Crisis for landlords as one in 12 tenants pays reduced rent | Buy-to-let investors suffer as cost-of-living crisis hammers renters’ finances

42 comments

  1. Article contents:

    *By Melissa Lawford! 15 September 2022 • 11:28am*

    One in 12 tenants has had their rent reduced to help them beat the cost-of-living crisis.

    Buy-to-let investors are haemorrhaging rental income as soaring inflation and rocketing energy bills hammer renters’ finances.

    Nearly one in 12 tenants (8pc) said their landlord had given them a temporary rent reduction in the last six months, according to research by Shawbrook Bank, a mortgage lender.

    A further 5pc said their landlord had temporarily frozen their rent.

    Experts warned that Britain’s soaring rental prices are now hitting a ceiling of affordability as the cost-of-living crisis deepens.

    Rental growth in the year to July hit 12.3pc, according to property website Zoopla. In London, rents rose by 18pc.

    By contrast, wages fell in real terms by 3pc in June – the steepest drop since records began in 2001, according to the Office for National Statistics.

    A severe shortage of properties means landlords have been able to raise rents quickly, but Shawbrook’s research suggested these jumps have become unsustainable.

    Emma Cox, of Shawbrook, said: “Arrears are definitely something most lenders are thinking about, it is definitely something that we are thinking about.

    “We might have to think about how we can support landlords who are under pressure with their mortgage payments and we have to be thoughtful about our approach to risk.”

    If the cost-of-living crisis deepens significantly, banks could tighten their lending criteria for buy-to-let mortgages, Ms Cox said.

    “We’re not there yet, but we’re trying to grapple with where the tipping point is, which would mean we would need to adjust our risk profile. At that point, we might reduce our loan-to-value ratios, or spread out the mortgage terms,” she added.

    The Centre for Economics and Business Research, a think tank, has forecast that nearly one in 10 tenant households will fall behind on rent this financial year – a total of 407,000 families. This will be a third more than during the pandemic.

    Shawbrook’s research was a representative survey of 1,000 landlords and 1,000 tenants.

  2. > **Rental growth in the year to July hit 12.3pc**, according to property website Zoopla. **In London, rents rose by 18pc**.

    Poor buggers. It’s clear they need tax payers’ help through government grants.

    > By contrast, **wages fell in real terms by 3pc in June** – the steepest drop since records began in 2001, according to the Office for National Statistics.

    And the tenants dare to complain that they can’t afford to pay the rent? Government must introduce a windfall tax to workers immediately!

  3. The value of investments can go up or down and capital is at risk, as they say.

    No one has a right to profit and as the market shifts, there will be losers. This is the reality of things.

  4. I mean. If you invest in things like by to let and your happy to take larger profit when things are good are you not also taking the largest exposure to loss when times are lean. That’s the nature of investing.
    Not being unsympathetic but when people have priorities such as warmth, food, bills, clothes for their children landlord profit margins don’t come near the top of the list for me.

  5. Maybe they should try getting a real job.

    Or, perhaps, sacrificing the avocado on toast so that they can survive

  7. They’ve had decades of growth way beyond inflation, while tenants have endured a decade of stagnation. Sky-high rents are part of the cost-of-living crisis, so excuse me if I don’t give a shit that landlords are making a bit less money.

  11. At some point landlords will have to accept they cannot pay off a mortgage and still profit from rent. It is unsustainable and unfair. The bustards are losing their “profits” after accruing wealth into their property and throwing a hissy fit about it. Don’t worry assholes you still accrue wealth even if you don’t get profits anymore.

  12. Another article produced solely to provoke rage in the reader – for what purpose?

    The real crisis is for the renters not the landlords.

  13. >Britain’s soaring rental prices are now hitting a ceiling of affordability

    so…. the pips are squeaking, isn’t it traditional to stop squeezing at that point? I suppose the worst case is that the landlords will have to sell up and forgo the rental profit and settle for just the capital gain profits instead.

  15. If you are going to treat housing as an investment class, which has caused some real issues in an era of cheap debt, then you have to accept the flip side, investments can go up or down and a positive return isn’t guaranteed.

  16. Honestly rent is frankly extortionate compared to wages and landlords seem to have no clue as to how theyve happily walked themselves onto a cliffs edge just like the rest of the housing market.

    Turns out if you make housing eat up a ridiculous % of a household income then when any shock to the economy hits any part of a household budget substantially well you quickly get large swathes of the population in an unaffordable situation. Something that actually has an impact on the economy as frankly the modern economy simply doesnt function if people have no real disposable income after food;bills and housing

  17. All the smug landlords who just declared they’d raise the rents on their tenants to cover whatever increase in costs they faced. Turns out, it doesn’t work that easily.

  20. My landlord raised my rent by another 50 a month. It’s such a shame as that was my heating money … place is starting to get a strange smell .oh well at least he’s got some more money.

  24. Renting out to cover a mortgage is trivial. To expect to make a full salary on top of that is ludicrous, landlords do very little.

    Just have a day job and chill out with drawing the maximum amount of capital out of your tenants.

  27. Ha ha ha ha ha ha ha….. oh hang on, was I supposed to feel sorry for them?

    AHAHAHAHAHAHAHAHAAAAAA!

    Let’s get real here, they’ve only raised rent due the fact there is more demand than supply and they could, get away with it so surely they were doing OK beforehand? If you bought property recently with the intention of rinsing some poor sod dry under the current housing climate then I’ve even less sympathy. Unfortunately how many will lose their homes now landlords decide they aren’t making enough money and sell up? To another shady landlord most likely that will charge less but not look after the place at all and save on that instead. God I’m glad I’m in a HA property, at least they are more tightly regulated and my rent is sensible.

    Not seeing an issue here other than greed.

  28. Landlord isn’t a job it’s an investment type. Get a real job if you want wages. Don’t cry about losing money when you gambled and gambled badly in this case.

  29. Over leveraged landlords are going to get wrecked when thier tennents loose thier jobs and Intrest rates start getting spicy.

  34. Someone let my landlord know, please. He put mine up 25 quid a month last mo th for no reason at all.

    Edit: I say no reason, he spotted me at the same gym he uses. My work pay for my membership. This is the only reason I can think, is that he thought I was doing well for myself.

  37. If the landlord can’t afford it, make them sell the properties. Drive the price down and shrink the buy-to-let market which is ruining housing. Honestly, screw these guys

  38. Another story where I’m annoyed I’ve lost my tiny violin… They’re not poor or struggling. They still have a 300k asset and their profit is down.

  39. So? I read that at times over 40% of apartments in London are empty because they are owned by corporations for tax shelters. They are in no crisis. 🙄

  40. Oh no. Maybe they better put these homes on the market then and get a real job like everybody else instead of scalping the market and robbing first time buyers of the opportunity to get on the ladder.

  41. Ah well.

    I’ve seen the car my landlord drives. I can guarantee the cost-of-living crisis is affecting me far more than it is him.

  42. Buy to let was the fucking dumbest thing this country has done in a while.

    Housing crisis? Oh lets make it easier for people who already own a house to buy up the supply!

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