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Time to raise the rents.

Are You Renting The Property, Or The Landlords Services

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With all this talk of what great new regulations are coming out, it occured to me that the law is leaning towards a situation where the landlords services are being rented rather than the property being rented.

For example, when you buy petrol, you're also buying the services of the petrol station in keeping that petrol safe to deliver to you. We wouldn't want to be huddled around old trucks paying cash to get a bucket of cheap petrol to pour dangerously into our tank ourselves, we want a safe delivery system in place.

So when you're renting a property, the govt seems to be taking the angle that knowing who the landlords are will help to deliver that safety.

Don't get me wrong here, I want tenant safety probably more than you lot do (as many of you wouldn't even realise the potential dangers in your rented homes). But I wonder if it's the right way of the govt to approach this. The problem is that if you exclude any undesirables from being landlords, ultimately the supply of accomodation will be impacted, especially over a longer period of time. This will impact rents, meaning that cheaper accomodation will be removed from the market.

Before you all start your replies, consider that an unsatisfactory property costs money to renovate. That renovation will result in it being placed back up to rent at a higher cost. Tenants pay that cost.

So I'm asking, wouldn't it be better (in terms of rental prices) to concentrate purely on the quality of property, so that anyone can be a landlord, but that only safe properties are rented out and unsafe properties are excluded.

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Not controversial enough for you lot?

Hits close to home though doesn't it, you want a better standard of landlord & applaud regulation & in not replying to this thread, you accept that there will be a price to pay for that.

The funniest part for me is that higher rents = you opting to buy = higher house prices.

Edited by Time to raise the rents.

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you talk rubbish.

this ships going down and theres nothing you can do about it.

simple financial dynamics. its over.

whats happened to your spring bounce mr property expert.?

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With all this talk of what great new regulations are coming out, it occured to me that the law is leaning towards a situation where the landlords services are being rented rather than the property being rented.

....

So when you're renting a property, the govt seems to be taking the angle that knowing who the landlords are will help to deliver that safety.

Don't get me wrong here, I want tenant safety probably more than you lot do (as many of you wouldn't even realise the potential dangers in your rented homes). But I wonder if it's the right way of the govt to approach this. The problem is that if you exclude any undesirables from being landlords, ultimately the supply of accomodation will be impacted, especially over a longer period of time. This will impact rents, meaning that cheaper accomodation will be removed from the market.

Before you all start your replies, consider that an unsatisfactory property costs money to renovate. That renovation will result in it being placed back up to rent at a higher cost. Tenants pay that cost.

So I'm asking, wouldn't it be better (in terms of rental prices) to concentrate purely on the quality of property, so that anyone can be a landlord, but that only safe properties are rented out and unsafe properties are excluded.

With rental properties there is a certain amount that the market will bear in terms of rents. If the costs of providing a rental service (and I believe it should be a service) rise, then either rents rise or profit margins erode. If profit margins erode then one possible response is that the number of properties available will fall, and therefore demand will force rents to rise. But if rents can't rise because they are what people can afford, then something else has to change. One possibility is that the type of provision will change. For example landlords might stop paying through the ears to have their properties managed, and tenants found for them by agencies, preferring a cheaper online provision. This would save how much already? 10%? Enough to pay for better service I would imagine. How much other inefficiency is there in the market? Enough to catch Stelios's eye? Imagine a big rental provision service undercutting private landlords as Tescos undercuts local mom&pop stores. Hiriing its own plumbers and decorators. Running its own website. Printing off its own contracts. Customer service centres in cheap countries.

It's also, IMHO, important to remember that the return on investment for many landlords is proportional to the purchase price of the property. If there are more costs for the landlord, then the return on investment can be the same if the rent is higher, or if house prices are lower. So if BTL landlords start selling because of increased costs, then that increases the supply of homes for sale, which could lead to descreased house prices, which then leads to the same return on investment despite higher costs for a better serice. So it is possible that if "cheaper" accomodation is removed from the market, that it could be replaced by "higher quality" accomodation becoming cheaper to take its place.

Billy Shears

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I have a few comments for you TTRTR.

Using your example, if you look at Shells, BP etc accounts. You will see they make very little, sometimes a loss out of the forecourts. The real profit is made out of extracting petrol out of the ground. This would indicate that extra regulation would not affect rents, just reduce the profit landlords make and place it in the hands of developers. This model is not really compareable IMO.

The way I look at it, renting is a more consistent true value of the property market (varies less, and less sentiment driven) Where as capital cost is more speculation and sentiment driven.

Therefore if the rent does not cover the capital cost, it is not because the rent is not enough, it is because the house costs too much. Similar if the rent more than covers the capital cost, then it is because the house is undervalued, not that the rent is too much.

So I believe you have it the wrong way around TTRTR, and regulation won’t affect the rental market, but is more likely to affect house prices ( if it has any effect)

Please try a prove me wrong as this is the main reason I think house prices are going to drop, but rents stay the same (in my opinion they haven’t changed much in the last 6 years).

