You don't need to be an 'investor' to invest in Singletrack: 6 days left: 95% of target - Find out more
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.
Something is certainly wrong if people earning £26k can't afford a £70k property.
The flip side is -should everyone own the deposit and feed on 70k may be out of reach to lots but i would think that on going repairs would also be out of reach, ( i dont think he was suggestingpeople on 26k cant afford them more that lots of people are below the average wage)
"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."
Priorities isnt it. I opted out of my pension in the early stages and prioritised a roof over my head (once i worked out where i wanted to live) didn pay out for an extra room , didnt do the 18-30 piss up everyweekend etc etc etc. then i maxxed my company pension %
I'm a landlord.
3 Small comercial shops, rented out to 3 small businesses.
2 flats, 1 rented to a friend that has split with his wife and walked out leaving everything, 1 rented to a young first property couple that are a family friend.
2 small houses, 1 rented to my Mother in law, bought because she was shafted by the local council after working as an in house care home manager for 18 years, she had a house but sold it when she was given the job as she was promised the pick of social housing when she left, you can guess the rest. The other rented to a couple in their late 60's, they had a house but have sold it and are spending the £120k wisly, mainly holidays I think.
I dont make alot of money (the MIL's house I lose about £80 pcm, but I didn't want her to be stuck in a run down 1 bed flat so I just suck it up) by the time repairs/insurance/checks/interest/tax/etc are taken out but its a little bit extra for all the hassle of sorting everything out.
I haven't put any of the house rents up in over 10 years, my cost have remained constant so the rent has reflected that, the shops rent went up £40pcm each in 10 years as the insurance has increased by quite alot.
Remind me how I'm a "greedy and parasitic landlord"
Remind me how I'm a "greedy and parasitic landlord"
It's the systemic risk that's the main problem here... what works for you and your tenants is no longer working for society nor the financial system as a whole. There's too many naive 'investors' making wrong assumptions about BTL that means too much risk of bad debt and a house price collapse has now built up.
BTL was less of a systemic risk when a small number of well-informed, sensible players made up the bulk. Now it's become fashionable you have large numbers of ill-informed people up to their balls in debt, hoping a tenant will pay it off for them...
Hence the time has come to kill BTL.
There's too many naive 'investors' making wrong assumptions about BTL that means too much risk of bad debt and a house price collapse has now built up.
To be fair regular home owners are also guilty of this. Theres many of them too. Perhaps we should ban them too
[what works for you and your tenants is no longer working for society nor the financial system as a whole]
So its working fine for me and my tenants but I should sell up and put them on the streets just beacause some landlords are getting it wrong?
I'll send the mother in law round to your house then 😀
To be fair regular home owners are also guilty of this. Theres many of them too. Perhaps we should ban them too
A lot are, yes. But they represent less of a systemic risk - default rates are a lot lower and if they struggle to pay they're more likely to try and keep paying whereas a leveraged BTL will sell - that's the risk BoE have been very clear that BTL now plays - of a sudden rush to sell which will crash the whole market. For those who think interest rates will never go up - note what happened in US yesterday and the forecast of 4 more increases by this time next year...
On a more positive note: this is an interesting idea and certainly far more constructive from a community and social point of view than BTL
[url= http://www.springwise.com/huge-co-living-space-provides-alternative-unaffordable-london-rents/ ]Co-living space[/url]
I don't think many on here are suggesting being a landlord makes you scum. I think most are pointing out that there are now too many people joining the BTL bandwagon who don't see themselves as landlords, but rather investors.
This might not be the best attitude to have when a boiler pops or a roof needs replacing. As any experienced landlords on here know, it's a long game, and about affording people a roof over their heads whilst (hopefully) protecting your future.
However, there are now too many BTL "investors" in the system, which the BoE and govt are beginning to see as a risk to the economy.
I think some of these changes will have a detrimental impact on proper landlords, and that sucks for them, but the BTL "investors" have to be slowed down a bit...
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...
No, you just missed the nuance of my response.
IF you rented for life rather than paying a mortgage for 30 years (lets assume this starts at 30 as few people are settled enough to do it in their 20's).
30-60 your mortgage repayments roughly equal the equivalent rent (assuming that in that time you'll move about a bit so the mortgage is always roughly reflective of the market rate, not staying put in your first time buyer "starter home" for life and letting inflation erode the debt).
At 60, one person has to keep renting. The other has moved maybe 4, 5, 6 or more times. Incuring stamp duty and fees each time, say an average of £15k each time (wishful thinking based on recent experience, but pegging it low to avoid accusations of picking numbers to suit the argument, and the bands dont keep up with inflation so future duty will always be higher) that's upto £60k you would save by renting.
£60k pays for a lot of rent in a retirement flat by the seaside, especially if you squirrel it away into your pension. And at no point in the preceding 30 years have you had the ballache of lost weekends to DIY, house price crashes, dealing with the planing application to turn next door into a chip shop, taking out a loan for re-roofing or anything else.
