If you want, say, a £150k property then in the current market you need to find a 20% deposit. That’s thirty grand. That’s a big ask for a lot of people – I haven’t got that sort of cash lying around now in my 40s, let alone back when I was in my 20s. A landlord fronts up the deposit putting those properties in reach of someone who can scrape £500 together.

In Skipton 10 years ago you could buy a terrace house for sub 100k + 10% deposit. 120k bought you another bedroom and a bit more space. My street was full of young families and older folk that had lived there all their life and 90% or so were owner occupied. Since then the BTL crowd has been snapping up everything available on those streets creating demand that has pushed prices up to the point where they cost 130/150k with 20% deposit if you can find one, which you can’t as they’re all up for rent. The rent on one of those terrace houses costs more than the mortgage on my 3 bed detached.

!0 years ago it wasn’t that difficult to save/find 10k for a deposit and there were plenty of houses to choose from. As you said, 20% on 150k is a little harder and all the stock is taken up anyway!

It comes back to tax (someone post links to Rutger Bergman!) because the lack of CGT / income tax on first and 2nd house wealth is driving the inequality. I’m paying a mortgage and I would be happy paying tax when we eventually sell because future generations will be able to live and move and not obsess about property which is bad for our economy and mental health & wellbeing

These threads miss something i heard on radio 4 once: Family-locked cross generational wealth.

If you want to buy a house in the S.East etc in future (now?) you need to have selected the correct grandparents-parents who have gained from huge equity growth…by living in the S.East. Bank of mum and dad giving you hefty deposit to add to your salary-multiple mortgage and get on the ladder. Not good for social mobiliy. Prices will keep going up indefinately, even if there’s a coronovirus blip.

Me and my sister grew up in RG27, family house is now a huge pile of equity ~£600k.

We’ve married into Wales & North East families so see the disparity clearly.

Question for those who see landlords as protagonists of affordability/price growth issue. How can they make a difference as a given property can have 1 family unit from either the rental pool or the homeowner pool of family units:
I’m currently a landlord about to sell my buy2let – the tenants can’t afford to buy it so will get turfed out if the new owner wants it vacant. These tenants will then have to compete against the other tenant units in the rental pool with -1 rental house in the supply. Have i saved the day because I’ve sold the buy2let to a family, likely a first time buyer?

IMO ‘investors’ who buy a family house then make it a multi-let / HMO are helping ease house price growth as they are fitting more (single person) units of demand into a single unit of supply. Same effect from ‘developers’ building in their gardens.

Dirty radiological device, anthrax?

Building more affordable homes would also do that.
Interesting, about the south east (not London) as the houses that ring the university of Reading used to house lecturers and ancillary staff now they’re completely unaffordable for staff as there are very few under 500k. My mate is a senior lecturer, lives with his wife in a tiny terrace built for factory workers in the 30’s.

With low interest rates there will always be a market for good properties in the right location, so whilst some segments of the market may drop, it wont be overall and it wont be sustained IMHO. Similar to 2008/9, most people pause plans rather than sell at a loss

Question for those who see landlords as protagonists of affordability/price growth issue. How can they make a difference as a given property can have 1 family unit from either the rental pool or the homeowner pool of family units:

The point I was making was that the landlords buy the cheap houses. This puts the price of them up and removes stock from the market so first time buyers or those on lower incomes have less choice. They then have to rent the houses they used to be able to buy at a cost higher than a mortgage would cost them which takes more money out of any pot they had to save for a deposit (which has also gone up)! If they could afford the next level up (bigger terrace or semi) they’d have loads of choice but they can’t as they’re first time buyers or on lower incomes.

And so the wheel keeps turning…..

Of course the problem is buy to let FFS. There is no justification for people who just happened to be born at the right time and are deemed credit worthy (despite having the same earnings as someone younger) ‘owning’ two or three properties. It pure greed that has been allowed to go on far too long. If property developing is not your full time job, then you are simply profiteering from the misery of others.

There are enough houses, that’s not the problem! The problem is a generation trapped by sky high rents and monstrous deposits + all the other shit (tuition feea, zero hour contracts, laughable pensions etc) thrown on them by people who just simply do not care.

If it makes you feel better to call me a Tory crack on.

I didn’t call you a Tory – I don’t know you – I said that’s a Tory attitude, because it is. Take your shit sandwich from the rich and put up with it – that is the Tory line, even if you’re not aware of it.

I could call you a lazy lefty wallowing in your own misery because your too lazy and unmotivated to make change in your life. I won’t though as I’ve never met you and don’t know you.

Well I own a house and I earn plenty of money so it’s not really accurate. I might actually be concerned for other people rather than just my own situation.

Of course the problem is buy to let FFS. There is no justification for people who just happened to be born at the right time and are deemed credit worthy (despite having the same earnings as someone younger) ‘owning’ 2 or three properties. It pure greed that has been allowed to go on far too long.

Please don’t lump us all in that one pile.

A bit like saying all moumtainbikers are overbiked, lazy and too rich.

My tenants love that I rent the place to them.

If you want to buy a house in the S.East etc in future (now?) you need to have selected the correct grandparents-parents who have gained from huge equity growth…by living in the S.East. Bank of mum and dad giving you hefty deposit to add to your salary-multiple mortgage and get on the ladder. Not good for social mobiliy.

Well not always. If me and my partner combined our 2 London flats into one property the mortgage would be affordable and living costs less. Both of us bought late with hefty deposits (as that’s what you need being self employed) and neither of us had a bank of mum
and dad or huge equity growth either, just working and saving hard.
No kids or cars though, that probably makes a huge difference!

Buy to let isn’t the whole problem but a massive part of it. Rich people get to use their money in a way that siphons money away from poorer people (and their descendants) and make them even richer.

How is that not wrong?

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. This means they can provide a secure foundation for their kids.

We are storing up so many social and economic problems in this country due to the ever rising cost of basic living.

Rich people get to use their money in a way that siphons money away from poorer people

It’s not even their money! They just have been granted access to credit, because …!?

Meanwhile, the tenants want to buy a house since a mortgage costs less to service but can’t afford to save for a deposit and even if they did inflation is higher than interest rates. Then, if and when they finally get the money together for a deposit they fail the affordability check for a £150 a month mortgage despite paying out £700 a month for their current arrangement (this is based on a very true and very current story).

How is any of that the landlord’s fault? It’s a wider problem.

In Skipton 10 years ago you could buy a terrace house for sub 100k + 10% deposit.

In Accrington last week you could buy a terrace house for 60k cos that’s what mine just sold for.

The point I was making was that the landlords buy the cheap houses.

What’s stopping prospective homeowners from buying them instead?

There is no justification for people who just happened to be born at the right time and are deemed credit worthy (despite having the same earnings as someone younger) ‘owning’ two or three properties.

By that argument there’s no justification for people like Richard Branson to own multinational corporations when a corner shop would suffice. Welcome to capitalism.

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.