Boomer life according to the economist
Discussion
Portia5 said:
But it's not as simple as properties changing hands from one landlord to another. Because for every landlord who's quitting there's probably two who simply aren't expanding. I'm one. I add about 4-6 a year to my collection. But rarely a residential since the weird legislation began. ADS 6%??? Rent controls???
Eviction restriction??? etc etc etc etc. No thanks. Just buy commercials instead.
Other associates buy in all kinds of places. Recently Greece, USA and Dubai seem popular. Others diversify into renovation or build projects - churches, steadings and some commercial too. All money diverted away from the UK resi letting market. And yet others diversify property money into all kinds of optional business things in the UK.
There is seemingly a growing 'issue' with landlords, by issue I mean the general populace realising they are being priced out and the focus is, rightly or wrongly being on those that do have them. There is an argument that if you and the Robbie Fowlers etc of the world hadn't have been able to buy up properties to let then they would perhaps be able to own their own? There is certainly an element of truth in that as in a world you couldn't buy the residential home stock, demand would have been lower and they would have stayed at a price where someone could? Eviction restriction??? etc etc etc etc. No thanks. Just buy commercials instead.
Other associates buy in all kinds of places. Recently Greece, USA and Dubai seem popular. Others diversify into renovation or build projects - churches, steadings and some commercial too. All money diverted away from the UK resi letting market. And yet others diversify property money into all kinds of optional business things in the UK.
Edited by Portia5 on Saturday 20th April 23:27
The current protests in the Canary islands are about a similar issue, the residents can't live in their own country whilst "Foreigners bought half of the houses sold in the Canary Islands in 2022. The Canary Islands have become an ideal destination for people looking for a second home and investment. In fact, the sale and purchase of homes by foreigners accounted for 52% of all transactions in 2022"
Also "The Canary Islands have the highest rising house prices in Spain, going up by 22.5 percent in 2023, according to Fotocasa, with most of the properties being bought by people from abroad"
So what's playing out out there is a potentially more rapid version of what might ultimately happen here? The workers are seeing their chances of home ownership, even renting there diminishing?
[i]"Residents living in the holiday destination say too much tourism is damaging the environment, driving down wages and squeezing locals out of the housing market.
Some local people say they have been forced to sleep in their cars or even in caves."[/i]
So you and your associates are doing nothing wrong obviously but the results over time are that on aggregate you will increase asset ownership and the lower rungs will therefore reduce in levels of ownership. I'm not pointing fingers here I'm just highlighting the potential long term consequences.
The Canary Islanders are living this shift to effectively, as they see it, just being servants to the wealthy tourists? The small island and large tourist destination and property purchasing is intensifying the situation but arguably this is playing out everywhere just at different rates?
When everything is going to the highest bidder then that bidder tends to be someone already wealthy, when prices for a home (and that's what properties largely should be) exceed a certain level then this is what we'll start to get?
You're diverting into questions of socio-political morality way way too complex for me to want to discuss, so I won't.
BUT: In the 1980's I lived in what was then a small Spanish coastal town (pop 10000) which turned into a tourist madhouse of 100000 every year for 4 months, and is now a very big town. A place called Javea/Xabia.
In the 80's, local landowners couldn't sell out to developers fast enough, and everyone local who didn't scarper was busy creating a business to service/supply the incoming foreigners as the developers did what they do and the North Europeans began to pour in to occupy their developments both as permanent and temporary/occasional residents.
Much later, despite the change from agricultural economy into tourist based prosperity, quite a few of the locals kind of regretted it all. A form of 'sellers remorse' perhaps?
I know what I think the Canarians should try - a modified form of what Goa (where I also spent some years) did starting in the 90's. Try to change it upwards - from cheap tourism to the opposite.
Shame though. We go to Tenerife a couple of times a year. Made some good acquaintances there over the years. But if we're not wanted we won't be going back.
Same as property letting. If landlording is to be pariahed then it'll be time to sell out. There's no shortage of substantial funds held by people who live in really crackpot regimes looking for a home for their money anywhere less crazy than the places they're from. One phone call is all it takes.
