And as we all know these ‘rent freezes’ don’t work so I don’t understand why they bother.
We were promised a ban on ‘no fault evictions’, but it never seemed to happen.
It is going to get worse, but this isn’t the answer.
It has been very easy to point the finger at the private rented sector and say they’re at fault for the state of the housing market in the UK, when in actual fact the fault lies with the government for failing to ensure enough housing is built
The UK population has grown by 6.6million in the last decade and yet we have built only 1.8million homes in the same period. _source gov.uk statistics_
That leaves nearly 5 million people chasing existing housing stock.
During that same time, social housing shrank by 200k to 4.4million. _source inside housing statistics_
That presented a problem, people without the capital to buy needed somewhere to live and so the PRS (private rental sector) has expanded to accommodate those people.
Half of all landlords only have one rental property and typically do so to supplement their pension. _source gov uk again_
The government doesn’t like the fact that small investors are building capital, it had become a mechanism for the working classes to retain wealth and they are anti-working class. So they span this narrative that the PRS was the enemy and the left bought it hook, line and sinker.
This allowed the government to bring in tax changes to target these demon landlords, all the while failing to deal with the issue of house building numbers being pitifully low.
The legislation would be written in such a way that it clawed the small landlords back into the pits of plebdom while the truly wealthy could incorporate and carry on business as usual.
These tax changes were unique in that landlords are now taxed on profits they haven’t made and I’ll include an example below.
Previously they could just claim mortgage interest as an expense because they had paid it. I’m going to use round numbers and assume a higher rate taxpayer for simplicity.
Before 2016 a landlord with
£10k earning rent with a mortgage of 160k at 2% (3.2k) would have paid £2.7k in tax. Profit 4k.
After 2016 that same landlord would pay £3.3k tax reducing profit to 3.4k
_this is where it gets bad_
It gets worse because it’s linked to mortgage rates which have recently skyrocketed. Using money facts to look at the available rates, our landlord would be able to get a rate of around 5%
Their calculation is now
£10k rent, pay out £8k in mortgage interest.
Then pay £2.4k in tax.
Leaving them underwater by £400
That’s before they’ve insured it, done a boiler service or an electrical cert etc.
Any repairs and it’s just more losses and there’s no way around that it just becomes unsustainable.
Well done if you’ve gotten this far, basically what I’m saying is that the evictions are happening because the government has made it impossible to be a small landlord in this country but has done nothing to plug the gap they’re creating.
Landlords are evicting tenants to sell up, and that is only going to increase over the next couple of years whether you fix the rents or not.
The mortgage interest relief changes need repealing and quickly or 2.2million (number of PRS properties with a mortgage) tenants are going to find themselves homeless. No landlord is going to operate at a loss indefinitely, no matter how kind hearted.
My own personal take on the above?
I think the gov want companies like insurers or pension companies to take the small investors’ place which will be awful for tenants. Lost your job? Fuck you pay me.
Had a leak? Fuck you pay me. Faceless corporations.
*Gasp* Won’t anyone think about the landlords, those hard working landlords
the common sense and empathetic policies of the greens is a soothing reassurance that, despite labour’s appalling diving ratings, we still have a morally acceptable party to vote for.
I’ve voted Labour always, but no longer. not with starmer the harmer at the helm I’m afraid.
Just build more homes.
The private sector will do it, just get rid of all the restrictions and NIMBYs.
I’m holding my breath for this to happen. If you don’t hear from me after 24:37.36 MINUTE(S) and SECOND(S) means I died, awaiting Tories to do this.
Well, landlords view tenants inside properties to flip as essentially housekeepers, so the contract was only ever temporary in their mind. Consequently with this, they might do illegal occupants or, well, have a vacant property…
I’m sure the jump in no-fault evictions in recent months was due to the very fact this was already threatened and there were landlords who wanted to get out before this came into force.
My rent will increase in January. My landlord cited inflation, interest rates and the rent no longer covering the mortgage…
Because god forbid the poor bastard only has 90% of his mortgage paid off each month by me.
The Greens calling for something to happen is like me texting a few mates to guage their opinion on something. Nothing will actually happen but at least I’ll know what they’re thinking.
