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However, there are now too many BTL "investors" in the system, which the BoE and govt are beginning to see as a risk to the economy.
init.
Also, their investing in BTL as a source of income and capital means they're not investing in companies that might actually grow our economy.
£60k pays for a lot of rent in a retirement flat by the seaside, especially if you squirrel it away into your pension.
10 years max, I reckon, and it doesn't buy you security of tenure.
If it was not for BTL or people renting out older homes from family death etc I would have been screwed for the first 10 years of my working life.
My first job was the other end of the country to any of my family and straight out of uni I had no chance of buying. It would have also forced me to remain fixed in that location and subsequently destroyed my chances of a career.
Without rented accommodation it is really hard to be mobile and I believe that for most young people this is a must if you are going to get on in many companies.
I don't think that social housing isn't really the option for young single people and while it has a place as a safety net for the most vulnerable it gives the government a lot of power over you. All it takes is some politician to stamp a piece of paper and then you know longer qualify.
The new taxes only apply to individuals companies will run as normal. All this will do is transfer the BTL market from the public to massive corporations as it is done in the USA. Properties will still not get to the market and the people who are currently renting will stop talking to individuals but will have to phone helplines to get things done. It makes for fantastic headlines but it really won't help anyone except those who already have money..
yeah but tinas you are I think very unrealistic in thinking that people will max out the mortgage to the equivalent rent. Yes they might move up a couple of times but even 10y in the same place will erode the mortgage through inflation. I don't believe that buyers will typically pay 60k more over their 30 years. More likely, they will have 10-20y in one house with the mortgage payment becoming a pittance. Plus then downsizing will pay for a lot of retirement flat plus spending money.
. I don't believe that buyers will typically pay 60k more over their 30 years.
Kitchens, boilers, leaking roofs, carpets, decorating over 30 years will add up even if you are not moving home... Not just the cost the materials but also the time if you are doing things yourself. With renting you don't have to do any of this.
That being said I still think you are better off buying than renting if you are stable over the long term..
Renting you pay for those things through the rent (which is more than a mortgage, almost always).
Tbh for me it wasnt down to the money numbers why i bought.
It was down to not being kicked out , about being able to knock a wall down to suit my needs , to not have a land lord getting on my neck about me working on my car in the drive , not having the rent go up every year,
Oh and brooess your kidding your self if you think moving btl into the hands of companies is a good thing. My worst experiances and stories ive heard always invariably imvolve national chain rental agents,
I always sought out private rental people doing rentals personally as at least you have someone to speak to and if they have any morals its much harder to side step issues.
It never gave me any issues in 4 seperate rentals.
I love the way people beating up on the landlords and supporting measures to remove their benefits, but totally failing to hammer the successive governments - of all 3 colours now - who have failed to address the lack of affordable housing and the glut of empty properties/derelict brownfield sites.
BTL landlords are a symptom of the problem, not the cause. We find it too easy in this country to lash out at the easy target and not address the root cause of issues.
I'll just add my tuppence . Our son went to Perth to study guitar ; it was cheaper to buy than rent . Bought the house, six months later the market crashes ; the property is now worth approx 15k less than when we bought it . Now renting out unable to sell ( to return the 15k deposit we put on our own mortgage to buy) . Yes , we make about 1K a year profit after fees , upkeep etc but I would much rather have the 15k paid back into my own mortgage . Don't think that will happen anytime soon.
Hang on - If it's a buy-to-let, you won't be "moving" it at all so that whole point is mootThe other has moved maybe 4, 5, 6 or more times. Incuring stamp duty and fees each time, say an average of £15k each time (wishful thinking based on recent experience, but pegging it low to avoid accusations of picking numbers to suit the argument, and the bands dont keep up with inflation so future duty will always be higher) that's upto £60k you would save by renting.
You think tenants don't do stuff like that ?And at no point in the preceding 30 years have you had the ballache of lost weekends to DIY
OK, if you bought right at a peak, but they're fairly short term issues pretty much every time so far (in comparison to a mortgage term) so since you're not going to sell your BTL property, you're going to be OK (especially as rents havent crashed)house price crashes
Hmmm, OK, though a tenant would have to look for a new home at that point if they cared enoughdealing with the planing application to turn next door into a chip shop
You can have that one - pretty rare though, and your buildings insurance may well pay anywaytaking out a loan for re-roofing or anything else
If you own you own home you'll never have the ballache (and removal expense) of having a landlord sell out from under you during a boom and having to move (4 houses in 2 yrs when we rented in Birmingham in the late 90's)
Too lateBTL landlords are a symptom of the problem, not the cause. We find it too easy in this country to lash out at the easy target and not address the root cause of issues.