BUT: In the 1980's I lived in what was then a small Spanish coastal town (pop 10000) which turned into a tourist madhouse of 100000 every year for 4 months, and is now a very big town. A place called Javea/Xabia.
In the 80's, local landowners couldn't sell out to developers fast enough, and everyone local who didn't scarper was busy creating a business to service/supply the incoming foreigners as the developers did what they do and the North Europeans began to pour in to occupy their developments both as permanent and temporary/occasional residents.
Much later, despite the change from agricultural economy into tourist based prosperity, quite a few of the locals kind of regretted it all. A form of 'sellers remorse' perhaps?
I know what I think the Canarians should try - a modified form of what Goa (where I also spent some years) did starting in the 90's. Try to change it upwards - from cheap tourism to the opposite.
Shame though. We go to Tenerife a couple of times a year. Made some good acquaintances there over the years. But if we're not wanted we won't be going back.
Same as property letting. If landlording is to be pariahed then it'll be time to sell out. There's no shortage of substantial funds held by people who live in really crackpot regimes looking for a home for their money anywhere less crazy than the places they're from. One phone call is all it takes.
I for one am super thankful to you Portia. There’s not many people who are willing to take one for the team and choose to make lots of money off people’s need for shelter. It’s extremely kind of you to be worried about them so.
Same with all the other rentier systems we have going on these days which really increase productivity but providing the same services as before but someone adding a layer of profit taking each time, slowing down a lot of real economic growth. It’s a great thing for the economy so it’s really appreciated.
Same with all the other rentier systems we have going on these days which really increase productivity but providing the same services as before but someone adding a layer of profit taking each time, slowing down a lot of real economic growth. It’s a great thing for the economy so it’s really appreciated.
NRS said:
I for one am super thankful to you Portia. There’s not many people who are willing to take one for the team and choose to make lots of money off people’s need for shelter. It’s extremely kind of you to be worried about them so.
Same with all the other rentier systems we have going on these days which really increase productivity but providing the same services as before but someone adding a layer of profit taking each time, slowing down a lot of real economic growth. It’s a great thing for the economy so it’s really appreciated.
www.youtube.com/watch?v=ZXdZZAf0AU0Same with all the other rentier systems we have going on these days which really increase productivity but providing the same services as before but someone adding a layer of profit taking each time, slowing down a lot of real economic growth. It’s a great thing for the economy so it’s really appreciated.
https://www.youtube.com/watch?v=ZXdZZAf0AU0
Portia5 said:
Same as property letting. If landlording is to be pariahed then it'll be time to sell out. There's no shortage of substantial funds held by people who live in really crackpot regimes looking for a home for their money anywhere less crazy than the places they're from. One phone call is all it takes.
Not sure they're looking for a slightly dilapidated 2 bed flat in Croydon or Middlesborough to invest their money in though... Condi said:
Portia5 said:
Same as property letting. If landlording is to be pariahed then it'll be time to sell out. There's no shortage of substantial funds held by people who live in really crackpot regimes looking for a home for their money anywhere less crazy than the places they're from. One phone call is all it takes.
Not sure they're looking for a slightly dilapidated 2 bed flat in Croydon or Middlesborough to invest their money in though... NRS said:
I for one am super thankful to you Portia. There’s not many people who are willing to take one for the team and choose to make lots of money off people’s need for shelter. It’s extremely kind of you to be worried about them so.
Same with all the other rentier systems we have going on these days which really increase productivity but providing the same services as before but someone adding a layer of profit taking each time, slowing down a lot of real economic growth. It’s a great thing for the economy so it’s really appreciated.
Is that you Patrick Harvie?Same with all the other rentier systems we have going on these days which really increase productivity but providing the same services as before but someone adding a layer of profit taking each time, slowing down a lot of real economic growth. It’s a great thing for the economy so it’s really appreciated.
I don’t have any skin in the game as only have 1 home, however private landlords, who are exiting the market in numbers, are removing rental properties from those who need them which is increasing rents due to lower supply.
Until the government build more houses or allow the market to by fixing the broken planning system, private landlords will provide the much needed rental properties that those who can’t get a mortgage badly need.
I remain to be convinced that being a landlord is purely altruistic 
. I remember the reaction from many on here to the changes to tenancy regulations.
