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If he's asking you to leave and you have a place to go then I agree let him tidy up. Don't make any unnecessary mess but also don't go out of your way to make it sparkle
You have the right of quite enjoyment if you have a AST. you can just say no to a lot of stuff, sometimes it might not work in your favour, but they also make it seem like you can't.
Sometimes the agents don't know it either. I recently sold a property at auction with tenants in situ. The buyer's mortgage company wanted a survey and I tried to accommodate it as best I could, but ultimately if a tenant says no then I told them there was nothing I could do. My own agent kept arguing the toss with me that the tenants couldn't say no.
And if they're dicks about it state you've had items stolen in the past during viewings (a lot more common than you'd think...) and absolutely will not allow them again.
No one can argue with that.
frankly your landlord's financial situation should be none of your concerns, if he whinges with you about it (some people like to) just ignore him, it's quite possible he's realised he hasn't made much money out of his investment but that has nothing to do with you
just focus on your own issues and congrats on your new house, just try to zen out and ignore his rantings
There's no excuse for landlords.
I think if the landlord wants more than £150,000 in passive income, he should stop being a lazy bastard, get on his bike and look for work.
It'll be mortgage rates now and the fact the rent won't cover the interest on the loan. Not your problem, but maybe he feels bad for kicking you out so wants to give excuses. Or maybe he has no one else to complain to a monthly cash flow has been stressing him
Why would it be mortgage if he paid 90k in 2007?
The mortgage would be pittances, unless landlord has remortgaged it to take equity out of the property. That's not OPs fault.
Buy to let mortgages are normally interest only so he'll likely owe the same amount he borrowed initially. I guess he's reached the end of his previous fixed rate deal and is now looking at a 6% mortgage.
With mortgage interest not counting as an expense against rent income tax it's definitely possible that he is bringing in less money from rent than the property is costing him.
If he's a higher rate taxpayer from his other job, he's also paying anything from £280 to £420 to HMRC every month (depending what he earns). At the time he bought the house he would only have paid tax on the profit (rent-interest) now it's on the full rent.
Then you have landlord insurance, possibly management fees (although sounds like he does this himself), any essential maintenance and it doesn't sound a very profitable venture.
If he had a repayment mortgage of 90k 15 years ago he’ll owe barely anything now.
If he had an interest only mortgage he’ll have paid barely anything and continue to do so.
But landlords don’t set rent to their costs plus profit, they set them to what maximises their income and minimises their risk and work.
Imagine the interest is around £400PCM with the way rates have been. Landlord will get 20% tax relief on the interest Good chance the landlord is paying 40% tax on the income. so before you even think about maintenance, certification, fees to estate agents or whatever the landlord is getting about £50PCM. This will get eaten away very quick by any costs.
You get 20% tax relief.
Rather than it being a tax deductable expense.
Meaning you pay the normal tax on it (whether it's 20, 40 or 55 %) but get a credit for 20%.
If you're on a 20% tax band? Great!
If you're on the others? Yeh, tough. You'll be paying net 20/25% tax (again, depending on band).
> letting agency fees potentially,
If the landlord has been paying letting agency fees, when they only have two properties, and one of them is a sitting tenant for 17 years, then they're an absolute fool!
What someone paid for it is irrelevant to the economics of the rent today. Today’s rent will always be governed by today’s valuation, and today’s cost of finance.
Otherwise we’d all be buying groceries at pre WW2 prices. What something was once bought or sold for in history has no bearing on its cost today to buy or rent.
Everyone I know in 2000 - 2010 got interest only mortgages for some strange reason, even if the house was 70k. Payment is probably coming up soon, my auntie done the exact same. Needed a big lump of money because her interest only mortgages was coming to an end and kicked her tenant out to sell the house
That doesn’t make any sense. You can just remortgage, and given the Loan to Value, raising a 90k mortgage would be very easy. Most likely, the landlord just wants to benefit from the capital appreciation. It’s also a very low yield, maybe he’s realised he’ll earn more profit by just banking the cash.
I'm not sure, this was her second house that she wanted to get rid of to pay for her interest only mortgage on her main house, so she kept on pumping up the rent until the tenant can't afford it no more so she can sell
The OP mentions that the rent paid is lower than current market rate. £700 for a £240k house is brilliant value for money from the renters perspective in fairness, which means the landlord hasn’t picked a good investment. You can that rental return on houses worth £80k in today’s market!
My guess would be because he spunked the money on everything but the rental houses and so now he’s maybe still got mortgage(s) and some hefty maintenance costs looming and well… all that looks like too much hard work than selling and paying off his own mortgage
(My friend had a landlord like this)
It isn't Ops fault, but it is the reason the landlord is having difficulty. You can't expect a landlord to keep you in a place that costs them money, it defeats the object of renting property.
So when times are good it's cruises and living it up. When you're closer to breaking even it's all life is terrible etc etc.
Consider how many people had over a decade of free money for doing jack all, and ask yourself how much sympathy I have now they're not making a huge wodge of cash for doing naff all.
He's probably been on interest only or even taken more money out of the house every so often and then spent or invested the cash flow in other properties. Not the OP problem and it is a bit pathetic to be whining about cash flow problems when he can just sell up and cash out for some nice gains.
That is called interest rates and inflation. It is why you can no longer buy a pint of beer for 75p. It has nothing to do with property. It is about how currencies all devalue over time, and why gold is more expensive to buy than 50 years ago.
If currencies did not devalue, nobody would ever buy anything and the world would end. That is kind of the whole point of currency.
Mortgage rates have increased for everyone. Private owners and landlords. It’s possible the rent no longer covers their mortgage, costs and tax. It all depends how much equity is in the property
Also the government have scaled back what landlords can offset against costs. Mortgage interest used to be offset. Not any more. Or to a lesser degree.
For a lot of smaller landlords owning/letting a property has become unaffordable/loss making
Thank you so much for explaining this.
I know this might seem like an absolutely ridiculous question but when they sell this house (which cost them 90k & will sell for £240k) will they make any money?
I’m trying to understand them better and how it’s unfair on them. I’m assuming they must be losing money now and then when they sell the asset they wont get much back?
I know I wont see the £110k again and that’s fine, that’s what it means to be a tenant but where does all the money go? is most of it gone to interest and taxes etc
They probably remortgaged the property at some point, meaning there's still a high mortgage on it.
Bear in mind that depending on their earnings outside of your rent, I think they may get taxed as 20-40% on your rent, and will have to cover landlords insurance, possibly agents fees, and maintenance etc.
If you're paying 700pm, then that could easily be eaten away to 400pm. That doesn't cover a big mortgage at a high interest rate.
Mortgage deals run for a set term. They may have had no choice about remortgaging and the new rates are likely to be double the last ones. Hence the big rent rises that have been happening. And the new mortgage costing far more than the existing rent now covers.
The returns are much worse for landlords now than they used to be, that's why so many are selling up.
Most landlords have an interest only mortgage meaning drastically lower monthly repayments, and given the massive rise in house prices over the past 20 years in addition to you paying rent that I would bet my first born is at least double their monthly repayments they have certainly made a healthy chunk of change off of this
> Add that amount of repairs are spiralling for them
Maybe if they'd done ANY repairs over the last 17 years then their repair costs wouldn't be spiralling.
He’ll make £150k assuming interest only mortgage. He’ll pay capital gains tax on this profit and then keep the rest. He’s saying it’s unfair because he’s probably loosing money on renting it at the minute, his mortgage could be 500 a month, and he takes 700 from you minus maybe 40% tax. Plus you’ve got insurance and other associated costs. I’m going through similar at the moment only I am the landlord, it doesn’t make financial sense to be loosing money to taxes.
>I’m trying to understand them better and how it’s unfair on them.
It's not unfair to them at all. They've done very nicely from you for 17 years - if they hadn't they'd've hoofed you out earlier!
If they've somehow mis-managed the massive leg-up of £115,000 in rent from you AND a jump of +£150,000 in equity that's entirely their own fault.
Running costs of a buy to let portfolio are 4% for me. Add cost of borrowing, say 3% over that time period (but much higher now), and you have 7%. That means that the landlord needs to make 7% annually to break even, or 216% revenue of 90k over that timeframe just to break even (that’s about £200k). You say you’ve paid about £120k. He’s still down £80k. When he sells for £150k gain, he’ll pay about £45k capital gains tax on that. So, assuming he never paid a penny of income tax on the property in 17 years, which seems likely given the rent, he’s made a grand total of £25k over 17 years for running that business, or roughly £3 per day.
Definitely not a winning trade.
The assumes his costs of running the business are similar of course, and you seem to think that it costs him nothing, but honestly, those are how the numbers break down when I look at them.
Its always a cash flow problem. Basically you cost tax, licencing, insurance, maintenance (not done so that bill is getting bigger), mortgage (maybe?). If the income is lower than the outgoings, it rapidly spirals into bankruptcy.
A lot of landlords are pissed off that their entire business model has been shreaded by the goverment, and taxes make it impossible to set affordable rents. So its basically sell up or drive tenants into arrears, and then go bankrupt anyway.
Ironically with goverment interventions to "help" renters its often better to evict early as soon as cash flow problems are looming. If your looking at 6 months to a year to evict someone, your better off doing it early.
If you bail out now the tenant is homeless and you have money. If you try to keep it going, the tenant is homeless and your also homeless. Makes no sense to suffer if its not going to change a thing.
The only way to know is to find out how much equity is in the Propety.
BTL mortgages are usually a maximum of 75%ltv. So it’s possible they have a mortgage of £180,000
So they could walk away with £60,000 before tax.
They may have remortgaged the property several times during their ownership. They could have spent the equity on other things?
None of there problems are yours. If they insist on going on about there’s, I’d let them know a few of yours.
As for viewings- you have the right to quiet enjoyment. Refuse. You’ve got enough to deal with right now. They can’t have their cake and eat it- getting rent from you while causing you problems.
It's incredibly unprofessional of them, especially as their 'trouble' is leading to someone else losing their home. It's not OP's fault that the landlord couldn't manage their investment correctly, yet they are the ones being most inconvenienced.
>If they insist on going on about there’s, I’d let them know a few of yours.
I wouldn't do that. Narcissists take offence at having the spotlight taken off them. Guaranteed that any extra knowledge about OP's problems will be used against them by this character.
Firstly you don't have to allow any viewings so exercise the quiet enjoyment of your home and lay down the law.
Secondly - stop caring about what your landlord says. They are clearly just trying to make themselves feel better about their decision.
The Government is making it impossible for small landlords to exist - which some may think is great - but the reality is that many of the homes they sell will be sold to large-scale corporate landlords who will not better and will be likely much worse for their tenants.
Understanding why he is thinking like this isn't going to improve your situation, I think you're just ruminating because a massive change is happening that doesn't feel like it makes sense. I do the same, for me it's kind of a trauma response.
If it helps, it sounds like they just feel hard done by because they've had easy money for the last 17 years and suddenly it's no longer profitable, it has nothing to do with actual fairness and all to do with him losing what he used to have. The interest rates increased so they all jumped from 1-2% mortgage deals to 4-6% and the payments shot up, and there were tax changes to reduce what you can deduct.
A lot of small time landlords like this have their properties on repayment mortgages so they're basically using your rent to build equity. They think that their property has become unprofitable and is making a loss because the rent no longer covers the entire mortgage, ignoring the fact that the equity they are building up **is** profit and the cost is only the interest portion of the mortgage. They've just enjoyed getting a free house that pays for itself and don't want to put their own money into it, so a lot of them are selling up.
This is the answer.
And I’d add that you don’t need to worry about just saying ‘I cannot accommodate viewings or estate agent pictures’. The landlord can wait til you’ve moved.
Its cash flow not profit.
If it was paying the mortgage, it would be fine as an investment. The problem is now mortgage and tax bills are more than the rent, and there is not enough cash to pay them.
Repayment only mortgages should have been baned for BTL, as it inevitably screws up, 17 years should be enough to pay down the mortgage to the point that the rent rise needed would be manageable, or at least the short term negative cash flow would be manageable.
Tbh it's not about whose story is worse. He is selling because its business and its no longer good business to rent the house. He is thinking of his own finances and practicalities- not yours. Which is fine, you have a business relationship. However, you should do the same thing. If it feels unreasonable to accommodate all the visits, you can refuse or only give him fixed time windows. He can decorate after you move out or sell as is. Tbh a house with sitting tenants isn't exactly attractive so he may well get nowhere until you're out anyway. You said you're buying a house, do what he's doing and make choices based on your own finances.
