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How does Buy to Let END!


macca

What happens when generation rent retire with tiny pensions and massive rent bills!  

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8 hours ago, One percent said:

I think it’s different this time. Wages have no way kept up with inflation, never mind the price of houses.  It’s sinking without mass unemployment this time. Well, unless government comes along with another massive prop. House prices need to at least halve. At least.  

High unemployment is a prerequisite for a proper correction I.e. ~20%+ down in nominal terms.

If there are jobs, people will take second and even third ones to keep a roof over their heads and this has been commonplace in countries like the US for decades.

A recession with associated credit tightening and unemployment is the only proven way for central banks to bring inflation down and, if that means popping asset bubbles, so be it. The stock and property markets eventually bounce back. Politicians who operate on short term electoral cycles don't like it but the alternative is far worse i.e. hyperinflation and civil disorder. 

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sancho panza

https://uk.finance.yahoo.com/news/landlord-left-15-000-pocket-093000068.html

image.thumb.png.6a208506d9dd2efd7f1cdd02e25517f7.png

A landlord was left £15,000 poorer after tenants turned his home into a cannabis farm and gangsters with knives tried to break down the door.

Landlords have been left with bills of tens of thousands of pounds after entering into disastrous, get-rich-quick “rent-to-rent” schemes.

Self-styled property investment trainers, who charge novice investors thousands for courses, promote the strategy as a way to invest in property without using your own money. It has become a favourite of social media landlord “influencers”.

Kwex Nwachukwu, 39, entered into an agreement with an investor who took on one of his houses in the Midlands. Impressed by his passion, Mr Nwachukwu, who lives in Essex, decided to support the young entrepreneur.

It was only when he got a call from the police that he discovered his property had been turned into a cannabis farm. The next-door neighbour had phoned the cops after two men in a black Audi had arrived at the door armed with large knives and attempted to force their way in.

The landlord contacted the investor, who initially promised to make good the damage but then disappeared. He said the debacle has cost him at least £15,000 in repairs and void rental periods.

Mr Nwachukwu said: “I had to clear about three skips full of soil, replaster the walls. It cost me a lot of money. I would not go into another rent-to-rent deal unless I knew them personally.”

In another case, a landlord spent more than £22,000 refurbishing a property for a rent-to-rent investor who was planning to apply for an HMO licence.

After delays the landlord enquired and discovered that the application had been rejected.

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leonardratso

i had no idea what that was;

https://rent2rentsuccess.com/r2rspodcast/2
 

sounds pretty dumb to me, bit like car rentals where they just rent them wholesale the sub-rent them to joe public, we know how well car rental places have done over the years, zero bankruptcies there.
 

(its so simple it Hetrz).

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Wight Flight
10 minutes ago, leonardratso said:

i had no idea what that was;

https://rent2rentsuccess.com/r2rspodcast/2
 

sounds pretty dumb to me, bit like car rentals where they just rent them wholesale the sub-rent them to joe public, we know how well car rental places have done over the years, zero bankruptcies there.
 

(its so simple it Hetrz).

Quote
  • You rent a property, usually for 3-5 years.

I don't think BTL mortgage lenders allow this.

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6 hours ago, Wight Flight said:

I don't think BTL mortgage lenders allow this.

Omfg!

I've wasted my life.

What is Rent 2 Rent? A Comprehensive Guide

 
The Rent 2 Rent Success Property Podcast

What is rent to rent?

Stephanie Taylor & Nicky Taylor

 
 

What is rent to rent?

The professionals at Rent 2 Rent Success offer a comprehensive guide on how to get a guaranteed income from property without buying it and how to avoid the common risks.

 
How you can make money from property without buying it – the ethical property strategy you’ve probably never heard of

For entrepreneurial minds looking for a way to create consistent cash flow from property and achieve freedom from the 9 - 5, rent to rent is a fantastic business model. The trouble is, it is easy to get overwhelmed and confused by the information available.


Often, people starting out only have part of the picture, piecing together the rent to rent strategy from YouTube videos, podcast episodes and social media posts. It is no secret that rent to rent is a business model with a lot of moving parts, and by trying to gather all the information piecemeal, it can be difficult to get a clear step by step process of the route to success.

