Viewing 40 posts - 41 through 80 (of 108 total)
  • This kind of sums up 'Buy to Let' for me!
  • trail_rat
    Free Member

    Duplicate

    matt_outandabout
    Full Member

    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.

    So you are suggesting the new mortgage rules are an issue? More so than BTL?

    Klunk
    Free Member

    should extend right to buy to the private sector with all the discounts.

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    D0NK
    Full Member

    Surely a BTL landlord is someone who buys a second/third etc home with the expressed interest of exploiting it for financial gain

    emotive language but change “exploiting” to “using” or similar and yes I reckon thats what joe public consider to be a BTLer (as opposed to a full time property company – presumably some buy and others build to let) Whoi gets to decide whether companies, your definition of BTLers or people in your own situation are unscrupulous money grabbers or earnest property owners? should be some parity/fairness across the board. Housing is something society needs along with other services and shouldn’t allow market forces and pursuit of profit to be detrimental to society.

    So you are still using that for financial gain egb81…

    well leaving a property empty while you are abroad probably isn’t a great idea so it’s keeping the place looked after with a bit of money as a little extra – depends how much he rents it out for I guess.

    trail_rat
    Free Member

    Who was that with ?

    I never had an issue. With 20% down.

    Have friends who earn similar to me buy a house for twice the price o mine on a 5% deposit ! This year

    egb81
    Free Member

    So you are still using that for financial gain egb81…

    Temporary stability, financially and practically. The house was bought to live in. The opportunity has arisen to try something new, that may or may not work in the long run. If it works, I sell the house. If it doesn’t I move back into it. I still only own one home at a time. My future is stable, no one gets particularly exploited. Selling it and renting for a short time only to want to return would be daft.

    matt_outandabout
    Full Member

    well leaving a property empty while you are abroad probably isn’t a great idea so it’s keeping the place looked after with a bit of money as a little extra – depends how much he rents it out for I guess.

    Or as the BBC article, and half this forum think, he should sell it to some desperate first time buyer, save being a greedy landlord out to make a buck or an empty property. Then he should re-buy on return from abroad.

    matt_outandabout
    Full Member

    @egb81 – I am playing devils advocate.

    I too bought our place as a ‘backup’ of a job with tied house going wrong / changing. This still means I cop the full force of STW and BBC emotion of being a horrid landlord.

    I do think there are some awful landlords out there, some greedy ones and some quick-buck-on-price-rises landlords out there.

    I also think there are a lot in it for the long term, to raise a long term profit and provide a service. Much like most of the jobs that outraged_of_stw are doing.

    This is an emotive issue – it is about ‘home’ to people. However, it seems that a service and industry with a few bad apples is being bashed like bankers.

    We can all service our cars, yet choose to pay hundreds for a mechanic to do it. Why? it suits most of us and saves an investment in tools and training.

    footflaps
    Full Member

    Much like most of the jobs that outraged_of_stw are doing.

    Selfish bastards, hoarding a job trying to turn a quick profit when they could resign and give it to an unemployed person! I hate the lot of them.

    egb81
    Free Member

    I totally understand why people hate landlords and, in particular, letting agencies having been messed about by so many of them. I have no interest in being a landlord really but owning my home does have some perks of security and opportunities that come with being able to rent it. I’m lucky to be in that situation. Exploiting a massively skewed housing market at the expense of others is a very different ball game though, something I want no part of.

    suburbanreuben
    Free Member

    So you are still using that for financial gain egb81…
    well leaving a property empty while you are abroad probably isn’t a great idea so it’s keeping the place looked after with a bit of money as a little extra – depends how much he rents it out for I guess.

    [quote]

    It’ll stop it going mouldy behind the headboards, like…

    agent007
    Free Member

    So you are suggesting the new mortgage rules are an issue? More so than BTL?

    The new mortgage rules are an issue for people looking to buy a house to live in – unfortunately they don’t seem to apply to BTL investors which puts young families looking for a roof over their head at a huge disadvantage.

    I do think there are some awful landlords out there, some greedy ones and some quick-buck-on-price-rises landlords out there.

