RIO (rent it out) - the rise of the accidental landlord

[Frank Hovis]

It's back, I haven't heard these terms used since, um, the last mini crash and the major crash 1988 - 96.

People move or inherit a house, can't find a buyer for "what it's worth", and thus rent it out until such buyer appears.

Only they don't.

This is stage two of the phoney war after a big uptick in listings which don't sell.

I called it end of last year so I can't call it again, but I would if I could.

 

Rent increases to slow as ‘accidental landlords’ flood the market

Story by Riya Makwana  • 15h

Britain’s rental crisis is forecast to ease in 2024 after the depressed housing market prompted a wave of “accidental landlords” to put their properties up to let.

Estate agent Winkworth said it expected rent increases to slow this year as an increase in supply puts downward pressure on prices.

Renters have more choice as homeowners put off selling their properties in a weak market and instead turn to renting them out.

An increased number of so-called “accidental landlords” will give tenants more options and should reduce the power of landlords to raise rents, Winkworth said.

Many tenants are also hitting the limit of what they can afford when it comes to rent increases.

The company said: “We believe that the rise of accidental landlords, postponing their sales due to price uncertainty and switching to the lettings market, combined with tenants hitting affordability ceilings, will lead to… slowing rent increases.”

Private rents paid by tenants in the UK rose by 6.2pc last year and 6.9pc in London, according to official figures. Housing costs surged as landlords passed on the cost of higher interest rates to tenants.

The rapid rise in borrowing costs has also depressed the property market, weighing on house prices and transactions.

Rent increases to slow as ‘accidental landlords’ flood the market (msn.com)

 

 

[Bear Hug]

I receive a letter in Dec every year with rental increase for end of February. 

Last year it was 2%. This year there was no letter. 

Looking on rightmove, my rent is at least 20% below advertised for similar places. No idea who accepts those ridiculous prices and happy to stay where I am. 

[Frank Hovis]

23 minutes ago, Bear Hug said:

I receive a letter in Dec every year with rental increase for end of February. 

Last year it was 2%. This year there was no letter. 

Looking on rightmove, my rent is at least 20% below advertised for similar places. No idea who accepts those ridiculous prices and happy to stay where I am. 

 

Definitely.  I was perfectly happy to rent and let someone else look after the often expensive maintenance.

Though you can be caught out when new circumstances arise, as set out on the Devon and Cornwall rent crisis thread where people who had rented the same house for twenty years and were fully inetnding to stay there for another twenty found that Lockdowns / wfh shot rents and prices up by about 40% which most existing tenants could not afford to pay.

 

Edit: I bought where I had been renting from a RIO in 1996, though tbf she was desperate to sell and kept offering me a lower and lower price until I bought it primarily for the convenience of not having to move.

Edited January 11 by Frank Hovis

[Bear Hug]

It's <3% gross yield. If it does go up by 20%, I'll probably still stay. But buying/moving here or elsewhere will be considered then too. Just no point at this price. Hope the rent increase letter didn't just get lost in the post, and it's an actual freeze. 

[Boon]

This is something I've captured in my own stats. 

The number of houses being listed isn't growing that much (net adds less than 400 on 50k listings since Christmas), but the rental properties are growing hugely (net adds of around 2k on 31k listings).

Listings have almost doubled in 13 months, although maybe even at these levels demand is keeping up.

Looking at my area prices are falling off the peak, but much like the sales prices the peak was comprised of kite-flying prices which were obtained in a FOMO period. But still you are talking 20% more than pre-covid average.

I dunno if BTR distorts the figures as it becomes a bit more of a force. They are expensive rates but are not strictly apples to apples as the price often does not include incentives and also includes extra amenities. 

[spygirl]

2 hours ago, Frank Hovis said:

It's back, I haven't heard these terms used since, um, the last mini crash and the major crash 1988 - 96.

People move or inherit a house, can't find a buyer for "what it's worth", and thus rent it out until such buyer appears.

Only they don't.

This is stage two of the phoney war after a big uptick in listings which don't sell.

I called it end of last year so I can't call it again, but I would if I could.

 

Rent increases to slow as ‘accidental landlords’ flood the market

Story by Riya Makwana  • 15h

Britain’s rental crisis is forecast to ease in 2024 after the depressed housing market prompted a wave of “accidental landlords” to put their properties up to let.

Estate agent Winkworth said it expected rent increases to slow this year as an increase in supply puts downward pressure on prices.

Renters have more choice as homeowners put off selling their properties in a weak market and instead turn to renting them out.

An increased number of so-called “accidental landlords” will give tenants more options and should reduce the power of landlords to raise rents, Winkworth said.

Many tenants are also hitting the limit of what they can afford when it comes to rent increases.

The company said: “We believe that the rise of accidental landlords, postponing their sales due to price uncertainty and switching to the lettings market, combined with tenants hitting affordability ceilings, will lead to… slowing rent increases.”

