How the establishment are Demonising good people
I began my ‘career’ as a landlord completely accidentally. I lived in my house for 18 years before moving on. It previously belonged to my sister and prior to that, my grandparents. I didn’t want to sell the house because of it’s emotional ties, so ended up renting it out (I knew nothing at the time about being a landlord).
In 2014, we were all still recoving from the crash of 2008-2009. Many people bought houses at the height of the market and were now finding that their asset was worth a huge chunk less than they’d paid, thanks to greedy bankers and BS lending practices. I was lucky in that respect, but even my house wasn’t worth a great deal more than i’d paid for it.
We’d bought a house in Durham in June 2014, so I had to find out quickly about renting my old house out. I organised a few visits from local Estate Agents (there were only 2 in my town) and signed up with Reeds Rains to manage it for me. Their fees were 12% per month of the rental figure. They also charged me for an inventory, tenant finder fees and others. The result was that I wasn’t paid any nett rent for the first 3 months, it was all eaten up in fees.
At the same time, I had to apply to my mortgage lender for ‘consent to let’. Fortunately this was granted to me, but they told me i’d have to ask them every year to re-grant the consent. The rent I was getting was just covering my mortgage payments, but I was ok with that. I wasn’t making any cash flow from it, but someone else was paying my mortgage so I was quite happy. I found out that I could claim for other expenses and these could be offset against my tax bill.
My first ever Tax Return
I’d never filled in a tax return before, because i’d paid my tax through PAYE whilst working and it was all taken care of for me. In that first year I declared the 9 months of income from property and paid my tax quite happily. Two years later I was made redundant.
Fast forward a couple of years and my first tenant was still with me, but suddenly she decided to leave because she felt threatened as a single woman by some goings-on a few doors down the street. Reeds Rains found another tenant for me but she only lasted 6 months before falling pregnant and moving back to be close to her mum. Another set of fees to pay. Shortly after that I got new tenants again, this time a couple of girls, best mates. They hadn’t rented before, so didn’t really have any idea, but they signed up for a 12 month tenancy.
Trouble at t’Mill
Shortly after they’d moved in, I started having trouble. They set the burglar alarm off and couldn’t stop it. One of them managed to track me down on Facebook and I agreed to have someone visit to look at it for them. When he got there he reported back that the alarm had been disconnected by the tenants ‘friend’. I told them this wasn’t on and they agreed not to do it again. I paid £75 to have the damage repaired.
Two months later, the shower started to play up. The girls had a bath available too, so they still had washing facilities. I started contacting plumbers and told the tenants not to use the shower in the meantime. The next month I got a phone call from the Letting Agent telling me the tenants had decided to withold part of their rent because the shower wasn’t working! I told them I was getting quotes because the problem appeared to be bigger than I first thought.
We arranged a date for a builder to go do the work, which was estimated at £1,150. However, on the day in question the girls were not answering either the phone or the door. Because of this, the shower wasn’t fixed and they were still witholding the rent. They thought they were being clever, probably doing what friends ‘advised’.
Another two weeks later I learned from the Letting Agent that one of them had moved out and the other one couldn’t afford to pay the rent on her own, so she’d be moving out too! Hang on, you’re only 3 months into a 12 month AST! I granted her early release on the condition that she continued to pay rent until i’d found another tenant, but she decided she wasn’t going to do that either. Unbelievable! Taking the piss actually. Her dad ended up covering her rent, disgusted with his own daughter. In short, that year the property also needed a new boiler and I made a pre-tax loss of about £3,400.
I’d got a new tenant however and everything seemed to settle down, but around the same time our wonderful Chancellor of the Exchequer decided that we landlords couldn’t claim relief for the interest on our mortgages anymore. Because I still had an ordinary residential mortgage, not a proper Buy to Let one, I was going to be hit hard by about £400 per year by 2020. I had made a big loss the year before, so it didn’t hit me straight away, but it will soon.
Universal Credit bollox
Shortly after this, the Government rolled out Universal Credit. This they said was to simplify benefits, but it was bodged badly with the result that some claimants had to wait 5-6 weeks for their money, resulted in some DSS tenants falling behind with their rent. Others were finding that if they were as much as late for an appointment at the Job Centre, benefits were withdrawn. People were being asked to live on pennies per week. Landlords were not receiving rent and had to wait. This didn’t affect me in particular (I always had working tenants), but some landlords then began advertising their properties with a ‘no DSS’ clause.
Another brilliant idea to ‘protect tenants’ was to stop Letting Agents charge certain fees to tenants when a rental agreement was set up. This hasn’t really hit home yet, but it will result in the tenant fees being passed on to the landlord. I asked a local Estate Agent and he confirmed that while he will only pass on a small portion, this is what will happen, sure as night follows day. Rents will need to rise if this comes true. The tenant will be paying higher rent rather than fees to Letting Agents.
‘No DSS’ sounds perfectly ok to me!
The authorities then decided that landlords wouldn’t be able to say ‘No DSS’ as it discriminated against tenants on benefits! That’s all very well, but why should a landlord be forced to rent to people who could have the benefits rug pulled from under them at a moments notice? Why is that acceptable as a business plan, to have our income stopped? Sure, it protects tenants, but it penalises landlords who are also trying to run a business against the backdrop of all the other changes! More total bollox.
Adding in a blanket 3% imposition of Stamp Duty on any BTL purchase, the business of being a landlord is getting harder and harder. Many landlords are selling up because they are now being taxed on turnover instead of just profit. They will be making a loss on their property. It doesn’t make business sense! Considering this in a climate of chronic housing shortages, the result will be a further reduction in available housing stock. Less stock means rent will need to rise further. The short- sighted rule changes are hammering landlords who are trying to make a living and provide good honest housing for those in need. It’s a total abortion the way it’s being implemented, almost ad-hoc.
Cloud Cuckoo Land
I like to keep my assets tidy and desirable for tenants, and whilst i’m not allowed to say ‘No DSS’ on my adverts, that’s a policy I will employ. I’ll ensure my tenants are vetted and are working. I can’t afford to have tenants living rent free because the Government has removed their benefits. It has nothing to do with ‘discriminating against DSS claimants’, but everything to do with mitigating the risk against my business and livelihood because those that make laws as usual haven’t thought them through. Doing nothing would be extremely brain-dead and any system that expects me to operate this as the basis for a business is living in Cloud Cuckoo Land. They can go and do one!
Any comments Ladies and Gents? Please leave them at the bottom of the page.
Copyright DK O'Hara and dkohara.com 2017-2019. All rights reserved.
Dkohara.com writes about products and services to help you navigate when shopping online. Dkohara.com receives a commission from our affiliate partners when you buy through our links, but our reporting and recommendations are always independent and objective.