UK Landlord Forum / Life

Hi all,

I am trying to work out the foreseeable costs related to the Renters Rights Bill, so I can adjust my financial planning.

Clearly some of the potential costs can't be easily calculated such as section 21 being repealed.

Some are potentialy more straightforward such as the new digital landlord database and ombudsman although I haven't got a clue how much these will cost.

I don't know whether we have to pay am annual fee to the ombudsman or if it's chargeable on a case by case basis.

A lot of Councils appear to be introducing selecting licensing which costs on average around £700 for 5 years from what I can see. I know that's different to this legislation but certainly a significant impact on  landlords financialy.

Has anyone managed to work out the mandatory costs associated with this new piece of legislation.

Do we know if the costs will apply to each property owned or is it one fee for the landlord regardless of number of properties?

Thanks in advance
Bob

Why does it matter?

Letting property is a business. You charge the rent that's going to deliver the best return. Which is usually (but not always) market rent adjusted down for good long term tenants to encourage them to stay.

If that makes you enough money to make letting worthwhile, great. If not, you're in the wrong business.

Legislation happens. You review the new situation and remake the decisions.

If you don't know where the possible legislation might leave you, your business is too marginal and it's time to leave.

Quote from: jpkeates on March 02, 2025, 10:14:38 PMWhy does it matter?

Letting property is a business. You charge the rent that's going to deliver the best return. Which is usually (but not always) market rent adjusted down for good long term tenants to encourage them to stay.

If that makes you enough money to make letting worthwhile, great. If not, you're in the wrong business.

Legislation happens. You review the new situation and remake the decisions.

If you don't know where the possible legislation might leave you, your business is too marginal and it's time to leave.

I agree with you entirely, however the costs related to compliance with this new legislation will impact rents going forwards.

As you alluded to in your response most of my properties are rented out at less than market rates because of long term tenants, within the last few years I have been increasing rents gradually at around 3 % but may need a higher increase this year if the cost of compliance is going to be significant.

I did read a impact assessment by the government which suggested it would cost £20 per property but somehow I don't think that's likely to be realistic

Quote from: Bobup on March 03, 2025, 03:31:57 PM...most of my properties are rented out at less than market rates because of long term tenants...

That's not a reason, not a valid use of because. That's just simple mismanagement on your part, likely brought about by some inherent laziness. No wonder you are concerned.

It might not be mismanagement. I used to let go long term tenants at below market rates. That was (I believe) a sound commercial decision.

Agree about the "because", though.

I am in complete denial about changes to the law. I have used up so much energy in the past, worrying myself sick about things that have never happened.  I am now an emu.

Quote from: heavykarma on March 04, 2025, 09:17:28 AMI am in complete denial about changes to the law. I have used up so much energy in the past, worrying myself sick about things that have never happened.  I am now an emu.

That's probably the best strategy! I might be over thinking matters.

Quote from: Hippogriff on March 03, 2025, 04:51:40 PM

Quote from: Bobup on March 03, 2025, 03:31:57 PM...most of my properties are rented out at less than market rates because of long term tenants...

That's not a reason, not a valid use of because. That's just simple mismanagement on your part, likely brought about by some inherent laziness. No wonder you are concerned.

Not laziness, I am definitely a hands on reasonably well informed landlord. The rationale was retain good long term tenants who provide minimal trouble versus more rent but risk of problem tenants and potential shorter let's voids etc. One of my tenants has been renting for 12 years and whilst I know many landlords focus on maximising income my view is more long term.

Then it's a combination of laziness, incompetence and nefariousness... modest and regular rent increases are not only about more rent, one objective is not to create a "rental trap" whereby the property in question is not sinking or swimming on its own merits, but is merely a cost-effective way of keeping a roof over someone's unhappy head... a roof where another side-effect is that both parties can gradually lose interest in maintaining the property and it slowly falls into neglect and disrepair.

No-one can, or should, try to avoid Inflation. Appreciating its existence is not about maximising income.

A rent increase in no way equals change of Tenant. Sure, it might if you abuse it.

For every story about a long-term Tenant with hardly any rent increase I can cite my own example - tenancy started in 2014 at £550 per month, now at £680 per month, will be £700 per month in August. In the grand scheme of things it's nothing. The figure of over 20% looks great, sure, but it's over a decade.

As I'm now a long-term Landlord my worries are less and less about changes in Government and legislation, my worries remain the mortgages and paying down any remaining debt I do have (which I've kept small, in my eyes) and allowing that true passive income.

Once we all know what the marginal costs are, you will be able to adjust the rents accordingly. In my view there is little point trying to calculate likely cost implications of the Act now as some are unquantifiable, such as the cost of making an error when the penalties are hugely increased.