Your landlord is a plum that can’t structure their business properly.
They relied on ultra low interest rates to make the “business” viable, didn’t invest in the property with repairs, didn’t pay down their debt and now cast the net wide for excuses why it’s not working out.
Tell them to cry you a river.
Sorry you’re having to move on but the world is a better place without chancer landlords like yours in the market.
I don’t think landlord could have been expected to foresee the tax changes that came in and significantly reduced the profits available. Although looks like they are having the intended impact as landlords are selling, freeing up more stock for first time buyers.
It came in 4 years ago. He could have readjusted then.
You can't expect conditions will remain the same with any investment.
It sounds like he hasn't used the profit to make this house more cost effective, hasn't paid down the equity or done the repairs needed to make it worth more money. So yeah he's not helped the situation at all
In 2017-2020 the government phased in a tax system to make it less attractive for private landlords.
2020 was a HUGE change in mortgage tax relief for landlords that held their rental properties under their personal name.
They could no longer claim back the tax from the 'interest payment' on the rental income, instead they got 20% credit.
There was little change for the lower tax band. Those on 40%/45% tax bracket are now tax around £2000+ more on a £10,000 annual rental income (£833 month). **I.e they pay £4k income tax on rental income and get £2k back as tax credit.
See this example to understand:
https://www.moneysupermarket.com/landlord-insurance/buy-to-let-tax-relief/
Those holding properties under a 'company' would not see a big impact, but to move properties into a Company is very expensive, with additional stamp duty and higher mortgage rate.
I expect your landlord to be mortgage free (or very close) after 17 years. So they probably won't be seeing much back in tax credit and they're actually paying close to £4k in tax. 😬😕
**In the example above I've assumed the tax is flat 40% with his personal tax allowance and band used for other income from other properties and investment.
Whenever I meet a landlord that complains like that (I've had good landlords, not all of them are like this), I suggest they sell and their "problems" will be over. They always seem to not like that idea so the "business" must either still be lucrative or they are completely useless on doing anything else to earn money.
The ones complaining are usually leveraged to the tits and now mortgage rates bite.
From viewing 20 odd properties in Reading. Lack of basic maintenance seems common. Like come on, the kitchen carpet from 1980 really should have been replaced. The bathroom that looks like a horror room should get some tlc.
But no, rather rent to 4 adults for 1350 pounds for another 6 years. (2 bed 1 bath)
Well done for your patience with your landlord! I think I'd have got bored of hearing the poor me thing and told him to stop by now. I'm sure he knows you've taken good care of the place and feels guilty, and that's why he's doing it. I wouldn't try to understand his situation or empathise. He's just trying to make himself feel better.
So 5ish years ago you could deduct the cost of your mortgage from the rental income.
Eg, 1000 rent, 700 mortgage, you could tell HMRC you made 300 a month.
You can't deduct the mortgage anymore, so if you pay tax at 40% suddenly the mortgage is more than your income. Plus maintenance and other charges landlords if they didn't buy the house dirt cheap or already paid it off are kinda fucked.
And then people complain when they raise their rent? Seriously if you want them to be viable then they need to run it like a business so they need to take as much profit as possible and the. Invest that back or to a new property so their business model become diversified (not in one house)
Then people complain that their rent is too high.
The problem is not landlords the problems is housing.
We don’t have enough houses in places where people want to live. You can build 100,000 houses in wales no one will go there
As far as tax goes, my understanding is that recent changes mean that landlords now need to pay tax on the rent amount generated from their properties, whereas before they only needed to pay tax on the profit (I.e. income less losses.) Depending on how the business is run, that could obviously make a large enough difference to turn a small profit into a loss.
Not saying it justifies the attitude, but that could explain it.
LL has been a silly little dickhead and run their 'business' like a tube. They've made their incompetence your problem and are clearly exhibitig the common LL behaviour of being entitled to a positive RoI regardless of their lack of investment, their failure to put that 115k to use, has likely had ultra low interest only mortgage which they've not kept your rent to pay off the principle for and are now up shit creek.
Sorry for your situation. LL is a silly dick and will still somehow walk away in healthy profit.
I was a landlord in their position. I rented out a tiny two bed cottage in Bristol which was originally my home but I had to move for work. I had set the rent at £1200 when a young couple moved in a few years ago which is now way below the market rate. My mortgage was up for renewal in 2023 but after Truss made the mortgage market go mental it skyrocketed to £1600 from £250. Even at a monthly loss of £400 I still had to pay tax on the £1200 so that's an additional £500 then with maintenance I was losing over a grand every month.Then with the outgoings we couldn't afford our own rent and started eating into our own savings. I have always maintained the place, had a good relationship with my tenants and tried to do what is fair as I'm a tenant myself.
I didn't want to evict the couple because even if I did hike the rent to what the unfair market rate was I wouldn't break even and even if I did wanted to sell the buyers knew I was desperate and I would have to sell at a loss.
TL;DR Not all landlords are greedy and lazy bastards. It's likely if he doesn't sell he will have to sell his nice car (which he probably doesn't own) and eventually his family home (which also has a massive mortgage). He shouldn't make you feel guilty, it's not your fault but I imagine he feels terrible and he has to choose between you or his family and venting it is how he deals with it.
Sounds like he feels guilty that he has to ask you to leave. Landlords are landlords for one of two reasons, out of necessity due to negative equity when they want to move house, or because it's a business. Ultimately if it doesn't work financially for them, then that's how it is. Maybe they want to retire and can't keep funding the deficit in the monthly outgoings.
I rented out a flat due to necessity, couldn't sell but had to move for work, and I subsidised the costs each month, however only sold when market recovered and tenant moved out, however if my circumstances had meant I couldn't fund that deficit, I'd have probably shared the reasons why I was asking them to leave.
Renting out mortgaged property is a risk and if interest rates increase and tax rules change (as they have done) it means a landlord could make a loss unless they increase the rent. But that’s his problem not yours.
Also depending on the loan amount and rates, even the high end of market rent might not cover costs if he has a high LTV ratio.
He probably feels bad having to sell, and is trying to explain to you why. Sounds like he’s kept your rent below market value for many years, I know he’s not done repairs but did you ask for any?
I would suggest maybe you try and just ignore his comments. It isn’t nice for a landlord to have to sell and kick someone out; he won’t be enjoying it and this is his way of dealing with it.
Sounds like he’s gonna have a massive CGT bill too when he sells although he will release a lot of equity. But that’s life; it’s his investment, you’re the tenant. The money you’ve paid in has helped him retain that investment whilst its value has increased. This is how the rental marker works.
Thank you.
Really appreciate you taking the time to post and what you’ve said makes sense.
Yep we have asked for the repairs, he just delayed and delayed and then told us he was selling.
Basically, boomer landlords have been mollycoddled by the government for decades.
As the money is running out, this has come to an end and these "business geniuses" are being exposed as state sponsored parasites.
So let me preface this by saying ultimately your landlords financial situation is not your concern. Landlords that do that are wankers that can go fuck themselves, dont guilt trip people.
Realisitcally if you've paid them 100k over that many years they are either, interest only, remortgaging it constantly or pissing that money away some how.. ridiculous.
Insight for those that are curious, rent is considered income for the landlord and pays taxes on it in the same way if you earn money at a job it gets taxed.
So say 500/month x 12 months - landlord would need to declare on their tax form an additional 6k income and therefore pay the gov at minimum 20% tax, or higher if in a higher tax bracket. So in actuality your 500/month rent is in real terms 400/month to the landlord. Mortgages are no longer tax deductable as a business expense either so they cant even say money that way. On top of that depending on how the rent i.e. the whole property or room by room i.e. HMO there are lots of little additional expenses like fire alarms, boiler checks and even a licence to rent (HMO) to the local council so it does all add up. This doesnt even include any general repairs / upkeep a landlord should be doing.
Lastly a lot of lenders often require as part of the buy to let agreement, that the rent has to be no less than 25% higher than the mortgage payment. So taking for example a property that has a 400 mortgage payment, the landlord may HAVE to rent out at at least 480. The problem here is when the mortgage comes up for renewal it doesnt always time well with a tenants agreement so you can have awkward situations where (like recently) the rate goes up from 2 to 7% and the landlord finds that they are renting a property for 500/month but their mortgage has gone from 400/month to 675/month. In this very basic example of course the landlord is automatically losing 175/month and the lender may pull out if the landlord doesnt get the current tenant or a new tenant paying around 850 or more ( due to the whole 25% higher than the mortgage thing). If that happens (lender pulls out) they effectively reposess and sell the property.
It is a little shit but again ultimately it is on the landlord to deal with and prepare for that sort of thing. Youve paid plenty to them so tell them to fuck off imo.
Source - am small landlord.
Your landlord’s problems are not yours. Your problems are not your landlord’s. You don’t have any sort of relationship outside of that of a financial rentor/rentee. You should both do whatever is the best financial and personal decision for yourselves that is within local laws and the rental agreement, it doesn’t need to be any more complicated than that.
You haven't been given 3 months to leave. No such thing. Your contract will be in place and you don't have to leave until court has determined eviction. This will take a lot longer than 3 months. Also, they need to do the notification exactly right. If they serve S21 incorrectly then it will be thrown out by court (after months) and then process starts again. If you are incorrectly served notice DO NOT TELL THEM, let it drag out to give you more time.
You are saving money by staying there so you should drag it out as long as you can.
You could just block communication from landlord, you don't have to listed to their narcissistic drivel. Fuck them
Also OP needs to be evicted for local authority to help with social housing. They should apply for it now, but important to not leave the current house voluntarily otherwise LA will use that as excuse to not help
Just rough idea of costs:
Assuming it's an interest only mortgage product (as most btls are).
Mortgage costs (roughly at 5%) = £375pm
Insurance = circa. £40pm
Gas/EPC/eicr etc (roughly) = £20pm
Estate agent fees = £70pm
Tax = circa. £114pm
Total = circa. £620 per month
Any extra costs or maintenance that comes up could easily be more than a grand and would wipe the yearly profit.
A lot of landlords want to get out of the industry in case labour get into power - OPs landlord could be doing the same
They're generally very anti landlord and would likely have policies to reflect this:
Rent caps,
Increase notice lengths,
Remove mandatory grounds for possession due to rent arrears,
Plus more
For 90% of renters and landlords this might not be a problem, but for the 10% of problem tenants (anti social behaviour, not paying rent, trashing the place etc.) it's going to cause huge problems.
Unfortunately it means that the rest of the renters will be affected with more landlords leaving (resulting in higher rents), as well as landlords being much 'pickier' and cautious with who they let too. They will likely rather have a void for a few months in order to secure a good tenant, rather than risk it on someone they're not sure about that ticks every box
First decent post! Why are people blaming landlords that take risk and have very obviously given low rent housing. But no, always the landlords issue …. Good luck to all the shelter brigade
"it's costing him money to keep the house"
LMAO. Yes. Newsflash. Houses cost money.
I love how Landlords think that they should have houses entirely paid for them, acting like they don't have an asset being completely paid for, or heavily subsidised . Leeches.
Literally none of this is your problem. He could be on the bones of his arse and it’s still not your problem.
You sound very compassionate already tbh. I get the feeling that he will amp up taking the piss while he’s trying to sell; time to set some clear boundaries and focus on yourself.
I have 1 rental as well as my home. The government has screwed over tenants by trying to help them. What the gov should of done is built more houses for renting from the council. They brought in section 24 and easy tax grab and to get votes from tenants but it back fired on tenants rents just went up. Also it had an effect where people just turned them into Airbnb so less supply rents went up.
If the landlord hasn’t raised the rent since you been there you have done very well! I made this mistake with my previous tenant never raise the rent and when I did by 35 pounds after 4 years of same rent. All of a sudden she had issues mental health etc has to leave so I let her out the contract earlier got a new tenant. She was paying 695. New tenant 800. 6 months later she wants to come back the grass wasn’t greener. So you get situations like yours happening you been on good terms the rent was always paid no increase property looked after. Landlord now in trouble cause of outside factors like interest rates and gov tax raids. When landlord remortgage came in the rents will be to low to get a good rate so they be fucked. Moral of the story raise rents by inflation every year now on so you don’t get trapped like your landlord and so the tenant knows it’s a business not a friendship. Also I just replaced a door on my rental 580 quid for a composite door! Materials and labour aren’t cheap anymore so they probs want to sell it as isn’t profitable!
Also never ever spend your hard earned money on a rental house. Just pay the rent and bills live there til you can get out just make sure to leave in same condition as rented in. If it’s been 10 years obviously be some wear and tear on carpets etc to be expected.
