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)

I’m currently selling our house. It’s a classic FTB type - small and cheap! - but a lot of the interest was from investors. From 200 miles away. Every FTB that viewed (three of them) said that most of the time they couldn’t even view a house as it had been snapped up hours after being listed, and I have no doubt it was cash investors.

Where I am an entire block of 45 one and two bedroom 'first rung on the ladder' type apartments was sold off-plan with 8 hours of going on sale. So either each set of genuine FTBs went from walking in to the sales office to signing on the dotted line within 10.6 minutes, or BTL investors who likely don't even live here snapped them up in bulk. It's insane.

@FrangipaniDeLaSqueegeeMop

Oh FGS, not everyone wants to buy! Renting works perfectly well for many people, the attack on landlords is so tedious and illogical.

Yes not everyone wants to buy. However a large number of people do, and are unable to due to the demand from BTL investors pushing prices so high.

@blueangel19

Invest not incest

:-)

I do not understand why it is anymore unethical than earning a large salary and spending it on designer clothes and holidays rather than donating it to the lower paid.

Question: given that renting is far more common and affordable in other parts of Europe, what are they doing that we aren't?

Letting a property as such isn't a problem in itself. Its how its done and why there are market issues.

Next thing you will be saying that shops should be making profits, or trades people should not just charge for materials!

There have always been private landlords. Some are awful, some are good people... as in the rest of life.

Someone at DH’s work earns a good 50k at work but also owns 10 houses on the side which he lets. He buys them for 20-30k in impoverished towns, spends about 10k doing them up then rents them out for £600+ a month each. He’s loaded.

@OneInEight

I do not understand why it is anymore unethical than earning a large salary and spending it on designer clothes and holidays rather than donating it to the lower paid.

Quite.

And how footballers get paid millions upon millions to kick a bit of leather about on some grass ultimately, when there are people living on the street.

I think there’s something more unethical about this than someone buying an extra property as an investment.

You are wrong OP.

I saved very hard at a young age to buy a flat that I have rented out for many years. That flat is my pension / my kids uni fees / my savings so that I remain independent and do not have to claim off the state.

How come you never did the same?

@RedToothBrush

Question: given that renting is far more common and affordable in other parts of Europe, what are they doing that we aren't?

Letting a property as such isn't a problem in itself. Its how its done and why there are market issues.

Having really expensive 9rooerty rents. I've rented in both Holland and Germany, cand anything near the popular city centres (Munich, Berlin, anywhere in the Randstad) is extremely expensive. Think 1200 euros per month for a tiny studio flat in Utrecht, not even a major Dutch city. And having to spend your life on kamernet or becoming best friends with an agent because properties go so quickly. Munich is much worse - I ended up living in a high rise 20k out and even that took weeks to pin down and responding to ads as soon as they went up. At least there was an s bahn line to commute on though.

I rent out a home to a family that I know for below market rent. I do this because I know they will look after it. In the next few years I hope to buy another house to rent out again to a family for below market rent. As long as I have enough to pay the mortgage, cover the tax and any repairs, with some left over to pay back the equity I'm happy with that.
However I do know there are some very unscrupulous landlords out there and unfortunately estate agents are pitching to them as they know they will have the funds to buy.

@ImInStealthMode

I’m currently selling our house. It’s a classic FTB type - small and cheap! - but a lot of the interest was from investors. From 200 miles away. Every FTB that viewed (three of them) said that most of the time they couldn’t even view a house as it had been snapped up hours after being listed, and I have no doubt it was cash investors.

Where I am an entire block of 45 one and two bedroom 'first rung on the ladder' type apartments was sold off-plan with 8 hours of going on sale. So either each set of genuine FTBs went from walking in to the sales office to signing on the dotted line within 10.6 minutes, or BTL investors who likely don't even live here snapped them up in bulk. It's insane.

