if you and people like you were not in BTL, that family could love that house, but own it.
"if you and people like you were not in BTL, that family could love that house but not afford to be living in it in the first place."
Strikes me that the problem here isn't landlords, it's house vendors and mortgage lenders.
Sorry I disagree, you might be (a rare) good landlord, but if you and people like you were not in BTL, that family could love that house, but own it. This means not being evicted because you ‘have a change of plans’ this means their monthly payments going down over time not up.
My flat was bought as 'fall back' for a job with tied house for my family. We've rented out for 10 years now. It's worth what we paid for it, about £125k for 3 bed in busy Highlands town.
All my tenants have been seasonal workers, first time leaving home, new couple moving in together etc. There's a market for the transient and new in rentals - you wouldn't buy a house at 19 with the boyfriend you've known for 3 months (my last tenants).
My current tenants work in local hotel and as a decorator. They're new to the UK, so don't have 'financial history' according to the banks. They're happy to rent while they save and get that financial history.
I've offered the flat for sale to them. Currently they pay £575 per month. I'm responsible for maintenance and decor. If they bought, they need £12-24k, plus monthly mortgage of £480-£500 however they are then responsible for the decor, maintenance etc, adding up to the £50-£100 a month difference. So renting costs maybe £20 a month more, without needing to save deposit.
That's if they can get a mortgage, now banks aren't lending to folk who've been on Furlough. Yet as a landlord I dropped 30% off the rent for three last 4 months without it affecting their financial history that they're trying to build.
Last year I made £900 profit from the flat and was taxed on that. It took about 10 days work over the year to decorate, clean, show, market, organise trades, insure etc
it's not the whole picture to blame buy to let, or be so nasty about businesses providing services. I assume you think the same of any business that makes a profit?
Now, I'll take my capitalist pig landlord services and leave the argument there
By that argument there’s no justification for people like Richard Branson to own multinational corporations
A roof over your head is a basic human right. Not sure how this equivalent to the right to own a business designed to generate profit.
I should moderate my earlier comment and say that some rental housing is required, as Matt points out.
But we have too much, because of people jumping on the investment bandwagon.
@matt_outandabout the bit you are missing out is the part where you get a house paid by someone else.
Obviously a small rental market is needed, but it should be provided by heavily regulated professional companies.
But we have too much, because of people jumping on the investment bandwagon
There's something odd about the economics of buy to let.
On one hand services are needed while folk save and try to buy a place, on another hand by paying rent they in effect encourage the investment in buy to let so possibly raising house prices. But the rental market would be flooded with empty properties if there were too many properties or prices too high.
I'm just wondering if a combination of over crowded island (particularly SE) and most home owners expecting prices too rise as the bigger issue... Time to persuade less people to live in SE.
the bit you are missing out is the part where you get a house paid by someone else
That profit is paying mortgage interest only.
Obviously a small rental market is needed, but it should be provided by heavily regulated professional companies
Like the housing trust who rent out in the same town, taking quite a large public money subsidy and still charging what I do?
Sorry, your view of this market is not accurate.
That profit is paying mortgage interest only.
Not sure how you managed such a poor ROI, but must be nice regardless to get a 0% loan.
Not sure how you managed such a poor ROI,
New boiler and repairs to downstairs that insurance refused to cover when a tenant didn't turn off the water when said boiler died suddenly and leaked downstairs.
Last year I did full redecorate and new carpets.
Year before was external decorate and repairs to shared hallways.
Year before a tenant screwed me over and left having not paid rent for 5 months. They made one £21 repayment of the court order to me.
Etc.
We're not all jaguar driving, multiple house owning, nasty people out to screw the poor. I'm proud to provide a hike for folk - and one that's half decent, or else they rent from the housing trust that cost you the tax payer money each year.
Like the housing trust who rent out in the same town, taking quite a large public money subsidy and still charging what I do?
But you are not making a profit, so sounds like this is working correctly. They are also employing people.
A roof over your head is a basic human right.