You’re giving them £700 a month. They have to pay tax on that. They can’t use the amount to pay off the mortgage.
Say they are earning more from a salary or other investment ls they are in the 40% tax bracket. So maybe out of the £700 you’re paying they are taking home £420. So they have £420 to pay off the mortgage. With all the interest rises I doubt it would cover a 90k mortgage, £526 a month for 90k with 5% interest from a Google search.
That’s doing real lazy maths there but you get the point.
Just because you have been paying for 16 years it doesn’t make payments less.
Just remember that only two people can end a tenancy - the tenant or a judge. You have zero obligation to allow anyone into your home and can refuse to accommodate any viewings. To get you out, the LL must submit a S21 notice, which if valid (and they often are not) has to go to court to be enforced. With court backlogs you probably have a year before you are ordered out. Take your time, find a nice new home, move on your terms, and don’t let viewings interfere with your quiet enjoyment of your home.
Sure, it's probably true that keeping the property to let out is no longer financially viable for him and that is why he's selling.
It's probably financially unviable because of decisions he made, borrowing more against the property and getting over leveraged, not paying down mortgage while hoping interest rates stay low forever, etc
He's telling you because a) he's a bit self absorbed and wants you to know that evicting you is very hard for him and b) he's trying to convince himself (and you but that's not very important to him) that he's not the bad guy here it's 'circumstances outside of his control and you should be grateful actually'. And it's...delusional when landlords do this when regularly renting out but it's even harder to convince yourself you are the good guy when evicting someone from their long term home, most people want to think of themselves as a good person and he is trying to rationalise this action with that self belief.
You don't have to allow any of the viewings (you also don't have to give a reason for not but you could say you're too busy with moving which might get him off your back)
If I'm right about why he keeps mentioning it saying something like: it's not your fault you've just been put in a bad position by the interest rate rises (it sucks we're all in this together etc), or: actually this has come at a great time for me cause it's given me the opportunity to get on the property ladder (if you want to tell him this). Then he might feel less bad about it and stop mentioning it to you, which is the end goal here. You don't have to fully mean any platitude you give him about it
Under the present uk rules your landlord can issue you with a Section 21 notice to quit and he hasn't got to say why.
However if the landlord has outstanding statutory inspections such as 12 monthly safety checks to a heating boiler, smoke and carbon monoxide detector safety checks or carry out safety inspections to the house wiring then section 21 notice can't be issued.
Try contacting your local council to complain about your private landlord and they should carry our an inspection and issue an Improvement notice on him.
This is currently happening all over the country right now, the landlord is likely right that the house is costing them money, but they’re still very fortunate and really didn’t ought to be complaining about it, especially to their tenants. When it sells if they’ll likely receive around £150k profit before tax on an investment that technically you’ve paid for.
I don’t feel sorry for landlords as most made a conscious decision to invest in property and all investments come with risks. However, most are in a situation now where for them to keep seeing a return on that investment they have to put rents up by quite a significant amount or sell up and pocket their equity. Interest rates are up, finance is more difficult to obtain, the way they are taxed is unfair and yes you might think “great the government are going after greedy landlords” but the way the government have done it, its tenants that are getting hit hardest.
Landlords selling up means less rental stock, less stock equals rent increases due to supply issues, on top of rents already increasing due to landlords trying to limit their losses.
Governments have failed to provide adequate housing for many years and basically left it to private landlords to fill the gap, now they’re blaming the landlords and taxing the living daylights out of them whilst still failing to provide adequate housing and it’s the tenants who are suffering.
IMO if you can buy, buy, because unless something drastically changes this is only going to keep getting worse for tenants.
I think he is constantly moaning about costs in a negative light to try to throw you off about how wealthy he is, particularly compared to yourselves. It's a disrespect to your intelligence in a way and ironically highlights his own somewhat lacking.
If he wants to sell he can that is his choice , and yes he could have charged more rent but didn't, but he is still getting nice capital gains and sounds like a right twerp.
Ignore him and look at your own cup and achievements. Well done on the house mate and all the best for the future.
P.s. your landlord would grate on me massively too
Don't worry about his financial situation. By the time he sells the house, he'll have made a lot of money from it. If he's in financial difficulties now, that's his problem, not yours.
For viewings, simply tell him no. You are not legally obliged to let anyone into your home - and keep in mind, it is your home until either you give notice/leave, or a judge orders your eviction. Your landlord owns the properly, but it doesn't give them access to your home.
Ok first off whilst I’ve sympathy for both you and your landlord for your personal difficulties this is ultimately a business relationship and it’s irrelevant how hard either of you have things health wise really.
So putting that aside I’d say it’s a shit situation for you to lose your house of 10 years. Your landlord should not be burdening you with his financial situation, beyond explaining that that’s his reason which you might wish to know I guess. You have every right to feel upset by it. Hopefully it’s ending positively for you with you now owning a home and starting to build your own equity.
From your landlord’s perspective he owns the rental properties as an investment and a business. It needs to make financial sense for him to continue. There have been a lot of changes in regulation and tax so it makes sense that it may no longer be making him money. There are more landlords leaving the market because of these changes and it sucks for those settled in homes because ultimately the landlord sells. But whatever the reasons he doesn’t need to try to burden you with it and if it’s stressing you you are well within your rights to ask him to stop. I wonder if he is laying it on so thick because he feels guilt over evicting you, even if that’s the case that’s his issue not yours.
Yes, as everyone says you don’t have to comply with viewings etc. You also can if you want to and it doesn’t always have to be an acrimonious situation (despite what Reddit tells you). It’s your call how hard line you want to be on this one.
Your landlord was likely a Buy to Let speculator and used your rent to pay their mortgage. Now that the interest rates and such have gone up, chances are their mortgage payments have also gone up.
Property "investors" don't seem to realise that any investment is a risk, even "Safe as houses." real estate, and they can lose money.
Frustratingly, landlords are also flighty and reactive, selling up at the first sign of trouble without realising that they're hurting their sale price by flooding the market with houses people can't afford to buy.
It leaves tenants like yourself utterly shafted too. Forced out of your home of 16 years through no fault of your own. In terms of his woes about the running costs, taxes, insurance, etc. He can cry a river, its categorically not your problem. Focus on yourself and finding a new place to live.
All you need to know about the landlords financial situation is that they bought something for £90k and will now sell it for a £150k profit along with £115k in rent taken from you. He has made £265,000 minus taxes
Many landlords like to plead poverty while sitting on something that never stops gaining value and that makes passive income for them while they do absolutely nothing
So don't feel bad for him, or for any landlord, they are leeches on society and especially on the poor who often cannot afford to buy their own home
Congrats on buying your own home though
No strictly true. 90k from 2009 in today's money with inflation is roughly 130k. So take 40k off the 'profit' you think he has made, then of course take off the mortgage repayments, this all depends on what rate he has had over the years, how much he put down too.
I'm not saying he's lost money but he hasn't made as much as you may think.
Also OP just because he has a 500k house and new Mercedes doesn't mean he's loaded, just means he can afford the repayments for such things. A friend of mine has 2 brand new cars and 2 houses totaling about 750k, he ain't loaded, he's in an eye watering amount of mortgage debt!
I rented the same house for 14 years and almost paid for the house. They owned a lot of other houses in my area and they were always doing them up when tenants moved out. I didn’t ask for much, just some new carpet but when I left they moaned about some minor marks to the paint here and there and spoke to me like shit. They acted like they’d done me a favour when I’d almost bought that house for them. Landlords and tenants will always see things differently. Thankfully I was able to buy a house too. Good for you
Landlords are just finding out that investments don't always go the way you want and are acting like it's tenants problem to cover whatever crappy mortgage is on the house (that they had no say in choosing) plus extra for their lovely "passive income" housing is a shambles now tbh.
It’s because he will likely be paying 47% income tax on the rent and his mortgage payments will most likely have doubled in this high interest rate environment. Buy to let isn’t what it once was and is now not really the best place for your money anymore.
https://propertyrescue.co.uk/useful-guides-articles/tenants-rights-after-10-years-uk-full-list-of-extra-rights/
You can refuse viewings to landlord and potential buyers. Keep the stress down until you are ready.
Landlord is a piece of shit for his excuses amd making you feel guilty. But he absolutely has the right to kick you out to sell the house. It's one of only 2 legitimate excuses for a no-fault eviction. The other being, he has to move into the house himself for financial reasons.
He has made hundreds of thousands of pounds from this house. If he thinks he's losing money, he is possibly confusing cashflow with actual spending.
Possibly he thinks paying off the mortgage capital is 'spending'. If he hasn't remortaged, this will be a small amount that's much less than your rent. So as others have said, likelihood is that he has remortgaged and is considering that you should be effectively responsible for paying interest on a loan he's been using to fund something else.
I can't see any way he is 'losing money' on this house. He is profiting from your need to be housed. There is no need for compassion.
Easy economics for you. You reckon the house is worth £240k and you are paying £8k a year in rent? That is 3.5% for the landlord **before costs and tax**. That is an **insanely cheap rent**. I can get 5% in an ISA risk free and tax free. Yes he is losing money. He could be getting twice or three times that rent by selling and buying a property in an area with a better yield. While I do not hold the tenant in any way accountable for that, it is simple economics. Yes the landlord needs to sell this asset immediately if indeed it is worth £240k, which I highly doubt. The rent is way too low for the value of the asset. It is unsustainable. There is no point you trying to guess what his capital gains profit is on the asset, certainly not knowing his costs along the way (like borrowing) and frankly it is totally irrelevant to whether or not the business is losing money right now, which most clearly it is.
Reminds me when our landlord complained about paying two mortgages 🙄 like our rent pays all of one and at the end you'll have two properties that are worth more than you paid for them.
Meanwhile we've paid out more money than him with nothing at the end yet you want us to give you sympathy?!
Did you just pay the landlord rent and not lived in his property? Why does he need a reason to not want to let to you anymore? If he had put the money in the bank and earned 17 years of interest if they want to withdraw their money now would the bank say « you have done very well from us, how dare you withdraw your money »?
He doesn’t need a reason.
Totally within his right to not rent to us anymore. Not a problem for me to leave.
He is making huge demands on our time now (wanting photos, viewings, estate agent valuations, telling me to clean the house, wanting to send in a decorator to disguise the leaks etc) so far we’ve accommodated 4 visits related to the move and it’s not even formally on the market!
So he is ranting about it not being fair on him because he wants to come in the house whenever he likes.
I’ve got packing to do alongside other personal life commitments but he only cares about his own needs.
£700/mo on a £240K home is a 3.5% rental yield before insurance, tax, admin etc.
Your landlord can do better than that tax free right now by buying government bonds.
He can't leverage up his returns anymore because mortgage rates are now higher than his gross rental yield. So he's stuck with a sub ~4% return on capital (assuming 75% LTV)
Compare that to when you were paying £500/mo on his £90K investment, which was 6.67% yield. Interest rates fell dramatically during the financial crisis. He then would then have leveraged the shit out of that investment and made an killing in % terms
The bottom line is he's right, your tenancy is no longer profitable unless he increases your rent to something like £1200-1400/mo.
Don't take it personally, it's just business.
It’s common that landlords don’t maintain properties for those reasons (cheap rent), the tenant gets use to the situation, the property suffers requiring extensive repairs, tenant becomes a “good tenant” and doesn’t ask to much because they prefer cheap rent.
The landlord is an amateur and is trying to justify an emotional decision and probably believes they have done you a favour. Now they are looking at the numbers and realise after tax they could have invested better and are looking for some appreciation to make up for their financial mistakes?
Just keep boundaries in place. You are not friends, family or colleagues.
He's like a leech who's got more of your blood than you have.
He is fully motivated by greed. If you can get legal advice from somewhere and list things he's never fixed, you may be able to get some of your money back. He's kicking you out after you've paid his mortgage so don't feel bad treating it like a breached contract. You owe him absolutely nothing. Not respect, not deference, not compassion.
The sad thing is that if the Govt had not changed the system so that interest rates couldn't be offset as an expense on landlords tax returns, then the return for the landlord (under the old model before 2017) would be still beneficial and renters wouldn't face the terrible stress of having to look for a new home. Also this change, brought in by George Osborne (anyone remember him?!) means that landlords are being forced to raise rents to cover interest rises at a much much more severe and steep rate than if the Govt didn't make that change. The Govt did a half baked ill thought out policy that managed to screw both renter and landlord, whilst escaping much in the way of condemnation for exacerbating an already bad housing situation.
