A pressure group is calling on the government to introduce in-tenancy restrictions on how much rents can be raised, and claims that currently landlords can “name their price” and are “cashing in”
Generation Rent - in its first major statement under a new director - claims that “Rents everywhere have been rising faster than wages, and in some parts of the country, including London, faster than inflation. And even if we’re not moving, our landlords are often demanding that we start paying the going market rate.”
It says demand has increased partly because some 300,000 young adults have left their parental homes since the end of pandemic restrictions in 2021 which “has allowed landlords to name their price.”
It says a study of Office for National Statistics figures shows that from summer 2021, as offices and universities reopened, many young adults moved back to cities and the mainstream rental market. Specifically in the 12 months to June 2022, the number of young adults living with parents fell by 307,000, the campaign group contends.
In a statement, Generation Rent explains: “Tenancy deposit data we obtained via Freedom of Information indicates that these young adults predominantly moved into private rented homes. The size of the deposit protection system increased by 101,000 deposits in the 2020-21 financial year, a 50% fall on the pre-pandemic average annual growth of 150,000. But in 2021-22, the number of deposits protected increased by 217,000, and increased again in 2022-23 by 226,000. (Many of these deposits will be protected on behalf of more than one individual.)”
The activists also accuse landlords of “cashing in” on the increasing market rents triggered by the higher demand, saying: “In many ways the pandemic is long behind us, but its reverberations are still making life miserable for private renters, who are not just facing fierce competition for new tenancies, but are also vulnerable to unaffordable rent increases imposed by landlords who want to cash in on rising market rents.”
The group - led since last week by new director Ben Twomey - says it wants the government to increase Local Housing Allowance so that renters getting benefits can cover market rents; build more social housing; and “place limits on in-tenancy rent rises so that tenants do not face rent increases they cannot afford.”
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It’s not cashing in it’s payback on investment, of time and money and hard work
Something these lefty layabouts know nothing about
So absolutely nothing to do with rising interest rates on mortgages, S24 and lack of stock as landlords leave due to aforementioned and the loss of S21 and rights to their own property threatened by Renters Reform Bill.
Bye Bye BTL
Government and Councils are totally responsible for the lack of rental properties.
There constant interference in the running of our businesses and the change in taxation makes BTL a non business.
We have PROPPED UP the rental market for years and years.
Government and Councils simply don’t have properties to house all these families that will become homeless due to the ineptitude of the G & Cs.
These families will be lining up at Council Offices every morning for properties that don’t exist.
So it’s B&Bs and Cheap Hotels that Government and Councils will have to fund.
But as I’ve said in the past “They know Best”. NOT.
They need to very quickly change directions and ensure PRS LLs can see BTL as a going concern business.
I for one have been selling off what was one a year for Capital Gains Allowance reasons but now due to the decrease in this allowance I am now selling off as soon as is possible along with thousands of other LLs.
Snap !! 👍🏻💰
Same here!
It would appear that Mr Twomey has never heard of supply and demand affecting prices. With so many landlords now leaving the sector due escalating prices in mortgages, insurance and the cost of renovation, alongside the recent changes in rental policies championed by Mr Twomey’s organisation, and others, it now seems there are not enough rental properties to go around. Who would have thought?
Still, if Mr Twomey gets his way on rent capping, I am sure there will be less rental properties available in the future. Now there’s a thought.
Twomey seems to forget that limiting in tenancy rent increases is exactly what is causing problems for families wanting to stay long term in Scotland, who are no longer preferred over a bunch of students.
He is just as deluded as his predecessor, the noble Baroness Kennedy.
I wonder if he would be twice as bad if he was called Fourmey?
The name issue (Twomey v Fourmey) would be a great topic for discussion, Robert!
You are so correct. I have kept my only rental property at a very modest rent. In fact last year I let the tennants chose the rental figure increase they were comfortable with, which I accepted. Now as interest rates on 1 years fixed rate deposits are available at well over 5%, I need to increase the rent by 20% just to get the same income as I would from selling it and investing the capital. This is after factoring in 25% of the sale value going to CGT and investing the balance. If I cannot obtain this increased rent then I will sell the property as I am in my 70s and I do not expect to see any substatial increase in the value of the property for the next few years, so cash has to be king.
Happy to curb my rent rises, just as soon as there is a massive reduction in mortgage interest, unfair S24 taxation etc.
‘ Cashing’ in he says 😂😂 it’s our business, an investment !! The numpty 🙄🙄
If Twomey has an issue with rent increases he needs to lobby the government to get rid of Section 24.
