This kind of sums up 'Buy to Let' for me!

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  • This kind of sums up 'Buy to Let' for me!
  • Premier Icon matt_outandabout
    Subscriber

    BBC in lazy reporting shocker.

    To redress the balance………….

    We ended up renting out her flat when we moved out in order to speed up the process. The plan was let it once, enough rent to cover the mortgage, and sell it whenever the tenant moves out.

    3 months in we got an e-mail from the letting agent, “the tenants are complaining about damp everywhere and peeling wallpaper and want to know what we’re goig to do about it” with attached pics. They’d managed to trash the place in 3 months when we’d been there 5 years and 15 years and never had more than a bit of mold behind a headboard when we accidentally turned the heating off in the spare room! God knows what kind of state it’ll be in when they move on.

    Do some people not know how to do the simple things in life, like live in a house with windows?

    Premier Icon kayak23
    Subscriber

    That’s not really redressing any balance, but more pointing out that some people are shit.

    Renting is a trap. I rent and will likely never be able to afford to buy whereas those, lucky enough to have gotten on the ‘ladder’ are generally only going to be better off. It’s only going to get worse.
    Don’t know what the answer is… 😕

    Premier Icon D0NK
    Subscriber

    was considering moving to a modestly priced new house and letting our old one (savings are bugger all use at the moment) looking into it it did seem to be a bit of a no brainer conisdering offsetting your own mortgage, tax savings etc.
    Happy to see they’re redressing it some, coz lets face it it’s probably a bad move for society overall, dunno whether we will go ahead, see how it pans out post changes.

    footflaps
    Member

    BBC in lazy reporting shocker.

    Click Bait article.

    footflaps
    Member

    Don’t know what the answer is…

    The answer is the same as it’s always been, build millions of council houses. Just there is no political will to solve the problem.

    Almost every housing related policy from the current Chancellor has been targeted at increasing house prices, so they’re actively making it harder to move from renting.

    Premier Icon jimdubleyou
    Subscriber

    3 months in we got an e-mail from the letting agent, “the tenants are complaining about damp everywhere and peeling wallpaper and want to know what we’re goig to do about it” with attached pics.

    My brother rents – his latest tenancy agreement had a clause in it about reducing humidity and keeping the place properly heated/aired.

    Premier Icon D0NK
    Subscriber

    Hang on, just reread that, is the problem that the rental market on the whole is a mess and B2L are the scapegoat du jour or are B2L really a bunch of heartless bastards? I’m tempted to go with the former.

    Also why do low level B2L feel the full effect af the new changes but the established 15+ property owners investors get exemption?

    joey
    Member

    Housing is a “safe” financial investment because there is a shortage of houses.

    Businesses struggle for start up funds/ investment.

    If we increase housing stocks and/or tax(or otherwise penalize) buy to let, investors will have to invest in more risky things like business – so stimulating economic growth??

    fin25
    Member

    I think the problem is that landlords see their BTL property as an investment and care very much about the state of their property. Yes, many tenants are pigs and will break stuff, which will cost you money to fix and bugger up your profit.
    What needs to be remembered is that landlords choose to be landlords, tenants rarely choose to be tenants.
    Buy to letters do not seem equipped enough to properly deal with being a landlord in the fullest sense of the word. Being a landlord is about a lot more than charging rent.

    Gary_M
    Member

    I’d love to know how me renting out a house to someone who wants to live in it, bearing in mind no one is twisting their arm, makes me ‘scum’. If people think that they must have led very sheltered lives.

    Premier Icon binners
    Subscriber

    Its ironic isn’t it that successive governments who endlessly lecture us that the market must be left to sort everything out, independent of the interfering state, are happy to constantly meddle in the housing market to ensure that the whole thing is totally dysfunctional, and prioritises the interests of investors before the far less important matter of people actually having a roof over their heads?