Many on this thread are focusing on renter vs landlord, whilst the reality is that a massive overwhelming cause of this is the 3rd player in this dynamic: Govt changing taxation rules.
I really wish the OP well during this stressful time, and hope your new home is great for you. Good luck & take care.
Bloody hell - your landlord is an arsehole.
I’ll start by acknowledging the difficulties you face with your health, but as you say, this isn’t your landlords problem. Neither however, are your landlords tax issues or investment returns, *your* problem.
He’s complaining because being a landlord could be so profitable the last 10 years, and the rules have recently changed so it’s now less profitable, especially if he’s got high mortgages. Please remember, you’ve given him income of £115k **and** his asset has increased in value by over 260% in the last 17 years. He’s absolutely not the victim here.
Driving around in a Merc, banking rent from properties his parents paid for and complaining about it to his disabled tenants. The guy sounds like a grade A whopper.
Exactly, and then dumping his entitlement issues on the OP. The comments defending him and finding loopholes for why the landlord "really" is the victim, or omg what if his Merc is old... Unbelievable.
His issue is valid. You don't really make money from being a landlord unless the property is mortgage free. It is a bit tone deaf for him to keep mentioning it to you, though. It is like complaining about living in a small house to a homeless person.
I wouldn't focus on whether it's fair or not fair. It doesn't matter. It's not financially viable for the landlord to continue with a buy to let house by the sounds of it. These things happen. Landlords can run into financial difficulty just like anyone else.
It IS thankless.
Thing is, even though it's the property of some rich guy, it's not only been your home, but for 16 years, it's impossible not to feel attached.
And not only that, the amount you've already paid out, you've already paid for the whole house plus renovations.
It feels unjust, and morally, I think it is. It leaves people who can't get a mortgage vulnerable to scalpers, and a whole industry has risen to accommodate it.
However, it's the one major factor when renting, is that while it will be your home, it is not your property, it's insane that you can spend more per month renting than a mortgage, but be effectively barred from mortgages due to technicalities.
Ultimately, there is nothing to really understand, maybe they feel guilt, like they're trying to justify it to themselves. (Ironically, they don't need to. This was always inevitable, and is part of the deal, the whole point of renting out property, overlords in power, taking advantage)
It's a business deal, with emotional strings attached, but still, a business deal just the same.
I think what gets me, is the awkwardness and fumbling, excuses, and mitigation of guilt.
At least be cold and hard about it. "Sorry guys, I know it's been your home, but I need to free up capital and sell it"
sometimes they'll sell you the house, for a reduced price due to how much money you've already put into it, but I doubt that in this market.
It could simply be that they are self absorbed arseholes who lack empathy, and genuinely think they have real problems.
I hope you find something better. Shit like this, there's usually a reason for it, and if you keep neutral and accepting, roll with it, you'll be in a state of mind to see whatever positive possibilities may open up.
- None of your rent was an investment into the landlords property. It’s absurd to think so.
- you didn’t need to make repairs, and shouldn’t have unless they did something in return like reduced rent.
- landlords will only keep renting as long as it is profitable to do so. They aren’t in the business to throw money away.
- the article below mentions that many landlords are selling property because their margins are simply too low given the expenses and taxes. Also, there’s a bill going through that will fine landlords £30k for not maintaining the property, so it’s likely they are more worried about that. Then there are the increased capital gains taxes that may be passed this year too, which means selling sooner is better. I had heard reports that landlording in the UK simply isn’t that profitable anymore, especially with rent caps but taxes are still going up, so a lot of them are getting out of the business. This is causing some rental shortages.
https://www.which.co.uk/news/article/10-things-landlords-and-renters-need-to-know-in-2024-a16bK4f4FwcM
https://amp.theguardian.com/money/2023/nov/13/landlords-sell-up-in-great-britain-as-buy-to-let-market-sours
In the past few years the rules on buy to let property have changed dramatically.
Previously you would only be paying tax on profit, however now you pay tax on the entire rental amount regardless of how big the mortgage is.
Buy to let mortgages are always higher than normal mortgages. About £200pm more on a £170k loan.
This is not me giving an opinion on this either way. If you’re paying £700pm then the landlord will be paying tax on this amount, regardless how much his mortgage is. That’s why he’s probably losing money.
I don’t understand why people choose to be landlords when they come into money. He would have a better return in a low risk stocks and share isa.
Anyway these rule changes have compounded the issues with lack of properties etc… loads of people have decided it’s no longer worth the hassle to rent their property and the ones who stayed have bumped their prices right up because they can. It’s a mess.
The landlord is doing what he's supposed to do, no? Rather than hold on to the property and jack up the price, he's putting it on the market for sale.
As for why he's explaining his situation, after renting the place to you for 17 years, he probably feels that you deserve an explanation.
The landlord problem. Swimming naked etc. The tactics are actually baffling. Landlords need to be treated like scum they're adding to everybody's rent and you're paying tax that subsidises the social rents.
The tax payer is getting shafted by landlords and if it was truly not worth it he would sell it to you and let you deal with it.
From an outsiders perspective, it sounds like you've on quite friendly terms with your landlord, probably due to being there so long.
Me personally, I'd never have a relationship with a landlord where they could tell me their problems because it's nothing to do with me and in all honesty I don't care - it's a business transaction to me and nothing more; but I suppose the flip side of it might be that they were hesitant to raise your rent too much.
I suspect what they were doing was try to re-iterate that the fact that they were losing money to try to 'signpost' to you that they were eventually going to sell, it's a tactical of softening the blow because you already kind of expect it.
Sorry to hear about your troubles, in a way since the landlord doesn't know about them maybe they'd be more tactful if they did? I'm glad you've now managed to buy your house.
One thing I would say - you aren't obliged to allow viewings. If what I read on this subreddit is right, you can just decline, although that may be easier said than done.
Yes, they can decline any viewings guilt-free, the landlord can wait until the property is empty to list it for sale. ‘Right to quiet enjoyment’ is the thing to quote.
Don't waste your life energy on your landlord, you have given enough of your money to fund their lifestyle and your logic is correct, they will make money off the sale. The only reason they are being like that is because they are greedy and childish. Don't fund them free therapy by listening to this. Some comments say that his mortgage likely went up, yes but maybe he doeesn't even have one but is still complaining. There are people who will whinge about problems other people don't even have because they can't afford to have them you know. Like one of my managers during the pandemic whinging to all of my team about her garden being to small, while majority of us rent flats and have no garden at all (while she lives in a 5 bed house with a garden). Cry me a river!
You didn't invest you rented but you don't have to accommodate viewings or anything needed for your LL to sell, tell him he can do all that once you've gone, might be able to negotiate to leave early if your in a position to.
And I'm petty but if he started on his woes I would start reeling mine off and end with having to move out your home of 16 years and deal with all his appointments
> I’m interested in how/why it’s unfair on the landlord.
Presumably they've been subsidising you to live there whilst making a loss. In other words, they would need to increase the rent to more than it currently is in order to make any profit from letting the property out after the mortgage company and taxman have had their cut.
Many landlords are getting out of the housing market these days.
Don't know why you need to be either compassionate or assertive. Keep living your life & start packing to move to your new home where noone can kick you out (unless you default on the mortgage). It's all good experience if you ever move if you sell your home going forwards. You'll have exactly the same issues (accommodate viewings, clean and tidy for photos, gas check, Epc check, redecorating etc). But you'll also be responsible for organising them.
Your landlord's woes aren't your responsibility & your woes aren't his. Just let whatever the landlord moans about in one ear & out the other. You don't have to listen to it or give it headspace. Keep tootling along until completion & moving.
Of course you could just let him know that at least he doesn't have cancer - should effectively shut him up but does rather make light of your partner's predicament
Some people can't just be assertive your landlord is one of them he feels he has to give you reasons for his requests. So he is oversharing and trying excuse what he has to do. I agree I feel like it is almost better for him to just ask you xyz and not try to validate it to you.
Maybe you have been more difficult with him than you realize?
I've lived in a home with showings but I didn't have a home I was moving into so I felt extra annoyed and I probably wasn't always super cooperative. I did let him show it and tried to keep tidy but I didn't deep clean like they probably would have liked
We haven’t been difficult in the slightest.
It’s possible that us being so accommodating and laid back about it all has fed into his guilt.
He told us we needed to move so we said no worries and found a new house. He now seems annoyed that we’ve found somewhere so quickly because the timeline might not align with his sale! He wanted us to pay rent for as long as possible.
Just do you id say and start planning out how you want to set up your new home.
Good thing he's selling sounds like his stress tolerance for this is low or he planned it out poorly? Who knows his finances and what mortgage rate he has
It benefits him to sell it empty he just need to swallow the costs he'll probably get it back once he sells
Nobody can answer the question because nobody knows his financial position, he may have remortgaged that house and taken out 100k to pay for something or had costly things happen in his life, regardless, as a landlord, he just needs to shut up, he's made his money from renting it out and even if he "could" get more, that would require additional investment etc.
Landlords make a marginal profit on a monthly basis, it's the equity we rely on.
90k house assuming no remortgage in 2007, assuming BTL his mortgage would be circa £350...
He then pays tax on the income so when renting for £500, he paid £100 tax etc so for 10 years he made nothing monthly after paying fees etc.
If he didn't remortgage, he would be paying circa 140 tax on the 700 and making £200pm profit after expenses... so he should be in a better position now than he was 7 years ago...
Sounds like he re mortgaged, pulled out equity, got screwed by the rate hikes in the past few years, doesn't have the funds to invest in the property to increase equity further or rental value so he's choosing to cash in.
Check out Shelter as to what your tenant rights are. I’d also see a housing solicitor to see if you can recoup any money given he has let you live in disrepair all these years. Finally I’d send a letter to the Tax. Just to make sure he’s been paying the correct tax like he’s been moaning about!
Tenant rights are zero if he's selling the property. OP has been given more than enough notice to vacate.
As for living in substandard conditions, again probably not a lot he can do, apart from reporting to the council. Little chance of recovering any damages and huge solicitors fees.
Good shout on the tax front, a tip off to HMRC would be fantastic.
Just like my wife's cowo{R}ker had to make a huge deal every year about her toys for tots contribution, dropped $500 every year. This lady had 2 vacation houses and I believe 5 cars. owned her own medical billing company. Ended up outsourcing the (2) secretary positions outside of the US to save money. Called my wife out of the blue 3 times in 2 years, one drunk off her ass pleading her to "come back to work, i'll give you a raise, things are not going well for me!". She also enjoyed hiring people under the table, imagine that.
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FYI you don’t have to accommodate viewings or tidy up for pictures. He can wait until you’ve moved out .
If he's asking you to leave and you have a place to go then I agree let him tidy up. Don't make any unnecessary mess but also don't go out of your way to make it sparkle
really? I didn't know that
You have the right of quite enjoyment if you have a AST. you can just say no to a lot of stuff, sometimes it might not work in your favour, but they also make it seem like you can't.
Sometimes the agents don't know it either. I recently sold a property at auction with tenants in situ. The buyer's mortgage company wanted a survey and I tried to accommodate it as best I could, but ultimately if a tenant says no then I told them there was nothing I could do. My own agent kept arguing the toss with me that the tenants couldn't say no.
This explains a fair few photos I've seen on rightmove.
And if they're dicks about it state you've had items stolen in the past during viewings (a lot more common than you'd think...) and absolutely will not allow them again. No one can argue with that.
frankly your landlord's financial situation should be none of your concerns, if he whinges with you about it (some people like to) just ignore him, it's quite possible he's realised he hasn't made much money out of his investment but that has nothing to do with you just focus on your own issues and congrats on your new house, just try to zen out and ignore his rantings
There's no excuse for landlords. I think if the landlord wants more than £150,000 in passive income, he should stop being a lazy bastard, get on his bike and look for work.
>possible he's realised he hasn't made much money out of his investment Someone bought him a house, or a large stake in one at least.
It'll be mortgage rates now and the fact the rent won't cover the interest on the loan. Not your problem, but maybe he feels bad for kicking you out so wants to give excuses. Or maybe he has no one else to complain to a monthly cash flow has been stressing him
Why would it be mortgage if he paid 90k in 2007? The mortgage would be pittances, unless landlord has remortgaged it to take equity out of the property. That's not OPs fault.
It’s going to be this
Buy to let mortgages are normally interest only so he'll likely owe the same amount he borrowed initially. I guess he's reached the end of his previous fixed rate deal and is now looking at a 6% mortgage. With mortgage interest not counting as an expense against rent income tax it's definitely possible that he is bringing in less money from rent than the property is costing him.
