[Closed] This kind of sums up 'Buy to Let' for me!

+1

BBC in lazy reporting shocker.

To redress the balance.............

We ended up renting out her flat when we moved out in order to speed up the process. The plan was let it once, enough rent to cover the mortgage, and sell it whenever the tenant moves out.

3 months in we got an e-mail from the letting agent, "the tenants are complaining about damp everywhere and peeling wallpaper and want to know what we're goig to do about it" with attached pics. They'd managed to trash the place in 3 months when we'd been there 5 years and 15 years and never had more than a bit of mold behind a headboard when we accidentally turned the heating off in the spare room! God knows what kind of state it'll be in when they move on.

Do some people not know how to do the simple things in life, like live in a house with windows?

That's not really redressing any balance, but more pointing out that some people are shit.

Renting is a trap. I rent and will likely never be able to afford to buy whereas those, lucky enough to have gotten on the 'ladder' are generally only going to be better off. It's only going to get worse.
Don't know what the answer is... 😕

was considering moving to a modestly priced new house and letting our old one (savings are bugger all use at the moment) looking into it it did seem to be a bit of a no brainer conisdering offsetting your own mortgage, tax savings etc.
Happy to see they're redressing it some, coz lets face it it's probably a bad move for society overall, dunno whether we will go ahead, see how it pans out post changes.

BBC in lazy reporting shocker.

Click Bait article.

Don't know what the answer is...

The answer is the same as it's always been, build millions of council houses. Just there is no political will to solve the problem.

Almost every housing related policy from the current Chancellor has been targeted at increasing house prices, so they're actively making it harder to move from renting.

3 months in we got an e-mail from the letting agent, "the tenants are complaining about damp everywhere and peeling wallpaper and want to know what we're goig to do about it" with attached pics.

My brother rents - his latest tenancy agreement had a clause in it about reducing humidity and keeping the place properly heated/aired.

-

Hang on, just reread that, is the problem that the rental market on the whole is a mess and B2L are the scapegoat du jour or are B2L really a bunch of heartless bastards? I'm tempted to go with the former.

Also why do low level B2L feel the full effect af the new changes but the established 15+ property [s]owners[/s] investors get exemption?

Housing is a "safe" financial investment because there is a shortage of houses.

Businesses struggle for start up funds/ investment.

If we increase housing stocks and/or tax(or otherwise penalize) buy to let, investors will have to invest in more risky things like business - so stimulating economic growth??

I think the problem is that landlords see their BTL property as an investment and care very much about the state of their property. Yes, many tenants are pigs and will break stuff, which will cost you money to fix and bugger up your profit.
What needs to be remembered is that landlords choose to be landlords, tenants rarely choose to be tenants.
Buy to letters do not seem equipped enough to properly deal with being a landlord in the fullest sense of the word. Being a landlord is about a lot more than charging rent.

I'd love to know how me renting out a house to someone who wants to live in it, bearing in mind no one is twisting their arm, makes me 'scum'. If people think that they must have led very sheltered lives.

Its ironic isn't it that successive governments who endlessly lecture us that the market must be left to sort everything out, independent of the interfering state, are happy to constantly meddle in the housing market to ensure that the whole thing is totally dysfunctional, and prioritises the interests of investors before the far less important matter of people actually having a roof over their heads?

You can't blame buy-to-letters. Its successive government that have created this sorry ****ing mess, with short term policies to suit their own political ends.

And Daves latest lunacy of forcing housing associations into selling their stock is just more of the same madness

How do you let something out if you haven't bought it in the first place - ergo everywhere is buy-to-let...

What about companies that purchase office building and then let out the office space, are they just as evil?

If there was no-where to rent because everyone had bought then you wouldn't be able to move around the country easily, for work, etc, unless you stayed in hotels all the time. Would that be more expensive than renting - and no cooking for yourself in a hotel room as no kitchen.

If buying and selling was a bit easier then maybe moving around more easily would work, but stamp duty and t8sser solicitors dragging the process out make that a non-starter.

That's not really redressing any balance, but more pointing out that some people are shit.

Renting is a trap. I rent and will likely never be able to afford to buy whereas those, lucky enough to have gotten on the 'ladder' are generally only going to be better off. It's only going to get worse.
Don't know what the answer is...

Lived frugally since graduating, took jobs no one wanted for the salary uplift, saved like mad, didn't do the 18-30 thing of going out every weekend. Bought a house and nothing's changed, just rather than voluntarily saving 2/3rds of my income goes straight out on house stuff.