    You can’t blame buy-to-letters. Its successive government that have created this sorry ****ing mess, with short term policies to suit their own political ends.

    And Daves latest lunacy of forcing housing associations into selling their stock is just more of the same madness

    TurnerGuy
    Member

    How do you let something out if you haven’t bought it in the first place – ergo everywhere is buy-to-let…

    What about companies that purchase office building and then let out the office space, are they just as evil?

    If there was no-where to rent because everyone had bought then you wouldn’t be able to move around the country easily, for work, etc, unless you stayed in hotels all the time. Would that be more expensive than renting – and no cooking for yourself in a hotel room as no kitchen.

    If buying and selling was a bit easier then maybe moving around more easily would work, but stamp duty and t8sser solicitors dragging the process out make that a non-starter.

    That’s not really redressing any balance, but more pointing out that some people are shit.

    Renting is a trap. I rent and will likely never be able to afford to buy whereas those, lucky enough to have gotten on the ‘ladder’ are generally only going to be better off. It’s only going to get worse.
    Don’t know what the answer is…
    I’m in my 20’s and live a 20min train ride from Paddington, not say it’s easy or that other people aren’t trying, but I’m hardly a baby boomer who’s been handed it on a plate.

    Lived frugally since graduating, took jobs no one wanted for the salary uplift, saved like mad, didn’t do the 18-30 thing of going out every weekend. Bought a house and nothing’s changed, just rather than voluntarily saving 2/3rds of my income goes straight out on house stuff.

    footflaps
    Member

    If we increase housing stocks and/or tax(or otherwise penalize) buy to let, investors will have to invest in more risky things like business – so stimulating economic growth??

    Basically yes, however successive governments have deliberately constrained supply, thus ensuring prices stay high, which also make BTL a one way bet.

    agent007
    Member

    If we increase housing stocks and/or tax(or otherwise penalize) buy to let, investors will have to invest in more risky things like business – so stimulating economic growth??

    Exactly – the UK is never going to prosper as a nation if a huge proportion of our GDP is geared solely towards the buying/selling and rental/letting of houses from each other, whilst diverting much needed investment and funds away from businesses that actually export stuff.

    I’d love to know how me renting out a house to someone who wants to live in it, bearing in mind no one is twisting their arm, makes me ‘scum’. If people think that they must have led very sheltered lives

    Because the likelyhood is you’re trying to make a fast buck out of someone who doesn’t have the financial means to buy the same said house themselves – primarily because BTL investors have helped to drive up the price of that same said house in the first place, and also because the level of rents charged these days means that it’s almost impossible for someone who’s renting to save enough for a deposit. BTL’ers have specifically hoovered up a huge percentage of smaller starter homes or flats, the very same homes that would give a young family a perfect start in life.

    And I’m not talking from a biased point of view – I’m not a renter, I own my own house, but just the one house, the one I need to live in. Guess that’s considered old fashioned now?

    footflaps
    Member

    Because the likelyhood is you’re trying to make a fast buck

    Or just investing for the future….

    Premier Icon binners
    Subscriber

    The government had a unique opportunity when they embarked on the QA programme of the banking bailout to ensure that those billions were used productively. If you recall, we were told that that money was for lending to business to get the economy moving.

    What happened to it instead? The banks decided to lend it as mortgages instead and start stoking another housing bubble in the South East, including a massive rise in BTL, because it was politically expedient to do so.

    Because fuelling housing bubbles has always ended really, really well in the past

    You couldn’t make it up

    Premier Icon woody74
    Subscriber

    Has buy to let really driven up the houses prices. It may have done in small pockets of the country but the housing market has always been rocketing along well before buy to let came along. Owning a house is not always the best thing. There are a ton of costs which you, not some invisible person has to pay for when things like the boiler need replacing or there is a hole in your roof. It might be a great idea to encourage people to own houses but can all of those low wage people living in council house really afford or be able to find £3k when the boiler goes pop!!

