Challenging tenants lead to mass landlord exodus

by Property118.com News Team

11:08 AM, 9th May 2018
About 3 years ago

Challenging tenants lead to mass landlord exodus

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Challenging tenants lead to mass landlord exodus

A third of British landlords could be forced to sell due to problem tenants, with unpaid rent and damage running into thousands of pounds cited as the main problems.

Nearly half 47% of landlords have had issues with tenants who don’t pay the rent on time, according to a new survey commissioned by online letting agent MakeUrMove.

A quarter of landlords have also faced large bills when tenants have left properties in a state of damage and disrepair. Many have had to pay thousands to restore their property after a tenant has moved out, with one landlord surveyed left with £16,000 of damage. Landlords say damage caused by tenants far outstrips the sum of the deposit usually taken at the start of the tenancy and held in the government-backed Deposit Protection Scheme.

This pressure is leading the majority of ‘good’ landlords, who try their best to support tenants, to feel they can’t continue to rent out their properties. The study found 98% of landlords believe it’s important to keep tenants happy and 92% have a good relationship with their tenants. Despite their best efforts, landlords are suffering when tenants don’t repay the favour, with 37% of landlords saying their biggest worry is problem tenants.

MakeUrMove managing director, Alexandra Morris, said: “60% of British landlords are ‘accidental’ or ‘casual’ landlords, meaning they only have one property and rent it out to supplement their main working income. As these landlords make up the backbone of the British property market, it’s important they feel happy to carry on letting. Stress and financial pressures caused by ‘challenging’ tenants is a sure fire way to put them off and steer them away from further investment.

“This could also be a real worry for smaller landlords when it comes to cash flow. Generally, as long the rent is coming in every month to cover mortgages and other associated costs, smaller ‘casual’ landlords don’t often plan for bigger costs caused by damage from tenants or lack of funds due to unpaid rent. As a result, when a big outlay comes around, some landlords find themselves in trouble, and there’s very little protection offered from the government against these things.”

Other issues faced by landlords include tenants breaking items and refusing to pay 26%, tenants refusing to leave at the end of their tenancy 16% and extra people living in the property who are not on the tenancy agreement 22%. The latter could even put the landlord at risk of breaching Right to Rent provisions, which may in some cases, amount to a landlord being found guilty of a criminal offence following changes to the Immigration Act 2016.

Morris added: “Legislation is currently swinging towards tenants, at the risk of undermining the vital role played by private landlords in the UK housing market. Legislation such as the proposed deposit cap could make it even harder for private landlords to deal with challenging tenants, resulting in further pressures on landlords to sell up. Whilst landlords selling their properties may appear to offer some short term benefits for buyers, it cannot deal with the systemic problems surrounding the lack of housing supply. It will also reduce supply in the rental sector, which will increase demand and likely only increase pressures on the remaining landlords to increase rents.”

Comments

BB

14:45 PM, 14th May 2018
About 3 years ago

Agree absolutely !!! I have been a private small time landlord since the mid '90s with 5 properties. I'm now selling up, one a year. With a huge housing bubble waiting to burst, loss of tax breaks and more and more grossly unfavourable laws or regulations all aimed at us, the landlord.
What's the point carrying on? Cash in and move the funds abroad, where you can earn 8-10% yeilds as I am currently.
TDS or DPS or whatever are a joke, recently I had them over turn the very clauses written into my contract, so as to favour a single mother on benefits. These being a fixed term tenancy "no break" clause and a redecorating clause, which she had asked for and signed prior to commencing tne tenancy. This stated in our Tenancy Agreement via a letting agent, that the tenant MUST return the property to it's original styles and colours.
To be honest we live in Socialist state where the poor, under achieving, lazy, useless unemployed, alcoholics/drug addicts are afforded more rights and protection than the likes of you and me, a 61 year old self employed guy whose never claimed a penny from the State, worked all his life and bought a few old properties to renovate for his pension plan. (Oh apart from one left by my parents).
The lunatics have taken over the asylum, jump ship now and quit this pile of s**t before Corbin gets in. Argh!!

Bill Morgan

6:30 AM, 15th May 2018
About 3 years ago

Reply to the comment left by Larry Sweeney at 09/05/2018 - 22:46
Hi Larry,
I agree with your advice.The Uk environment for landlords has become hostile.

Can I ask where you have reinvested your money?

BB

12:49 PM, 15th May 2018
About 3 years ago

Yes certainly Bill, its Thailand. As I spend a fair bit of my time there, about half the year, I have a home too. So firstly I can keep an eye on matters.

But thanks to Brexit and the 20% loss on Sterling it's not that good at the moment with the exchange rates. But on the flip side lots of British expats are leaving in droves due to that very same reason. Their pensions have halved in real terms in 10 years. So there's always a deal to be had on a payment into their UK bank in Sterling. Especially when you know they bought 3, 5 or 10 years ago when the ForEx was very favourable.

Maintenance costs are nothing, very few laws requirements or regulations. It's the "Wild West" so to speak a developing, naive market. I recently picked up a lovely 2 bed apartment 90 SqM with 2 pools, fitness center etc etc next to a quiet beach also close to major tourist and commerial areas, airports, road links industrial parks etc for£70k. It's currently getting me £400 per/mth.

Thai ecomony is doing well and booming middle class. 70 Million population with very young dynamic and mobile work force.
Asia with overtake Europe totally within 10-20 years. End of the road for Europe , especially UK. Doomed!!?!

Bill Morgan

17:39 PM, 16th May 2018
About 3 years ago

Reply to the comment left by Larry Sweeney at 09/05/2018 - 22:46
Hi Larry,

Did you just decide to sell up and pay the cgt or did you use any tax minimisation techniques?

I am thinking of doing the same.

Regards,

Bill.

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