If we increase housing stocks and/or tax(or otherwise penalize) buy to let, investors will have to invest in more risky things like business - so stimulating economic growth??

Basically yes, however successive governments have deliberately constrained supply, thus ensuring prices stay high, which also make BTL a one way bet.

If we increase housing stocks and/or tax(or otherwise penalize) buy to let, investors will have to invest in more risky things like business - so stimulating economic growth??

Exactly - the UK is never going to prosper as a nation if a huge proportion of our GDP is geared solely towards the buying/selling and rental/letting of houses from each other, whilst diverting much needed investment and funds away from businesses that actually export stuff.

I'd love to know how me renting out a house to someone who wants to live in it, bearing in mind no one is twisting their arm, makes me 'scum'. If people think that they must have led very sheltered lives

Because the likelyhood is you're trying to make a fast buck out of someone who doesn't have the financial means to buy the same said house themselves - primarily because BTL investors have helped to drive up the price of that same said house in the first place, and also because the level of rents charged these days means that it's almost impossible for someone who's renting to save enough for a deposit. BTL'ers have specifically hoovered up a huge percentage of smaller starter homes or flats, the very same homes that would give a young family a perfect start in life.

And I'm not talking from a biased point of view - I'm not a renter, I own my own house, but just the one house, the one I need to live in. Guess that's considered old fashioned now?

Because the likelyhood is you're trying to make a fast buck

Or just investing for the future....

The government had a unique opportunity when they embarked on the QA programme of the banking bailout to ensure that those billions were used productively. If you recall, we were told that that money was for lending to business to get the economy moving.

What happened to it instead? The banks decided to lend it as mortgages instead and start stoking another housing bubble in the South East, including a massive rise in BTL, because it was politically expedient to do so.

Because fuelling housing bubbles has always ended really, really well in the past

You couldn't make it up

Has buy to let really driven up the houses prices. It may have done in small pockets of the country but the housing market has always been rocketing along well before buy to let came along. Owning a house is not always the best thing. There are a ton of costs which you, not some invisible person has to pay for when things like the boiler need replacing or there is a hole in your roof. It might be a great idea to encourage people to own houses but can all of those low wage people living in council house really afford or be able to find £3k when the boiler goes pop!!

Landlords are just being blamed as an easy scape goat as salaries have not risen much in the last few years and there are nows lots more graduates that have been sold the line that if they go to Uni they will earn loads and then they will be able to afford that bend new car and brand new house. That isn't the case and understandably there are lots or disgruntled people who expect more.

I've spent 10 years working in the housing benefit sector.

The underlying issue is lack of affordable/social housing and low wages. The actual problem won't be removed until they are addressed.

Plenty of BTL landlords I have met are greedy, have taken all the breaks, stretched themselves and want or need to keep the rents high to cover their costs and Range Rover Sports.

Plenty of BTL landlords are perfectly reasonable, not greedy, maybe inherited a house or some money to invest, just want a reasonable rent and return.

In the same way that not all cyclists jump red lights, not all drivers are homicidal texters, not all BTL landlords fit the lazy journalism, click baiting stereotype, and you'd think cyclists, of all groups, would avoid jumping on that unthinking bandwagon.

What Footflaps said - successive governments haven't invested in, or otherwise encouraged, affordable/council housing. Coupled with the selling off of council stock means that there now is a chronic shortage. The conditions of the free-market (the direct result of governmnt policies) have encouraged BTL to step in and fill the short fall - risking their own hard earned in the process .... and now the government decides to starty scapegoating the BTL landlords by pulling the rug from under their feet. Meanwhile the popular press are jumping on the bandwaggon.
Ruined my day (again) ... and that's before the bill arrived for a new external door in my BTL and I've just heard that the boiler's gone pop - that's no 'profit' again this year for this greedy barsteward... but at least ny tenant and her kids are out of an abusive relationship and have a warm secure roof over their heads for Christmas ... bah humbug!

Because the likelyhood is you're trying to make a fast buck out of someone who doesn't have the financial means to buy the same said house themselves - primarily because BTL investors have helped to drive up the price of that same said house in the first place, and also because the level of rents charged these days means that it's almost impossible for someone who's renting to save enough for a deposit. BTL'ers have specifically hoovered up a huge percentage of smaller starter homes or flats, the very same homes that would give a young family a perfect start in life.

