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)

There is no tax relief on BTL mortgages and no reduction in council tax.

I’m a huge hypocrite because I agree with you in theory, but I’m about to do the same.

I’ve seen pension pots raided, I’ve seen massive corporate places pay virtually no tax, I’ve seen others get rich off others misfortune, I’ve seen others buy their parents council houses at massive discounts I could go on.

I’ve got an opportunity to have a buy to let and I’m going to do so.

I don’t think you are looking at the full picture OP.

A friend of mine, owns two buy to let’s, with a mortgage. She looks after her tenants really well, any problems are usually fixed in 24 hrs, she charges fair rents. She is not wealthy, she would struggle if her tenants did not pay their rent. She is providing good housing.

Where we live their is a big shortage in rental properties, if people didn’t buy to let. I have a friend that have been on the council list for years and years hasn’t had a chance to get a property. She has no choice but to rent privately.

I can completely understand the frustration of anyone trying to get on the housing ladder, it’s really hard. But bitterness directed at buy to let ll seems futile.

My DH and I own a buy-to-let property. It is the only property we own as we live in accommodation provided by our employer.
If we lost our jobs we would also lose our house, so it is security for us.
Plus, we are employed as a couple, so if anything happened to my DH I would lose my husband, my job and be homeless.

Depends why people do it, as there's different reasons and factors.

When people are buying up several properties just to let them out and rip people off then it can just be sheer greed.

People owning houses to rent out are providing a service. Many are having to pay a mortgage to provide that accommodation and earn very little from their investment.

Doing it out of the goodness of their hearts then, are they?

Look obviously there’s always going to be a need for the private rented sector. Equally obviously, there are some big problems with how it operates at the moment, with huge numbers of total amateurs who can’t be arsed to learn the first thing about their legal responsibilities, huge numbers of people paying expensive rents to live in insecure accommodation with limited ability to have it feel like home, and a common impression that group A is in fact doing group B a favour by ‘providing housing’.

Landlords do not “price jack” if they pay over the odds for their housing stock it makes their investment less profitable. You cannot just “whack rents up” the rent is dictated by the size of the house, the area and how well presented it is.

Landlords are not rubbing their hands together gleefully paying over the odds for kicks and giggles, so they can charge market rent?

I live in a city. I had a two bed new build flat in a popular urban area. I put it on the market. No-one wanted to buy it because there were hundreds of identical flats in the same area, with new ones going up all the time. So I rented it out.

My first tenants were from a different country and they didn't want to buy, my second tenant was a guy working away from home, my third tenant has been there for over 10 years and is currently enjoying a 40% discount on market rental value because I feel bad he's paid my mortgage. Even though I (of course) pay a lot of tax on his rent. Shrug.

I don't think I'm a bad person (but I would say that, wouldn't I?) - I just made the best out of non-ideal personal circumstances, in a perfectly legal way.

No one gave it to us we earned it.

Don't really understand that logic, it's your tenants who are paying for it, not you.

Why are people comparing accommodation with food etc? Apart from water bills (and don't get me started on that), we have a choice where we buy our food/electricity etc. If I don't like how much Tesco charge for bananas I can go to ALDI, competition forces prices down.

The lack of housing (i.e. no competition) forces prices up. And I don't think just building new houses will help because they will be snapped up by LLs because they can raise deposits by releasing equity from current houses. And they can afford to pay the higher prices because higher rents will cover the mortgage.

I agree with you OP but I don't know what the answer is. Maybe the government needs to say that the country now has enough rental properties and all future sales can be for residential use only. OBVIOUSLY never going to happen and I'm sure there are lots of legal reasons why it can't happen but something drastic does need to be done (if only to ensure that future generations have assets that can be sold if they need to fund expensive care when elderly).

I rent and it’s by choice - me and DH don’t want to buy. Have no desire to and never have.

My issue with renting is the uncertainty of being able to be served our notice and then our home is gone, and we’d have to scramble around trying to find something else (not many rentals at all around here)

I’d prefer to have a very long term rental agreement (my aunt and uncle have a council house and it’s a 100 year lease!)

As it is, the rental set up is such a farce we will end up buying - although we’ll wait to buy the house we rent when the landlord decides to sell up (it’s his pension pot)

@Sweetpeasaremadeforbees

Did the tenants pay for the minimum 25% deposit?

I have disabled children who may never be able to afford homes of their own and would otherwise be stuck in small flats.

Why should I not buy them a house while I am young and can afford it, and offset the cost by letting it out to another family who needs it in the meantime?

@RickiTarr That argument of yours doesn't really stack up.

Education and the NHS are not free. They are provided through taxation, according to someone's income. People who earn more or paying for people who earn less or are not able to work. If they choose to go outside the system provided by the state, they are paying twice- no tax incentives for paying for private education or medical care.

Unless we embrace communism or a very socialist state, there will always be people with more money than others.
The council cannot provide enough housing for people who can't afford to buy without higher taxation.

There is a shortage of housing in the south east and a lot of it comes down to the policy of not allowing building on the green belt. There is no shortage of housing in the north and house prices are very low in some areas.

And they can afford to pay the higher prices because higher rents will cover the mortgage.

So they have a higher mortgage which necessitates higher rent. Where’s the profit?

The OP isn't arguing against renting; the argument is about profiteering from renters. I agree. There are good landlords - reasonable rents and keep house in good condition.

There are also a lot of crap, amateur ones trying to make as much as possible by providing as little as possible. They buy up the affordable end of the market which should be starter homes for people, not "investment opportunities."

Our housing market is very skewed.

I'm a landlady, and I'm a good one.