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i work for a number of landlords of small domestic properties the sort that sell for south of 100k well south 60-85k been the norm. they fall into two catagories folk who buy cheap and let them straight out in as bought condition.. they have old kitchens bathrooms heating systems loads have damp.. they are normally let 20/30% beow market value always below 400pcm and as low as 275 the modus been.. you rent it like this its cheap we aint going to be doing it up.. complain and well ask you to move out whilst the property is renovated when it will be re rented at full market value
the second group buy the same house but spend 6 -8 weeks taking them back to bare wall and EVERYTHING is brand new they rent for above market value mostly to folks without kids and or retired folks
of the dozen or so that i work for not one is in it for a fast buck all are in as a very long term investment none rely on the rents as income..one landlord holds down a full time job as a labourere yet has 8 properties in the first catagory that he rents out.. some of his tenants have been there for 30 years..
i have limited experience of folks buying to make a fast buck.. usually public service employees and postmen strangly from the south east who buy northern properties unseen as they are cheap.. and fail miserably.. miserably.. buying in very poor areas letting to very poor tenants and losing a lot of money..
I think Thatcher was in favor of people owning their own homes, she didn't create the BTL market...
From what I saw in the south the policy worked, previously scummy estates started to smarten up as people took pride in their own homes, rather than renting 'social' housing.
In chester, lots of BLT landlords have jumped on the bandwagon and bought flats and smaller houses in not so expensive areas, this pushed up the prices,and also the rents chargeable, and around the garden lane area a lot of large nice houses where bought by private landlords for conversion to hmo,s houses of multiple occupancy,and let with up to 6 students per house, this forced the locals out reducing the house prices and then the btl lot jumped in.
But now large companies and the university are now building on non residential sites and either knocking the existing property down for redevelopment into student lets or converting the old building,and theyre doing a nice job on the whole but the sites could have been designated social housing .Something that is urgently neded in chester.
The result is that the hmo,s are now going up for sale as students dont want to share a old house but want to have a nice room in a new block, and landlords who are sticking it out are failing to deal with repairs or maintance. So we have run down student areas, void properties, high rents for those who want to rent, and a huge loss of council tax to the council
There may also be a changing trend to the types of properties people want to live in... I shared a room as a student and knew quite a few people who were two or three to a room (London).
I remember after uni 8 of us living in a 5 bedroom house (landlord knew) but after 3 years he wanted to do it up (change the carpets and paint it) so he could let to 5 students at a higher rate. The university also got rid of all double and trips rooms from their accommodation as well.
With more people living alone and not wanting to live in Hoogstraten style tenements has changed the rental market over the last two decades. Add in student living and fee loans and for many people the champagne lifestyle expectation exceeds the special brew budget...
Mostly I put it up as a "Fatcha!!" -style stw jokeI think Thatcher was in favor of people owning their own homes, she didn't create the BTL market...
However - She created the conditions for the late 20th century housing boom by beginning a purge on social housing with the "whateveritwascalledhousingbill" pretty much as soon as she came into government. That in turn generated property speculation, one aspect of which is called buy-to-let
When you sell thousands of council houses at 15- 20% of their resale value , and don't build any more affordable housing to replace it, you screw up the supply V demand V affordability equation.
When houses in the SE were going up by more than peoples monthly wage it really was the best investment vehicle. Then Maggie effectively gave hundreds of thousands of pounds to people who had been renting a discounted council house.
Some of those stayed , some banked the cash and got the hell out , with a suitcase full of cash they never , ever would have earnt unless they had inherited it or robbed a bank.
This increased the speed in which the bubble inflated. Add in self cert mtg's , no deposit mtg's and accesable buy to let money and the rise in BTL and house prices ensued.
Then factor in greed and our 'must have' society,' If you cant afford it .- buy it on credit' lifestyle and peoples reluctance to say 'No, I can't afford it .Everyone has a smart phone, car(s) less than 5 years old, Sky Tv, consols , 3 foreign holidays a year and they rent as they never have any money for a deposit ( sweeping generalization I know ).
So who are they going to rent from? The council? The 9 remaining council houses have a waiting list 50 years long so that leaves family or BTL landlords.
Then Maggie effectively gave hundreds of thousands of pounds to people who had been renting a discounted council house.
The idea was that the discount was proportional to the years of rent you had already payed, making it look like you had been paying a mortgage on it in the first place, instead of being trapped in a forever-rent situation. The hope was that it might make people more aspirational than being stuck in social housing forever.
Some of those stayed , some banked the cash and got the hell out , with a suitcase full of cash they never , ever would have earnt unless they had inherited it or robbed a bank.
That was the problem, for such a decent deal they should have locked in that you couldn't just sell up, after all you were supposed to be buying your 'home'.
Here’s a fun little ebook on Buy To Let that nicely sums the situation up:
[url= https://drive.google.com/file/d/0B24wHuyDETj3dzNzS1E5V1lfNkU/view ]A Goodbye To All That Buy To Let[/url]