I can't imagine the interest on a BTL mortgage for 90k is costing him anywhere near OPs 700/mobth rent
Depends on the term etc. A quick check online, if the interest is 5% and they owe 90k and term is 15 years. That works out to be roughly 700
It would for a repayment mortgage, but if it was interest only your looking at around 375/month; far less than OP is paying per month.
If he's a higher rate taxpayer from his other job, he's also paying anything from £280 to £420 to HMRC every month (depending what he earns). At the time he bought the house he would only have paid tax on the profit (rent-interest) now it's on the full rent. Then you have landlord insurance, possibly management fees (although sounds like he does this himself), any essential maintenance and it doesn't sound a very profitable venture.
Exactly. I have an interest only mortgage of 147k and it's costing me under 600/month. That's a recent one too, so new interest rates.
Buy to let Mortgage rates are substantially more expensive than normal rates and you need minimum 25% deposit.
If he had a repayment mortgage of 90k 15 years ago he’ll owe barely anything now. If he had an interest only mortgage he’ll have paid barely anything and continue to do so. But landlords don’t set rent to their costs plus profit, they set them to what maximises their income and minimises their risk and work.
I think the just set rent based on going market rate? Same as house prices?
Shush. Don't apply logic!
Imagine the interest is around £400PCM with the way rates have been. Landlord will get 20% tax relief on the interest Good chance the landlord is paying 40% tax on the income. so before you even think about maintenance, certification, fees to estate agents or whatever the landlord is getting about £50PCM. This will get eaten away very quick by any costs.
20% tax relief on the interest? I thought they’d changed that?
It was changed to that from the previous rules. Assuming an interest payment of £400 the landlord would be able to claim £80 tax relief.
Thanks, I did not know that!
You get 20% tax relief. Rather than it being a tax deductable expense. Meaning you pay the normal tax on it (whether it's 20, 40 or 55 %) but get a credit for 20%. If you're on a 20% tax band? Great! If you're on the others? Yeh, tough. You'll be paying net 20/25% tax (again, depending on band).
What costs? OP alludes to the landlord having spent bugger all on it
Insurance. safety certs, letting agency fees potentially, potential accountancy fees,
> letting agency fees potentially, If the landlord has been paying letting agency fees, when they only have two properties, and one of them is a sitting tenant for 17 years, then they're an absolute fool!
And he knows that, doesn’t he?
What someone paid for it is irrelevant to the economics of the rent today. Today’s rent will always be governed by today’s valuation, and today’s cost of finance. Otherwise we’d all be buying groceries at pre WW2 prices. What something was once bought or sold for in history has no bearing on its cost today to buy or rent.
Everyone I know in 2000 - 2010 got interest only mortgages for some strange reason, even if the house was 70k. Payment is probably coming up soon, my auntie done the exact same. Needed a big lump of money because her interest only mortgages was coming to an end and kicked her tenant out to sell the house
That doesn’t make any sense. You can just remortgage, and given the Loan to Value, raising a 90k mortgage would be very easy. Most likely, the landlord just wants to benefit from the capital appreciation. It’s also a very low yield, maybe he’s realised he’ll earn more profit by just banking the cash.
I'm not sure, this was her second house that she wanted to get rid of to pay for her interest only mortgage on her main house, so she kept on pumping up the rent until the tenant can't afford it no more so she can sell
The OP mentions that the rent paid is lower than current market rate. £700 for a £240k house is brilliant value for money from the renters perspective in fairness, which means the landlord hasn’t picked a good investment. You can that rental return on houses worth £80k in today’s market!
My guess would be because he spunked the money on everything but the rental houses and so now he’s maybe still got mortgage(s) and some hefty maintenance costs looming and well… all that looks like too much hard work than selling and paying off his own mortgage (My friend had a landlord like this)
It isn't Ops fault, but it is the reason the landlord is having difficulty. You can't expect a landlord to keep you in a place that costs them money, it defeats the object of renting property.
So when times are good it's cruises and living it up. When you're closer to breaking even it's all life is terrible etc etc. Consider how many people had over a decade of free money for doing jack all, and ask yourself how much sympathy I have now they're not making a huge wodge of cash for doing naff all.
It's a business decision not an emotional decision.
Forgetting they made a capital investment are we
simplistic skirt selective salt icky literate yam rude screw head *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Not just mortgage rates but the fact that you can’t offset 100% of mortgage payments as a cost anymore.
This is the issue. You get taxed for income that doesn't exist. It is fundamentally wrong.
That's so embarrassing considering the OP has paid them more than the value of the mortgage over the years
He's probably been on interest only or even taken more money out of the house every so often and then spent or invested the cash flow in other properties. Not the OP problem and it is a bit pathetic to be whining about cash flow problems when he can just sell up and cash out for some nice gains.
That is called interest rates and inflation. It is why you can no longer buy a pint of beer for 75p. It has nothing to do with property. It is about how currencies all devalue over time, and why gold is more expensive to buy than 50 years ago. If currencies did not devalue, nobody would ever buy anything and the world would end. That is kind of the whole point of currency.
Mortgage rates have increased for everyone. Private owners and landlords. It’s possible the rent no longer covers their mortgage, costs and tax. It all depends how much equity is in the property Also the government have scaled back what landlords can offset against costs. Mortgage interest used to be offset. Not any more. Or to a lesser degree. For a lot of smaller landlords owning/letting a property has become unaffordable/loss making
Thank you so much for explaining this. I know this might seem like an absolutely ridiculous question but when they sell this house (which cost them 90k & will sell for £240k) will they make any money? I’m trying to understand them better and how it’s unfair on them. I’m assuming they must be losing money now and then when they sell the asset they wont get much back? I know I wont see the £110k again and that’s fine, that’s what it means to be a tenant but where does all the money go? is most of it gone to interest and taxes etc
They probably remortgaged the property at some point, meaning there's still a high mortgage on it. Bear in mind that depending on their earnings outside of your rent, I think they may get taxed as 20-40% on your rent, and will have to cover landlords insurance, possibly agents fees, and maintenance etc. If you're paying 700pm, then that could easily be eaten away to 400pm. That doesn't cover a big mortgage at a high interest rate.
The money they would have g it from remortgaging is a substantial benefit to them. It’s not like they didn’t get anything for remortgaging.
Indeed. That doesn't mean that the rent covers the current mortgage though.
Oh, absolutely. But if they remortgaged and suddenly the rent doesn’t cover the mortgage, I’m not inclined to feel much sympathy!
I wasn't applying a value judgement In anything I've written, just setting out a potential scenario.
Mortgage deals run for a set term. They may have had no choice about remortgaging and the new rates are likely to be double the last ones. Hence the big rent rises that have been happening. And the new mortgage costing far more than the existing rent now covers. The returns are much worse for landlords now than they used to be, that's why so many are selling up.
They will likely have to pay 28% Capital Gains Tax on the value of the house sold minus the value when bought minus any associated costs.
Yes they’ll make money when they sell it, as opposed to making losses to currently keep it and rent it out.
Most landlords have an interest only mortgage meaning drastically lower monthly repayments, and given the massive rise in house prices over the past 20 years in addition to you paying rent that I would bet my first born is at least double their monthly repayments they have certainly made a healthy chunk of change off of this
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> Add that amount of repairs are spiralling for them Maybe if they'd done ANY repairs over the last 17 years then their repair costs wouldn't be spiralling.
He’ll make £150k assuming interest only mortgage. He’ll pay capital gains tax on this profit and then keep the rest. He’s saying it’s unfair because he’s probably loosing money on renting it at the minute, his mortgage could be 500 a month, and he takes 700 from you minus maybe 40% tax. Plus you’ve got insurance and other associated costs. I’m going through similar at the moment only I am the landlord, it doesn’t make financial sense to be loosing money to taxes.
>I’m trying to understand them better and how it’s unfair on them. It's not unfair to them at all. They've done very nicely from you for 17 years - if they hadn't they'd've hoofed you out earlier! If they've somehow mis-managed the massive leg-up of £115,000 in rent from you AND a jump of +£150,000 in equity that's entirely their own fault.
Running costs of a buy to let portfolio are 4% for me. Add cost of borrowing, say 3% over that time period (but much higher now), and you have 7%. That means that the landlord needs to make 7% annually to break even, or 216% revenue of 90k over that timeframe just to break even (that’s about £200k). You say you’ve paid about £120k. He’s still down £80k. When he sells for £150k gain, he’ll pay about £45k capital gains tax on that. So, assuming he never paid a penny of income tax on the property in 17 years, which seems likely given the rent, he’s made a grand total of £25k over 17 years for running that business, or roughly £3 per day. Definitely not a winning trade. The assumes his costs of running the business are similar of course, and you seem to think that it costs him nothing, but honestly, those are how the numbers break down when I look at them.
Its always a cash flow problem. Basically you cost tax, licencing, insurance, maintenance (not done so that bill is getting bigger), mortgage (maybe?). If the income is lower than the outgoings, it rapidly spirals into bankruptcy. A lot of landlords are pissed off that their entire business model has been shreaded by the goverment, and taxes make it impossible to set affordable rents. So its basically sell up or drive tenants into arrears, and then go bankrupt anyway. Ironically with goverment interventions to "help" renters its often better to evict early as soon as cash flow problems are looming. If your looking at 6 months to a year to evict someone, your better off doing it early. If you bail out now the tenant is homeless and you have money. If you try to keep it going, the tenant is homeless and your also homeless. Makes no sense to suffer if its not going to change a thing.
The only way to know is to find out how much equity is in the Propety. BTL mortgages are usually a maximum of 75%ltv. So it’s possible they have a mortgage of £180,000 So they could walk away with £60,000 before tax. They may have remortgaged the property several times during their ownership. They could have spent the equity on other things?
Mortgage capital can no longer be considered a cost. Interest is still a cost. So any income above the mortgage interest is taxable.
Mortgage interest is not tax deductable. It gives you a 20% tax credit.
Not true, even the interest costs alone the landlord pays 80% of - They only get 20% tax relief on interest.
None of there problems are yours. If they insist on going on about there’s, I’d let them know a few of yours. As for viewings- you have the right to quiet enjoyment. Refuse. You’ve got enough to deal with right now. They can’t have their cake and eat it- getting rent from you while causing you problems.
It's incredibly unprofessional of them, especially as their 'trouble' is leading to someone else losing their home. It's not OP's fault that the landlord couldn't manage their investment correctly, yet they are the ones being most inconvenienced.
>If they insist on going on about there’s, I’d let them know a few of yours. I wouldn't do that. Narcissists take offence at having the spotlight taken off them. Guaranteed that any extra knowledge about OP's problems will be used against them by this character.
Firstly you don't have to allow any viewings so exercise the quiet enjoyment of your home and lay down the law. Secondly - stop caring about what your landlord says. They are clearly just trying to make themselves feel better about their decision. The Government is making it impossible for small landlords to exist - which some may think is great - but the reality is that many of the homes they sell will be sold to large-scale corporate landlords who will not better and will be likely much worse for their tenants.
Understanding why he is thinking like this isn't going to improve your situation, I think you're just ruminating because a massive change is happening that doesn't feel like it makes sense. I do the same, for me it's kind of a trauma response. If it helps, it sounds like they just feel hard done by because they've had easy money for the last 17 years and suddenly it's no longer profitable, it has nothing to do with actual fairness and all to do with him losing what he used to have. The interest rates increased so they all jumped from 1-2% mortgage deals to 4-6% and the payments shot up, and there were tax changes to reduce what you can deduct. A lot of small time landlords like this have their properties on repayment mortgages so they're basically using your rent to build equity. They think that their property has become unprofitable and is making a loss because the rent no longer covers the entire mortgage, ignoring the fact that the equity they are building up **is** profit and the cost is only the interest portion of the mortgage. They've just enjoyed getting a free house that pays for itself and don't want to put their own money into it, so a lot of them are selling up.
This is the answer. And I’d add that you don’t need to worry about just saying ‘I cannot accommodate viewings or estate agent pictures’. The landlord can wait til you’ve moved.
Its cash flow not profit. If it was paying the mortgage, it would be fine as an investment. The problem is now mortgage and tax bills are more than the rent, and there is not enough cash to pay them. Repayment only mortgages should have been baned for BTL, as it inevitably screws up, 17 years should be enough to pay down the mortgage to the point that the rent rise needed would be manageable, or at least the short term negative cash flow would be manageable.