‘How dare they? Well, guess what I will do then. I’ll chuck out my tenants out and/or hike rent to the maximum extent possible while I can. You never know, my costs might continue to increase at this rate, and if they do, my decision will be vindicated’
Hopefully enough has been done to incentivise pension saving as a retirement strategy for current generations rather than falling into being an ‘accidental’ landlord.
Somehow I suspect that there will still be enough people to buy that housing stock either way.
. I remember the reaction from many on here to the changes to tenancy regulations. ‘How dare they? Well, guess what I will do then. I’ll chuck out my tenants out and/or hike rent to the maximum extent possible while I can. You never know, my costs might continue to increase at this rate, and if they do, my decision will be vindicated’
Hopefully enough has been done to incentivise pension saving as a retirement strategy for current generations rather than falling into being an ‘accidental’ landlord.
Somehow I suspect that there will still be enough people to buy that housing stock either way.
Portia5 said:
Condi said:
Portia5 said:
Same as property letting. If landlording is to be pariahed then it'll be time to sell out. There's no shortage of substantial funds held by people who live in really crackpot regimes looking for a home for their money anywhere less crazy than the places they're from. One phone call is all it takes.
Not sure they're looking for a slightly dilapidated 2 bed flat in Croydon or Middlesborough to invest their money in though... Burnley, Hull and Grimsby have a rental market, surprisingly/not surprisingly.
havoc said:
Portia5 said:
So why bother BUILDING them when they're there already, just waiting for legislative changes to encourage landlords into utilising them (as they have done since the stone age).
As a chap called Derek Hatton discovered some decades ago, it's all very well building houses if you've got (or can grift) the money to do so, but you also need to build in a supporting maintenance, management and infrastructure system to go along with them. If you don't, all you're building is a colossal problem, not a 'housing dream'.
Right now most councils are squealing about not having enough money to provide basic essential services never mind fanciful schemes to build dwellings + infrastructure en masse.
Everyone in the property letting business knows that discouraging landlords has created a major rental housing crisis. The stupid legislation actually hugely enhances the profits of those who can adapt and survive this silly discouragement. Ok it's embarrassing to have to accept that the crisis is only recoverable by accepting stupid things have been done which need UNdone, but there really isn't a choice.
Are you REALLY suggesting that private-sector landlords - who are making a PROFIT - can sort all those things out through subcontractors but a council - who don't need to make a profit and therefore will have more cash to pay for all the supporting services - can't sort them out? As a chap called Derek Hatton discovered some decades ago, it's all very well building houses if you've got (or can grift) the money to do so, but you also need to build in a supporting maintenance, management and infrastructure system to go along with them. If you don't, all you're building is a colossal problem, not a 'housing dream'.
Right now most councils are squealing about not having enough money to provide basic essential services never mind fanciful schemes to build dwellings + infrastructure en masse.
Everyone in the property letting business knows that discouraging landlords has created a major rental housing crisis. The stupid legislation actually hugely enhances the profits of those who can adapt and survive this silly discouragement. Ok it's embarrassing to have to accept that the crisis is only recoverable by accepting stupid things have been done which need UNdone, but there really isn't a choice.
This is the same story that was used to justify privatisation of all the utilities, and look how well that's turned out!?!
Council-provided housing isn't free. Either the renter pays the council instead of a private-sector landlord, or the council pays itself instead of a private sector landlord. The economics of this are so simple a schoolchild could grasp it.
f
k me, if this is the standard of 'reasoned' argument on here then no wonder the UK's in trouble...We haven’t had this article yet: The end of landlords: the surprisingly simple solution to the UK housing crisis
Scootersp said:
Portia5 said:
But it's not as simple as properties changing hands from one landlord to another. Because for every landlord who's quitting there's probably two who simply aren't expanding. I'm one. I add about 4-6 a year to my collection. But rarely a residential since the weird legislation began. ADS 6%??? Rent controls???
Eviction restriction??? etc etc etc etc. No thanks. Just buy commercials instead.
Other associates buy in all kinds of places. Recently Greece, USA and Dubai seem popular. Others diversify into renovation or build projects - churches, steadings and some commercial too. All money diverted away from the UK resi letting market. And yet others diversify property money into all kinds of optional business things in the UK.
