So are Landlords finished?

[maz8062]

Olivera said:

nickfrog said:

What's your source for this pearl of wisdom?

My source is the oft posted on PH simpleton statement of: 'I'm selling up my BTLs, that's X less rental properties available'. This is self evidently nonsense because:

a) Some may be bought by other landlords, so they will remain as rentals
b) If they are sold to buyers then this will (somewhere along the chain) allow renters to transition to buyers. So there may be less rental stock, but there is an equal reduction in the number of renters.

You’re clueless, pal. I’m a landlord, but recently experienced life as a tenant until the landlord decided that enough was enough and put my flat up for sale. The buyer was a FTB with financial support from parents and now lives in the property with one less rental property off the market.

What do you think has happened to the cost of rent from the time that my landlord put the flat up for sale til it was sold? Up 50% from £1250 to £1800 per month. I’m lucky that I no longer have to rent, but I can’t see how landlords selling up will help renters in the long run. It’ll simply create increased demand resulting in higher rents. Higher rents mean folk will have to pay a larger percentage of their income on rent. Not good.

Landlords are an easy target. Politicians don’t have to deal with the fall out with these policies, the homelessness, the clogged court system. But vowing to do something about those “unscrupulous landlords” is a vote winner for the clueless, the same clueless that will complain about the unintended consequences without having the gumption to realise it.

Oh well…

[Sir Bagalot]

Dingu said:

Biggy Stardust said:

Many, sick of the incessant attacks, have got out of BTL. This has caused shortages & rent rises. Ireland is several years ahead of us on this path and is now beginning to realise the consequences of their actions against landlords.

The solution for UK is not to continue the attacks.

Maybe if so many landlords weren’t scummy there wouldn’t be an issue.

The whole thing should have regulatory oversight rather than any other messing around. Licences to be a landlord with revocation if standard fall below acceptable levels.

I all for standards amongst landlords. Shame no one has mentioned standards to be set for tenants.....

[andy43]

Vast majority of tenants I’ve met/housed will not or more likely cannot get a mortgage. Most fail their credit checks. I’ve only known three tenants in ten years buy their own homes. The concept of a house just moving to being owned instead of rented might work in your head, but in the real world there are families who need somewhere to live.

I’m about to advertise a 3 bed semi that I’ve spent a few months refurbing after my only sub-human tenants to date were evicted. It’s the only 3 bed available to rent in the entire postcode area. I’ve been advised that because of basic supply and demand the market rent is now 30% higher than it was two years ago. That’s what you get when you mess with the housing market. By all means bring in C Epc ratings, licences, no guarantors, but when there’s already hotels full of families it might not turn out very well.

[JagLover]

nikaiyo2 said:

The problem Elise98 was illustrating was that when one can earn 5% risk and hassle free why would anyone in their right mind choose to make 5.5% from an investment that is fraught with risk and attracts the hatred of so many, its the only place the justice system penalizes those who are stolen from.

If you have the money you can earn 4.7% at the moment and only tie up your money for one month, entirely risk free, being the return on UK zero interest bonds that you hold until sale and redemption.

[markh1973]

JagLover said:

markh1973 said:

It's a good job professional tax advisors and accountants do exams then and not simply use Google

When I say "quick google search" I mean guidance produced by the above such as this from Baker Tilly

https://www.mha.co.uk/insights/can-property-incorp...

Not my area of speciality and if you have anything to share would be interested to read.

A very narrowly focussed article dealing with what advantages there may be for an individual to move their properties into a corporate wrapper. A company at that scale gets to offset its interest against their taxable income - the tax rate applying is of course likely to be lower than for an individual so the benefit is somewhere between 19% and 26.5% (marginal rates for certain levels of profit).

Scale that business up to serious corporate landlords and their are rules such as the Corporate Interest Restriction which mean that it isn't as simple as getting a deduction for all of your interest.

