Greed of ‘buy to let’

[LittleLottieChaos]

When did people start to think that they should profit from housing? It all feels incredibly Dickensian. Pees me off when I see housing being listed as buy to let investments rather than ‘here’s a house for a nice young family to live in’. Especially with the market so horribly skewed right now.

It is shocking that people seem to think they have a right to profiteer from those less fortunate by whacking on high rents, that more than cover their mortgages. Legit: you need one house, one house only. Or maybe I’m missing something... or these are genuinely just bad people.

Interested to hear how people justify it? Do you just think, fuck ‘em I want to be rich? Do you not think about the morality?

(I rent but am saving to buy an appropriate house to live in... not to profiteer from)

Thé problem isn't BTLs necessarily (no, I don't own any) but house prices in general. This is a problem of global capital to a certain extent - there is a flow of money around the world looking for somewhere safe where there is also a) minimal risk of losing the entire thing and b) some hope of a return.

There are new developments round us where a significant percentage of the houses were bought by investors in the Middle East and Far East. They will never live in them (or even visit) and they are not rented out. They are retained to give a safe investment in a country where property rights have generally been enforced.

I suppose it started in the 80s, when it suddenly became more desirable to buy a house.
Council houses were sold off, mortgages were 100% and we were paying as much a month to buy a house as to rent it.

Couple that with the fluctuations of the stock markets and loss of pension funds and that's why people prefer to invest in a solid house they can actually see.
Stands to reason that some will want to increase their investment to more than one house.

We rent a house out. We keep it to a really high standard and let them keep their dogs. We charge a fair rent. We repair ASAP and our tenants are happy

My husband doesn’t have a pension so this is part of his retirement planning.

@BeenAsFarAsMercyAndGrand

I love the way posters on MN always pretend that the only possible way of ensuring that the country has a decent supply of rented housing, in good condition, with flexibility for tenants who may move a lot MUST be for the market to be dominated by private landlords.

The above outcome would be better achieved through the expansion of social housing / housing associations and tighter regulation of how those housing associations are allowed to operate. People who want to boost their pension could invest in housing associations if they want. Or in any other form of business.

Basic human needs shouldn't be hoarded and sold for private profit. That applies to energy, water etc. as well in my view.

I actually agree with this. But the argument here are usually in response to someone having a dig at landlords, not the government. So the replies are defending landlords from the claims of greed. Not agreeing with the argumebt that changes need to me made from the top. Its a different conversation.

The problem with charging a reasonable rate for a flat in Central London, for example, is that there are many unscrupulous people who will take on a cheaper rent flat (think about the rare remaining council properties and old-school landlords) and illegally sub-let these. Overloaded councils will then also have to pay through the nose for emergency accommodation for homeless families - often from the very “tenants” who are already making a profit from renting from them.
Obviously the same happens to private landlords: hence the thread on here the other week complaining that the living room of flats on the rental market are often advertised as additional bedroom space to increase the amount of rent they can charge, as otherwise, often, tenants will take on a lodger, and the extra income from them, themselves.
Only a sensible rent cap and consequences for those who try to play the system will resolve this madness, and I can’t see that being a popular campaigning choice for any political party in the near future.

@Housebuyingdilemma

We are about to become accidental landlords. I would really not like the hassle but i cannot afford to lose this much money.

The weird thing is, much though I do understand that some people do find themselves in that situation inadvertently, if I were ever to rent again, I would ideally want a corporate landlord who definitely knew what they were doing. Maybe one of the housing associations who now do market rent properties? It would be such pot luck to rent from a first time landlord, although I’m sure you’re one of the diligent ones.

What used to happen anyway, before 1989, in these “accidental landlord” situations? I assume it just wasn’t an option? I can remember relatives having bridging loans, (they seemed quite a common thing, but I was still at school so no personal experience) but that’s it. OTOH, the whole market was calmer, so people probably didn’t face such high stakes dilemmas.

It’s all too easy to blame Maggie for flogging off council houses, but I doubt that anyone foresaw how house prices were going to soar some time later. I know at least one lifelong Labour voter who was only too delighted to buy the house where she’d lived for 40 years (and still does) at a discount.

Not forgetting that Labour had 13 years in which to abolish the right to buy. But they didn’t - I wonder why? Could it possibly have been because they thought it would lose them votes?

