Landlords...

[Richie N]

Hi,

There's a petition going for landlords regarding tax changes in the recent budget;

https://petition.parliament.uk/petitions/104880

The Institute for Fiscal Studies has stated, in response to the Budget, individual landlords are already taxed more heavily than other homeowners.

The private rented sector is heavily reliant on individual landlords. The planned change is likely to result in higher rents due to landlords looking to offset higher tax liabilities.

In some cases, employed individuals own buy to let properties as investments for retirement. The planned restriction would adversely and unfairly affect them.

 

[silentjay]

individual landlords are already taxed more heavily than other homeowners.

As they should be seeing as other homeowners aren't running a business.

 

[Cromulent]

I find it hard to feel sorry for landlords when they get £700 a month minimum for a tiny studio flat where I live. It basically prices people out of the market.

 

[Richie N]

I find it hard to feel sorry for landlords when they get £700 a month minimum for a tiny studio flat where I live. It basically prices people out of the market.

But do you know his mortgage amount? the other costs involved.

 

[Vectis]

I find it hard to feel sorry for landlords when they get £700 a month minimum for a tiny studio flat where I live. It basically prices people out of the market.

But you could easily say that about any business, couldn't you? How about website development for instance? It could be argued that the fees charged could price some people out of the market - and website developers don't even offer a room over people's heads for what they charge!

Obviously the above example is said in jest but, if you think £700 is too much, why don't you take out a mortgage, get insurance, pay agent's fees, pay maintenance costs etc etc and see if you can do it for less? The landlord doesn't make £700 per month, you know, just because that's the rent charged!

 

[silentjay]

and website developers don't even offer a room over people's heads for what they charge!

Website developers produce something of value. Landlords don't, they make profit off the productive backs of others. Landlords didn't build the house and if they don't rent it out it isn't simply going to vanish.

 

[Richie N]

Website developers produce something of value. Landlords don't, they make profit off the productive backs of others. Landlords didn't build the house and if they don't rent it out it isn't simply going to vanish.

If they don't rent it out then they won't cover their costs. Not all landlords get a good return.
Some are landlords not by choice either.

 

[Mattk1983]

I'm a landlord and don't begrudge the new tax changes, so won't be signing sorry.

Why would you pass the tax onto tenants with higher rents? Maybe I'm a daft lefty, but I see paying tax as a duty not a chore

 

[Cromulent]

But you could easily say that about any business, couldn't you? How about website development for instance? It could be argued that the fees charged could price some people out of the market - and website developers don't even offer a room over people's heads for what they charge!

Obviously the above example is said in jest but, if you think £700 is too much, why don't you take out a mortgage, get insurance, pay agent's fees, pay maintenance costs etc etc and see if you can do it for less? The landlord doesn't make £700 per month, you know, just because that's the rent charged!

I guess I'm just a bit bitter about housing costs. The average house price where I live is £451,000 so buying a house is just stupidly expensive and renting isn't much cheaper either.

I'm lucky in that I work from home so I can move up north if I want (and in fact that is exactly what I am considering) and still continue with my current work but other people round here aren't so lucky.

Being a landlord is easy you just need the money to be able to afford a house in the area. You can even outsource most of it to a letting agent and watch the money roll in. Being a developer takes years of practice and learning.

 

[Richie N]

I guess I'm just a bit bitter about housing costs. The average house price where I live is £451,000 so buying a house is just stupidly expensive and renting isn't much cheaper either.

I'm lucky in that I work from home so I can move up north if I want (and in fact that is exactly what I am considering) and still continue with my current work but other people round here aren't so lucky.

Being a landlord is easy you just need the money to be able to afford a house in the area. You can even outsource most of it to a letting agent and watch the money roll in. Being a developer takes years of practice and learning.

I wouldn't say it was easy, especially if you have to evict tenants....

 

[silentjay]

If they don't rent it out then they won't cover their costs. Not all landlords get a good return.
Some are landlords not by choice either.

If they aren't getting a good return maybe they should start a real business instead then.

 

[garyk]

I find it hard to feel sorry for landlords when they get £700 a month minimum for a tiny studio flat where I live. It basically prices people out of the market.

Yeah amazing that, as a landlord my wife were just lucky I guess. The fairy of good fortune waved her magic wand and boom, we have properties.

No that didn't happen.

Must have been the silver spoon and I went to mummy and daddy and borrowed cash? Nope I grew up in a mobile home actually so mummy and daddy weren't rich.

Shall I tell you what really happened? We worked, for years, and years...and years. We saved and took the risk of buying a property to rent out and just repeated this. It's our pension plan as our pensions are worth squat (and I think they are the biggest scam in financial services anyway) and we wanted to better ourselves. See thats' the problem with this country, if you want to work hard and save to improve your situation you get screwed.

I'm sure the rents you mention are the market rate for the area, simple as. That's how we price ours, we are led by the market, simple as.

 

[tony84]

Being a landlord is easy you just need the money to be able to afford a house in the area. You can even outsource most of it to a letting agent and watch the money roll in. Being a developer takes years of practice and learning.

Being a landlord is not easy. I have been a landlord (I am not a landlord anymore).