Secondly, if what you are saying is true, then I should be able to put my BTL flat on the market and have new owner purchasers queuing up to buy it. Do please explain why in the same small but popular Highland town with good employment and new jobs opening up this year, there are 1,2 and 3 bed houses and flats on the market, unsold for upto a year, despite costing 70-130k?

2/3rds of MPs are BTL landlords iirc, so im sure that not muchj will really change

there is a Housing Crisis, in large parts of the country, BTL landlords are just one contributing factor, a cause and a symptom of the widening inequality gap in the UK (we are only ranked lower than the USA)

Secondly, if what you are saying is true, then I should be able to put my BTL flat on the market and have new owner purchasers queuing up to buy it. Do please explain why in the same small but popular Highland town with good employment and new jobs opening up this year, there are 1,2 and 3 bed houses and flats on the market, unsold for upto a year, despite costing 70-130k?

Which dozy ****ers sold off all the council houses ?
Oh yeah 😉

I think this buy to let 'hate' is a very london centric phenomena, as it the practice of increasing rent by 25% overnight, as are most of the arguments about affordability.

Take this property

http://www.rightmove.co.uk/property-for-sale/Machen.html?index=10

http://www.rightmove.co.uk/property-to-rent/find.html?searchType=RENT&locationIdentifier=REGION%5E16526&insId=2&radius=0.0&minPrice=&maxPrice=&minBedrooms=&maxBedrooms=&displayPropertyType=&maxDaysSinceAdded=&sortByPriceDescending=&_includeLetAgreed=on&primaryDisplayPropertyType=&secondaryDisplayPropertyType=&oldDisplayPropertyType=&oldPrimaryDisplayPropertyType=&letType=&letFurnishType=&houseFlatShare=false

Mortgage repayments with a 10% or £15k deposit are not significantly higher than the rent, although I expect that this property will be rented out rather than sold, this is the first time in the last 2 years that there has been more than a single property listed for rent in this village.

The current changes are designed to slow down waht is an inflating housing bubble, which they will. Are they unfair, yes, but then show me a totally fair tax system and I will eat my hat. The tax system is a tool, and in this case it's being used to control house prices (which are high due to too much credit, not lack of supply (excluding London)). Perhaps the next target should be disallowing loan interest as an expence against corporation tax, this could raise a large amount of revenue, and encourage equity investment in business rather than successful businesses taking on debt purely as a way to reduce their tax bill.

All I can say is the whole thing is an utter mess and the sooner house prices go back to some level of affordability the better - whether renting or buying there's a huge proportion of earned wealth going into paying off mortgages - either your own or your landlords, the ultimate beneficiary of which is a bank - not wider society.

I'm paying £1300 a month for a 2-bed flat just outside London. 10 years ago I would have paid c £800 but in the meantime my salary has barely budged so guess what - I've reined in spending on almost everything else which means less business for all the companies I used to spend my disposable income on, lower wages or fewer jobs, no expansion for those businesses, and I'm no longer funding my private pension provision because I simply don't have the money.

We have barely any real economic growth, we're mired in a massive amount of debt - sending so much of consumers' money to the banks in the form of mortgage payments - it's utterly stupid and just holding us back and likely to lead to another crash

The biggest problem with BTL is it's scale - far too many naive investors getting into more debt than they can manage - this is why BoE want to kill it -financial stability and prevention of another crash. Remember the current bust started by banks lending too much to people on mortgages they couldn't repay.

The problem now is the emotion that's being attached to it and landlords are feeling attacked and getting defensive about it. Understandably I suppose, but they really are a massive systemic problem and BTL and house prices generally need to be sorted for the sake of us all. BTL may work for a single landlord but it doesn't work for the healthy functioning of housing provision or for the economy when it's done at the scale it's now reached and by so many inexpert people...

but at least my tenant and her kids are out of an abusive relationship and have a warm secure roof over their heads for Christmas ... bah humbug!

For which you are so honorably charging her (or the rest of us through the benefits system), a nice tidy packet for the privilege of paying off your mortgage.

Do please explain why in the same small but popular Highland town with good employment and new jobs opening up this year, there are 1,2 and 3 bed houses and flats on the market, unsold for upto a year, despite costing 70-130k?