There is seemingly a growing 'issue' with landlords, by issue I mean the general populace realising they are being priced out and the focus is, rightly or wrongly being on those that do have them. There is an argument that if you and the Robbie Fowlers etc of the world hadn't have been able to buy up properties to let then they would perhaps be able to own their own? There is certainly an element of truth in that as in a world you couldn't buy the residential home stock, demand would have been lower and they would have stayed at a price where someone could? Eviction restriction??? etc etc etc etc. No thanks. Just buy commercials instead.
Other associates buy in all kinds of places. Recently Greece, USA and Dubai seem popular. Others diversify into renovation or build projects - churches, steadings and some commercial too. All money diverted away from the UK resi letting market. And yet others diversify property money into all kinds of optional business things in the UK.
Edited by Portia5 on Saturday 20th April 23:27
The current protests in the Canary islands are about a similar issue, the residents can't live in their own country whilst "Foreigners bought half of the houses sold in the Canary Islands in 2022. The Canary Islands have become an ideal destination for people looking for a second home and investment. In fact, the sale and purchase of homes by foreigners accounted for 52% of all transactions in 2022"
Also "The Canary Islands have the highest rising house prices in Spain, going up by 22.5 percent in 2023, according to Fotocasa, with most of the properties being bought by people from abroad"
So what's playing out out there is a potentially more rapid version of what might ultimately happen here? The workers are seeing their chances of home ownership, even renting there diminishing?
[i]"Residents living in the holiday destination say too much tourism is damaging the environment, driving down wages and squeezing locals out of the housing market.
Some local people say they have been forced to sleep in their cars or even in caves."[/i]
So you and your associates are doing nothing wrong obviously but the results over time are that on aggregate you will increase asset ownership and the lower rungs will therefore reduce in levels of ownership. I'm not pointing fingers here I'm just highlighting the potential long term consequences.
The Canary Islanders are living this shift to effectively, as they see it, just being servants to the wealthy tourists? The small island and large tourist destination and property purchasing is intensifying the situation but arguably this is playing out everywhere just at different rates?
When everything is going to the highest bidder then that bidder tends to be someone already wealthy, when prices for a home (and that's what properties largely should be) exceed a certain level then this is what we'll start to get?
If that wasn't then case then you could argue shared ownership properties affect supply and demand depending on the % owned, even though its the same family in the same home!
101 families can't fit into 100 properties no matter how you try. The problem as ever is not enough properties where people want to live, not that they are rented or owned.
Exactly why the idiotic policies from the SNP/ Greens won’t help renters.
Rents are increasing as supply drops and renters aren’t in a position to purchase property from their landlords - hence why they are renting in the first place.
So less landlords, but less choice for renters. Stupid.
Rents are increasing as supply drops and renters aren’t in a position to purchase property from their landlords - hence why they are renting in the first place.
So less landlords, but less choice for renters. Stupid.
It's not just people who can't get mortgages who want to rent privately. There are people who don't WANT mortgages or (for many many reasons) don't want to OWN property.
So can we just accept that there's massive demand for private sector property to rent and can we please facilitate rather than repress the industry of supplying it?
No-one's going to rent a property in bad condition for an exorbitant sum when there's a cheaper option in far better condition available.
But if the availability's limited the choice down to taking the st and very expensive property or living on a friend's couch or a tent, the repressive legislation has truly failed and shouldn't be clung on to, or doubled down on.
Creating a scenario which bad actors can exploit (as has happened) isn't clever or in anyone's interests.
https://www.youtube.com/watch?v=UaiGABTj0aA
So can we just accept that there's massive demand for private sector property to rent and can we please facilitate rather than repress the industry of supplying it?
No-one's going to rent a property in bad condition for an exorbitant sum when there's a cheaper option in far better condition available.
But if the availability's limited the choice down to taking the s
t and very expensive property or living on a friend's couch or a tent, the repressive legislation has truly failed and shouldn't be clung on to, or doubled down on.Creating a scenario which bad actors can exploit (as has happened) isn't clever or in anyone's interests.
https://www.youtube.com/watch?v=UaiGABTj0aA
Edited by Portia5 on Sunday 21st April 14:50
Portia5 said:
Your naive understanding is forgivable because it's an understanding of a market you're not actively involved in, but the scenario you've outlined is far far far from the reality of matters.
