Boomer life according to the economist

[Portia5]

Hustle_ said:

I believe that LL financial risk aversion- or less charitably, greed and opportunism was in part responsible for rents going up as much as they have. The relative scarcity has just created the conditions where they can get away with it. Hence earlier post and article link.

How does your greed theory fit the very recent MASSIVE rise in LHA rates (which are based on 30th market percentile)

In a well stocked market, how could a landlord get away with a greed-level rent? Why would anyone take it rather than a rent at normal market price?

[Portia5]

Olivera said:

Portia5 sounds very much like an utterly insufferable previous PHer that relentlessly banged on about their BTL portfolio. Best ignored.

Ad hominem's a poor look.

Any wisdom to offer?

Hmmmm

[Sheepshanks]

Zj2002 said:

How is BTL parasitic?

Properties purchased on the open market. Renters could buy them if they wanted?

You talk (angrily) about leveraged landlords - perhaps renters could take on leverage and buy for themselves?

If you want BTL to die and prices to drop it will happen across the market - and will effect non landlords as well.

So you would be happy for value drops and negative equity for hard working families just to stick one to landlords? Seems a bit stupid and misguided.

This is a supply issue - pushing landlords out only increases rents.

Certainly when one of our daughters bought an entry level house, BTLers were snapping up everything and had put a floor under the pricing which meant she was paying more than if they hadn't been in the market. She was lucky that the older couple selling to her said they wouldn't sell to a BTLer, and she paid less than they'd paid for the house 5yrs earlier.

[Hustle_]

Portia5 said:

Hustle_ said:

I believe that LL financial risk aversion- or less charitably, greed and opportunism was in part responsible for rents going up as much as they have. The relative scarcity has just created the conditions where they can get away with it. Hence earlier post and article link.

How does your greed theory fit the very recent MASSIVE rise in LHA rates (which are based on 30th market percentile)

In a well stocked market, how could a landlord get away with a greed-level rent? Why would anyone take it rather than a rent at normal market price?

It’s not so much a theory as an observation. LLs seem to have in good conditions become accustomed to always ‘winning’. An expectation that they cannot ‘lose’, even in the short term. There seems to be an expectation from some LLs that they are entitled to always have their costs, whatever mortgage they have signed up for, plus a margin, covered by tenants. Plus capital growth on top of course.

There seems to be a pinch point at the moment. Greater supply would alleviate it. Alternatively a LL exodus would release a lot of stock.

I don’t know how the situation de-escalates from here but I will not cry a river now that becoming a private landlord is no longer a no-lose no-brainer for anybody with the surplus money or leverage to enter into it.

[Panamax]

Portia5 said:

How does your greed theory fit the very recent MASSIVE rise in LHA rates (which are based on 30th market percentile)
In a well stocked market, how could a landlord get away with a greed-level rent? Why would anyone take it rather than a rent at normal market price?

I have only just returned to this thread so may be behind the ball. Presumably you are familiar with concept of "markets" and "supply and demand". So here's a situation,

• UK builds around 250,000 new homes a year.
• UK net immigration is around 650,000 people a year.
• The natural birth rate in UK means the existing population continues to expand, regardless of immigration (whether legal or illegal).

Do you think the cost of housing is likely to be increasing or decreasing?

[Zj2002]

Hustle_ said:

Portia5 said:

Hustle_ said:

I believe that LL financial risk aversion- or less charitably, greed and opportunism was in part responsible for rents going up as much as they have. The relative scarcity has just created the conditions where they can get away with it. Hence earlier post and article link.

How does your greed theory fit the very recent MASSIVE rise in LHA rates (which are based on 30th market percentile)

In a well stocked market, how could a landlord get away with a greed-level rent? Why would anyone take it rather than a rent at normal market price?

It’s not so much a theory as an observation. LLs seem to have in good conditions become accustomed to always ‘winning’. An expectation that they cannot ‘lose’, even in the short term. There seems to be an expectation from some LLs that they are entitled to always have their costs, whatever mortgage they have signed up for, plus a margin, covered by tenants. Plus capital growth on top of course.

There seems to be a pinch point at the moment. Greater supply would alleviate it. Alternatively a LL exodus would release a lot of stock.

I don’t know how the situation de-escalates from here but I will not cry a river now that becoming a private landlord is no longer a no-lose no-brainer for anybody with the surplus money or leverage to enter into it.

A landlord exodus won’t help renters though. There will be less properties to rent.

Your solution only works if the current renters have the deposit, credit record and actual willingness to buy.

[Hustle_]

I’m aware of that. The guardian article I posted earlier explained what happened last time there was a mass LL exodus.

[otolith]

Without scrolling through five pages of discussion, have the stats in this been looked at?

https://www.gov.uk/government/publications/state-o...

[Portia5]

Hustle_ said:

It’s not so much a theory as an observation. LLs seem to have in good conditions become accustomed to always ‘winning’. An expectation that they cannot ‘lose’, even in the short term. There seems to be an expectation from some LLs that they are entitled to always have their costs, whatever mortgage they have signed up for, plus a margin, covered by tenants. Plus capital growth on top of course.

