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Agents are also a factor, every year without fail my agents have advised me to raise the rent. Of course this raises their commission. I’ve never taken their advice as my tenants are good and I’m happy enough with the rent. I’m not dismissing other factors.
It's like everything else, the bills go up each year; council tax, water rates, internet services, energy, not to mention mortgage rates.
Do your mortgage rates go up each year?
If on a tracker they change every quarter right now. If on a fixed it’s every few years
No, they go up (or down) every month. You can "pay more" as an insurance and then its a "2-year fix" or "5-year fix" and they go up every 2 or 5 years.
Landlords don’t pay any of those in their rentals , apart from mortgages.. and the payments amount should reduce
Energy costs, material costs, labour costs, agency costs, insurance costs, certification costs, risk associated costs etc....
fuck off
The us tenants always have to pay for utilities
That's not really true. There are many bills included rentals, but I wasn't even talking about utilities prices.
The whole country is based off the energy economy. When petrol goes up it costs more to send someone to repair things, it costs more to ship things. When energy prices go up it costs more to manufacture parts and increased costs for agents to keep their businesses open. Operating costs get more expensive in general.
Same reason everything else does.
Market rate goes sup with inflation, even if your cost base hasn't changed - the value of what you're offering has.
So the flat gets renovated every few years?
Interesting that your takeaway is that.
How much is a can of coke worth now?
How much was it 10 years ago?
Whether you agree with it morally or not, the fact of the matter is that inflation happens. Particularly in housing
Yes but the standard of,the can stays the same ie new in mint condition. Your house items depreciate and should be then replaced to keep the same standard???
Yes, but the price of the things that need to be replaced goes up each year, so then the amount the LL needs to set aside for it is also going up more than planned.
Yes agreed. Nothing wrong with increasing rent when required but you also need to upkeep the property constantly. That's your responsibility.
A lot of landlords just keep.putting the price up but do not plough any money back into the property.
Constantly...don't know about that. Consistently, adequately, religiously, sure.
Yeah, I meant like yearly or so
And if you pay 8% of the house value in rent (for example) then it's staying fairly flat in many cases
No you are considering how much was a NEW can of coke 10 years ago vs a NEW can of coke now.
I’m asking why I need to pay more every year for the same old shitty kitchen falling apart?
Why do you assume the kitchens falling apart?
Maybe it just up because of your "same old shitty" attitude making the tenant/landlord relationship fall apart?
Hell, look at how combative you are here...
The kitchen is an example.
I’m explaining that the asset/flat does not improve/increase in value by magic for the tenant but it only depreciate over time unless maintenance happens. So, obviously why I should pay more every year for a service that decrease in value?
So, I go back to my initial question:
Why should a tenant swallow rent increases above inflation, some times 10/20% ?
Ah, yeah. The can of coke, sure.
Because the price of housing increases.
They could move of course if there really is a better deal. But that would only work if the house/flat/room wasn't providing value.
Many reasons Inflation Interest rates Insurance costs Labour costs Materials costs Regulatory burden costs (more legislation, more staff hours per property, more systems to pay for etc etc) Professional fees - local authority council costs, accountants etc etc
A landlord cannot operate without any of the above, and these are all set to increase further as a direct result of the rent reform bill. It's not good news for tenants, unfortunately.
I think it's to do with the way the economy works, people ask for more money at their existing job, job agrees, job then puts price of goods/service up, external issues such as energy rates go up so price of goods/service goes up and so on.
You may question but why rent, well rent goes up to cater for expense increases so landlords will see yearly that insurance, cost of services such as agent fees, yearly gas checks etc also go up. Landlord may raise rent to keep it in proportion or they might raise it a little and take a hit on the rest or they may not raise rent at all meaning they will be downvaluing the rental they are achieving.
People then moan rent is going up but do people actually moan about the bigger picture that everything is in fact going up naturally or even greed. I wouldn't say landlord rent increases is greed when you look at how much the cost of being a landlord has increased. Probably unpopular comment but just my observation I wouldn't know of many landlords actually making anywhere near the percents they were making 10 years ago so you can't call it greed if the percents have dropped all they are doing is trying to keep it going until they can't no more.
My big realisation in recent times is that no matter what your job offers you on the yearly salary or nmw increases. You will never be better off financially without upskilling or moving jobs for an actual higher salary.
Potentially all of what I just said is pure crap but it is always good to hear other people's thoughts. Probably will be shut down by the anti landlord brigade.
We're all caught in a cycle of everything constantly going up and landlords are no exception. We're all just dogs chasing our own tails.
I've not done so. Inflation adjusted it so marginal and i've always had cooperative tenants.
Why do I put rent up? Because I want to make money and I will do whatever makes me the most money.
That's the answer and anyone who says otherwise is just lying.
Charging the most rent doesn't always equal the most profit though. I haven't put rent up for 3 years on one property because the tenant has never caused me an issue.
On the other hand he is leaving this month so I'll put the rent up 20% when I let it again because that's still bottom of current market rate and you're welcome to try and get what I'm offering in the area for less.
Some of it is market rate. However, recent legislation (intro of S24) means that landlords can no longer offset their mortgages on tax, so they're receiving little to no relief for that expense. Third, mortgage interest rates have gone up a lot so anyone who renewed in the past 3-4 years will have seen that rise and passed it onto their tenants.
