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)

Welcome to the world.

Not everything is equal.

It hasn't been since we we're walking around with dinosaurs, and it still won't be when we're blown up by aliens.

Good topic for a thread btw.

There’s a massive misconception about landlords with them being all put into the same category that is called greed.

Landlords come in all form and shape. Yes you have those who e made it their main business, only care about profit and will only do the strict minimum, either within the law or worse, not even so. Some of them will be directed by greed.

But you also have many landlords who have become so either by inheriting a property or by moving in with a partner and keeping their own property for security.

Many of the latter group work and will be taxed heavily on their rental income, so much so that by the time they’ve paid it, along with management fees, insurances, annual electric and gas checks, setting a budget for repairs and redecoration and ideally something towards potential non payment, they are actually making a loss and the only interest is that of the property inflation.

Sadly, these landlords were often the best ones, but many have now sold up because of that situation. This leaves areas where there are very few properties left to rent, especially in the SE, or renting from big property developers who couldn’t care less about their tenants.

Sadly, it’s government greed, tapping where it was easy to tap, that is the biggest problem. People who need to rent and can’t find a place. Landlords who are getting pickier and pickier because demand massively exceed supply, and no government intervention attempts to male it illegal to refuse pets or people on benefits will change that because all it does is encourage landlords to sell.

I’m getting there myself. I’ve got a very desirable home in a popular location that I let. It doesn’t pay my mortgage at all as after all costs, I’m left with nothing. In the meantime, the market is going insane and the house is worth 20% more than last year. It’s very tempting but who knows where that would leave my tenants as there are only 1 or 2 similar properties that come up, usually not as nice or in the desired location and rent is £100 more a month.

Sadly this is the reality of the rental market as it stands.

The market needs plenty of safe, secure and high quality rental stock. Lots of people move somewhere for a couple of years, maybe get a 1 year contract somewhere far from home, intend to move to a particular city or country when their kids are older. Students. Lots of people simply don't WANT to buy. Why should they be forced to because of cultural pressure (or the fear of instability?).

Why should there only be HMO's with poor standards and zero long term security available?

In plenty of other countries, renting is the norm and it's both affordable and secure. In Italy, for instance, renting is so secure that you install your own kitchen and flooring, etc, much like many do with council properties here. Initial tenancies are 4 - 5 years (with break clauses after 1 or 2 years) and many people stay for life!

The problem is not BTL. The problem is the bloated property market where house prices are 10 - 20 times people's salaries, even for a modest 2 up/2 down where I live.

That's not being caused by BTL because all of those people still need homes, it's caused by inadequate council housing stock, excessive mortages and the system being structured to put young people in the SE into debt to articifially prop up the increasing upward trend of the value of their parents' houses and the properties owned by foreign investors.

If you brutally capped mortgages (I mean BRUTALLY), wiped off the mortgages of all the people who would be left in catastrophic negative equity and started building an appropriate level of high quality council homes the system would rebalance, but a) nobody would vote for it because we've all been trained to value houses that go up in value and b) the banks would collapse, swiftly followed by the GBP.

Maybe it would be worth it? Probably, but there would be nothing to stop the cycle returning with a change in government a few years down the line.

There's a cool economist on TikTok who explains this pretty well.

I would say that if anything, there aren't ENOUGH rental properties - certainly if the high rent in my city is anything to go by!

I think some people need places to rent but what is happening just now is ridiculous. I live in a beautiful part of Scotland with a large local community. Locals have been struggling for years to compete with people from other areas to buy property and right now it's worse than ever. People from big cities, making much more money than locals here ever could, are buying any available property to turn into their holiday homes which they then also rent out the rest of the year on airbnb. Locals can't compete with them in the sales market but then can't afford to rent out a place long term at holiday let prices. This isn't an area which relies on tourism to get by, it has its own functioning community but we are being forced out of it by people buying for airbnb!

landlords making generous monthly profits too, by charging far far above what the property is costing them

How do you know that though? You can’t possibly know how much someone has put as a deposit on a house nor how long their buy to let mortgage is or even if they have one. By your logic a landlord could just have a shorter mortgage term with higher monthly payment and then it would be somehow ‘ok’ because the rent equalled what the mortgage plus costs were. What about if they pay cash from a retirement payout? They then don’t have a mortgage but will have genera maintenance and agent fees, should the renter benefit from the random persons pension pay out and only pay enough to cover monthly agency fees and maintenance costs? What an absurd way to look at it.

You have absolutely no idea on what each landlord is making. What about the absolute arseholes who stop paying rent then refuse to leave, you have to keep paying your mortgage. You’re literally paying for someone to live for free for months, that isn’t fair. The other side of that coin is the landlords who don’t maintain their property but still charge the same amount in rent.

With rent you are paying for flexibility and it not being your problem if something goes wrong with the house. Owning property is a massive headache from start to finish. Not everybody is cut out for it and all that it includes.

@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.

Have you never rented a holiday cottage, then? I’m in a lovely one at the moment, and very glad such things are available.

People profit off food, health, utilities, education. Why is single out landlords?

We have several rentals - I’m comfortable with our choices. I really don’t care for the judge, jury and executioner of Mumsnet.

The people I rent to don't want to buy. They rent on a room per room basis and use it as digs for work. Most people don't live near the sites they work at in this industry.

We moved to London for work where we couldn't buy in a million years and didn't want to sell our house. A lovely couple rent it and we've never put the rent up and fix everything immediately.

I met dh pretty quickly and we bought a house - l wanted to keep my little 2 bed as insurance in case we split up and l didn't have anywhere to go. At the same time, l had a friend who needed somewhere to live so he rented it and it worked out fine for a few years. Sold it after dd was born as l was secure I my relationship and didn't want the hassle of getting new tenants after friend moved out.
Wasn't being greedy - just safeguarding my security which is what MN always tells us to do!

