BTL - long term winner?

Author
Discussion

Fotic

719 posts

128 months

Tuesday 22nd July 2014
quotequote all
TTwiggy said:
I imagine the answer is simple. Their 'problem' lies in financing someone else's loan for them, while that person sits back and makes money on the asset.
I think most tenants are more realistic with their finances and how the world works than you.

GG89

3,526 posts

185 months

Tuesday 22nd July 2014
quotequote all
TTwiggy said:
fblm said:
The UK has roughly 70% home ownership, compared to France around 60%, Germany 50% and Switzerland 40%... What is Brits problem with renting? Why are BTL's a problem and why are an increasing number of renters a problem? Doesn't seem to be an issue with the rest of the continent.

And in answer to Cranked... beats BARC or TSCO!

Edited by fblm on Tuesday 22 July 16:17
I imagine the answer is simple. Their 'problem' lies in financing someone else's loan for them, while that person sits back and makes money on the asset.
Exactly, paying some ones mortgage with your hard earned whilst never having a place to call your own. A few of my friends rent and its merely a stop gap during a saving up period.

Sheepshanks

32,530 posts

118 months

Tuesday 22nd July 2014
quotequote all
fblm said:
So the renter cares if the landlord has a mortgage? Weird, I never did.
You should care a bit - if the landlord doesn't pay the mortgage you can be turfed out with virtually no notice.

TTwiggy

11,500 posts

203 months

Tuesday 22nd July 2014
quotequote all
Fotic said:
TTwiggy said:
I imagine the answer is simple. Their 'problem' lies in financing someone else's loan for them, while that person sits back and makes money on the asset.
I think most tenants are more realistic with their finances and how the world works than you.
Sorry, you've lost me? Are the tenants covering the cost of the landlord's loan (mortgage) through their rental payments or not?



anonymous-user

53 months

Tuesday 22nd July 2014
quotequote all
Axionknight said:
98elise said:
Why do you assume BTL landlords are avoiding tax? Mine are all accounted for properly on my Tax return, and I pay tax on them. If HMRC knows of people avoiding taxes, it would act now and get the money now.

Income from BTL is taxed just like any other income.
Avoiders, as in, those who are avoiding, not that ALL are avoiding. Unless you are saying that every BTL landlord in the land is on the financial level, so to speak?

Jesus.
Nothing wrong with avoiding taxes. We all, quite rightly, do it, some better than others. I for one will continue to do so every way I can.




rover 623gsi

5,230 posts

160 months

Tuesday 22nd July 2014
quotequote all
fblm said:
The UK has roughly 70% home ownership, compared to France around 60%, Germany 50% and Switzerland 40%... What is Brits problem with renting? Why are BTL's a problem and why are an increasing number of renters a problem? Doesn't seem to be an issue with the rest of the continent.

And in answer to Cranked... beats BARC or TSCO!

Edited by fblm on Tuesday 22 July 16:17
home ownership in Britain has fallen to around 64-65%, while the percentage of social housing has fallen from a high of 31% in 1981 to around 16-17% now. There are now more people renting privately than renting from a council/housing association. 50% of all property in London is rented.

there are approx 4 million social housing properties in the UK - just slightly less than the number of privately rented homes. The country's biggest private landlord owns 1,000 homes. By way of a comparison, I work for a medium-sized HA and we own and manage approx 7,000 homes. That may give some indication of the number of BTL landlords out there - though I would hazard a guess that the number of people who own a extra home or two as an income / pension top-up far outweighs the number of private landlords who operate as a full-time business.

because we are not building anywhere near enough new housing (imho, of course) if you are fortunate enough to be able to buy a second property and rent it out, the in the long term (so long as you don't do anything stupid) you will almost certainly make money.

Mark Benson

7,498 posts

268 months

Tuesday 22nd July 2014
quotequote all
TTwiggy said:
Fotic said:
TTwiggy said:
I imagine the answer is simple. Their 'problem' lies in financing someone else's loan for them, while that person sits back and makes money on the asset.
I think most tenants are more realistic with their finances and how the world works than you.
Sorry, you've lost me? Are the tenants covering the cost of the landlord's loan (mortgage) through their rental payments or not?
As opposed to what?

Why is paying off an individual's mortgage any worse than paying off a corporate loan taken out by a housing association for instance? Why is renting a house any different to buying a commodity - if you have a problem with people making money from other people, how do you earn a living?

rover 623gsi

5,230 posts

160 months

Tuesday 22nd July 2014
quotequote all
Sheepshanks said:
You should care a bit - if the landlord doesn't pay the mortgage you can be turfed out with virtually no notice.
yeah - that happened to me once. Some bailiffs turned up at 7.00am. Right pain in the arse - especially as we'd all just paid a month's rent about two days previously. The four of us eventually took the landlord to a smalll claim's court - we won and awarded our month's rent and deposit back.

