I should have the right to buy from my my to let landlord after 6 years here

[chocolatekatie]

No government will ever do it as loads of them are into buy to let hence why they do all they can to prop up the bubble.

My landlord thinks he's some businessman doing me a favour by letting me live here. Actually he's the problem, he just had money so can afford to buy up property - push up the price and force people like me to rent.

Best way to make housing more affordable is to build more houses and not allow foreigners to buy as investments. Also, businesses need to be more spread out across country. Too many are concentrated in south east pushing up prices in this area whilst large parts of the country have affordable housing but not enough jobs.

I think we covered why you can't buy a similar house- deposit.

So presumably the landlord has paid the deposit on this house.

Therefore if you want to be equivalently arsy as the OP, the landlord is subsidising the OP by providing her with a more expensive home than she can provide herself with. And paying tax for the privilege. In fact, if this landlord has earned the income by which he/she has purchased the btl house, he/she has already been taxed quite a lot on those sums.

I wouldn't live in London if I was struggling to buy. Its one of the most expensive countries in the world - why would you arrange your life like that? I have friends in quite well paid jobs in London, in their thirties, and single, and they sort of quietly accept that unless something drastically changes in their lives (such as meeting a husband and even then...), they will always be in rented property. But they get the consolation of living in London, the life that it offers, the jobs they couldn't find anywhere else, and so on.

Being a buy to let landlord isn't the licence to print cash people think it is.

Let me explain with an example.

I inherited a third of a nice terraced house after my dad died in a very rentable area. I also inherited some cash. House was valued at 140k. Can't quite remember how much cash there was but iirc if I used all the cash I also inherited plus some savings I would have had a short fall of about 30k. So effectively Id have put up 110k cash and needed another 30k.

Rental would be £550 a month.

So a 30k mortgage would be about £200 a month. Then paying 10-13% to a letting agent depend on package so you lose £50-£70 a month. Alongside one off fees of finding someone (£600). Then building insurance and landlord insurance. Oh and then tax.....which is on the £550, not the profit.

I figured out Id be left with maybe £70- 100 a month. So that would need to be saved for repairs, so could just be small repairs but who knows maybe one year the house needs a new roof. Professional clean at the end of a tenancy.

That's without thinking about the risk of void periods, defaulting tennants. And of course if you do need to sell for any reason there's the risk of capital gains tax if there is a profit. Or at least legal fees and estate agent fees.

Funnily enough I decided it wasn't worth the worry and we sold the house instead.

Now if the law was changed so after five years someone could could buy my £150k house for £125k Id be mightily pissed off if I was a landlord.

Foreigners barely buy enough houses for is to worry about it.
Chandler- I agree with you re London and in my experience most people accept they won't be able to buy there or buy in a horrible part. The rest move out and commute.

However the rest of your post is absolute nonsense. How is a landlord subsidising the tenant? It's very unusual to rent a house for less per Calendar month than the mortgage would be

Diamond However the rest of your post is absolute nonsense. How is a landlord subsidising the tenant? It's very unusual to rent a house for less per Calendar month than the mortgage would be

See VivaLeBeaver's post above.

That's on a tiny mortgage. Say on a more typical example of a btl landlord putting down a 15% deposit of a £250,000 house with 3 bedrooms in a city in the UK. A very rough suggestion of costs (not including purchase costs of stamp duty and legal costs):

Mortgage: £1300 per month.

Agency fees: 10-15%
Start up costs - gas safety certificate, EPC, private landlord registration, drawing up lease, tenant checks, tenant move-in fees, etc. - up to £1000 as a one off every time the tenant changes or every year
If in Scotland and an HMO - HMO license every year about £350, plus complying with the changing standards - budget a £1500 per year plus fire extinguisher checks annually plus replacement every 5 years. Recently Edinburgh introduced a requirement that all HMOs had to be carpeted - so as an unexpected one off cost of covering hardwood floors, maybe another £1000.
Say you rent each room to unrelated persons for £500 per month - doubtful you would be in profit but maybe, just maybe for two months of the year, you might make a couple of hundred.

