House prices rose 7.3% this year, average now almost £250k

[Psycho Sonny]

Average wage in 1979 was £6k/year

you should be feeling lucky for your situation as opposed to sad for current generations. Your dad was probably the top 1% earner at the time.

£90k for a house in 1979 was also expensive considering average uk house price was £20k.

your situation is fairly unique but I don’t disagree that houses were a lot more affordable that house prices were only a few multiples of an average person’s wage at the time.

Lol he was earning the equivalent of £150k a year today and bought a home equivalent to £1.1 million based on averages back then and today.

Clearly his mum isn't exactly financially savvy as I'm sure even today earning £150k you would struggle to buy a home for over a million however you wouldn't struggle to buy a 4 bed detached home in most places outside of the absolute most expensive places to live so maybe 1% of the country would be outwith your reach.

It's a terrible comparison as his dad literally could afford any home in the country back then bar Buckingham palace due to his wages.

 

[pc-guy]

Lol he was earning the equivalent of £150k a year today and bought a home equivalent to £1.1 million based on averages back then and today.

Clearly his mum isn't exactly financially savvy as I'm sure even today earning £150k you would struggle to buy a home for over a million however you wouldn't struggle to buy a 4 bed detached home in most places outside of the absolute most expensive places to live so maybe 1% of the country would be outwith your reach.

It's a terrible comparison as his dad literally could afford any home in the country back then bar Buckingham palace due to his wages.

his dads wage was probably more than 150k compared current equivalent. In those day people with that sort of wage got all sorts of company benefits which are not taxable so probably around £200k+. Yes most definitely his dad could have afforded to buy a castle if he wanted to. I am surprised that the 90k house is only 1.1mil atm. I would have thought it is nearly 5-10mil now. Those high end properties gain value much faster than our pleb homes.

 

[FoxEye]

You would be a naive to charge £350 because it's all taxable minus expenses which don't include mortgage payments. Used to include mortgage interest but that's now been whittled down and removed completely.

So if they give you £350. You minus say 20% as expenses. You are then taxed on £280 at full rate of income tax. Let's just say that's 40% to keep things simple. You would be left with less than half of the £350 in your pocket at the end so you would therefore be paying majority of the mortgage yourself even with a tenant in place.

So it's only "fair" to the landlord when the tenant covers 100% of the landlord's mortgage for them?

That's the measure of what is fair and just and good for all parties?

Why shouldn't the landlord pay some of the mortgage? He will end up owning the property. The tenant owns nothing and has virtually no rights in this country.

 

[Psycho Sonny]

So it's only "fair" to the landlord when the tenant covers 100% of the landlord's mortgage for them?

That's the measure of what is fair and just and good for all parties?

Why shouldn't the landlord pay some of the mortgage? He will end up owning the property. The tenant owns nothing and has virtually no rights in this country.

I never said that. Maybe read my post again?

Also would it be fair for a landlord to pick up the tab when a bad tenant destroys the property and doesn't pay rent for several years?

Again your questions are always skewed to your own bias.

Therefore a landlord has to take all the risks into consideration and aim to make money to cover losses.

Also what if I don't have a mortgage? Does that mean I should let them live there for free? Because that's how I work mine. Paid in full.

 

[Simon]

No landlord will be paying off the mortgage either. Will be interest only.

 

[Psycho Sonny]

No landlord will be paying off the mortgage either. Will be interest only.

Rubbish.

These types of landlords have been targeted by all the increases on taxation by reducing the allowable expenses like mortgage interest.

It's not viable to do that and hasn't been for many years now. Unless of course you bought the properties many moons ago and they have risen considerably in value.

 

[FoxEye]

In the current climate, the "risks" of being a BTL landlord are hugely overstated. The only real "risk" is being hugely over-leveraged, which is just being reckless.

In all other ways your rental property is a machine to print money.

Unless you've chosen to be a slum landlord you're not going to deal with a huge number of non-paying tenants or trashed properties. Or need to go through the eviction process to get people out.

