Updating post from Reddit.
I'm a tenant and very worried come the autumn as I may not get selected for any properties. Right now Zoopla and Rightmove have many properties daily being released To Let by agencies.
Will most landlords sell up or just be very stringent in their selection process. Will there be much change and will rents soar. Because currently rents are already sky high.
Out of London, as in the commuter belt ie High Wycombe, Redhill, Chelmsford, Reading, Stevenage, MK, HemelH, Guildford, Basildon, Harlow.. rents are still approx 1050-1250 for a 1 bed.
Just my personal opinion but the bill won’t make a whole lot of difference, finding a place at the moment is unbelievably tough for folks and that’s not going to change.
I am not a landlord but will this not increase the rents even more? If landlords are selling their properties there will be fewer properties and thus higher demand.
Yes. Anything that causes landlords to leave increases rents.
A rising population causes increasing rents too.
Rents are going up. About 8% pa at the moment I believe.
FWIW, I’ll not be putting any new tenants in my rental properties due to the reforms and I actually agree with probably all the changes. The trouble is that the person who signs the tenancy doesn’t need to occupy the property to benefit from these protections. If they limited the benefits to resident tenants it would be fine but the whole system will now be even more corrupted by scammers and subletters. I’m out.
All it will do is make my super hyper picky.
Two guarantors, a character reference from your CEO, meet your parents and all four grandparents need to be alive.
I think house prices and rents will go up and landlords will only rent to people with perfect credit scores.
I'm keeping mine. Only slumlords or those in for a quick buck need worry.
Or small landlords where one bad acting tenant can soon cost you a year or 2 in rent before you can get them out.
This risk can be insured.
Had mine over ten years, tenants leaving, now is a good time to sell for me after expenses and taxes last year I made £2k, mortgage interest rates and an of EPC D, if I improve I won’t make a penny for many years to come, except capital gain. Not worth the hassle.
I’ll take the profit pay the CGT and invert it in my sipp
A lot are going to sell up. Many properties are held by accidental landlords or as a spare investment. These will not want or can not financially support the changes required, and will sell up. All that will remain are those with the capital to keep up - i.e. those with multiple properties.
Even then, in the past few months i have seen a lot of HMO's and blocks of flats being sold up.
Property investing is a long term gain, Labour will be out soon enough, in 20 years time I wont even remember. Buy in fear sell in hype
I believe that landlords will be more selective by choosing:
Yes some will sell up (many were anyway) and the wise will be more stringent in approval process. It's going to get harder for tenants but not impossible. I woudnt worry too much, there is not much you can do anyway.
All you can do is work on yourself. Get that promotion, wage increase, qualification, get a budget organised, pay down those debts, keep a clean credit file, cut those expences but do enjoy life. Renting is a stepping stone to homeownership so, good luck.
Unfortunately I'll never get a promotion, I earn 34k basic, I have a good credit score great references never missed a rent payment never had any major checkout disputes apart from one incident where the landlord claimed half the deposit for dust and a left mirror. The TDS still sided with them and agreed 25% of it to be returned to the LL. I did leave the mirror mistakenly so I was ok with that The agent did say they'd rent to me again so thankfully I didn't leave on bad terms.
But I doubt that will go against me in the future always paid rent on time and never ever damaged properties which these agents acted like I did It's just a bit of dust that was already there before moving in but I won't ramble 😄
A wage increase and qualification isn't doable. I'm hoping I can manage a 1200 flat on 34k but I have p60s showing over 40k each year so hopefully some EAs accept overtime as some do, but then some do not unfortunately. I
If the dust was already there, then why did the TDS side with the landlord? The landlord has to prove his case to TDS. So they found that the dust wasn't there based on actual evidence.
I had no evidence it was there before unfortunately .
so they kind of decided 50/50 it was a really good lesson for me because whenever I move somewhere new now I will take pictures of every corner time stamped and I will take a video before moving everything in
I didn't do it in this flat thorough enoug they even charged me damage to a sink that was there before and my video couldn't be received by the TDS, it was somebody in this subreddit said to me i should have took a picture of the video or a screenshot of that part in the video with the timestamp it was a big lesson to learn there.
