No tax rises

I think there is a fair bit of envy from many of these comments.
If, as has been suggested, all the small landlords with 1 or 2 properties were to sell up where would their tenants go? They wouldn't be eligible for council/social housing so basically you would be making them homeless and who do you suppose would buy these properties? Not these tenants who might not want to buy or might be unable to afford the deposit required.
We owned an ex-council flat in central London which had a lovely gentleman tenant for many years. We wanted to sell but we were very worried (as was he) about making him homeless. There would have been no way, as a single man, he would have been housed by the council. I spent weeks looking at alternatives for him and finally found him a lovely flat in sheltered accommodation in an outer borough, but it wasn't easy.
Many private landlords help the local councils with their housing, suggestions that all landlords be made to sell is very shortsighted

If anyone wants to make their blood boil even more on this hot day, here are some 2024 stats on empty homes from Action on Empty Homes - almost a million.

On average, one in every 26 properties is standing empty.

One story that sticks in my minds is from 2017, when Kensington council was struggling to find accommodation for survivors of the Grenfell Tower fire. Meantime 1 in every 8 properties in the borough stood empty - almost 11,000 at the last count.

static1.squarespace.com/static/6553693f7d629a133b6a4ece/t/673e128bbaec355e0f66be58/1732121228754/TotalVacancy2024AtoZ.pdf

www.actiononemptyhomes.org/

Well done to your son growstuff👏

Thanks for the stats Maizie. I knew the gist of them, but I didn't have the details to hand. My son wrote his MSc dissertation about residential property ownership, so knows how it works. He's also a rebel, which is why he now works for a not-for-profit housing association - despite his father's business.

I agree LizzieDrip. It's part of the reason my ex-husband is my ex. He's lazy but likes the finer things in life and that was reflected in our relationship as well as his choice about generating an income. Not only that, but he's just inherited half of his mother's property portfolio (and the b wouldn't even pay me maintenance when we divorced - gggrrr! - but that's personal to me).

David49

“The Duke of Westminster is the UK's richest landlord - I hardly think he fixes leaky taps himself.”

I don’t think he’s going to be looking for a buy to let mortgage either.

I don't understand the relevance of your last sentence.

However - think about it! It would make a huge difference to the country's economy if the Duke of Westminster sold his property portfolio and invested it in more productive businesses (he won't, of course, because property generates so much money and there's almost no risk).

It offends me that so many people consider domestic property as a vehicle for personal gain while others struggle to find anywhere affordable to live. It needs to be taxed more highly as a deterrent. It might deter the hobbyists and the Rachmanites who want the personal gain but don’t want to provide a decent service to tenants paying exhorbitant rents. I'd introduce rent control at the same time

I totally agree Silverbrooks.

I’d go even further.

In my view, in a country where many people have nowhere to live, no-one should be allowed to own more than one property.

I find the terms ‘property portfolio’ and ‘the property is my pension pot’ offensive.

If you don’t need the property to live in yourself, sell it, so that someone else may have the chance to own their own home - a property is a home not a bluddy pension pot. No individual should be allowed to own a ‘property portfolio’.

I believe second / third / fourth etc home ownership should be outlawed. When someone purchases a house, the contract should state they must live in it.

And as for ‘but to let mortgages’ - despicable!

If an urgent repair needs to be done, why would getting it done to a B2L be any different to getting it done to one’s own home? I have home insurance which gives me 24 hour emergency cover on certain things. I assume the same can be obtained for B2L.

If people have any sense they also have a contact list of tradespeople they know to be reliable who will come out and fix non-urgent things within a reasonable time. In fact, it is my decorator, who I have known for 20 years, who has proved me with names of carpenters, electricians, plumbers etc when people I have employed in the past have retired or moved away.

You won’t get the same return on simple cash investments and, unless very, very lucky, you won’t see the same return on stocks and shares for many years. This was the argument many people were putting forward a few months ago, especially older people, when Emma Reynolds was talking about potential moves to reduce cash ISA savings limits to encourage people to invest in the stock market. No guaranteed return on S&S and a long wait for growth.

Even with agents fees at the upper end, B2L on a property owned outright with average maintenance costs will still net short term more than a cash investment on which there is no capital growth and why so many people are doing this.

Why do people who form personal relationships and decide to co-habit, keep one of the two properties they individually own and rent it out? I know many people who do this. Why don’t they sell the one they no longer need? Why do people who inherit properties with no sitting tenant, so no contractual obligation, keep them and rent them out? Ditto. Why do people deliberately B2L?

Why has Homes Under the Hammer been on our screens for so many years and why are the questions at the end all about rental income and profit? It's a boring format. Buy a house. Tart it up. Rent it or sell it on. Not all auction properties are wrecks. They all do it as they know they make will make more money more quickly than they could from any other investment and for very little effort in many cases. If it was such a bother they wouldn’t bother.