    Of course all landlords think that they’re a great landlord don’t they – that they’re somehow doing it for the greater good. Much like most drivers think they’re way above average ability.

    BTL is not only taking advantage of those financially less fortunate, but it’s also destroying communities in the process. Transient residents become the norm – I mean why put down roots and take an active role in your local community when you could be kicked out with 2 months notice and at the landlords whim?

    footflaps
    Full Member

    BTL is not only taking advantage of those financially less fortunate

    Or providing a much needed service for people who can’t / don’t want to buy eg the 1m+ students out there….

    scaredypants
    Full Member

    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.

    I think that’s most people’s “problem” though – you set your rent to pretty much cover your mortgage, so your renters are effectively buying you an asset that, granted in quite a few years (of you essentially paying only to maintain it), will be all yours. Your return on a relatively minimal investment will ultimately be disproportionately large. If I was your tenant I’d feel that you were taking advantage, most especially if I couldn’t raise the deposit/fees, or had a job that didn’t satisfy potential lenders.

    Don’t get me wrong, I don’t have anything specifically against BTL landlords, I mostly save my disdain for governments who allowed state housing to all-but disappear. I do hate them a bit for giving landlords (big and small) too much of an easy ride as well, though.

    matt_outandabout
    Full Member

    BTL is not only taking advantage of those financially less fortunate, but it’s also destroying communities in the process. Transient residents become the norm – I mean why put down roots and take an active role in your local community when you could be kicked out with 2 months notice and at the landlords whim?

    Have you read my posts?
    Up here, it is cheaper or no cost difference to rent!
    My tenants could not get a mortgage, under new rules and having seasonal tourism jobs (50% of the jobs in the town).
    There is NOT the queue of well-deserving prospective owners of property up here that you are assuming exist.
    You can be booted out of any job at less that two months notice.

    matt_outandabout
    Full Member

    scaredypants and agent007 – what do you do for a living?

    agent007
    Free Member

    scaredypants and agent007 – what do you do for a living?

    How does this make a difference?

    trail_rat
    Free Member

    “If I was your tenant I’d feel that you were taking advantage, most especially if I couldn’t raise the deposit/fees, or had a job that didn’t satisfy potential lenders.”

    Ah yes the self entitled who feel they should get all the benifits but non of the risk.

    Btl isnt without risk…..renting is almost exclusively without risk, certainly none of your capital is tied up in an illiquid asset…..

    matt_outandabout
    Full Member

    I am intrigued as to what you do to ‘earn a quick buck’ or if I should feel that you are taking advantage of your clients.

    trail_rat
    Free Member

    Oh and as per matt, mortgages are less than rental round here, rentals mental due to high volumes of transient workers on temporary visas and who dont want to live in the area perminantly.

    So although its not cheap , its cheaper to buy than to rent an equivalent property.

    There is also choice. When i moved up here i moved into a poky 1 bed in a shit part of town renting privately.

    My mates ( all couples ) moved into 3 bed private rental houses in nicer parts as they could “afford” the rent…..

    Living in a crap hole was 600 quid…..a 3 bed was 1200 quid.

    600 quid a month for 2 years soon adds up.

    jambalaya
    Free Member

    Without buy-to-let we would have woefully inadequate amounts of rental property. Where do you think all these school leavers, young professionals and new arrivals/immigrants would live ?

    Buy to let is booming as the number of potential tenants is booming

    As an aside you can now rental in an expensive part of London like Chelsea for 5 years before the total rent equals the cost of the stamp duty for buying the place, never mind mortgage costs.

    footflaps
    Full Member

    Oh and as per matt, mortgages are less than rental round here, rentals mental due to high volumes of transient workers on temporary visas and who dont want to live in the area perminantly.

    That can’t be right, we have been repeatedly told such people don’t exist. Everyone wants to buy from the minute they’re born!

    brooess
    Free Member

    People make a wrong comparison between renting and owning when they see the two as equal. For the immediate reality, maybe, but if I rent for the rest of my life, I will have to pay rent after retirement. If I buy a house now and get the mortgage paid off before I retire, I will need a much lower pension pot to maintain a given standard of living, or have a higher standard of living.