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Imagine a big rental provision service undercutting private landlords as Tescos undercuts local mom&pop stores. Hiriing its own plumbers and decorators. Running its own website. Printing off its own contracts. Customer service centres in cheap countries.

I've thought this. Why are Tesco or Virgin not piling into the BTL market? Is it that they don’t think its a viable model long term and can see it as the latest get rich pyramid scheme?

Regardless, I would rather rent from a large corporate landlord than an amateur any day. If Tesco were to enter the market with their economies of scale and scope, what would that do to rental prices. That would be a bad day for TTRTR and his ilk. One can only dream. :D

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Before you all start your replies, consider that an unsatisfactory property costs money to renovate. That renovation will result in it being placed back up to rent at a higher cost. Tenants pay that cost.

You are so blinded to reality that I am laughing out loud reading this nonsense.

If regulations come into existence that make your property "unsatisfactory", the value of the property will fall. Tenants will not pay more to rent it - it is the same property after all!

In an active market, the result is that as properties change hands, they will do so at lower values to reflect the work that needs to be done to make it lettable. Think of a car - if it needs work done to pass the MoT, it is worth less to a prospective purchaser.

I think you are fooling yourself to think that you determine rents. It is basic economic fact that market rents will be determined by the intersection of supply and demand. The only way you can increase rental prices is to decrease supply or increase demand.

How can you increase demand? Are you going to import more tenants?

How can you decrease supply? Are you going to knock down millions of homes?

New regulations may make a property unviable for YOU. So you need to sell it. To make it viable for the next purchaser, the price paid will be LOWER. Pretty basic.

p.s. I was under the impression for a while that you were an accountant previously. I take it you didn't actually have any qualifications in this field? Most require at least a basic appreciation of market dynamics.

Edited by Smell the Fear

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TTRTR,

From my perspective, I do buy the landlord's services. I have once locked myself out of my home, and have rung the landlord tobe let in. If anything breaks I ring up the landlord and they replace/repair it. A perfect example was when a washing machine blew up on a Friday evening. I contacted the letting agent on Saturday, and on Monday a new washing machine was supplied and installed when I was at work. If I had been living in my own house, I would have had to find a new machine, buy it and take a day off work so it could be installed.

I don't have to worry about the maintenance of the exterior of the house. If the gutters fall off, Icall the landlord and they are fixed. From the sound of it, you are a decent landlord, and it would be a pleasure paying the premium for me to live in a house hassel free.

On the other hand, some landlords do not make repairs, are difficult of get hold of, and don't do any work for my rent. This has only happenned to me once, and I stayed in the house for my 6 months and found a better landlord.

In my oppinion, the landlord is more important thean the house, and when looking at houses to rent, I tend to ask questions about the landlord. I won't rent a house off somebody who has just become a landlord as they don't know or understand their responisbilities.

So in summary, I am prepared to pay more for rented accomodation than to buy a house.

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Not controversial enough for you lot?

Hits close to home though doesn't it, you want a better standard of landlord & applaud regulation & in not replying to this thread, you accept that there will be a price to pay for that.

The funniest part for me is that higher rents = you opting to buy = higher house prices.

All I hear is blah blah blah blah... there's an awful stench of shit around here, think it's coming from your mouth.

In fairness though, i think landlords are the best thing in this country, they provide an excellent service in providing homes to the young generation who can't afford to buy themselves a home. The more houses they buy the better they are in my opinion. In fact, raise the rents, please i'll pay extra if you paint the flat up a little bit more.

tosser.

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The funniest part for me is that higher rents = you opting to buy = higher house prices.

Te funniest part for me is your belief that rents can rise infinately irrespective of wage inflation.

Doesn't the fact that house prices have doubled over the last 5 years whilst rents and wage inflation have remained in step tell you something?

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Im worried about the dangers in my rented property. Like rented gas...much more dangerous than mortgaged gas... leaking out of my rented fire.

BO!!ocks.

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p.s. I was under the impression for a while that you were an accountant previously. I take it you didn't actually have any qualifications in this field? Most require at least a basic appreciation of market dynamics.

he was asked this months ago - the thread is probably long gone now.

he didn't answer.

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The way I look at it, renting is a more consistent true value of the property market (varies less, and less sentiment driven) Where as capital cost is more speculation and sentiment driven.

Therefore if the rent does not cover the capital cost, it is not because the rent is not enough, it is because the house costs too much. Similar if the rent more than covers the capital cost, then it is because the house is undervalued, not that the rent is too much.

Very true. Admittedly, cheap credit can indirectly affect the market for rent as well. This effect, however, is not at all as powerfull as cheap money effect on asset (house) prices.

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The funniest part for me is that higher rents = you opting to buy = higher house prices.

This is funny: -

higher rents = higher house prices = higher wages to pay for higher house prices = more money siphoned off higher house prices via mew to redistribute into the economy = more money available for wage rises = more money yet again going into houses, add infinitum.

