The UK rental market is shit!

[Chrisch]

I've been a landlord for forty years, through registered and AST tenancies. Never have been told I am/was a bad landlord and present tenants couldn't be happier. ......

Have made the decision that when the present tenants leave I'll sell up. The increasing hassle and costs just don't make it worthwhile.
Expect this years 'profit' to just about cover the dive club dinner cost for wife and i...

But that's the problem. The good people give up because they cannot make a decent return. The people that make a decent return are the ones that treat people like shit. The yield on residential property is poor, maybe 5% in many instances. That is a crap investment unless you have the 10-15% capital growth that has been enjoyed in recent years. Therefore the "investors" are either the ones seeking capital growth or the ones that make their above average return by neglecting the asset and the poor sucker that lives in it.

If, as seems likely, the capital growth turns negative then it is an even dumber investment. It's only redeeming factor is a steady revenue stream that is linked to the cost of living. If the revenue stream is more important than the rate of return then property makes sense and can be an ideal thing. Throw in a bit of maintenance and it can be a good way to keep yourself active and fed and clothed in retirement. But the only way to make serious money in property is to lend people the money to buy it.

The tide of public opinion seems to have turned against the buy to let people and so the government have turned against this investment class. The greed and dishonesty of the bad people in the business is to blame so as always it is the arseholes that spoilt it for the good people. You could write that about anything that involves our species.

The weird thing for me is how many people are prepared to pay a liar and crook 10% of their revenues just for collecting the rent and pretending to inspect the property every so often. I can understand it if the property is hundreds of miles away from where you live but mostly it seems to me that the landlords are just scared of dealing with their customers and one hell of a lot of the problems stem from that.

[Chrisch]

Now before Chris and Mark chime in - in less than a week you have managed to block the system up? Have you considered more roughage? ��

You may have tapped a whole new topic there.

[Mikael]

Now before Chris and Mark chime in - in less than a week you have managed to block the system up? Have you considered more roughage? ��

Surely more roughage would be counterproductive in this case

[WFO]

The weird thing for me is how many people are prepared to pay a liar and crook 10% of their revenues just for collecting the rent and pretending to inspect the property every so often. I can understand it if the property is hundreds of miles away from where you live but mostly it seems to me that the landlords are just scared of dealing with their customers and one hell of a lot of the problems stem from that.

My parents tried this.
Turns out flying back from Greece yourself is more reliable than trusting an estate agent.

Think liars and crooks is too kind.

Had all sorts of problems, fuckwit tenants not bothering to report the shower tray needing re caulking which leaked water into the garage below and resulted in us replacing structural timbers etc. Lying estate agents not bothering to inspect the place to see the problems. etc...

[Chrisch]

...fuckwit tenants not bothering to report the shower tray needing re caulking which leaked water into the garage below and resulted in us replacing structural timbers etc. ...

One of the issues is being evicted because you complain about the need for repairs. This practice may not be universal but it does happen. After a while it enters the thinking of people that rent and we learn to keep our mouth shut about problems. The agents should inspect the property periodically and they should identify and remedy such issues. As a tenant I am not worried that the agent has identified it, but I am worried that if I complain I might be out.

These sub-structural problems therefore go unresolved and the cheap and easy solution becomes a nightmare as in your example.

There is a naive trust in so-called professionals that is common in the average Brit. My dad was like it, a man in a suit was "respectable". Those days have long long gone.

[UnCheeky Monkey]

One of the issues is being evicted because you complain about the need for repairs. This practice may not be universal but it does happen

may be about to change, with the abolition of s21 notices

https://www.theguardian.com/society/2019/apr/15/short-notice-evictions-face-axe-in-tenant-rights-victory

[WFO]

One of the issues is being evicted because you complain about the need for repairs. This practice may not be universal but it does happen. After a while it enters the thinking of people that rent and we learn to keep our mouth shut about problems. The agents should inspect the property periodically and they should identify and remedy such issues. As a tenant I am not worried that the agent has identified it, but I am worried that if I complain I might be out.

These sub-structural problems therefore go unresolved and the cheap and easy solution becomes a nightmare as in your example.

There is a naive trust in so-called professionals that is common in the average Brit. My dad was like it, a man in a suit was "respectable". Those days have long long gone.

Or there were the fookers who got "a cat", which had kittens, which the filthy shits let live in the kitchen. We ended up burning the floorboards after that one!

Currently got problem tenants who owe us a shit load of rent in my partners house.


And you wonder why some landlords are not nice...

[Chrisch]

Or there were the fookers who got "a cat", which had kittens, which the filthy shits let live in the kitchen. We ended up burning the floorboards after that one!

Currently got problem tenants who owe us a shit load of rent in my partners house.


And you wonder why some landlords are not nice...

No, there is no mystery to it. Landlords all have tales of woe about some tenant or another that is bad in some way and all tenants have tales of bad landlords. As Mike says the UK rental market is shit. So both sides expect the other to be problematic, neither side respects the other.

Many owner occupiers have cats and a great many of them will be in the kitchen. I wouldn't like to put numbers on it but it must be a fair percentage. Virtually all rental agreements forbid pets so I would guess rental based cats are in the minority.

If people don't pay the rent then they can be evicted.

I'm sure Hertz find that people have puked in their rental cars and I know for a fact they get the odd one stolen or involved in a crime and impounded by the police. You need to factor it into the investment decision. No one owes you a living.

[UnCheeky Monkey]

If people don't pay the rent then they can be evicted.

its not quite that simple though and the damage that some do in the meantime (while more unpaid rent accrues) can be eye watering

seen both sides of all this, with various hats on !

