A complaint about OpenRent article on landlords maximising profits

A complaint about OpenRent article on landlords maximising profits

9:35 AM, 27th November 2023, About 3 months ago 7

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Booming Rental Market: How OpenRent Landlords Are Maximising Profits

Dear OpenRent team,

I object to your article for several reasons. Firstly, the whole tone of ‘landlords maximising profits’ and ‘How Much Can a Landlord Increase Rent in 2023?’ are not helpful or correct – there is double digit real inflation (methods of measurement have been adjusted several times following the start of the invasion of Ukraine and that war) which not a single journalist or you in this case use in the context of ‘rents increasing by 19%, 27% or even 46%’.

Rents are with data I see and can verify, only just keeping up with inflation – and as there is leverage of 80-60% and interest rates doubling or more, that leads to lower landlord profits. And you are forgetting non-incorporated landlords can no longer deduct mortgage interest so are terribly and often terminally suffering from making losses yet paying taxes.

Secondly, Shelter and other less well-informed organisations busy demonising landlords will grab hold of these for landlords very unhelpful sales emails you are sending and further incorrectly fuelling the anti-landlord rhetoric.

I noticed you raised prices from £29 to £49 for your basic service of putting adverts out online. I hope you are not using that to pay for the daft person writing these stupid emails and that you will refrain from such counterproductive articles. Journalists read this – they influence mainstream media – more tenants citing that and working against landlords – stop doing that please.

Most landlords – including myself – raise just by inflation only – and have not even passed on the higher energy bills (which I as landlord pay for my tiny HMO business). Tenants are suffering from high energy bills. Let’s be sensitive on how we all communicate as people are with emails like yours, led to believe that we are profiteers or something when all we really notice is twice the work for half the money and increased energy, insurance, interest costs.

I would have expected you to use your brains before having a probably 26-year-old inexperienced marketer write this – I expect you to be a thinking organisation aimed at helping landlords as well as tenants.

Kind regards,

Accommodation Provider


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Comments

Anthony Hawes

10:57 AM, 27th November 2023, About 3 months ago

Fair points. How did Open Rent respond when you approached them?

Stella

11:02 AM, 27th November 2023, About 3 months ago

Well said!

Property One

11:05 AM, 27th November 2023, About 3 months ago

I completely agree, especially as Openrent charge landlords and make their living from Landlords. But here they feel they should advocate the landlords should make a loss and disregard interest rates or forget that it is an investment. An investment should make money.
Simple calculation interest rates BTL 7% - London gross income per property 5%( therefore costs bring this to about 3% - inflation at the moment 4.6%). This would mean ALL landlords are subsidising tenants.

Why don't you write an article on that! Is it because you don't understand fundamental maths?

Peter Webb

13:09 PM, 27th November 2023, About 3 months ago

Reply to the comment left by Property One at 27/11/2023 - 11:05
Or sell and put the money in the bank at 4.5% to 5% without all the aggro.

John Adair

14:57 PM, 27th November 2023, About 3 months ago

"Lies, Damned Lies, and Statistics” — attributed to Mark Twain. Some of the media 'journalists' don't know the first thing about how a business is run, costs, risks and putting money aside for a sinking fund etc

Tom C

17:08 PM, 27th November 2023, About 3 months ago

Reply to the comment left by Property One at 27/11/2023 - 11:05
@Property One

I’m not sure you understand fundamental maths.

There are two gains from property letting.
1. Capital appreciation
2. Rental income

And the 7% mortgage rate you imply carries a 20% (1.4 percentage point) tax credit.

My recent rate switch (3 Nov 23) is 5.53% (equivalent to 4.42% with the tax credit).

Yes, there are ongoing costs: ground rent, buildings insurance, GSC, EICR, voids, maintenance. But that is all easily paid. And since becoming a BTL landlord in 2011, property value appreciation has easily outstripped inflation. And when I consider leverage I have made a killing on my small property portfolio.

DAMIEN RAFFERTY

18:08 PM, 27th November 2023, About 3 months ago

Well Done Tom C if your making a killing from your BTL portfolio 👏
However some Landlords are now paying a much higher Interest rate than 7%
Higher rate Tax paying Landlords are also paying more tax than ever due to section 24 and higher interest rates.
Now capital appreciation is all well and good till you come to sell the HMRC want 28% of everything your assets have gone up in the last 10/15/20 years.
Rental Income is taxed at 20/40% and maybe 45%
Please don't forget the on-going costs of maintaining a property to the high standards now required by local councils and central government.
Openrent your article was nothing short of an attack on Landlords.
Don't bite the hand that feeds you !
I would love to meet and speak to the member of staff who researched and wrote this article.
So you have increased your charges from £29 to £49 to advertise with yourselves
Can you please explain and justify this 80% Increase in your costs ?
I am 100% sure that No Response will be forthcoming from Openrent

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