A lot of properties are sold to overseas investors who neither live in them nor rent them out. They're just left empty. Whether it's for long term investment or somewhere to launder their money. Same with abroad in the Med. There are entire blocks of holiday apartments in Cyprus which are empty and gathering dust, mostly owned by wealthy Russians.

I feel like the discussions on Landlords are often very South/ London centric, however people forget that Landlords in more deprived areas can fill a genuine need/ shortfall from the council with no adverse effect on the local buyers market.

A family member rents out a couple of properties in the North of England in an area where there is significantly more housing than people wanting to buy, property can sit on the market for years and sell for very cheap. She rents mainly to those on housing/ disability benefits and the returns are pretty low to be honest. it brings in a bit of extra income but I wouldn't say it was greedy for what she has to put in in maintenance and upkeep.

@NoBetterthanSheShouldBe

I don’t think buy to let is bad, it’s not taking homes of the market. Second homes ownership and holiday letting of liveable properties is despicable.

I own a holiday let, a small property I bought with money I inherited after my parents died.

I put a lot of hard work and money into it, and respond to feedback from guests on how I can improve it.

I don't charge a huge amount, and don't make money on a day to day level, any money I earn on it during the summer keeps it ticking over in the winter and/or gets ploughed back into it (improvements etc). In fact last year I made a loss and had had to inject a lot into it from my savings. (BTW I ain't complaining, as that's the only way I've been affected by covid, I'm happy.)

You don't have to stay in a holiday let, noone's forcing you to. I'm not saying that holiday lets are not without their issues, I'm very aware of them, but there are areas of the country who rely on tourism and without holiday lets would not get that custom.

I have considered letting it out as a long term let, but if I did so would rent it at a fair price. To me, it's a long term investment as an alternative to a pension plan. It's certainly not a get rich quick scheme, not for me, there are easier ways of investing my inheritance, I just chose this route.

@Remmy123

You are wrong OP.

I saved very hard at a young age to buy a flat that I have rented out for many years. That flat is my pension / my kids uni fees / my savings so that I remain independent and do not have to claim off the state.

How come you never did the same?

Did you miss what happened since you were young? Property prices have risen far faster than wages. As a result rent takes up a higher proportion of people's income, so there's less available to be saved, but the amount you need to save up has gone up.

Oh, and don't even get me started on the fact that - due to the pandemic - government has banned me from working and and then refused me financial support - I'm one of the 3 million #excludeduk So now my savings have gone, not on the house deposit I intended, but on keeping the wolf from the door when banned from working. As things stand, I'll be lucky to be allowed to work properly from Spring 2022.

What would have happened to your savings if you'd been prevented from working for TWO YEARS and then excluded from the financial support given to others?

Wow @LadyWhistledownsQuill what job do you do that’s banned until spring 22?

Op believes that greed takes the form of owning more than one property

Other people may think that greed takes another form

For those that have a private pension, who knows where or what it is invested in, because it could include property or construction companies

Savings rates have been poor for some time, under 1%

I have a couple of properties that I paid cash, that I renovated. No complaints from my tenants. I comply to all the responsibilities of being a LL & pay my taxes on time

I resent your comment about greed.

Ever worked FT & renovated a property at the same time. It is hard graft !

It’s not so much that there needs to be property to rent, but that people are buying multiple properties ‘off plan’ to rent out - landlords who don’t own one or two rental properties, but one or two hundred.

There are swathes of substandard, overcrowded estates being built by companies who pay their chief execs millions in bonuses, markets being fuelled by government schemes, estates with no proper boundaries between properties, not enough space for parking cars so the whole estate becomes congested and dangerous for children, properties with poor soundproofing so living cheek by jowl with neighbours becomes a nightmare of noise issues. These Properties are bought up by btl landlords who don’t have to live in them so don’t care about the problems.