Anyone see a problem with that equation?

:rolleyes:

As you say TTRTR money grows on trees-er- Houses

B)

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Not controversial enough for you lot?

Hits close to home though doesn't it, you want a better standard of landlord & applaud regulation & in not replying to this thread, you accept that there will be a price to pay for that.

The funniest part for me is that higher rents = you opting to buy = higher house prices.

TTRTR - this is a bit of an attention-seeking post, is it not?

Just because people dont respond to your boorishness couldnt it mean people are just bored with you?

Besides higher levels of rent these "rules" will bring about higher costs to the LL.

So I cant understand what you're crowing about.

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"landlords services"

Aha ha. Ha ha ha. Excuse me, hahahahahahaaaaaaaah! Landlords in the country don't know the meaning of the word.

"many of you wouldn't even realise the potential dangers in your rented homes"

Yes, we're all really ******ing stupid.

"any undesirables from being landlords"

aka make existing landlords clean up their shoddy act

"This will impact rents, meaning that cheaper accomodation will be removed from the market."

To be sold? Not everyone can afford an expensive rent. The housing has to go somewhere. Heads we win, tails you lose.

"an unsatisfactory property costs money to renovate. That renovation will result in it being placed back up to rent at a higher cost. Tenants pay that cost."

Ooooor, your landlord doesn't do it and you have them by the short and curlies forever. Not that I know anyone that's happening to (heh heh heh) :ph34r:. FINALLY living like a student into one's 30s pays off!!! And thanks for the info, HPC, would never have known about it if it weren't for this site.

Oh poo - thought had the hang of the multiple quote business - apparently not. HOW DO YOU DO THAT??!! Seriously, I'd really appreciate it if someone PMed me with how to or posted it somewhere on the site. Thanks peeps.

Edited by North London Rent Girl

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With all this talk of what great new regulations are coming out, it occured to me that the law is leaning towards a situation where the landlords services are being rented rather than the property being rented.

For example, when you buy petrol, you're also buying the services of the petrol station in keeping that petrol safe to deliver to you. We wouldn't want to be huddled around old trucks paying cash to get a bucket of cheap petrol to pour dangerously into our tank ourselves, we want a safe delivery system in place.

So when you're renting a property, the govt seems to be taking the angle that knowing who the landlords are will help to deliver that safety.

Don't get me wrong here, I want tenant safety probably more than you lot do (as many of you wouldn't even realise the potential dangers in your rented homes). But I wonder if it's the right way of the govt to approach this. The problem is that if you exclude any undesirables from being landlords, ultimately the supply of accomodation will be impacted, especially over a longer period of time. This will impact rents, meaning that cheaper accomodation will be removed from the market.

Before you all start your replies, consider that an unsatisfactory property costs money to renovate. That renovation will result in it being placed back up to rent at a higher cost. Tenants pay that cost.

So I'm asking, wouldn't it be better (in terms of rental prices) to concentrate purely on the quality of property, so that anyone can be a landlord, but that only safe properties are rented out and unsafe properties are excluded.

Sorry TTRTR, having lived in a property with holes in the walls and holes in the ceiling, during the height of the bubble I want to see the scum driven to the bottom of the pond. Nobody deserves that situation. Offering decent homes is very unlikely to push prices up. I don't even understand your logic. Argue that the cost of the improvements to bring the place to a decent standard will push the price up but then say, keep rubbish landlords but do the improvements.

What has pushed prices up is the housing bubble. The private sector is driven by rental yields. Get rid of the housing bubble you get rid of the bubble yield required to sustain it. I had a lovely 1 bd rental flat in 1997 for 400 pm. That flat would be going for 1000 now. Not because anything did or did not need to be done to it. Simply because the yield required from the investment, determined by the value has more than doubled.

Actually provide enough social rental stock and the void capacity will be boyant enough to prevent bubbles (unless you live in Kensington Chelsea!). There seems to be this idea that there is something more noble about living in a private rental (lining a landlords pocket) than living in the social rental. Sorry, I'm not that proud. :D If it were a nice flat in a nice area, I couldn't care less whether someone else was making a profit at my expense (as opposed to a break even not-for-profit social landlord), so long as they charged the same amount ;)

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well my adsentee landlord has some looser estate agents who have majorly fecked up the guys 350K crashpad. They got workmen in to retile the bathroom in the worst way using the wrong coloured tiles. Its never going to sell now hahahahahahaha.

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My business partner is looking for somewhere to rent at the moment. He is earning a high wage and willing to pay a high price for the right place.

The sort of people he has come in contact with during his house search has reinforced my view that many landlords are totally dodgy. If it's got 2 berooms and a lounge don't advatise it as a 3 bed, if it's in a crappy part of town just admit it, he'll find out when he gets there.

They've got a room temperature IQ yet they think they are superior to you because they've learned how to borrow money.

What's the matter with these people?

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  • 341 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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