Currently, as I've tried to explain to you, legislation is off-putting to potential new landlords. And, as I've also explained, only a few (5%?) of existing landlords are interested in expanding their portfolios - again because of silly regulation/legislation. So how active do you think the market is for offloading occupied tenancies? Ill tell you. It's DEAD. Unless the owner of the unwanted property is prepared to reduce the asking price substantially, which most aren't or if they are then only very slightly and gradually, especially as other 'punitive' legislation makes the whole disposal unattractive anyway.
Your inability to comprehend someone else's argument is forgivable, if only because you're clearly lacking in the brain-cell department.Currently, as I've tried to explain to you, legislation is off-putting to potential new landlords. And, as I've also explained, only a few (5%?) of existing landlords are interested in expanding their portfolios - again because of silly regulation/legislation. So how active do you think the market is for offloading occupied tenancies? Ill tell you. It's DEAD. Unless the owner of the unwanted property is prepared to reduce the asking price substantially, which most aren't or if they are then only very slightly and gradually, especially as other 'punitive' legislation makes the whole disposal unattractive anyway.
If a LL has sitting tenants and wants to exit, they'll take their time to unload a the right time for them. So the property isn't empty. LL's may feel trapped in a situation where they either need to suck up new laws or flog the property below market value. But you know what...tough luck. They've gained MASSIVELY over the last 15 years, so a little bit of pain now is just part of capitalism - "the value of your investment may go down as well as up" I believe is the rallying cry! Cry me a f
king river. If they'd invested in speculative companies on the stock market they'd have had more risk and arguably lower returns.If a LL has NO tenants and wants to exit, and the BTL market is dead, they'll unload into the mainstream market. The two types of property aren't mutually exclusive.
...so, as was proved to you above with DATA, there IS no empty-property crisis.
Portia5 said:
Sheeesh! It's quite hard work explaining something which is basically really simple. At least try to accept that supply shortage is playing a big part in crazy rent levels.
You should know, though, that the Crisis is not really very difficult to reverse or - at least- stabilise. Not by building, by redirecting all kinds of regulation and legislation to assist, rather than undermine, the letting industry.
You should know, though, that the Crisis is not really very difficult to reverse or - at least- stabilise. Not by building, by redirecting all kinds of regulation and legislation to assist, rather than undermine, the letting industry.
How to tell people you don't understand simple economics in two paragraphs.
1) Supply / demand. It's economics 101. They teach it to 11/12 year olds. Shortage of supply does (well done!) drive prices up, ceteris paribus.
2) ...so how do you get to "fixing the crisis without building more houses"?!?
3) ...unless you've no clue about how the housing market works. About how the same houses which are bought to rent are also bought to live in. Almost like theres NO f
kING DIFFERENCE!!! You encourage BTL landlords you increase demand for houses which pushes the price of houses up which pushes the cost to (new) landlords up which increases the floor at which said landlords are prepared to offer property.4) ...but no, you claim building new houses won't work, because councils won't be able to borrow the money (seriously?!? what planet are you on?) to buy for BTL which would increase supply and drop the price without any onward headaches elsewhere in the market. Sometimes the most obvious solutions ARE the right ones.
5) ...and can I note that all these last 10 years of permissive landlord legislation have led to the biggest rise in rental prices we've ever seen. And you claim returning to that will LOWER prices?!?
Except of course I don't think you do believe half of what you say. I think you're one of these highly geared landlords who's now panicking that the legislative environment is moving against him after years of gravy, and rather than being phelgmatic and rolling with it, is crying "foul" because he thinks the world owes him a (parasitic) living and wants his nice little gravy train back again.
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.
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.
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. Unfortunately the relative scarcity has just created the conditions where they can get away with it. Hence earlier post and article link.
Edited by Hustle_ on Sunday 21st April 19:35
I give up.
Mr Havoc, I did my first property deal in 1970. And apart from 4 years spent loafing in India, I have always been in the property business.