And if you’re reading this, I know that working ethically is important to you too. This is why we started teaching what we knew because so many property ‘trainers’ have a sleazy approach and we wanted to show that there is an ethical way to make money out of properties you don’t own and provide value for landlords, for housemates and for you and your business.

At Rent 2 Rent Success we’re here to help you get started. We are sisters Stephanie Taylor and Nicky Taylor we’re here to guide you on your journey to finding success and profit with the rent to rent method. We’ll clear up the mysteries of rent to rent so you can get started the right way.

Fortunately, rent to rent can be simple if you have all the right information. In this article, we present a comprehensive guide on rent to rent, from what it is in a nutshell, to some major considerations to think about before you begin.

 

How does “Rent to Rent” work in the UK?

The rent 2 rent model is a simple concept. Here’s how it works in a nutshell.

  • You rent a property, usually for 3-5 years.

  • You pay the owner or letting agent a guaranteed rent. Typically, you take on any bills.

  • You rent the property to tenants for a higher rent than you’re paying the owner.

  • The difference between the rent you receive from your tenants and the rent you pay the owner or letting agent after property costs is the profit for you and your business.

  • There are three main ways to do rent to rent on residential property which I’ll come to in a moment.

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Wight Flight
1 minute ago, spygirl said:

Omfg!

I've wasted my life.

What is Rent 2 Rent? A Comprehensive Guide

 
The Rent 2 Rent Success Property Podcast

What is rent to rent?

Stephanie Taylor & Nicky Taylor

 
 

What is rent to rent?

The professionals at Rent 2 Rent Success offer a comprehensive guide on how to get a guaranteed income from property without buying it and how to avoid the common risks.

 
How you can make money from property without buying it – the ethical property strategy you’ve probably never heard of

For entrepreneurial minds looking for a way to create consistent cash flow from property and achieve freedom from the 9 - 5, rent to rent is a fantastic business model. The trouble is, it is easy to get overwhelmed and confused by the information available.


Often, people starting out only have part of the picture, piecing together the rent to rent strategy from YouTube videos, podcast episodes and social media posts. It is no secret that rent to rent is a business model with a lot of moving parts, and by trying to gather all the information piecemeal, it can be difficult to get a clear step by step process of the route to success.

And if you’re reading this, I know that working ethically is important to you too. This is why we started teaching what we knew because so many property ‘trainers’ have a sleazy approach and we wanted to show that there is an ethical way to make money out of properties you don’t own and provide value for landlords, for housemates and for you and your business.

At Rent 2 Rent Success we’re here to help you get started. We are sisters Stephanie Taylor and Nicky Taylor we’re here to guide you on your journey to finding success and profit with the rent to rent method. We’ll clear up the mysteries of rent to rent so you can get started the right way.

Fortunately, rent to rent can be simple if you have all the right information. In this article, we present a comprehensive guide on rent to rent, from what it is in a nutshell, to some major considerations to think about before you begin.

 

How does “Rent to Rent” work in the UK?

The rent 2 rent model is a simple concept. Here’s how it works in a nutshell.

  • You rent a property, usually for 3-5 years.

  • You pay the owner or letting agent a guaranteed rent. Typically, you take on any bills.

  • You rent the property to tenants for a higher rent than you’re paying the owner.

  • The difference between the rent you receive from your tenants and the rent you pay the owner or letting agent after property costs is the profit for you and your business.

  • There are three main ways to do rent to rent on residential property which I’ll come to in a moment.

Just another layer of cockroach.

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We waited until we were in our forties to start HMO Heaven. And we am amazed by what has happened in a few short years. 

Couple of alchis burning down the house making chips, bag head dying in the toilet and some migrant murdering a prozzie in the bedroom?

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To begin, the first step is learning about the trade of renting out a property that is owned by someone else. Stephanie said: "I think the first thing is to understand the strategy to a high standard - find out about it.

"You rent a property for usually three to five years. You pay the owner or letting agent a guaranteed rent - usually, you are going to take on paying the bills. You rent the property out to tenants for a higher, yet still affordable rate than you pay the owner."

