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)

Because this country isn’t the Soviet Union.

Using that logic why do people profit from heating, food, healthcare, water...

There will always be a demand for rentals. I moved regularly with work in my 20s, I didn’t want to buy a house every six months.

I rented from 18-34 by choice.
If I have money to invest, I think it’s fine to provide a rental service for the ‘me’ of the past.
I was an accidental landlord at first but now considering buying a second house to rent out.
Money in the bank will depreciate. I’m ok with people who are professional landlords. How does anyone make money?

Businesspeople do business shock.

If you want the government to structure incentives and penalties to encourage individual home ownership and discourage private landlords, then the people to appeal to are your MP and relevant national lobby groups.

If you want incentives and penalties structured so that only large companies can buy and offer housing to let, only their owners and shareholders benefit from the profits, including capital gains from price increases, while small landlords are excluded, likewise, campaign for that.

You could say the same of the pharma industry - why should it be run for profit?.......but all things being ‘equal’ has been tried in various countries and seems a less than workable solution. I can understand your frustration though.

@Babyroobs

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.

It isn't. It's called a contrived tenancy. Claiming state help in this circumstance is not allowed.

YADNBU!! The fact that the stamp duty holiday applied to buy to let infuriated me, I’m renting and would love to be a first time buyer, have a good deposit and a stable job with a good income but I can’t afford to buy as prices are just beyond me in the area I have to be to work (until the end of my training at least).

Means the pool is more limited and keeps prices high. Really frustrates me.

I agree. It used to be that renting was a cheaper option but not anymore. I own my house and pay just over £500 a month for the mortgage (has come down over the years) to rent a similar house would cost around £800 per month. It's absolutely bonkers!

It’s not BTL pushing up prices. Prices are high and BTL are taking advantage of that. And why are house prices high? Because the banks made credit too cheap and easily available, so people bidded more and more for houses until prices were stupidly high. Then when the availability of cheap credit stopped, house prices were completely out of reach. Banning BTL won’t necessarily bring prices within reach for the people who want to buy them but can’t afford to.

I don't believe people should be able to own things just because they want to. There are millions of businesses earning money by supplying people with things they can't afford. Like smart phones on monthly contracts, credit cards, cars on credit, cars on lease, holiday villa rentals, flying. Can you afford a plane? No. But you get to use one because someone who can afford one buys it and let's you use it. Rental housing is just one of those things. You can't afford a house, but you get to live in one because someone who can afford it, buys it and lets you use it.

If you didn't get to own more/better things by working harder, then no one would work harder. So no one would do the big difficult jobs that need doing, no one would earn enough money to pay all the tax it takes to run this country including the massive benefits bill.

When did people start to think that they should profit from housing?

Well, I own 3/4 of my house and the bank owns the rest. They profit from the interest on my mortgage.
In answer to your question, unless you own property outright, someone else will always be making a profit from payments regardless of whether you are a mortgaged ‘home owner’ or rent.

We do need rental properties, but landlords need to be more community minded and charge fair rent.

If you want the government to structure incentives and penalties to encourage individual home ownership and discourage private landlords, then the people to appeal to are your MP and relevant national lobby groups.

In fairness landlords have lost a lot of incentives in recent years, higher rate stamp duty, loss of tax reliefs on mortgage interest payments and soon equity payments, tighter controls on electrical safety, gas safety, deposit schemes. Rightly or wrongly these all make renting more expensive and less profitable.

Not that MN will recognise any of this. They view it as mortgage should equal rent and don’t take account of the other factors.

There are lots of people who prefer renting. I rented an apartment when I worked abroad. If anything needed repair or replacement I picked up the phone. There was no maintenance to do or think about. All utilities included in the rent.
I now live in my own property, paying a mortgage and bills. I have to manage and fund any repairs etc. Sometimes it is a big, time consuming headache. My son rents a flat. He could afford a mortgage, but he prefers renting for now because all he has to think about is his work/ career. His LL takes care of everything else. There are advantages and disadvantages to both.
Some councils are awful LLs. Look at Croydon! Those poor tenants are living in shocking conditions.

@Babyroobs

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.

It's been a while since I dealt with benefits but back then I'm sure you didnt qualify for HB if renting from family? May have changed though.

