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Thursday, May 29, 2014

Generation tenant & landlord - the facts

We all know that politicians spin information for their own political benefit. Labour 'lovies 'Ed & Ed the comedic double act have been doing that recently trying to hook in 'generation rent'. Here are some useful facts from a useful piece of work produced by Allsop & BDRC that might dispel some of the myths banded about by the politicians.

Firstly, landlords are not after making a fast buck. 78% of landlords see the main motivation for building their property portfolio is to provide for their pension.

Despite the stories of spiralling rental costs their figures reveal:
  • the average rental for a 2 bed flat in London (zone 1-2) has gone up by just £5 over the last year
  • the average rent increase is 4.2% over the last 12 months - our own Rentindex shows rents have fallen by 1.7%
  • only 74% of gross rental income remains after a landlord paying management & maintenance costs
  • 2 years 6 months is the average tenancy (pouring scorn over the idea that landlords are constantly booting tenant out because they can then jack up the rent)
It's not what the politcians want to hear but being a landlord outside Knightsbridge maybe isn't always a bed of roses.
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1 comment:

Anonymous said...

I have two BTL properties on the South Coast, from which I've make a small profit since interest rates have been low. Before that, it cost me more to let & maintain the properties and pay the interest than the rental income. When rates go back up, I am unlikely to do more than break even.

Like many BTL landlords, I am betting on house prices rising sufficiently over the longer term to allow me a small income in my retirement. I have no pension, and thanks to the way that all parties have lurched towards the right-wing, it's pretty obvious that the state is withdrawing from any responsibility for looking after people in their old age.

This is a very risky strategy, and I live with the constant worry that a housing crash and hike in interest rates could leave me bankrupt with negative equity. If that happens, I will lose everything I have worked for all my life.

If my strategy is successful, I might just about be able to afford to retire one day.

Whilst being a landlord is relatively easy, it can also be stressful and there is always something to do. OK if you are a professional landlord, but most of us are not and have to fit in all work to be done on our properties around full-time jobs.

Of course, the millionaire politicians that populate all parties couldn't possibly understand this. They live in a world so far removed from reality that they have no idea what life is like for ordinary people.