[MrBig]

MrBogSmith said:

MrBig said:

98elise said:

. You can get 5% returns on cash these days!

This is the crux of it. 5% return guaranteed, no worries about tenants smashing the place up, disappearing without paying or worse, staying without paying.

Unless you own the property outright, it seems like a massive PITA for no advantage.

Over what time horizon?

The central bank aims to have lower interest rates when possible so high interest savings rates aren’t likely to be for the long term.

Fair point, but its all a bit 'finger in the air at the moment'. I've toyed with the idea of buying a rental property at least once a year for the last 7/8 years and every time I look it seems less and less attractive.

My mum has a rental flat, last year the tenant moved out, the agent went in to assess the property and the stupid b*tch had left an iron in the middle of the lounge carpet (obviously switched on) among other things, and then kicked off when she heard she wasn't getting her deposit back.

I have enough st to worry about in my life without adding to it. Each to their own and all that, but while cash continues to earn even vaguely close to a BTL ROI I think there are going to be many landlords (or potential landlords) thinking the same thing.

I know its a simplistic way of looking at it, and there are capital gains to be considered, but I suspect those are now diminishing returns, and will be for the next 5-10 years now. Oh and then there's 28% CGT. Urgh.

[98elise]

Otispunkmeyer said:

Astonishingly, the Green MP suggestion of a minimum EPC "C" rating, actually sounds quite sensible.

What happens if you're a tenant in a property that cannot easily be bought up to C?

The cheapest area for renting in my town is mostly victorian 2 up 2 downs. Almost impossible to bring them up to a C without major work,which will not be recovered by the landlord.

Then you have flats. There you don't even have the right to make changes to the fabric of the building.

You've also go to factor in that adding insulation into the fabric of a building that wasn't designed for it, comes with its own problems.

As I said before I have reasonably modern properties with modern heating, double glazing, and loft insulation. They are D. To get to C the EPC suggests installing insulation in the floor, which is a concrete slab!

The government rolled back on their plans for EPC C as they could see what was going to happen.

[nikaiyo2]

MrBig said:

Fair point, but its all a bit 'finger in the air at the moment'. I've toyed with the idea of buying a rental property at least once a year for the last 7/8 years and every time I look it seems less and less attractive.

My mum has a rental flat, last year the tenant moved out, the agent went in to assess the property and the stupid b*tch had left an iron in the middle of the lounge carpet (obviously switched on) among other things, and then kicked off when she heard she wasn't getting her deposit back.

I have enough st to worry about in my life without adding to it. Each to their own and all that, but while cash continues to earn even vaguely close to a BTL ROI I think there are going to be many landlords (or potential landlords) thinking the same thing.

I know its a simplistic way of looking at it, and there are capital gains to be considered, but I suspect those are now diminishing returns, and will be for the next 5-10 years now. Oh and then there's 28% CGT. Urgh.

Hahaha its weird how frequently tenants burn things, carpets, work tops, fridges, hair tong things are the worst, then they get all upset when they are asked to pay to replace whatever they have damaged.

I dont get the mentality of using an iron on a carpet its just mad, especially when there was an ironing board in the flat or one can be bought for less than £20.

[Downward]

nickfrog said:

Downward said:

Biggy Stardust said:

Downward said:

Yet 1 in 21 Adults are landlords…

What's the trend over the last few years & the projection for the next few?

Less hopefully.

Why? Do you want the cost of renting to carry on going even higher?
What's wrong with landlords?

Guess it’s more of a morals thing.
I’m seeing folk at work, Both partners working house hunting. Their rent is double a mortgage but banks won’t lend to them. So out pops Mr Landlord from the older generation. House bought mortgage paid and a nice bit of rental profit. 10 years on sell up for even more profit.

So yeah this no doubt will happen to my children too.

[Killboy]

nikaiyo2 said:

I dont think anyone is suggesting that Landlords should be protected from anything other than perhaps more well meant but idiotic legislation.

