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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Frugal neighbours, 7 houses no intention of selling ever

206 replies

Mrspitt3 · 15/10/2017 09:58

My neighbour and wife live in a 3 bed modest semi, is in late 50s, has been really frugal (still has 20 year old carpet tiles in kitchen etc) all their life which I do respect actually, they have always invested in property (totally understand), what I don't get is that they are now retired they have no intention on selling any of the houses and having a really nice retirement even though the rented houses cause them a lot of stress with their tenants, I said to my neighbour a few weeks ago about one particular troublesome property, why don't you just sell it? His reply was "well what would I do with the money?" ...... if they had no intention of selling them/enjoying a nice retirement then I don't understand why you would buy property. I understand they get a monthly income but they still live frugal lives. It feels immoral to me and greedy when they could help the housing market by selling the houses. AIBU?? Have I missed something??

OP posts:
Original poster
Mrspitt3 · 15/10/2017 18:24

Come on then titchy!!

What would happen if the gov announced tomorrow that from 2020 anyone that has more than one house in the U.K. Is taxed I dunno a crazy percentage that makes owning a second home or buy to rent unprofitable?? What would happen in your opinion??

OP posts:
Agustarella · 15/10/2017 18:30

It would be great if people could have the peace of mind that comes from being frugal and prudent and all that stuff, without rent seeking off other people. Likewise it makes me a bit anxious when people have very extravagant lifestyles and possibly can't afford it, though it's not my business. It feels as if people with decent disposible incomes today have gone to extremes of either predatory, parasitic miserly behaviour (Let's call the BTL spade a spade!) or ostentatious 'keeping up with the Joneses' spending on holidays and nightlife. I wouldn't want either of these lifestyles tbh, even though more money wouldn't go amiss!

Agustarella · 15/10/2017 18:33

Oh, except the rentier neighbours don't have peace of mind apparently. Maybe they would sleep better if their consciences were clearer!

PinkFlamingo888 · 15/10/2017 18:34

You're not being unreasonable. As someone who is of a generation that is struggling to get a mortgage and find somewhere to live, people that buy to let really annoy me. I understand that it's a good source of income and people to need to let houses or else people wouldn't have houses to rent but when they clearly don't need 7 properties it would be polite to allow people a chance to buy at some point.

Ermm · 15/10/2017 18:34

That’s basically just happened OP. What is likely to happen is that there will be a greater shift towards rental housing being owned by large corporates (predominately build to rent - already happening a lot in London) or the significantly wealthy. And probably increase in rents and reduced investment in upkeep and maintenance of rental properties. For sure there will indeed be cases where a property will be bought by a homeowner rather than a landlord - but very unlikely to have a significant impact on prices overall. Nor on deposits required - don’t forget availability of financing is a massive factor in house pricing - its not just supply of housing (also overall wages etc). But as I said, its a complex subject that really can’t be constructively reduced to sound bits.

But you do also really need to think about the importance of the right to own property which lies at the heart of this. State intervention - direct or indirect (ie through taxing) on property ownership is a very significant step and a very slippery step.

All the solutions that are bandied about re housing were tried in communist states if you really want to see how things can play out in real life.

One obvious way to increase access to home ownership is to improve supply (and indeed buy-to-let buyers are often a good source of funds to finance this supply - although it can distort the types of properties built). Planning laws. Crazy. If you want a soundbite.

Cantspell2 · 15/10/2017 18:39

So in their 50's and retired. I would say being frugal has worked well for them if they can afford to retire 10 years early.
They would be stupid to sell their rental properties now. Pay a large chunk of tax on the money then be lucky to find a income bond paying more than 2%.

And the reason why a mortgage is often less than a rental is the fact that interest rates have been kept so low over the last few years. If we went back to the days of 15% mortgage interest rates then it would be vastly different.

titchy · 15/10/2017 18:40

Did you miss last year budget op? The one where stamp duty on second homes was doubled? Hmm

Why do you think removing properties from the rental market will enable people to suddenly buy? It just pushes up rents generally as supply is reduced, thus meaning more and more becoming homeless or forced into over crowding as they can't afford the increased rents.

There is no shortage of property in purchase market in the UK, so extra homes for sale will have negligible effect on sale prices.

RosiePosieRosie · 15/10/2017 18:41

YANBU

Original poster
Mrspitt3 · 15/10/2017 18:50

I know about the stamp duty but is it resulting in landlords selling off their properties? As a country don't we want people to aim to own their own homes rather than renting their entire life then need to be supported by HB in old age? More houses available to buy would surely bring down house prices and make owning a home an option for more folk.