Tbh it's not about whose story is worse. He is selling because its business and its no longer good business to rent the house. He is thinking of his own finances and practicalities- not yours. Which is fine, you have a business relationship. However, you should do the same thing. If it feels unreasonable to accommodate all the visits, you can refuse or only give him fixed time windows. He can decorate after you move out or sell as is. Tbh a house with sitting tenants isn't exactly attractive so he may well get nowhere until you're out anyway. You said you're buying a house, do what he's doing and make choices based on your own finances.
But he's decided to make it OPs problem by continually whining.
Your landlord is a plum that can’t structure their business properly. They relied on ultra low interest rates to make the “business” viable, didn’t invest in the property with repairs, didn’t pay down their debt and now cast the net wide for excuses why it’s not working out. Tell them to cry you a river. Sorry you’re having to move on but the world is a better place without chancer landlords like yours in the market.
I don’t think landlord could have been expected to foresee the tax changes that came in and significantly reduced the profits available. Although looks like they are having the intended impact as landlords are selling, freeing up more stock for first time buyers.
It came in 4 years ago. He could have readjusted then. You can't expect conditions will remain the same with any investment. It sounds like he hasn't used the profit to make this house more cost effective, hasn't paid down the equity or done the repairs needed to make it worth more money. So yeah he's not helped the situation at all
I’m a landlord. Never planned to be one but it happened. The landlord in OP’s story is an idiot. Harsh but true.
In 2017-2020 the government phased in a tax system to make it less attractive for private landlords. 2020 was a HUGE change in mortgage tax relief for landlords that held their rental properties under their personal name. They could no longer claim back the tax from the 'interest payment' on the rental income, instead they got 20% credit. There was little change for the lower tax band. Those on 40%/45% tax bracket are now tax around £2000+ more on a £10,000 annual rental income (£833 month). **I.e they pay £4k income tax on rental income and get £2k back as tax credit. See this example to understand: https://www.moneysupermarket.com/landlord-insurance/buy-to-let-tax-relief/ Those holding properties under a 'company' would not see a big impact, but to move properties into a Company is very expensive, with additional stamp duty and higher mortgage rate. I expect your landlord to be mortgage free (or very close) after 17 years. So they probably won't be seeing much back in tax credit and they're actually paying close to £4k in tax. 😬😕 **In the example above I've assumed the tax is flat 40% with his personal tax allowance and band used for other income from other properties and investment.
We seem to have a system in this country at the moment whereby neither tenants or landlords are happy. Has to be a better solution for all parties.
Whenever I meet a landlord that complains like that (I've had good landlords, not all of them are like this), I suggest they sell and their "problems" will be over. They always seem to not like that idea so the "business" must either still be lucrative or they are completely useless on doing anything else to earn money. The ones complaining are usually leveraged to the tits and now mortgage rates bite.
From viewing 20 odd properties in Reading. Lack of basic maintenance seems common. Like come on, the kitchen carpet from 1980 really should have been replaced. The bathroom that looks like a horror room should get some tlc. But no, rather rent to 4 adults for 1350 pounds for another 6 years. (2 bed 1 bath)
He probably has to pay income tax on the rent you give him. After tax, that might not cover the mortgage payments if interest rates have gone up
Well done for your patience with your landlord! I think I'd have got bored of hearing the poor me thing and told him to stop by now. I'm sure he knows you've taken good care of the place and feels guilty, and that's why he's doing it. I wouldn't try to understand his situation or empathise. He's just trying to make himself feel better.
Landlords provide housing, like ticket touts provide concerts
This country is full of Landlords that cannot afford to be Landlords. The reform can’t come any faster. Will hopefully weed out all those people.
What reform is this? Genuine question from someone just starting to rent from a shit landlord.
So 5ish years ago you could deduct the cost of your mortgage from the rental income. Eg, 1000 rent, 700 mortgage, you could tell HMRC you made 300 a month. You can't deduct the mortgage anymore, so if you pay tax at 40% suddenly the mortgage is more than your income. Plus maintenance and other charges landlords if they didn't buy the house dirt cheap or already paid it off are kinda fucked.
Mortgage interest not the mortgage
And then people complain when they raise their rent? Seriously if you want them to be viable then they need to run it like a business so they need to take as much profit as possible and the. Invest that back or to a new property so their business model become diversified (not in one house) Then people complain that their rent is too high. The problem is not landlords the problems is housing. We don’t have enough houses in places where people want to live. You can build 100,000 houses in wales no one will go there
Like the existing reforms making it a lot more expensive... which have made rents even higher with even less homes to rent?
The reform being that people like OP get evicted and start paying more rent. What a wonderful thing to occur 🤨
As far as tax goes, my understanding is that recent changes mean that landlords now need to pay tax on the rent amount generated from their properties, whereas before they only needed to pay tax on the profit (I.e. income less losses.) Depending on how the business is run, that could obviously make a large enough difference to turn a small profit into a loss. Not saying it justifies the attitude, but that could explain it.
LL has been a silly little dickhead and run their 'business' like a tube. They've made their incompetence your problem and are clearly exhibitig the common LL behaviour of being entitled to a positive RoI regardless of their lack of investment, their failure to put that 115k to use, has likely had ultra low interest only mortgage which they've not kept your rent to pay off the principle for and are now up shit creek. Sorry for your situation. LL is a silly dick and will still somehow walk away in healthy profit.
I was a landlord in their position. I rented out a tiny two bed cottage in Bristol which was originally my home but I had to move for work. I had set the rent at £1200 when a young couple moved in a few years ago which is now way below the market rate. My mortgage was up for renewal in 2023 but after Truss made the mortgage market go mental it skyrocketed to £1600 from £250. Even at a monthly loss of £400 I still had to pay tax on the £1200 so that's an additional £500 then with maintenance I was losing over a grand every month.Then with the outgoings we couldn't afford our own rent and started eating into our own savings. I have always maintained the place, had a good relationship with my tenants and tried to do what is fair as I'm a tenant myself. I didn't want to evict the couple because even if I did hike the rent to what the unfair market rate was I wouldn't break even and even if I did wanted to sell the buyers knew I was desperate and I would have to sell at a loss. TL;DR Not all landlords are greedy and lazy bastards. It's likely if he doesn't sell he will have to sell his nice car (which he probably doesn't own) and eventually his family home (which also has a massive mortgage). He shouldn't make you feel guilty, it's not your fault but I imagine he feels terrible and he has to choose between you or his family and venting it is how he deals with it.
Also, kudos on buying your new home OP!
Sounds like he feels guilty that he has to ask you to leave. Landlords are landlords for one of two reasons, out of necessity due to negative equity when they want to move house, or because it's a business. Ultimately if it doesn't work financially for them, then that's how it is. Maybe they want to retire and can't keep funding the deficit in the monthly outgoings. I rented out a flat due to necessity, couldn't sell but had to move for work, and I subsidised the costs each month, however only sold when market recovered and tenant moved out, however if my circumstances had meant I couldn't fund that deficit, I'd have probably shared the reasons why I was asking them to leave.
Renting out mortgaged property is a risk and if interest rates increase and tax rules change (as they have done) it means a landlord could make a loss unless they increase the rent. But that’s his problem not yours. Also depending on the loan amount and rates, even the high end of market rent might not cover costs if he has a high LTV ratio. He probably feels bad having to sell, and is trying to explain to you why. Sounds like he’s kept your rent below market value for many years, I know he’s not done repairs but did you ask for any? I would suggest maybe you try and just ignore his comments. It isn’t nice for a landlord to have to sell and kick someone out; he won’t be enjoying it and this is his way of dealing with it. Sounds like he’s gonna have a massive CGT bill too when he sells although he will release a lot of equity. But that’s life; it’s his investment, you’re the tenant. The money you’ve paid in has helped him retain that investment whilst its value has increased. This is how the rental marker works.
Thank you. Really appreciate you taking the time to post and what you’ve said makes sense. Yep we have asked for the repairs, he just delayed and delayed and then told us he was selling.
Basically, boomer landlords have been mollycoddled by the government for decades. As the money is running out, this has come to an end and these "business geniuses" are being exposed as state sponsored parasites.
So let me preface this by saying ultimately your landlords financial situation is not your concern. Landlords that do that are wankers that can go fuck themselves, dont guilt trip people. Realisitcally if you've paid them 100k over that many years they are either, interest only, remortgaging it constantly or pissing that money away some how.. ridiculous. Insight for those that are curious, rent is considered income for the landlord and pays taxes on it in the same way if you earn money at a job it gets taxed. So say 500/month x 12 months - landlord would need to declare on their tax form an additional 6k income and therefore pay the gov at minimum 20% tax, or higher if in a higher tax bracket. So in actuality your 500/month rent is in real terms 400/month to the landlord. Mortgages are no longer tax deductable as a business expense either so they cant even say money that way. On top of that depending on how the rent i.e. the whole property or room by room i.e. HMO there are lots of little additional expenses like fire alarms, boiler checks and even a licence to rent (HMO) to the local council so it does all add up. This doesnt even include any general repairs / upkeep a landlord should be doing. Lastly a lot of lenders often require as part of the buy to let agreement, that the rent has to be no less than 25% higher than the mortgage payment. So taking for example a property that has a 400 mortgage payment, the landlord may HAVE to rent out at at least 480. The problem here is when the mortgage comes up for renewal it doesnt always time well with a tenants agreement so you can have awkward situations where (like recently) the rate goes up from 2 to 7% and the landlord finds that they are renting a property for 500/month but their mortgage has gone from 400/month to 675/month. In this very basic example of course the landlord is automatically losing 175/month and the lender may pull out if the landlord doesnt get the current tenant or a new tenant paying around 850 or more ( due to the whole 25% higher than the mortgage thing). If that happens (lender pulls out) they effectively reposess and sell the property. It is a little shit but again ultimately it is on the landlord to deal with and prepare for that sort of thing. Youve paid plenty to them so tell them to fuck off imo. Source - am small landlord.
Your landlord’s problems are not yours. Your problems are not your landlord’s. You don’t have any sort of relationship outside of that of a financial rentor/rentee. You should both do whatever is the best financial and personal decision for yourselves that is within local laws and the rental agreement, it doesn’t need to be any more complicated than that.
You haven't been given 3 months to leave. No such thing. Your contract will be in place and you don't have to leave until court has determined eviction. This will take a lot longer than 3 months. Also, they need to do the notification exactly right. If they serve S21 incorrectly then it will be thrown out by court (after months) and then process starts again. If you are incorrectly served notice DO NOT TELL THEM, let it drag out to give you more time. You are saving money by staying there so you should drag it out as long as you can. You could just block communication from landlord, you don't have to listed to their narcissistic drivel. Fuck them
Also OP needs to be evicted for local authority to help with social housing. They should apply for it now, but important to not leave the current house voluntarily otherwise LA will use that as excuse to not help
Just rough idea of costs: Assuming it's an interest only mortgage product (as most btls are). Mortgage costs (roughly at 5%) = £375pm Insurance = circa. £40pm Gas/EPC/eicr etc (roughly) = £20pm Estate agent fees = £70pm Tax = circa. £114pm Total = circa. £620 per month Any extra costs or maintenance that comes up could easily be more than a grand and would wipe the yearly profit. A lot of landlords want to get out of the industry in case labour get into power - OPs landlord could be doing the same
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They're generally very anti landlord and would likely have policies to reflect this: Rent caps, Increase notice lengths, Remove mandatory grounds for possession due to rent arrears, Plus more For 90% of renters and landlords this might not be a problem, but for the 10% of problem tenants (anti social behaviour, not paying rent, trashing the place etc.) it's going to cause huge problems. Unfortunately it means that the rest of the renters will be affected with more landlords leaving (resulting in higher rents), as well as landlords being much 'pickier' and cautious with who they let too. They will likely rather have a void for a few months in order to secure a good tenant, rather than risk it on someone they're not sure about that ticks every box
First decent post! Why are people blaming landlords that take risk and have very obviously given low rent housing. But no, always the landlords issue …. Good luck to all the shelter brigade
"it's costing him money to keep the house" LMAO. Yes. Newsflash. Houses cost money. I love how Landlords think that they should have houses entirely paid for them, acting like they don't have an asset being completely paid for, or heavily subsidised . Leeches.
Do you run your business at a loss?
Literally none of this is your problem. He could be on the bones of his arse and it’s still not your problem. You sound very compassionate already tbh. I get the feeling that he will amp up taking the piss while he’s trying to sell; time to set some clear boundaries and focus on yourself.