    Landlords are just being blamed as an easy scape goat as salaries have not risen much in the last few years and there are nows lots more graduates that have been sold the line that if they go to Uni they will earn loads and then they will be able to afford that bend new car and brand new house. That isn’t the case and understandably there are lots or disgruntled people who expect more.

    Premier Icon MoreCashThanDash
    Subscriber

    I’ve spent 10 years working in the housing benefit sector.

    The underlying issue is lack of affordable/social housing and low wages. The actual problem won’t be removed until they are addressed.

    Plenty of BTL landlords I have met are greedy, have taken all the breaks, stretched themselves and want or need to keep the rents high to cover their costs and Range Rover Sports.

    Plenty of BTL landlords are perfectly reasonable, not greedy, maybe inherited a house or some money to invest, just want a reasonable rent and return.

    In the same way that not all cyclists jump red lights, not all drivers are homicidal texters, not all BTL landlords fit the lazy journalism, click baiting stereotype, and you’d think cyclists, of all groups, would avoid jumping on that unthinking bandwagon.

    What Footflaps said – successive governments haven’t invested in, or otherwise encouraged, affordable/council housing. Coupled with the selling off of council stock means that there now is a chronic shortage. The conditions of the free-market (the direct result of governmnt policies) have encouraged BTL to step in and fill the short fall – risking their own hard earned in the process …. and now the government decides to starty scapegoating the BTL landlords by pulling the rug from under their feet. Meanwhile the popular press are jumping on the bandwaggon.
    Ruined my day (again) … and that’s before the bill arrived for a new external door in my BTL and I’ve just heard that the boiler’s gone pop – that’s no ‘profit’ again this year for this greedy barsteward… but at least ny tenant and her kids are out of an abusive relationship and have a warm secure roof over their heads for Christmas … bah humbug!

    Premier Icon matt_outandabout
    Subscriber

    Because the likelyhood is you’re trying to make a fast buck out of someone who doesn’t have the financial means to buy the same said house themselves – primarily because BTL investors have helped to drive up the price of that same said house in the first place, and also because the level of rents charged these days means that it’s almost impossible for someone who’s renting to save enough for a deposit. BTL’ers have specifically hoovered up a huge percentage of smaller starter homes or flats, the very same homes that would give a young family a perfect start in life.

    Firstly, fast buy to let returns are non-existent. It takes years to see a return.

    Secondly, if what you are saying is true, then I should be able to put my BTL flat on the market and have new owner purchasers queuing up to buy it. Do please explain why in the same small but popular Highland town with good employment and new jobs opening up this year, there are 1,2 and 3 bed houses and flats on the market, unsold for upto a year, despite costing 70-130k?

    Premier Icon kimbers
    Subscriber

    2/3rds of MPs are BTL landlords iirc, so im sure that not muchj will really change

    there is a Housing Crisis, in large parts of the country, BTL landlords are just one contributing factor, a cause and a symptom of the widening inequality gap in the UK (we are only ranked lower than the USA)

    Premier Icon scaredypants
    Subscriber

    Secondly, if what you are saying is true, then I should be able to put my BTL flat on the market and have new owner purchasers queuing up to buy it. Do please explain why in the same small but popular Highland town with good employment and new jobs opening up this year, there are 1,2 and 3 bed houses and flats on the market, unsold for upto a year, despite costing 70-130k?

    They’re unable to raise the (these days very high) deposit, largely due to the high rental costs ?

    Which dozy **** sold off all the council houses ?
    Oh yeah 😉

    gearfreak
    Member

    I think this buy to let ‘hate’ is a very london centric phenomena, as it the practice of increasing rent by 25% overnight, as are most of the arguments about affordability.

