To think we should ban private renting?

Outside of London the equity doesn't really "skyrocket", but yes it does increase. However, I could easily take that same equity and put it in a stocks and shares ISA (obviously up to the limit over 3 years) and could get a similar return tax free, or I could take the same equity and throw it at my private pension to be invested again for a similar if not better return. Many LLs are now selling up and doing that for precisely this reason.

The equity also only holds if the tenants haven't destroyed the property in the meantime. Have a look on Landlords UK Facebook group to see how some properties are left.

You seem determined to be very judgemental over other people's decisions. We don't all go into these things for the same reasons. The reasons I got into this is due to very personal circumstances which I can't go into on a public forum, but I do get fed up of these accusations made with little to no real understanding of what you are talking about.

@justasking111 seems to be existing in an unreal world where living in social housing should be a preferred choice .
Many of us wouldn’t have that choice extended to us as for one reason or other we’d fault to gain enough points or whatever to bid for a home, as we work/have savings/whatever arcane reasons might be applied.

I don't understand what you mean

Well stick to living in social housing and benefit your community.

The equity skyrockets over the life of a mortgage and you know it, or you wouldn't do it.

I wish landlords would stop moaning about how little they make from their predatory habits.

My post related to profit earned from money borrowed. How do you think developments happen? Taylor Wimpey save up before starting a development?
Just what your reply is meant to mean, I just don’t know. But if everyone stopped renting privately, how long would the wait for social housing be? Are empty owned properties going to miraculously morph into housing association owned overnight? Not likely, they’d be on the housing market instead.
(Shakes head).

Then don't privately rent. You can put your name down for social housing and wait.

The fly in the ointment with that is that the homeless will need to hop ahead if their private rental is sold up. Or financial circumstances mean that they lose their home through divorce, job loss.they are of course priority.

Which bit of BTL mortgages are usually interest only do you not understand? The tenant is not paying off the mortgage at all.

In the end BTL mortgages will usually be paid off from the sale of the house.

It would not be profitable in most cases for BTL mortgages to be repayment based.

What?

That’s also true even if ‘publically’ owned. Where do you think the money would come from?

Oh boo hoo.

The asset is the profit, the property that a tenant pays off for you.

You effectively pay 60k for an entire house, and wanting a monthly profit on top is just insanely greedy.

Personally I think a lot is the fault of developers building housing that people don't want or can't afford.

There's a large new build development in my city which is mainly empty and unsold because nobody wants to pay half a million for a house in the most notorious crime-riddled area of the city (this is an area of the country where that type of money usually buys you a lot of house). They then make special discounts, but only for certain groups, so first time buyers can get discounts, "key workers" can get discounts etc. Why not just make them more affordable for everyone?

There's a reasonably priced family home going in cardiff. The agents are marketing it as a possible hmo. That is wrong in my eyes. It's just a four bed.

We have to stop thinking of housing as income for some and view it as a necessity for people. I blame capitalism.

So what would happen to uni students? They need to rent privately S they would not qualify for social housing. Universities often don’t have enough dorm rooms for students past their first year unless they have special needs.
How about staycations in AirB&B type properties. With your logic we could not do that type of holiday ever again.
You are being totally unreasonable.

This whole thread is wild.

We're renters. I have never bought simply because i didn't want to give up everything i had (horses) to be able to save up up for the type of house i want to live in.

I'm 42 now, still no intention to buy, still no deposit saved anyway!

I like the freedom of renting, i can be picky about what we want and where and no less than a 3 bed (main bedroom, office, and guest room) i can imagine it would be horrific trying to get what we want from a HA, we'd have to make do with what we're given, and probably no more than a 1/2 bed which wouldn't suit us at all.

Yeah because you are being subsidised by other people

Yeah but if they aren’t buying the houses where will all the housing association people live? They have to buy all the houses

Oh and coming back to those figures.

Say our hypothetical renter wanted to buy the £200k house they've been renting. In all probability they don't have 30% deposit. They probably have 10%. That means they need a mortgage of £180000 to buy the house.

Even at a lower interest rate of 4.5% (and remember, this could change significantly over 25 years - back in 2006 when I bought my first house interest rates were around 6.5%), they'd have repayments on their mortgage of £1000.50 pcm over 25 years. They'd then need to find the money themselves for all the ongoing jobs and replacement of things as they get worn out. These are all jobs that fall to the LL as renters.

Even if that had the same equity in as the LL (30%) to start with, their monthly repayment would be £778.17.

All this suddenly makes the £950 they were paying in rent look not quite so bad after all.

Sorry but I find this suggestion not only utterly hilarious but in reality it would be totally unworkable! What is even more ridiculous for me and my political 'peers' is that the majority of people when asked if they would like to see a 'socialist' government in power always act as if that's the most horrendous suggestion they've ever heard and the answer is a resounding NO!! 🙄

Sorry, cross post. I was just covering that.

I for example last month had to pay out £500 for a new oven (to replace a 2 year old one that the tenants broke), £400 to get the hedges trimmed in the garden, £120 for a gas safety certificate and boiler service. One tenant was 5 days late paying rent, which meant I had to cover costs from my savings account.

So tell me again how much profit we are making and rents should be controlled?

The caveat in that calculation is that I've not allowed for the 20% tax credit on the mortgage interest. However, that would still only bring the total after tax to £104 per month and that doesn't include agents fees, safety certificates, insurance, backup to cover void periods etc etc.

@PocketSand, cross post. They can't! Hence why tenants are complaining of poor standards of maintenance.

Add all the other costs! I have to factor £3000 a year at least for decorating, new bathroom and kitchen every 6 to 8 years, new boiler, roof repairs, window replacement.

Add having to put money aside for potential non payment of rent, court fees etc...

There's insurance, rental agents fees, gas, electric, EPC certificate etc...

Honestly, it's unbelievable how clueless the average public Jo is. Why do they think so many landlords are selling? It's no longer profitable at all for the professionals who happen to have one home to rent. The government has made sure of it.

@Verysmalltimelandlordi have not checked your figures but how could a landlord I those circumstances afford maintenance on the property?

Ok, so to break down some costs.

Here is an example.

3 bed house worth £200k. LL has 30% equity (a common minimum for a BTL mortgage), so they've put £60k of their own money into the house. They get a BTL mortgage to cover the rest. 5% interest is not uncommon at the moment, so they are paying £583 per month in interest.

The charge £950 per month rent, all of which they pay tax on because mortgage interest is not a tax deductible expense. A higher rate tax payer is paying 40% on that £950 so that's £380 they are paying in tax, leaving £570. Their mortgage payment is £583 per month, so they've got a loss of £13 per month.

Does that look like such a great return on there £60k investment? That same £60k would earn them £200 per month on a basic savings account at 4% interest.