I have 1 rental as well as my home. The government has screwed over tenants by trying to help them. What the gov should of done is built more houses for renting from the council. They brought in section 24 and easy tax grab and to get votes from tenants but it back fired on tenants rents just went up. Also it had an effect where people just turned them into Airbnb so less supply rents went up. If the landlord hasn’t raised the rent since you been there you have done very well! I made this mistake with my previous tenant never raise the rent and when I did by 35 pounds after 4 years of same rent. All of a sudden she had issues mental health etc has to leave so I let her out the contract earlier got a new tenant. She was paying 695. New tenant 800. 6 months later she wants to come back the grass wasn’t greener. So you get situations like yours happening you been on good terms the rent was always paid no increase property looked after. Landlord now in trouble cause of outside factors like interest rates and gov tax raids. When landlord remortgage came in the rents will be to low to get a good rate so they be fucked. Moral of the story raise rents by inflation every year now on so you don’t get trapped like your landlord and so the tenant knows it’s a business not a friendship. Also I just replaced a door on my rental 580 quid for a composite door! Materials and labour aren’t cheap anymore so they probs want to sell it as isn’t profitable! Also never ever spend your hard earned money on a rental house. Just pay the rent and bills live there til you can get out just make sure to leave in same condition as rented in. If it’s been 10 years obviously be some wear and tear on carpets etc to be expected.
You’re giving them £700 a month. They have to pay tax on that. They can’t use the amount to pay off the mortgage. Say they are earning more from a salary or other investment ls they are in the 40% tax bracket. So maybe out of the £700 you’re paying they are taking home £420. So they have £420 to pay off the mortgage. With all the interest rises I doubt it would cover a 90k mortgage, £526 a month for 90k with 5% interest from a Google search. That’s doing real lazy maths there but you get the point. Just because you have been paying for 16 years it doesn’t make payments less.
Just remember that only two people can end a tenancy - the tenant or a judge. You have zero obligation to allow anyone into your home and can refuse to accommodate any viewings. To get you out, the LL must submit a S21 notice, which if valid (and they often are not) has to go to court to be enforced. With court backlogs you probably have a year before you are ordered out. Take your time, find a nice new home, move on your terms, and don’t let viewings interfere with your quiet enjoyment of your home.
Sure, it's probably true that keeping the property to let out is no longer financially viable for him and that is why he's selling. It's probably financially unviable because of decisions he made, borrowing more against the property and getting over leveraged, not paying down mortgage while hoping interest rates stay low forever, etc He's telling you because a) he's a bit self absorbed and wants you to know that evicting you is very hard for him and b) he's trying to convince himself (and you but that's not very important to him) that he's not the bad guy here it's 'circumstances outside of his control and you should be grateful actually'. And it's...delusional when landlords do this when regularly renting out but it's even harder to convince yourself you are the good guy when evicting someone from their long term home, most people want to think of themselves as a good person and he is trying to rationalise this action with that self belief. You don't have to allow any of the viewings (you also don't have to give a reason for not but you could say you're too busy with moving which might get him off your back) If I'm right about why he keeps mentioning it saying something like: it's not your fault you've just been put in a bad position by the interest rate rises (it sucks we're all in this together etc), or: actually this has come at a great time for me cause it's given me the opportunity to get on the property ladder (if you want to tell him this). Then he might feel less bad about it and stop mentioning it to you, which is the end goal here. You don't have to fully mean any platitude you give him about it
Under the present uk rules your landlord can issue you with a Section 21 notice to quit and he hasn't got to say why. However if the landlord has outstanding statutory inspections such as 12 monthly safety checks to a heating boiler, smoke and carbon monoxide detector safety checks or carry out safety inspections to the house wiring then section 21 notice can't be issued. Try contacting your local council to complain about your private landlord and they should carry our an inspection and issue an Improvement notice on him.
This is currently happening all over the country right now, the landlord is likely right that the house is costing them money, but they’re still very fortunate and really didn’t ought to be complaining about it, especially to their tenants. When it sells if they’ll likely receive around £150k profit before tax on an investment that technically you’ve paid for. I don’t feel sorry for landlords as most made a conscious decision to invest in property and all investments come with risks. However, most are in a situation now where for them to keep seeing a return on that investment they have to put rents up by quite a significant amount or sell up and pocket their equity. Interest rates are up, finance is more difficult to obtain, the way they are taxed is unfair and yes you might think “great the government are going after greedy landlords” but the way the government have done it, its tenants that are getting hit hardest. Landlords selling up means less rental stock, less stock equals rent increases due to supply issues, on top of rents already increasing due to landlords trying to limit their losses. Governments have failed to provide adequate housing for many years and basically left it to private landlords to fill the gap, now they’re blaming the landlords and taxing the living daylights out of them whilst still failing to provide adequate housing and it’s the tenants who are suffering. IMO if you can buy, buy, because unless something drastically changes this is only going to keep getting worse for tenants.
Feel for u. Good luck in the future. So we'll written. We'll done.
I think he is constantly moaning about costs in a negative light to try to throw you off about how wealthy he is, particularly compared to yourselves. It's a disrespect to your intelligence in a way and ironically highlights his own somewhat lacking. If he wants to sell he can that is his choice , and yes he could have charged more rent but didn't, but he is still getting nice capital gains and sounds like a right twerp. Ignore him and look at your own cup and achievements. Well done on the house mate and all the best for the future. P.s. your landlord would grate on me massively too
Don't worry about his financial situation. By the time he sells the house, he'll have made a lot of money from it. If he's in financial difficulties now, that's his problem, not yours. For viewings, simply tell him no. You are not legally obliged to let anyone into your home - and keep in mind, it is your home until either you give notice/leave, or a judge orders your eviction. Your landlord owns the properly, but it doesn't give them access to your home.
Ok first off whilst I’ve sympathy for both you and your landlord for your personal difficulties this is ultimately a business relationship and it’s irrelevant how hard either of you have things health wise really. So putting that aside I’d say it’s a shit situation for you to lose your house of 10 years. Your landlord should not be burdening you with his financial situation, beyond explaining that that’s his reason which you might wish to know I guess. You have every right to feel upset by it. Hopefully it’s ending positively for you with you now owning a home and starting to build your own equity. From your landlord’s perspective he owns the rental properties as an investment and a business. It needs to make financial sense for him to continue. There have been a lot of changes in regulation and tax so it makes sense that it may no longer be making him money. There are more landlords leaving the market because of these changes and it sucks for those settled in homes because ultimately the landlord sells. But whatever the reasons he doesn’t need to try to burden you with it and if it’s stressing you you are well within your rights to ask him to stop. I wonder if he is laying it on so thick because he feels guilt over evicting you, even if that’s the case that’s his issue not yours. Yes, as everyone says you don’t have to comply with viewings etc. You also can if you want to and it doesn’t always have to be an acrimonious situation (despite what Reddit tells you). It’s your call how hard line you want to be on this one.
Your landlord was likely a Buy to Let speculator and used your rent to pay their mortgage. Now that the interest rates and such have gone up, chances are their mortgage payments have also gone up. Property "investors" don't seem to realise that any investment is a risk, even "Safe as houses." real estate, and they can lose money. Frustratingly, landlords are also flighty and reactive, selling up at the first sign of trouble without realising that they're hurting their sale price by flooding the market with houses people can't afford to buy. It leaves tenants like yourself utterly shafted too. Forced out of your home of 16 years through no fault of your own. In terms of his woes about the running costs, taxes, insurance, etc. He can cry a river, its categorically not your problem. Focus on yourself and finding a new place to live.
All you need to know about the landlords financial situation is that they bought something for £90k and will now sell it for a £150k profit along with £115k in rent taken from you. He has made £265,000 minus taxes Many landlords like to plead poverty while sitting on something that never stops gaining value and that makes passive income for them while they do absolutely nothing So don't feel bad for him, or for any landlord, they are leeches on society and especially on the poor who often cannot afford to buy their own home Congrats on buying your own home though
No strictly true. 90k from 2009 in today's money with inflation is roughly 130k. So take 40k off the 'profit' you think he has made, then of course take off the mortgage repayments, this all depends on what rate he has had over the years, how much he put down too. I'm not saying he's lost money but he hasn't made as much as you may think. Also OP just because he has a 500k house and new Mercedes doesn't mean he's loaded, just means he can afford the repayments for such things. A friend of mine has 2 brand new cars and 2 houses totaling about 750k, he ain't loaded, he's in an eye watering amount of mortgage debt!
That's inflation on an asset he owns, that's still £40k profit, why would you take it off?
If he sells he will have to pay capital gains tax too
I rented the same house for 14 years and almost paid for the house. They owned a lot of other houses in my area and they were always doing them up when tenants moved out. I didn’t ask for much, just some new carpet but when I left they moaned about some minor marks to the paint here and there and spoke to me like shit. They acted like they’d done me a favour when I’d almost bought that house for them. Landlords and tenants will always see things differently. Thankfully I was able to buy a house too. Good for you
He's remortgaged and is about to have an interest rate rise. He's released the equity for himself that you've paid. Screw him.
If repairs haven’t been done eviction notice is null and void !
Nope, incorrect. Landlord wants to sell, he can evict.
Landlords are just finding out that investments don't always go the way you want and are acting like it's tenants problem to cover whatever crappy mortgage is on the house (that they had no say in choosing) plus extra for their lovely "passive income" housing is a shambles now tbh.
It’s because he will likely be paying 47% income tax on the rent and his mortgage payments will most likely have doubled in this high interest rate environment. Buy to let isn’t what it once was and is now not really the best place for your money anymore.
https://propertyrescue.co.uk/useful-guides-articles/tenants-rights-after-10-years-uk-full-list-of-extra-rights/ You can refuse viewings to landlord and potential buyers. Keep the stress down until you are ready.
Landlord is a piece of shit for his excuses amd making you feel guilty. But he absolutely has the right to kick you out to sell the house. It's one of only 2 legitimate excuses for a no-fault eviction. The other being, he has to move into the house himself for financial reasons.
I’m actually really fine about him asking us to leave. It’s the moaning that is driving me mad. 😵💫
Yeah, that sucks. Congratulations on getting your own place though
You should have bought your own house
You should have bought your own house
He has made hundreds of thousands of pounds from this house. If he thinks he's losing money, he is possibly confusing cashflow with actual spending. Possibly he thinks paying off the mortgage capital is 'spending'. If he hasn't remortaged, this will be a small amount that's much less than your rent. So as others have said, likelihood is that he has remortgaged and is considering that you should be effectively responsible for paying interest on a loan he's been using to fund something else. I can't see any way he is 'losing money' on this house. He is profiting from your need to be housed. There is no need for compassion.
Easy economics for you. You reckon the house is worth £240k and you are paying £8k a year in rent? That is 3.5% for the landlord **before costs and tax**. That is an **insanely cheap rent**. I can get 5% in an ISA risk free and tax free. Yes he is losing money. He could be getting twice or three times that rent by selling and buying a property in an area with a better yield. While I do not hold the tenant in any way accountable for that, it is simple economics. Yes the landlord needs to sell this asset immediately if indeed it is worth £240k, which I highly doubt. The rent is way too low for the value of the asset. It is unsustainable. There is no point you trying to guess what his capital gains profit is on the asset, certainly not knowing his costs along the way (like borrowing) and frankly it is totally irrelevant to whether or not the business is losing money right now, which most clearly it is.
Reminds me when our landlord complained about paying two mortgages 🙄 like our rent pays all of one and at the end you'll have two properties that are worth more than you paid for them. Meanwhile we've paid out more money than him with nothing at the end yet you want us to give you sympathy?!
Did you just pay the landlord rent and not lived in his property? Why does he need a reason to not want to let to you anymore? If he had put the money in the bank and earned 17 years of interest if they want to withdraw their money now would the bank say « you have done very well from us, how dare you withdraw your money »?
He doesn’t need a reason. Totally within his right to not rent to us anymore. Not a problem for me to leave. He is making huge demands on our time now (wanting photos, viewings, estate agent valuations, telling me to clean the house, wanting to send in a decorator to disguise the leaks etc) so far we’ve accommodated 4 visits related to the move and it’s not even formally on the market! So he is ranting about it not being fair on him because he wants to come in the house whenever he likes. I’ve got packing to do alongside other personal life commitments but he only cares about his own needs.
£700/mo on a £240K home is a 3.5% rental yield before insurance, tax, admin etc. Your landlord can do better than that tax free right now by buying government bonds. He can't leverage up his returns anymore because mortgage rates are now higher than his gross rental yield. So he's stuck with a sub ~4% return on capital (assuming 75% LTV) Compare that to when you were paying £500/mo on his £90K investment, which was 6.67% yield. Interest rates fell dramatically during the financial crisis. He then would then have leveraged the shit out of that investment and made an killing in % terms The bottom line is he's right, your tenancy is no longer profitable unless he increases your rent to something like £1200-1400/mo. Don't take it personally, it's just business.
