Are earnings too low / living costs getting too high??

[Spook187]

Foxeye the money you have saved will get you a nice deposit on a house up north, drop me a message i can show you a few things from my area, your banging your head against a brick wall talking to most of London crowd on here.

 

[Rroff]

Even if you decide that owning a home is not important... you will likely pay *more* in rent than a mortgage would cost!

Now certain people here applaud BTL landlord's as "risk takers", "entrepreneurs", "smart investors", etc. But there is nothing entrepreneurial about using buying up all the housing stock, knowing full well that everybody *must* have a house to live in. Where exactly is the "risk"? They can pick and choose their tenants, evict them with as little as two weeks notice if they object to yearly rent increases... And we know now that the government will not allow the housing bubble to burst, no matter what. BTL landlords can put up rent to astronomical levels, knowing that demand is insatiable and that the government will help their tenants pay these exorbitant rents! Housing benefit now costs the UK govt almost £30 billion a year.

The entrepreneurial spirit is seeing a gap in the market, innovating to produce a new product, or doing something differently. Being a BTL landlords is not clever. Not innovative. They are exploiting their good fortune in having sufficient capital to invest in housing, often having started many years ago when housing was affordable. Now as the increase in renters and decrease in owners shows, those who don't already own property are frozen out of getting on the ladder. Meanwhile BTL can still use their existing properties to get mortgage terms the banks won't give to anyone else. The measures the govt has taken to reduce gaming the tax system don't address this. People with a few properties under their belt are now many times more likely to buy new housing than somebody who wants to live in that house.

But this is a "service" right? We should be grateful for BTL - and as mentioned, foreign property investors - who snap up all the new builds, because what we locals most want in all the world is to pay more in rent to them than they pay in mortgage repayments. It's a fantastic service and I'm super glad BTL landlords are here to provide it.

Anecdotal, sure, but around here and in neighbouring towns we've seen a lot of new-build estates go up. Walking around them it's funny (not) to see how many are now rented out, just another property in somebody's growing portfolio.

We really should stop applauding people who do this. It is not the kind of innovation that will drive this country forwards. It's simple opportunism. That's all. Opportunistic profiteering. To applaud these people for "investing well", "being smart", etc, and to call the neigh-sayers "jealous" really is insulting to our intelligence. I have no doubt things will get much worse. In a few years time we'll look back on today as a time when more people owned their own home than rented. Because in future, if current trends continue, not only will many of us be wage slaves to the landlords, we have have engineered through apathy a new Victorian era, with record homelessness, and perhaps even complete societal collapse.

Frankly that's not an exaggeration. When discontent grows and grows and inequality ever increasing, it's only a matter of time. By that time the BTL landlords need to have earned enough money to pay for their own private security forces.

While I don't have anything against most BTL landlords, etc. I whole heartedly agree with this - I think many are looking at it too short sighted to see where it potentially leads.

I'm not sure that they're entrepreneurs but I don't see the issue(in general) in someone investing in housing and providing it for rent. Certainly I do see some merit in curbing excesses and perhaps making allowances for first time buyers, reserving some properties on new developments for them along with affordable housing etc.. But the fact is that a rental market is still needed and so we need landlords willing to invest capital in providing that service. As for the risk there are plenty, they're exposed to risk from interest rates, rental market rates, the property market re: the value of their investment, changes in legislation and of course are liable to carry out repairs. Some of these risks can be offset somewhat others they have to accept. You seem to get a bit emotional about this subject which perhaps skews your perspective a lot.

The problem is it has taken on a life of its own too big to self regulate for the overall good - if the vast majority of homes become bought up by BTL landlords in the long run that is not a good thing at all given the amount of power that gives them over the people who don't own their own home and with little potential for ever doing so.

 

[Caged]

Renting as a concept is absolutely fine, being an amateur landlord because you think it's a good investment tends to not provide the service that a tenant should be able to expect. I would favour more regulatory involvement in the market in terms of expected standards and how properties are marketed.

 

[FoxEye]

Foxeye the money you have saved will get you a nice deposit on a house up north, drop me a message i can show you a few things from my area, your banging your head against a brick wall talking to most of London crowd on here.

Thanks; I appreciate the gesture. Personal family circumstances don't allow me to move at this time. In the future I may well leave the UK, because I'm pretty sure the writing is on the wall for this country. It seems hell-bent on recreating the Victorian age all over again.

And with no effective opposition and an elitist government here to stay for the foreseeable future, I'm not sure things are going to get better any time soon. My worry is that by the time I am able to leave, my savings may be worth nothing.