The problem Elise98 was illustrating was that when one can earn 5% risk and hassle free why would anyone in their right mind choose to make 5.5% from an investment that is fraught with risk and attracts the hatred of so many, its the only place the justice system penalizes those who are stolen from.

But thats the thing with "investments", its about weathering the storms and managing risks. Right now may not be a great time to be a landlord, but there are times when it has been. If you have an interest only BTL mortgage too you cant really complain either. The only thing protecting a large amount of these "businessmen" is the lack of supply and the high cost of getting on the market for first time buyers.

[Biggy Stardust]

Downward said:

Guess it’s more of a morals thing.
I’m seeing folk at work, Both partners working house hunting. Their rent is double a mortgage but banks won’t lend to them. So out pops Mr Landlord from the older generation. House bought mortgage paid and a nice bit of rental profit. 10 years on sell up for even more profit.

So yeah this no doubt will happen to my children too.

Current rental costs are high largely because of government interference. More interference might not be the answer.

[Downward]

Rivenink said:

The answer is we need to bring down house prices.

We need to build more. Proper development plans with appropriate public infrastructure.
We need to regulate and set stringent standards of upkeep on homes for let.
We need to tax corporate ownership of housing properties more. Tax exemption for co-operative housing societies that operate on a not for profit basis.

I don't think we'll get anything like that, much as I wish Labour would.

I think assets will continue to be bought up by the very wealthy, and there will be very little ownership of property by the middle clases down.


I thought we had enough houses ?

[Olivera]

Biggy Stardust said:

Current rental costs are high largely because of government interference.

You've surmised this from thin air. It's a multi-facetted problem:

1) Not enough house building
2) High net immigration
3) An excess of amateur BTL investors

[Biggy Stardust]

Olivera said:

You've surmised this from thin air.

or possibly from many years' experience of the BTL business. I presume you have none.

Olivera said:

It's a multi-facetted problem:

1) Not enough house building
2) High net immigration
3) An excess of amateur BTL investors

3- how does a large number of LLs cause a problem? It's the opposite of an oligopoly and allows the market to function better. How many is excessive & what would be a better system? (One which works & is possible, just to narrow the range of answers you might produce.)

[Downward]

ChocolateFrog said:

philv said:

I am selling one of my properties.
Tenant is therefore having to move out to a smaller place and 25% increased rent.

I know of another person selling as he needs to to aford the 20% vat on private education.

I know of another person selling 2 blocks of appartments.

cant see here ending well at all.

Ah Jesus, please pass the tissues.

So landlords, Assume most have either a fully paid of mortgage or a nearly finished one ?

I think I’m on maybe 30% LTV now. Could easily go and get a bit more equity and buy a BTL but it’s not something I agree with.

[Otispunkmeyer]

98elise said:

Otispunkmeyer said:

Astonishingly, the Green MP suggestion of a minimum EPC "C" rating, actually sounds quite sensible.

What happens if you're a tenant in a property that cannot easily be bought up to C?

The cheapest area for renting in my town is mostly victorian 2 up 2 downs. Almost impossible to bring them up to a C without major work,which will not be recovered by the landlord.

Then you have flats. There you don't even have the right to make changes to the fabric of the building.

You've also go to factor in that adding insulation into the fabric of a building that wasn't designed for it, comes with its own problems.

As I said before I have reasonably modern properties with modern heating, double glazing, and loft insulation. They are D. To get to C the EPC suggests installing insulation in the floor, which is a concrete slab!

The government rolled back on their plans for EPC C as they could see what was going to happen.

Ah fair do's

On the face of it, a decent proposal but yeah the realities of doing it practically sound like a headache.

Maybe this raises the question of the existing housing stock not being fit for purpose when viewed exclusively through an energy efficiency lens. But that is as expected. Houses built 100 years ago were built with standards and technology of the time, they can't be expected to meet todays standards. I guess we'd be getting into a "knock it all down and start over" as the most practicable answer then! (and I am no fan of modern new build house design. They're awful. Give me mid-century modern with its massive heat releasing windows!).

