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  1. #51
    Old but keen Mark Chase's Avatar
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    Quote Originally Posted by Chrisch View Post
    Who are they selling to? The reality is there are a certain number of people and a certain number of properties. I rent because it is cheaper to do so, if it were cheaper to buy I would buy. Same person, one property - landlords sell up, I buy. We looked at buying here about 4 years back but the prices were bonkers. We would have rented it out when we left, but it didn't make financial sense. My neighbours rent the other half of our property and have just bought a property to rent out so they have their own place when they retire.

    People make all sorts of assumptions about what is going on to suit their own point of view. Some landlords might well be selling some might be buying. What I can say for a fact in that there is massive building going on so the supply is increasing. I would suggest the interest rate is much more of a concern than the overall market size. Don't overlook the big companies getting into rental and the build to let market. Rents track what people are prepared to pay not the other way round. Landlords are price takers not price makers, a weak position. There are better investments but your point about mortgages is correct - but then this is the one asset class you can readily borrow against if you have no real money to speak of - hence it's popularity. That favours a long term view - which begs the question of why people are selling up?
    Most landlords (85%) are single property non professional people

    Recent taxation like taxing the interest they pay on the BTL Mortguage and a 3% increase in stamp duty on BTL properties has hit the market hard.. A situation that does not occur in any other business model. SO higher earners are paying 40% tax on a legitimate business expence as if it were income. For many this has pushed the profit below acceptable levels. So they sell up. They sell to other landlords and to people whi wish to take the property out of the rental market and make it a private residence.


    Many like me have low levels of leverage on their BTL loans so it does not affect them. Many like me have set up limited companies to manage portfolios and put the properties into the business so they do not have to pay tax on the interest. Many like me have increased rents to cover the shortfall


    Most of the above is not viable on a single property but works well on multiple properties.


    Then theres those who have been hit by a bad tenant and jst want out

    Those that see the government screwing over landlords and just want out


    Those with little knowledge baught problem properties because they were cheep and found the cost of the problems and their affect on rentals meant their profits were well below expectations.

    Talk to housing associations and councils and they are in a bad spot right now because landlords are pulling private rentals and they have no where to put their tenants.

    Greenwich council are sponsoring tenants to move out of Greenwich. I took on a tenant recently for whom Greenwich paid 2600 to them to do just that



    All recent actions have meant rents have gone up.

    New build alternatives are a joke


    I looked to invest in some "affordable housing" only to be told the 1 bed flats were 250K


    The land cost and build cost of properties today means, theres no such thing as affordable new housing.

    How does this Affordable housing solve the problem of mortgage companies wanting 20 -30% deposits for the lower rate mortgages or 10% for higher rates

    The insecurity of modern employment has meant many are scared to take on a permanent residence and prefer the flexibility of renting.


    The recent government actions against landlords has made their rental position stronger which is fine by me as I want long term tenants and I do the job properly.


    Sadly the by product of recent govt actions has meant professional bad tenants are getting away with much more.

    What is needed now is harder rules for bad tenants forcing their debt to be paid.

    I am very happy for this to be combined with harder enforcement on bad landlords.


    The cash grab on landlords via taxation will need to be reviewed because if not, expect rental shortages, increased rents and major housing issues for the poor.

    https://www.telegraph.co.uk/investin...vestment-80pc/
    Last edited by Mark Chase; 15-05-2019 at 09:02 AM.

  2. #52
    Established TDF Member Chrisch's Avatar
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    Quote Originally Posted by Mark Chase View Post
    Most landlords (85%) are single property non professional people
    Yes. That answers the OP question I think

    Quote Originally Posted by Mark Chase View Post
    Recent taxation like taxing the interest they pay on the BTL Mortguage and a 3% increase in stamp duty on BTL properties has hit the market hard..
    Has it? (Genuine question) Firstly the stamp duty you only pay when buying so I can only assume it has hit the people wanting to get into the market not existing players. I didn't understand the tax on interest thing when it came in, seems a bit odd (esp. from the Tories). I can see it hits the IO mortgage people that rent the money but don't own the property.

    Quote Originally Posted by Mark Chase View Post
    ..Those with little knowledge baught problem properties because they were cheep and found the cost of the problems and their affect on rentals meant their profits were well below expectations.
    Another reason that tenant's experiences are shit I think.


    Quote Originally Posted by Mark Chase View Post
    .All recent actions have meant rents have gone up.
    Mine hasn't.

    Quote Originally Posted by Mark Chase View Post
    ...
    The cash grab on landlords via taxation will need to be reviewed because if not, expect rental shortages, increased rents and major housing issues for the poor.
    Or we could just build more social housing - which is the solution. The sell off of council housing created an artificial problem. It was a stupid policy but popular (understandably) with the tenants that made a killing at the taxpayers' expense. The massive price inflation that was a result of low interest rates gave an opportunity for a lot of people to "dabble" in the market on a one way bet. It has now become received wisdom prices only go up and that rents will only ever go up. Both of these assumptions are wrong. At some point there will be more votes in building social housing that there are in rewarding amateur landlordas.