Also, I'll never use these agents again because they just wanted to claw back as much as they could of the deposit, most agents I don't think are that unreasonable and I think the landlord in this case was unreasonable in my opinion.
most landlords are great everybody in this subreddit I bet are great landlords and the bad landlords don't use the reddit is my guess.
That isn't how TDS decides things. The landlord has to prove the claim. So he will have presented some evidence that TDS believed.
Write to your Labour MP. It’s going to be very hard for tenants with labours changes.
Some landlords definitely looking at selling up. There appears to be more and more ‘rental’ style properties out on the market at the moment. If you bought the property back in the cheap house days you are probably fine. If you bought recently with the hype of these influencers telling you how to be a landlord you are buggered. Highly leveraged with zero equity in a house.
Rents will ultimately go up. Nothing the government can do about that. Even rent caps won’t help. There is going to be a monumental rental problem on Labours hands soon just because they want easy pickings for votes.
How do they have zero equity when a BTL mortgage has minimum deposit requirements?
Once the house is done up they refinance with. Higher valuation and pull out initial equity. Bigger mortgage but at the end of the day this is what courses tell them to do. Now mortgage rates are rising their numbers don’t stack up. Great when going was good.
But they still will minimum equity requirements on the refinance at stress tested rates...
Refinance 1 property that has built up equity and use that for the deposit. The new house is essentially 100% mortgaged
No, it isn't. You still are subject to LTV ratios at refinance. What BTL lender out there is going to lend on a property with no equity? None.
I’m rather hoping that some come on the market and I can pick them up for a good cash price. The cash buyer landlords won’t have issues.
Why do you think that?
The bill doesn't have effect cash buying landlords significantly less on the sticking points than mortgage based landlords.
The new bill may not but the changes to how mortgage interest payments affect tax have massively impacted those with mortgages already.. many of them just hanging in. Any extra legislation imposed on them may well tip the scales for that individual. The death of a thousand cuts.
What’s the difference?
Because we don’t generally give a toot about minor changes to cash flow. A lot of these reforms are designed to make it tougher to generate a reasonable return. This will simply slow it down for cash owners but the mortgaged will be stuffed.
I don’t think the bill will have that much of an effect.
Rented properties are generally more densely populated by sharers.
The effect of the bill on the market will be a small negative effect on supply, as smaller landlords will leave the market.
The larger effects are net migration being ~1 million incoming to UK per year, coupled with a lack of new housing stock being built.
Selection of tenants will always be stringent as landlords choose the safest tenant for the ongoing operation of their business.
If you can supply a guarantor, ideally one who owns a home, you will move to the front of a selection process :)
That's reassuring. I'm hoping rents won't keep rising as eventually I worry outside of London rents may hit 1300+ for a 1bed. On 35k approx is my salary I cannot afford that as my overtime which adds around 10k to my salary, won't always be accepted by some EAs.
It sucks to say but for the reasons the commenter mentioned (general lack of supply) rents will always keep rising i London due to high demand and lack of supply that isn’t changing.
Unfortunately the best bet is moving out of london or trying to buy your own 1 bed flat. You could look at shared ownership, it sucks but probably better than renting forever.
Rents will continue to rise until supply is sorted. Supply will only be sorted by ensuring ample social housing, or more landlords entering the space. Given landlords are leaving in droves, and the renters reform bill will not help that, expect rents to increase much higher rate than they have in the last 6 years.
It's certainly likely that rents will continue to increase between 6% to 8% per year over the next 3 years minimum, unless there is a massive and immediate change in direction from the current government (highly unlikely).
Given the above - that 1300 1bed is likely to be 1400 next year, and 1520 in 2 years. This is in fitting with the high increases seen over the last 2 years (where a year ago, that 1300 would have been around 1100 - 1200).
It can only make things worse
This is generally what happens when the government decided to 'help'
This is generally what happens when the government decided to 'help'
I don’t see it changing a whole lot in all honesty. Bill I think is over exaggerated in relation to changes for landlords. The ones I’m witnessing leaving have been in the game for a long time, are at retirement age and using this as a final tipping point to sell up.