Private rents paid by tenants in the UK rose by 6.2pc last year and 6.9pc in London, according to official figures. Housing costs surged as landlords passed on the cost of higher interest rates to tenants.

The rapid rise in borrowing costs has also depressed the property market, weighing on house prices and transactions.

Rent increases to slow as ‘accidental landlords’ flood the market (msn.com)

 

 

I have a vague memory of some god awful 90s sitcom that was about a split up couple living with each as theywere in negative equity./

Going by the collapse in local - and national - sales theres going to be a lot of people with houses they dont want.

 

[ccc]

3 hours ago, Frank Hovis said:

It's back, I haven't heard these terms used since, um, the last mini crash and the major crash 1988 - 96.

People move or inherit a house, can't find a buyer for "what it's worth", and thus rent it out until such buyer appears.

Only they don't.

This is stage two of the phoney war after a big uptick in listings which don't sell.

I called it end of last year so I can't call it again, but I would if I could.

 

Rent increases to slow as ‘accidental landlords’ flood the market

Story by Riya Makwana  • 15h

Britain’s rental crisis is forecast to ease in 2024 after the depressed housing market prompted a wave of “accidental landlords” to put their properties up to let.

Estate agent Winkworth said it expected rent increases to slow this year as an increase in supply puts downward pressure on prices.

Renters have more choice as homeowners put off selling their properties in a weak market and instead turn to renting them out.

An increased number of so-called “accidental landlords” will give tenants more options and should reduce the power of landlords to raise rents, Winkworth said.

Many tenants are also hitting the limit of what they can afford when it comes to rent increases.

The company said: “We believe that the rise of accidental landlords, postponing their sales due to price uncertainty and switching to the lettings market, combined with tenants hitting affordability ceilings, will lead to… slowing rent increases.”

Private rents paid by tenants in the UK rose by 6.2pc last year and 6.9pc in London, according to official figures. Housing costs surged as landlords passed on the cost of higher interest rates to tenants.

The rapid rise in borrowing costs has also depressed the property market, weighing on house prices and transactions.

Rent increases to slow as ‘accidental landlords’ flood the market (msn.com)

 

 

I did an entire thread on this on TOS in 2009 that went on for years. 

[Wight Flight]

5 hours ago, Frank Hovis said:

It's back, I haven't heard these terms used since, um, the last mini crash and the major crash 1988 - 96.

People move or inherit a house, can't find a buyer for "what it's worth", and thus rent it out until such buyer appears.

Only they don't.

This is stage two of the phoney war after a big uptick in listings which don't sell.

I called it end of last year so I can't call it again, but I would if I could.

 

Rent increases to slow as ‘accidental landlords’ flood the market

Story by Riya Makwana  • 15h

Britain’s rental crisis is forecast to ease in 2024 after the depressed housing market prompted a wave of “accidental landlords” to put their properties up to let.

Estate agent Winkworth said it expected rent increases to slow this year as an increase in supply puts downward pressure on prices.

Renters have more choice as homeowners put off selling their properties in a weak market and instead turn to renting them out.

An increased number of so-called “accidental landlords” will give tenants more options and should reduce the power of landlords to raise rents, Winkworth said.

Many tenants are also hitting the limit of what they can afford when it comes to rent increases.

The company said: “We believe that the rise of accidental landlords, postponing their sales due to price uncertainty and switching to the lettings market, combined with tenants hitting affordability ceilings, will lead to… slowing rent increases.”

Private rents paid by tenants in the UK rose by 6.2pc last year and 6.9pc in London, according to official figures. Housing costs surged as landlords passed on the cost of higher interest rates to tenants.

The rapid rise in borrowing costs has also depressed the property market, weighing on house prices and transactions.

Rent increases to slow as ‘accidental landlords’ flood the market (msn.com)

 

 

This is a classic of the type - though I think it is a developer rather than an OO.

https://www.rightmove.co.uk/properties/143532944#/?channel=RES_LET

Was on for £2,250 last March. Now £1,650.

 

[Democorruptcy]

I thought we'd had accidental landlords for years, aided by low mortgage rates.

[onlyme]

On 11/01/2024 at 10:24, Frank Hovis said:

It's back, I haven't heard these terms used since, um, the last mini crash and the major crash 1988 - 96.

People move or inherit a house, can't find a buyer for "what it's worth", and thus rent it out until such buyer appears.

Only they don't.

This is stage two of the phoney war after a big uptick in listings which don't sell.

I called it end of last year so I can't call it again, but I would if I could.

 

The one we bought they tried that, not goping to work well in many market sectors / areas, goign to pu a lot of renters off if they want a stable rental and not be told to piss off in 6 months if a sale comes through.

Last year we were being told with BTL selling up there would be nowhere to rent and demand would further outstrip supply, not happening, number of able or willing renters per property is elastic to a certain extent.

[Frank Hovis]

18 hours ago, Democorruptcy said:

I thought we'd had accidental landlords for years, aided by low mortgage rates.