However, there are now too many BTL "investors" in the system, which the BoE and govt are beginning to see as a risk to the economy.
init.
Also, their investing in BTL as a source of income and capital means they're not investing in companies that might actually grow our economy.
£60k pays for a lot of rent in a retirement flat by the seaside, especially if you squirrel it away into your pension.
10 years max, I reckon, and it doesn't buy you security of tenure.
If it was not for BTL or people renting out older homes from family death etc I would have been screwed for the first 10 years of my working life.
My first job was the other end of the country to any of my family and straight out of uni I had no chance of buying. It would have also forced me to remain fixed in that location and subsequently destroyed my chances of a career.
Without rented accommodation it is really hard to be mobile and I believe that for most young people this is a must if you are going to get on in many companies.
I don't think that social housing isn't really the option for young single people and while it has a place as a safety net for the most vulnerable it gives the government a lot of power over you. All it takes is some politician to stamp a piece of paper and then you know longer qualify.
The new taxes only apply to individuals companies will run as normal. All this will do is transfer the BTL market from the public to massive corporations as it is done in the USA. Properties will still not get to the market and the people who are currently renting will stop talking to individuals but will have to phone helplines to get things done. It makes for fantastic headlines but it really won't help anyone except those who already have money..
yeah but tinas you are I think very unrealistic in thinking that people will max out the mortgage to the equivalent rent. Yes they might move up a couple of times but even 10y in the same place will erode the mortgage through inflation. I don't believe that buyers will typically pay 60k more over their 30 years. More likely, they will have 10-20y in one house with the mortgage payment becoming a pittance. Plus then downsizing will pay for a lot of retirement flat plus spending money.
. I don't believe that buyers will typically pay 60k more over their 30 years.
Kitchens, boilers, leaking roofs, carpets, decorating over 30 years will add up even if you are not moving home... Not just the cost the materials but also the time if you are doing things yourself. With renting you don't have to do any of this.
That being said I still think you are better off buying than renting if you are stable over the long term..
Renting you pay for those things through the rent (which is more than a mortgage, almost always).
Tbh for me it wasnt down to the money numbers why i bought.
It was down to not being kicked out , about being able to knock a wall down to suit my needs , to not have a land lord getting on my neck about me working on my car in the drive , not having the rent go up every year,
Oh and brooess your kidding your self if you think moving btl into the hands of companies is a good thing. My worst experiances and stories ive heard always invariably imvolve national chain rental agents,
I always sought out private rental people doing rentals personally as at least you have someone to speak to and if they have any morals its much harder to side step issues.
It never gave me any issues in 4 seperate rentals.
I love the way people beating up on the landlords and supporting measures to remove their benefits, but totally failing to hammer the successive governments - of all 3 colours now - who have failed to address the lack of affordable housing and the glut of empty properties/derelict brownfield sites.
BTL landlords are a symptom of the problem, not the cause. We find it too easy in this country to lash out at the easy target and not address the root cause of issues.
I'll just add my tuppence . Our son went to Perth to study guitar ; it was cheaper to buy than rent . Bought the house, six months later the market crashes ; the property is now worth approx 15k less than when we bought it . Now renting out unable to sell ( to return the 15k deposit we put on our own mortgage to buy) . Yes , we make about 1K a year profit after fees , upkeep etc but I would much rather have the 15k paid back into my own mortgage . Don't think that will happen anytime soon.
Hang on - If it's a buy-to-let, you won't be "moving" it at all so that whole point is mootThe other has moved maybe 4, 5, 6 or more times. Incuring stamp duty and fees each time, say an average of £15k each time (wishful thinking based on recent experience, but pegging it low to avoid accusations of picking numbers to suit the argument, and the bands dont keep up with inflation so future duty will always be higher) that's upto £60k you would save by renting.
You think tenants don't do stuff like that ?And at no point in the preceding 30 years have you had the ballache of lost weekends to DIY
OK, if you bought right at a peak, but they're fairly short term issues pretty much every time so far (in comparison to a mortgage term) so since you're not going to sell your BTL property, you're going to be OK (especially as rents havent crashed)house price crashes
Hmmm, OK, though a tenant would have to look for a new home at that point if they cared enoughdealing with the planing application to turn next door into a chip shop
You can have that one - pretty rare though, and your buildings insurance may well pay anywaytaking out a loan for re-roofing or anything else
If you own you own home you'll never have the ballache (and removal expense) of having a landlord sell out from under you during a boom and having to move (4 houses in 2 yrs when we rented in Birmingham in the late 90's)
Too lateBTL landlords are a symptom of the problem, not the cause. We find it too easy in this country to lash out at the easy target and not address the root cause of issues.
