To ask for your experience as a buy-to-let landlord?

[iPaid]

I'm thinking of buying a house or two and renting them out to hopefully fund my retirement in 15 years or so.

Would appreciate any advice or sharing of experience - good and bad!

[cruikshank]

27% of private sector rental households claimed housing benefit in 13/14. Which is quite a lot. I know that mumsnet landlord demographics are generally skewed in that they are all lovely, do their repairs promptly, don't charge market rent and don't make a profit on their properties, so maybe the 1 in 3 rule doesn't apply to them either.

[MrsJorahMormont]

Cruikshank if that is the case then the obvious solution is for more social housing to be made available. Or of course for a decent living wage to be paid. LLs aren't a charity though, even if some misguided individuals would like them to be. And it's generally frowned upon to speak of mass groups of people as being X, Y or Z. There's a thread on here at the minute about the stigmatisation of single mothers. Others about refugees. All your juvenile student rage about LLs puts me in mind of that, like LLs are all some homogenous mass of greed and corruption. The LLs I know are mostly accidental and all very decent, having been tenants themselves.

Landlords provide a valuable service. I rented myself for years and was an excellent tenant with reasonable LLs. We're not all in the SE; there are no guarantees about the value of houses here. I honestly don't think most renters have a clue about the actual costs of getting a rental up and running plus maintaining it to a decent standard. I lived in my house before renting it out and it is much nicer for my tenant than it ever was when I lived in it. Factor in insurance and agent's fees plus accountancy fees and my tenant was getting a bloody bargain.

To be blunt: she would be incapable of getting a mortgage. In the absence of charitable / social housing, private rental is her only option. Well, it was, until she stopped paying her rent. Good luck finding another private LL after that.

[cruikshank]

And if housing benefit was scrapped entirely, I think rents would fall in the long term, but in the short term there would be a shit-load of homelessness and the associated societal problems that our govt has proven itself to be utterly useless in doing anything to alleviate, so I don't think that's the answer. If you want, as a country, to spend less on rent, then make it illegal to charge as much for rent. That is a policy decision that could feasibly be made without making people homeless, so it should be done. Plenty of other countries have rent controls. Ffs, even the US, bastion of the free market, has rent controls, plus much tighter regulation of landlords and better rights for tenants, and the sky isn't falling in on them over there.

[NadiaWadia]

Thanks, specialsubject and Janet. If it was something free-standing, yes, she'd consider doing that and taking it when she leaves. But it's the built-in induction hob. The oven itself is working, but it limits how they can cook, obviously. The agency sent an appliance engineer to look at it a few weeks ago, he confirmed it needed spare parts and he did mention that induction hobs go wrong frequently and are very expensive (4 times the cost of an ordinary gas hob, I think he said). So I expect that is why she is balking at the cost of a repair, and the letting agents are now ignoring them.

He also checked the washer dryer (not working either) and was proposing to fix that too (again spare parts needed, so maybe an expensive repair too, especially with the agency mark-up on top?). The landlady has chosen instead to replace it with a cheap machine which washes only. A bit annoying, when they have no outside space to dry anything!

[cruikshank]

I don't see how saying that private sector landlords cost the country ??12 bn a year, when they do just that, is stigmatising them unnecessarily.

I agree that the answer is to build more social housing, but just pointing out that this privatisation of housing provision, removal of rent controls and scrapping of security of tenure has been a disaster in both societal and economic terms should surely be a fairly uncontroversial position?

[sproketmx]

I wouldn't recommend it. I never intended to be a landlord but when the market crashed we were left with a flat too small for our growing family that wouldn't sell for what we payed for it. We sold our cars and bought old bangers, sold our most valuable possessions and scraped together a deposit for a house that would do and rented the flat out. The first couple we had in fought constantly, police out, complaints from neighbours and wrecked the place which we had to pay to get them out and put right. They seemed great at first too. The next girl was nice but had to end the tenancy at short notice because she got a job on a cruise ship so we had to cover the mortgage and bills until another Tennant was found. This one seems ok but we have had a few issues with the boiler and security door on the property and he works a lot so getting him to be in for workmen is a task. It's not as easy as it's made out and if I could get it sold I would.