[Chrisch]

its not quite that simple though and the damage that some do in the meantime (while more unpaid rent accrues) can be eye watering

Agreed. Take out insurance.

[UnCheeky Monkey]

Agreed. Take out insurance.

another cost to add to the rent ....

I'd add that I've never been a landlord by the way ! But I've had involvement in rentals and indeed evictions in various roles

[Chrisch]

another cost to add to the rent ......

You cannot add costs to the rent - the rent is set by the market. Non payment insurance simply eats up part of the margin for the investor. Property can be a good investment and it certainly was when there was a massive capital growth in property values. However in terms of yield residential property is a rather poor investment. The finance industry were very keen to get unsophisticated people to invest in it so they could milk them. Mortgages, insurance and agency fees take far more of the available revenue than the landlord. If you own outright then you have to look at opportunity cost (unless you don't understand investment) and once again it looks like a poor choice.

The big advantage of (residential) property as an investment is it tracks the cost of living in residential property and so the return is broadly in line with living costs. If you own outright then you can almost certainly live off the rent of three properties irrespective of what happens to the currency, to inflation or any other variable. This makes it a low risk as a retirement income. Even if there are problems with one then the other two will almost certainly generate some return. Unfortunately the huge capital growth now means that three average domestic properties are around a mill and far far more than that if you can smell the stinking M25 and what it surrounds from the garden.

IMHO it is the small margin failing to live up to the hyperbole and latent greed that makes landlords "bad". There is nothing intrinsically wrong with providing a capital asset to someone wishing to rent it. For the tenant it is "home" and again the emotional nonsense attached to that cause the opposite viewpoint. It's hardly surprising that it causes so many problems.

[UnCheeky Monkey]

You cannot add costs to the rent - the rent is set by the market.

if all Landlords have to pay for insurance, then it ends up on the rent one way or another IMO because there is a shortfall (as I understand it) so Landlord's costs across the board will be a major factor in setting rent levels, since there is an under supply to meet excess demand

[Mark Chase]

You cannot add costs to the rent - the rent is set by the market. Non payment insurance simply eats up part of the margin for the investor. Property can be a good investment and it certainly was when there was a massive capital growth in property values. However in terms of yield residential property is a rather poor investment. The finance industry were very keen to get unsophisticated people to invest in it so they could milk them. Mortgages, insurance and agency fees take far more of the available revenue than the landlord. If you own outright then you have to look at opportunity cost (unless you don't understand investment) and once again it looks like a poor choice.

The big advantage of (residential) property as an investment is it tracks the cost of living in residential property and so the return is broadly in line with living costs. If you own outright then you can almost certainly live off the rent of three properties irrespective of what happens to the currency, to inflation or any other variable. This makes it a low risk as a retirement income. Even if there are problems with one then the other two will almost certainly generate some return. Unfortunately the huge capital growth now means that three average domestic properties are around a mill and far far more than that if you can smell the stinking M25 and what it surrounds from the garden.

IMHO it is the small margin failing to live up to the hyperbole and latent greed that makes landlords "bad". There is nothing intrinsically wrong with providing a capital asset to someone wishing to rent it. For the tenant it is "home" and again the emotional nonsense attached to that cause the opposite viewpoint. It's hardly surprising that it causes so many problems.

Id strongly debate the poor investment comment?

My worst performing property is brining in 8.75% my best 17.4% my worst mortgage / loan is 5% APR most are around 4% APR

But your right in so far as its a top up income until I pay off the mortgages, then it becomes a primary income.

I have experienced significant capital growth but its not particularly relevant to me as its likely that wont be realised until my kids sell them all after I die. They are my only significant pension



Your comment is correct for a specific target market investor who's investment is totally or significantly based on capital growth. To me that's a different type of investment all together. Yes its virtualy impossible to realise 5% in London but I baught a property just before Christmas for 60K that's bringing in 500 a month less 1000 service charge, that's 8.34%

It is doable, but not in London.

Other point is rents will continue to rise so my return in 10 years time will be significantly more than 8.34%



It drives me nuts when people say Landlords are only in it for the money???? Yes of course we are, how many of you would go to work or invest for nill return?


Landlords treat it as a business??? Well it is a business?



My daughter is a Clinical Psychologist who is working in a hospital. After four years of training and a first class degree that left her with a 50K debt, shes earning 22K????

That to me is a vocation not a job. She could earn twice that in the private sector as shes well aware.


I like to feel I am a supportive and generous landlord, but at the end of the day if its not making me money, I am not running it as a charity.











The point I

[Mark Chase]

if all Landlords have to pay for insurance, then it ends up on the rent one way or another IMO because there is a shortfall (as I understand it) so Landlord's costs across the board will be a major factor in setting rent levels, since there is an under supply to meet excess demand

A very valid point. Every tax and cost the govt put on landlords is just passed to the tenant. Obviously

I find it disgusting that the Govt shout loudly that they are doing it to reduce the cost of housing or grab back from greedy landlords. They are in fact just taxing the tenants but most are to daft to realise that

I run a separate business and if my materials costs go up my rates of charge out go up to cover it. And I stay competitive because every other business is doing exactly the same


The ONLY thing that affects my profits is if the housing market values drop massively and at the same time, lenders reduce mortgage rates and criteria for lending money is relaxed

But that's the exact opposite of what happens when theres a property crash

During periods of property devaluation the conditions for lending are tightened up and the cost of borrowing goes up.