If a mortgage goes up £500 the rent needs to go up £667 for the landlord to stand still. HMRC take the first 40% (£267), the mortgage lender take their £500, then HMRC give back 20% of the interest payment (£100). Due to this some landlords will be pushed into the 60% tax band so would need to raise rent £1000 just to stand still. In both cases the Landlord receives NOTHING to go towards other increasing costs. Very few will be able to raise rents sufficiently to cover the mortgage increases so more and more will decide to sell before the sales market drops too much.
Landlords aren't the bad guys. Many of us are passionate about providing decent, long term housing at affordable prices. The government just treat us as a cash cow. When I became a landlord we paid standard Stamp Duty (no 3% surcharge), were taxed in the same way as every other business or self employed person on profit (not turnover) and had taper relief on CGT instead of paying it at a far higher rate than on any other asset and encompassing inflation based rises (effectively actually stealing some of our asset). It we sell a 5 bed we finish up with enough money to buy a 3 bed if we've owned the property for maybe 20 years. On top of this we can't pay rental profit into a SIPP so are denied the tax relief everyone else enjoys.
So Twomey if you want to support tenants do what you can to make the PRS work for landlords, instead of painting us as the problem. In the current climate with very limited building and a mortgage market in melt down the PRS is more crucial than it has ever been before. So nurture and support us. Don't make us all decide to throw in the towel due to the relentless attacks we have suffered for the last 7 or 8 years.
Jo very well said, I have cut and pasted your comments to my MP, not that it will do any good!
Andy - you might be surprised. I had a long chat with my MP at a local residents meeting last week. Although I had previously emailed him about Section 24 and received the generic copy and pasted nonsense in reply he had no idea how it worked and seemed to be genuinely horrified.
Thanks Jo, also sent to my MP.
Hi Jo.
I am attaching my letter to my MP to which I attached your response to the comment from Ben Twomey. I hope you don't mind me using your letter.
Dear Cherilyn ( MacKrory )
I send this response from Jo Westlake, a lady with very sensible and balanced views, as it describes very well the situation many landlords find themselves in, with many more to come as fixed term mortgages expire and require remortgaging over the next couple of years .
I have always been a staunch Conservative voter but I have to admit that what I admired in the party and it's treatment of those people who were prepared to get off their behinds and try to better themselves has been swept away and they have become more left leaning than Labour. Making decisions regarding property without soliciting the views of those actively providing the housing and ignoring the obvious impractical inconsistencies, and attempting to bulldoze the Private Rented Sector into becoming a replacement for Social housing will not work, especially with the Housing Benefit being well below any current market rents.
Glossing over with platitudes and ignoring the realities of the current housing crisis will lead to disaster. What is needed is a consistent policy of encouraging investment into the housing sector by fair taxation policies and less restrictions as to what control the landlord has over his own property. It has worked well for many years before it was messed with over the last 8 years with the resultant " unintended consequences". This sort of enlightened policy will result in more investment, more property available to rent, reduced rental costs and more tax revenue to HMRC.
One factor largely ignored is that "No fault "evictions rarely happen. "No reasons given" is a more apt description. Section 21 is used because it is a better and mandatory way of regaining your property when the tenant has breached the tenancy agreement than section 8 and having to undergo the lengthy. frustrating and costly court and bailiff processes. If it must be repealed then the promised court reforms and accelerated procedures must be in place and thoroughly tested before the removal of section 21.
I hope the above explains the feelings of being let down, ignored and vilified many landlords feel at the present time.
Kind regards
Paul Holmes
Hi Jo,
This is what I received from my letting agent last weekend, some very valid points on the numbers and if correct seems a crazy decision to abolish S21 when it appears to only be used as a last resort.....
*
You will probably have heard that the Renters (Reform) Bill, changing tenancy law in England, has started its passage through Parliament. We just wanted to take this opportunity to explain more about the legislation and perhaps dismiss some of the hype that is appearing online and in some media.
The main point being focussed on in the media is the much-announced loss of Section 21 notices. Actually, the change is a little more substantial in that they are removing the whole of assured shorthold tenancies, so all future letting will be on assured tenancies (that are not shortholds). When the act came into force in 1989, these were the default tenancies used and we are effectively reverting back to that position.
