The joy of being a landlord
- Thread starter Quartz
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The root of the problem imo is that too many people don't actually want this, especially those in a position to actually influence change in policy or legislation.
Worrying about the mechanisms that might be getting used to prop prices up is neither here nor there really, there's not enough appetite for actual change anyway.
Edit - I think I actually should have said actually more
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This is quite a funny response but a bit economical with the truth
I think that's true for sure re: some Boomers/long-term property owners and plays into the NIMBYism we re: planning applications. But for others, there's the skepticism mentioned in the article or indeed a lack of awareness of how planning is impacting this.
One thing I noticed in a FB group for the area I grew up in is repeated complaints about new approvals of retirement homes, everyone has an opinion on what sort of housing should be built - more affordable homes for young people etc. but we've got such an acute shortage that even not tackling that directly is still useful/has side effects. Build some more retirement homes and people can downsize, if you've got some widow/widower in a 4-bedroom home moving into a 1 or 2-bedroom retirement flat then you've only had to build a relatively small property to make a much larger one available to the market etc.
I think retirement homes are going to be the next big scandal to hit the headlines in a few years time. Having experienced multiple Grandparents passing away who were living in a typical McCarthy Stone property, the ground rent and service charges have basically made the property unsellable and have been vacant for several years.
Referring specifically to retirement homes too, not care homes.
[Edit to add context] for a recent local retirement home, service charges are £800 PER MONTH just to live in the flat that you already own.
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No, why would there be? It's not really the most likely buyer in say the West Midlands suburbs but if they really wanted to then of course they could buy it. We need homes to rent too, either way whether it gets sold on or rented it wasn't previously available to the market.
I think there's a wider issue there re: service charges and leaseholder reform - there were a few stories not too long ago re: a developer in London that had high service charges associated with some of it's properties and leaseholders having difficulty selling (I think it's the company behind the fancy elevated swimming pool bridge thingie).
£800 a month sounds very expensive unless there were a lot of staff on site that need to be paid (so maybe a situation similar to the posh flats in London where service charges have just gotten out of control after purchase), I think some retirement flats are basically regular developments with simply a condition that the leaseholders be 55+ or so.
Scotland doesn't do long-term leasehold for residential properties anymore though there may be some issues with people not paying management charges in flats, it seems to be one of those things where there are news stories every so often about proposals to reform it but the actual process of trying to reform it is potentially quite complicated and would involve compensating a load of freeholders.
This 100% - just had a letter today for increasing the service charge next year 19% on a flat I have and literally you can't do anything to stop it - despite having a huge sinking fund currently. I definitely think that there needs to be regulation in this area as there is literally no incentive to control costs for the management company and of course this cost will eventually be passed on to the tenant so it's bad news for everyone apart from the building maintenance guys.
Soldato
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Can you explain this more please, what do you mean pay service charges for the flat you already own.
Is a retirement home not equal to a care home?, which is like, a hotel for old people who are looked after?
You are making it sound like someone is paying £800 for nothing?
A retirement home is not the same as a care home.
They tend to be complexes / blocks with apartments that only people above 55+ can buy. They do not employ carers and the residents are still expected to be self sufficient with cooking, cleaning, laundry etc. However the apartments are only owned leasehold and the service charges (like any leasehold) are extortionate.
McCarthy Stone are a massive retirement homes company, here are their charges as an example - https://www.mccarthyandstone.co.uk/what-we-offer/services/service-charge/ (for the mid-range complexes, they charge £183/week).
Care homes are something else entirely, where they have a 24 hour care staff on site for helping people with eating, washing themselves etc.
IIRC some retirement complexes do at least have a few staff to do things like run a front desk for deliveries and cleaning the general areas.
One of my aunts, back in the 90's was a live in warden at a retirement place, from memory she did some cleaning of common areas, was on call to basically check if someone triggered a fall alarm and organised the likes of activities and co-ordinate with the management company for repairs and the like, and a couple of the new places near me seem to have something similar (it's a big selling point), but as you say they're nowhere near "care homes" even if the service charges seem to be nearing care home levels (I think the care homes near me start at around 2k a month, so a little over twice the cost)
But the sort of service charges people are talking about at 800+ a month, or so is insane given that those places usually have dozens of flats so even if they're paying a good wage (which they won't) for someone to man a reception desk that's only a couple of grand a month across the whole block.
You pretty much have to have some sort of service charges with flats, for example, buildings insurance pretty much has to be communal but obvs there are repairs/maintenance, gardening etc.. things like carpark gates and lifts (the latter can be a big pain) will need maintenance contracts. I own a 1 bed flat and it works out at about £170 a month now, that's with residents in overall control of the budget and an appointed managing agent running things day to day.
OK so that looks like
basic option
1 bed: £212 or 2 bed: £318 per month
fancy option
1bed: £599 or 2 bed: £799 per month
The 1-bed basic option is a bit more than I pay for a regular flat albeit, there is a "24-hour emergency call system" - I doubt that costs all that much so I'd assume the issue there is that things have gotten a bit inflated in comparison to how the charges could be reduced if residents were managing it, but it's not wildly out there.
I guess your relatives were in the 2 bedroom fancy option and that is a big jump in charges but that does seem to have some additional services to go with it - notably staff on-site 24/7 and an on-site restaurant facility. Everything else listed seems similar enough to the basic option, maybe they're making a fat profit on top too but staff costs can add up, ultimately you've gotta decide on the risk with these things, like the people in London who got fancy flats from the Irish developer these facilities can really add to the service charges and rather than being a nice selling point they can be a bit of a liability and may mean you need to discount the flat below what it may have gone for otherwise.
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Are those figures in absolute terms or adjusted for inflation? For instance £20,000 in 1970 is the same as £261,000 today - 13x inflation - whereas in France €20,000 in 1970 (converted from Francs) would be €162,000 today - 8x inflation.
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They say on the TikTok that the figures are from St Louis Fed but it looks like they, in turn, are using BIS data and that's deflated using CPI.
There's still plenty of unawareness of how bad the housing issue has become, tropes about young people spending money on frivolous things etc. May well be partly true but it's insignificant in comparison to the general affordability (or lack of) of homes.
Of course, when it comes to increasing supply we've got the silly planning system to deal with and as part of that planning process, at the local level, we've got this lot (someone posted this AI image on twitter a while back) who, thanks to retirement, have plenty of time during the day to attend planning meetings and kick up a fuss meanwhile the people who are impacted by the lack of homes are at work.
Of course, when it comes to increasing supply we've got the silly planning system to deal with and as part of that planning process, at the local level, we've got this lot (someone posted this AI image on twitter a while back) who, thanks to retirement, have plenty of time during the day to attend planning meetings and kick up a fuss meanwhile the people who are impacted by the lack of homes are at work.
Everyone should get a say and be allowed to comment working status isn’t relevant. The planers are perfectly free to give permission despite local objectives, the council should be making decisions for the good of all and building more housing would certainly fall into that category!
Not if it affects my house price boyo. I joined this ponzi scheme at the bottom and I sure as hell ain't letting someone else get on for less work than I put in.
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