OK, that's BTL. But what about my circumstance? If it cost me money then I'd just keep it empty which would further the issue and consider it a retirement fund or an asset to sell when I needed the money.
House prices rose 7.3% this year, average now almost £250k
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OK, that's BTL. But what about my circumstance? If it cost me money then I'd just keep it empty which would further the issue and consider it a retirement fund or an asset to sell when I needed the money.
Here’s an example from a online calculator.
Last year on £10k of rental income. Profit £1100. £1600 tax
This year on same numbers. £864 profit, £1764 tax.
Next year. £626 profit. £2k tax
Look back at 2016-17 £1577 profit. £1k tax
it’s significant less. So what will landlords do to cover this reduction ? It’s also a pretty crap return vs investment/hassle
Last year on £10k of rental income. Profit £1100. £1600 tax
This year on same numbers. £864 profit, £1764 tax.
Next year. £626 profit. £2k tax
Look back at 2016-17 £1577 profit. £1k tax
it’s significant less. So what will landlords do to cover this reduction ? It’s also a pretty crap return vs investment/hassle
Ok so last year i had 2 months empty due to covid and a few bills.
Using those numbers fr 2016/17. £682 tax, £1077 profit. If i plug the same numbers into 20/21 (due next Jan) I make £12, yes twelve pounds, profit and £1692 goes to the goverment.
The government have done what many have wished already... But the profit has simply moved from the BTL owner into the governments pocket. Doesnt really solve the issue does it?
Using those numbers fr 2016/17. £682 tax, £1077 profit. If i plug the same numbers into 20/21 (due next Jan) I make £12, yes twelve pounds, profit and £1692 goes to the goverment.
The government have done what many have wished already... But the profit has simply moved from the BTL owner into the governments pocket. Doesnt really solve the issue does it?
Soldato
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Yep seem to be having the same problem myself over the last few years , change in law made it cheaper for tenants to be vetted as well passing the buck onto Landlords - stupid really as it increased rents .
FYI - last Tennant I found was advertised on FB - I asked for a letter from his employers confirming income , 3 months bank statements and used one of the Tennant checking services - Cost me £12.50 . 6 months in all is well so might do it again . Didn’t cost me a months rent .
https://www.mudhut.com/patron/reference/landlord
Guys I keep saying it , landlords are not the problem .
Demand - deflated wages and a sense of entitlement is .
Most landlords I have dealt with over the years when renting have generally been ok. It's the letting agents that have been complete ****. Whenever I've been able to deal with the landlord direct, they have generally been reasonable. The agents just want to make money and so report things to landlords in a bias way often, especially when it comes to end of tenancy condition reports trying to take money out of your deposit. I can't really understand that one as surely it mostly all goes back to the landlord anyway?
We've had letting agents go all the way to nearly court and then back down as they play the game over a cooker knob. Yes really. We've had them try to put rent up without telling the landlord to pocket extra. We've had the classic and seemingly standard practise of trying to make between £100-200 annually by "renewing our annual contract" which involves clicking the print button having changed the date to the new year to generate a new piece of A4 white paper for us both. One set of agents tried to argue that not signing one of these "mandatory annual renewals" meant we were giving up the property with immediate effect, rather than fall onto rolling monthly. A quick chat with the landlord rectified it. I don't mean to stereotype all of them, but in my personal experience I have had some form of issue with 100% of letting agents throughout my rentals over 20 years.
We've had letting agents go all the way to nearly court and then back down as they play the game over a cooker knob. Yes really. We've had them try to put rent up without telling the landlord to pocket extra. We've had the classic and seemingly standard practise of trying to make between £100-200 annually by "renewing our annual contract" which involves clicking the print button having changed the date to the new year to generate a new piece of A4 white paper for us both. One set of agents tried to argue that not signing one of these "mandatory annual renewals" meant we were giving up the property with immediate effect, rather than fall onto rolling monthly. A quick chat with the landlord rectified it. I don't mean to stereotype all of them, but in my personal experience I have had some form of issue with 100% of letting agents throughout my rentals over 20 years.
The fact that there is profit should be an added bonus.
The tenants are paying the mortgage which in time will also equate to an asset that can be liquidated and reap the rewards from.
So landlords wanting a quick buck buying all of the affordable houses doesn't drive demand?
