UK Government’s Underhanded Push to Eradicate Private Landlords in Favour of Corporates

It looks like farmland will be gobbled up by corporates too. 'You will own nothing and be happy'

Reply to the comment left by Desert Rat at 07/11/2024 - 03:33
Hi Desert Rat

Very good post.

Keeping your tenant's rent down to £495 is laudable but is it sensible? I used to do exactly the same thing but since Sadiq Khan started to demand the power to freeze rents in London I've been putting my rents up.

I still have tenants who are paying well below market rent, not least because rents in London have risen so fast due to rising landlord finance and other costs, anti-landlord taxes like S24, and the deluge of regulations. But I'll keep putting them up because if we do get rent controls, I don't want to be stuck, unable to raise rents to a sensible level.

Even under the Renters Rights Bill, tenants will have the right to appeal a rent increase to prevent this being used as a backdoor route to eviction. The claim from the government is that charging market rents will still be allowed, but let's see how it will operate in practice. The court system seems to have a bias towards tenants so I wouldn't be surprised if we find that an 'independent' rent tribunal errs in favour of the tenant.

Like you, I'd have to pay a great deal of CGT if I sold my properties but at least if you pass them on to the next generation you are only hit with IHT, as the assets' value is rebased. That's a big saving although still a large IHT bill. But you could cut your IHT bill by mortgaging them and passing the proceeds on sooner, and as long as you lived another 7 years that gift would be IHT free.

PS: funny to think that Sadiq Khan's demand for rent controls has led directly to my tenants paying more. Talk about unintended consequences.

I have a relevant anecdote. During Covid lockdown a couple of my tenants told me they were struggling so I agreed a large temporary rent reduction.

At the time I was also a non-executive director for a large housing association. I asked the management whether they were offering any rent reductions and they told me "no, without exception."

I suspect many other private landlords acted as I did. It seemed like a pragmatic solution. Yet social landlords took a harder corporate line. Like other corporates their "professionalism" seems to remove their humanity. So why do we keep hearing about rogue landlords when politicians and others speak about the private rented sector and never hear stories like these?

Reply to the comment left by Rob Thomas at 07/11/2024 - 11:06
Rob, Keeping tenants rent low is not a sensible idea. And I can think of many reasons these days not to do it.

I've done it out of compassion for the tenant , these days everyone is struggling,c

Anyone think that the big corporate take over will have any compassion for tenants that are struggling to pay the rent? ?

And so, its the first year of me being a landlord for over 30 years, I am increasing all of my rents this year as they are way too low.

If a tenant leaves they will never be able to adjust to the current market rate.

The thought of rent controls and selective licencing and price increases are making me make adjustments now as if they come in I will continue to increase every year to the maximum, where as before I wouldn't increase the rents.

I can now not just accept all of the price increases, so they will now be passed along with an explanation of why my rents will be increasing this year.

Now, when a tenant moves out they will be increased to just below the maximum.

As we all known, rent controls do not work. They just drive up rents. Selective licencing is also doing this, the cost of living is also doing thei, the RRB is going to make a huge increase in rents as landlords sell up and then when you throw in EPC C all at the same time, renters are going to be lucky to find a house to rent anywhere in the UK. . The government know that most of this cost will be passed along to tenants, yet they don't care.

This of course is absolute cobblers. Yes, corporates will thrive and expand but they don't want the average tenant the general PRS has. With over 4m renting there is no way the corporates could absorb this, and as for social housing you can forget it.

So, does the government want the private PRS to go, absolutely not. Does the government want more tax, absolutely yes. So the private PRS will easily survive assuming landlords in the PRS don't throw the towel in and exit (as I have already started doing - retirement beckons)

Ill informed lefty activists aside, the last Government and the current Government are using a false moral high ground message regarding tenants rights and a few bad landlords to simply justify excessive taxation of the PRS. We can speculate about different motives all we like, it comes down to revenue at the end of the day, with a hint of vote gaining leading up to the election. The school bully turning the whole class against his victim.

Reply to the comment left by BillyC at 06/11/2024 - 14:11
Because at the end of the day Labour and Conservatives are two wings of the same bird. As Lord Hailsham said, we are an elective dictatorship after all.

Oliver….here here!

I regret I do not agree with Mark Alexander,

The biggest problem and danger for us all is the Renters Rights Bill. Worrying about anything else is like moving the furniture around when the house is on fire,

The biggest problem is the change of existing fixed tenancies to periodic when the Act comes into force, and only periodic tenancies may be granted after that date. There are a lot of other provisions too which need to be understood

Even now the people running courses for would- be landlords are ignoring the point that the business model they put forward is broken or will be soon .

That is buy renovate let remorgage. Whilst letting was relatively certain and low risk it is not now.

I am looking at propreties to buy now. My greatest concern is not the purchase cost nor renovations cost, nor even sdlt, It is getting the property back if I have bad tenants or want to sell.

There are ways to reduce these risks but they still loom large even though I know from experience some of measures to take to reduce the risks. There are some strategies which may stop occupation being a letting at all but these are only available in a few cases. A specific type of periodic tenamcy may help the owner in ways the government may not have imagined

It is those issues which we should be banding together to address, not fighting battles which we are doomed to lose

The S24 rule was brought in -it was said - because it wasn't fair that ordinary people buying their own homes were competing with Landlords who got tax relief on all their borrowings. That meant Landlords could afford to buy when ordinary people could noty. As someone who has been a landlord for over twenty years I'm afraid I can't disagree with that

However, as usual when government does anything the result is not what was intended, It actually caused many landlords to incorporate and it didn't allow ordinary people to buy

We all sing from the same hymn sheet. However, one of my biggest worries is when governments become so over confident that those of us with humble status will no longer be able to own a car, let alone a rental property…give an inch…they will take a mile!