 

[dowie]

if the vast majority of homes become bought up by BTL landlords in the long run that is not a good thing at all

they're not though, they represent about 20% of the market and the previous government last year made various moves to curb the sector including changes to tax relief, increases in stamp duty on second/additional homes etc.. which in turn led to a drop in BTL mortgage approvals in April 2016

 

[Madwelsh]

For what it's worth Fox, I agree whole-heartedly with you. There are many landlords who have amassed huge portfolios, but, through playing the game and sticking to the rules. The real problems came about when people were allowed to buy houses on interest only then keep adding to their portfolio. I can't understand why these weren't prosecuted for tax evasion? More than likely because the MPs were all up to their noses in it too. If you buy a house and the mortgage is 500 a month, you rent for 550 a month, you should still be taxed on 550 a month, not bloody 50.. isn't this what was supposed to have happened? If this had happened, you'd have found them portfolios floundering at 3 houses before being made bankrupt. Instead we had people riding this wave until they had 80 -100 properties or more.. with the rapid increase in property late 90's early noughties, they made a killing.. Now they already have a huge amount of asset so now just cherrypick everything up, some went for higher end / london etc. others went for volume and it's these who are choking off the first time buyers..

It does suck, the rules are finally in place, the problem is that it's 20 years too late, the damage has been done.

 

[Irish_Tom]

Foxeye the money you have saved will get you a nice deposit on a house up north, drop me a message i can show you a few things from my area, your banging your head against a brick wall talking to most of London crowd on here.

It will give him a nice deposit on a place in Cornwall. A quick look on RightMove shows plenty of places where his savings would give him a ~50% deposit.

Ok, he's not going to get a four-bed with double garage and massive garden in the centre of Truro, but to suggest there are no properties he could buy in the whole of Cornwall is laughable.

 

[NickXX]

Even if you decide that owning a home is not important... you will likely pay *more* in rent than a mortgage would cost!

Now certain people here applaud BTL landlord's as "risk takers", "entrepreneurs", "smart investors", etc. But there is nothing entrepreneurial about using buying up all the housing stock, knowing full well that everybody *must* have a house to live in. Where exactly is the "risk"? They can pick and choose their tenants, evict them with as little as two weeks notice if they object to yearly rent increases... And we know now that the government will not allow the housing bubble to burst, no matter what. BTL landlords can put up rent to astronomical levels, knowing that demand is insatiable and that the government will help their tenants pay these exorbitant rents! Housing benefit now costs the UK govt almost £30 billion a year.

The entrepreneurial spirit is seeing a gap in the market, innovating to produce a new product, or doing something differently. Being a BTL landlords is not clever. Not innovative. They are exploiting their good fortune in having sufficient capital to invest in housing, often having started many years ago when housing was affordable. Now as the increase in renters and decrease in owners shows, those who don't already own property are frozen out of getting on the ladder. Meanwhile BTL can still use their existing properties to get mortgage terms the banks won't give to anyone else. The measures the govt has taken to reduce gaming the tax system don't address this. People with a few properties under their belt are now many times more likely to buy new housing than somebody who wants to live in that house.

But this is a "service" right? We should be grateful for BTL - and as mentioned, foreign property investors - who snap up all the new builds, because what we locals most want in all the world is to pay more in rent to them than they pay in mortgage repayments. It's a fantastic service and I'm super glad BTL landlords are here to provide it.

Anecdotal, sure, but around here and in neighbouring towns we've seen a lot of new-build estates go up. Walking around them it's funny (not) to see how many are now rented out, just another property in somebody's growing portfolio.

We really should stop applauding people who do this. It is not the kind of innovation that will drive this country forwards. It's simple opportunism. That's all. Opportunistic profiteering. To applaud these people for "investing well", "being smart", etc, and to call the neigh-sayers "jealous" really is insulting to our intelligence. I have no doubt things will get much worse. In a few years time we'll look back on today as a time when more people owned their own home than rented. Because in future, if current trends continue, not only will many of us be wage slaves to the landlords, we have have engineered through apathy a new Victorian era, with record homelessness, and perhaps even complete societal collapse.

Frankly that's not an exaggeration. When discontent grows and grows and inequality ever increasing, it's only a matter of time. By that time the BTL landlords need to have earned enough money to pay for their own private security forces.

The risk is in the fact that house prices can go up and down, interest rates can go up and down, and that you can have bad tenants.

To think that landlords have it easy going, particularly under the current and previous government, shows that you don't understand how the BTL model works at all.

 

[FoxEye]

It will give him a nice deposit on a place in Cornwall. A quick look on RightMove shows plenty of places where his savings would give him a ~50% deposit.

Ok, he's not going to get a four-bed with double garage and massive garden in the centre of Truro, but to suggest there are no properties he could buy in the whole of Cornwall is laughable.

What RightMove doesn't/won't tell you is that Camborne/Redruth have massive drug problems, and nobody in their right mind wants to live there.