[OutInTheShed]

98elise said:

What happens if you're a tenant in a property that cannot easily be bought up to C?

The cheapest area for renting in my town is mostly victorian 2 up 2 downs. Almost impossible to bring them up to a C without major work,which will not be recovered by the landlord.

Then you have flats. There you don't even have the right to make changes to the fabric of the building.

You've also go to factor in that adding insulation into the fabric of a building that wasn't designed for it, comes with its own problems.

As I said before I have reasonably modern properties with modern heating, double glazing, and loft insulation. They are D. To get to C the EPC suggests installing insulation in the floor, which is a concrete slab!

The government rolled back on their plans for EPC C as they could see what was going to happen.

The irony is, I used to have an old terraced house from about 1900, a few rolls of loft inuslation and it was pretty cheap to keep plenty warm enough.
OK, it had solid brick walls, but being terraced, it didn't have much external wall area.l

[Olivera]

Biggy Stardust said:

3- how does a large number of LLs cause a problem? It's the opposite of an oligopoly and allows the market to function better. How many is excessive & what would be a better system? (One which works & is possible, just to narrow the range of answers you might produce.)

I see you've completely ignored reasons 1 and 2.

But on 3 - an excess of BTL investors (typically with more capital than a FTB) stokes demand and squeezes out FTBers that could otherwise afford to buy, forcing them to now rent. This isn't an even remotely contentious point, it's established fact. Hence the government and treasury have pulled various levers to dampen BTL demand.

[98elise]

Olivera said:

nickfrog said:

What's your source for this pearl of wisdom?

My source is the oft posted on PH simpleton statement of: 'I'm selling up my BTLs, that's X less rental properties available'. This is self evidently nonsense because:

a) Some may be bought by other landlords, so they will remain as rentals
b) If they are sold to buyers then this will (somewhere along the chain) allow renters to transition to buyers. So there may be less rental stock, but there is an equal reduction in the number of renters.

Or c) does not result in any renters becoming owners, and therefore reduces the number of rental properties.

Also how does your logic work when the amount of rental properties available is decreasing, and it's near impossible to find rental property these days?

There are now 25 people chasing every rental, and there was a long thread on here about how hard it is to find a place to rent. I have a rightmove alert for new rentals in my area (so I can monitor prices), and it rarely sends me any new properties.

[CaiosH]

98elise said:

What happens if you're a tenant in a property that cannot easily be bought up to C?

The cheapest area for renting in my town is mostly victorian 2 up 2 downs. Almost impossible to bring them up to a C without major work,which will not be recovered by the landlord.

Then you have flats. There you don't even have the right to make changes to the fabric of the building.

You've also go to factor in that adding insulation into the fabric of a building that wasn't designed for it, comes with its own problems.

As I said before I have reasonably modern properties with modern heating, double glazing, and loft insulation. They are D. To get to C the EPC suggests installing insulation in the floor, which is a concrete slab!

The government rolled back on their plans for EPC C as they could see what was going to happen.

I echo this.

D would be a much more suitable minimum standard. C isnt viable for much of the UKs housing stock.

Anything rural off mains gas supply can forget getting a C. So it will mean no rentals in rural locations at all or only airbnbs....




All of this is the same old rope. The UK has fundamental problems with an ageing population (cost of pensions & NHS treatment being 60%+ of the UK budget) and the lack of housing in the right places.

The above it hard to deal with without some big brave changes. Its easier to blame people on state benefits, immigrants and landlords to score some political points.

Get rid of landlords and property available to let. Where are all the people who can’t get a mortgage going to live? You can’t get rid of landlords without building more social housing or deregulating mortgage affordability rules.

I would also point out that more experienced and professional landlords are also often the same people buying distressed uninhabitable properties and putting them back into use.