    As things currently stand, my rent is so high I can’t afford to continue funding my private pension as I have for the last 18 years. So I’m a middle-class professional with a degree and post-graduate qualifications earning well above median wage – facing a reasonable standard of living until I retire and then almost entirely dependent on state help to pay my pension and possibly have to fund my housing as well… and therefore having a much lower standard of living over all.

    We have to remember that if the system doesn’t share the gains evenly and reward hard work then the social contract starts to fall apart – inequality like that tends not to motivate people and tends not to end well!

    The future taxpayers (our kids) and the economy won’t be able to afford to pay for my pension and housing and it’s pretty unfair to put that tax burden on them for a problem they didn’t create.

    Better, surely, to bring housing costs under control now?

    As per my links above, landlords need to be less defensive about how people feel about BTL and remember when you accumulate what seems like ok behaviour at an individual level it’s having a severely detrimental impact, economic and social for society as a whole – especially the risk of pushing us into another financial crisis – and it’s this that BoE have asked for permission to tackle and one reason why Osbourne is killing BTL for the one-man BTL model.

    The Institutional model is BUILD to let. So far it’s not really taken off, but if pension funds, insurers and other investors build brand new purpose built rented accommodation the risks and the impact are very different – not least the increase in supply of new property…

    matt_outandabout
    Full Member

    Better, surely, to bring housing costs under control now?

    Yes.

    Shall we devalue all houses by 50% immediately. Problem solved.

    footflaps
    Full Member

    We have to remember that if the system doesn’t share the gains evenly and reward hard work

    It has never done this and is currently going further away from this ideal!

    Shall we devalue all houses by 50% immediately. Problem solved.

    Capitalist! I say 90% and by yesterday!

    agent007
    Free Member

    Matt, I’m director of a company that provides services to large corporations, mostly in the medical and healthcare field. We do a good job and deliver solutions to our clients that will enable them to save money on their marketing, yet deliver a proven increase in it’s effectiveness. Make of that what you will.

    Funnily enough, and part of the reason I don’t like BTL is that it takes funding away from businesses that actually export stuff, like us. Well when I say stuff, in our case it’s service based so there’s no actual physical goods as such.

    3 Years ago a large American client asked us to deliver a £300k piece of work but this would require us to make an investment in our suppliers of roughly £100k beforehand to be able to deliver that work. It wasn’t a pitch, this would have been guaranteed work for us with a good profit margin.

    So we approached our bank to apply for a bridging loan or temporary overdraft to cover our cashflow until the deposit payment was received from our client (it’s likely that would have had to part pay our suppliers slightly before we received the deposit payment from our client – possibly around a 2 week overlap). There was no real risk – the loan was required just to solve a temporary cash flow situation.

    The bank refused as we’d not yet been in business for 3 years at that point. So unfortunately since we couldn’t work it with our cashflow, and in the absence of other suitable sources of funding we had to decline the work. So that’s £300k out of the UK economy!

    Yet at the same time our bank was seemingly dishing out loans on BTL properties like nobodies business!!!

    Friend of mine who is director in a very profitable business also had an equally torrid time trying to fund investment and a management buyout via a bank who was making loan conditions so draconian that he couldn’t risk it in the end since if the business had failed he, and his kids would have been out on the street, homeless. Funnily enough, my mate deciding that it wasn’t worth the risk with the conditions imposed by the bank is now employed by the Danish company who bought the business and whom now continue to turn a fantastic profit.

    Again at the same time BTL mortgages were being handed out like confetti by the big banks!!!

    footflaps
    Full Member

    Make of that what you will

    Sounds like you’re exploiting them to make a fast buck to me 😉

    Yet at the same time our bank was seemingly dishing out loans on BTL properties like nobodies business!!!

    You mean they were happy to lend against an asset, but not on a speculative business venture? Fancy that, a rational business decision!

    Why didn’t you get an LC for the order and factor that, then you could have had 80% of the final value up front as cash for a 5% fee?

    matt_outandabout
    Full Member

    Again at the same time BTL mortgages were being handed out like confetti by the big banks!!!