Most tenants are just normal people trying to scrape together an existence.

Difficult when you take home <£1k and your rent is £700. (Where I live atm you can pay £700 for a room in a shared house. And that's a crappy town in Cornwall - not even Mayfair!)

Anyway none of what you said counters the point that the other chap made - that £600 rent on a property with a £350 mortgage just highlights the different experience renters have to home owners/BTL landlords.

At the end of the day the owner/landlord ends up with a property that they own. The renter ends up with nothing. Nada. Jack ****.

 

[Simon]

Empty property is a risk. Fees are much higher now since tenants can’t be charged. The tax changes also make it pretty small margin. The biggest thing you get is property price rise but this doesn’t mean you own the property outright when you realise this gain.

Rubbish.

These types of landlords have been targeted by all the increases on taxation by reducing the allowable expenses like mortgage interest.

It's not viable to do that and hasn't been for many years now. Unless of course you bought the properties many moons ago and they have risen considerably in value.

Actually it’s the opposite. If you are paying repayment then it’s likely over a year that you are actually paying out more than is coming in due to tax changes.

why is it not viable to pay interest only ?

 

[FoxEye]

Empty property is a risk. Fees are much higher now since tenants can’t be charged. The tax changes also make it pretty small margin. The biggest thing you get is property price rise but this doesn’t mean you own the property outright when you realise this gain.

Empty property isn't a reality, tho, is it. It's not like you'll struggle to find tenants unless you've done something spectacularly wrong.

Can't be charged for what?

And if it's so small margin why to properties keep being bought up for their rental value.. and why does the % of renters keep going up, home owner % keep falling.. BTL landlords aren't doing it for any other reason than making money. People keep saying it's so hard to be BTL and it's so small margin, but the stats don't bear that out, nor do people getting £600 rent on a £350 mortgage. That's not low margin! If that's low margin I'd hate to see high margin...

And if the property value increases, who do you think realises that gain except the home owner.. Is someone else going to realise that gain? You don't need to be mortgage-free to realise that gain..

 

[Fusion]

The chances of having an empty property are low. In my town, there are a handful of rental properties available yet 100+ for sale. Anything half decent on the rental market is snapped up within a few weeks.

Rental demand is higher than demand to buy.

 

[Ahleckz]

In the current climate, the "risks" of being a BTL landlord are hugely overstated. The only real "risk" is being hugely over-leveraged, which is just being reckless.

In all other ways your rental property is a machine to print money.

Unless you've chosen to be a slum landlord you're not going to deal with a huge number of non-paying tenants or trashed properties. Or need to go through the eviction process to get people out.

Most tenants are just normal people trying to scrape together an existence.

Difficult when you take home <£1k and your rent is £700. (Where I live atm you can pay £700 for a room in a shared house. And that's a crappy town in Cornwall - not even Mayfair!)

Anyway none of what you said counters the point that the other chap made - that £600 rent on a property with a £350 mortgage just highlights the different experience renters have to home owners/BTL landlords.

At the end of the day the owner/landlord ends up with a property that they own. The renter ends up with nothing. Nada. Jack ****.

I agree with you, and I’m the chap who posted my rent/mortgage. What do you think I should do to make it ‘fairer’ if that’s possible?

FWIW, it was my flat I bought to live in but then moved in with my partner. I pay her rent to live where I do.

 

[Bald-Eagle22]

Empty property isn't a reality, tho, is it. It's not like you'll struggle to find tenants unless you've done something spectacularly wrong.

Can't be charged for what?

And if it's so small margin why to properties keep being bought up for their rental value.. and why does the % of renters keep going up, home owner % keep falling.. BTL landlords aren't doing it for any other reason than making money. People keep saying it's so hard to be BTL and it's so small margin, but the stats don't bear that out, nor do people getting £600 rent on a £350 mortgage. That's not low margin! If that's low margin I'd hate to see high margin...

And if the property value increases, who do you think realises that gain except the home owner.. Is someone else going to realise that gain? You don't need to be mortgage-free to realise that gain..

