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)

@Tuliptuliptulip I agree 100% and nicely put!

We buy auction properties that don't allow a mortgage, so yes, a young couple could bid just the same, as long as they have the cash.
It's not a case of being rich, for self employed people it can be our pension.
I've seen too many workplace and private pensions go bust and people losing out big time.
You can't lose on a long term investment in property.
Have you got a pension?

[quote qualitygirl]@LittleLottieChaos not all landlords own more than one property though?? I own a property in another city. My job moved and I didn't want to sell. So now I rent out my apartment and I myself rent an apartment in the city I now live in. I'm not profiteering at all!! I'm at a slight loss actually [/quote]
You rent out your apartment for less than the mortgage cost? Why?

I think the idea that LLs are 'greedy' is odd. Most if they rent out 1 property are not earning much.

In my area, a 2 bed flat costs around £250-£300K. The rental is around £1000 a month, maybe a little more. That's £12K gross, minus all the admin and outgoings the landlord has, minus tax. Some people I know who rent out a home are netting £800 a month. It's hardly a living wage if that's their only income, and for all the hassle of tenants not paying, damaging the property, bills for the upkeep, it's not exactly a good return on that investment of £250K.

The only people who make a living out of it are those who buy do-er uppers in cheap areas, go for multiple occupancy, and rent them out (with a mortgage paid for by the rent from the others.)

@Tuliptuliptulip

I find it bizarre on these kind of threads when people turn up and defend their owning of multiple properties by saying its their pension, their nest egg etc. Surely you understand that one day when you sell that property, your tenants over the years will have effectively paid for it, and paid for your security whilst not being able to afford any for themselves? Even if rent doesn't yield a constant profit, a btl mortgage by its very nature requires a tenant to service it.

I don't think landlords are bad people, I think it's the system that allows it which is bad, but I find it frustrating that people refuse to recognise the system for what it is, and convince themselves that they are altruistically providing a service.

ALL "pension funds" grow in value because of profits made on the backs of other people. Pension funds invest in all kinds of businesses, from supermarkets, to manufacturers, to distribution firms, to commercial properties (rented to shops, factories and warehouses). Every time you buy a tin of beans, you're contributing to other peoples' pension schemes. Where do you think the pension scheme investment growth comes from???

I rent my house out, I saved up really hard to buy my first home alone and then my job moved so I moved and I rent it out to a family. This was after I saved again for furniture and new carpets which I no longer have the benefit off. It will be unlikely that I will ever live in my lovely home again as I cannot afford too but I keep it in the hope that one day I will. So no, we are not all making a profit, I just about break even but with extra interest for it now being a buy to let, insurance, annual checks etc it actually costs me money! Where I currently live I will not be able to afford to buy a property even if I sold that one!

Go back 100, 200 years+
Most people didn't own their own property

ALL "pension funds" grow in value because of profits made on the backs of other people. Pension funds invest in all kinds of businesses, from supermarkets, to manufacturers, to distribution firms, to commercial properties (rented to shops, factories and warehouses). Every time you buy a tin of beans, you're contributing to other peoples' pension schemes. Where do you think the pension scheme investment growth comes from???

I don't think you can equate a tin of beans, where there is huge choice of brands, cost, shops to buy from & is highly regulated, with a house.

Bottom line is, if you are in the BTL market, you are contributing to people being stuck in a spiral of excessive rent, often far higher than the equivalent mortgage, plus you are adding to the misery of young people who cannot buy a property without help from Mum and Dad, only available to the few.

The comment from the PP that he/she buys property from auctions, where any young couple can also buy from (so long as they have the cash) shows how out of touch BTL landlords are.

Surely you understand that one day when you sell that property, your tenants over the years will have effectively paid for it, and paid for your security whilst not being able to afford any for themselves? Even if rent doesn't yield a constant profit, a btl mortgage by its very nature requires a tenant to service it.

Tenants are paying for a service. Along with paying for somewhere to live, the internal and external property maintenance (including boiler, plumbing, heating, fixtures and fittings) should be included in the rent.
I often wish I rented. These things cost a fortune as a home owner.
People ‘rent’ all kinds of things - white goods, cars, offices, shops... It’s the way of the world. Rich people invest their money in companies or real estate and their money grows. Banks make money from mortgage holders by charging interest on the loan.
There are thousands of examples...

I don't think landlords are bad people, I think it's the system that allows it which is bad, but I find it frustrating that people refuse to recognise the system for what it is, and convince themselves that they are altruistically providing a service.

We live in a capitalist society. I doubt anyone who ventures into a profit making business would tell you that they are doing it for altruistic reasons.

One of the things that really hurts the image of BTL landlords is the utter tone-deafness that always turns up in threads like this.

