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)

But @yoyo1234 what about people who want to rent and not buy? How will they have anywhere to live?

I would guess that a large number of renter's would like to buy ( more reasonable prices would help that). I would love increased social housing (more affordable for councils if land prices etc lower).

I am sure plenty of renters want to buy. And also, many don't (me for example, for over 30 years). What about them?

Even if it is very expensive to own 2 some will still do so just hopefully costs will stop a number of people investing in BTL as opposed to investing in other sources that do not potentially hike up property prices for others. If there is better and more social housing this may help keep private rents down for renters ( also some could rent from housing association etc as opposed to individuals). Better renter security may become more common (if housing association and social housing becomes more the norm than private rentals). Ideally I feel over the years too much had been done to support a housing market that may benefit from a correction and that may be helped if other avenues were seen as investments.

Relocated for a new job
I could have left my mortgage free property empty & just paid the council tax, insurance & min bills

Instead, I totally refurbished to a high standard before leaving
Let it out with under market rate rent, allow pets, do repairs on time, have not increased rent etc

I thought that I was helping out some local people

Instead I am tarred as a greedy LL

The property I currently live in is a doer upper
It was on the market for a long time, because nobody wanted to live in it
It is paid for
I can afford more than one property

@3then2t0day321

Relocated for a new job I could have left my mortgage free property empty & just paid the council tax, insurance & min bills

Instead, I totally refurbished to a high standard before leaving
Let it out with under market rate rent, allow pets, do repairs on time, have not increased rent etc

I thought that I was helping out some local people

Instead I am tarred as a greedy LL

The property I currently live in is a doer upper
It was on the market for a long time, because nobody wanted to live in it
It is paid for
I can afford more than one property

Same, but I just leave mine empty. I might need to move back one day, and the risk of damage/non payment of rent plus the hassle of landlord registration, various checks, etc makes the rent achievable not worth the risk, plus the tax I'd pay on the rent as I could no longer deduct mortgage interest tax relief. Its just safer to have it sitting empty, and its in a pretty safe location.

When renting, I've nearly always chosen cheaper rentals which need modernisation which are in an area I couldn't otherwise afford to live in.

We just took on our first tenant on UC. Her benefits won't cover the full rent amount but she said she could do it herself. Two months in and she's already in arrears. My fault for wanting to give tenants on benefits a shot. It's already bitten me in the bum. So no, landlords are not always making a profit.

I don't understand why you didn't just check her income like you would with a working tenant @NeedaTan I'm on benefits and can afford the rent for some places but not others. It's the same as when I wasn't ill and was working. I've never not paid the rent in years of renting. I showed bank statements to landlords to prove I can afford the rent. It's hard to find someone willing to let me have a home though because so many landlords are prejudiced against benefits.

Because the issue stems from the fact that the council pays on a given date each month. That's after the 'anniversary' of the date when she moved in. Which means there's a 'gap.' We didn't realise this until the second month because the council paid the first month and the deposit on the correct date. It was after that, when the rent was due again that we realised the council wouldn't pay for a couple of weeks until the date when it pays rents.

Most landlords have a letting agent who will have contracts with companies who do credit checks and require certain levels of income. That is one reason some properties are not let to benefits claimants as they do not pass the credit checks

@Xenia

Most landlords have a letting agent who will have contracts with companies who do credit checks and require certain levels of income. That is one reason some properties are not let to benefits claimants as they do not pass the credit checks

In some areas, there's not exactly a selection of potential tenants with a hope in hell of passing a credit check.

Even if youre being lenient on that, I lost hope after advertising for a while (and bring sent the same tenants by a letting agency) people who couldn't even string a pleasant introductory sentence together. I was seriously going to let to one woman on benefits, but then she admitted that she worked cash in hand from home, and I had visions of men turning up at all hours for massage, along with the DWP fraud investigations team or HMRC! I still get creditors' letters for a former tenant 5 years who who used my address to apply for a loan which he has defaulted on, long after he'd moved out. Another former tenant is or was using it as an address for his limited company and HMRC keeps sending letters for him, despite me constantly sending them back and writing asking them to stop and giving them his real address!

Why do people have to do these things?

It's a nice property in a nice area too, so it stands empty alongside my neighbour who thinks along the same lines as me!

yoyo1234

I agree with PP: YANBU, OP. I have always thought that it is grim to make a profit from housing. I know some people who do, and I think it says a lot about someone's character

Pm me when you are selling your house for the same price as you bought it for so you don’t become one of those people who are grim for making a profit on your home.

We all need one home only. It should be prohibitively expensive to own in excess of one home

It already is hence the increase in rents if you have a btl property.

I do not wish for a property crash just a realignment of price rises with wage rises and a gradual realignment with maybe average house price being 4x average earnings

But how would this all work out? Wages increase so 4x salary makes a house worth more so people when selling make a profit on their house so become one of the grim people for profiteering from property.

@Xenia

Most landlords have a letting agent who will have contracts with companies who do credit checks and require certain levels of income. That is one reason some properties are not let to benefits claimants as they do not pass the credit checks

We do all the credit checks ourselves (we are members of the RLA) but with benefit tenants there's not much point in doing them because most wouldn't pass.

I wish women's aid and council housing departments would read this thread. They keep telling me to rent privately and keep acting like I'm mad when I tell them landlords won't let me. I hate seeing adverts telling women to leave domestic violence because it's a waste of money when there's nowhere to go.

It's very frustrating isn't it.

People need to be careful what they wish for. Shelter has a lot to answer for.