Whilst this is receiving a lot of media attention, it should be carefully considered if this is really such a problem. The 2022 Survey of English Housing shows that 73% of tenants left because they chose to move on and were not served any notice by the landlord at all. 10% left because the fixed term ended and only 6% left because the landlord served notice. 63% of those who were served a notice, were given notice because the landlord wished to sell. 63% of the 6% who were served notice is roughly two thirds, leaving just 2% who were served notice other than to sell. This ability to repossess in order to sell is drafted in the new legislation so these would be unaffected. 7% were by mutual agreement and 5% was for “other reasons”. This means that these ‘shocking’ headlines around Landlords losing the ability to serve notice is only actually relevant for circa 2% of tenancies, and the majority of those will be covered by the other grounds for serving of notice that will be in place.
The survey shows that the average time in the current property is about four years, though 44% of people had not even been in the private rented sector for four years.
All this shows that landlords do not wake up one morning and for no reason decide to evict a tenant. This will not change with this new legislation and as the above figures show the vast majority of tenancies will end for reasons that will continue after it becomes law (likely to be at least 12-24 months away).
We just wanted to paint a more realistic picture compared to a lot of media that rely on sensational headlines in order to attract readers. We will continue to update you as the legislation progresses as there are very likely to be changes to the bill before it is passed into law.
Cashing in?? Happy to curb my rent rises, when every cost is curbed in-line, such rising mortgage interest rates, council tax, energy etc etc, & the abolition of S25, these idiots do not have a clue
When there's a shortage of secondhand xars dealers increase the prices on their forecourts, landlords are no different , supply and demand
Andrew, apart from everything that’s said above which is correct and sums it all up that I have emphasised every day in the past only t fall on deaf ears.
Regarding secondhand cars there’s a massive glut in London of the finest diesels many luxurious cars only 6 years old with low mileage for a pittance.
Thanks to clueless Mr Sadiq Knan Mayor of London imposing a £12.50 per day Penalty Charge.
It just the same disgraceful carry on as housing problems created by the leaches, money grabbers in power.
At this at a day & age with all the technology, education and master degrees, could they not even plan 6 years ahead and not even build those cars if they had to be scrapped after 6 years then they talk about saving the environment ?.
I am not sure about education anymore. I am sure you will have seen yesterday the year 8 pupil (13 years old) in Rye, Sussex at a C of E school who said she identified as a cat. It was all over the news. A classmate said how can this be when you are a girl. The teacher branded the questioning girl "despicable" for questioning the girl's identity. She reported the pupil to the school's leaders and said she was no longer welcome at the school.
What would have happened back in your day if you stood up and said you are a cat? The cain? Detention? Lines? At least get laughed at by your classmates for years to come. But these days it's fine. Worse than fine. You are supported for 'wrong doing' in some way. Similar to Lisa Nandy and her Charter with rent becoming 'optional'.
And to think these sorts of people are landlords' future tenants going forward! If not cats, it's LGBTQIA+ or whatever it is I can't understand it. Or Just Stop Oil / Extinction Rebellion protesters. All due to have more rights than a landlord going forward. I think things will be very chaotic going forward.
Agreed Nick and to be honest I will still keep a no pets policy at my properties even if the the Cat looks like a Girl..
Tired of renters thinking they know it all. Tenancies are subject to supply and demand.
If there was an abundance of properties there would be rock bottom rents or indeed no private Landlords which would cause many homeless. Scotland is going the way with Patrick Harvie’s green ideas where his input has restricted landlords rents, despite some landlords now subsidising tenants. I have stopped renting my two properties, one sold and the other one now on the Market. Govt just don't understand the basic economic principles.
Here we have another plank from the activists arena complaining about rent. Rent controls in Scotland meant exodus and nowhere to rent.
Wales is now on the verge of no houses to rent, UK soon to follow. We have the NRLA in our corner and what can we hear??????? SILENCE.........!
Rent increases are a result of this kind of nonsense and wording tenants not to pay and sit tight, wait for a court date, cry to the judge you have hurt feelings or broke a nail, gain another three months and then back to court. No wonder landlords are only looking at blue chip tenants, all business is risk and reward except now landlords is just risk.
Peter
The initial "reform" of the prs in Scotland, effective in December 2017 outlawed landlords and tenants agreeing a mutually acceptable fixed term tenancy and led to many landlords selling up and others either moving to short term rentals or focusing on students who won't stay long term.
Market forces allowed rents to increase by 30% - so Harvie brought in a rent freeze followed by a 3% limit on increases. No thought about Market forces causing the rent increases or the effect that rent controls will have on families wanting to rent long term.