Lol , you want to see my books if that’s what you think . If I was making that return every month I’d sell a kidney and leverage myself to the hilt .



So I’ll go through one of my proprieties income expenditure for you for 18/19 . It’s typical of most of them and probably a good example of what going on out there . Swap out ground rent and maintenance for any freehold property you have , it’s equates to much the same .

£195 per month interest only Mortgage , will turn Into to a repayment in 22/23 when my house mortgage is totally done.
£80. per month management fee ( block of flats )
£15. a month ground rent
£10 a month insurance
£5. Council tax ( averaged ) over three years vacancy .
£50 running repairs
£25 gas landlord service plan
£50 a month new boiler
£15 a month accountancy fees
£15 a month estate against fees - advertising tenant finding ect.

£460 a month running costs

Rent has averaged out at £650 per month so a gross profit of £190 a month and I have to pay tax on this ( remember I also only get a 20% tax credit on the interest ) . Yes you can scrutinise this as much as you like but it’s accurate to within a few £100 each year.

This is without my initial investment of £60,000 .

Without divulging to much about my personal tax affairs it’s approx £114 profit a months and is very indicative of private landlords .

The money obviously comes in when you can clear the mortgages but here’s my point , it’s retirement planning . I decided to go down this path when pensions annuities crashed and my future was governed by stockbrokers.

There are loads of individuals that have managed to save a lot of money during lockdown so I can’t see a massive correction coming any time soon , along with low interest rates not much will change with house prices .

 

[Simon]

Empty property isn't a reality, tho, is it. It's not like you'll struggle to find tenants unless you've done something spectacularly wrong.

Can't be charged for what?

And if it's so small margin why to properties keep being bought up for their rental value.. and why does the % of renters keep going up, home owner % keep falling.. BTL landlords aren't doing it for any other reason than making money. People keep saying it's so hard to be BTL and it's so small margin, but the stats don't bear that out, nor do people getting £600 rent on a £350 mortgage. That's not low margin! If that's low margin I'd hate to see high margin...

And if the property value increases, who do you think realises that gain except the home owner.. Is someone else going to realise that gain? You don't need to be mortgage-free to realise that gain..

I’m doing my tax return right now. I don’t think you are seeing the big picture if you think you are making £250 a month in the above scenario.

My flat is empty right now too. Means council tax and utility bills need covering. Plus I have the joy of the annual tenant swap. I seem to be getting 1yr tenancies lately. Each time is £850 finder fee.

As said this is the first year of the full removal of being able to not offset interest of the mortgage . Without the 10% wear and tear too it’s no where near as lucrative as 5 years ago. You are literally being taxed on the full income now

the last point I made was in response to ‘paying off the landlords mortage’. Most landlords won’t be paying off their mortage as they are interest only.

 

[FoxEye]

I agree with you, and I’m the chap who posted my rent/mortgage. What do you think I should do to make it ‘fairer’ if that’s possible?

FWIW, it was my flat I bought to live in but then moved in with my partner. I pay her rent to live where I do.

I think BTL needs to be made next to completely unprofitable. So much so that your average man on the street isn't going to see it as in any way viable. Even loss-making.

This isn't to stop the average man on the street making money - just not through providing what should be a basic human right.

Let housing associations and the local Council provide rental accommodation on a non-profit basis.

And increase our rather pathetic regulation around rental and tenant's rights, which is in no way comparable to our European neighbours.

e: There may need to be some mechanism to allow private rental of high-end, luxury properties, which nobody actually needs to live in. But your average terraced house where most of the tenants work in care homes or the local supermarket, those shouldn't be profit making vehicles at the expense of the working classes.

 

[Simon]

You are now making a completely different point in response to my reply. You are living in the wrong country for that

I think all the changes have done is made rentals go up anyway. So it’s not made the desired affect. The biggest winners from BTL right now are the government.

what we need to reduce house prices are more houses. Anyone can buy a house if they get a deposit. It’s not impossible but I guess in your world everyone should be paid the same too ?