  3. #53
    Old but keen Mark Chase's Avatar
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    Quote Originally Posted by Chrisch View Post
    Yes.
    Or we could just build more social housing - which is the solution. The sell off of council housing created an artificial problem. It was a stupid policy but popular (understandably) with the tenants that made a killing at the taxpayers' expense. The massive price inflation that was a result of low interest rates gave an opportunity for a lot of people to "dabble" in the market on a one way bet. It has now become received wisdom prices only go up and that rents will only ever go up. Both of these assumptions are wrong. At some point there will be more votes in building social housing that there are in rewarding amateur landlordas.

    You have no idea what your talking about. It is impossible to build "Social housing" in a cost effective way to reduce rents in ANY areas outside the highest rental districts inside the M25 and I suppose affluent other areas in the country with high property prices.


    The cost of land, the cost of materials and the cost of labour make it a loss making enterprise. The AT COST result then needs managing by PAYE staff which costs a load more.


    Net result is still high rents



    Its ridiculous to say "my rent hasn't gone up". We had a great tenant paid on time every time and he was in there for five years until he down sized from my 2bed flat to my 1 bed flat for personal reasons. He was paying 650 rent. I hadn't put it up because I was already making 15% and I knew he was struggling.

    He left I, now let it for 750 a month


    A tenant moving out costs money. The flat needs a tosh through and deep clean likely bits need repairing / replacing. Then theres marketing costs loss of rent during marketing and tenanting phase and the risks of a new tenant moving in who may be a bad one.

    Whats the point of putting up the rent on a good tenant by 5% (35.00) when its going to cost you 2000 to replace him when he moves out.

  4. #54
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    Quote Originally Posted by Chrisch View Post
    No, there is no mystery to it. Landlords all have tales of woe about some tenant or another that is bad in some way and all tenants have tales of bad landlords. As Mike says the UK rental market is shit. So both sides expect the other to be problematic, neither side respects the other.

    Many owner occupiers have cats and a great many of them will be in the kitchen. I wouldn't like to put numbers on it but it must be a fair percentage. Virtually all rental agreements forbid pets so I would guess rental based cats are in the minority.

    If people don't pay the rent then they can be evicted.

    I'm sure Hertz find that people have puked in their rental cars and I know for a fact they get the odd one stolen or involved in a crime and impounded by the police. You need to factor it into the investment decision. No one owes you a living.
    Have you been elected as minister for stating the bastard obvious recently?

    Getting rid of problem tenants is a expensive pain in the backside.

    Patronising remarks about who owes anyone a living aside... it's getting harder and harder to do these days. The tories make you pay tax on legitimate expenses now (the mortgage interest), they're trying to make all the small guys sell up, so their rich mates with big companies can buy up the stock (they don't pay tax on the interest, and they can get discounts on stamp duty which normal working people get fucking hammered on)

  5. #55
    Established TDF Member Chrisch's Avatar
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    Quote Originally Posted by Mark Chase View Post
    You have no idea what your talking about. It is impossible to build "Social housing" in a cost effective way to reduce rents in ANY areas outside the highest rental districts inside the M25 and I suppose affluent other areas in the country with high property prices.
    The cost of land, the cost of materials and the cost of labour make it a loss making enterprise. The AT COST result then needs managing by PAYE staff which costs a load more. ...
    Why does social housing have to make money? I agree there is precious little new land inside the M25 but I think there is brownfield potential. Whether it ever gets done or not is another matter.

    Quote Originally Posted by WFO View Post
    ... The tories make you pay tax on legitimate expenses now (the mortgage interest), they're trying to make all the small guys sell up, so their rich mates with big companies can buy up the stock (they don't pay tax on the interest, and they can get discounts on stamp duty which normal working people get fucking hammered on)
    Yup. And still people vote for them. Probably will be the next government too. Don't blame me, I would rather stick pins in my eyes than vote Tory.

  6. #56
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    Quote Originally Posted by Chrisch View Post
    Why does social housing have to make money? I agree there is precious little new land inside the M25 but I think there is brownfield potential. Whether it ever gets done or not is another matter.



    Yup. And still people vote for them. Probably will be the next government too. Don't blame me, I would rather stick pins in my eyes than vote Tory.
    The costs on brownfield sites tend to be horrendous to develop due to previous contamination hence meaning it is no cheaper than greenfield (a lot of times it is far more expensive). Making the sums add up for social housing is near impossible with high development costs - a housing association need to at least get to a break even point with regards to return on investment over the lifespan of a house.

  7. #57
    Established TDF Member Chrisch's Avatar
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    Quote Originally Posted by Neilwood View Post
    The costs on brownfield sites tend to be horrendous to develop due to previous contamination hence meaning it is no cheaper than greenfield (a lot of times it is far more expensive). Making the sums add up for social housing is near impossible with high development costs - a housing association need to at least get to a break even point with regards to return on investment over the lifespan of a house.
    Agreed, but you must consider that a future government might well not go the housing association route.

    Social housing is something the two major parties agreed upon years ago and after the war they both built council properties as fast as they could. there is no reason at all that this could not be the case at some future point (not with the current Tory shits true but they are about to implode and may not be in power for another 30 years)

    Assumptions are dangerous. Mark has property in Turkey as it will join the EU. I have property in France as I can retire there as an EU citizen. Life often turns out different to what you expect. A big push to build new council houses could be a major vote winner.


 
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