First tenant - locked himself out every few weeks, I kept having to go round with the keys, ok not exactly a difficult job but a pain in the **** when you have other things to do. When he moved out there was an iron mark on the carpet, he denied doing it. I had to go through all of my old invoices from when I did the property up to show him that the carpet was fitted 2 days before he moved in (why would I take an iron to a house I do not live in) before he backed down and paid for the carpet.

Second tenant - decided to decorate without asking and make a complete hash of it. She put down laminate flooring after ripping up the carpet which looked like a child did it with a blunt saw. She also decided to drill a 6 inch hole in the basement to allow ventilation for the canabis she was growing (this was a lady with 2 young kids and a full time office job). She also cancelled the DD and left without giving any notice. By the time I gained entry I had lost 2 months rent, I had to pay to clean the house, redecorate, fix the hole and carpet the living room.

On top of that, the second tenant went through a letting agent. She paid the deposit to him (pre deposit protection days) and he closed up one night taking everyones money. That was a hassle and I very nearly lost £600 (thankfully I managed to track him down and get that back from him).

I never really intended on becoming a landlord the intention was to do up and sell but not long after doing up the recession hit. The income was very good, but to say it is easy is far from the truth. If it was that easy I would have bought another property and let it out or kept hold of that one. This was a property that was in a nice area, not a run down hole.

 

[Cromulent]

Being a landlord is not easy. I have been a landlord (I am not a landlord anymore).

First tenant - locked himself out every few weeks, I kept having to go round with the keys, ok not exactly a difficult job but a pain in the **** when you have other things to do. When he moved out there was an iron mark on the carpet, he denied doing it. I had to go through all of my old invoices from when I did the property up to show him that the carpet was fitted 2 days before he moved in (why would I take an iron to a house I do not live in) before he backed down and paid for the carpet.

Second tenant - decided to decorate without asking and make a complete hash of it. She put down laminate flooring after ripping up the carpet which looked like a child did it with a blunt saw. She also decided to drill a 6 inch hole in the basement to allow ventilation for the canabis she was growing (this was a lady with 2 young kids and a full time office job). She also cancelled the DD and left without giving any notice. By the time I gained entry I had lost 2 months rent, I had to pay to clean the house, redecorate, fix the hole and carpet the living room.

On top of that, the second tenant went through a letting agent. She paid the deposit to him (pre deposit protection days) and he closed up one night taking everyones money. That was a hassle and I very nearly lost £600 (thankfully I managed to track him down and get that back from him).

I never really intended on becoming a landlord the intention was to do up and sell but not long after doing up the recession hit. The income was very good, but to say it is easy is far from the truth. If it was that easy I would have bought another property and let it out or kept hold of that one. This was a property that was in a nice area, not a run down hole.

OK I was being a little bit over the top when I said it was easy but most of that isn't exactly taxing just time consuming. Let me put it this way you don't need a PhD to be a landlord.

I can understand the frustration that landlords feel but at the same time landlords need to understand the frustration of the people trying to rent a property. Ever since Margaret Thatcher had that amazing brain wave of letting people buy their own council house the amount of property available for poorer families has plumeted because most of the council housing stock has been sold off and not replaced.

This forces them onto the private market which is much more expensive than a council house and forces people to live on tiny amounts of money because their rent takes up 80% of their income leaving them just enough to pay the bills. Personally I think that is pretty sickening and it annoys me that people are profiting on other peoples hardship.

Maybe that's just me though.

 

[garyk]

I can understand the frustration that landlords feel but at the same time landlords need to understand the frustration of the people trying to rent a property. Ever since Margaret Thatcher had that amazing brain wave of letting people buy their own council house the amount of property available for poorer families has plumeted because most of the council housing stock has been sold off and not replaced.

This forces them onto the private market which is much more expensive than a council house and forces people to live on tiny amounts of money because their rent takes up 80% of their income leaving them just enough to pay the bills. Personally I think that is pretty sickening and it annoys me that people are profiting on other peoples hardship.

Maybe that's just me though.

I don't want to get into the whole political race thing but there is one other massive factor that you haven't considered: immigration. I'm not about to rant about immigrants but the bottom line is you have large amounts of migrants who come to work and need somewhere to live. Regardless if that is to buy, private rent or in social housing the amount of homes we have in this tiny island is an issue.

 

[tony84]

So to avoid private landlords charging higher rents, your suggestion is what?
They sell them? To who? The people who can not afford to save a deposit to buy them? Or the council? So they can sell them off on the cheap under RTB?

The profit margin between the mortgage and rental income is probably not what you think it is.
As an example, a £200k property would need a 20% deposit (£40k), mortgage of £160k. (Using what I believe to be one of the cheapest 80% mortgages) The rate would be 3.99% that comes to £530 a month. I have just looked at rent in parts of manchester where houses would cost £200k and the rent is around £700-750 per month, lets call it £800 just to play devils advocate. So thats £270 GROSS per month, £3,240 per year. Thats before you add on the costs of the mortgage (ie arrangement fee, valuation fees, legal fees, insurance, maintenance, hassle, letting agents costs, tax) and assuming 100% occupancy. If you said £2,500 a year sheer profit, do you think its unreasonable for a landlord to make that much in a year for the investment and risk they are taking?

I do not doubt there are better returns in some properties and likewise worse returns in others, but I just wanted to give an example somewhere in the middle.

I have no idea what the answer is, but its unfair to think landlords have it easy and its money for old rope.