    Blame the banks then.

    a company that provides services to large corporations, mostly in the medical and healthcare field.

    /engage facetious mode
    I presume taking taxpayers money from the NHS, at profit and good salaries allround? Just think how much more the NHS could do, if you lowered your prices, took a salary cut and reduced profit. Profiting from ill health, shocking.
    /disengage facetious mode

    😉

    Also, put your self in the position of getting that loan, starting that order, and then the deal changing, putting your profit at risk or even business on the line. That is what is happening to BTL.

    FWIW, we re-mortgaged both our house and the BTL with the same lender at the same time 18 months ago. The same checks and balances were applied to us for both mortgages, by two different departments. I don’t believe that BTL mortgages are ‘handed out like confetti’.

    loddrik
    Free Member

    The pic in the article, it’s in Liverpool obviously as all pics representing deprivation and urban decay seem to be. My gran grew up in the next street, it was nicer back then!

    Buy to leters are capitalist scum IMO. I hope they all get badly burned financially.

    matt_outandabout
    Full Member

    ^ and that street is a failed European funded, Government and Council led regeneration project that was leading to vast profit for the house builders, at the expense of the local people, including friends of ours.

    agent007
    Free Member

    Sounds like you’re exploiting them to make a fast buck to me

    That’s business – all businesses need to turn a profit.

    Housing is a social necessity, it should not be subject to speculation or at the whim of greedy people hoping to turn a profit. Whether you like it or not, BTL by en-large is making money out of someone’s inability to afford their own roof over their head. Part of the reason that they can’t afford a place of their own is that the house they could have bought (had they been lucky to be born at the right time), has had it’s price inflated ridiculously by greedy BTL’ers, irresponsible bank lending, ruthless agents, a government hellbent on protecting the same said over leveraged borrowers, and TV inspired property developers.

    brooess
    Free Member

    Shall we devalue all houses by 50% immediately. Problem solved.

    Um, that’s what BoE are trying to prevent from happening by bringing BTL under control – they’re worried it would lead to a mass sell-off and bring about a crash. A lot of people will be in very serious trouble if we have a repeat of 2008…

    A crash isn’t the only option which could be managed either… how about a steady fall in house prices over 10 years? Or stagnant prices for 50 years?

    I know BTL is at the end of a lot of emotion right now – me included as one of the anti’s but you really need to take a look at the bigger picture and the risk BTL at the current scale and with the position of the current participants to understand why it’s important to kill it.

    And blaming the banks for it is like blaming the car manufacturer when a driver kills a cyclist by driving into them at high speed…

    footflaps
    Full Member

    Housing is a social necessity

    Well we did used to have this thing called Social Housing….

    But we then voted in a succession of governments who believe that turning a fast buck is all that matters.

    A crash isn’t the only option which could be managed either… how about a steady fall in house prices over 10 years?

    Quite hard to engineer that without killing the economy, as we’re carefully engineered it to be almost entirely dependant on housing equity (debt backed) consumption….

    agent007
    Free Member

    Blame the banks then.

    The banks only offered the loans – people didn’t have to take them out!

    I presume taking taxpayers money from the NHS, at profit and good salaries allround? Just think how much more the NHS could do, if you lowered your prices, took a salary cut and reduced profit. Profiting from ill health, shocking.

    We are lowering marketing costs for these businesses whilst at the same time allowing their marketing to be more effective. That allows them to cut costs, not increase costs. Without companies in this field being allowed to make a profit, there would be no incentive to develop new treatments, so the NHS would still be in the dark ages without them. Certainly cheaper though, but would you want that if you were ill?

    I’m not sure how much money the inflated rents of the BTL brigade cream off the taxpayer every year through housing benefit? Thankfully there seem to be some sort of controls coming in now at last.

    johnx2
    Free Member

    The people I know who buy to let, and I know a lot of ’em, do so because it’s a relatively easy and safe investment. If they had access to easier and safer investments they’d go for those instead (and will do when btl gets harder and riskier, which is down to govt to do).

