Rents soar to (another) record high

gadgetmind

Nice chunk of CGT mind you!

michaels

Don't worry, Labour have spotted a problem and will look to deal with it:
http://www.bbc.co.uk/news/uk-politics-36348550

Councils would be given the power to limit "skyrocketing" rent increases, John McDonnell has said, as he set out Labour's approach on the economy.

So you can be pretty certain that in reality rents are falling:
http://www.bbc.co.uk/news/business-36285049

But according to the Reed Rains buy-to-let index, rents have been falling in any case since September 2015. At that time, rents in England and Wales hit an average of £816 a month. By April 2016 they had fallen to £791 a month.

No wonder we are still some way from trusting Labour on the economy....

mwpt

buglawton wrote: »

On the other hand, larger landlords look set to profit nicely from rising rental demand as a result of the Osborne BTL taxes:
http://www.telegraph.co.uk/business/2016/05/19/private-renting-developer-grainger-profits-up-as-buy-to-let-sque/

This is an entirely predictable consequence. So predictable that I wonder what the true intention of the tax changes were. Sure as heck not to benefit tenants. To benefit ones mates that support the Tory party? More likely.

I can't follow your argument. If rental demand and rents are rising, amateur landlords don't need to sell up. The change in tax relief hasn't even hit them yet, so how are you drawing your conclusions? I'm going to throw a wild guess that you're a leveraged private landlord.

wotsthat

mwpt wrote: »

I can't follow your argument. If rental demand and rents are rising, amateur landlords don't need to sell up. The change in tax relief hasn't even hit them yet, so how are you drawing your conclusions? I'm going to throw a wild guess that you're a leveraged private landlord.

Those who are best placed to benefit from increasing rents are the richer landlords. If you're a leveraged landlord and don't see that rising rents are going to make your model viable then it might be better to offload now. The rich sure aren't going to give you best price if you delay and turn yourself into a distressed seller.

Crashy_Time

wotsthat wrote: »

Those who are best placed to benefit from increasing rents are the richer landlords. If you're a leveraged landlord and don't see that rising rents are going to make your model viable then it might be better to offload now. The rich sure aren't going to give you best price if you delay and turn yourself into a distressed seller.

If it was just a case of being able to increase the rent to make it viable very few if any landlords would be in trouble? It isn`t though.

wotsthat

Crashy_Time wrote: »

If it was just a case of being able to increase the rent to make it viable very few if any landlords would be in trouble? It isn`t though.

That's right and isn't being disputed.

For some landlords the tax changes are going to mean it'll be impossible to make up for the tax via rent increases. Question is what do they do next?

There's plenty of time for them to ponder but I tend to think we'll see less well off landlords replaced by wealthier landlords.

cells

it will be interesting to see if there is any regional differences in what happens to the mix of owners and landlords. The problems of London housing are not the same as the problems of housing in the North East.

My guess is that we will see a continued divergence with London becoming more and more renters and perhaps the growth in rentals in rUK slowing and maybe even stopping.

buglawton

mwpt wrote: »

I can't follow your argument. If rental demand and rents are rising, amateur landlords don't need to sell up. The change in tax relief hasn't even hit them yet, so how are you drawing your conclusions? I'm going to throw a wild guess that you're a leveraged private landlord.

Large institutional landlords are better placed to deal with every aspect of BTL taxes. That's why Grainger's profits are up according to the Telegraph. And I tend to agree.
Yes I'm a LL but not at all badly leveraged. But annoyed how small investors who try control their own destiny are now at a disadvantage compared to bigger - and often foreign- investor groups.

chucknorris

buglawton wrote: »

But annoyed how small investors who try control their own destiny are now at a disadvantage compared to bigger - and often foreign- investor groups.

What really! I have to admit that you astonish me, my attitude is that we take on the risk of potential revised tax laws, and it is all part and parcel of the 'game'. I don't think it is fair to cry wolf when it goes against you, it could have equally gone for you.

buglawton

chucknorris wrote: »

What really! I have to admit that you astonish me, my attitude is that we take on the risk of potential revised tax laws, and it is all part and parcel of the 'game'. I don't think it is fair to cry wolf when it goes against you, it could have equally gone for you.

Yep I actually dared to express an opinion there. Sorry 'bout that Chuck.