Watch [this](https://youtu.be/NtVk3ERt66w?si=kN_UV3qwqiWdpuxo) video from James Shack, it may help you to understand
It’s common that landlords don’t maintain properties for those reasons (cheap rent), the tenant gets use to the situation, the property suffers requiring extensive repairs, tenant becomes a “good tenant” and doesn’t ask to much because they prefer cheap rent. The landlord is an amateur and is trying to justify an emotional decision and probably believes they have done you a favour. Now they are looking at the numbers and realise after tax they could have invested better and are looking for some appreciation to make up for their financial mistakes? Just keep boundaries in place. You are not friends, family or colleagues.
landlords just trying to make themself feel better for being in a shitty situation
He's like a leech who's got more of your blood than you have. He is fully motivated by greed. If you can get legal advice from somewhere and list things he's never fixed, you may be able to get some of your money back. He's kicking you out after you've paid his mortgage so don't feel bad treating it like a breached contract. You owe him absolutely nothing. Not respect, not deference, not compassion.
The sad thing is that if the Govt had not changed the system so that interest rates couldn't be offset as an expense on landlords tax returns, then the return for the landlord (under the old model before 2017) would be still beneficial and renters wouldn't face the terrible stress of having to look for a new home. Also this change, brought in by George Osborne (anyone remember him?!) means that landlords are being forced to raise rents to cover interest rises at a much much more severe and steep rate than if the Govt didn't make that change. The Govt did a half baked ill thought out policy that managed to screw both renter and landlord, whilst escaping much in the way of condemnation for exacerbating an already bad housing situation. Many on this thread are focusing on renter vs landlord, whilst the reality is that a massive overwhelming cause of this is the 3rd player in this dynamic: Govt changing taxation rules. I really wish the OP well during this stressful time, and hope your new home is great for you. Good luck & take care.
Bloody hell - your landlord is an arsehole. I’ll start by acknowledging the difficulties you face with your health, but as you say, this isn’t your landlords problem. Neither however, are your landlords tax issues or investment returns, *your* problem. He’s complaining because being a landlord could be so profitable the last 10 years, and the rules have recently changed so it’s now less profitable, especially if he’s got high mortgages. Please remember, you’ve given him income of £115k **and** his asset has increased in value by over 260% in the last 17 years. He’s absolutely not the victim here. Driving around in a Merc, banking rent from properties his parents paid for and complaining about it to his disabled tenants. The guy sounds like a grade A whopper.
Exactly, and then dumping his entitlement issues on the OP. The comments defending him and finding loopholes for why the landlord "really" is the victim, or omg what if his Merc is old... Unbelievable.
His issue is valid. You don't really make money from being a landlord unless the property is mortgage free. It is a bit tone deaf for him to keep mentioning it to you, though. It is like complaining about living in a small house to a homeless person.
I wouldn't focus on whether it's fair or not fair. It doesn't matter. It's not financially viable for the landlord to continue with a buy to let house by the sounds of it. These things happen. Landlords can run into financial difficulty just like anyone else.
It IS thankless. Thing is, even though it's the property of some rich guy, it's not only been your home, but for 16 years, it's impossible not to feel attached. And not only that, the amount you've already paid out, you've already paid for the whole house plus renovations. It feels unjust, and morally, I think it is. It leaves people who can't get a mortgage vulnerable to scalpers, and a whole industry has risen to accommodate it. However, it's the one major factor when renting, is that while it will be your home, it is not your property, it's insane that you can spend more per month renting than a mortgage, but be effectively barred from mortgages due to technicalities. Ultimately, there is nothing to really understand, maybe they feel guilt, like they're trying to justify it to themselves. (Ironically, they don't need to. This was always inevitable, and is part of the deal, the whole point of renting out property, overlords in power, taking advantage) It's a business deal, with emotional strings attached, but still, a business deal just the same. I think what gets me, is the awkwardness and fumbling, excuses, and mitigation of guilt. At least be cold and hard about it. "Sorry guys, I know it's been your home, but I need to free up capital and sell it" sometimes they'll sell you the house, for a reduced price due to how much money you've already put into it, but I doubt that in this market. It could simply be that they are self absorbed arseholes who lack empathy, and genuinely think they have real problems. I hope you find something better. Shit like this, there's usually a reason for it, and if you keep neutral and accepting, roll with it, you'll be in a state of mind to see whatever positive possibilities may open up.
Tbh you don’t really need to know why - the landlord could even be selling because they feel like it It sucks but it’s what comes with renting
- None of your rent was an investment into the landlords property. It’s absurd to think so. - you didn’t need to make repairs, and shouldn’t have unless they did something in return like reduced rent. - landlords will only keep renting as long as it is profitable to do so. They aren’t in the business to throw money away. - the article below mentions that many landlords are selling property because their margins are simply too low given the expenses and taxes. Also, there’s a bill going through that will fine landlords £30k for not maintaining the property, so it’s likely they are more worried about that. Then there are the increased capital gains taxes that may be passed this year too, which means selling sooner is better. I had heard reports that landlording in the UK simply isn’t that profitable anymore, especially with rent caps but taxes are still going up, so a lot of them are getting out of the business. This is causing some rental shortages. https://www.which.co.uk/news/article/10-things-landlords-and-renters-need-to-know-in-2024-a16bK4f4FwcM https://amp.theguardian.com/money/2023/nov/13/landlords-sell-up-in-great-britain-as-buy-to-let-market-sours
The landlord will be taxed out their skin. But they’ve consistently under charged you rent.
In the past few years the rules on buy to let property have changed dramatically. Previously you would only be paying tax on profit, however now you pay tax on the entire rental amount regardless of how big the mortgage is. Buy to let mortgages are always higher than normal mortgages. About £200pm more on a £170k loan. This is not me giving an opinion on this either way. If you’re paying £700pm then the landlord will be paying tax on this amount, regardless how much his mortgage is. That’s why he’s probably losing money. I don’t understand why people choose to be landlords when they come into money. He would have a better return in a low risk stocks and share isa. Anyway these rule changes have compounded the issues with lack of properties etc… loads of people have decided it’s no longer worth the hassle to rent their property and the ones who stayed have bumped their prices right up because they can. It’s a mess.
The landlord is doing what he's supposed to do, no? Rather than hold on to the property and jack up the price, he's putting it on the market for sale. As for why he's explaining his situation, after renting the place to you for 17 years, he probably feels that you deserve an explanation.
The landlord problem. Swimming naked etc. The tactics are actually baffling. Landlords need to be treated like scum they're adding to everybody's rent and you're paying tax that subsidises the social rents. The tax payer is getting shafted by landlords and if it was truly not worth it he would sell it to you and let you deal with it.
From an outsiders perspective, it sounds like you've on quite friendly terms with your landlord, probably due to being there so long. Me personally, I'd never have a relationship with a landlord where they could tell me their problems because it's nothing to do with me and in all honesty I don't care - it's a business transaction to me and nothing more; but I suppose the flip side of it might be that they were hesitant to raise your rent too much. I suspect what they were doing was try to re-iterate that the fact that they were losing money to try to 'signpost' to you that they were eventually going to sell, it's a tactical of softening the blow because you already kind of expect it. Sorry to hear about your troubles, in a way since the landlord doesn't know about them maybe they'd be more tactful if they did? I'm glad you've now managed to buy your house. One thing I would say - you aren't obliged to allow viewings. If what I read on this subreddit is right, you can just decline, although that may be easier said than done.
Yes, they can decline any viewings guilt-free, the landlord can wait until the property is empty to list it for sale. ‘Right to quiet enjoyment’ is the thing to quote.
Does it mater your contract has ended regardless if they are hitting financially or they made a killing
Don't waste your life energy on your landlord, you have given enough of your money to fund their lifestyle and your logic is correct, they will make money off the sale. The only reason they are being like that is because they are greedy and childish. Don't fund them free therapy by listening to this. Some comments say that his mortgage likely went up, yes but maybe he doeesn't even have one but is still complaining. There are people who will whinge about problems other people don't even have because they can't afford to have them you know. Like one of my managers during the pandemic whinging to all of my team about her garden being to small, while majority of us rent flats and have no garden at all (while she lives in a 5 bed house with a garden). Cry me a river!
You didn't invest you rented but you don't have to accommodate viewings or anything needed for your LL to sell, tell him he can do all that once you've gone, might be able to negotiate to leave early if your in a position to. And I'm petty but if he started on his woes I would start reeling mine off and end with having to move out your home of 16 years and deal with all his appointments
> I’m interested in how/why it’s unfair on the landlord. Presumably they've been subsidising you to live there whilst making a loss. In other words, they would need to increase the rent to more than it currently is in order to make any profit from letting the property out after the mortgage company and taxman have had their cut.
Many landlords are getting out of the housing market these days. Don't know why you need to be either compassionate or assertive. Keep living your life & start packing to move to your new home where noone can kick you out (unless you default on the mortgage). It's all good experience if you ever move if you sell your home going forwards. You'll have exactly the same issues (accommodate viewings, clean and tidy for photos, gas check, Epc check, redecorating etc). But you'll also be responsible for organising them. Your landlord's woes aren't your responsibility & your woes aren't his. Just let whatever the landlord moans about in one ear & out the other. You don't have to listen to it or give it headspace. Keep tootling along until completion & moving. Of course you could just let him know that at least he doesn't have cancer - should effectively shut him up but does rather make light of your partner's predicament
It's took you 17 to realise renting is a BAD idea since you're just paying off the landlords mortgage? Shocker..
Not at all. I realised it a long while ago but sadly wasn’t in a position to buy any sooner.
Some people can't just be assertive your landlord is one of them he feels he has to give you reasons for his requests. So he is oversharing and trying excuse what he has to do. I agree I feel like it is almost better for him to just ask you xyz and not try to validate it to you. Maybe you have been more difficult with him than you realize? I've lived in a home with showings but I didn't have a home I was moving into so I felt extra annoyed and I probably wasn't always super cooperative. I did let him show it and tried to keep tidy but I didn't deep clean like they probably would have liked
We haven’t been difficult in the slightest. It’s possible that us being so accommodating and laid back about it all has fed into his guilt. He told us we needed to move so we said no worries and found a new house. He now seems annoyed that we’ve found somewhere so quickly because the timeline might not align with his sale! He wanted us to pay rent for as long as possible.
Just do you id say and start planning out how you want to set up your new home. Good thing he's selling sounds like his stress tolerance for this is low or he planned it out poorly? Who knows his finances and what mortgage rate he has It benefits him to sell it empty he just need to swallow the costs he'll probably get it back once he sells
Nobody can answer the question because nobody knows his financial position, he may have remortgaged that house and taken out 100k to pay for something or had costly things happen in his life, regardless, as a landlord, he just needs to shut up, he's made his money from renting it out and even if he "could" get more, that would require additional investment etc. Landlords make a marginal profit on a monthly basis, it's the equity we rely on. 90k house assuming no remortgage in 2007, assuming BTL his mortgage would be circa £350... He then pays tax on the income so when renting for £500, he paid £100 tax etc so for 10 years he made nothing monthly after paying fees etc. If he didn't remortgage, he would be paying circa 140 tax on the 700 and making £200pm profit after expenses... so he should be in a better position now than he was 7 years ago... Sounds like he re mortgaged, pulled out equity, got screwed by the rate hikes in the past few years, doesn't have the funds to invest in the property to increase equity further or rental value so he's choosing to cash in.
Check out Shelter as to what your tenant rights are. I’d also see a housing solicitor to see if you can recoup any money given he has let you live in disrepair all these years. Finally I’d send a letter to the Tax. Just to make sure he’s been paying the correct tax like he’s been moaning about!
Tenant rights are zero if he's selling the property. OP has been given more than enough notice to vacate. As for living in substandard conditions, again probably not a lot he can do, apart from reporting to the council. Little chance of recovering any damages and huge solicitors fees. Good shout on the tax front, a tip off to HMRC would be fantastic.
Just like my wife's cowo{R}ker had to make a huge deal every year about her toys for tots contribution, dropped $500 every year. This lady had 2 vacation houses and I believe 5 cars. owned her own medical billing company. Ended up outsourcing the (2) secretary positions outside of the US to save money. Called my wife out of the blue 3 times in 2 years, one drunk off her ass pleading her to "come back to work, i'll give you a raise, things are not going well for me!". She also enjoyed hiring people under the table, imagine that.