Also people buying property to rent out as holiday lets - there are parts of Scotland, Lake District, Cornwall, Pembrokeshire, Yorkshire Dales etc where most of the houses are holiday accommodation. This hollows out communities and makes it impossible for people who work in the area, perhaps grew up in the area, to actually live there. This has been particularly noticeable over the last year, people buying up rural property as a bolt hole during the pandemic - not instead of their urban homes, but as well as.

The property market in this country has become so over inflated - bubble has to burst at some point. As soon as property is viewed as a way of making money rather than a home for someone to live in something fundamental goes wrong at a societal level.

@Sunnyfreezesushi

I don’t have a problem with local and responsible buy to let. There are no final salary pension scheme left and people do need to be able to invest. The government have already put in place tax disincentives for buy to lets for individuals (cannot deduct mortgage interest, capital gains taxes have increased etc). The real problem I have is with foreign investors able to purchase (I am not convinced it is all clean money either) and then not pay taxes like capital gains taxes locally because they are resident abroad. We really need to crack down on foreign ownership, that is the main problem. There are far too many empty houses. There needs to be a penalty for that. For example, in Switzerland you pay wealth tax on property owned there plus an own usage fee plus you cannot actually buy in many places if you are a foreigner. We have all these property companies selling to foreign investors constantly who then can leave their property empty and just pay council tax.

Cameron made a start with the ATED, "annual tax on enveloped dwellings" which was aimed at high value properties owned by overseas trusts/companies etc. Currently, it applies to properties valued at over £500k. It would be good to extend the scope to lower value properties.

@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)

Well said, though expect to get shot down in flames. "It's my right" to profit.. etc.etc. Selfishness is endemic now.

@lavieengrenache Whilst I agree that holiday homes have helped push out the locals, there's the other issue that all the "good" jobs are in a few big cities, so kids go to Uni and don't go back to their home towns due to lack of decent jobs.

I do it because it’s a legal way to make money that suits my lifestyle/savings goals, but paradoxically I am in favour of greater government regulation on both non-resident buyers (eg right of first refusal to local people) and clamping down on the availability of BTL lending. If it wasn’t cheap and easy, people would quickly look elsewhere.

It’s difficult op, just really a product of living in a capitalist society. Money is always involved. My db is a BTL landlord. It’s his only house though and he has to live in work accommodation elsewhere. It’s not always greed. Also renting houses out is a legitimate choice for employment - as long as it’s done properly.

@lavieengrenache

It’s not so much that there needs to be property to rent, but that people are buying multiple properties ‘off plan’ to rent out - landlords who don’t own one or two rental properties, but one or two hundred.

There are swathes of substandard, overcrowded estates being built by companies who pay their chief execs millions in bonuses, markets being fuelled by government schemes, estates with no proper boundaries between properties, not enough space for parking cars so the whole estate becomes congested and dangerous for children, properties with poor soundproofing so living cheek by jowl with neighbours becomes a nightmare of noise issues. These Properties are bought up by btl landlords who don’t have to live in them so don’t care about the problems.

Also people buying property to rent out as holiday lets - there are parts of Scotland, Lake District, Cornwall, Pembrokeshire, Yorkshire Dales etc where most of the houses are holiday accommodation. This hollows out communities and makes it impossible for people who work in the area, perhaps grew up in the area, to actually live there. This has been particularly noticeable over the last year, people buying up rural property as a bolt hole during the pandemic - not instead of their urban homes, but as well as.

The property market in this country has become so over inflated - bubble has to burst at some point. As soon as property is viewed as a way of making money rather than a home for someone to live in something fundamental goes wrong at a societal level.

Scotland has addressed this to some extent by requiring much higher stamp duty to be paid if its a second home.

Unfortunately this also applies to cities like Aberdeen and is another nail in the coffin for the property market there. It always strikes me as strange how thuse in power in Scotland can talk about rent caps in rent pressure zones but can't think of any ideas to help the market in depressed areas.

The stamp duty rule also has the unfortunate effect of making it cheaper for foreingers to buy in Scotland than Scots wishing to buy a second home in their own country.