I’m a landlord selling my homes worth £1.5m – tenants are too much trouble

Jacqui Coombes, 66, owns 13 properties across Bristol – but said she will soon have to sell them. “What motivated me to invest in buy-to-let was my mum’s divorce. She ended up being housed by the council in a bedsit she was so grateful for. I wanted to do up properties and let them through the council to people in desperate need of housing,” says Jacqui. “After five years, and a lot of problems with tenants, I switched to the private rented sector instead. Twenty years on, I’m retired and feel it’s time for me to leave the rental market, which is now all too precarious, scary, and no longer a good investment.” Jacqui owns the properties with her husband, Steve Mead, and bought her first buy-to-let in the Noughties. Shorts She rents to a mix of students and young professionals, and estimates her portfolio is worth around £1.5m, with a 50/50 split of equity and mortgage. She started out as a property developer and landlord in 2004, having previously stayed at home, bringing up her children with her first husband. “I liked doing up properties and we were already in our dream home, so I said to my first husband, could I take the equity out of this house and start developing properties?” He agreed, they bought three buy-to-lets and, before getting divorced, built up a good property portfolio between them. At first, Jacqui rented out her properties via the council, hoping to replicate the joy that her own mother had experienced, but it didn’t turn out as planned. “The council tenants were nothing but trouble,” says Jacqui. “I had someone who sublet the property to a drug dealer, who grew drugs in the loft, and then assaulted a neighbour. Another lady moved in with a baby; I didn’t realise that she’d had five babies already taken into care. “All the other tenants in the block said she was stealing their parcels.” “I rang her up and said: ‘If I give you £1,000 in cash and turn up with a locksmith, will you leave?’ Her baby had already been taken into care at this point. She did leave but you’d never be able to do that nowadays,” adds Jacqui. Another couple just left without telling her and stopped paying the rent. They also left the property full of rubbish, and it took months to arrange getting possession again. What’s more, whenever there was an issue, there was no support forthcoming from the council. “[They] were so useless. They would go round and say to me: ‘What can I do?’” This experience led Jacqui to switch to private tenants only, and, 10 years ago, she also stopped buying new properties when the government abolished the tax relief on mortgage interest. “I only accept people if they have a guarantor now. It’s bad for tenants, but at my age, that’s my pension,” she says. Along with her property portfolio, the 66-year-old also has a small private pension which she paid into while running her own small business on Amazon. While, for the most part, her recent tenants have been easier to deal with, there are still issues. The Renters’ Rights Act, introduced in May, is a cause of stress, particularly as her portfolio includes student accommodation and the new legislation allows students to give notice when their term ends, before the summer, rather than fixing them into a year-long contract. “I’m considering selling the student HMOs as we won’t make any money on them if they hand in their notice before the summer,” says Jacqui. “Compliance is increasing too. There should have been a register of landlords, a long time ago, but why do we have to pay to be on it? My tenants say I’m a great landlady so it’s sad that we get vilified.” Her plan is to sell two of her HMOs at auction once the tenants give notice. She thinks she’ll be lucky to get £600,000 for the five-bedroom HMO, which has a mortgage of £500,000 on it. For this, Jacqui receives £4,000 a month in rent and pays £2,500 a month on the mortgage. “I doubt if I’ll make any money. It might be in my interest to give it back to the bank, although I might have to still pay Capital Gains Tax,” she says. The second, three-bedroom HMO makes her £1,800 a month in rent and she pays a monthly mortgage of £700. “The auction price for this one should be £300,000 but I’ll be lucky if I get £225,000 and the mortgage on it is £160,000,” she says. “If there are no landlords at the auction, I won’t get £225,000. It’s above a shop so specifically a property for landlords.” This is because it’s difficult to get residential mortgages on mixed-use buildings. If the properties fail to sell at auction, Jacqui says she will look into giving them over corporate lets in the short term. “As you get older you tend to worry more, and, in the rental market today, it’s just worry upon worry. “I worry about tenants not paying and not being able to get them out. I worry about EPC ratings on the listed property I own. I worry about capital gains tax. It goes on and on. At my age, I just don’t need the hassle,” she says. “I’ll be wide awake in the middle of the night and overthinking it all.” If Jacqui manages to sell these properties, she plans to then pay down the mortgages on the others and eventually sell those in four years’ time. “[By selling the HMOs,] I’m hoping to only have one-and-a-half properties that need mortgages paying down and I’ll chip away at them. The others I’ll look to sell when I’m 70. If the market ends up smoothing out, I might keep them. It’s a shame for young professionals though,” says Jacqui. A recent survey by SpareRoom found that 78 per cent of landlords have no confidence in the rental market post-The-Renters’-Rights-Act, and 27 per cent are, like Jacqui, getting out. Furthermore, it found that less than 4 per cent of landlords are expanding their portfolios and 36 per cent are reducing them. “For all the good it has done tenants so far – the end of no-fault evictions and bidding wars has been positive – the Renters’ Rights Act has also battered supply and forced up asking rents,” says Matt Hutchinson, director of SpareRoom. “While landlords have the option to walk away and invest their money elsewhere, tenants don’t. They’re now facing the fallout of a private rented sector that’s deterring those who provide homes.” Jacqui agrees, flagging that many of her contemporaries got into buy-to-let property in the 1990s and are now looking to retire. “There’s a mass exodus of landlords selling up because they can’t be bothered, so there are less properties to rent,” she says. “It’s really sad things have come to this and, it’s even worse for tenants, who will have fewer and fewer options.”