Landlords: Would you start in BTL in 2025 if given the choice?

Despite a growing landlord exodus – which the housing minister Matthew Pennycook disbelieves – would you start as a landlord in 2025? There are reasons for and against. I’d like to hear your views because I try – honestly! – to remain positive despite what is regularly being thrown our way.

I got thinking after the Renters’ Rights Bill headed off to its next stop in the House of Lords.

Are things really as bad as I make out most weeks? I’m still here, most of my landlord friends are still landlords and people are still investing.

I’m not saying it’s all chocolates and roses, but I would say that government policies are inadvertently contributing to homelessness and rising house prices.

We are spending fortunes of taxpayers’ money on housing people – and this is on some tenants who don’t care about a landlord’s property even though it’s a free home.

Then we have the increasing legislation to contend with. The Renters’ Rights Bill is just a part of it.

There’s no doubt that landlords are selling up and other investors are wondering whether they should spend their hard-earned cash in the private rented sector.

I think there are still opportunities, and most tenants are decent people needing a home (not those tenants who emptied my mate’s flat of everything in a moonlight flit, obvs).

PRS stock will reduce

Without landlords remaining or investing, the PRS stock will reduce, and tenants will struggle to find a home.

Fewer homes mean choosier landlords and dearer rents.

I’m amazed at how this simple equation is little understood by the media, politicians and tenant activist groups.

So, here’s a quick rundown on the issues affecting us all:

• Renters’ Rights Bill: A big red flag for all landlords with a Bill delivering longer notice periods for eviction and limitations on rent increases which could impact profitability
• Taxation: Tax burdens like stamp duty, inheritance tax and potential changes in income tax can make BTL investments less attractive
• Regulation: Selective licensing adds another layer of bureaucracy for landlords and now Labour has announced that councils don’t need the Secretary of State’s permission, we really are in for a hiding on this.

While these issues affect landlords, any costs – we still don’t know how much joining the landlord database will be – will be passed on to tenants.

Jump into the PRS

For potential investors wondering whether they should jump into the PRS, then yes, it is something to consider. It’s not what it was years ago (the late 90’s were joyous times…) but there are opportunities.

Don’t lose sight of the fact that this is a business, and you should never do tenants ‘favours’. That will always cost you money.

Having said that, you’ll enjoy:

• Strong demand: Despite the challenges, there’s still a huge demand for rental properties in the UK. A lack of supply keeps rents high in many areas. Labour is still throwing work visas around like confetti so this demand will be high for a few more years
• Professionalisation: I hate this word, but the PRS is becoming more professional and is offering opportunities for landlords who provide high-quality accommodation and manage their properties efficiently
• Long-term Investment: Property can be a good long-term investment, offering capital appreciation alongside rental income. I’m not sure how the numbers work for those investing with a buy to let mortgage today, but for cash buyers there are rewarding opportunities.

Labour doesn’t know what it is doing

Obviously, the Labour Party doesn’t know what it is doing but they are making such a hash of things I don’t believe the PRS is their biggest concern. It will be when the homeless numbers go up.

Would I invest again if was starting out? I probably would since the good tenants tend to outweigh the awful ones (Yes, Generation Rent there are bad renters out there) and you’ll have an enjoyable business.

However, I resent being the whipping boy on a range of issues for second rate politicians who accuse us of profiteering and exploitation.

We can’t offer homes for free even though critics say this should be expected, and we must make money from the enterprise.

Don’t forget too when the word ‘professionalisation’ is bandied about, what they really mean is making a landlord’s role into a proper job – but without any of the benefits.

We aren’t seen as workers but the hours you’ll spend on the property will come as a surprise.

You’ll be sad at the legislation and jumping through the legal hoops, you’ll be baffled at the tax situation and the moronic politicians will make you want to pull your hair out.

So, yes, it is worthwhile but it’s frustrating, costly, unrecognised and comes with critics keen to criticise without wanting to be landlords themselves (Hello, Shelter).

We need more homes or fewer immigrants; we need a better tax environment that welcomes investment and encourages people to downsize, and we need recognition.

It is hard to believe but you’ll be entering a world of contradictions with tenants needing us, but everyone resenting us because we charge rent for providing a safe home.

It was ever thus.

Until next time,

The Landlord Crusader