Being a landlord can feel like a constant battle

Emma, I do not criticise what you are doing. In other parts of the country many young people would love to get hold of houses (at a discount) to refurbish, but they are simply scarce now. My first house was in unrefurbished condition and I learned a lot by bringing it to a reasonable standard. I think many others would do the same – my sons certainly did. Many smaller properties, particularly flats, seem to be snapped up because the letting market gives a decent return (compared to other investments) not only in income, but in capital growth.

I am not surprised it is only the prospect of capital gains that supports the buy-to-let market, given the acknowledged management difficulties and expenses. It is the leverage that enables this: if the monthly BTL mortgage interest payments and management expenses are fully covered by the rental income then the landlord can participate in 100% of any capital appreciation. This will depend on the loan-to-value ratio of the mortgage and lending is stricter nowadays so 100% LTV is less common on new acquisitions.

I am a bit perplexed by Emma’s comments that many of the thousands of properties in West Yorkshire valued at £100,000 or less sit on the market for months. I am aware of this and it occurs in many other parts of the country too, including rural areas. It is related to the strength or otherwise of the local economy and availability of work. Many de-industrialised areas have streets upon street of unwanted property. So why don’t the prices fall to a market equilibrium where supply and demand are in balance? This is needed in order to lubricate the housing market generally and provide opportunities for people to move and release properties elsewhere.

I remain curious to know how the CGT and IHT implications are factored into private landlords’ business plans, especially as their portfolio passes into double figures.

Hi John. With regard to Capital Gains Tax , the increase in property values in West Yorkshire is really quite low overall, so many of our houses have not increased much in value in ten years…I think when we do eventually sell we will do it bit by bit and just pay what’s due. And as for Inheritance Tax, well hopefully it will all have been sold before that tax is relevant. I think these things would matter much more if we had a very valuable portfolio, but the fact is that one residential house on many London streets would be worth the same as our assets.

Hi Emma – I have friends who buy, sell, renovate and rent property, mainly in West Yorkshire. As you say, property prices are often very reasonable. Usually they look for properties that are structurally sound and in good or improving areas, but need modernisation. Over the years they have built up a team including plumbers, electricians, builders, kitchen fitters, gardeners and letting agents in two areas. I have often stayed in their properties between lets and am very impressed by the standard of workmanship. I have not discussed the economics of their business, which includes their son, but I gather that they have gradually been able to cut down on mortgages over the years. Best of luck.

It is exactly these sorts of properties that also suit first time buyers who will often put a lot of work in themselves, as and when funds permit, but gives them a place of their own and a better start on the housing ladder. They gain financially when they sell and move up by the improvements they have made.

As Emma has pointed out, there is plenty of available properties in West Yorkshire. The ones my friends buy are in need of refurbishment.

Beryl- I agree with every word you said (cue to give me a thumbs down too ) but nobody will pull the wool over my eyes . I have watched slum landlords rake in money from the poor who are never able to obtain a mortgage . Council houses snapped up when Maggie “freed them up ” . Scotland has blocked that now . They have insisted a certain number of houses on new builds are for cheap rent and rent to buy and surprise -surprise ! council house building is on the increase there . I have seen all the tricks of the day played on tenants by landlords , so sorry I will not be crying into my hankie for them , for every good one the is 100 bad . When you live in poor surroundings , talk to poor neighbours visit their homes for nearly 20 years repairing their phones you see real life not some rose tinted version of it viewed from afar . Nobody remember Rachmanism ? -London area . I have given Beryl a thumbs up which removes the thumbs down but I expect several thumbs down for me but that just shows the lack of real information on real life living in this country . Dont talk about it , dont publish it , those Poooor business people , when I see young people made homeless by removal of housing benefit and spikes put in streets to stop the homeless being seen by tourists it just shows the social decline of this country into -me-me-me .

Many local authorities had a deplorable record for maintaining their tenanted properties and allowed them to become run down to the point they had to be demolished at only a third of their life expectancy. In the whole of Norfolk only Norwich City has any significant housing stock now as so many in the other areas have been acquired by the tenants under the right to buy [and many of which are now in private landlords’ hands] or were transferred en bloc to housing associations. Norwich has one of the largest Council-owned housing stocks in the country and has lost very few through the right to buy but it is now smarting under new government requirements to facilitate tenant acquisitions much more readily and to sell off the properties with the highest values on the open market, notionally to fund additional social housing supply.

You can’t look further than first hand experience Duncan. There is a book within waiting to be written there I feel!

Avoiding the temptation to venture into politics, Emma’s most recent post does emphasize the existence of and the reality behind the north-south divide in this country.

There are affluent areas in the north, and deprived areas in the south. I used to live in the north midlands and there are many attractions – lower housing cost and more choice perhaps, lovely country, less commuting, nice people, ………What’s not to like. I’d like to see instead of a vanity project like HS2 (and Trident) putting money into moving companies and public bodies away from the south east so we spread the population more evenly and ensuring that attractions like the arts – music, theatre, opera, pictures – and sports are not centred on London. Which? could move out of London and set an example. The BBC did.