That's not including costing your own time and unexpected repairs of course! Complying with the necessary paperwork takes up a lot of time - especially since a landlord recently, whose agent got the postcode slightly wrong when registering the deposit was fined the entire deposit, in one of the most unfair decisions of the courts I can recall hearing. It also means that landlords are running a proverbial knife-edge, bearing the risk of massive fines (more than if they went out drink driving and killed someone) for small clerical errors through no fault of their own.

If you do make a few hundred, remember that if you are a higher rate taxpayer, paying the mortgage out of your already taxed income, you will be charged 40% on that. Although you can claim a wear and tear discount of 15%.

Of course, there may be those who were gifted properties, or lots of money, but many small btl landlords seem to have jobs. Perhaps we should have a public register of everyone's financial resources, so we can all decide whether they are worthy enough or not (some countries do - e.g. Norway, Denmark - your entire salary and income and tax payments are published nationally, online, in public).

What you've described isn't subsidising.

Diamond What you've described isn't subsidising

My point is that its as far fetched to say many landlords subsidise their tenants, as it is for the OP to suggest that her landlord is a "problem", that he "forces her to rent" or that he should be forced to sell his property to her. Actually, make that not quite so far fetched.

But as a few people have pointed out, housing associations may well be forced to do exactly that, so it's not that far fetched? It may well happen

There will not be a law change to force private landlords to sell properties at a discount to tenants in England.

Scotland has some very scary proposed property law changes but that is a different kettle of fish.

My daughter made nothing on her London flat when she let it out - rent only just covered costs including letting agent costs £2k, new boiler £2k and various other expenses. Tenants seem to think landlords make profits. Most make a little over 3% in good years with no empty or void periods. Now prices can go up but they can go down too (we sold two flats for 50% less than we bought them for in London - 1990s crash) so it's a risk to buy and let out.

Are you saying that because you know housing associations will be successful in taking the government to court to prevent them being forced sell their assets to tenants lotus lights? Or are you referring go something else?

Jeez if they allowed that my LL would be broke.

I'm in Scotland and rent a 1 bed flat for just under £400 a month. My LL bought it for £90k 8 years ago. An identical flat across the landing sold last month for £75k so were he to sell my LL is already £15k down. He'd be thrilled to have to sell to me at a discount I'm sure

If landlords aren't making profits, would it be rude to suggest that they have an unprofitable business model, and should seek an alternative business?

Or are they wanting the double - capital appreciation over time (low-risk compared to many investment vehicles) and profits today helped by tax relief on mortgage fees, mortgage interest, letting agent fees, maintenance and repairs (such as new boilers), insurance and many other things? Jam tomorrow and jam today?

Interesting stat from the Census I just stumbled upon: The proportion of owner occupiers among those aged 25 to 34 has declined from 58 per cent in 2001 to 40 per cent in 2011. That's quite a shift.

Jessy If landlords aren't making profits, would it be rude to suggest that they have an unprofitable business model, and should seek an alternative business?

Probably more uninformed. Property is a long term investment - most mortgages are for 20-30 year terms, so it will often depend on which stage of being paid off a particular property is. And it will also depend on whether a landlord has a job and is a higher rate taxpayer, because extending the mortgage to cover maintenance costs, for example, then makes sense, rather than using taxed personal income to pay for it.

I would think for most small private btl landlords, paying off the mortgage by the time they retire is a key goal, and that its to add to unreliable private pensions in many cases. In those terms, with property being a relatively easy to understand investment, and one which you can manage yourself, rather than a fund manager, it makes a lot of sense.

Most businesses are unprofitable at the beginning anyway - a lot of them are set up as tax avoidance/investment measures with the hope of being sold at some point for a large profit. Very few businesses suddenly start making excellent profits from the start. If people simply gave up and started doing something else because their business wasn't suddenly a miraculous road to riches, very few people would ever run a successful business.

I think most BTL landlords take the risk of no profit now but capital gain in the long term. I don't think many expect jam today and jam tomorrow and are happy with the jam tomorrow but many people think they are just greedy landlords who are making heaps of profit on a monthly basis and benefiting from capital gain.
If you make landlords sell to tenants at a discount there would be no jam today and little or no jam tomorrow which would indeed be a very poor business model and not one that many people would invest in which ultimately means less rental
Properties available for tenants to choose from. I reckon there are some people who would be happy with no jam today but some jam tomorrow and would just buy property and leave it empty rather than risk having a tenant who will take a portion of their jam tomorrow.

