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One of the biggest challenges that the Tenant Tax campaigners are facing is lack of data on landlord behaviour.The government does not know itself how many landlords there are in the U.K.Most people estimate there to be in the region of 2 million.Only a tiny percentage of these landlords are a member of a professional landlord association, which suggests that the vast majority of landlords are living in ignorance of S24.We would like the PT community to assist with some research. Please can you undertake the below poll and share it on Facebook and via social media so that we can get some decent data from it to share with MPs.Without data to prove our claims, we are toothless!
Loading poll...Thank you in advance for your assistance and please do share this via social media and on the Facebook property groups so that we can get some useful data for the campaign against this draconian tax that will force many landlords into financial ruin.SEE ALSO - Landlord hammering to continue in 2017UP NEXT - Academic calls for S24 to be abandoned DON'T MISS - Landlord apathy will be the death of usNOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
You can not dictate rent levels, the rental sector is perhaps one of the most competitive markets in the UK.
We are not a big 6 energy company, we are not a big 6 supermarket, we are literally a sector with more than a million suppliers all of who will not accept voids and will push rents down until their properties are filled.
So none of us can dictate rents we can only accept rents that are set by tenant demand levels. This should be easily clear by the fact that rents around september are stronger than February which shows tenants set local rent prices.
In my area of London rents are down about 10% so no one will be putting rents up, at best they can hope to get the same rents as 18 months ago
Absolutely correct. Supply and Demand 101. This example from Tim Harford's excellent book, The logic of life, explains how a very small change in supply/demand can have a large effect:
Imagine, says Tim, a marriage supermarket. In this supermarket any man and woman who pair up get £100 to split between them. Suppose 20 men and 20 women show up at the supermarket, it's pretty clear that all the men and women will pair up and split the £100 gain about equally, £50:£50. Now imagine that the sex ratio changes to 19 men and 20 women. Surprisingly, a tiny change in the ratio has a big effect on the outcome.
Imagine that 19 men and women have paired up splitting the gains £50:£50, but leaving one woman with neither a spouse nor any gain. Being rational, this unmatched woman is unlikely to accede to being left with nothing and will instead muscle in on an existing pairing offering the man (say) a £60:£40 split. The man being rational will accept but this still leaves one women unpaired and she will now counter-offer £70:£30. And so it goes.
If you follow through on the logic it becomes clear that in the final equilibrium no married (paired) woman can be significantly better off than the unmarried woman (otherwise the unmarried woman would have an incentive to muscle in with a better deal) and so because the unmarried woman gets nothing, the married women can't get much more than nothing. Thus when the sex ratio is 20:20 the split is £50:£50 and when the sex ratio is 19:20 the split is more like to £99:£1 in favor of the men.
The key simplification of the marriage supermarket is that the next best option to marriage (pairing) is worth £0 – thus there is a long way to fall from the equilibrium of £50. If the outside option is worth more then changes in the male/female ratio will have smaller effects.
Applying this to BTL: renting your house for at least something (anything) is worth more than a void, which will force you to sell unless you don't need the money or are happy to wait for / speculate on capital value increasing.
In London, the demand will always outstrip the supply until there are more homes built so, whilst that continues, there will only be upward pressure on rents.
I will be putting rents up everywhere as I have long term tenants who normally would benefit from a rent freeze during their tenancy, at least for the first 3 years.
Wirh the idiocy of Section 24 looming, I can no longer afford to be loyal and supportive to tenants and I will now have to be wringing every penny I can get out of each property.
Interestingly, Section 24 has caused me to become the very sort of landlord I have avoided being since I started, 15 years ago.
it is a deeply flawed policy promoted by shortsighted idiots.
Rents have been falling in London as supply has outstripped demand. For example...
There hasn't exactly been a dip in rents, more an artificial slowing of rises due to manipulation of the market by inept State interference, in this case with the introduction of the clumsy extra 3% Sgamp Duty. State interference in any sphere is always inept - it's all 'they' can do: ineptitude and incompetence
I agree completely Aya - and stated as such in the video below. However, we need data on landlord intentions and there are many landlords who have tenants on below market rents because they are long-term good tenants. These landlords have headroom to raise rents. Other landlords may be forced to raise rents, although whether the market accepts them is another matter.Either way, we need data on landlord intentions and that is the purpose of the poll!
My point exactly.
I will be raising all my long-term tenants' rents as there is room to do so.
Of course, one is limited by the market - something of which the ill-informed hype-merchants like Shelter are ignorant. These poorly informed and unable-to-reason hype-junkies think evil landlords just charge what they like, ignoring the fact that everyone is limited by what renters are prepared to pay and that is determined solely by market forces.
Well my costs will be increasing by £50 due to increased SC
Plus S24 costs
Plus a normal rent increase of £50 pm
However to raise to £150 pcm is currently impossible I believe
So to stand still I have to increase by £100pcm
Next S24 year I would need to increase by another £50 plus a normal increase of £50
So in two years my rents would need the have increased by £250pcm!!!
If S24 wasn't factored into the equation over two years my rents would only need to have increased by £150pcm
If I could force service charges to reduce I could even reduce rent!
If I don't or cannot increase my rents my business starts going backwards!!
No money for a sinking fund etc
All business needs to have sufficient income to renew itself
I can't on effectively reducing income!!
It seems that even if I manage to increase rents then all I will have done is become a glorified tax collector and SC payer!
If IR increased my business becomes unviable
What would be the point in carrying on!
My business would be going backwards, but with the hope I might achieve additional capital growth if I hang on in there though effectively subsidising that possibility
So essentially a gamble I have to keep paying for out of other very limited income!?
A bit pointless!
Where would my 7 tenants go!?
You can't say "whether the markets accept [rent raising] is another matter" - it is the only matter.
We increased rents due to s24 on a SW London property in early 2016, but the tenants moved out in October 2016 and we had to drop the price by £100 pcm to avoid a void period (due to an increase in rental supply and/or drop in demand in the area ).
Increasing rent above market rates is daft, I'm afraid. No one is going to put up with that.
However, where there is room in the price, Landlords will no longer be generous to long-term tenants and that 'room' will disappear.