But sure, I'm not saying there's nowhere I could buy in Cornwall. My personal circumstances aren't as dire as many down here. But I'm happy to think about things from the perspective of somebody earning 12k, as many do down here. Esp the massive number of self-employed-but-not-really carers.

Also bear in mind that I've been living with my Mum for the last 14 years, and this arrangement would not suit most people. Hence my deposit has been saved whilst not paying commercial levels of rent.

I have no problem with living at home, and indeed its mutually beneficial for both of us. But most people value their independence too much to do the same. Many people down here are literally trapped, with no prospect of ever being able to save a deposit.

 

[FoxEye]

The risk is in the fact that house prices can go up and down, interest rates can go up and down, and that you can have bad tenants.

To think that landlords have it easy going, particularly under the current and previous government, shows that you don't understand how the BTL model works at all.

Hah. In the last decade or so there has been virtually no risk, and astronomical reward. You'd have to be exceptionally unlucky or stupid to fail to make a return on any property you bought since 97 or so.

The government has shown again and again it is committed to keeping the housing bubble afloat. You're deliberately over-stating the "risks", and we all know it.

 

[dowie]

Hah. In the last decade or so there has been virtually no risk, and astronomical reward. You'd have to be exceptionally unlucky or stupid to fail to make a return on any property you bought since 97 or so.

The government has shown again and again it is committed to keeping the housing bubble afloat. You're deliberately over-stating the "risks", and we all know it.

he's not overstated anything, he's not even attempted to quantify them, he's simply pointed out what they are

just because people have done well from an investment doesn't negate the fact there were risks involved in making it, of course it is very easy to make bold statements with hindsight it isn't a reflection of reality

 

[FoxEye]

he's not overstated anything, he's not even attempted to quantify them, he's simply pointed out what they are

just because people have done well from an investment doesn't negate the fact there were risks involved in making it, of course it is very easy to make bold statements with hindsight it isn't a reflection of reality

But the housing market, like the banks, is now too big to fail. We know the government will do everything in its power to stop house prices crashing, not that anybody is predicting anything other than year-on-year increase of at least 5% a year. The carnage that would be caused if house prices did fall, with everybody mortgaged up to their eyeballs these days, is unthinkable for any government.

You honestly going to tell us any different?

 

[dowie]

But the housing market, like the banks, is now too big to fail. We know the government will do everything in its power to stop house prices crashing, not that anybody is predicting anything other than year-on-year increase of at least 5% a year. The carnage that would be caused if house prices did fall, with everybody mortgaged up to their eyeballs these days, is unthinkable for any government.

You honestly going to tell us any different?

The government can't stop prices from falling if they were to fall, that is just one of the previously mentioned risks for BTL investors. There isn't some conspiracy to support BTL investors, As has already been pointed out there are risks from legislation as we saw last year, risks from bad tenants, risk of damage/expensive repairs, risks associated with rental yields.

 

[NickXX]

Hah. In the last decade or so there has been virtually no risk, and astronomical reward. You'd have to be exceptionally unlucky or stupid to fail to make a return on any property you bought since 97 or so.

The government has shown again and again it is committed to keeping the housing bubble afloat. You're deliberately over-stating the "risks", and we all know it.

The housing market goes up and down. There are probably a good chunk of BTL landlords who bought in 2006/2007 up North who are still down on their purchase prices. With Brexit, house prices are starting to falter again too.

Capital Gains tax changes, halving the top rate of deductible interest, and the extra 3% stamp duty have made it very difficult to break even in the short term.

If you think it's easy and lucrative, why not actually try giving it a go?

 

[FoxEye]

The housing market goes up and down. There are probably a good chunk of BTL landlords who bought in 2006/2007 up North who are still down on their purchase prices. With Brexit, house prices are starting to falter again too.

Capital Gains tax changes, halving the top rate of deductible interest, and the extra 3% stamp duty have made it very difficult to break even in the short term.

If you think it's easy and lucrative, why not actually try giving it a go?

I would happily be a live-in landlord with one property. I fundamentally object to owning multiple houses for the purpose of monetising them. I'm not going to abandon my firmly held principles for the sake of making money.

I'd like to make more money, sure, but if the only way to do so is to screw others in the process, I'll stay poor, thanks. I don't subscribe to the "dog eat dog world" mentality.

Funnily enough my brother and I were talking about this the other night, because both of us could invest in property if we chose to. He plans to. He said to me, "I don't like it any more than you do, but there are two types of people in this world: those who get screwed and those who do the screwing. I'm not going to get screwed."

I don't agree with him.

 

[Irish_Tom]

What RightMove doesn't/won't tell you is that Camborne/Redruth have massive drug problems, and nobody in their right mind wants to live there.

I have a lot of friends in Camborne, it's not as bad as you're making out. You're right about Redruth though, what a **** hole.