No it isn't.
It absolutely should be, I don't disagree there. But there's plenty of people who don't have that luxury.
Not sure how this equivalent to the right to own a business designed to generate profit.
As opposed to all those other kinds of businesses?
the bit you are missing out is the part where you get a house paid by someone else.
Rather, no-one's forcing them to rent if they can buy instead. Why don't they do that? Oh, right, they can't afford it. Pay off someone else's mortgage, then.
I agree, it's a shit situation and it penalises those who have no money. But as I said before, why is this landlords' fault? What's the alternative?
No-one is holding a gun to tenants' heads, there's plenty of properties available for sale. You can have mine for £65k cash tomorrow.
You can have mine for £125k, with new boiler, carpets and great tenants... 🤪
So you invested your profit back into the appreciating asset your own. Great.
Not sure why you are so keen to be seen to be altruistic using BTL, many better ways to help people. Sorry if I come across as harsh, but you can do all the mental gymnastics you like, you are not helping anyone.
People who can not afford to buy a house are often not 'poor' my last rent was £250 more than my first mortgage, which is now £340 cheaper.
There is absolutely is a 'gun to their head' but I think you have to live this reality to understand it.
There are lots of things we can choose to do, just because opportunity exists does not mean we have to take it.
appreciating asset
I've owned it 10 years. It's worth exactly what I paid for it.
My points still stands- buy to let is a service many people need, and buy to let is not the only (or even main) reason why we're in this odd financial conundrum, and not all landlords are the nasty, greedy People you claimed they were.
you can do all the mental gymnastics you like, you are not helping anyone.
Explain to me how giving someone the opportunity to live somewhere they otherwise couldn't afford to live isn't helping anyone. Once more with feeling: "what's the alternative?"
Say I have a second property worth (handwave) £150k. You can rent it from me for £500/month, or you can buy it from me for £500/month with a £30k deposit up front. What's stopping anyone from choosing the latter over the former?
People who can not afford to buy a house are often not ‘poor’ my last rent was £250 more than my first mortgage, which is now £340 cheaper.
Why were you renting rather than buying? Did the nasty landlord make you do it?
What would you have done if that rental property hadn't been available?
And for the record - I do think house prices need to go down, a lot, and I'm considering taking a loss if I can sell my flat. It's becoming a buyer's market.
How is this hard to grasp. I like many many people now, could not borrow enough to buy, but could afford to rent at a higher rate then the mortgage - it's a rigged game.
What would you have done if that rental property hadn’t been available?
I would have bought the property.
could not borrow enough to buy, but could afford to rent at a higher rate then the mortgage – it’s a rigged game.
But a mortgage isn't the only cost to factor into rent.
I bought my first house in 2002, I read an article that my generation was huge and all first time buyers so it’s going to cause a housing boom, I bought and sure as shit it boomed
When I bought you could only borrow 3x earning and I was on 12k per year
Within 6 months of buying I could no longer buy it so the banks changed it all up and it boomed some more, as soon as it’s easy to get cheap money everything booms be it the cost of uni or cars or houses
To blame but to let is unfair lots of different things have contributed to the situation plus a lot of people don’t trust pensions as they saw a lot of people’s get decimated over the years so went with bricks and mortar
How is this hard to grasp. I like many many people now, could not borrow enough to buy
I would have bought the property.
How would you have bought the property when you couldn't borrow enough to buy?
These two statements are mutually exclusive and kind of the crux of what I'm getting at.
You are missing the point, I would have been able to buy the house if BTL was not driving the market up and my savings were not going on over inflated rents.
I find this blindspot incredible, but many just simply have not had the same experiences.
I think you miss mine if you could still only borrow 3x income houses wouldn’t have sky rocketed as people would only be able to buy within their means, so buy to let would have been a lot less prevalent as it wouldn’t be so easy for them to get the money as well
Prices hadn’t moved a lot previously
Not suggesting people buying buy to let’s aren’t adding to the problem just saying why I think it’s surged
Quick google suggests private rentals have nearly doubled in the last 10 years 😳
University has gone through the roof since people started borrowing money to do it
Quick google suggests private rentals have nearly doubled in the last 10 years
Well homes are needed.