I have no personal experience of this and have no wish to, only what I hear from the many people I know who don’t find owning rentals onerous at all. They see it as easy money.

It offends me that so many people consider domestic property as a vehicle for personal gain while others struggle to find anywhere affordable to live. It needs to be taxed more highly as a deterrent. It might deter the hobbyists and the Rachmanites who want the personal gain but don’t want to provide a decent service to tenants paying exhorbitant rents. I'd introduce rent control at the same time.

“The Duke of Westminster is the UK's richest landlord - I hardly think he fixes leaky taps himself.”

I don’t think he’s going to be looking for a buy to let mortgage either.

There is clearly some disagreement over the profitability of being a landlord. I don't know if this is helpful. Taken from the government's English private landlords survey 2024.(Note 'English', figures might be different in Scotland, Wales and NI)

I feel the figures support both contentions.

45% of landlords owned one rental property, representing 21% of tenancies.

A further 38% owned between two and four rental properties, representing 30% of tenancies.

17% of landlords owned five or more properties each, representing 49% of tenancies.

So, although it appears that most English private landlords have relatively few properties, it is noticeable that the 17% who own 5 or more properties represent almost as many tenancies as the 83% who own 5 or fewer properties. There are some big timers who have considerable influence on the market. And, presumably, hold onto their properties as they give a good return on their 'investment'. I can't see them as being landlords just augmenting their pensions...

www.gov.uk/government/statistics/english-private-landlord-survey-2024-main-report/english-private-landlord-survey-2024-main-report

David49

I’m sure their are professionals who make money but most landlords aren’t, it’s just like pubs and restaurants some do well a great many do not because they aren’t or have the wrong property in the wrong area.

Oh yes, they are professionals. Some landlords have a portfolio with hundreds of properties. Some of the biggest estates are worth billions.

The Duke of Westminster is the UK's richest landlord - I hardly think he fixes leaky taps himself.

A handful of landlords own the majority of rental properties. Some, like my ex-husband, own between 10 and 20.

Incidentally, your friend should consider selling one of the properties as soon as a tenant vacates. He could then employ a contractor to use the proceeds to refurb the other properties and pay an agent to manage them on a day-to-day basis. If he wants to get rid of the properties, he needs to wait until tenants vacate and sell them off gradually.

I’m sure their are professionals who make money but most landlords aren’t, it’s just like pubs and restaurants some do well a great many do not because they aren’t or have the wrong property in the wrong area.

I also have experience from the other side because I'm a tenant and have lived in the same house for over 11 years. My landlord bought the house for cash and isn't that interested in making a huge profit. He employs an agent who does all the hard work and he collects the rent every month (minus agent's commission, fees for checks, insurance, taxes, etc.) He still has a surplus. There is nowhere he could have invested his money to produce the same income. If he were really making a loss, he could have put the rent up, but he hasn't. The rent has only increased £25 in 11 years and the house is well-maintained. He recently had a water softener installed, even though I didn't ask for it - just because he had one installed himself and thought I might like one too. Not only has he had rental income, but the property has at least doubled in value during the time I've been a tenant. He's not interested in selling, but wants to leave his daughter a nice legacy.

MOnica If a landlord can't make a decent profit from renting, I'm afraid he/she isn't doing things properly. I can see with my own eyes how well my ex-husband has done in the last 25 years because he's a professional.

David49

Many private rental owners are effectively retired and I& they just have a couple of properties taxation isn’t an issue it’s effectively their pension.

A friend has around 10 city rentals that he inherited, they are a real burden, continually in need of work the sort you see on the TV refurbishment shows. He’s thinking of selling the lot it’s not viable to pay builders to refurbish then properly, if he sells them and pays the taxes and other expenses he won’t end up with much more than £500k. He’s hardly going to be a pauper of course but its not a great prospect

You really don't know much about the market. I'm not going to give full details, but I really do have personal experience. My ex-husband gave up doing paid work in his early 40s to become a full-time landlord. Not only that, but my son did his MSc in housing and has worked in housing since he graduated, so I do know how it works.

My ex-husband is a qualified building surveyor, so was able to buy properties he knew would make him the most money, but apart from the original purchases, he hardly lifted a finger to do anything about the properties and has spent most of the last 25 years swanning around Europe. He employs maintenance contractors, an accountant and a solicitor to do the work - and still makes a tidy profit. There are many other people who operate in the same way and are far from retirement.

The escape route from manifesto promises is 'Events, dear boy, events'.

Many private rental owners are effectively retired and I& they just have a couple of properties taxation isn’t an issue it’s effectively their pension.

A friend has around 10 city rentals that he inherited, they are a real burden, continually in need of work the sort you see on the TV refurbishment shows. He’s thinking of selling the lot it’s not viable to pay builders to refurbish then properly, if he sells them and pays the taxes and other expenses he won’t end up with much more than £500k. He’s hardly going to be a pauper of course but its not a great prospect

There is considerably more legislation governing buy to let properties than there is for owner occupied properties.