"The difference is your profit after the running costs of the property - you want something that is a win-win for all three parties

Sooo obvious when they write it down.

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On 18/04/2023 at 22:14, tank said:

Unemployment is the key.

You can't have any of form of real correction without a major recession and high unemployment forcing overleveraged owner occupiers and BTL landlords to sell up.

The HPC types on here who think otherwise have been proven wrong over and over again for 20 years. The last proper recession we had was in 2008 and house prices fell just like in the early 90s. 

They didn't fall anything like the early 90s. Or the mid 70s.

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sancho panza

 

 

https://uk.finance.yahoo.com/news/london-landlords-abandon-market-mortgage-164419147.html

London landlords abandon market as mortgage rates erode profits

Landlords are behind a quarter of homes for sale in London as punitive taxes and soaring mortgage rates force buy-to-let investors to quit the market.

Buy-to-let investors in the capital are selling up at the fastest rate in the country, according to property website Zoopla, as a combination of rising mortgage costs and low rental yields erodes their profitability.

Of the homes listed for sale in the capital during the first three months of this year, 26pc were previously let out, the research found, more than double the 11pc average across the rest of the UK.

 

In Scotland, just 5pc of homes listed for sale during the period had previously been let out.

Lee Karasavvas, managing director at Prolific Mortgage Finance, a mortgage broker, said that the Government’s tax crackdown on the buy-to-let sector had for years been mitigated by low interest rates but has now been laid bare by rising costs.

Buy-to-let fixed rates are roughly double what they were a year ago, according to Moneyfacts, a data company.

Mr Karasavvas said: “We have seen more and more landlords questioning their profit margins with more asset stripping and placing lower yielding properties on the market.”

Landlords are also selling properties with poor energy efficiency ahead of the Government’s planned introduction of minimum Energy Performance Certificate requirements for the private rental sector, he added.

“We expect more landlords to follow suit as the profit reduces and cost of borrowing rises due to high rates and high fees,” Mr Karasavvas said.

Before 2017, landlords who owned properties in their own names could deduct all of their mortgage interest costs when calculating their profits for income tax purposes.

This tax relief has since been phased out.

Since April 2020, unless they own properties in a limited company, they can deduct only 20pc of their interest costs. This means that they will continue paying the same amount of tax even as high mortgage rates erode their profit margins.

Landlords in the capital are particularly exposed because high house prices mean rental yields in London are much lower than across the rest of the country.

In the South East, where rental yields are also low, landlords made up 10pc of all properties listed for sale, the second highest rate in Britain.

The share of landlord sellers in London has declined from a peak of 30pc during the pandemic property boom, as falling property prices and capital gains tax rises start to deter sellers, but the numbers are still up by nearly a fifth compared to the start of 2019.

Crucially, many of the landlords selling now are bringing properties to the market because they can no longer afford them, rather than because it is an opportune time to sell.

Imran Khan, chief executive of Property Loop, a London lettings agency, said: “Many landlords are struggling to make ends meet, leading to a concerning exodus from the market.”

Craig Fish, director of Lodestone Mortgages and Protection, said high rates meant some buy-to-let properties in the capital have become loss-making.

Rent growth across all lets hit a new record high for the eleventh month in a row in March, according to the Office for National Statistics.

But in a note to investors, Brian Snow, senior analyst at Moody’s, a credit ratings agency, said that the benefits of higher rents for landlords are eroded by a combination of government policy, inflation and high rates.

Mr Snow said: “Private landlords will struggle to maintain profit margins given the impact of inflation on operating costs coupled with the increasing burden of government regulations.”

Lenders’ affordability stress tests also mean landlords will find it increasingly difficult to remortgage when their fixed-rate deals expire, Mr Snow said.

While affordability for residential mortgages is based on income multiples, buy-to-let mortgages are assessed based on interest coverage ratios.

This means the rental income must be a certain percentage above a landlord’s interest payments.

Higher interest rates mean much higher stress tests.

If landlords cannot raise rents enough to meet these requirements, they will be unable to remortgage and may face higher product transfer or standard variable rates, which would be a further incentive to sell.

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45 minutes ago, Rare Bear said:

They didn't fall anything like the early 90s. Or the mid 70s.