Your landlord should generally not be able to raise your rent more than once per year or per term (via a S13 form or a renewed tenancy agreement).
Remember that this is not a one way discussion. Rent increases are an agreement between two parties. You can negotiate / challenge as well as accept.
Inflation does cause costs to rise. However the rent also needs to reflect the market in a free market economy. If the rent in your area hasn't gone up then you should challenge it for example. You could in theory negotiate a reduction in rent if the prices have gone down.
Never heard of anyone going down on rent. Either as a landlord or tenant.
It’s rare but I’d does happen, when markets stall and landlords want to keep good tenants
Yes costs. But a lot of that cost is the cost of risk -- and that risk is mostly driven by legislation.
There are routine costs and maintenance, but there are also sporadic large costs due to tenant behaviour/arrears/damages which are never recovered. Those have to be somehow paid for and the way they are paid is from good tenants who are not the cause of the issues.
It's a business; businesses always look to maximise profits and minimise costs. Sure, costs increase, but that doesn't raise prices in itself; it just makes landlords reconsider the numbers or their investment. If the landlord is not obtaining a good yield, they will sell and invest the money elsewhere. This reduces supply, allowing the remaining landlords to increase prices.
Business.
Because they can.
Landlords and lettings are not charities.
Inflation is actually a thing.
Expectations of a return on investment is not an alien concept.
>Inflation is actually a thing.
Plus, rents have been increaseing lower than inflation anyway.
greed mosey of the time. simple greed. especially by agents or 3rd parties.
If interest rates go down... has anyone's rent been reduced.
This is a community for Landlords. You can be anti-landlord in other places like /r/HousingUK/
I rent out one small house through an agent. Every year they tell me what they'd advertise a new tenancy in the area at, and we agree thats too much and we'd rather do a small rise and keep the existing very good tenant.
Maintenance costs, insurance rates etc all creep up so theres a general upward trend.
Inflation, property prices rise so to maintain a decent yield % rents can too. Agents without a doubt push everything up. Government interference, they essentially punish all landlords instead of sorting the slum lords and tax dodgers. I’ve had some good tenants in terms of paying on time, but I’m yet to have a tenant truly look after a property, and when they have left they leave it in a state. Nothing massive, so they don’t think anything of it, but it’s loads of small things that add up and take time, which increases voids, if using trades whacks up price, of not adds loads of work onto the LL themselves. All of that makes me want to pass it onto an agent, and because they charge a minimum 10%, I want the max they can get. Self managing I’ve been happy with 10-20% under market. Using an agent it’s going for market rate.
The idea was always to keep up with inflation..now it is to keep up with market rates, which are influenced by supply and demand; build / deliverability costs, and also generally - profit.
More tax - mortgage rates up- lease/maintenance costs up - insurance costs up… all have a knock on effect
It’s tracking rental demand. Tenants get pay rises and hop from one property to another in better condition.
Simple answer: greedy landlords
Why does anything go up? Costs increase like mortgage interest, insurance, tax, etc etc etc. rent in general increases so many landlords will increase annually
I saw this picture of a landlord increasing rent because he discovered a higher number
The secret ingredient is greed. And being twats.
This is a community for Landlords. You can be anti-landlord in other places like /r/HousingUK/
Admin: This is against rule 1.
It's because estate agents are hoes & greedy fuckers.
In theory mortgages only go up when interest rates change.
There's very little reason to redo paperwork ~£300 (estate agent costs) to raise rent by £30-40/month, as the landlord will only gain £60-80/year extra - yet estate agents always are pushing fro this.
Now if base rate is going up, sure rents are too.
But 90% of the time it's estate agents being hoes & greedy fuckers.
>There's very little reason to redo paperwork
AST is okay, but paperwork in general? You're going to end up having a bad time if you don't get your certificates renewed regularly.
Repapering an existing tenancy agreement is precisely fuck all to do with certificates and inspections etc.
I should have been more specific, but that is what agencies push.
Mine tried to up rent by £20/month for "only" the cost of £300 to repaper the tenancy agreement instead of just let it roll.
They also tried to double rent to £2k/m from £1k/m because "thats in line with market average".
theres some legitimate cost increases but it also has to be said in a lot of cases its simply greed and because they can. theres a post on this sub about 10 minutes ago asking for advice on how much to increase the rent on their mortgage free property (with the perfect tenants)
I never understand the greed argument. If you've paid off a mortgage or bought it outright with cash, this could have been put to work somewhere else. It doesn't seem unreasonable to track market rates with some discount for good tenants if you wish.
Ultimately in any business, suppliers are responsible for managing sustainability.
Housing suffers from a race to the bottom because there are a) irresponsible financial products allowing people to own properties they cannot afford (like BTL mortgages); and b) zero-barrier entry routes, like inheriting a property, which created poorly researched suppliers.
Both of these groups have precarious overheads, BTL landlords being subject to mortgage rate fluctuations and amateur landlords just being inefficient because of ignorance. These are both volatile suppliers who may need to increase prices dramatically. The rest of the less volatile suppliers then follow that trend and increase margins.
The problem is that eventually you hit a wall and people simply cannot afford it. Some inner London boroughs are closing primary schools because young families cannot live there. If that squeeze hits young professionals, there’s a significant chance of a bubble bursting.
It is clear that landlords cannot be trusted to self regulate.