Most buy to let landlords own one house they live in and one they let out. Very few have more. Many have only one property including a lot of mumsnetters who have to move city, rent there and rent out their one owned place - what you might call the accidental landlord.

So my daughter who bought, let out for 2 years and lived with friends and at home until her pay went up enough so she could get a residential mortgage yes took the risk property prices might go down. They are down 1.6% in the last 6 months in my bit of London this year for example.

"Are you saying that because you know housing associations will be successful in taking the government to court to prevent them being forced sell their assets to tenants lotus lights? Or are you referring go something else?" I would need to refer to the legislation when the Tories draft it to know if it is likely to withstand a legal challenge. The state can often do a lot of what it likes from compulsory purchase to all that nationalisation (in effect asset confiscation) we had in the UK in the past.

But not all LL are BTL

My LL bought the flat I live in as his first home. He lived here 2 years then got a job overseas. The house prices were on the way down by then and he didn't know how long he'd be away so he rented it out. My rent covers his mortgage and the letting agency. My rent hasn't increased in 6 years because he just wants to keep things ticking over and would rather I stayed here.

My sister has BTL properties, two I think.

She does it all on those funny interest only mortgages so pays less but then is relying on property price rises to pay it off at term. I couldn't sleep.

Anyway she breaks even now, and that's with the cheaper mortgage type. She says she's hoping by the time she's 60 she will be able to sell one maybe both. Have made money to pay the bank back and some left over for a pension. Or maybe enough to keep the second house and have the rental then as income. But she makes no money now.

So again, if she was forced to sell in ten years time how would that be fair to her?

Thanks Chandler for expanding on the point I was making. I apparently underplayed the irony.

This is one of the problems with BTL - not the people who treat it like a business.

Annie, that's what the 'London is shit' people can't seem to get.

I'm the opposite to you in many ways. I'm an immigrant. London was where my skills were in short supply and I was sponsored to work here. I've built my entire life here - my support networks, my surrogate family. I have no family in this country and soon to be two small children. My DH is British but his family are about as supportive as a cheap maternity bra. I absolutely rely on the support system I've built, both in practical terms and for my emotional health.

Fortunately I was able to buy a flat, and then a house, helped both times by extremely fortuitous timing, skills the market happens to value, and a good dose of luck in the life lottery. So I have a modicum of security here.

Plus, London is a damn sight more welcoming to immigrants than other parts of Britain I've encountered. And yes, I'm counting people who say 'oh, but you're not one of those immigrants' in that evaluation.

YABVU.

We need a private rental sector as there are many people who are not ready to buy even if they are able to. Having a right to buy would mean that many landlords would sell or evict their tenants every two years. People with poor credit scores would struggle to find housing.

We need to get people to move to the regions where prices are a bit more sensible. The rent trap is a London problem.

has the OP ever come back to discuss if any of the idea's presented were informative?

Have to say, I do feel sorry for all of these poor landlords. It must be sheer hell owning more property than you have use for yourself and taking other people's money that they've worked for to do so. In fact, it's not just other people's wages, is it, but also £12 billion every year in housing benefit that they're raking in as well. And for that (imagine!) there are even some laws that give minimal rights to tenants too. Of course, you can always evict them any time you like, but it's a terrible thing that the provision of shelter is regulated at all.

So I'm glad really that a thread that started out about what a fucking shit position a private sector tenant is in and that highlighted the hypocrisy of right to buy not applying to that private sector tenant has turned into a thread about how hard it is to be landlord. My heart fucking bleeds. Truly it does. After all, we all know that landlords up and down the country, taking advantage of a sector that is about as tightly regulated as cockle-picking, had guns held to their heads and were forced, forced I tell you, to get private individuals and the state to pay them for providing shelter. They are all practically Mother Teresa and I salute them.

Communism really does not work well in other countries. Yes, it's unfair that some people are born with advantage or can earn more money etc. Countries like Russia have housing issues as well. Communist countries have different fat cats and there is no prospect of anyone owning anything.