I previously took tenants with pets on the condition on an increased deposit. Not allowed now so now I don't take pets. I once also let to self employed ppl who failed the 'computer says no' credit checks because they were willing to give a bigger deposit. I wouldn't do that now. I got asked to rent to a lady who wanted to install some adaptations for her disabled husband but I declined as I can't take a deposit that would even touch the cost of making good the holes etc if she failed to do that when she moved out. I don't take ppl on HB as its not paid direct to me and its nigh on impossible to evict for rent arrears.

I don't mind the increased taxes or stamp duty and think they are sensible policies (it's still financially advantageous for me even with them) but so many policies are disastrous.

The regulatory framework risk profile is such that landlords with nice properties who can afford to be fussy won't let to anyone who isn't in full time well paid employment with no pets. Everyone else can rent the dregs or get very very lucky.

But yay for tenants' rights!

The regulatory framework risk profile is such that landlords with nice properties who can afford to be fussy won't let to anyone who isn't in full time well paid employment with no pets. Everyone else can rent the dregs or get very very lucky

We are selling and going into rented. I think in your analysis we can only rent the dregs.

We have pets and none of us is employed

See if you can pay the rent upfront using your capital from the sale. Can't speak for everyone but I'd be happy with that!

@Lostatsea1988

See if you can pay the rent upfront using your capital from the sale. Can't speak for everyone but I'd be happy with that!

That's not actually allowed in Scotland now, apparently to protect tenants...

It's also not permittrd to sign a lease or pay a deposit more than a month before it's due to start, or to take a larger deposit, vagain apparently to protect tenants. I think it's maximum 1.5 months deposit now.

So tough luck if you want to rent and want the security of having signed a lease and paid a deposit 3 months in advance... illegal.

These are literally stricter rules than anywhere else in Europe and I'm honestly struggling to understand the logic in them for the vast majority of tenants.

Our properties are in good condition not dregs and we have always allowed up to 3 pets. Never had any issues and don't expect any extra deposit. Our tenants with pets have always left the houses spotless.

We just took on our first tenant on UC. Her benefits won't cover the full rent amount but she said she could do it herself. Two months in and she's already in arrears. My fault for wanting to give tenants on benefits a shot. It's already bitten me in the bum. So no, landlords are not always making a profit
That’s the bit that many posters here don’t want to see yet sadly is too often the reality.

We accepted tenants on benefits. We went through the agency, they said they past the credit checks and knew them well as previous tenants.

What we didn’t know at the time was that they were highly reliant on tax credits and their children were almost 16 and 17.They were fine the first year when claiming, but they then saw their tax credits reduce when the eldest left school. A couple of months later, the second dropped out of school. Suddenly they lost all their child tax credits, maintenance from the dad and they just couldn’t afford the rent. They didn’t pay for 5 months and when they finally left, we knew there was no point taking them to court because they didn’t have the means to pay.

What are we supposed to do when their income takes into account tax credits, ask for the age of the children and say no if over 15?

Many will say accept that you could not get any rent for months, except that as I’m not making any profit monthly once the 40% tax is paid, this comes at a large cost to me.

That 40% tax (on money you haven't even received because you can't take off mortgage interest) removes that financial cushion you have to take a risk on a tenant.

It's so easy now to end up tens of thousands out of pocket, by the time you've eventually evicted a non paying tenant and rexecorated/repaired a property to a lettable standard again.

I own several properties that are let as part of an overall investment strategy which also includes shares, bonds and cash. Are my returns from the stock market any more or less “immoral” than the returns from the rental properties? We serve a specific market - mature post grad students and young professionals who are not in the market to buy a place, but want somewhere nice to live. And 50% of my profits goes to the tax man for society’s greater good. Of course I could keep the masses of cash we earn under the bed in a shoebox but on balance I think the decisions we have made benefit more than ourselves in various ways

@vivainsomnia

We just took on our first tenant on UC. Her benefits won't cover the full rent amount but she said she could do it herself. Two months in and she's already in arrears. My fault for wanting to give tenants on benefits a shot. It's already bitten me in the bum. So no, landlords are not always making a profit That’s the bit that many posters here don’t want to see yet sadly is too often the reality.

We accepted tenants on benefits. We went through the agency, they said they past the credit checks and knew them well as previous tenants.

What we didn’t know at the time was that they were highly reliant on tax credits and their children were almost 16 and 17.They were fine the first year when claiming, but they then saw their tax credits reduce when the eldest left school. A couple of months later, the second dropped out of school. Suddenly they lost all their child tax credits, maintenance from the dad and they just couldn’t afford the rent. They didn’t pay for 5 months and when they finally left, we knew there was no point taking them to court because they didn’t have the means to pay.

What are we supposed to do when their income takes into account tax credits, ask for the age of the children and say no if over 15?

Many will say accept that you could not get any rent for months, except that as I’m not making any profit monthly once the 40% tax is paid, this comes at a large cost to me.

My tenants have been in arrears since they moved in last September, I was sympathetic because they had a particular difficulty but they stopped paying altogether. Until last week I had had no rent from them since February and their arrears are mounting up by the agents told me they had paid £1200. I hope that is the start of regular payments.

Does letting through an agency help to filter out potential non-paying tenants. I don't think its wise to let to people on UC. It is risky to to let out a house that you have a substantial mortgage on. HMHO.

We have several properties which we rent out. They were bought with cash which we saved.
We were thinking of our own family’s future when we bought them. The rent on our properties is less than £600 a month so hardly extortionate. We do rent to people on benefits and will allow pets and redecorating.
We don’t have lots of properties but I agree with you that we are part of the problem. The rent from all properties goes into an account to save to buy the next one.