An inconvenient truth is 100% of rents will be going up?Make Text Bigger
A survey at present on property 118 suggests 71% of landlords will increase rents as a direct result of section 24. Here is why I believe 100% of rents will inevitably have to go up.
Like a lot of landlords, I have not increased rents to my tenants for the last few years or so for many reasons, but for 3 in particular.
1. Once you have found a good and decent tenant who looks after your property and pays the rent on time, you do not want to lose them.
2. Interest rates have been low for many years which have reduced my overheads.
3. If I currently tell a tenant I am increasing the rent they have the option of saying “no thanks” and move on to a new landlord in the next street.
This is all about to change.
If we assume that the 71% figure is correct, then that means approx. 3 million tenants will have rent increases within the next year or so. Coupled with the fact thousands of landlords including myself intend to sell properties in the next year or two mean that option 3 is no longer available to most tenants, as the number of available rented properties reduce.
A report out today states net migration year to June was 335,000. Where are they going to live. Another report out today states there are a half million people homeless in Britain today. Interest rates have been at record low levels for many years, but the simple fact is they only have one way to go. Its any ones guess when they will go up but it is inevitable.
The existing good tenants you have will not now be looking to move because rents will be going up across the board all at the same time.
Back to my original point. The reason I believe 100% of rents will go up is because a landlord is a business person first. If 71% of landlords are increasing rents around me, I will need to increase rents as well for 2 main reasons.
If section 24 goes ahead it is guaranteed it will be followed by further assaults by the government on the private landlord. Interest rates will inevitably go up. It makes total business sense to increase rents now when every other landlord is doing the same, so you can build a pot of money to help safeguard you and your tenants future. Even if you have millions in the bank and section 24 has no impact on you it makes no business sense to rent out your houses for example £500 monthly when all the landlords around you are charging £600.
Many of my tenants have become friends and as such I owe it to them to keep my business viable. If my business fails most of my tenants will have nowhere to go.
This is the truth that will be very inconvenient for this government.
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