    Take this property

    http://www.rightmove.co.uk/property-for-sale/Machen.html?index=10

    http://www.rightmove.co.uk/property-to-rent/find.html?searchType=RENT&locationIdentifier=REGION%5E16526&insId=2&radius=0.0&minPrice=&maxPrice=&minBedrooms=&maxBedrooms=&displayPropertyType=&maxDaysSinceAdded=&sortByPriceDescending=&_includeLetAgreed=on&primaryDisplayPropertyType=&secondaryDisplayPropertyType=&oldDisplayPropertyType=&oldPrimaryDisplayPropertyType=&letType=&letFurnishType=&houseFlatShare=false

    Mortgage repayments with a 10% or £15k deposit are not significantly higher than the rent, although I expect that this property will be rented out rather than sold, this is the first time in the last 2 years that there has been more than a single property listed for rent in this village.

    The current changes are designed to slow down waht is an inflating housing bubble, which they will. Are they unfair, yes, but then show me a totally fair tax system and I will eat my hat. The tax system is a tool, and in this case it’s being used to control house prices (which are high due to too much credit, not lack of supply (excluding London)). Perhaps the next target should be disallowing loan interest as an expence against corporation tax, this could raise a large amount of revenue, and encourage equity investment in business rather than successful businesses taking on debt purely as a way to reduce their tax bill.

    brooess
    Member

    All I can say is the whole thing is an utter mess and the sooner house prices go back to some level of affordability the better – whether renting or buying there’s a huge proportion of earned wealth going into paying off mortgages – either your own or your landlords, the ultimate beneficiary of which is a bank – not wider society.

    I’m paying £1300 a month for a 2-bed flat just outside London. 10 years ago I would have paid c £800 but in the meantime my salary has barely budged so guess what – I’ve reined in spending on almost everything else which means less business for all the companies I used to spend my disposable income on, lower wages or fewer jobs, no expansion for those businesses, and I’m no longer funding my private pension provision because I simply don’t have the money.

    We have barely any real economic growth, we’re mired in a massive amount of debt – sending so much of consumers’ money to the banks in the form of mortgage payments – it’s utterly stupid and just holding us back and likely to lead to another crash

    The biggest problem with BTL is it’s scale – far too many naive investors getting into more debt than they can manage – this is why BoE want to kill it -financial stability and prevention of another crash. Remember the current bust started by banks lending too much to people on mortgages they couldn’t repay.

    The problem now is the emotion that’s being attached to it and landlords are feeling attacked and getting defensive about it. Understandably I suppose, but they really are a massive systemic problem and BTL and house prices generally need to be sorted for the sake of us all. BTL may work for a single landlord but it doesn’t work for the healthy functioning of housing provision or for the economy when it’s done at the scale it’s now reached and by so many inexpert people…

    agent007
    Member

    but at least my tenant and her kids are out of an abusive relationship and have a warm secure roof over their heads for Christmas … bah humbug!

    For which you are so honorably charging her (or the rest of us through the benefits system), a nice tidy packet for the privilege of paying off your mortgage.

    Do please explain why in the same small but popular Highland town with good employment and new jobs opening up this year, there are 1,2 and 3 bed houses and flats on the market, unsold for upto a year, despite costing 70-130k?

    Could it be that they’re overpriced? Could it be that all those currently renting in that area simply can’t afford the deposit due to the sky high rents they’re having to pay? Could it be that the lending market is currently unfairly skewed in favour of the BTL brigade?

    Premier Icon NewRetroTom
    Subscriber

    High house prices are fundamentally a supply side problem in the UK.

    BTL is a demand side issue, and has probably not made a huge difference to house prices.