I live in one of the most expensive suburbs in my country, I don't want to move as my sons father owns his home just round the corner here.

I've been in my rented apartment 8 years.

If I were to buy this place the repayments would be more than double what I pay in rent.

It doesn't make sense for me to buy here and stretch myself.

So I bought an investment property in a cheaper city. I have a single dad and his teen daughter and their dog living there, after mortgage payments, repairs etc in usually around £2000 out of pocket a year.

I'm hoping that as they improve infrastructure in that area the value will increase and I can sell and afford to buy a home for my son and I in the suburb we want to live.

What's wrong with that?

I am a landlord. I bought a flat and when I got together with my now husband, he also had a flat. So we moved in to his and rented mine out. The alternative would have been to sell my place and put all my eggs in his proverbial basket. Which would have been absolute madness.

We still have the flat now as I have tenants, a young couple who wanted to try living in London before buying. With covid I’ve dropped the rent substantially (still covers my mortgage and tax etc). They have a reasonably priced place to live, in a location they can try out before deciding to commit to buying in.

I can’t see the issue. Not all landlords are greedy bastards making people live in damp shitholes you know.

Also, maybe banks should review the way they use credit scores to decide on whether they will lend. So many people who apply for mortgages with a less than perfect credit score, ie they missed a credit card payment 12 months ago, are either offered a mortgage with a lot higher interest rate, or are declined a mortgage at all. Some people hit ‘blips’ in their lives, but that blip will cost them dearly if they want a mortgage. Banks should base their lending decisions on the bigger picture as it is now, not on an unfortunate series of events from the last 6 years when the mortgage applicant can now clearly afford a mortgage.

We still own my flat from when I was single, its in Bath City centre and a lovely flat/apartment that is mortgage free. Sometimes we have let it out, Sometimes we and currently we don't.
Should I not charge and therefore profit from renting it out?

[quote JinglingHellsBells]@RickiTarr That argument of yours doesn't really stack up.

Education and the NHS are not free. They are provided through taxation, according to someone's income. People who earn more or paying for people who earn less or are not able to work. If they choose to go outside the system provided by the state, they are paying twice- no tax incentives for paying for private education or medical care.

Unless we embrace communism or a very socialist state, there will always be people with more money than others.
The council cannot provide enough housing for people who can't afford to buy without higher taxation.

There is a shortage of housing in the south east and a lot of it comes down to the policy of not allowing building on the green belt. There is no shortage of housing in the north and house prices are very low in some areas.[/quote]
It’s not an argument. It’s a response to PO the hi was talking about potential “profiteering” from food, education and healthcare.

There is a big difference between profiting and profiteering. I’m not arguing against the need for a profit motive. I was specifically answering what she said about “profiteering”.

You both need to look up the difference.

Banks should base their lending decisions on the bigger picture

They do.
A missed credit card payment will not prevent you from getting a mortgage.

www.themortgagehut.co.uk/late-payments-impact

Common late payments are the problem.

Honestly picking the holes out the segments in this thread is tiring.

@Sweetpeasaremadeforbees you have an absolute choice of where you rent and what you rent. Better places cost more, you don't "have" to live anywhere. You choose to live near your parents, or the school you like, or the job you want. If you want to pay less, then pay less, live somewhere cheaper, have less bedrooms, live in a terrace instead of a detached, a flat instead of a house. Just like you can go to Lidl or waitrose.

I don’t disagree that it is at unsustainable levels but I don’t think this is down to people and their greed. Wages have been stagnant for decades and have not kept up with the cost of living - this is going to continue. On top of that pensions are going to be a shock when those retiring are not on defined benefit. People are just trying to keep their heads above water by getting a source of income not linked to the traditional market where jobs are going to become automated etc. Gone are the days of a family being able to survive on one good wage, you need two to just survive. In terms of the impact on people I agree that rental is needed in society but the rent is often too high. Go back a few generations and owning property was not a given but rent was much more affordable but this is the price of a capitalist system - it is based on survival of the richest (not saying there is anything better maybe a more controlled capitalism?). I don’t think in most cases it is greed

Did the tenants pay for the minimum 25% deposit?

You'll get that and more back in rent. And unless we have a massive financial crash that 25% is pretty safe.

And I guess the tenants would struggle to come up with 25% because of the massive rent they are paying every month to their landlord.

This is really close to my heart as someone who is now in a position to think about buying in the next couple of years. We are on what would have been fantastic salaries 20 years ago in relation to property buying. In fact we are not far off what my parents currently make. They own 3 large village houses (including two with a swimming pool). If we are lucky we will get something with a really small garden and 2 bedrooms. Of course people will tell me I should only expect a 1 bedroom flat for a first property. The problem is, this first property is coming 8 years later than first properties used to and I would have no chance of being a mum and having a family if I bought a 1 bed flat as my first property at the point it was feasible.
So in the meantime, we wait longer to try and save more to buy what could be a family home in early 30s (while prices are still increasing) and live in a horrifically maintained rental property, that we don't want to try and make nicer as we could be kicked out every 6 months.
I really think rent caps and longer, secure tenancies would be perfect for most young professionals. Being able to paint a wall or hang a picture would mean a lot! And of course no restrictions like "no children."

P.s. I don't eat avocados, I don't eat out, I drive a tiny fuel efficient second hand car and I own one ancient bra because I'm saving for a house and cant bear to spend money. Most of my shoes have holes in too. Luckily the bottom so I can disguise them at work and just put plastic bags over my feet. No haircuts either.

All we contribute to the economy is the bare essentials and a whole load of rent, despite being medium earners.