“Ah yes, OP, I hear that you have no house while I have seven houses, and the impact of the BTL sector has had a negative prospect on your ability to buy a house yourself. But have you factored in that BTL landlords deserve your sympathy too for the things we go through? And that for many of us, BTL provides a good pension and financial security going forward? Also loads and LOADS of renters don’t actually want to buy ever and love renting, so I’m sure that puts your mind at rest about wanting a house of your own.”

I know many landlords are genuinely decent people, but Christ.

Our complete western society is built on profiting from people less well off and who dont have the stuff we are selling. If I have a green house full of tomatoes and sell them I am profiting from others who can't afford or who aren't inclined to do the same. And I am buying advantage for myself and my loved ones. This is what a capitalist society is based on surely? Look after yourselves because the state won't do it. You can hate the society if you want but unless you can change it you will lose out if you don't buy into it. So why should landlords lose out. I sell health care. The people who pay for the healthcare are paying my pension and my mortgage.

Every time you buy a tin of beans, you're contributing to other peoples' pension schemes. Where do you think the pension scheme investment growth comes from???

Swop beans for absolutely any service or product money can buy.
When you spend money on anything you are contributing towards shareholder/ owner profits, pensions and government taxes.

Not everyone buys to rent out for profit. We bought a house so that we could rent it to my brother for 'mates rates' so we're not making any profit. Prior to that he was renting a similar property in the same area for twice the amount! So maybe if rental properties were capped at a lower rate it would be fairer and not so attractive to landlords of multiple properties.

@SpringtimeSummertime
Tenants are paying for a service. Along with paying for somewhere to live, the internal and external property maintenance (including boiler, plumbing, heating, fixtures and fittings) should be included in the rent.
I often wish I rented. These things cost a fortune as a home owner.

Go on then. What's stopping you?

@AlwaysLatte

Not everyone buys to rent out for profit. We bought a house so that we could rent it to my brother for 'mates rates' so we're not making any profit. Prior to that he was renting a similar property in the same area for twice the amount! So maybe if rental properties were capped at a lower rate it would be fairer and not so attractive to landlords of multiple properties.

They used to be rents just like this before the Government got rid of such things. My Grandparents rented under a protected rent scheme. Owners changed throughout their tenancy as their house was sold and bought as an investment by landlords. The rent could not increase. In 2010 they were paying £230 a month for a 3 bed detached with a big garden in a really nice area. They had lived there for 50 years.

There not they

I couldn’t sell so I rented out our flat to friends. We only charged our mortgage payment (which was super low)+ maintenance and it was still half the market rate for a flat that sizez

I think the PRS are part of the solution. It would be good to have a housing policy that built homes to rent at an affordable rent. Until that happens, which is unlikely under this administration, the PRS will continue as part of the solution.

The other issue which I find intensely annoying is the lack of enforcement against landlords both in the PRS and social housing sector. The legislative structure is there, just unenforced, and this needs to be dealt with as a matter of urgency, but of course, it won't be . . . because it doesn't suit the narrative.

They used to be rents just like this before the Government got rid of such things.My Grandparents rented under a protected rent scheme. Owners changed throughout their tenancy as their house was sold and bought as an investment by landlords. The rent could not increase. In 2010 they were paying £230 a month for a 3 bed detached with a big garden in a really nice area. They had lived there for 50 years.
It's lovely that they had that security. Rents can be astronomical now, it's so wrong, and because of that my brother couldn't save to get onto the property ladder and so the cycle for some just never breaks.

Chairman
Go on then. What's stopping you?

Umm... because I stupidly bought a house which needs so much work doing on it that if I sold I would be in negative equity.

Landlords take risks in order to make flats or houses available. Risks have to be compensated or people won't take them. Unless you can convince the government to build and operate all rental housing you're going to have landlords renting at rents determined by supply and demand.

Rents have dropped in NYC because of the pandemic. The possibility of falling rents or tenants who can't pay is a risk that landlords took. It's not all flowers and sunshine.

As rents go higher it encourages more supply to come onto the market, regulations permitting. If supply is constrained prices will go up until things reach equilibrium. It's really very basic economics.

@AlwaysLatte

They used to be rents just like this before the Government got rid of such things.My Grandparents rented under a protected rent scheme. Owners changed throughout their tenancy as their house was sold and bought as an investment by landlords. The rent could not increase. In 2010 they were paying £230 a month for a 3 bed detached with a big garden in a really nice area. They had lived there for 50 years. It's lovely that they had that security. Rents can be astronomical now, it's so wrong, and because of that my brother couldn't save to get onto the property ladder and so the cycle for some just never breaks.

It was really common back then. Their whole family rented under this scheme. There is an official name for it which I can’t remember but yes, the rent was protected by government law.

I hope that if Keir Starmer gets in this sort of thing will come back.

Just to add, they rented from private landlords. The scheme ran alongside council rentals/houses. All rents were capped.

@AlwaysLatte

I hope that if Keir Starmer gets in this sort of thing will come back.

We can hope...