I was also raised in the Midlands Malcolm and I am all too aware of the social division that exists at local level in large cities and towns such as Birmingam and London. House prices can vary according to which area you happen to live. There are also pockets of more affluent areas in the North such as Cheshire and Harrogate for example.

The North-South divide is a generic term that pertains to the majority population residing North or South of what used to be referred to as The Watford Gap at Daventry, Northamptonshire and you only have to look at the difference in house prices to realise it does exist. There is a sign post erected at the M1 Service Station defining the unofficial boundary and dividing point.

When I first moved to my current house in a beautiful village in the South on a small development, most of the houses were occupied by single retirees who had downsized. The downturn in the economy lead to homes being bought by wealthy investors, (some actually live abroad) renting them out to tenants who have no regard for the existing home owners who go to great lengths to keep their properties well maintained. You can tell at a glance which properties are rented and which are owner occupied.

Landlords need to be made aware how their investments in property can affect the lives of others, after all most don’t have to live next to their tenants. If they did maybe they would have a better understanding of the annoyance some can cause to their neighbours and act accordingly.

Hi Beryl. You have obviously had some poor experiences of living near bad tenants and I sympathise. However there is very little that a landlord can do when a tenant lets a house go downhill as the landlord is legally obliged to let them have a right to privacy. Everybody chooses to live their lives differently – if the house was owner occupied and still left to deteriorate there would be absolutely nothing you could do either. I think that perhaps you would look on this as the inhabitants’ fault. When houses are owned by a third party the inhabitants are still to blame for much of the mess.
Your previous comments suggest that you feel sorry for those who have to rent, but surely you should be blaming them for gardens which are left to grow wild etc. It is a tenant’s responsibility to maintain a property while they are living in it apart from necessary repairs etc. Would you like to be the person who tells the landlord to expel the tenants? This is often difficult and costly, and would mean that those people who you would like to get a foot on the property ladder are made homeless once again. This just creates a very vicious circle whereby the tenant has to leave the property and pay new reference fees and moving costs. The landlord has to put money into repairs, and then the rents might increase. I think that all too often landlords are blamed for the condition in which other people choose to live.

Here ! here ! Beryl you have a fan on this issue ,more power to your elbow .

What “council owned property”? That is surely the point – there is very little of it left, and an increasing population that needs to be housed. At £340 per calendar month I think that even the stingiest tax-payer would agree that they are getting value for money if they are able to house a family for that amount! And the private landlord has to do all the repairs. Local councils clearly think it’s a no-brainer.

Hi Graham. Yes you are right…when a boiler goes I can lose much of the profit for the year.

Local Housing Allowance rates are £80.55 per week for a one bed house, £96.91 for two beds, and £113.92 for three beds. Can I also add that while there was an accreditation scheme for landlords, I was always part of it, and I adhere to all my obligations. I invariably re-carpet and repaint as a minimum when new tenants arrive. I am very proud of the houses I provide and my tenants and I always get on very well. If only landlords could be cut a little bit of slack sometimes it would be great!

Emma,
I hope you aquire these properties at a really low price cos I just can,t see where your profits are coming from. Considering the expenditure that you say you do including your time every time a new tenant comes in and without being rude you need to re-brand yourself as the Salvation Army. I really hope that the Capital growth on your properties are good otherwise surely the numbers don,t stack up. Its clear that L.H.A. rates are different in areas, DORSET is higher but saying that the property prices are also higher. Down here 1xbed rate £105.94 & 2xbed rate £136.93 till 2020.finishing on a positive several areas sections of Dorset have accreditation schemes for Landlords, we have been trying for 3 years to get an accreditation scheme for TENANTS then we see first hand who has issues, bad debt ,before somebody throws us a curve ball but as you can imagine all the will in the world it still has NOT arrived ,so with L.H.A. tenants like tenants with jobs there is an element of luck involved .And I have had some where there was no luck at all. Good luck with your venture and clearly with the compassion you show I hope it all goes well for you ,but as always there will be some that will class even you as that nasty ,greedy landlord .

I very much agree with you about the need for council housing, but with long waiting lists in some areas, what is the alternative to private landlords?

Wavechange I think my latest comment goes some way to answer your question.

I see your point, Beryl. It’s a subject I know little about.

Thanks for this Andy. I totally agree with many of you that government should be under an obligation to build more social housing. I have long discussions with my tenants about this issue, and the fact that hundreds of other families are in front of them for council accommodation. It is very sad. It is apparent though that a council such as Kirklees, who have had to make severe cutbacks over the last few years, feel that the way forward is through private landlords. They have reduced the LHA which they will pay for tenants, and increased the regulations for landlords. This is clearly preferable however to spending £100-150,000 to build a new house (and they need many hundreds of them), and having to employ a huge team of maintenance workers. They simply can’t afford to do it.