Could it be that they're overpriced? Could it be that all those currently renting in that area simply can't afford the deposit due to the sky high rents they're having to pay? Could it be that the lending market is currently unfairly skewed in favour of the BTL brigade?

High house prices are fundamentally a supply side problem in the UK.

BTL is a demand side issue, and has probably not made a huge difference to house prices.

Some (somewhat old) research:

BTL mortgage lending would appear to have increased house prices since its introduction in 1996
Q3 but it is important to note that the impact is small in relation to the effect of household growth,
the size of the housing stock, mortgage interest rates, and changes in disposable income.
However, it has nevertheless had some impact on prices and therefore affordability. For instance,
by 2007 Q2 BTL investment was estimated to have increased prices by up to 7 per cent, which
was the equivalent of £13,000 on the average house price in that period. This may have been
enough to price out some potential buyers from the housing market. On the upside, it is
important to acknowledge that there are significant economic and social benefits being delivered
by the sector.

[url] http://webarchive.nationalarchives.gov.uk/20120919132719/http:/www.communities.gov.uk/documents/507390/pdf/684943.pdf [/url]

They're unable to raise the (these days very high) deposit, largely due to the high rental costs ?

The cheapest two bed flat in the area is £70k.Deposit £4k, fees etc £2k, Monthly cost £350.
You can rent a two bed flat upstairs in our block at £350, one months deposit down. You do not need to maintain, insure etc.

You can buy a cheap, small, three bed ex council flat for £100k. Again, fees and deposit @£7k and £500 per month.
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.

Now, tell me again about the massive deposits and over high rents?

If I had that choice, I would have a shiny holiday and car, and rent a place...

High house prices are fundamentally a supply side problem in the UK.

With over a million properties sitting long term empty, I would say that high house prices are more a symptom of the easy credit we've had in this country over the last 15 years. Interest only mortgages, BTL, self certification, added a huge amount of fuel to this fire, pushing up prices beyond the reach of most. Ultra low interest rates, foreign investors and the BTL brigade are now the only thing keeping the current bubble afloat, but I suspect it will probably pop in spectacular fashion before long - to the great benefit to most of the rest of us in the process.

Surely a BTL landlord is someone who buys a second/third etc home with the expressed interest of exploiting it for financial gain. This is a very different animal to those who inherit houses or rent them after moving in with a partner. I'm considering letting my house out so I can move abroad for a few years but I didn't buy it just to do that. I'd be using the income to pay rent somewhere else. If I were to buy a new place I'd sell the old one.

So you are still using that for financial gain egb81...

BBC in lazy reporting shocker.

I know - they had this headline today: [url= http://www.bbc.co.uk/news/world-europe-35118927 ]"Putin pours fresh scorn on Turkey"[/url]

Really? "Fresh scorn"?

A completely missed opportunity for the headline "Putin Roasts Turkey" 😀

The cheapest two bed flat in the area is £70k.Deposit £4k,

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.

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.

You should have bought a BTL instead, much easier to get finance 😉

A completely missed opportunity for the headline "Putin Roasts Turkey"

[img] [/img]

😆

The problem with BTL specifically in the UK is a lot of people think it's different from any other debt-based speculative activity. There also seems to be a belief that prices will go up for ever, especially over the long term based only on the fact that the last 20 years have followed this pattern when in fact UK housing has never done this before...

Well worth reading these two articles to see the similarities between crashes in general and the current UK housing situation, esp the last 2-3 years in London and SE. I don't have the link but The Economist published some research recently about recessions caused by housing crashes have been shown to be deeper and longer than recessions from other causes. BoE is therefore very wary of stopping our current bubble from bursting. Osborne also wants to as it'll ruin his chances of being PM...

[url= http://www.investopedia.com/articles/stocks/10/5-steps-of-a-bubble.asp ]5 steps to a bubble[/url]

[url= http://www.investopedia.com/features/crashes/ ]Market Crashes - a study[/url]

Duplicate

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.

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

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

So you are still using that for financial gain egb81...

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

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 [i]try [/i]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.

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.

@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.

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.

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.

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.

It'll stop it going mouldy behind the headboards, like...

 

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?

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....

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.

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.

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.

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

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

How does this make a difference?

"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.....

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.

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.

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.

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

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!

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...

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

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

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!

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!!!

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?

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.

😉

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'.

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.

[img] [/img]

^ 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.

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.

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...

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....

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.

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.)

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.

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.

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 [i]think[/i] 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...

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.

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!