 

[FoxEye]

You are now making a completely different point in response to my reply. You are living in the wrong country for that

I think all the changes have done is made rentals go up anyway. So it’s not made the desired affect. The biggest winners from BTL right now are the government.

what we need to reduce house prices are more houses. Anyone can buy a house if they get a deposit. It’s not impossible but I guess in your world everyone should be paid the same too ?

Yeah sure, everybody should be paid the same because housing as a right is FILTHY DIRTY COMMUNISM. Why do I hate our glorious capitalist country? Why don't I go live in the USSR?

I think we're done discussing this.

 

[413x]

Btl shouldn't be unprofitable. But it should be a sliding scale. The more you have the less profitable it is.

What we don't want is no value for the landlord. Unless you could successfully take the service public. If there are no rentals where are rentals going to go.

But really. This wouldn't be a problem if houses were dirt cheap. So maybe it is right.


What you don't want now is a system that causes btl to flood the market because it is unprofitable. The middle ground (those with big mortgages) would be screwed for life .

But Enough is enough. Price increases need to stop. Ignoring this covid false spike it may happen . Thought it would a few months ago. No idea now. Still, can't be zero impact with the way the world is.

 

[Simon]

Yeah sure, everybody should be paid the same because housing as a right is FILTHY DIRTY COMMUNISM. Why do I hate our glorious capitalist country? Why don't I go live in the USSR?

I think we're done discussing this.

USSR doesn’t exist. When did I say filthy dirty country ? I live in Russia half my time. I see the difference when people all live in identical flats, the lack of keeping up with the Jones and everyone seems to just get along with neighbours much better. I see value in this type of living to be honest.

I still think it’s a valid point. You think people shouldn’t profit from others. So surely this is for anything in life ? Anyway the point I made was for the effort /risk/ return on investment BTL isn’t all people who have no experience of it seem to believe.
We haven’t even mentioned the fees when you sell and CGT.

as said. Government love the cash cow of BTL. They are milking it hard right now.

 

[FoxEye]

Btl shouldn't be unprofitable. But it should be a sliding scale. The more you have the less profitable it is.

What we don't want is no value for the landlord. Unless you could successfully take the service public. If there are no rentals where are rentals going to go.

But really. This wouldn't be a problem if houses were dirt cheap. So maybe it is right.


What you don't want now is a system that causes btl to flood the market because it is unprofitable. The middle ground (those with big mortgages) would be screwed for life .

But Enough is enough. Price increases need to stop. Ignoring this covid false spike it may happen . Thought it would a few months ago. No idea now. Still, can't be zero impact with the way the world is.

We need the Council and public/non-profit bodies to be able to offer housing/rental.

Unfortunately the Tories are ideologically opposed to Council owned housing, and force them to sell it even if they build it, often well below market value.

"Right to buy" is a huge part of the problem, but the Tories love it. Because they believe everything should be privately owned. It's in their DNA.

 

[FoxEye]

USSR doesn’t exist. When did I say filthy dirty country ? I live in Russia half my time. I see the difference when people all live in identical flats, the lack of keeping up with the Jones and everyone seems to just get along with neighbours much better. I see value in this type of living to be honest.

I still think it’s a valid point. You think people shouldn’t profit from others. So surely this is for anything in life ? Anyway the point I made was for the effort /risk/ return on investment BTL isn’t all people who have no experience of it seem to believe.
We haven’t even mentioned the fees when you sell and CGT.

as said. Government love the cash cow of BTL. They are milking it hard right now.

I said people "Shouldn't profit from something (housing) that should be a human right". Even said luxury property (ie mansions) should be exempt. Clearly what I want is basic housing to be available to all at cost. The kind of housing that we all need to live.

I didn't say, "People shouldn't make profit," or that all housing should be owned by the state, or that we should have a glorious citizens revolution, or all be paid the same, or any number of other things I didn't say.

It was you that started saying do I want people to be paid the same, etc. Which clearly is nothing to do with the discussion at all.

If you want a serious answer - no I haven't asked for everybody to be paid the same.