 

Accidental as in don't want to be landlords but have become such as they cannot sell the house for what they perceive it to be worth, as opposed to mug amateurs buying BTLs for their pensions.

[Democorruptcy]

6 hours ago, Frank Hovis said:

 

Accidental as in don't want to be landlords but have become such as they cannot sell the house for what they perceive it to be worth, as opposed to mug amateurs buying BTLs for their pensions.

Yes I know what you mean, just did a quick search picking a year before mortgage rates went up and in 2021 7% were accidental landlords. I think it's been a thing since the GFC. The covid boom might have helped some sell before those 2021 stats.

https://www.thepropertydaily.co.uk/article/2021/04/12/accidental-landlords-–-don’t-get-caught-out-income-tax-trap

[Frank Hovis]

12 minutes ago, Democorruptcy said:

Yes I know what you mean, just did a quick search picking a year before mortgage rates went up and in 2021 7% were accidental landlords. I think it's been a thing since the GFC. The covid boom might have helped some sell before those 2021 stats.

https://www.thepropertydaily.co.uk/article/2021/04/12/accidental-landlords-–-don’t-get-caught-out-income-tax-trap

 

Okay, so it's the media picking up on it.

I have heard the odd mention of negative equity but the banner headlines of such are still pending.

[Democorruptcy]

16 minutes ago, Frank Hovis said:

 

Okay, so it's the media picking up on it.

I have heard the odd mention of negative equity but the banner headlines of such are still pending.

It's been mentioned for years, 2017 talking about a previous high in 2010

https://www.propertywire.com/news/uk/accidental-landlords-entered-letting-market-britain/

[MrXxxx]

On 11/01/2024 at 11:26, Bear Hug said:

It's <3% gross yield. If it does go up by 20%, I'll probably still stay. But buying/moving here or elsewhere will be considered then too. Just no point at this price. Hope the rent increase letter didn't just get lost in the post, and it's an actual freeze. 

Put it into perspective as a LL [although most don't], that 'extra' 2% equates to less than 1 weeks rent...is it worth pushing for this when the economy/market is becoming depressed and risk a void and/or losing a good tenant [assuming you are] only to be replaced by a bad one?...be like picking pennies up in front of a steamroller!

[jamtomorrow]

On 12/01/2024 at 18:02, Frank Hovis said:

 

Okay, so it's the media picking up on it.

I have heard the odd mention of negative equity but the banner headlines of such are still pending.

I do think there are different degrees of "accidental".

There's "moved abroad for work, probably should have sold but never quite got round to doing so and anyway all our friends have a BTL", versus "finances are in tatters, but selling would make them worse so we're just going to have to RIO", and everything in between.

Does anything in the numbers tell us which is prevalent these days?

Edited January 14 by jamtomorrow

[humdrum]

10 minutes ago, jamtomorrow said:

I do think there are different degrees of "accidental".

There's "moved abroad for work, probably should have sold but never quite got round to doing so and anyway all our friends have a BTL", versus "finances are in tatters, but selling would make them worse so we're just going to have to RIO", and everything in between.

Does anything in the numbers tell us which is prevalent these days?

True.

When my daughter went off to uni she managed the amazing feat of being evicted four times in the first term. Our sympathises were all with the landlords, but she was our little girl and we decided that her only options were to become a home owner or a cardboard box outside Waverley station. So we staked her to a foul den off Easter Road and left her to get the first class degree that enabled her to embark on her career as a middle class, lefty academic and what parent could ask for more ?

As soon as she graduated she disappeared with some lad or other and left us with an empty flat. Which was worth sod all because the market had taken one of its usual dips, so I put a coat of paint on the walls, replumbed the bathroon (Christ, students are disgusting) and did whatever else had to be done to stop  the rats reporting us to the Department of Health.

And then we had a stroke of luck. We meet what I can only described as an honest thief. She charged us a set fee for collecting the rents plus extra for general maintenance. And somehow the maintenance always came to 10% of the rent. Never more or less.  In return she sent us a cheque every month along with a list of harmless lies detailing necessary repairs, none of which I could bother myself over.

Finally the agent decided to retire on her well deserved plunder and we were forced to find another solicitor.

And all of them turned out to be as honest as the day was long and total pains in the arse. We stopped buying toilet paper because we got a couple of reams of paperwork every month detailing endless inconsequential bollocks.

So we decided to sell and discovered that the flat was worth three times as much as we had paid for it.

I don't know that this story has a morale other than that when it comes to property, there is a lot to be said for putting your feet up and letting that market take care of things. 

[King Penda]

On 12/01/2024 at 11:09, Frank Hovis said:

 

Accidental as in don't want to be landlords but have become such as they cannot sell the house for what they perceive it to be worth, as opposed to mug amateurs buying BTLs for their pensions.

Well yes where are they moving to and renting there house out and how do they get away with it  ?