And
Prices won't plummet, ever. Too many people have got a vested interest in keeping them rising (or at least holding steady).
Prices won’t plummet, ever. Too many people have got a vested interest in keeping them rising (or at least holding steady).
Clearly you weren't in the housing market in the early - mid 90's; that's what people, including me, were saying then.
What happened? Price falls of c50% in some areas; East Anglia being one of them - I know as I lived there at the time and felt the pain.
You are missing the point, I would have been able to buy the house if BTL was not driving the market up
Would you though? How much deposit did you have against what you actually needed?
In real terms how much are the BTL buyers "driving the market up?"
and my savings were not going on over inflated rents.
You couldn't afford to buy. You're whining about 'having' to rent. Forth time lucky: what's your alternative?
Affordable houses exist. Mine sold for £60k. To mortgage that tomorrow you'd need a £12k deposit. Have you got £12k lying around? If not, how is that a landlords' fault?
I find this blindspot incredible, but many just simply have not had the same experiences.
It's not about experiences, it's about correct appropriation of blame. My girlfriend is renting, her capital worth is in the red. Aside from shacking up with me (or someone else) her only option of getting on the property ladder is a 100% mortgage. If she can't get that - and the mortgage lenders wanted a £30k deposit from her daughter recently - then at the risk of repeating myself, what's the alternative? If mortgage lenders want a deposit you don't have and no-one is letting rental properties, what are you going to do?
I understand your dilemma and I sympathise, it's a shit situation all round. But I posed the question "why is BTL such a bad thing?" and I am as yet unconvinced by your argument, without BTL tenancy as an option you'd have been on the streets or still living with your mum.
If the BTL market is driving property prices up by, I don't know pick a figure, 20%, that just means you'd need to find ten grand rather than twelve to buy my armpit of a house.
Not much love for or understanding of BTL landlords in some posts.
For clarity, I'm not one of them.
They can be seen as anything between a social good and thieving bastard; it's a broad spectrum.
We've moved a long way from the thread title but I'l play.
If you have a deposit and satisfy the lenders affordability criteria, you have options - buy, rent, live with parents, live in car/van, live in tent.
If you don't have deposit and/or fail to satisfy affordability criteria you can scrub buy from the list above but the other options are still available.
BTL is not a guaranteed way to make money but has attracted a high level of opprobrium.
Sure, some landlords are unscrupulous but many others aren't.
Some are small scale, friendly, supportive, looking to cover their mortgage and other essential costs; others are large scale, profit driven and see it as a business.
BTL landlords have decided to use their (spare) capital in the housing market; nothing wrong with that.
They are partially filling a huge gap left by councils largely walking away from social housing.
Pre-covid my suggestion would have been - take on a second job and save like F; not useful now so... work, save, minimise expenditure, differentiate between wants and need, convert 'stuff' into cash, swap/switch utilities and bank, stop take aways and so it goes on.
It's also tiresome to read the bleating comments about...older generation(s), pensions, zero hours contracts, how unfair life is.
The 'older generation' have not gone out of their way to make life difficult for subsequent generations.
Let's take final salary pension schemes; for people of certain age they were the only available option; first day in new job, told to see Margie in payroll office - just sign here to enroll in pension scheme, no option, explanation or discussion so you're in the DB scheme. Never see the money so don't miss it.
Employers were able to fully fund pension schemes - then.
Who knew what the future would hold?
Hindsight gives all of us perfect vision.
As for houses owned by older generation(s) - affordable mortgage based on 2.5X salary with possibly 1X second income; tightly controlled expenditure; credit card debt - what's that?stuffed wardrobes - no, latest technology - no, public transport everywhere as cars weren't 'a thing' so...prudent. Generally, no wish to move and re-mortgage.