They nominally contracted about 20% in most regions and remained depressed for a while before the sheer scale of money printing propped them back up to new highs.

Those hoping for a crash are kidding themselves either way.

The UK economy is now effectively all about selling overinflated property to all comers, so any noticeable downturn will, like in 2008, be quickly corrected. In order for the UK economy to grow, house prices need to keep pace with inflation at the very least over the medium to longer term.  It's that or a depression with mass unemployment and civil disorder. 

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sancho panza
13 hours ago, tank said:

Those hoping for a crash are kidding themselves either way.

The UK economy is now effectively all about selling overinflated property to all comers, so any noticeable downturn will, like in 2008, be quickly corrected. In order for the UK economy to grow, house prices need to keep pace with inflation at the very least over the medium to longer term.  It's that or a depression with mass unemployment and civil disorder. 

Takes two to makea market.I've no interest in buying a UK property,my interest is trying toa void the effects of a collapse.

I think this is a very different macro set up from 08 in terms of national debt,relative forex values,logn term outlook for western currencies,banking debt/capital ratio's etc

But the biggie is food and fuel inflation relative to wages and levels of disposable income more generally.

Even if the govt were capable of gerneating demand for assets with rising costs of carry such as houses,I have little faith they can do it at 2022 price to incoem levels.

time wil tell.

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The worst type of property is something like this. 

https://12ft.io/proxy?q=https%3A%2F%2Finews.co.uk%2Finews-lifestyle%2Fmoney%2Fproperty-and-mortgages%2Fi-cant-sell-my-home-people-in-shared-ownership-flats-are-failing-to-sell-even-at-a-loss-2289320%3Futm_term%3DAutofeed%26ito%3Dsocial_ifb_theipaper%26utm_medium%3DSocial%26utm_source%3DFacebook%26fbclid%3DIwAR1tGMWTijsAME_b2VSZX6BZEoN8MKJW-EIGTzkUPtCQrR6I1Bf1dyObZU4%23Echobox%3D1682083261

There isn't landlords, foreign buyers, BOMAD, or anyone else buying the dip for these, because the price doesn't add up and there is only so far they can be discounted. You could buy a 3-bed house for £500k in the surrounding area which comes without a service charge, so why bother at these prices? And they can't discount too far. 

If this is in one of the blocks near the station I sense that £2k/month might about the top rent it could get. But if the service charge is £400/month what kind of price actually is achievable at current rates? If you want gross returns of 10% before fees/charges/tax then £240k is it. But that leaves a shortfall that isn't going to be paid.

So maybe some deal is on: some kind of specific bailout which means people can move, but crucially keeps very distressed properties sales out of the stats and helps support prices of everything else in the block as you won't have lots of unsellable properties depressing the price for everyone else.

I mean it stinks, introduces bad moral hazard, and makes it even harder for the young.

Sadly so many people have lost their sense of morals that this will end up being seen as quite a good idea.

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AlfredTheLittle
24 minutes ago, Boon said:

The worst type of property is something like this. 

https://12ft.io/proxy?q=https%3A%2F%2Finews.co.uk%2Finews-lifestyle%2Fmoney%2Fproperty-and-mortgages%2Fi-cant-sell-my-home-people-in-shared-ownership-flats-are-failing-to-sell-even-at-a-loss-2289320%3Futm_term%3DAutofeed%26ito%3Dsocial_ifb_theipaper%26utm_medium%3DSocial%26utm_source%3DFacebook%26fbclid%3DIwAR1tGMWTijsAME_b2VSZX6BZEoN8MKJW-EIGTzkUPtCQrR6I1Bf1dyObZU4%23Echobox%3D1682083261

There isn't landlords, foreign buyers, BOMAD, or anyone else buying the dip for these, because the price doesn't add up and there is only so far they can be discounted. You could buy a 3-bed house for £500k in the surrounding area which comes without a service charge, so why bother at these prices? And they can't discount too far. 

If this is in one of the blocks near the station I sense that £2k/month might about the top rent it could get. But if the service charge is £400/month what kind of price actually is achievable at current rates? If you want gross returns of 10% before fees/charges/tax then £240k is it. But that leaves a shortfall that isn't going to be paid.