    The bank refused as we’d not yet been in business for 3 years at that point. So unfortunately since we couldn’t work it with our cashflow, and in the absence of other suitable sources of funding we had to decline the work. So that’s £300k out of the UK economy!

    Yet at the same time our bank was seemingly dishing out loans on BTL properties like nobodies business!!!

    Similar judgement made, in this case by the bank,

    (Not bashing the btl brigade, much as it wrankles with me for reasons spelt out up thread, as I’m part of a worse crowd: bntl.)

    thisisnotaspoon
    Free Member

    People make a wrong comparison between renting and owning when they see the two as equal. For the immediate reality, maybe, but if I rent for the rest of my life, I will have to pay rent after retirement. If I buy a house now and get the mortgage paid off before I retire, I will need a much lower pension pot to maintain a given standard of living, or have a higher standard of living.

    You miss the fact that buying/moving house is incredibly expensive as an owner rather than as a tenant. OK as a tenant you get shafted with LA fees left right and center, but they’re a fraction of stamp duty, solicitors, surveys, which are all on top of the estate agents fees (which in themselves are vastly more than they charged for lettings).

    Move house with any regularity (which is becoming more and more common, I’m coming upto 30 and I don’t know anyone I graduated from uni with who hasn’t moved 4+ times in the last 8 years) and that would be financial suicide. Even over a more stable average lifetime I wouldn’t be surprised if a lot of people end up paying £50k+ moving house, that’s a lot of rent, especially if you downsize once the kids have left.

    So the fact that rent and mortgage repayments are approximately equivalent is a red herring. The tenant doesn’t have to insure the building, maintain it (new CH boiler £5k+, new roof £30k+, or even decorate a room £500+), or take any risk that the house could fall in value trapping them there in negative equity, they just keep paying the rent and move out whenever it suits them.

    A good/bad example was i rented a house in Teeside for a couple of years, cost me £550 a month, the house was worth £100k, maybe £120k if you were feeling very generous (and judgeing by the time it took the similar but in need of modernising house nextdoor to sell for £55k £100k was optimistic). But I had no risk, never had to do any DIY, and moved out with 28 days notice posting they keys back through the letterbox.

    thecaptain
    Free Member

    Might be worth pointing out that even 70k is still out of reach of a whole lot of people, what with *average* salaries being about 26k or something like that. So, something like half the population cannot afford the cheapest hole in the middle of nowhere.

    Maybe housing benefit needs a closer look…taxpayers paying off the mortgages of BTL speculators, and propping up rents at an unaffordable level.

    brooess
    Free Member

    TINAS – you’ve missed my point entirely! I’m talking about my position at retirement after a lifetime of renting instead of living in a house that I own, having paid off the debt…

    The people I know who buy to let, and I know a lot of ’em, do so because it’s a relatively easy and safe investment.

    And this is the nub of the problem exactly. They think it’s safe. It rests on a number of assumptions which may not be true – not least that the tax rules around it wont change – which they just have – and look at the response – just anger and resentment. That tells you most BTL had got their assumption totally wrong. Let alone interest rates going up or house prices falling at some point…

    The BoE will be looking at this from a systemic point of view, looking at the amount of debt being built up (again) in the banks, using housing as the asset, and looking at the risks of default (roughly twice as high as an owner-occupied mortgage I believe) and deciding that in actual fact, the risk is now high and they need to get this under control and avoid having to bail the banks out again…

    footflaps
    Full Member

    So, something like half the population cannot afford the cheapest hole in the middle of nowhere.

    Which is why we had social housing, although that’s now a dirty word and the little remaining stock is being sold off as quickly as possible.

    agent007
    Free Member

    Thisisnotaspoon, we’re not slating all rental property, renting suits a lot of people, it’s just that BTL is out of control, has had an unhealthy impact on the property owning aspirations of those who were unfortunate enough to be born at the wrong time, and an unhealthy impact on the UK economy as a whole which seems now to be based more on renting or selling over inflated property to each other, rather than delivering goods and services that can be exported.

    Build to let – now there would be a much better idea, creating income through positive change. Might take the average BTL’er a while to get their head around that one I suspect!

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