Warning for landlords considering increasing rent

“As a result of a surcharge on stamp duty for second property owners, a third of buy to let landlords intend to pass on increased costs to their tenants.”

I would imagine that a third of landlords that have continued buying further rental properties since 1st April 2016 may intend passing on some costs to their tenants but I imagine that 90% plus of all landlords with BTL finance on existing properties, purchased prior to 1st April 2016, have already started putting rents up, as well as starting to sell off properties from their portfolios, to stave off increased tax costs and in some cases bankruptcy.

It’s a horrible choice between putting additional financial stress on tenants or going under due to the added costs BTL landlords will soon be facing - unfortunately it’s dog eat dog out there.

Does your insurance cover bankruptcy?

Sorry, landlord insurance does not protect against bankruptcy. It's a terrible state of affairs and as a landlord myself, I have already started increasing rents. If it wasn't for C24 I wouldn't have needed to do so.

I have also stopped buying any properties as the chance of making a loss now is far too high. That's not going to help the construction industry either.

I feel sorry for tenants. I feel sorry for landlords. I hate C24 and the Conservative Government for bringing us to this. My pension is in tatters and I am being tarred by the media as a greedy landlord. Walk a mile in my shoes...it's all about survival now and if a tenant cannot pay the increased amount, then they will be left in the hands of the Council and that will end up costing the Government a lot more. Well done George Osborne!

"There were 10,732 repossessions of rented homes by bailiffs between January and March 2016, up from 10,253 in the final three months of 2015.

Official figures from the Ministry of Justice show that 42,728 households in rented accommodation were forcibly removed in 2015 which is a record high."

You forgot to mention, most of those were by social landlords, not private landlords.

It's a bit rich for us to have a tax imposed on 'fictitious profit' and then be told we shouldn't increase rents. I also wouldn't have increased rents and have only done so because of Section 24. As for extra voids, I've found that the increase in rents on say 9 houses, more than compensates for an extra month or so of voids on one property where the tenants give notice as a result of the rent increase. I didn't realise and didn't really care that I could get much higher rents for some houses as I am not a 'greedy landlord.' I preferred a quiet life, ticking over and not grasping every penny. Things have changed now. The Government declared all-out war on us and to protect our businesses we have to raise our charges. As many have said, we will be in effect just passing on the increase in rent to the Exchequer. We won't be keeping it. So rather than have an organisation tell us not to increase rents, they should be telling the Government not to impose outrageous taxes on us which leave us with no choice.

' Who ' is urging landlords to not increase rent ? - I understand its Property118 Insurance, bu where is this published ?
Chris

Reply to the comment left by "Dr Rosalind Beck ." at "06/07/2016 - 15:07":

We are that organisation Ros, we are shouting as loud as we can!

The point of Jason's article was to highlight the increasing need for RGI. I haven't let a property in the last two years without it. Guess who pay the premiums, albeit indirectly? !!!
.

Reply to the comment left by "Mark Alexander" at "06/07/2016 - 18:30":

This report below urged landlords not to increase rents as well, Mark. I find it annoying. for various reasons. Firstly, it implies that we are thick and are going to push rents so high that we'll have voids/arrears etc. - when I've made very incremental increases. Secondly, I don't want to be told in the context of the Government's attack on our businesses that one of the few recourses left to me is something I shouldn't use because it will be hard for tenants. If Kent Reliance are worried about tenants they should be lobbying the Government, not pleading with landlords.

https://www.landlordtoday.co.uk/breaking-news/2016/7/landlords-urged-not-to-push-for-rent-increases

Jane Morris, managing director of PropertyLetByUs, who is quoted, is also annoying as she is still talking about restricting landlords' 'tax breaks,' which demonstrates that she doesn't know what she's talking about.

I totally agree Rosalind. The article is reflecting a body of opinion and urging you to use RGI to protect your property income.

Being right, as I think we are in railing against the terrible 100%+ tax situation of C24 and the attack on landlords, does not mean that we shouldn't be prudent and guard against the outcomes of the misguided legislation and the ignorant comments of so called experts.

Ultimately the tenants will pay for the increase in tax, otherwise landlords will sell up and supply will dry up. And as supply dries up those that can afford to rent will pay more to get a property. Those that cannot afford to rent will be washed up on the Council office steps looking for social housing which has been decimated by the Conservatives. At that point maybe George Osborne may admit he was wrong - but he is so arrogant of course he will not...until the homeless are on the streets and robbing him directly, because of course he is cutting the police budget as well.