National Rent Rise Day 5 April 2017

by Readers Question

12:32 PM, 10th October 2016
About 4 years ago

National Rent Rise Day 5 April 2017

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National Rent Rise Day 5 April 2017

Unless the government confirms a U-turn on section 24, I suggest ALL LANDLORDS make it widely publicised that as of 5th April 2017 they will in unison apply a Tenant Tax to their passing rents. i.e. current rent plus X% tenant tax. (The actual % applied will probably be circa 8% but should be independently forecast by a respected national firm of accountants in conjunction with RLA and NLA)april 5th

A similar tax rise should also be applied in April 2018 and April 2019 depending on the forecast tax impact of prevailing interest rates.

Once the hard reality of THE TENANT TAX is nationally recognised especially by tenants, then the Government and Local Councils will have to make plans for the colossal impact in six months time.

I am not proposing to inflate rent for profit, but purely for my business to stand still. I suspect like many other landlords, I have never increased a rent to a sitting tenant, and only increase to the current market rent upon a natural change of tenant.

Likewise I am not proposing some form of price fixing, just merely to keep the status quo for the property business I started in 1989.

Once the NATIONAL RENT RISE DAY is widely publicised, one would hope that the Government can see the folly of their proposed tax grab, and realise the direct consequences of their actions on tenants.

Like the utility firms or any other business in the UK, when costs are rising the consequent impact has to be passed on to the consumer if the business is to remain viable.

My biggest bug bear is that as an industry with a national average yield of 5% we are portrayed as “greedy landlords” by the media and politicians. The country fails to realise that 5% yield is turnover not the profit margin, and that in reality the army of “cottage industry” landlords make a tiny rental profit and that is only because they are doing the work unpaid in their own time. Also that without the effect of some mortgage gearing or hope of long term capital growth the PRS business model is utterly futile.


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Robert Mellors

9:44 AM, 11th October 2016
About 4 years ago

Reply to the comment left by "money manager" at "11/10/2016 - 09:40":

My tenancy agreements do not exclude a possible rent increase, but of course you have to follow the correct notification procedure (if memory serves me right I think it is a s13 Notice? for most standard tenancies, e.g. ASTs).

However, it may be a god idea to insert a clause in future ASTs which specifically relates to increases in rent due to changes in government taxation.

Rippedoff Investor

10:08 AM, 11th October 2016
About 4 years ago

I do not support this publicity stunt which would merely serve to prove what many people think about grasping landlords. Rent levels are about what the local market can support: unilateral rent increase if your tenant is in arrears leads you to a greater problem, if the tenant rent is up to date why punish them ? Mortgage rates have fallen dramatically and been held low for many years. Did you reduce your rents during this period ?

I struggle to see the point of increasing rents to bring in more income to pay more tax upon. I never increase rents whilst a tenant has their home in my property.I am happy that they pay and stay.

Incidentally, my approach is to consider sale when any of my property becomes vacant ( five sold in last 18 months) and to pay off, from the proceeds, mortgage debt on the remaining 10 properties. I will pay less tax this way rather than increase rents which leads to a greater tax take for HMRC.

Barbara Gwyer

10:10 AM, 11th October 2016
About 4 years ago

Yes this idea is all well in areas where there is strong competition for limited stock but that doesn't apply in south-west London so hey guess what - I put my rents up as suggested making my properties a lot more expensive than my competition and tenants will opt for other properties and mine will languish empty.
Apparently less than 500k of the 1.8m or so landlords in the country are members of the NLA or RLA and while I don't know how many people read these bulletins, I imagine it includes a very small percentage of those 1.3m other landlords. I'd also speculate that not many of those 1.3m people have the faintest idea what lies ahead and until they come on board I'm not convinced the Government/HMRC will ever change direction.
Whatever we say in this forum is preaching to the converted. Somehow we have to come up with some way of reaching those landlords who are in blissful ignorance which I know is like pushing water up a hill if the press continue to vilify landlords

Dr Rosalind Beck

10:26 AM, 11th October 2016
About 4 years ago

There are problems with this - in terms of how it makes us look to the public, how the Government might react and so on. Also, it wouldn't work for student tenancies which tend to be one-year tenancies running from end of June to beginning of July. I also agree that in some areas where people pay £300pm for a two-bed house, you can't just increase it by 8%. It's like saying tenants must bear all the burden; there would be an argument for saying we would share the burden and we would face half the cost and they would face half.

Generally I'm not a fan of the idea, but there's no harm in exploring it - another suggestion might lead on from it.

terry sullivan

11:23 AM, 11th October 2016
About 4 years ago

also add all landlord licensing fees fees to rent in same way?

money manager

11:54 AM, 11th October 2016
About 4 years ago

Reply to the comment left by "terry sullivan" at "11/10/2016 - 11:23":

Well, not add but show seperately.

The former FSA progressivley hunted down all forms of bundled commissions and charges both between fund managers and platforms and those platforms, advisers who used them and their own clients; we should do the same.

We now let and manage direct and our application charges (yes, we DO charge) itemises each element such as the hard cost of deposit registration plus an eleemnt for the time.

This is why the pressure to ban fees is wrong in principle and iniquitous; why should a "plain vanilla " tenant be charged more in rent if fees are banned while a tenant who wants a special break clause, negotiated termination, change of co-tenant or requires a conditional tenancy due to R to R delays? Could Mr Green of CaseHub? of course he couldn't, nor would he be pressing the class action if he didn't get to charge a 33% success fee.

Robert Mellors

12:07 PM, 11th October 2016
About 4 years ago

Reply to the comment left by "money manager" at "11/10/2016 - 11:54":

Not sure what the FSA or Mr Green at Casehub have got to do with landlords raising their rents, but I do agree that if landlords are raising their rent specifically due to the imposition of an extra cost/tax on them, e.g. tenant tax, or selective licencing costs, then it would be best to state quite clearly how the rent increase has been calculated and why it is being implemented.

Luke P

12:17 PM, 11th October 2016
About 4 years ago

I can understand some of the concerns about action such as a National Rent Increase Day perhaps bringing forward any plans for further regulation/rent control and the negative media attention it could bring, but we can't really get any more negative press, can we?

The truth is, many of us will be increasing our rents anyway and we'll get slated in the news anyway, so why not unite to create an impact and awareness?

If we, here, are preaching to the converted then a campaign backing #NationalRentRiseDay will alert both tenants who are unaware and landlords that are currently in blissful ignorance.

Personally I like the idea and think it's a more measured approach to a previous suggestion of what was essentially a 'national section 21 day' (which I agree is rather more militant).

Dr Monty Drawbridge

13:02 PM, 11th October 2016
About 4 years ago

I think it makes landlords look like they are ganging up on tenants.

Appropriate times to put rents up will differ from one tenancy to another. Start putting them up gradually now - don't wait until next year. Write a brief accompanying letter explaining why rents are going up.

Luke P

13:10 PM, 11th October 2016
About 4 years ago

Reply to the comment left by "Dr Monty Drawbridge " at "11/10/2016 - 13:02":

I see it as tying the Government (and their actions) directly to the tenant and an attempt at cutting us landlords -the middleman in all of this- out. It should be clear to HMG, rent payers and onlookers why the rents have increased and who is actually responsible.

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