Can you tell me what you were doing in 1970? Were you even born then? Or have I been wheeling and dealing and letting and managing and buying and selling and building too including in Scotland, England, Germany, Dubai, Greece and Spain since before you were born?
I have co-owned with others well in excess of 1000 properties and owned up to 200 in my own name. I have used corporate debt up to 10's of millions but since 2016 haven't used so much as a penny of borrowed money.
The impact of the crazy legislation on the letting industry has certainly had an impact on me personally. It has DOUBLED my wealth and it has DOUBLED my income.
But I and my property associates - probably much to your surprise - are not entirely happy with this. Why not? you might ask. But there would be no point in explaining it to you because you do not know the first thing about the letting business and WHY it is not at all healthy to have a small humble flat that produced £400 a month in 2020 now producing £800! And this rising almost monthly!
It is reminiscent of the property sales business of 2006 when property prices were rising so quickly and steeply that a small fortune could be made by buying property "off plan" and selling it on completion.
In fact it's exactly the same feeling of foreboding now with letting as was being felt with sales by 2007.
Yes the tills were ringing, and ringing very loud. But doom was clearly on the horizon. That's how letting feels right now.
For the first time EVER in my property 'career' we've had to put annual rent reviews in place, like social housing providers do. And of course (as you'll not know Mr Havoc because you really don't know much about letting because you're not involved in it in any serious way) the nature of tenancies has massively massively changed. Now tenants who do not receive regular large rent rises become "rent prisoners". Again, this is difficult to explain, and would require you to understand principles of business as well as its specific applications to letting.
One of the advantages of private rental is that in Scotland (and I think in a year or two in England) tenancies have no fixed term. The tenancy goes on until the tenant gives a month's notice and leaves. This notice can be given the day the tenancy starts. So anyone who wants to can leave anytime at a months notice. It's been in place since 2017 and has been really excellent for people who ended up in dumps with bad landlords.
BUT. Tenants are now finding landlords and agents continually want to raise rent (allowed annually) to keep it in line with ever-upwardly changing market levels. I had one last week. Lady's been in the flat for a couple of years. Agent told her rent was changing from £600 to £800. Not acceptable to her. Expressed intention to appeal to the rent officer and quite rightly said the rent officer will limit her rent rise to £672 (12%increase). Ok says I to agent, she knows market level of rent has risen, so ask her how she feels about £670 but with a certainty that it'll be reviewed again in 12 months time.
And she was delighted to accept the new rent of £670.
Of course, she's now trapped in my flat. (Actually it's a really nice flaat to be trapped in). Because the only similar property she can move to will be an empty one whose market rent will be £800.
We call them 'rent prisoners". Their mobility has gone.
If there were a plethora of empties then some landlords would offer reduced rent to attract tenants. But there aren't a plethora, Theres a big scarcity. Unknown in my lifetime. Anything that becomes empty is instantly refilled by prior arrangement and at the current rent which is inevitably higher than the departing tenant's was. Anything professionally marketed receives literally hundreds of responses. The departer suffers a rent shock wherever they go to, the incoming tenant takes the pain of the 'new' rent, AND THE LANDLORD'S COFFERS SWELL AND SWELL AND SWELL.
That's ONE example of the twenty or thirty problems the scarcity of private sector properties is causing FOR TENANTS.
Here's another oncoming one just starting to emerge:
Scarcity causes rent increase. So do other things, but market rent INCREASES. All the time now, and mainly because of scarcity. Stamp your foot all you want, but it's scarcity that is currently driving insane rent escalation.
So rent arrives at a level which the tenant's income can't sustain, even with rent control restrictions. What happens then? Oh dear. The tenant can't move because....see above. So what's your solution to THAT one, Mr Havoc? lol. What do you think happens next in that scenario (which is already upon us and is going to become ever more common). Come on! You're the expert! How do we deal with it?....
And there's plenty more.
And if you think for one second that council's building more properties is the solution then I suggest you ask yourself why they don't just do that.
Over tou you Rumpelstiltskin
. Let's start with your experience of the letting businesss. How long and to what level?
Mr Havoc, I did my first property deal in 1970. And apart from 4 years spent loafing in India, I have always been in the property business.