[MrsJorahMormont]

Perhaps next time you could avoid opening your argument with 'You fuckers.' That's a fairly controversial starting point. As is the statement that private sector LLs cost the country blah blah blah. I have no doubt some LLs might be driving around in gold plated Ferraris, paid for from public money. Tragically I'm not one of them!

[cruikshank]

Ok, so calling people fuckers is maybe a bit rude. Not as rude as getting ??12bn a year every year off the state though which, incidentally, is not controversial at all since it happens to be true.

[MrsJorahMormont]

No, it's not true. Some LLs are getting money from the state. Many others are not. I haven't challenged your 12 billion figure as I'm trusting that it's from a reputable source. I also assume that most of those costs are for housing in expensive or desirable areas in the SE / cities.

A lack of housing is the cause of that cost. Until a government comes along and tackles the issue of building new kinds of accommodation that isn't going to change. We're becoming a nation of solo occupants, split families and retirees. The existing housing stock is totally unfit for purpose. It will take real vision and imagination (as well as shitloads of public money) to change that.

[cruikshank]

It's not just a lack of housing though - it's thirty years of failed housing policy starting out with right to buy, continuing with scrapping rent controls and removing security of tenure effectively meaning that landlords are pretty much unregulated (as they can just evict a tenant that asserts their paper rights), and continuing again with a slow-down in both social and private house building, all of which was done with the express intention of encouraging 'investment' (ie speculation) in what has become known as 'the housing market'.

It really does go that far back - in policy discussions during the tail end of the 1980s, that is what the Tories wanted to happen - for the private landlord sector to take over from the state in terms of the provision of rented housing, and to encourage more landlords into the market through the removal of tenants' rights and making them easy to evict. It wasn't an overnight event - the housing crash of the early 1990s was what really spurred it on, which was obviously something they didn't foresee - but that was the intention.

Now that we've got here, we can see it's a complete disaster - 1 in 3 private sector rental properties are of a substandard condition, almost 1 in 3 private sector tenants claim housing benefit; ie we have poorer quality rental stock that collectively costs the country an arm and a leg in what is effectively a state subsidy far outstripping the amount of money it would have cost to have today's tenants in decent, affordable state-owned accommodation.

I don't really know what the easy answer is, because as you say it would cost a lot to reverse the entire mess, and in the meantime we're spunking ??12bn a year on effectively nothing and the private sector landlords are collectively the main part of the problem, benefit as they do from light-touch regulation and the unquestioning hand of the state. But the hard answer, and the one that would reap long term benefits, is as you say to build more state housing. It would cost more initially, but the rent receipts in what is pretty much perpetuity would more than cover the initial cost many times over during the life of the properties.

[ReallyTired]

It's not that easy to build more housing. There is no land to build the houses on! As a country we need to be a bit less London centric. We need more jobs in other regions of the country. We need to encourage people to populate the country more evenly. The UK certainly has room for more houses, we even have room for asylum seekers, but not in London.

[Sansoora]

We think only once a month a house comes on the market that hasnt be bought prior by a ll.

Ah so you only think you miss out on buying because of other purchasers who BTL? Its not that you know for a fact?

[Maursh]

The issue is not one of land or housing. We only have buildings on 6% of UK - 10% of England. There is plenty of room to build. Also the housing shortage is a very well perpetrated myth owing to a misprint in some official publication about 10 years ago - a bit like spinach having lots of iron in it!

Here are some real numbers (ONS): the number of dwellings to households is in surplus by about 1mln (c28mln dwellings v c27mln households). The real issue is one of distribution. The number of private rentals has doubled (about 2.5 to 5mln) over the last 10- 15 years. Yes many of these are "accidental" - but this is the whole point. In 1994 to 1996 you would have had to sell for a loss and take the hit. Cheap lending rates and the ability to take out a second BTL have all contributed to the fiasco that we have today. There are no longer structural transactions in the market because "renting out" rather than selling has become the choice for many. This is a disaster for the economy - so much money is tied up in property that it is not being invested in real enterprises.

[Andrewofgg]

A rent cap?

That worked well under the Rent Acts, didn't it?

As for immoral: if it's immoral to buy-to-let it's immoral to sell to a buy-to-letter. Is anyone suggesting that if you have a house to sell you should ask the buyer's intentions? Of course if I was selling I would be sending someone round to the EA posing as a residential buyer to make sure my house was not on some special list which you had to pay to see!