I said it earlier in the thread, Cornwall has some of the lowest wages and the highest cost of living in Europe. Coupled with a cronic lack of investment and a tiny supply of new affordable housing, it's hardly surprising that the poorest are unable to get on the property ladder.

That may not be helped by the BTL brigade, but they certainly aren't the root cause.

I have to say, I don't like the situation any more than you do, but I think I take more of a pragmatic approach.

 

[NickXX]

I would happily be a live-in landlord with one property. I fundamentally object to owning multiple houses for the purpose of monetising them. I'm not going to abandon my firmly held principles for the sake of making money.

I'd like to make more money, sure, but if the only way to do so is to screw others in the process, I'll stay poor, thanks. I don't subscribe to the "dog eat dog world" mentality.

Funnily enough my brother and I were talking about this the other night, because both of us could invest in property if we chose to. He plans to. He said to me, "I don't like it any more than you do, but there are two types of people in this world: those who get screwed and those who do the screwing. I'm not going to get screwed."

I don't agree with him.

Fair enough if you're uncomfortable. Personally, I don't see the unethical side of it, so will continue to use BTL as a long term investment.

 

[dowie]

I would happily be a live-in landlord with one property. I fundamentally object to owning multiple houses for the purpose of monetising them. I'm not going to abandon my firmly held principles for the sake of making money.

You could whack your savings into a commercial property ETF if you think there is no risk, or is renting space to businesses also 'screwing people'?

 

[coolsurfer]

Even if you decide that owning a home is not important... you will likely pay *more* in rent than a mortgage would cost!

Now certain people here applaud BTL landlord's as "risk takers", "entrepreneurs", "smart investors", etc. But there is nothing entrepreneurial about using buying up all the housing stock, knowing full well that everybody *must* have a house to live in. Where exactly is the "risk"? They can pick and choose their tenants, evict them with as little as two weeks notice if they object to yearly rent increases... And we know now that the government will not allow the housing bubble to burst, no matter what. BTL landlords can put up rent to astronomical levels, knowing that demand is insatiable and that the government will help their tenants pay these exorbitant rents! Housing benefit now costs the UK govt almost £30 billion a year.

The entrepreneurial spirit is seeing a gap in the market, innovating to produce a new product, or doing something differently. Being a BTL landlords is not clever. Not innovative. They are exploiting their good fortune in having sufficient capital to invest in housing, often having started many years ago when housing was affordable. Now as the increase in renters and decrease in owners shows, those who don't already own property are frozen out of getting on the ladder. Meanwhile BTL can still use their existing properties to get mortgage terms the banks won't give to anyone else. The measures the govt has taken to reduce gaming the tax system don't address this. People with a few properties under their belt are now many times more likely to buy new housing than somebody who wants to live in that house.

But this is a "service" right? We should be grateful for BTL - and as mentioned, foreign property investors - who snap up all the new builds, because what we locals most want in all the world is to pay more in rent to them than they pay in mortgage repayments. It's a fantastic service and I'm super glad BTL landlords are here to provide it.

Anecdotal, sure, but around here and in neighbouring towns we've seen a lot of new-build estates go up. Walking around them it's funny (not) to see how many are now rented out, just another property in somebody's growing portfolio.

We really should stop applauding people who do this. It is not the kind of innovation that will drive this country forwards. It's simple opportunism. That's all. Opportunistic profiteering. To applaud these people for "investing well", "being smart", etc, and to call the neigh-sayers "jealous" really is insulting to our intelligence. I have no doubt things will get much worse. In a few years time we'll look back on today as a time when more people owned their own home than rented. Because in future, if current trends continue, not only will many of us be wage slaves to the landlords, we have have engineered through apathy a new Victorian era, with record homelessness, and perhaps even complete societal collapse.

Frankly that's not an exaggeration. When discontent grows and grows and inequality ever increasing, it's only a matter of time. By that time the BTL landlords need to have earned enough money to pay for their own private security forces.

Opportunist it might be but also a brilliant strategy for wealth accumulation. It's survival of the fittest. My parents are of Indian origin, the model is the same as what the British Empire taught them as they robbed India of their riches. Now their children (me) get to do the same strategy on home turf. By winning the ovarian lottery I was born 38 years after the British Raj was dissolved. If you want to hate me, feel free. I have simply learned the way of the British.

I'm looking forwarding to adding more to my portfolio this time via LTD company to escape Section 24 taxes - play the system to your advantage.

 

[FoxEye]

You could whack your savings into a commercial property ETF if you think there is no risk, or is renting space to businesses also 'screwing people'?

They are clearly not the same thing, tho. We have not been discussing the commercial/industrial/business property market up to this point. I have no clue what the situation with commercial property is. Different sites, different uses, different clients... it's absolutely nothing like the housing market.