Can you tell me what you were doing in 1970? Were you even born then? Or have I been wheeling and dealing and letting and managing and buying and selling and building too including in Scotland, England, Germany, Dubai, Greece and Spain since before you were born?
I have co-owned with others well in excess of 1000 properties and owned up to 200 in my own name. I have used corporate debt up to 10's of millions but since 2016 haven't used so much as a penny of borrowed money.
The impact of the crazy legislation on the letting industry has certainly had an impact on me personally. It has DOUBLED my wealth and it has DOUBLED my income.
But I and my property associates - probably much to your surprise - are not entirely happy with this. Why not? you might ask. But there would be no point in explaining it to you because you do not know the first thing about the letting business and WHY it is not at all healthy to have a small humble flat that produced £400 a month in 2020 now producing £800! And this rising almost monthly!
It is reminiscent of the property sales business of 2006 when property prices were rising so quickly and steeply that a small fortune could be made by buying property "off plan" and selling it on completion.
In fact it's exactly the same feeling of foreboding now with letting as was being felt with sales by 2007.
Yes the tills were ringing, and ringing very loud. But doom was clearly on the horizon. That's how letting feels right now.
For the first time EVER in my property 'career' we've had to put annual rent reviews in place, like social housing providers do. And of course (as you'll not know Mr Havoc because you really don't know much about letting because you're not involved in it in any serious way) the nature of tenancies has massively massively changed. Now tenants who do not receive regular large rent rises become "rent prisoners". Again, this is difficult to explain, and would require you to understand principles of business as well as its specific applications to letting.
One of the advantages of private rental is that in Scotland (and I think in a year or two in England) tenancies have no fixed term. The tenancy goes on until the tenant gives a month's notice and leaves. This notice can be given the day the tenancy starts. So anyone who wants to can leave anytime at a months notice. It's been in place since 2017 and has been really excellent for people who ended up in dumps with bad landlords.
BUT. Tenants are now finding landlords and agents continually want to raise rent (allowed annually) to keep it in line with ever-upwardly changing market levels. I had one last week. Lady's been in the flat for a couple of years. Agent told her rent was changing from £600 to £800. Not acceptable to her. Expressed intention to appeal to the rent officer and quite rightly said the rent officer will limit her rent rise to £672 (12%increase). Ok says I to agent, she knows market level of rent has risen, so ask her how she feels about £670 but with a certainty that it'll be reviewed again in 12 months time.
And she was delighted to accept the new rent of £670.
Of course, she's now trapped in my flat. (Actually it's a really nice flaat to be trapped in). Because the only similar property she can move to will be an empty one whose market rent will be £800.
We call them 'rent prisoners". Their mobility has gone.
If there were a plethora of empties then some landlords would offer reduced rent to attract tenants. But there aren't a plethora, Theres a big scarcity. Unknown in my lifetime. Anything that becomes empty is instantly refilled by prior arrangement and at the current rent which is inevitably higher than the departing tenant's was. Anything professionally marketed receives literally hundreds of responses. The departer suffers a rent shock wherever they go to, the incoming tenant takes the pain of the 'new' rent, AND THE LANDLORD'S COFFERS SWELL AND SWELL AND SWELL.
That's ONE example of the twenty or thirty problems the scarcity of private sector properties is causing FOR TENANTS.
Here's another oncoming one just starting to emerge:
Scarcity causes rent increase. So do other things, but market rent INCREASES. All the time now, and mainly because of scarcity. Stamp your foot all you want, but it's scarcity that is currently driving insane rent escalation.
So rent arrives at a level which the tenant's income can't sustain, even with rent control restrictions. What happens then? Oh dear. The tenant can't move because....see above. So what's your solution to THAT one, Mr Havoc? lol. What do you think happens next in that scenario (which is already upon us and is going to become ever more common). Come on! You're the expert! How do we deal with it?....
And there's plenty more.
And if you think for one second that council's building more properties is the solution then I suggest you ask yourself why they don't just do that.
Over tou you Rumpelstiltskin
. Let's start with your experience of the letting businesss. How long and to what level? Gassing Station | Finance | Top of Page | What's New | My Stuff