The problem is bad landlords, not landlords full stop. Being a ‘good’ landlord, i.e. providing decent sized rooms, communal space, keeping up repairs, etc., should be incentivised.

I’m letting my house. I have to go abroad but not permanently and I want to keep my house. Where I live housing is very scarce, so someone is going to rent it whilst I’m away. I will be renting my new place whilst abroad. think it’s supports two people to be honest.

Of course you’re being unreasonable. We have a rental property. It doesn’t make us rich, it covers the mortgage, insurance, repairs, safety certificates with very little left over. It’s an investment for our future sp one day we can retire and not be skint. We don’t have private pensions. State pension is a pittance.

No one gave it to us we earned it.

Not all landlords charge extortionate rent or have houses falling into disrepair.

I’m not a landlord.
Your point is very narrow minded and entirely focusing on one small section of people which is arguably just as selfish as you claim landlords are.

Let’s imagine every private renter in the U.K. as a pie graph shall we?

30% won’t want to buy (students or young professionals working in a city they don’t actually wish to live in long term)

30% won’t be in a position to buy (young families, bad credit, low/no employment, UC paying their housing costs. No matter how reasonable property prices became these people still wouldn’t be eligible to buy)

The remaining 40% might be in a position to buy if the property market was more reasonably priced. Let’s be honest, this section would be dominated by professionals (mainly young professionals) with decent but not high earning jobs.

Private renting keeps the housing market somewhat fluid with people moving around more frequently than they would if owned. There is still a huge housing shortage. What would actually happen if landlords were suddenly not allowed to own second homes is this;

• Houses would suddenly come on the market
• prices would be somewhat more reasonable because of an increased sudden supply.
• The 40% who could afford to now buy them would.

The 60% who either don’t want to or can’t buy them would be left fighting for few scraps still available to rent. Students and professional house shares no doubt taking priority as more reliable and profitable.

The 30% young families, bad credit, low income, UC reliant...etc would be at the bottom of the pile for a greatly reduced number of properties and in an even worse situation than they currently are because the house they were living in has been sold to a young couple with no kids and a £35k combined income

Seriously? We rent - its suits our current financial situation and other things. You have a very narrow and naive view on life. People like you seem to be ignoring if there aren't enough people making enough money to be paying huge amounts in taxes - than the government won't have enough money to pay for infrastructure, hospitals, schools, roads - or enough money for people who claim benefits. And besides - just because a property is advertised as a good buy to let doesn't mean a new family are not allowed to buy it!

Landlords making generous monthly profits too, by charging far far above what the property is costing them

I am new t this as I say, I’m just renting my house as a temporary measure, but with the mortgage, landlords insurance, certification costs, property management company (and storage) I will likely be losing money, or making it. Major generalisation. I’m sure some people make big profit, others I imagine Make small profit, some break even and some lose. That’s business, and life.

The rental market should be more regulated and more provisions in place to protect the tenant.

Scrap the 364 day contracts, give them security to be able to make the house a home, allow them to decorate. Long-term tenants are normally more supportive and happy in their home than one who knows I can be kicked out at any time. That also means less expenses for the landlord as it often means he doesn't have to deal with new tenants and problems with people moving all the time.

I come from a country where renting is a lot more common. We stayed for over 3 years in our first flat, only left because we moved towns. My parents rented the same house for 40 years, my PIL are in the same flat for over 50. It works because they have security. They don't want to deal with expenses when a boiler breaks or the roof needs re-doing.

What is a big problem are landlords buying not for "normal" tenants but for holiday lets, AirBnB etc, often pricing out people in holiday areas. There should be more protection against those. Short-term rentals are not necessarily evil and are needed but not on the expense of people loosing out.

I only recently found out (here) that when you buy a house to rent, the mortgage company insists you rent it out for at least 145% of the monthly mortgage payment amount, so it's not just greed.

I didn’t know this. But I remember the eye-watering lists of fees and charges that letting agents charged to tenants, until the law changed recently. They left me in no doubt that BTL is a nasty racket.

I wonder if it all started just after the Government allowed the selling off of Council houses without a scheme to replace them. The need for properties to rent increased and someone saw a gap in the market. I also struggle with the concept of people buying up 'extra' houses just to make a profit. I have a DS and nieces and nephews who are all at an age where they should be buying property but can't afford to inspite of some of them having decent jobs.
We are shortly to receive a pemsion lump sum with which we could purchase a BTL but it does not sit comfortably with either DH or me. We know that sticking it in the bank will lose us money as interest rates don't keep place with inflation but we don't need more. We calculate that we will be in the fortunate position of having pensions that will provide sufficient for our modest but comfortable lifestyle so don't see the need to generate lots more income/capital by adding to the housing crisis. I acknowledge that if we don't do it someone else will so us not buying a BTL makes no difference other than to our social conscience.

Not making it! Not or making it! ^

Yanbu OP. It's like homes under the hammer.
I see an auction and hope it'll be a needy family bidding or getting... Always ends up being some property developer with a huge portfolio.... They profit..... And rent for more than the average wage earner can afford. Awful.
Anyone can do it, but it's a bit Sickening.

The worst thing I have seen ( multiple times ) is parents buying a house, rent it commercially for a couple of years then rent to their kids who claim state help ( Housing benefit, Universal credit ) to rent the property from their parents. Property that these same kids will one day inherit. I can't for the life of me think why this is allowed.

A relative had 80k..... Not enough to get a tiny place in SE. Even as a deposit as earnings wouldn't achieve top up mortgage.
80k not enough 🙄crazy.