LANDLORDS AND TENANTS

Evening Post, Volume CXXI, Issue 115, 16 May 1936, Page 8

LANDLORDS AND TENANTS

(To the Editor.)

Sir, —Apropos the Government's "fair rental" proposals, it appears opportune to bring to the notice of many critics'of existing rental conditions exactly what is covered and provided fcr in rental payment. To arrive at a "fair rental" many items not even thought of- by the majority of tenants must be taken into- account and the following example and subsequent comments show that for an average five-roomed dwelling a "fair rental" exceeds £2 per week. Take the example of a modern' fiveroomed dwelling, the cost of which on the average today is £1250, allowing j £250 for the land and £1000 for the building. No one will dispute that I for the trouble caused the landlord, land the risk taken,by him in this type of investment, he should receive 5 per cent.. on his invested capital. In the suburbs rates and insurance pre; miums will amount to £9 per annum. The life of a substantially built wooden■ dwelling is at most fifty years, so that in order not to lose his capital the landlord must provide a 2 per cent, sinking fund. Repairs and upkeep, covering painting; plumbing, etc., over the period of fifty years, will at the very least be £10 per annum; so that the position is as follows:— ■■ '■ .'-.■'*■■ Per annum. <y\ ■.'■' £ s. d. Rates and insurance ....... 9 0 0 2 p.c. sinking fund (on cost of building) ..'. 20 0 0 Repairs, etc. .....;....:.... 10 0 0 5 p.c. on invested capital (£1250) .............. 62 10 0 ■'"■. . - , .. 101.10 0 At a-rental'of : £2 per week the landlord has a margin of only £2 10s per annum to. work on. In addition to'the above -expenses he has to.-, cover all •manner of sundry items such as loss of rents (through bad tenants and vacant periods), agents' letting commissions, and expense of collection of rents, cost of ejections,: etc. These items in themselves require a further sinking fund of up to 2 per cent, per annum. It will therefore, be found- that in practice a rental based on 10 percent, of the capital value will return the landlord barely 51 per cent, on his invested capital.—l- 'am, etc., NEITHER LANDLORD NOR : , :•.-■:.. TENANT. ■