    Some (somewhat old) research:

    BTL mortgage lending would appear to have increased house prices since its introduction in 1996
    Q3 but it is important to note that the impact is small in relation to the effect of household growth,
    the size of the housing stock, mortgage interest rates, and changes in disposable income.
    However, it has nevertheless had some impact on prices and therefore affordability. For instance,
    by 2007 Q2 BTL investment was estimated to have increased prices by up to 7 per cent, which
    was the equivalent of £13,000 on the average house price in that period. This may have been
    enough to price out some potential buyers from the housing market. On the upside, it is
    important to acknowledge that there are significant economic and social benefits being delivered
    by the sector.

    http://webarchive.nationalarchives.gov.uk/20120919132719/http:/www.communities.gov.uk/documents/507390/pdf/684943.pdf

    Premier Icon matt_outandabout
    Subscriber

    They’re unable to raise the (these days very high) deposit, largely due to the high rental costs ?

    The cheapest two bed flat in the area is £70k.Deposit £4k, fees etc £2k, Monthly cost £350.
    You can rent a two bed flat upstairs in our block at £350, one months deposit down. You do not need to maintain, insure etc.

    You can buy a cheap, small, three bed ex council flat for £100k. Again, fees and deposit @£7k and £500 per month.
    You can buy a big, spacious three bed flat from me for £120k. Fees £8k and £585 per month.

    Or you could rent mine at £525 per month.

    Now, tell me again about the massive deposits and over high rents?

    If I had that choice, I would have a shiny holiday and car, and rent a place…

    agent007
    Member

    High house prices are fundamentally a supply side problem in the UK.

    With over a million properties sitting long term empty, I would say that high house prices are more a symptom of the easy credit we’ve had in this country over the last 15 years. Interest only mortgages, BTL, self certification, added a huge amount of fuel to this fire, pushing up prices beyond the reach of most. Ultra low interest rates, foreign investors and the BTL brigade are now the only thing keeping the current bubble afloat, but I suspect it will probably pop in spectacular fashion before long – to the great benefit to most of the rest of us in the process.

    egb81
    Member

    Surely a BTL landlord is someone who buys a second/third etc home with the expressed interest of exploiting it for financial gain. This is a very different animal to those who inherit houses or rent them after moving in with a partner. I’m considering letting my house out so I can move abroad for a few years but I didn’t buy it just to do that. I’d be using the income to pay rent somewhere else. If I were to buy a new place I’d sell the old one.

    Premier Icon matt_outandabout
    Subscriber

    So you are still using that for financial gain egb81…

    Premier Icon GrahamS
    Subscriber

    BBC in lazy reporting shocker.

    I know – they had this headline today: ”Putin pours fresh scorn on Turkey”

    Really? “Fresh scorn”?

    A completely missed opportunity for the headline “Putin Roasts Turkey” 😀

    agent007
    Member

    The cheapest two bed flat in the area is £70k.Deposit £4k,

    I’m sorry but you’re living in cloud cuckoo land if you think that a deposit of £4k on a £70k property would be acceptable to 99% of lenders out there? Sure, deals are advertised out there but have you actually tried applying to get one? I had to jump through hoops recently to get a mortgage with a 25% deposit and I have a perfect credit rating and earn roughly 3 times the national average.

    footflaps
    Member

    I had to jump through hoops recently to get a mortgage with a 25% deposit and I have a perfect credit rating and earn roughly 3 times the national average.

    You should have bought a BTL instead, much easier to get finance 😉

    Premier Icon binners
    Subscriber

    A completely missed opportunity for the headline “Putin Roasts Turkey”

    😆

    brooess
    Member

    The problem with BTL specifically in the UK is a lot of people think it’s different from any other debt-based speculative activity. There also seems to be a belief that prices will go up for ever, especially over the long term based only on the fact that the last 20 years have followed this pattern when in fact UK housing has never done this before…

    Well worth reading these two articles to see the similarities between crashes in general and the current UK housing situation, esp the last 2-3 years in London and SE. I don’t have the link but The Economist published some research recently about recessions caused by housing crashes have been shown to be deeper and longer than recessions from other causes. BoE is therefore very wary of stopping our current bubble from bursting. Osborne also wants to as it’ll ruin his chances of being PM…

    5 steps to a bubble

    Market Crashes – a study

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