The joy of being a landlord

[chrcoluk]

The alternative being "go out of business"

A BTL landlord has a fairly straightforward business model. The money coming in from the renter must exceed the spend of the landlord, and if it doesn't, then there is no sustainable business.

It's not like a manufacturing company where increasing costs could potentially be offset with cheaper materials or methods.

If the cost of business goes up, the end price to the customer goes up directly, or the business is no longer profitable and ceases to be viable.

What alternative do you see?

Sadly there is an alternative that is being played out, rents can go up with no relation to cost, there is the "charge what the market will tolerate".

I agree with your fundamental point though, anyone imposing costs on a landlord is very naive if they think the LL will take the hit personally.

The government also a few hours ago confirmed to the BBC they wont be tracking rent increases in 2025 for housing benefits, to me thats a big fail, they were claiming to be the party on the side of tenants, the previous government raised it last year, then the current government freezes it. Also a bit sneaky if that wasnt read out in the budget, as its in its own article on the BBC website, with the BBC saying they were told by the government.

 

[Mr Badger]

Sadly there is an alternative that is being played out, rents can go up with no relation to cost, there is the "charge what the market will tolerate".

Indeed. I have witnessed it happen.

I agree with your fundamental point though, anyone imposing costs on a landlord is very naive if they think the LL will take the hit personally.

It seems a little unreasonable if the landlord must end up with a free house as the only viable business model requires passing all costs onto the tenant. I have known plenty of BTL landlord's, some with just a flat or two and some with numerous houses. Generally they seem to make enough to pay the mortgage off early and to my knowledge not one of them has ever then dropped the rent. It's usually a case of charging what the market will stand.

One retired guy has been getting out of the game and (that I know of) has sold off 3 of his rental properties over the last couple of years for prices ranging from £400K to £700K. Doubtless he has some tax to pay, but on the face of it he has made something like £1.5 Million from the sales, on top of the profits he made whilst renting out the houses.