OP posts:
SleepingStandingUp · 15/10/2017 18:50

less private tenants = more houses available to buy = cheaper house prices

But even with cheaper house prices, not everyone can afford to buy. A 2 bed by me is about 150k. It would be just as unfavorable at 100k. Or 75k. I'm a full time carer, my husband works full time but doesn't earn enough to get a 70k mortgage. By your logic that's just tough look because you wish you had paid less for your own home?

Ermm · 15/10/2017 18:58

Yes it has led to some landlords selling off their portfolios and some less new buy-to-let purchases. You will note that the housing affordability crisis is not over.

And if you are wishing for lower house prices have a bit of a ponder on that - what about all the current homeowners many of whom have mortgages based on the current level of house prices. What do you think happens to their financial lives if house prices go down?

There are no easy solutions. That might not be pleasant to acknowledge. But it is unfortunately the case.

JoanBartlett · 15/10/2017 19:01

It is morally good to rent out properties. The fact some people on MN don't agree with me doesn't mean they are right. Loads of people don't want to buy and never will do. Plenty move around all the time or just don't like the idea of owning or want someone to have to fix the boiler if it breaks or want the ability just to up and move abroad and to different cities or are in jobs where they are moved from place to place. There is nothing wrong with people buying a property for others to live - I say good for then and you are heroes of the nation.

Original poster
Mrspitt3 · 15/10/2017 19:05

Sleeping I agree some wages are not aligned to affording a mortgage for a lot of people currently and prices would need to drop quite a bit. But even if people have a mortgage longer (cheaper monthly payments) eventually they would own their own home. But yes they would need to have banks/lenders willing to change rules about accepting lower earners.

OP posts:
Efnisien · 15/10/2017 19:06

Leave you something in their will? Hmm and you think they're greedy? ..

Original poster
Mrspitt3 · 15/10/2017 19:09

Efnisen.... it was a joke 😂

OP posts:
Efnisien · 15/10/2017 19:09

Right-ho

Ermm · 15/10/2017 19:11

I really don’t want to be rude or patronising - but do you have any idea how complicated it is to determine the laws and regulations which apply to banks lending policies. Recent tightening of affordability rules have been developed to avoid a repeat of the Global Financial Crisis (including banks are now required to lend less so they are not overexposed) - this is not only to provider broader economic stability but also to protect those low earners themselves.

Again. Complex problems. Needing complex solutions.

Original poster
Mrspitt3 · 15/10/2017 19:14

I wouldn't mind if house prices dropped to make housing more affordable to more people...house prices have always gone up and down. Lots of people end up in negative equity but they would still end up owning their house at the end of the day. I understand the various reasons why lots of people rent currently. But is it in the countries best interest to have the current volume of renters doing so into old age.

OP posts:
Maelstrop · 15/10/2017 19:18

I can't understand why they'd rather hang onto troublesome properties. I'd sell the lot, buy a beautiful house in the country and stick my horse in the back garden. Stress free!

Original poster
Mrspitt3 · 15/10/2017 19:21

Yes fully aware of banking lending rules and how over lending contributed to the crash, but if people can afford rent they can afford to pay off a mortgage. Maybe if partownership was massively improved.... I agree a complex issue with numerous solutions that need balancing.

OP posts:
titchy · 15/10/2017 19:21

But yes they would need to have banks/lenders willing to change rules about accepting lower earners.

I guess you weren't around in the 80s and 90s then...? That plan didn't exactly go well...

titchy · 15/10/2017 19:24

I agree a complex issue with numerous solutions that need balancing.

And yet you still think the problem would be alleviated if landlords simply sold their properties... Hmm

Ermm · 15/10/2017 19:28

LOTS of people go into arrears for rent.

Partownership is crap for buyers.

Basically it sounds like your neighbours have followed a sensible financial long term plan - choosing property as their preferred investment vehicle. Unsurprisingly they find it stressful - because being a landlord is actually quite hard work and not easy.

The only reason why they have the capacity to now (possible because who knows) have a lot of money is because they made all those decisions. And if they hold on then in another ten years they’re going to have even more options.

If they bang on about it all the time I’d totally politely tell them to fuck off though.

Original poster
Mrspitt3 · 15/10/2017 19:32

Titchy
Yes I was people borrowed beyond their means, are you saying that only high wage earners should be eligible to own their own home?

OP posts:
titchy · 15/10/2017 19:33

No I'm saying there is no particular shortage of properties to buy. There is though a massive shortage of properties to rent.