House prices are so high they make it almost impossible to save for the outrageous deposits needed to buy a house and driving people to rent, thus creating a demand for rental?
Deflated wages wouldn't be a thing is house prices were in check. Instead of £1000 a month on rent it could be £700 with a house you own at the end of it.
Sense of entitlement goes both ways tho, the entitlement of the landlords who want to create this mess for personal gain.
The tenants are paying the mortgage which in time will also equate to an asset that can be liquidated and reap the rewards from.
So landlords wanting a quick buck buying all of the affordable houses doesn't drive demand?
House prices are so high they make it almost impossible to save for the outrageous deposits needed to buy a house and driving people to rent, thus creating a demand for rental?
Deflated wages wouldn't be a thing is house prices were in check. Instead of £1000 a month on rent it could be £700 with a house you own at the end of it.
Sense of entitlement goes both ways tho, the entitlement of the landlords who want to create this mess for personal gain.
£12 profit does not pay a mortage off. No landlord is paying off their mortage with rent, even now its not tax efficient to reduce the only taxable spend, mortgage interest.
Im an accidental landlord to be fair but maybe the government have their way and i sell my flat to someone who wants to also rent it out? No one can afford to buy it to live in apparently but at least i wont get the BTL landlord hate right?
Even with you paying interest only you are relying on house prices going up to make it worthwhile, if they do go up then the government get their cut again.
Im an accidental landlord to be fair but maybe the government have their way and i sell my flat to someone who wants to also rent it out? No one can afford to buy it to live in apparently but at least i wont get the BTL landlord hate right?
Even with you paying interest only you are relying on house prices going up to make it worthwhile, if they do go up then the government get their cut again.
Tax empty properties at 10% of the value per year.
If it's crap they can sell the property. It's funny how people feel they're entitled to make a profit from their lands.
Landlords class often mocks other people for acting entitled because they want housing that doesn't cost 65% of their income, but in reality they're ones acting like entitled babies. It's all projection.
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Personally for us its about the long term investment rather than yearly profit, eventually we will have had renters pay a significant amount of the house value. Though we already own the second house outright......the principle is the same.
This is ultimately the point for most BTL owners i'd have thought - riding the wave of the ever inflating housing market (that most I imagine are fairly confident the government will not allow to completely collapse, so risk is minimal) so that whether you've been covering a repayment or interest only mortgage with the rental income, the £20,000 you had lying around for a deposit is now (years later) worth either a whole property or at the very least a much bigger chunk of equity once the interest only mortgage has been paid off.
Monthly/yearly profit is nothing more than an incidental bonus if you can manage to fill a rent thats charging much higher than the mortgage you're covering.
You put down £60k so let's say for arguments sake the property could have been around £200-240k when you bought it?
Says the guy who put down £60k for a glorified loan, makes a profit off it every month from his tenants, and then gets circa £240k capital at the end of his mortgage term. lol the deflection is real bro
Do you call your tenants entitled because they're unable to save a £60k deposit themselves because you and your ilk have pushed up rents in their local area?Agreed. See above.
Expecting landlords to make a loss each month is a bit of a stretch in my opinion. I think what some landlords would say is the government has made it way less profitable in recent years but instead of passing that onto the renter, they've pocketed the taxes.
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but by them playing on that team, they are continuing the game. Its not a game if there is only 1 team.It's a game ultimately. Don't hate the players...hate the game. I've paid off £150,000 - £200,000 off of previous landlords mortgages over the years.
It's a game ultimately. Don't hate the players...hate the game. I've paid off £150,000 - £200,000 off of previous landlords mortgages over the years.
Hate the game and those who play it to their advantage.
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If being a landlord is so profitable and easy. Do it yourself.
I think that's fair, but would need to have some controls. For example, in between lets, when doing the property up. These will cause abuse ("I was decorating for 6 months...") but without it, the landlords would just pass the rent on. I'm in my first year of renting, and hopefully it's a long term tenant but I have to accept that he may want to leave at the end of the year and the property may be empty for a month whilst he moves out and I find a new tenant (or even longer than a month). I'd therefore have to pay £833.33 tax each month (property worth £100kish). Surely I'd then just add this onto the rent, costing the tenant even more?
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