A property industry trade body chief says buy to let is “virtually pointless” for landlords with substantial mortgages who seek income from rent.
The situation is worsening because of proposed energy efficiency changes, says the National Association of Property Buyers.
“The proposed upgrade to EPC legislation is the latest in a long line of disadvantages of owning a Buy To Let. To make properties cheaper to keep warm, and to help the country meet its green targets, landlords will soon have to spend up to £10,000” warns NAPB spokesperson Jonathan Rolande.
From 2025, under the current proposals all newly rented properties will be required to have an EPC rating of C or above. Currently, properties only require an EPC rating of E or above. Existing tenancies will have until 2028 to comply with the new rule changes.
“Whilst landlords of expensive properties in places like London or Manchester can take this in their stride, the thought of spending £10,000 on a home worth £80,000 will be a catalyst to see yet more landlords flee the sector.
“If these homes sell to owner occupiers, there will be increased scarcity of homes to rent, potentially forcing up prices yet again. Many landlords are already getting out and I suspect more will follow.”
He continues: “At the moment if a landlord has a sizable mortgage, owning BTL for the rental income is virtually pointless. Months or even years of profit can disappear in one go if there’s a costly boiler issue or the managing agent of the block decides a new lift is required.”
Rolande says that while awareness is beginning to grow around these proposals, there is still much consideration that needs to be given to the actual impact that these changes will have on landlords and property owners.
He warns that there is “a real concern” that a substantial amount of properties risk potentially being declared ‘unrentable’ and subsequently ‘unsellable’ or ‘unmortgageable’ due to landlords being unsure about what the changes will mean for current and prospective tenancies.
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A decent article, and as for “ being forced “ to spent £10k 😂😂, nope not me….. bye bye tenants. 💵💵
Same here Simon Bye Bye BTL.
To much grief and with interest rates on the up there are much better places to put your money theses days.
II have just read that 7 out of 10 LLs have no intent of selling any properties in the coming year. Well looking at it another way 3 in 10 LLs are going to sell properties off in the coming year. So that’s 30% of LLs getting rid.
The Government and Councils have now interfered to much and LLs simply won’t accept it any more.
From my point of view I shall never re-rent any of my properties ever again.
If a tenant moves out the property goes up for sale.
There is a massive problem coming down the road for the Government and Councils as the PRS LLs sell up.
They will now have to find homes for all these families and they will have to pay for it.
Very shortsighted Government and Councils.
In almost complete agreement with both of you. Short sighted and one sided views and interference from Government will cause and has caused major issues to both tenants and Landlord's. In trying to level up they are in fact levelling down, now where have I seen this before....education, health in fact anything these 2 major parties have tried to improve!
I have just had a property come empty, but I will let 2 rooms in this property whilst I do a very light refurb, mainly to the outside. Property market is a buyers market currently and I will wait it out.
Fortunately I have sufficient funds to carry my properties that are now not doing so well, in the Summer my poor tenants will see hikes in rent that may drive some of them out, I simply have no choice as to pay for Section 24 tax rents need to increase massively due to the new mortgage rates, and I have no chance of re-mortgaging and to be honest very little inclination to do so.
Where is our voice and where are the Landlord representatives.........!
You mean you will sell up?
We are seeing that landlord as not been fairly treated but this government .
Tenants allowed to not heat homes now which are a main concern of a let.
Condensation issued and 1000k of pounds of damage.
Landords will have no choice but to leave this sector.
We are already seeing 100 pound a year increase in rent for 2023,
High demands for properties and 400% increase in the amount of tenants looking to apply on one property.
With no fees paid by a tenant they demand us to work for fee, and constantly request us to work on their behalf.
Landord services we are paid to work in their best interest.
Tenants have become too big for their britches!
Cocky attitude and rude to the agents since 2021
“ this government is hell bent on getting rid of buy to let’s”
I'm giving the government exactly what they want and getting out. Another 2 from the portfolio going up for sale at the end of this month with more to follow. I'll NEVER rent one of my properties on the PRS again. NEVER. I'm prepared to take the hit with capital gains and feel its better to get out now with something going in to the bank than to leave it until it's too late and have zero control over my own properties or possibly compulsory purchase at a price which favours them, or even worse, which is the way it's gong here in Scotland. I'm out!!! Ladies and gentlemen.... Shane has left the building. 👍
Don't forget John McDonnell voiced compulsory purchase of PRS homes at a price Labour would have set. He had to back down on that one! But the way the Tories are now Labour and Labour are now Commies... In 2 years time... I'm getting out now too.
Rather have something rather than lose the house altogether.
Yes Shane. On all mine that are on variable rates I’m not putting them back up for rent when someone leaves. They will be sold
Hi Jahan, I'm in the same position and with the change in rates I don't think I could re-mortgage unless I put down a sizeable sum. I've sold 2 properties, one in 2021 and the other recently. BTL is no longer profitable and way to much legislation. I've used all mine and my partner's ISA allowance, put as much as I can into a SIPP and will slowly step away from this market.
The shame is that I have enjoyed being a Landlord, have got on really well with most of my tenants and enjoyed turning a run down property in a place that was not only fit to live in but to a high standard with quality fittings.
But you can't fight the tide!