I might also point out that buy to let really took off after Gordon Brown’s raid on pension funds, which made a lot of people want to invest in something safe and tangible, instead, not something that was just ‘on paper’.

Incidentally, council houses were being sold off well before Maggie. A dd bought an ex council house that the former owners had bought in 1971 - for almost exactly a hundredth of what she paid.

@GlitterGiraffe13 Since 1938 farming methods and food production have changed entirely, it is mostly automated so it isn’t really comparable. Also, your food is hugely subsidised by the government through subsidies because it generally isn’t profitable to farm. Farmers would make about £600 on an acre of wheat before costs, the government will give them a minimum of £100 on top, more if they sign up to environmental schemes.

I'm a LL - made the decision to BTL first when PIL split and could not afford a house each. Then bought more for security/pension each time DH or I was made redundant

Private rentals are needed - we are fulfilling a demand and I think we are very fair with rents/service etc. (presuming so as we have a number of tenants been in for 10+ years and tell us we are good LL!)

Yes - we need better laws around it, both to stop poor landlords and to protect good landlords against bad tenants (it's a risk tou factor in but we have had people trash houses, leave without telling us owing months of rent etc.)

However, unless you want the governtment to buy/build hundreds of thousands of social houses, private landlords are needed (which will come out of your taxes, which the govt will have to raise to pay for it!)

There is still a 3% premium on stamp duty for BTL - (@countbackfromten which did not stop during the SD holiday)

Agree some people have no idea how much it costs to be a LL - they just think rent needs to equal mortgage. Completely ignoring all the costs of insurance, repairs, safety certificates, maintenance etc.
Not all LL are greedy so @LittleLottieChaos on that basis YABU

@Petronius16 - don't forget that £100 a month extra they were paying to rent covered them for all repairs, maintenance plus eventualities like boiler breaking etc. Also the flexibility to leave at any time with 1 month's notice. Now they own, they will be responsible for all that plus buildings insurance, so likely that will be more than £100 month anyway

It's a much bigger picture without a 'one size fits all' solve. Needs a good combinations of new legislation and government investment

It's weird to think that imo. Not everyone can afford to buy a house, so if people just bought a house for them to live as you say they should, there will be no house for people who wats to to rent.

I think we need a rental forms to make buy to let less attractive. Rent control and longer tenancy for a start.

@Housebuyingdilemma

We are about to become accidental landlords. I would really not like the hassle but i cannot afford to lose this much money.

I feel much the same, Housebuy, as does the younger relative whom I mentioned previously. We have both inherited small properties which are currently tenanted. They will eventually be sold but at present, they provide decent housing for people not yet ready to buy, the rents are reasonable.

Reforms not forms

I wouldn't mind landlords so much if it was actually possible for everyone to rent, rather than the discriminatory approach they use. No blacks, no dogs, no Irish has become no DSS, no dogs, no kids.

As a dog owner, I've just run a search on Zoopla for properties to rent in my city. There's 537 properties within my budget. When I filter it to "pets allowed" there are FOUR. Two of those don't have gardens so aren't suitable.

So, simply because I inherited a (non-destructive, non-barky, scrupulously house trained) dog from a relative who died, only 0.37% of rental properties are open to me. In reality, it could be that those two landlords rejected me, in which case (were I facing eviction) I'd end up street homeless.

So, I remain in a property with chronic damp where I'm frequently scrubbing mould from the walls because the landlord hasn't got the rendering fixed, despite reporting it for years.

The rental market works about alright if you're young, no kids, no pets, don't mind insecurity, employed full time in a reasonably paid job, not disabled (heaven forbid you need adaptations!) etc etc.

Anyone who falls outside of that very narrow range of people generally gets rejected by the vast majority of landlords.

@GoldenOmber

I don't think people do that first stage of the traditional housing ladder any more, they want an ample family home straight away.

There is less of it, but in large part because first-time buyers now tend to be older and more often have children already by the time they can afford to buy.

This we are looking to become first time buyers, we have rented since 19 year old and now we're a couple in our 30s and have 3 children + 2 pets.

A 1 bed starter flat or studio etc... just isnt suitable for us - we need minimally a 3 bed house (preferably a 4 bed if possible) we arent looking for luxuary but we need the space to fit us all in.

