Ever wondered why your rent keeps going up? Is it just because your landlord wakes up and thinks, “I’m going to squeeze my tenants for more cash today”? The reality is a lot more complicated - and it might surprise you who’s really behind those increases.
1. The Landlord’s Income - Where Does the Rent Go?
Let’s break it down with real numbers. Suppose you’re paying £1,500 a month in rent.
- Mortgage Payments: Out of that £1,500, the landlord might pay around £900 straight to the bank.
- Tax: Next, HMRC takes their share - say, £400 in tax.
- What’s Left: That leaves the landlord with £200 - not a huge payday.
- Unexpected Costs: But wait, the shower breaks and needs fixing. There goes another £100. Now the landlord is left with just £100.
2. Rising Costs - What Happens Next?
But it doesn’t stop there. What if things change?
- Interest Rates Go Up: If mortgage rates increase and that £900 payment jumps to £1,100, suddenly the landlord is running at a loss.
- Tax Changes: Or what about the introduction of new tax rules, like Section 24? Landlords now get taxed on profit they never even received - meaning, in some cases, they’re paying in just to keep their property.
3. So Who’s Actually Responsible for Rent Increases?
Here’s the key point:
- The banks get their money, no matter what.
- HMRC gets its tax, often before the landlord sees a penny.
- And if anything goes wrong in the property, it’s the landlord who pays.
When the costs of running a property go up, thanks to higher interest rates, new taxes, or increased maintenance. The only way for landlords to avoid losing money is to raise the rent. Otherwise, they’re subsidising your accommodation out of their own pocket.
4. Who Gets the Blame? And Who Controls the Narrative?
Yet, whenever rents rise, the finger gets pointed at landlords. The headlines blame “greedy landlords” for the housing crisis. But is it really that simple?
- Banks set the mortgage rates.
- The government sets the tax rules.
- The media shapes public opinion.
So next time you see a story about rising rents, ask yourself - who benefits most from higher rents? And who really controls the system?
Final Thoughts
It’s easy to blame landlords for rent increases, but the truth is more complicated. Most landlords are caught between rising costs and stricter regulations. If we want to understand why rents go up, we need to look at the bigger picture: banks, taxes, and policies that shape the entire property market.