So maybe some deal is on: some kind of specific bailout which means people can move, but crucially keeps very distressed properties sales out of the stats and helps support prices of everything else in the block as you won't have lots of unsellable properties depressing the price for everyone else.

I mean it stinks, introduces bad moral hazard, and makes it even harder for the young.

Sadly so many people have lost their sense of morals that this will end up being seen as quite a good idea.

How do people lose sight of the fact that a million pounds is (still) a huge amount of money? £575k for a shitty 3 bed flat in southeast London shows how stupid people are, though maybe there is hope for humanity as she can't find a greater fool to sell it on to. I feel sorry for the kid in the photo growing up there (assuming it's not an actor).

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19 hours ago, tank said:

They nominally contracted about 20% in most regions and remained depressed for a while before the sheer scale of money printing propped them back up to new highs.

Those hoping for a crash are kidding themselves either way.

The UK economy is now effectively all about selling overinflated property to all comers, so any noticeable downturn will, like in 2008, be quickly corrected. In order for the UK economy to grow, house prices need to keep pace with inflation at the very least over the medium to longer term.  It's that or a depression with mass unemployment and civil disorder. 

It's not.

House sales have been flatlining  since 2008.

2008 saw banking equity thrown under the bus. The banks fault.

However by destroying bank equity theres limited bank finance available.

It's getting harder n more expensive for banks to raise capital.

In terms of employment, the housing market employs fuckall.

 

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One percent
On 21/04/2023 at 14:08, sancho panza said:

https://uk.finance.yahoo.com/news/landlord-left-15-000-pocket-093000068.html

image.thumb.png.6a208506d9dd2efd7f1cdd02e25517f7.png

A landlord was left £15,000 poorer after tenants turned his home into a cannabis farm and gangsters with knives tried to break down the door.

Landlords have been left with bills of tens of thousands of pounds after entering into disastrous, get-rich-quick “rent-to-rent” schemes.

Self-styled property investment trainers, who charge novice investors thousands for courses, promote the strategy as a way to invest in property without using your own money. It has become a favourite of social media landlord “influencers”.

Kwex Nwachukwu, 39, entered into an agreement with an investor who took on one of his houses in the Midlands. Impressed by his passion, Mr Nwachukwu, who lives in Essex, decided to support the young entrepreneur.

It was only when he got a call from the police that he discovered his property had been turned into a cannabis farm. The next-door neighbour had phoned the cops after two men in a black Audi had arrived at the door armed with large knives and attempted to force their way in.

The landlord contacted the investor, who initially promised to make good the damage but then disappeared. He said the debacle has cost him at least £15,000 in repairs and void rental periods.

Mr Nwachukwu said: “I had to clear about three skips full of soil, replaster the walls. It cost me a lot of money. I would not go into another rent-to-rent deal unless I knew them personally.”

In another case, a landlord spent more than £22,000 refurbishing a property for a rent-to-rent investor who was planning to apply for an HMO licence.

After delays the landlord enquired and discovered that the application had been rejected.

One of my neighbours did the rental thing by the book. Appointed a letting agent who would check the property every six months. Due diligence on who was renting it, taking up all references and carrying out all checks. Of course, this all came at a healthy commission. Well, the property was a cannabis farm for well over two years, maybe even up to four, can’t remember. Letting agents never went anywhere near. Place was completely wrecked. Everything, and I mean every, ripped out to make space for the grow.  

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Wight Flight
2 hours ago, One percent said:

One of my neighbours did the rental thing by the book. Appointed a letting agent who would check the property every six months. Due diligence on who was renting it, taking up all references and carrying out all checks. Of course, this all came at a healthy commission. Well, the property was a cannabis farm for well over two years, maybe even up to four, can’t remember. Letting agents never went anywhere near. Place was completely wrecked. Everything, and I mean every, ripped out to make space for the grow.  

I think i rented that place after they got it back.

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4 hours ago, spygirl said:

It's not.

House sales have been flatlining  since 2008.

2008 saw banking equity thrown under the bus. The banks fault.

However by destroying bank equity theres limited bank finance available.

It's getting harder n more expensive for banks to raise capital.

