Death of buy-to-let: landlords wake up to Osborne's 150pc ta

[anonymous-user]

If you really want to sell it, put it into an auction - a far better mechanism for price discovery than an estate agent in most cases

If you trust the estate agent, market it at the price she suggests - a 'below market price' is often taken (irrationally) by buyers as a sign of problems with the property

[ClaphamGT3]

It rents well so we will probably keep it and stick my in-laws in it when they get less mobile.

[andy43]

ClaphamGT3 said:

northwest monkey said:

2.5pi said:

Where I'm renting out homes oop North all my tenants would in the past have been housed in council houses. I know I'm a way better landlord than LA who take forever to sort out any problems and seem to piss money away in ever more bizarre one size fits all " initiatives" whilst not sorting the biggest problem all their tenants experience , that of anti social behaviour by scrotes who make others lives a misery.

That is why many HB tenants actively prefer to live in a mixed residential area where landlords take action to evict problem tenants to ensure that their asset is protected.

FYI - The property he lives in was up for sale with a high street estate agent. It needed some modernising as it was a mid 1980s flat with a 1980s kitchen and bathroom, but nothing to worry any mortgage lender. It was available for anyone to buy - be that an investor or a first time buyer. When I went to view it, there were 2 other young couples looking round. Neither were interested as it was "dead old fashioned". I put in a cheeky offer and got it. A lot of first time buyers want the moon on a stick these days and aren't prepared to compromise on what it is they "have to have right now".

Absolutely this. For boring, historic reasons, we find ourselves with a 4 bed/2bath townhouse in Peterborough. It was built c2002 and is in good condition but still has its original kitchen and bathrooms. It's less than 10 minutes walk from the station. It's mortgage free and, to be frank, we would rather put the money into another flat near us that would be easier to manage and give a better prospect of capital appreciation.

About 6 months ago we had it valued by a few agents who all came in at £195-200k. We put it on at £185k for a quick sale and didn't get a sniff. All the locals would rather pay an extra £15-45k to get a brand new house in Hampton and apparently London-based FTB/STBs don't want to buy in Peterborough because 'it isn't aspirational'

Noughties kitchens are so passé dahhling.
Bought a townhouse on a great estate - nw England - it was about to go to auction - no one would buy because the kitchen, windows and bathrooms were developers original 2000 efforts. Plus the carpets were blue. Changed the lot, spending ten percent of purchase price, revalued at fifty percent over purchase price by men with shiny shoes. Now rented moon on a stick does sum it up.

[98elise]

Willy Nilly said:

98elise said:

Inflationary pressure is being pendantic, all things being equal its meaningless.

Am I so wrong about supply and demand? Which one of these scenarios would cause a price drop?

1. Make BTL illegal and force all those properties onto the open market.....or
2. For every BTL build a new house and put that on the market.

There is a need for rental properties, but in this country people are obsessed with buying houses. Some people are buying houses that other people would like to buy to live in, but these people want to rent them out to the people that really want to buy them.

I am rather surprised that you cannot see how taking houses out of the pool available to buy doesn't push the price up.

As I keep saying, because the tenants are now no longer prospective buyers. Both the supply and the demand side have been reduced. If those tenants had actually bought the house the situation would be exactly the same.

[ClaphamGT3]

It is also worth noting that BTL landlords beat FTBs to purchases not because they can pay more but because they are more likely to be proceedable than the FTB. I have bought more than one property where prospective owner-occupiers have offered more but are at too great a risk for the vendor to take for the sake of an additional £5-10k

[98elise]

TooMany2cvs said:

98elise said:

2. For every BTL build a new house and put that on the market.

Perhaps you'd be so kind as to explain how that might work...

I'm not suggesting that could or would happen. It trying to illustrate that moving x number of properties from BTL to owner occupier would not free up any stock, as there would be x number of additional buyers.

Creating more homes would obviously create more stock without additional demand, so would reduce house prices.

The resolution to the issue of high house prices is to get building. The process for getting planning permission is very very long and very expensive, especially if CPRE get involved!

[amusingduck]

98elise said:

Willy Nilly said:

98elise said:

Inflationary pressure is being pendantic, all things being equal its meaningless.

Am I so wrong about supply and demand? Which one of these scenarios would cause a price drop?

1. Make BTL illegal and force all those properties onto the open market.....or
2. For every BTL build a new house and put that on the market.

There is a need for rental properties, but in this country people are obsessed with buying houses. Some people are buying houses that other people would like to buy to live in, but these people want to rent them out to the people that really want to buy them.

I am rather surprised that you cannot see how taking houses out of the pool available to buy doesn't push the price up.

As I keep saying, because the tenants are now no longer prospective buyers. Both the supply and the demand side have been reduced. If those tenants had actually bought the house the situation would be exactly the same.

How is the situation the same?

Assuming a pool of 1000 people that need housing, and 500 of those wish to buy their own house.
There are 1000 houses available.