Landlords with vacant properties are now doubling down on avoiding families as they realise that their only chance to maintain Market level rents is a frequent change of tenant, for which students are ideal and families are to be avoided.
The real figures for my best 4 bed flat about 5 minutes walk from Glasgow University are £1600 per month in 2014 to 2017 before the new legislation, £2100 in 2018 and now £2800 in 2023. I shall also not leave rents unchanged again and will ensure that they rise as much as Market forces will allow every year or at every change of tenant.
Everything that the SNP touch, especially with the input of their little Green helpers, goes awry but the prs debacle may be their worst move when viewed in hindsight.
Meanwhile England refuses to learn from the disaster next door.
Nick, she’ll probably end up being one of your Tenants. Landlords are required to allow cats now.
I know. What if I have someone who identifies themselves as a vulture? or a leech? Or a parasite? Do I have to accept them because Mr Gove & co says I must?
The cries about rent increases will rise as Landlords have to start including annual rent review clauses in all tenancies going forward which will be the only way to meet Lenders criteria. They will also have a choice on properties to offer the highest rent6 or go to sealed offers.
Effectively Mr Gove is creating a situation where the lower income people will be unable to afford to rent in the PRS and a rent cap will only increase the rate of selling up!
Landlords are not a charity and if there is not enough rent coming in they can not continue to provide the property. Simple economics!
I have just had one enterprising group of students offer a further £200 per month to secure a flat because they realised how many groups were ahead in the queue to view it.
I moved them to the top of the queue and they are due to move in on 1 July, two days after the outgoing tenants leave.
Four happy tenants and one very happy landlord.
Surely that's what the SNP, Shelter, Acorn, Generation Rant and Michael Gove all want? Job done!
Just told my letting agent that I want a five percent increase every year putting into every contract.
Also said if inflation and the nonsense stops then happy to relax it. Doubt that will happen with both central and local government doubling down on us.
These muppets (no disrespect to Jim Henson) are the types that you find on social media looking for trades to do some work, yet telling trades that it's only a small job, will only take 1/2 an hour to complete. They haven't a clue, really should not be allowed anywhere near dangerous machinery!
I am acutely aware my rents are seriously below the market rates.
For example I have a one bed Flat with parking & small garden rented for £1020,.pm and I see a one bedroom Flat in same road £1600.
I also have a 4 bed 2 bathroom, 100ft garden 3 parking spaces, HMO Licensed currently let £1600. pm, other houses same road one bathroom no license £2800.pm.
I also see a one bedroom Flat in this road, £1600. pm same price as my 4 bedroom house with parking etc.
I have no doubt that I am £100k pa below Market value.
My rents are the same as yours Michael, but I don't really mind that they are half the market rent because people are paying up. Everything is so expensive - utilities, food, transport etc. and I don't think people can afford very high rents. Many will simply stop paying at all.
However, while I am OK with lowish rents, I am not OK about the loss of Section 21. And there is the dilemma. I would like to sell, but my tenants obviously don't want me to do that because they can't get the same deal anywhere else. I am sure that they would like the Renters Reform Bill to disappear so that things can just continue as they are.
Ellie
The Scottish legislation allows remaining tenants to stay on the old rules.
That will be different in England, Robert. There will be a date when ALL tenancies will revert to the new rules.
Interest rate increases must be stopped. Otherwise we will literally go bankrupt.
We provide good property at a reasonable rent but still attacked from every angle.
I had letter response from the Department for Levelling Up, Housing & Communities yesterday telling me how to suck eggs.
Its enough to make me explode. basically telling me when the Fixed Term Tenancies ends, Shelter will providing advice to the Private Rented Sector, what’s any of it got to do with them, are they now a branch of the Department.
Who voted for them and who appoints them, they shouldn’t appear on Government paper work.
I know Ellie we are being taken for mugs and without S21 it’s not a Business.
The Rent Reform Bill should be re-branded and given its proper name.
The Property Confiscation Order.
You always sum everything up perfectly, Michael.
You are absolutely right about Shelter - they have no mandate from anyone.
I have no intention of taking any advice from Shelter.
There are too many little liberal people bought up from the late 1990s/2000s becoming 'advisors' in government. All with their sociology and philosophy degrees. They have all the ideas of how it should be. Never done a proper days work in their lives. But they know what to do with our property.
Mohammad. Looks like continuously raising interest rates caused all this inflation.
Suppose they done nothing it couldn’t be any worse. The markets would find there own level and if things got too expensive you wouldn’t buy and cut back yourself.
This way they undermine the whole economy structure.
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