What we could and should do is break the power of the councils and the NIMBY groups to build more, and put new build under a covenant against BTL - it would not be entirely enforceable but if mortgages were made void if the covenant were broken the lenders would be hot on the case!

[specialsubject]

We only have buildings on 6% of UK - 10% of England. There is plenty of room to build.

of course there is, if you don't want food and don't require utilities, water, transport, education and healthcare, none of which are available in fields, forests or up mountains. Anyone not in a bubble might notice that all these resources are already grossly overstretched. We need to sort that out by all paying more tax (and having it spent correctly)

as for those objecting to landlords taking HB tenants - alternative suggestions? Do you also suggest that those on benefits are not allowed to buy food as the supermarkets will also make profit on that?

and boring old facts again - my agent will not allow any tenant to rent somewhere if the rent is more than 40% of their income. I did have a prospective HB tenant (she didn't take the place in the end, chose somewhere else because, get this, she had choice) so the idea of rent being more than 2/3 income doesn't stack up even if it wasn't insane.

but that is cruikshank, one of our regular ranters. Logical thought not required because that ruins the bleating.

[ReallyTired]

"We only have buildings on 6% of UK - 10% of England. There is plenty of room to build."

The pressure of housing is in the south east. There are areas of hull, county durham with empty houses.

"What we could and should do is break the power of the councils and the NIMBY groups to build more, and put new build under a covenant against BTL - it would not be entirely enforceable but if mortgages were made void if the covenant were broken the lenders would be hot on the case!"

I think that having new right to buy properties with a convenant against private buy to let would help. However many investors would just keep such properties empty. The easiest way to prevent right to buy properties becoming buy to let is to only sell the leasehold. If a leaseholder breaks the terms of the least then freeholder can take pocession. (Ie. someone can lose a 200K flat over not paying the service charge.)

[londonrach]

Sansoon its what the ea tell us!

[Maursh]

specialsubject and ReallyTired you have both quoted me out of context about 6% of UK being built on whilst ENTIRELY ignoring the thrust of my post.

There are 1mln excess properties in the UK.
We don't need to build more - if we did, we have space and we could
The housing shortage is a myth

[JanetBlyton]

I would certainly favour a change in law to require state bodies to sell unused abandoned buildings to individuals to provide housing. I applied to buy an unusual loo for conversion in London and they wouldn't sell. It's been unused and empty for about 8 years.

As the stats show above fewer than a third of landlords take housing benefit tenants so HB is not the whole issue.

There is absolutely nothing morally wrong with landlord charging market rent any more than if a mumnetter working in a cafe charges market prices for the tea served there or an accountant charges market rates for their services. That is how the economy works.

[specialsubject]

sorry, when a post starts with a totally incorrect statement I don't bother to read the rest as I assume it will be all the same.

bringing empty properties back into use is a great idea. Outlawing buy-to-leave (Gosh, wow, a LONDON problem) is also a great idea.

too simple for our succession of asleep-at-the-wheel governments.

[Maursh]

Which part of the statement was incorrect? [hmmm]

[specialsubject]

nadia just found your post amongst all the noise. And I was of course busy polishing the Ferrari.

a hob is an essential. I think this would be worth raising with environmental health as that's as bad as no heating etc. New legislation means that a landlord can't evict while such a complaint is in force. (assuming your daugher wants to stay, of course!)

washer-dryers are notoriously useless, so providing a washing machine makes more sense but in a property with no outside space, not providing a dryer is asking for damp and mould. So your daughter could point this out.

[JanetBlyton]

yes, she must get them to make the hob work. i deliberately replaced ours after 30 years this year with a traditional one as I think those induction ones are useless.

[specialsubject]

there's another MN hot potato....I got rid of ours and put gas in!

this would be another option for the landlord as there clearly already is gas at the property, and adding another item to the annual inspection list doesn't cost much more. Also more attractive to the tenant.

[cruikshank]

so the idea of rent being more than 2/3 income doesn't stack up even if it wasn't insane.

What is insane about it? People only qualify for housing benefit if their rent is more than 2/3rds of their income. Do you think I'm lying or making stuff up or something?