Tory Budget Squeeze: Why Small Landlords Are Feeling the Pinch

More anti-conservative policies that dismantle the opportunities of the enterprising individual. The abolishment of multi unit stamp duty relief is again squeezing the middle-class and forcing ownership of assets into the hands of those with bottomless pockets. Another manoeuvre to move assets from the average member of the population into the hands of the few. 2030 is only 6 years away, perhaps this is another measure to bring about the “you will own nothing and be happy” policies of the world economic forum.

It became clear to me when I bought my first rental property that just having one or 2 ‘for my pension’ wouldn’t cut the mustard. It was obvious that 1 non paying tenant could scupper any pland I had. I quickly expanded so within 3 years had 13 properties, it was easy then because house prices were risinbg so fast there was plenty of equity to borrow against. I also had a plan B as I had another business which could be called upon to subsidise any shortfalls. All went well till 2008 – but I got through it.

The problem now is there is NO ROOM for the small landlord if you have to borrow money to finance the property, you need to be a CASH buyer to be safe(r).with S21 going (and even before that) you could be losing money from day 1 if you were unlucky.

So the moral is, always have a plan B and go into BTL with your eyes wide open and don’t expect it to be a gravy train.

Reply to the comment left by GlanACC at 14/03/2024 – 19:52
So few landlords understand the risks involved. Even fewer realise than one risk materialising could make other hazards more likely to occur.

If mortgages cost more, house prices fall.

If tenants don’t pay, repairs and maintenance liabilities don’t stop. Non-paying tenants are more likely to damage property.

Then there’s the ‘magic of leverage’ which they believe only happens in one direction.

Reply to the comment left by GlanACC at 14/03/2024 – 19:52I didn’t expect it yo be a “gravey train”… I did think that being in it for long term wood provide an additional income to my (badly performing) pension fund… I’ve been thru bad times… Initial losses on letting, large unexpected external repair bills, anti social neighbours affecting my tenants, voids.. Mortgage see-saw rates.. But I should now be making a comfortable 5%…Except we all know that abolishing Section 21 means rent controls will soon be coming… Tenants will have nothing to lose by appealing to the rent accessment officer even if a rent rise is below inflation. The Rent Office will be overwhelmed.. The government will do what it has done on Housing Benefit and fix rent based purely on property size..

Reply to the comment left by Yellard at 16/03/2024 – 00:37
You are pretty much spot on about the return. My properties are mortgage free and I am making 4.8% but that is before maintenance. My policy now is that as I don’t need the money from the property income I intend to spend it on maintenance and improvements making sure I pay no tax at the end of the year.