The underlying problem is the fact that house values have increased so much more than anything else - out of all proportion to other investments and wages. So of course people want to invest in property.

We need to look at the reasons why house prices have increased so disproportionately (eg: housing scarcity; the PPR exemption from CGT; mistrust of other types of investment) and fix those. Once property gains are no longer so incredibly inflated, buy to let will fizzle out by itself.

Why do anarchists only drink herbal tea?

Because Proper tea (property) is theft !

They are public services at the moment that is paid for through taxes, so not really relevant to this issue.

If they decide to privatise these institutions then it affects everyone and the rich will be ok and the poor not so, but that’s pretty much how society is in general. The USA is the perfect example of the haves and have nots.

Take dentists now, there aren’t enough nhs places available for those that need them.

Trying to share the wealth is problematic however and has been tried and failed over the years.

I’m not saying it’s fair, it’s not fair but it is the way of the western world unfortunately. Not everyone can get a mortgage so they need to rent or they’d be homeless anyway. Again, I don’t agree with it but it’s not as simple as blaming landlords. It’s down to the fact there’s been hardly any affordable housing built for years!

@BeenAsFarAsMercyAndGrand

It’s all too easy to blame Maggie for flogging off council houses,

Oh but that’s only one of the things she did to upend the housing market, and actually possibly the least significant, although it was huge.

The Housing Act 1988 did away with rent controls and security of tenure for life, of tenants wanted to stay that long. She created Assured Shorthold tenancies instead. Typically six months long, then rolling.

This created the amateur BTL sector.

What’s your alternative?

If rents are fixed low, why would investors invest? If they don’t, then what happens next?

Have you considered whether you might prefer living in a society where capitalism isn’t in place? It sounds like you aren’t really content and you might find it more satisfying to be somewhere more equitable. It must be frustrating for you that you aren’t good enough at your job to get one in an area with cheaper property so you have to stay in London. China and Cuba are beautiful countries and the people are lovely. Would your skills be transferable? Are you good at languages?

@LadyWhistledownsQuill

I wouldn't mind landlords so much if it was actually possible for everyone to rent, rather than the discriminatory approach they use. No blacks, no dogs, no Irish has become no DSS, no dogs, no kids.

As a dog owner, I've just run a search on Zoopla for properties to rent in my city. There's 537 properties within my budget. When I filter it to "pets allowed" there are FOUR. Two of those don't have gardens so aren't suitable.

So, simply because I inherited a (non-destructive, non-barky, scrupulously house trained) dog from a relative who died, only 0.37% of rental properties are open to me. In reality, it could be that those two landlords rejected me, in which case (were I facing eviction) I'd end up street homeless.

So, I remain in a property with chronic damp where I'm frequently scrubbing mould from the walls because the landlord hasn't got the rendering fixed, despite reporting it for years.

The rental market works about alright if you're young, no kids, no pets, don't mind insecurity, employed full time in a reasonably paid job, not disabled (heaven forbid you need adaptations!) etc etc.

Anyone who falls outside of that very narrow range of people generally gets rejected by the vast majority of landlords.

I think that these are often blanket requirements set by estate agents. If you are able to contact a landlord directly you might find that a lot of them are open to one well behaved pet. Some don't even realise their agent is refusing them.

When did people start to think that they should profit from housing? It all feels incredibly Dickensian

Presumably around the time of, or before, Dickens. Based on your second sentence.

However, unless you want the governtment to buy/build hundreds of thousands of social houses, private landlords are needed (which will come out of your taxes, which the govt will have to raise to pay for it!)

I absolutely want the government to build more social housing - it would cost a lot less than the £23.4 BILLION currently paid out in housing benefit which ultimately ends up in the pockets of private landlords. For context, that's 2.9% of total public spending (OBR, 2018-19 stats)

Building or buying social housing would absolutely work out cheaper in the medium to long term - and the government would have an asset to show for it at the end

That was in reply to @LadyWhistledownsQuill

My sister bought a buy to let because she had a deposit, but didn't earn enough to qualify for a residential mortgage. So she got a buy to let mortgage and rents. She had a DSS tenant but the bank made her raise the rent to have enough "yield". So the DSS tenant had to move out. It's not as simple as saying there are "greedy people".