[img]
[/img]
i work for a number of landlords of small domestic properties the sort that sell for south of 100k well south 60-85k been the norm. they fall into two catagories folk who buy cheap and let them straight out in as bought condition.. they have old kitchens bathrooms heating systems loads have damp.. they are normally let 20/30% beow market value always below 400pcm and as low as 275 the modus been.. you rent it like this its cheap we aint going to be doing it up.. complain and well ask you to move out whilst the property is renovated when it will be re rented at full market value
the second group buy the same house but spend 6 -8 weeks taking them back to bare wall and EVERYTHING is brand new they rent for above market value mostly to folks without kids and or retired folks
of the dozen or so that i work for not one is in it for a fast buck all are in as a very long term investment none rely on the rents as income..one landlord holds down a full time job as a labourere yet has 8 properties in the first catagory that he rents out.. some of his tenants have been there for 30 years..
i have limited experience of folks buying to make a fast buck.. usually public service employees and postmen strangly from the south east who buy northern properties unseen as they are cheap.. and fail miserably.. miserably.. buying in very poor areas letting to very poor tenants and losing a lot of money..
I think Thatcher was in favor of people owning their own homes, she didn't create the BTL market...
From what I saw in the south the policy worked, previously scummy estates started to smarten up as people took pride in their own homes, rather than renting 'social' housing.
In chester, lots of BLT landlords have jumped on the bandwagon and bought flats and smaller houses in not so expensive areas, this pushed up the prices,and also the rents chargeable, and around the garden lane area a lot of large nice houses where bought by private landlords for conversion to hmo,s houses of multiple occupancy,and let with up to 6 students per house, this forced the locals out reducing the house prices and then the btl lot jumped in.
But now large companies and the university are now building on non residential sites and either knocking the existing property down for redevelopment into student lets or converting the old building,and theyre doing a nice job on the whole but the sites could have been designated social housing .Something that is urgently neded in chester.
The result is that the hmo,s are now going up for sale as students dont want to share a old house but want to have a nice room in a new block, and landlords who are sticking it out are failing to deal with repairs or maintance. So we have run down student areas, void properties, high rents for those who want to rent, and a huge loss of council tax to the council
There may also be a changing trend to the types of properties people want to live in... I shared a room as a student and knew quite a few people who were two or three to a room (London).
I remember after uni 8 of us living in a 5 bedroom house (landlord knew) but after 3 years he wanted to do it up (change the carpets and paint it) so he could let to 5 students at a higher rate. The university also got rid of all double and trips rooms from their accommodation as well.
With more people living alone and not wanting to live in Hoogstraten style tenements has changed the rental market over the last two decades. Add in student living and fee loans and for many people the champagne lifestyle expectation exceeds the special brew budget...
Mostly I put it up as a "Fatcha!!" -style stw jokeI think Thatcher was in favor of people owning their own homes, she didn't create the BTL market...
However - She created the conditions for the late 20th century housing boom by beginning a purge on social housing with the "whateveritwascalledhousingbill" pretty much as soon as she came into government. That in turn generated property speculation, one aspect of which is called buy-to-let
When you sell thousands of council houses at 15- 20% of their resale value , and don't build any more affordable housing to replace it, you screw up the supply V demand V affordability equation.
When houses in the SE were going up by more than peoples monthly wage it really was the best investment vehicle. Then Maggie effectively gave hundreds of thousands of pounds to people who had been renting a discounted council house.
Some of those stayed , some banked the cash and got the hell out , with a suitcase full of cash they never , ever would have earnt unless they had inherited it or robbed a bank.
This increased the speed in which the bubble inflated. Add in self cert mtg's , no deposit mtg's and accesable buy to let money and the rise in BTL and house prices ensued.
Then factor in greed and our 'must have' society,' If you cant afford it .- buy it on credit' lifestyle and peoples reluctance to say 'No, I can't afford it .Everyone has a smart phone, car(s) less than 5 years old, Sky Tv, consols , 3 foreign holidays a year and they rent as they never have any money for a deposit ( sweeping generalization I know ).
So who are they going to rent from? The council? The 9 remaining council houses have a waiting list 50 years long so that leaves family or BTL landlords.
Then Maggie effectively gave hundreds of thousands of pounds to people who had been renting a discounted council house.
The idea was that the discount was proportional to the years of rent you had already payed, making it look like you had been paying a mortgage on it in the first place, instead of being trapped in a forever-rent situation. The hope was that it might make people more aspirational than being stuck in social housing forever.
Some of those stayed , some banked the cash and got the hell out , with a suitcase full of cash they never , ever would have earnt unless they had inherited it or robbed a bank.
That was the problem, for such a decent deal they should have locked in that you couldn't just sell up, after all you were supposed to be buying your 'home'.
Here’s a fun little ebook on Buy To Let that nicely sums the situation up:
[url= https://drive.google.com/file/d/0B24wHuyDETj3dzNzS1E5V1lfNkU/view ]A Goodbye To All That Buy To Let[/url]