We ended up receiving £100 each and then the landlord disappeared again. Still, it was nice to win.

anyway...

anonymous-user

53 months

Tuesday 22nd July 2014
quotequote all
Mr Snap said:
Because, as I understand it, leases in other countries are cheaper and set for longer terms. We have a system where house price inflation is seen as a good thing and landlords have a incentive to increase rents on a regular basis (esp as housing benefits increase to meet inflation).
OK, actually I see that, its wrong IMO that private renters paying rent out of taxed income should be competing with the housing benefit crowd for the same properties. That's a policy issue though that landlords can legally do nothing about and until it ends, which seems unlikely, is a good reason to invest in that sector of the market.

Regarding the longer term lease thing I heard Millipeed wittering about that the other day and I dont get it. Landlords love it when renters want a long lease for lots of reasons, I just signed a 2 year with 5 year extension a couple of weeks ago. Another tenant stayed over 5 years. I'd be over the moon to do a 10 year or longer but most tenants have no interest.

anonymous-user

53 months

Tuesday 22nd July 2014
quotequote all
rover 623gsi said:
fblm said:
The UK has roughly 70% home ownership, compared to France around 60%, Germany 50% and Switzerland 40%... What is Brits problem with renting? Why are BTL's a problem and why are an increasing number of renters a problem? Doesn't seem to be an issue with the rest of the continent.

And in answer to Cranked... beats BARC or TSCO!

Edited by anonymous-user on Tuesday 22 July 16:17
home ownership in Britain has fallen to around 64-65%, while the percentage of social housing has fallen from a high of 31% in 1981 to around 16-17% now. There are now more people renting privately than renting from a council/housing association. 50% of all property in London is rented.

there are approx 4 million social housing properties in the UK - just slightly less than the number of privately rented homes. The country's biggest private landlord owns 1,000 homes. By way of a comparison, I work for a medium-sized HA and we own and manage approx 7,000 homes. That may give some indication of the number of BTL landlords out there - though I would hazard a guess that the number of people who own a extra home or two as an income / pension top-up far outweighs the number of private landlords who operate as a full-time business.

because we are not building anywhere near enough new housing (imho, of course) if you are fortunate enough to be able to buy a second property and rent it out, the in the long term (so long as you don't do anything stupid) you will almost certainly make money.
Thanks for the detail. I agree, supply and demand always wins out in the end.

TTwiggy

11,500 posts

203 months

Tuesday 22nd July 2014
quotequote all
Mark Benson said:
TTwiggy said:
Fotic said:
TTwiggy said:
I imagine the answer is simple. Their 'problem' lies in financing someone else's loan for them, while that person sits back and makes money on the asset.
I think most tenants are more realistic with their finances and how the world works than you.
Sorry, you've lost me? Are the tenants covering the cost of the landlord's loan (mortgage) through their rental payments or not?
As opposed to what?

Why is paying off an individual's mortgage any worse than paying off a corporate loan taken out by a housing association for instance? Why is renting a house any different to buying a commodity - if you have a problem with people making money from other people, how do you earn a living?
Jeez - I'm not attacking capitalism here so you can lay off the personal crap. Someone asked what the problem with renting was. I just thought that from the POV of the tenant at least, the 'problem' might lie in covering someone else's loan for them, so that they make money on an asset that the tenant can't afford, due to the rising cost of property, caused by houses being seen as commodities in this country.

Edited to add: Housing is not just any 'commodity' though. Shelter is a basic human need. It's not the same as renting telly or a PS4.




Edited by TTwiggy on Tuesday 22 July 17:16

anonymous-user

53 months

Tuesday 22nd July 2014
quotequote all
TTwiggy said:
Someone asked what the problem with renting was. I just thought that from the POV of the tenant at least, the 'problem' might lie in covering someone else's loan for them...
It was a fair enough answer but as an ex-renter for many years myself it's not something I ever thought about, not least because I had no clue if the landlord had a mortgage for me to pay or not. I was just paying for a roof over my head, couldn't care less how much the house was worth, I honesty think house prices, especially other peoples, are a peculiarly British obsession.

Fittster

20,120 posts

212 months

Tuesday 22nd July 2014
quotequote all
BoRED S2upid said:
That would take a brave or very stupid politician how many people have BTL's as part of their pension? An instant vote looser.
Doesn't it depend on what party those landlords already vote for? If you make the huge assumption that Landlords vote Tory and renters vote Labour you can see an obvious winner.

TTwiggy

11,500 posts

203 months

Tuesday 22nd July 2014
quotequote all
fblm said:
TTwiggy said:
Someone asked what the problem with renting was. I just thought that from the POV of the tenant at least, the 'problem' might lie in covering someone else's loan for them...
It was a fair enough answer but as an ex-renter for many years myself it's not something I ever thought about, not least because I had no clue if the landlord had a mortgage for me to pay or not. I was just paying for a roof over my head, couldn't care less how much the house was worth, I honesty think house prices, especially other peoples, are a peculiarly British obsession.
Thank you. I'm glad someone 'got it'. I agree that house prices take up far too much concern in this country, but it's understandable to an extent.

As an example, due to a particular bubble in the area, my girlfriend's flat in Walthamstow made more money than she did last year. Actually, it almost made more than our combined gross incomes. Had we been renting it out for the past 5 years, with a tenant covering the mortgage, we'd be laughing - I wonder how the tenant would feel?

