Study apparently shows Renters’ Rights Bill won’t ‘harm the rental market’?

Reply to the comment left by Beaver at 06/08/2025 – 12:02
For the same reasons as you, I increased my remaining rental by 9% three years in a row. It had finally hit the market rent and my tenant objected. I suggested she take me to the FTT but she decided to leave. I would have sold up if I could (long story) but took the opportunity to increase the asking rent above the local market rent. It let on the first viewing! Even so, unless my mortgage drops, I’m still not making anything.

Reply to the comment left by NewYorkie at 06/08/2025 – 15:56
Barclays have just published some figures showing that rents are rising again:

https://home.barclays/insights/2025/08/July-2025-Property-Trends/#:~:text=%27Rentflation%27%20diminishes%20aspirations,to%20save%20for%20a%20deposit.

“For the first time since February, Barclays Property Insights found that growth in spending on rent and mortgages increased year-on-year. Spending increased by 5.2% year-on-year in July, up 0.9% percentage points from June. Growth had decreased month on month from the high-water mark of February, where spending on rent and mortgages grew by 7.7%.”

What a lot of people who want to have a more affordable rent or perhaps wish to save a deposit to buy their house don’t realise is that it is GOVERNMENT POLICY that is driving up rents.

Just as in your situation and mine, if the property is mortgaged, you are now prevented from offsetting your interest costs, and interest rates go up, then you have to increase the rent (or sell and evict the tenant). That may have to be well above what ‘market rent’ might be locally. Historically those of us who had small property portfolios didn’t do this. Rightly or wrongly we held rents down a bit to reduce the risk of a void period and our agents advised us to do it.

The risk of a void period is lower at the moment because there are waiting lists for PRS properties caused by failure of government policy that has created a shortage of housing.

The government is making landlords into tax collectors. That isn’t necessarily bad for the ‘rental market’ if you measure the success of the market by the growth of the market in £s. The more the government drives up rents, the bigger the market.

But the majority of landlords don’t necessarily benefit from it much despite the misinformation from government because it just increases a tax bill that is paid by tenants. What the government is doing is a bit like Donald Trump slapping tariffs on imported goods. He might claim that it will Make America Great Again but the fact is that it means that Americans pay more for their cars and coffee.

Government interference means tenants pay more rent.

Reply to the comment left by Beaver at 06/08/2025 – 17:00
Just for the record, you do get tax relief for interest paid, but it is restricted to 20%.

This means that, if your rent before interest and other income push you into higher rates, but you are highly geared and making a loss after interest, you will be paying tax on the net rental income, even though you are making a loss!

Complete madness. But obviously the Governments know what they are doing.

Reply to the comment left by Ryan Stevens at 07/08/2025 – 13:25
You get some tax relief on interest by getting a tax credit making the effective tax burden 20% but this is withdrawn once your gross income is above £50K. This is at the moment assuming that Rachel from Accounts doesn’t drop the level at which you start paying higher rate tax.

So what this means is that your combined income including pension income plus employed or self-employed income and GROSS rental income is likely to push you into a band where you may be paying 40% tax or higher. Your NET earnings on e.g. £25K of rental income might be as little as £5K per annum though, or less and any margin you make might easily be swallowed up by additional costs imposed on you by government policy.

This could be in order to meeting the latest EPC band for example.

This means that as a small portfolio landlord you are lightly to experience a penalty that larger, incorporated landlords don’t experience, unless you increase your rents sufficiently to cover both your additional costs AND your additional tax. The effect of the government doing this (and we should acknowledge that it was George Osborne and the conservatives who introduced it) is that it distorts the market and drives rents up.

Our worst lettings experience was what lead us to self manage and especially to directly handle maintenance.

Reply to the comment left by Cider Drinker at 04/08/2025 – 08:17
Personally I think Pims.co.uk is better than the NRLA for PRS landlords.

Reply to the comment left by Judith Wordsworth at 09/08/2025 – 07:56
Surely you mean Pimms?

Reply to the comment left by Cider Drinker at 04/08/2025 – 08:17
I would never go back to full management ever again. Sell it no sale if properties. A lot of them have no clue. That should be abolished. There are too many of them and many sprouting up, as it is easy money for survival and being the n a job. They can just rent out 100 to 200 properties for letting and some sales and just about survive.
Same for large chain ones. Each branch having 199 to 200 properties to survive. Anymore and icing on a cake. They have all been advised to play a larger role by offering full management. So now more agents wanting offer full management or nothing or for same fees allow landlords to manage their own properties.
If landlords leave, letting agents will be reduced as they close down.

Reply to the comment left by Beaver at 04/08/2025 – 17:02
I think in the Agent’s interest the max price might not be too appetising. They want to rent quickly, the high rent will keep the property on the market for longer.
Just a thought and, as always, depends on the circumstances.

Reply to the comment left by Beaver at 07/08/2025 – 14:05
No it isn’t, you get 20% tax credit whatever your taxable income. However, net rental income before interest could take you into the 45% band, but you only get 20% interest credit.

So, if your position is, for example:

Net rental income before interest £100000
Interest £120000
Loss £(20000)

and you have other income eg salary you could pay tax on net rental income at 45% i.e. £100000 x 45% = £45000, less interest credit £120000 x 20% = £24000, so net tax payable of £45000-£24000=£21000, even though you made a loss after interest of £20000!