Market movements were completely outside of their control.
Good fortune - yes.
Why slag them off?
Why slag them off?
Is it not the system people are slagging off? When many people own multiple homes, that reduces the supply of homes available to buy for people who want to own their own home. Pretty obvious why some people don’t like that situation.
Sure let's just shut up and accept that's things are they way they are, fine I guess as you are profiteering, but why do people not care about their children?
The pull yourself up by your bootstraps brigade are the same people that did not have to do this.
For the record I saved a 80k deposit over 12 years, working through uni, living with parents, stressing over every last penny etc What a waste of my 20s.
When we had kids we rented damp, undersized properties, being no fault evicted 3 times in 5 years. The house we brought for all that effort is 3 bed semi ex council house. We were bidding against BTL every time. It's now even more unaffordable.
I do not feel proud that I was able to save the money, I feel robbed and truly sad for the next young family after us that will have to struggle even more.
There will be a point when enough people will have gone through similar experiences to cause a fundamental change. I don't think many people realize how much anger is brewing.
@matt_outandabout you must be aware a 3 bed house at 130k is highly unusual. I could got not get studio flat within 50 miles of where I live. Sure I could pack up and move - but there are no jobs or family (childcare).
Your housing market is working, reasonable rent, small profit for the landlord, can buy a house after a few years saving - we are not talking about the same thing.
You raise a good point there - the excessive prices of South / South East is part of the issue.
We're a crowded island, even more crowded in the S/SE with policies that still focus on jobs, economic activity and benefit within a couple of hours travel of London.
I'm of the view that to transform investment, jobs and infrastructure elsewhere could start to 'reorganise' house prices. I also think that's why there's so much resistance to such a change - MP's, consultants and more who stand to personally lose out on expensive house prices in S/SE. Turkey's voting for Christmas and all that.
I’m of the view that to transform investment, jobs and infrastructure elsewhere could start to ‘reorganise’ house prices.
Probably, but it'll push prices up in other areas, not drop them significantly in the SE
Yes just look at what is happening in places like Manchester - lots of new housing sold to investors, locals priced out.
The market needs to be taken out of it. There is a gap opening up, my friends in their 40s tend to have multiple homes, those under 40, probably will never own now. These are the people that will ultimately force a change -hopefully peacefully.
We’re a crowded island,
We aren’t.
Brilliant, lets build a load of new towns in Scotland or mid wales where its not so crowded. That will solve it.
A uni mate got into BTL in a big way.
Ended up owning several streets of houses (all on the never-never, obviously). Reckoned he was going to be a huge property baron.
It all went tits up. He squandered his wife's inheritance and ended up bankrupt - now lives in a rented house.
Hope that makes some of the landlord haters feel a bit better.
We are 14th out of 195 countries on earth.
London and SE has nearly 50x the population density of Scotland, with England averaging 5x the population density of Scotland.
🤔
For the record I saved a 80k deposit over 12 years, working through uni, living with parents, stressing over every last penny etc What a waste of my 20s.
I'm not sure that's any different from my parents generation, or the one between them & myself. Living at home, scraping money together for a deposit, getting married & moving into the family home.
My other halfs parents bought an old farming cottage with the floor collapsing, the roof leaking everywhere, with no money left to do any repair work. It’s just how it was, and still is IMO.
Buying a house isn’t easy. It never was.
Buying a house isn’t easy. It never was.
It's even LESS easy nowadays though, all you need to do is look how much the house price to earnings ratio has skyrocketed. It is significantly harder for people to get on the property ladder now compared to 20/30/40 years ago.
Oh come on! Of course it's different. The deposit is much larger, the mortgage many more times income, the mortgage term 30, even 40 years instead of 20 or 25. The average first time buyer age is much higher. The time to get a family home much much later. You need two incomes now FFS. Good luck trying to sort childcare.
Add the other obstacles thrown at them e.g uni debt it's no wonder people give up and dare to enjoy an occasional avocado.