I wouldn’t be suprised if rents continue to be squeezed. I also suspect agents and Landlords will become super picky as to what tenants to proceed with. RGI will become gold standard. If you do not earn enough, have no guarantor, no credit, a precious ccj / iva etc, you’re going to struggle. The new regs, previous deposit changes etc punish tenants. All seemingly poor thought out policies put through because on the onset they ‘sound good’.
Slumlords will do just fine. Those operating under the radar, not paying taxes will continue to thrive and be the only option for less than perfect tenants. Small scale compliant law abiding landlords are the ones in the Government’s target. Chances of finding a decent landlord will be diminished as the rental sector switches over to large corporates. Tenants are becoming emboldened by the increased ability to stay in properties and withhold rent, safe in the knowledge it will take at least a year to evict. We’ll probably see the rise of eviction specialists and bailiffs as landlords try to protect their assets. It’s a horrible Ill thought out mess which benefits neither tenants nor landlords. Still, may appease the landlord bashers who haven’t quite worked out that opportunities to rent anywhere decent and be treated fairly have been greatly diminished.
Landlords and their forums are often all doom and gloom on any news because it’s never as good as it was 20 years ago. Times change, people still invest in property. 99% will probably require a guarantor now, no matter how good a tenants circumstances are. Rents will go up, as what labour are doing isn’t easing the demand, until demand is addressed I can’t ever see rents declining, so it’s still a good return on investment
I'll sell up when current (excellent) tennant leaves. Probably always would have but changes confirm my decision
It won't make a lot of difference to us. Our property is already up to standard and a lot of the changes seem fair to me. We will probably upgrade the heating and insulation anyway because it's been a while but it's currently good enough for the Decent Homes Standard.
Maybe if other landlords sell up and the market looks good we'll buy some more.
The only landlords who will lose out are accidental landlords/ones with a handful of properties as well as slumlords.
I'm never one to landlord bash but as selfish as it sounds (although I won't be the only one to feel this) I can't wait for slumlords to lose everything they have when it comes to selling a property that won't be valued anywhere near anything the slumlord wants for it.
People with one/two properties may well decide to cash in, those with a larger portfolio will probably stick around, but will almost certainly be much more stringent with their checks on prospective tenants.
I think many tenants will be stuck In existing rental unable to switch because they are not preferred.
Many homes will be rented by those saving a few thousand avoid hotels and holidays lets. Instead they could rent a home for a few months and given two months the notice. They are going to bid up rents and many landlord will take those on initially, leaving many normal renters having to compete.
I’m not so sure about labour’s reforms but Scotland is going through its own reforms and might be worth looking at what is happening there for a sign of things to come. Scotland has had rent controls, increase its ADS to 8% and are now putting in legislation which can tighten rent controls further. The net result is rents have increased and there are housing emergencies declared by several councils. Landlords have been selling up.
Those who are left in the game are likely to have large chunks of equity in their rentals or are owned outright meaning that the mortgage rate increases doesn’t impact them as much.
As for me, I think I may continue to invest in 2-3 more properties despite these challenges, but that’s primarily because I already have some investments and it’s better for me to continue to scale them - but not by much
A lot of them can’t sell, they are massively over leveraged to due to the increased mortgage rates. Selling would cause the house of cards to collapse
41% have no mortgage whatsoever. The average LTV for those who do is 62%. You've not been able to get a BTL mortgage above 85% LTV for at least a decade now, and house prices have been going up.
A tiny minority will be over-leveraged.
No but they roll that equity into another house and another and another until they are 20 houses deep
The average equity shows that isn't the case or isn't a big factor.
The fact prices aren't dropping hugely stops that from being a problem (for now) as well.
I’m not sure that’s how 75% LTV mortgages work
The rates don’t affect your leverage. If you pulled equity to buy another place … that’s another matter
No but it means they have many mortgages on different houses all on the edge of affordability. So they get pushed over the edge
None of which would stop you selling
It does when the value of the properties are below the amount owed and your choice is bankruptcy
Which again the rates have nothing to do with
The increased rates mean that when they need to remortgage they can’t afford it and either go bankrupt or crank up rent
Or they sell … because they have the same equity they did before. Like I said rates have no effect on your ability to sell
How will landlords selling reduce the amount of properties available?
Less landlords so less lettings. This means you're going to have less properties to let more people or the same which already is really high as of today going for one property less properties It's going to just be longer queues more competition