11 comments
And as we all know these ‘rent freezes’ don’t work so I don’t understand why they bother.
We were promised a ban on ‘no fault evictions’, but it never seemed to happen.
It is going to get worse, but this isn’t the answer.
It has been very easy to point the finger at the private rented sector and say they’re at fault for the state of the housing market in the UK, when in actual fact the fault lies with the government for failing to ensure enough housing is built
The UK population has grown by 6.6million in the last decade and yet we have built only 1.8million homes in the same period. _source gov.uk statistics_
That leaves nearly 5 million people chasing existing housing stock.
During that same time, social housing shrank by 200k to 4.4million. _source inside housing statistics_
That presented a problem, people without the capital to buy needed somewhere to live and so the PRS (private rental sector) has expanded to accommodate those people.
Half of all landlords only have one rental property and typically do so to supplement their pension. _source gov uk again_
The government doesn’t like the fact that small investors are building capital, it had become a mechanism for the working classes to retain wealth and they are anti-working class. So they span this narrative that the PRS was the enemy and the left bought it hook, line and sinker.
This allowed the government to bring in tax changes to target these demon landlords, all the while failing to deal with the issue of house building numbers being pitifully low.
The legislation would be written in such a way that it clawed the small landlords back into the pits of plebdom while the truly wealthy could incorporate and carry on business as usual.
These tax changes were unique in that landlords are now taxed on profits they haven’t made and I’ll include an example below.
Previously they could just claim mortgage interest as an expense because they had paid it. I’m going to use round numbers and assume a higher rate taxpayer for simplicity.
Before 2016 a landlord with
£10k earning rent with a mortgage of 160k at 2% (3.2k) would have paid £2.7k in tax. Profit 4k.
After 2016 that same landlord would pay £3.3k tax reducing profit to 3.4k
_this is where it gets bad_
It gets worse because it’s linked to mortgage rates which have recently skyrocketed. Using money facts to look at the available rates, our landlord would be able to get a rate of around 5%
Their calculation is now
£10k rent, pay out £8k in mortgage interest.
Then pay £2.4k in tax.
Leaving them underwater by £400
That’s before they’ve insured it, done a boiler service or an electrical cert etc.
Any repairs and it’s just more losses and there’s no way around that it just becomes unsustainable.
Well done if you’ve gotten this far, basically what I’m saying is that the evictions are happening because the government has made it impossible to be a small landlord in this country but has done nothing to plug the gap they’re creating.
Landlords are evicting tenants to sell up, and that is only going to increase over the next couple of years whether you fix the rents or not.
The mortgage interest relief changes need repealing and quickly or 2.2million (number of PRS properties with a mortgage) tenants are going to find themselves homeless. No landlord is going to operate at a loss indefinitely, no matter how kind hearted.
My own personal take on the above?
I think the gov want companies like insurers or pension companies to take the small investors’ place which will be awful for tenants. Lost your job? Fuck you pay me.
Had a leak? Fuck you pay me. Faceless corporations.
*Gasp* Won’t anyone think about the landlords, those hard working landlords
the common sense and empathetic policies of the greens is a soothing reassurance that, despite labour’s appalling diving ratings, we still have a morally acceptable party to vote for.
I’ve voted Labour always, but no longer. not with starmer the harmer at the helm I’m afraid.
Just build more homes.
The private sector will do it, just get rid of all the restrictions and NIMBYs.
I’m holding my breath for this to happen. If you don’t hear from me after 24:37.36 MINUTE(S) and SECOND(S) means I died, awaiting Tories to do this.
Well, landlords view tenants inside properties to flip as essentially housekeepers, so the contract was only ever temporary in their mind. Consequently with this, they might do illegal occupants or, well, have a vacant property…
I’m sure the jump in no-fault evictions in recent months was due to the very fact this was already threatened and there were landlords who wanted to get out before this came into force.
My rent will increase in January. My landlord cited inflation, interest rates and the rent no longer covering the mortgage…
Because god forbid the poor bastard only has 90% of his mortgage paid off each month by me.
The Greens calling for something to happen is like me texting a few mates to guage their opinion on something. Nothing will actually happen but at least I’ll know what they’re thinking.