Why can’t the media understand how inflation affects rent rises?

Why can’t the media understand how inflation affects rent rises?

0:04 AM, 27th March 2024, About 3 months ago 27

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Hello, I am a big fan of the Times and Financial Times as these newspapers are usually reliable and have high quality journalists. However, I have written to the Times to explain why I am upset about one journalist and her story on why renting in the UK is so expensive.

She – and most other journalists – does not mention or even seem to understand inflation. Inflation has been far higher than rent increases – meaning that in real terms, landlords have gone backwards. Vilifying landlords whilst not mentioning their rent increases are less than inflation is telling not even half the story.

The media needs to explain what inflation is – it is money becoming worth less. The costs of landlords are going up – not just interest costs on mortgages but also home insurance, maintenance costs, particularly labour and scarcity, endless certificates and regulations and licensing schemes designed to enrich councils, the list is endless.

Apart from that – even though of course that is seen as sensitive – the media must address the supply of homes issue. Even if planning permissions were granted more readily, there is no affordable labour or enough hands to build the homes we all need. That also means addressing the sensitive issue of net migration running at 700,000 people per annum – a city the size of Liverpool or Southampton coming into the UK every year.

This is a crisis in the making – and one that won’t be solved by beating out the 96% of all landlords who only have one property. Replacing these with big corporate landlords like Blackrock – I can assure you being an economist of decades – they will be wanting far higher rent from tenants than small private landlords – who work hard to maintain themselves, will be very responsive to tenants’ needs, who are – as statistics prove – very likely to not increase rent for good, longstanding tenants.

I don’t see big corporate landlords doing any of that – they will just, especially if they are American – be very, very tough on tenants and won’t be bullied into submitting to governments who are step by step expropriating and exsanguinating small landlords on a decades-long tightening of every single screw they can think of for the landlord who is on a rack and cannot move abroad to avoid more pain. And who is locked in with punitively and discriminatory landlord-only high taxes, penalty stamp duty rates, penalty high capital gains tax rate.

But let me not digress. The media is discriminating and sensation seeking, and all journalists need to be educated on inflation and real rent increases versus nominal increases; and publish honest, not misleading, inflation-corrected figures.

Thank you,

R


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Comments

TheBiggerPicture

10:02 AM, 27th March 2024, About 3 months ago

I was disappointed upon coming to the U.K to find that the Financial Times was left leaning.

In general journalists are left leaning, and if they are only given a short time to produce articles then their biases will appear in the gaps.

If you want a more balanced approach to your news, try CItyAM (Free but not much content) or the Telegraph.

Property One

10:10 AM, 27th March 2024, About 3 months ago

Well said.

It seems the media ignores costs like inflation, mortgage, epc updates, repairs, agency fees, insurance - all going up.

I am on less than 3% net profit (less tax) and that is with my own equity in the properties! This means that I am subsidising the rent.

I can only see costs and rents go up.

Fed Up Landlord

10:14 AM, 27th March 2024, About 3 months ago

Think where these journalists are both physically and metaphorically coming from:

1. University- the "petri- dish" of the left wing with it's Marxist anti landlord policies which has infiltrated not just our educational institutions but all others. The police, judiciary, civil service, local authorities etc. The embryonic starting point of political and social influence for many indoctrinated recruits.

2. Envy. A lot of journalists are thirty somethings who think baby boomer landlords had it easy and have gobbled up all the property leaving them to rent. When not building enough houses and uncontrolled immigration combined is the real cause. Not landlords.

3. Selling sensationalism. A story doesn't sell unless it demonises one of it's angles. Like landlords.

Add all these together and you will never get an objective view from any newspaper with a political slant of any nature. Particularly one with a left wing bias. Why let the facts get in the way of an opportunity to beat up landlords?

Beaver

10:17 AM, 27th March 2024, About 3 months ago

On "Replacing these with big corporate landlords.....will be wanting far higher rent from tenants than small private landlords...who.....are – as statistics prove – very likely to not increase rent for good, longstanding tenants."

I agree with this. Most small landlords are doing something else and cannot offset the cost of a single BTL against other properties so void periods are a problem for them. And so they tend to keep rents slightly lower to encourage long term tenancies.

Large incorporated landlords have lawyers, know the rules on eviction, can offset the cost of refurbishment against other lets, know how to maximise pricing and can offset the cost of churn against the rest of their portfolio. Small landlords provide competition and choice in the marketplace.

Driving small landlords out drives rents up.

Andy

10:18 AM, 27th March 2024, About 3 months ago

Preaching to the converted although I don't rate either of those papers, but each to their own. Most people don't understand inflation generally and journos have an agenda to push anyway - another reason why people are migrating away from mainstream media with its biases.

NewYorkie

10:21 AM, 27th March 2024, About 3 months ago

Reply to the comment left by Fed Up Landlord at 27/03/2024 - 10:14
You didn't mention the biggest contributor to landlord vilification... Shelter. Given they don't actually house any homeless people, their raison d'être is taxpayer-funded lobbying.

Beaver

10:32 AM, 27th March 2024, About 3 months ago

I hadn't heard that Blackrock were going to invest in BTL. But it wouldn't surprise me given that housing is regarded as a solid long term investment:

https://www.theguardian.com/money/2024/mar/26/little-planning-for-looming-retirement-crisis-blackrock-chief-warns

But if that's true then companies like Blackrock, the world's largest asset manager, are going to be focused on return on total assets or return on capital employed. They may tick all the compliance boxes but they will drive rents up.

So yes, any tenants out there sympathising with Shelter and thinking that policies bashing small landlords (the majority) are going to help them....think again...careful what you vote for. Small landlords provide competition.

Martin Redif

11:50 AM, 27th March 2024, About 3 months ago

Let's not forget the cost of loans has tripled in 18 months, and these loans are no longer offset against tax. We also now paying more tax. I run an HMO and my energy and my loan costs are through the roof, but also cleaning and maintenance etc, the cost of living hits the landlord hard, and we cannot recover the full increases, I have asked my tenants to contribute half, the remainder is coming from my pocket.

JB

12:19 PM, 27th March 2024, About 3 months ago

It seems to me that the drive to get rid of the PRS is a bit like getting rid of cash

Bernard Mealing

12:49 PM, 27th March 2024, About 3 months ago

I can only assume that the article was written by a renter.

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