I'm doing the same RE SIPP and ISAs. I also enjoyed being a LL but not with my Africans. It's a constant drain and gives me sleepless nights I could be stuck with them forever...So I've started the eviction process already.
I'm in the same position with the house I have at Catton, Norwich. Polish, Mum and son have not paid rent since September, they were already in arrears due to covid. During the covid period happy to support them but poor communication and now veiled threats from the son, (he's mid thirties) . Section 21 actioned and waiting until March before applying to evict. I understand that the Mum has already left but the son i'm sure will stay until the last possible moment.
Worried about the state of the house, but whatever it is I'll put right and will then put up for sale.
I do get grumpy about it as the law is not fit for purpose and hearing these Politicians talking utter nonsense is like a red rag to a bull.
On a plus side property has plenty of equity as bought in 2005.
I'm the same with my Nigerians. She's naturally aggressive speaking. Constant repairs needed. Been a little quiet over the last 6 months. Thankfully I think she wants the council to take her.
I only bought in 2015. Wanted to keep it at least another 10 year but the White Paper (or brown) scares the hell out of me. I only read the first half for the comedy horror value.
Do you know you will be made to apologise to the tenant if (when) the ombudsman finds against you. No mention of any tenant apologies mentioned!!!!
I've had threats of violence in the past, did have one guy pin me over the bonnet of a car once, we had quite an audience so nothing much happened, normally a load of huff and puff, I do however keep a very large nail bar by the driver's seat of my car, not used it yet, but never say never
Blimey Andy. I was wary about letting to my lot. I DO regret it. I took a chance to do the right thing...
I wonder if anyone in Government/Council ever sees what is written on this site ?, otherwise it’s a waste of our time. It might feel better to get it off your chest, but achieves nothing.
On the news this morning it stated that Courts are seeing unprecedented use of Section 21's by Landlords.
Come on NRLA or other Landlord bodies, now is your time to shine!!
Andy
I think they quoted around 5000 cases in a month. If there are over 4 million private rental properties that would mean any single property only being repossessed every 800 months or so - hardly an overused method of ending a tenancy!
Hi Robert, my point is that this points towards Landlords wanting their properties back and likely selling. This is what needs to be found out and which hopefully give the politicians something to think about.
This is where we need the NRLA to chase the reason, otherwise we will be subject to poor speculation.
And yes I do agree to your point raised.
The Telegraph’s headline is;
Landlords scramble to take back properties as Michael Gove prepares to scrap ‘no fault’ evictions.
They say there were 26,000 in 2022.
I've been reading that Nick, I just love the click bate and the comments from the landlord haters who have no idea what they are talking about
Andrew, it features on MSN news today. Comments are fascinating on there.
Ironically I have a tenant under a S21 atm. The infamous ones! She’s texting me “am I selling?”.
I’ve just had to refer her back to my solicitor who is dealing with everything for obvious reasons.
26000 in a year means that it would take over 150 years for every UK private rental property to be repossessed in this way!
The more that Shelter etc quote real figures the weaker their case would be IF anyone put them in context.
It’s a race, like a run on a bank 💵💵
Nick. Thanks to Mr Michael Gove and the imminent threat of Removing Section 21 the very reasons for those evictions, landlords making a run for it to get out while they still can.
That’s me Michael. See my response above just now!
Can’t take the risk of not being able to get rid of
The bad tenants and also maybe never getting that property back.
This government and Labour cannot be trusted.
No point in expecting politicians to sympathise about pointless activities. Most of them specialise in them!
I think it totally wrong that the landlord is going to be left with no option but have to sell to get rid of the Tenant, this is not Right its an absolute disgrace.
Who are those Clowns destroying the Housing Sector and the Economy in one go,
It’s disgusting. All their interfering just makes things worse.
Rental market is still profitable when intrest rate comes down. Section 21 only required if you can't find any fault with tenant. If they are paying good and maintain property why do you want to evict them. Rental property were giving 8 to 12% returns of investment, now with increased interest rates it gives 2 to 3% which is less than savings rates. However it will recover to 6 to 7% atleast. But that is not profitable business any more. With increasing cap gain tax, it is completely becoming useless being in property market.
When interest rates come down ? can't see it
I'm with you Andrew, I can't see interest rates coming down either. 4% is still a low rate. I'm sure the clowns in B of E will want to put rates up at least another 0.5%, just hope they leave it a few months before doing any more increases. Remember their duty is to get inflation down to 2%.
The only likelihood is that lenders will offer better deals once confidence returns. At the end of the day a lender has to lend!
I have 3 long term tenants that I will keep if they can afford my rent hikes. The rest I will likely sell due to this government and because I believe the next government wil be even worse.
When rates come down. They were historically low. They are still low now. They're not going down in our lifetimes to what they were i'm sure.
Are you a landlord in the UK??? Do you not know how hard it is to find fault with a tenant other than late payment (which no one but the LL cares about) or non-payment. Trying to prove anything else is incredibly tricky.
Businesses are going down for lenders. No one is buying new properties. With money people saved during pandemic, they are paying off mortgages. If bank has to make profit, they have to reduce the rate. When the rate was .25, lenders are ready to give mortgage for .85. Now it has to reduce atleast near to Boe rate.
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