Quite often as house owners we will live with a minor problem because we can't be bothered to do anything and it isn't that much of a nuisance. With a tenant they will contact you and expect repairs to be done quickly. Of course you can always be the kind of landlord who neglects their properties and ignores tenants complaints. If owning and renting out property was such a guaranteed large money maker, even more people would do it.

Then you must consider the return he could have got investing the money in other assets that require no effort at all, like stocks and shares, which, with a distributed portfolio consistently outperforms inflation and fixed rate investments - and all without effort,

Of course there will always be those who get lucky and make enormous returns like your builder friend, but the exception does not provide the rule.

Surely that depends on the condition of the property, the tenants and how it’s managed.

The person I described had four B2L houses already with solid long-term tenants. He regards it as doddle if you choose the property and tenants carefully, which is precisely why he’s buying two more.

He says it’s a darn sight easier than working for a living and will yield twice the income compared to working. Six houses bought outright and rented at between £1,200 and £1,500 a month. Where else would one get that ROI in the short term and virtually guarantee capital gains?

Really, how much time does it take to manage own’s home? Very little in my case. I don’t see why a BtL should be any different.

Politically and socially, I don’t agree with what he’s doing but he’s far from alone in it if there are now 5 million privately rented homes in the UK

M0nica

Silverbrooks There is considerably more to owning a buy to let than collecting rent and paying tax. I only ever owned one accidentla buy to let and I had a steady stream of expenses from insurance to regular care and maintenance. I certainly didn't just bank and spend the rent.

Sorry MOnica but there is a considerable amount of money to be made from Buy to Lets (maybe not for amateurs who don't know what to expect). I really have had personal experience of it via my ex-husband.

Silverbrooks There is considerably more to owning a buy to let than collecting rent and paying tax. I only ever owned one accidentla buy to let and I had a steady stream of expenses from insurance to regular care and maintenance. I certainly didn't just bank and spend the rent.

Silverbrooks If your decorator has any sense/a good financial adviser, he could squirrel away £20,000 a year of the rent into an ISA and/or buy himself a pension. He's probably paying 40% tax on the rental income, so he could contribute to a pension fund before paying tax and the government will effectively give him a 40% subsidy on his pension contributions. I'm sure there are all sorts of other tricks. My ex is in the process of selling his properties. They're all mortgage-free now. They've all increased in value many times, so paying CGT on a property which originally cost £100k but is now worth £350k isn't a great hardship - especially as he's had rental income for 25 years.

Individual renters are on a hiding to nothing, regulation makes it more difficult, many will already paying top rate tax and then CGT when sold …

Hardly. My decorator age 50, is now in the process of buying his 5th and 6th B2L. With six, he expects to generate an income of almost £100,000 a year, more than £72,000 net of income tax without getting out of bed in the morning.

That’s double what he earns now getting out of bed in the morning and working five days earning a £1,000 a week. Once he has the 5th and 6th, he will retire - which is a shame for his customers as he’s very good at his job.

All done through tax free inheritance from family members.

If and when he sells at a gain, he will only pay CGT at 24% so he’ll keep 76%. That’s one tax the government should increase to aling with income tax.

It’s easy money and the main reason young FTB are stuck renting and unable to buy.

It needs to stop. Homes are for living in nor for landlords to profit from.

There has always been a need for a private market to supplement local authority provision but since that was decimated by Thatcher, more and more people have jumped on the bandwagon of B2L and make easy money at the expense of people desperate for a home.

It’s a disgrace that over 40% of local authority housing is now owned by private landlords charging three of four times social rent and often paid through housing benefit. It’s a racket exploited by criminal gangs to launder drug and other illegally acquired money.

That 5 million homes are now B2L and another 1 millon homes are standing empty most or all of the time in the UK (source Action On EmptyHomes) it’s no wonder so many people are struggling.

David49

“David The information I've posted is about households, not business renters. The number of private renting households has doubled in approximately 20 years.”

The ONS record the increase in England from 2008 - 2024 from around 4m homes to around 5m homes with low interest rates to buy that’s hardly surprising because UK shares did not prove to be a great investment in that period.

That's what I've been saying!

Investing in property and becoming a landlord is a much safer investment and considerably less work than using an asset to set up a small business. Historically, property has been a good investment for decades (despite the occasional crashes) and much safer than the volatile stock market.

For an individual it makes sense to invest in property, but on a macro-economic level, it's detrimental to the national economy for a number of reasons.

“David The information I've posted is about households, not business renters. The number of private renting households has doubled in approximately 20 years.”

The ONS record the increase in England from 2008 - 2024 from around 4m homes to around 5m homes with low interest rates to buy that’s hardly surprising because UK shares did not prove to be a great investment in that period.