Fittster

20,120 posts

212 months

Tuesday 22nd July 2014
quotequote all
TTwiggy said:
fblm said:
TTwiggy said:
Someone asked what the problem with renting was. I just thought that from the POV of the tenant at least, the 'problem' might lie in covering someone else's loan for them...
It was a fair enough answer but as an ex-renter for many years myself it's not something I ever thought about, not least because I had no clue if the landlord had a mortgage for me to pay or not. I was just paying for a roof over my head, couldn't care less how much the house was worth, I honesty think house prices, especially other peoples, are a peculiarly British obsession.
Thank you. I'm glad someone 'got it'. I agree that house prices take up far too much concern in this country, but it's understandable to an extent.

As an example, due to a particular bubble in the area, my girlfriend's flat in Walthamstow made more money than she did last year. Actually, it almost made more than our combined gross incomes. Had we been renting it out for the past 5 years, with a tenant covering the mortgage, we'd be laughing - I wonder how the tenant would feel?
Isn't it an obsession because many people consider property in one form or another to be a significant part of their pension planning. Being interested in how you are going to fund your old age doesn't seem unreasonable.


TTwiggy

11,500 posts

203 months

Tuesday 22nd July 2014
quotequote all
Fittster said:
Isn't it an obsession because many people consider property in one form or another to be a significant part of their pension planning. Being interested in how you are going to fund your old age doesn't seem unreasonable.
Of course not, but we have a situation (at least in London and the SE) where even reasonably well paid people can't afford to buy. The BTL boom is at least partly complicit in this. I live in a block of new builds near Greenwich. I am one of only four owner-occupiers in a block of 30 flats. The rest are all BTLs.

Mr Snap

2,364 posts

156 months

Tuesday 22nd July 2014
quotequote all
fblm said:
OK, actually I see that, its wrong IMO that private renters paying rent out of taxed income should be competing with the housing benefit crowd for the same properties. That's a policy issue though that landlords can legally do nothing about and until it ends, which seems unlikely, is a good reason to invest in that sector of the market.

Regarding the longer term lease thing I heard Millipeed wittering about that the other day and I dont get it. Landlords love it when renters want a long lease for lots of reasons, I just signed a 2 year with 5 year extension a couple of weeks ago. Another tenant stayed over 5 years. I'd be over the moon to do a 10 year or longer but most tenants have no interest.
You're right, length of lease is a problem, but there have to be means of introducing more flexibility. Some may be happy with short term lets but others might like the option of longer terms. I'm sure that a pensioner living in rented accommodation would like to know he/she won't have to negotiate a new lease when they're getting frail. If they're getting pushed out merely because the landlord can raise his profits (esp if the money is coming from the state).

Similarly, I'm sure that all the BTL landlords here on PH are perfect... But my daughter has been repeatedly fleeced by agencies and unscrupulous landlords inventing damages and keeping deposits. She can't afford to fight them legally or to 'lose' her good references, so many of them seem to be utter scam artists.




TTwiggy

11,500 posts

203 months

Tuesday 22nd July 2014
quotequote all
Mr Snap said:
Similarly, I'm sure that all the BTL landlords here on PH are perfect... But my daughter has been repeatedly fleeced by agencies and unscrupulous landlords inventing damages and keeping deposits. She can't afford to fight them legally or to 'lose' her good references, so many of them seem to be utter scam artists.
My friend's brother and his wife were renting a cottage near Bristol until recently. It was a nice place, but needed a bit of tidying up. They redecorated and did a few other jobs out of their own pockets, as they were happy to make it a nicer place to live.

A month later, the landlord told them that she was really sorry, but she needed to sell the place. They were annoyed, but that's life eh? Except that while looking for somewhere else to live a few weeks later, they happen across that same cottage, now advertised at a higher rent, due to all the nice work they did.

Fittster

20,120 posts

212 months

Tuesday 22nd July 2014
quotequote all
TTwiggy said:
Fittster said:
Isn't it an obsession because many people consider property in one form or another to be a significant part of their pension planning. Being interested in how you are going to fund your old age doesn't seem unreasonable.
Of course not, but we have a situation (at least in London and the SE) where even reasonably well paid people can't afford to buy. The BTL boom is at least partly complicit in this. I live in a block of new builds near Greenwich. I am one of only four owner-occupiers in a block of 30 flats. The rest are all BTLs.
Are you happy to ps off the 26 landlords so more people could buy their own property?

TTwiggy

11,500 posts

203 months

Tuesday 22nd July 2014
quotequote all
Fittster said:
TTwiggy said:
Fittster said:
Isn't it an obsession because many people consider property in one form or another to be a significant part of their pension planning. Being interested in how you are going to fund your old age doesn't seem unreasonable.
Of course not, but we have a situation (at least in London and the SE) where even reasonably well paid people can't afford to buy. The BTL boom is at least partly complicit in this. I live in a block of new builds near Greenwich. I am one of only four owner-occupiers in a block of 30 flats. The rest are all BTLs.
Are you happy to ps off the 26 landlords so more people could buy their own property?
Why does it have to be that black and white?

Realistically, the horse has bolted, but maybe allowing BTLs in the first place was just a bad idea?