I suspect its people on highly leveraged mortgages increasing rent to cover a potential future interest rate increase. Those on IO mortgages might have a lot of issues if things increase a couple more percent.

I think if the common argument of "supply and demand" is used, that would lead to further restrictions being placed on landlords. Likewise if there are comments to the effect of "Well the government is punishing me, so i'm just going to pass that on to the tenant"

It's going to be a tough time ahead for Landlords and Tenants alike and I don't know what the solution to this is.

Mark Alexander - Founder of Property118

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16:57 PM, 23rd August 2022, About 2 years ago

Reply to the comment left by The Forever Tenant at 23/08/2022 - 16:50
I do truly appreciate you being a Member of this website and commenting as you do. We've had other tenants commenting before, but they usually get banned quite quickly when they become abusive towards landlords. Your views and very considerate and balanced. Thank you 🙂

I hope you stick around and continue to share, because the reason we created this website was "to facilitate the sharing of best practice among UK Landlords" You comments are helpful 🙂

Mick Roberts

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17:16 PM, 23rd August 2022, About 2 years ago

Reply to the comment left by The Forever Tenant at 23/08/2022 - 16:50
Yes u right.

U got the Landlords who are thinking Screw u Council, u charging me £890 for Selective Licensing when I've done nothing wrong. So now I'm charging higher rent cause I ain't paying for this Licensing. Tenants rent pays for everything.
And then cause of the attacks, we now have limited supply & more demand, so the other Landlords think Ooh Baby I'm getting 900 calls for this flat, I'm charging what I can get. I will be one of them Landlords. I will look after existing tenants, but if the Govt & Councils keep hammering us, for my next new tenant who I don't know & have no duty or morals to, I'm gonna' charge what I can get as I genuinely do not know where the next attack is coming from.

Kier Starmer said if he gets in, he's gonna' charge a 1% tax on all Landlords value of properties-Just like that. Green Party said the same cause Landlords have all had big rent increases-Der Uh What if we haven't gave our tenants rent increases? I sure am now. And that's how the Govt's & MP's & Councils are driving rents up.

We had none of this problem pre 2015. I'll keep saying it, I had tenants do bunks on me twice a year on average. I no longer have these videos at bottom to entertain us any more-Life is becoming calm.

Landlords are doing more work & hours which don't make the house any better.

https://youtu.be/i_HKaqYlHi4 Tenants from Hell Bulwell.

https://youtu.be/OzqVVRlZzE8 Tenants from Hell Bestwood Park

https://youtu.be/QcENHbgfMR4 Tenants from Hell Top Valley Nov 2010

https://youtu.be/_UvO8dmxGQQ Tenants from Hell May 12th 2010.

https://youtu.be/DzRIyfLHRn0 Tenants from Hell May 10th 2010.

The rest are on http://www.youtube.com/mickroberts2006
I han't done any for years.

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