There seems to be a pinch point at the moment. Greater supply would alleviate it. Alternatively a LL exodus would release a lot of stock.

I don’t know how the situation de-escalates from here but I will not cry a river now that becoming a private landlord is no longer a no-lose no-brainer for anybody with the surplus money or leverage to enter into it.

I think what you call "winning" is what businesspeople call 'making a profit'.

BTL is just a n other business. And, like every other industry, some participants' business plans are more robust than others. So inevitably some landlords' business plans have no contingency plans for certain events occurring- especially those over which they've no control. So off they go, although you must understand that the slack their departure creates is taken up by others whose profits inevitably rise.

When they quit the market one of 2 things happen. The quit property goes to another landlord (99% of those sold with tenant in situ) or it goes to someone previously renting who becomes an owner-occupier. The second category always were going to become owners. But there really isn't that many of them. So there remains the same level of seemingly ever increasing demand for private rentals exacerbated by the reduction of properties which have now disappeared to owner occupancy.

However, you've said that 'greater supply would alleviate' things. So do you also agree that by simply legislatively encouraging rather than discouraging landlords the greater supply could be achieved?

[Hustle_]

Just read it already

Hustle_ said:

We haven’t had this article yet: The end of landlords: the surprisingly simple solution to the UK housing crisis

[Zj2002]

Hustle_ said:

I’m aware of that. The guardian article I posted earlier explained what happened last time there was a mass LL exodus.

I don’t get why you are wanting a LL exodus.

The rental market is a fundamental sector of the wider property market.

There seems to be a view that landlords are grubby. However institutional build to rent is a massive growth area and there is strong tenant demand as not everyone wants to own their property.

[Hustle_]

Zj2002 said:

I don’t get why you are wanting a LL exodus.

I don’t believe I said that.

ETA: personally what I wanted was to not get involved in landlordism on either side.

[Portia5]

Panamax said:

I have only just returned to this thread so may be behind the ball. Presumably you are familiar with concept of "markets" and "supply and demand". So here's a situation,

• UK builds around 250,000 new homes a year.
• UK net immigration is around 650,000 people a year.
• The natural birth rate in UK means the existing population continues to expand, regardless of immigration (whether legal or illegal).

Do you think the cost of housing is likely to be increasing or decreasing?

As said earlier (about rents) part of the relentless supply/demand imbalance could be addressed by addressing net migration, although it opens the door to a lot of difficult debate.

To me) that seems blindingly obvious.

[Zj2002]

Hustle_ said:

Zj2002 said:

I don’t get why you are wanting a LL exodus.

I don’t believe I said that.

ETA: personally what I wanted was to not get involved in landlordism on either side.

It’s not landlordism though in the same way that owner occupationism isn’t a thing.

The rental market is a fundamental part of a functioning property market and rental and capital values are increasing due to a lack of supply - can only be fixed by creating more homes.

[Portia5]

Hustle_ said:

Hustle_ said:

We haven’t had this article yet: The end of landlords: the surprisingly simple solution to the UK housing crisis

The thing with the article is that its author spends his life dealing with a certain corner of the industry which inevitably impacts on his view of landlords/letting as demonstrated pretty clearly by his opinions.

[Portia5]

Zj2002 said:

It’s not landlordism though in the same way that owner occupationism isn’t a thing.

The rental market is a fundamental part of a functioning property market and rental and capital values are increasing due to a lack of supply - can only be fixed by creating more homes

.....by encouraging people to take up, rather than leave the business, along with encouraging existing landlords to increase their scale.

[Hustle_]

Portia5 said:

The thing with the article is that its author spends his life dealing with a certain corner of the industry which inevitably impacts on his view of landlords/letting as demonstrated pretty clearly by his opinions.

Maybe, but the writer will know more about the subject than I do- so I will post the article and let Nick Bano take the flack.

[Zj2002]

Portia5 said:

Zj2002 said:

It’s not landlordism though in the same way that owner occupationism isn’t a thing.

The rental market is a fundamental part of a functioning property market and rental and capital values are increasing due to a lack of supply - can only be fixed by creating more homes

.....by encouraging people to take up, rather than leave the business, along with encouraging existing landlords to increase their scale.

Bang on. In Scotland at least, at needs the SNP/Greens to engage with the industry and work towards a solution.

The amount of investment/ homes that are now mothballed due to BTR no longer stacking up in Scotland is staggering. Financial illiteracy from the government.

[Hustle_]

Landlords of PH agree that landlords = good

[Portia5]

Some of the "fact' is a bit suspect too. Clearest example for me is him describing London in the '70's as having a low level of private rentals. Not in my experience. It was rammed with them. In 1970 we paid £8 a week to Mr Dakowski for our flat in Redcliffe Gardens. In 1972 I returned and asked Mr Dakowski for another flat. No problem. £72 a week