Landlord asks for £50 more and now he’s £2,400 a year worse off!

Well, colour me shocked but an extra £50 in rent a month hardly sounds like the opening bid for a Caribbean island.

Sadly, for one Manchester landlord, asking for it proved to be an expensive exercise.

The landlord wanted to increase the monthly rent from £1,650 to £1,700.

After the tenant challenged it, the First-tier Tribunal determined it should be £1,450.

Instead of another £600 a year, the owner faces receiving £2,400 less than before.

That should concentrate a few minds over the breakfast cornflakes.

Rent control warning

The kicker for me is that I’ve warned several times now that the Renters’ Rights Act effectively introduces rent controls through the back door.

Give tenants a cheap route at £47 to challenge a proposed increase (and get government help if that’s a struggle, naturally), with the possibility of reducing their existing payment, and landlords will inevitably think harder before asking.

Some will decide the uncertainty simply isn’t worth it.

However, there is an inconvenient detail here which deserves acknowledging.

The tenant produced evidence of comparable flats advertised between £1,400 and £1,500 with the tribunal preferring those comparisons.

There were no ongoing maintenance problems identified, and the accommodation was considered attractive.

This was a decision about the market evidence.

What rent should be

Nor does a landlord’s rising mortgage bill automatically establish what a tenant should pay.

Anyone claiming otherwise is handing critics an easy victory.

But accepting that point leaves a rather bigger question unanswered.

What happens when the amount a property can command no longer covers the cost of providing it, with a reasonable return for the person carrying the risk?

Let’s not forget the electrician still wants paying.

Insurance doesn’t become cheaper because a tribunal has reached its decision.

A replacement boiler remains stubbornly uninterested in housing policy.

The landlord must somehow make the figures work.

Landlord costs grow

Readers responding to Property118’s report understood that immediately.

Their concerns centred on mounting costs, uncertain income and whether another investment would offer fewer headaches.

One wrote: “This all seems designed to put landlords off increasing their rents.”

That is an understandable reaction but it’s also where the wider consequences deserve serious attention.

A landlord considering even a modest increase has been given a sharp reminder: check the evidence supporting the whole rent, because the existing payment could also be at risk.

For someone managing one property alongside a job, that represents another demand on evenings already occupied by repairs, paperwork and tax records.

Can landlords sell?

Meanwhile, uncertainty over future income can influence what a landlord investor is prepared to pay for a tenanted property.

One tribunal decision does not automatically set the rent for every neighbouring home. Each case depends on its own evidence.

But it can influence something much harder to measure, and that’s whether other landlords think the potential return still justifies the risk.

Nevertheless, ministers cannot keep adding obligations while assuming private capital will patiently absorb every consequence.

Landlords have choices

Landlords have choices which most people, including politicians and tenants, don’t seem to understand.

We can stop buying, sell when circumstances permit or put our money elsewhere.

Now, the challenge for organisations representing landlords is to explain these commercial realities forcefully to the world outside of the private rented sector.

I appreciate that helping members comply with laws and tax rules is useful but asking whether the resulting landlord business remains viable is essential.

Tenants deserve decent homes and protection against unjustified rent rises.

Equally, a housing policy dependent on private investment needs people willing to provide it.

Celebrate every reduced rent without considering tomorrow’s supply and the apparent victory could become painfully short-lived.

Perhaps the government could ask the tribunal to reduce the electrician’s invoice next.

Until next time,

The landlord Crusader