Scenario A -
1 person wishes to buy a house, and he does so.
There are now 999 people who require housing, and 499 people who wish to buy their own house.
The supply and demand for purchasable houses has decreased.

Scenario B -
A house is BTL'd and rented out.
There are now 999 people who require housing and 500 people who wish to buy their own house.
The supply of purchasable houses has decreased, the demand has not.

I don't see what point you're making.

[RYH64E]

ClaphamGT3 said:

It rents well so we will probably keep it and stick my in-laws in it when they get less mobile.

A 4 bed townhouse sounds ideal for an elderly, less mobile couple... Plenty of stairs to keep them fit and more rooms than they could possibly need, perfect.

[TooMany2cvs]

amusingduck said:

How is the situation the same?

Assuming a pool of 1000 people that need housing, and 500 of those wish to buy their own house.
There are 1000 houses available.

Scenario A -
1 person wishes to buy a house, and he does so.
There are now 999 people who require housing, and 499 people who wish to buy their own house.
The supply and demand for purchasable houses has decreased.

Scenario B -
A house is BTL'd and rented out.
There are now 999 people who require housing and 500 people who wish to buy their own house.
The supply of purchasable houses has decreased, the demand has not.

I don't see what point you're making.

Scenario C. All 500 people who wish to buy their own house do so.
There are now 500 people needing housing, and 500 available houses. Guess we'd better find some BtL investors sharpish, eh? Or are you expecting 500 vendors to be accidental landlords due to a lack of buyers?

[mph1977]

ClaphamGT3 said:

It is also worth noting that BTL landlords beat FTBs to purchases not because they can pay more but because they are more likely to be proceedable than the FTB. I have bought more than one property where prospective owner-occupiers have offered more but are at too great a risk for the vendor to take for the sake of an additional £5-10k

exactly andthe BTL is often a 'cash buyer' even if leveraged to the hilt

[Ade07]

northwest monkey said:

2.5pi said:

Where I'm renting out homes oop North all my tenants would in the past have been housed in council houses. I know I'm a way better landlord than LA who take forever to sort out any problems and seem to piss money away in ever more bizarre one size fits all " initiatives" whilst not sorting the biggest problem all their tenants experience , that of anti social behaviour by scrotes who make others lives a misery.

That is why many HB tenants actively prefer to live in a mixed residential area where landlords take action to evict problem tenants to ensure that their asset is protected.

You're similar to me. A lot of my tenants would have been in council houses 20 years ago. The problem is today is that there are not enough council houses as when the councils started selling them off they never replaced them. So now the council properties are given out sparingly based on needs.

I mentioned earlier a lot of my tenants would not be in a position to get a mortgage - most of them would not be eligible for a council house either under current rules. I have a 51 year old labourer as a tenant - he wouldn't get a mortgage under current lending rules, nor would he want one. Realistically, he has very little chance of getting a council flat as he's a single bloke earning a wage so he isn't a priority to the council. I provide a good standard of home for him to live in at a price (a) he can afford and (b) I'm happy with.

So am I exploiting my tenant, exploiting the system, or providing a service where I and the tenant are both happy?

FYI - The property he lives in was up for sale with a high street estate agent. It needed some modernising as it was a mid 1980s flat with a 1980s kitchen and bathroom, but nothing to worry any mortgage lender. It was available for anyone to buy - be that an investor or a first time buyer. When I went to view it, there were 2 other young couples looking round. Neither were interested as it was "dead old fashioned". I put in a cheeky offer and got it. A lot of first time buyers want the moon on a stick these days and aren't prepared to compromise on what it is they "have to have right now".

Very true. Our latest purchase is a 2 bed semi-detached in Liverpool. The house was up with a local estate agent and available to purchase by FTB or investors. They had two viewings from young couples looking for their first home, but neither put an offer in, as the kitchen was '1980's' and the decor was dated! We managed to purchase it after out bidding the other investor, no offers were received from any first time buyers. A new kitchen and fresh decor were completed in 4 days and on day 5 the new tenant moved in, a couple in full time employment!

[amusingduck]

TooMany2cvs said:

amusingduck said:

How is the situation the same?

Assuming a pool of 1000 people that need housing, and 500 of those wish to buy their own house.
There are 1000 houses available.

Scenario A -
1 person wishes to buy a house, and he does so.
There are now 999 people who require housing, and 499 people who wish to buy their own house.
The supply and demand for purchasable houses has decreased.

Scenario B -
A house is BTL'd and rented out.
There are now 999 people who require housing and 500 people who wish to buy their own house.
The supply of purchasable houses has decreased, the demand has not.

I don't see what point you're making.

Scenario C. All 500 people who wish to buy their own house do so.
There are now 500 people needing housing, and 500 available houses. Guess we'd better find some BtL investors sharpish, eh? Or are you expecting 500 vendors to be accidental landlords due to a lack of buyers?

https://en.wikipedia.org/wiki/Straw_man

elise98 is saying that both the supply and demand decreases when a house is BTL'd. My example was simply to illustrate why I disagree.