Spacedone wrote:Lots and lots of estate agents, property speculators and BTL landlords on Twitter this morning attacking Labour over their newly announced rent policy. Apparently capping rent increases to just the rate of inflation and cutting the tax break for landlords who don't make their properties decent places to live will damage the BTL market and nobody will build houses anymore.
If you hear an annoying whining noise today don't worry, it's just the vested interests.
It's very interesting, this - I think they are coming to realise that Ed is, in fact, a bit of a socialist.....
Having done up a few wrecks myself (and lived happily in them for a while) I'm a bit of an addict of those TV makeover shows.
Homes under the hammer is a case in point - and when they assess the newly-renovated properties for rental, they invariably say that the yield for the owner is £X and that yield is usually in the 10% to 15% area. So if you spend £100,000 on a wreck, do it up, and rent it out, you can expect to "earn" quite a lot of money. A loan or mortgage on such a sum would cost between £400 and £1,000 PCM depending on the term in years and the rate of interest - renting out such a property would yield anything from £500 to megabucks.
Assured shorthold tenancies have very little protection from rent hikes - landlords can, and do, raise the rent when the 6-month term expires. At the moment, there is nothing to stop them hiking them up way beyond the overall rate of inflation.
We have zero inflation now - but private rents have increased by 3.2% in London and an average of 2% in most other places. It doesn't sound like much, but of you're paying £600 PCM your rise will be in the order of £12 a month. If you get LHA, you will have to find the shortfall yourself from whatever income you have. There was an article about this in the G on Friday.
Capping increases is a good idea - it means that landlords can't hike rents up willy-nilly, and if it stops some of the BTL landlords buying up hundreds of properties and renting them out (thus blowing up the property bubble further) it's a good thing.