In terms of employment, the housing market employs fuckall.

 

Sales may or may not have flatlined since 2008 but prices in the vast majority of places most certainly haven't. Surely not even you can deny this? 😃😃

In terms of GDP and tax revenues, the single most important factor for the Treasury/BOE and the Tory/NuLab political establishment is the continuous steady increase in land values.

Without this clear growth in house prices, the British economy would have been in recession every single year since 2008.

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10 hours ago, sancho panza said:

Takes two to makea market.I've no interest in buying a UK property,my interest is trying toa void the effects of a collapse.

I think this is a very different macro set up from 08 in terms of national debt,relative forex values,logn term outlook for western currencies,banking debt/capital ratio's etc

But the biggie is food and fuel inflation relative to wages and levels of disposable income more generally.

Even if the govt were capable of gerneating demand for assets with rising costs of carry such as houses,I have little faith they can do it at 2022 price to incoem levels.

time wil tell.

I'd agree with you if it was just a domestic market and UK immigration post Brexit had been halved not doubled, but the only real 'asset' the UK has left is its legal tradition in relation to property rights.

Only a few other developed 'Anglosphere' economies protect landowners in an equivalent manner.

UK property is now an international store of wealth that generally keeps pace with inflation over time and, in some locations, outperforms it minus the volatility associated with equities and the like.

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6 hours ago, tank said:

Sales may or may not have flatlined since 2008 but prices in the vast majority of places most certainly haven't. Surely not even you can deny this? 😃😃

In terms of GDP and tax revenues, the single most important factor for the Treasury/BOE and the Tory/NuLab political establishment is the continuous steady increase in land values.

Without this clear growth in house prices, the British economy would have been in recession every single year since 2008.

Jesus ...

government-revenue-sources.jpg

Its taxed labour n NICs

Taxes levied on land barely register.

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2 minutes ago, spygirl said:

Jesus ...

government-revenue-sources.jpg

Its taxed labour n NICs

Taxes levied on land barely register.

well of course.  The rich own lots of land and do fuck all taxable work.  Are you really shocked!

:Jumping:

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On 24/04/2023 at 17:29, Boon said:

I did consider Shared Ownership during my flat searches in 2003/4 and again just recently. I just could not get the maths to work. The full asking prices seem to be well over an equivalent sized property on the open market. 

There's a 2 bedroomed So house with a full asking price of £300k. Usually £190-230k in the same area. For the time being. 

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Shock poll finds 44% of landlords will sell up

https://www.property118.com/shock-poll-finds-44-of-landlords-will-sell-up/

To whom?

 

shaun carter

20:02 PM, 27th April 2023, About 2 hours ago

This case you have to feel sorry for both landlords and tenants.

The goverment are totally to blame. If I had to highlight how stupid they are the word stupid would be written continuously, never ending.

Not letting landlords claim interest as an expense !!!!! That is trades discrimination. Everybody else can. I want to confront House of Lords on this. I feel like just barging in, with a live film crew.. Best bit they tax the interest, as if its earnings.

Oh thats land lords biggest expense. Oh let put interest rates up so landlords are forced to put rents up.

Why are interest rates going up; to tackle inflation. Inflation is goverments fault again. Why ? Because they let companies like shell make an extra 30 billion for quarter year.

Der goverment !!! as that 30 billion is extra on inflation figures.no to mention all the other electric companies profits.

The goverment are forcing people to spend more, by having to spend more on electric. This is wrong , and goverment should be prosecuted !!!!

The electric payouts ! Wake up everybody its not a payout, its an investment. With rocketed electric bills they soon claw back with all rhe massive tax increases they will get from higher electric.

Best bit these french electric companies never paid tax for years. Goverment saying no french company no need to pay tax, as our tax payers will cover it. Even now its only small amount.

This new wirlds longest cable for electric; prices want go down, they will go up.

I feel for the tenant too ! Less house due to this stupid epc rating c; oh install storage heaters the tenants can't afford to run. On paper house better, but thick governent tenants cant afford to run them, so houses worse.

Please people support me, and we must now take on the goverment, before its too late.

Contact me [email protected]
We need to help each other

 

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