Not going to read the comments as I suspect it'll piss me off. But in my opinion Buy 2 let is highly unethical.

There will always be a need for rented accommodation.

Students
People working somewhere short term
People unable to get a mortgage
People able to buy but who choose not to
People moving out of their main home while they have major work done on it.
People in between house purchases who rent for a while

Someone has to own these houses in order to lease them.
And the more properties that are o the market to rent, the cheaper the rent will be- supply and demand principle.

The ethical question could be resolved by easing the supply and demand problem in other ways.

The government has failed to build more houses whilst single occupancy has increased and there is an issue with older people being in big houses with family squeezed into smaller ones.

There is no thought as to how you could encourage downsizing or house swap schemes.

We also have the pattern of NIMBYism over planning with the very same people demanding more housing, especially low cost first time buyer housing (with no thought towards the second rung of the ladder and how you free up the smallest houses). Lots of people are effectively trapped in tiny houses which are unsuitable even though they own it.

Developer just build big houses to make maximum profit. They are not compelled to build what an area actually needs first. Which of course pushes up the price of rentals in the process too.

We never talk about these other factors and issues that could resolve this somewhat because its convenient to blame 'greed' rather than continuous policy failure by subsequent governments since the 1980s.

Rental properties at the moment are like hens teeth. We have a neighbourhood help group, and there are so many people who need private rentals because they can’t get a council or HA property, but there’s hardly any. And that’s the fault of people like you who demonise private landlords, so that there are so many rules and laws now hugely in the favour of tenants, that no-one wants to be a landlord, and are just selling up. Some of the laws are very much needed, but some aren’t. You have the preconception that if these homes are sold that all these private renters will buy them, but often they can’t. They have bad credit, low income, and their only option is to rent. Where do you suggest these renters go when there are no rental properties left? Point your resentment at the government who have nothing in place for these people. Not landlords who are providing a very much needed service. And I don’t speak as a landlord, but someone who has previously rented for years, and I would have been screwed without that option.

i don't believe people should be able to own things just because they want to

Well there are lots of countries in the world where that’s the way it works. You can pop off and live there?

@WWYD my second post, following from my first, references 'professional landlords'. I know a number for whom it's their full time job, they have no other income aside from rents on their many properties and live very comfortably indeed after all the associated expenses are covered.

As an aside; Thanks to all the respondents who rent out properties that they didn't intentionally bought to let, excellent missing of the point of the post

YABU

Rents are determined by supply and demand - both house and rental prices are high because there is a shortage of housing in the areas that it's needed (I.e. areas with good schools and jobs).

It's not actually landlords who are the problem but homeowners. There was an excellent article in the economist recently which explained that the housing crisis was due to having too high a proportion of homeowners. Homeowners are more likely to be NIMBYs and object to any new developments which could devalue their properties, and therefore it's very hard for councils to authorise more building. In Germany, where there is much more renting and more protection for renters, NIMBYism is less and so they can build the extra homes they need. Unfortunately as homeowners are more likely to vote conservative, the current government has no motivation to change the status quo.

I do think that in this climate, second home ownership is a bit unethical - we shouldn't be leaving perfectly good homes empty for much of the year.

BTL in itself isnt the issue, it's the fact that she sheer volume of it is bumping up house prices which then bumps up rental prices and a viscous cycle then starts.

We need alot more social housing, which isnt just for those in desperate need and on high landings but that those who both parties work but cant afford a mortgage or private rent. But that's rarely the case. (I work in social housing)

I remember watching a tv show where a landlord owned an entire new build street, and then evicted all his tenants in one go. Does anyone else remember it?

@Babyroobs

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.

This is breaking several laws. You could report them.

I completely agree with you. I understand not everyone is in the position to own their own home but everyone should be able to feel secure knowing that they have some control over their living conditions and length of stay.
It is a horrible feeling to be raising a family never feeling 100% settled, worrying that your rent will go up, or you might get evicted and living in a home that’s falling to bits because you don’t dare complain in case it causes you problems. It makes you feel like a second class citizen made worse when you know you have basically paid off someone’s mortgage and are still scrapping together the money each month to live another 30 days in someone’s ‘nest egg’.