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)

Don't be so ridiculous. Would you rather one company owned 100 houses and made huge profits, or 100 people provide for their family by having a house people pay rent for?

In the 80's, 90's and early 2000's if you retired or got an inheritance you would put it in savings and get 7/8%interest.
I remember an old ndn getting about £8k a year on top of her pension from savings.
My dfil died in 2014. My dh got roughly £70k.
Currently his savings interest is around 1%.
I can understand that those inheriting enough to buy a second home would do so.
Coupled with selling off council houses and not replacing them, wages lower than ever and more people inheriting from parents, the past 12 years(of Tory government) have been a perfect storm for first time buyers.

When I was a student students used to rent spare rooms at people's house's where their children had left. People should have been able to rent a flat for a lot less but the fact that familes have to share a room is unacceptable.

What has also inflated the market is being allowed to convert your house into a rental. I see nice big houses worth a million and I think that if you hadn't been allowed to convert to to at least 4 grotty flats no family would have been able to afford your extortionate rent of 2000 or over and you would have been forced to accept a smaller amount. Equally then if you could rent a 4 bedroom house for less, why would you rent a 3 bedroom or even a 2 bedroom for the same price? Their rents would have had to be reduced out of necessity.

I think YABU.

I am a home owner (renovating it) but have been renting for the past 8 months due to the renovation works. Next door lives 2 friends who have just moved out of their parents house. Opposite a young couple who have just moved in together for the first time (she has relocated from London). Next door the other side are a couple who have moved from Hong Kong due to the ongoing problems there.

There are so many reasons people need rentals and yes others profit from them but is it not supply and demand?

@chocorabbit

When I was a student students used to rent spare rooms at people's house's where their children had left. People should have been able to rent a flat for a lot less but the fact that familes have to share a room is unacceptable.

What has also inflated the market is being allowed to convert your house into a rental. I see nice big houses worth a million and I think that if you hadn't been allowed to convert to to at least 4 grotty flats no family would have been able to afford your extortionate rent of 2000 or over and you would have been forced to accept a smaller amount. Equally then if you could rent a 4 bedroom house for less, why would you rent a 3 bedroom or even a 2 bedroom for the same price? Their rents would have had to be reduced out of necessity.

What I meant is to convert your house to FLATS.

Tenants have no idea of the costs involved to landlords.

To get a BTL mortgage you need at least 25% deposit (sometimes up to 40%). The mortgage is usually interest only, which sounds great in principle but a big lump sum will need to be found at the end of the term to pay it off.

Letting agent fees have changed as they were ripping tenants off and so a lot of the money lost to agents has been transferred to the landlord in increased fees their end.

Then there's maintenance, certificates required by law, tax etc.

And of course non paying or late paying tenants. I know loads of people who rent and see that particular bill as 'non essential'. They'll stall and pay late and pay only part or just generally dick around. One gleefully told me that 'there's not much my LL can do, it'll take so long and cost so much to get me out, better for him to get something than nothing at all' If I stopped paying my rent today I probably would be evicted for a year, and even if they chased me for £7 grand+ of unpaid rent I'd have no assets to pay it with. So potentially I could pay it off at £5 a week or whatever.

Not to mention repairing damage and redecorating costs every tenant cycle.

If you actually sit and did the maths, it's really not greed or profiteering. The most it is, is a long term investment, gambling on the value of the property going up enough that when you go to sell it was worth your while. Factor in solicitors fees and everything else at that point and the stress and time involved in no-rent months and shitty awkward tenants and it's not something I would want to get into myself.

Really annoys me that MN look with such envy at people who have something they don't. We all have to muddle through as best we can and attacking landlords when the huge influx of Air BnBs for example where people really do just want to make a quick buck are far more damaging to the housing market and community.

Grandson and partner live in a cheap area. Finally they've been able to buy a house. Their mortgage is £100 less than they were paying rent. Similar house. That’s what’s wrong.

Meant to say we are all renting but for different reasons and for some the rental is a stop gap but for others it will be long term.

I'm not bitter, I own my own house outright and I'm saving money to give DD a large deposit for a house when she is older.

But I feel sorry for those having to spend maybe half their income every month on housing and I resent my taxes subsidising LLs via housing benefit and my taxes having to pay for elderly care for others when they were unable to save for their retirement because either they couldn't afford to buy a house or invest in savings or a pension because their housing costs were so high.

Anyway, this argument comes up regularly on MN, fuck knows why I got drawn in this time.

It would be fine using it as a business if it didn’t affect people so much.
Houses are so much more than a business to the people that live in them.

It’s school catchments and with more schools getting rid of the sibling rule, you could be stuffed. With children in different schools. Or not being able to follow their primary friends to secondary as you had to move.

It’s buying a trampoline for the garden or a sofa for the living room, but getting the little one incase you have to move.

Getting your kids a pet, think long and hard. The next land lord might not let you have that rabbit.

Getting the paints out for the kids, better think again in case the kids get it on the floor and you can’t get it out.

Wanting to plant some vegetables in the garden, your on a rolling contract so might have to move in 2 months. There’s no point.

Wanting to paint a nursery for your new baby, sorry it’s rented. You can’t

That photo you’ve got would make a lovely canvas on your wall, oh no. Your tenancy says you can’t put pictures up.

Eyeing up that electric car? pointless as you’ll have to worry about charging points, asking the landlord and where you might move to.

It over takes every decision you make in life and is all consuming.

@Oneeyeopen

In the 80's, 90's and early 2000's if you retired or got an inheritance you would put it in savings and get 7/8%interest. I remember an old ndn getting about £8k a year on top of her pension from savings. My dfil died in 2014. My dh got roughly £70k. Currently his savings interest is around 1%. I can understand that those inheriting enough to buy a second home would do so. Coupled with selling off council houses and not replacing them, wages lower than ever and more people inheriting from parents, the past 12 years(of Tory government) have been a perfect storm for first time buyers.

Absolutely true!

I’m pretty capitalist in most respects but agree with you that people shouldn’t profit from housing so YANBU. With the current housing market, they’re essentially profiting from other’s misfortune.

It’s unethical to use poorer/younger people to top up your income while they struggle in a rigged system.

You say yourself it's "Dickensian", so presumably, people thought of it some time before Dickens?

I think you have to distinguish between the thing in principle, and the current implementiation. I see nothing wrong with someone owning a property to rent out in principle, but the rules around this in the UK are possibly not set up in a way that promotes good actions by landlords. Different countries have different rules, and different market dynamics as a result.

I think it's like everything in capitalism. Some landlords are fulfilling a real market need and others are exploiting it for their own benefit, perpetuating the market need.

The main problem is how high rents are, that they aren't secure - potentially meaning frequent moves for the tenant, that they can't be made into a home due to restrictions with decorating and some won't allow pets/children then add on to this 'no housing benefit' rentals.

The people who need secure, affordable housing most are likely young families who need housing benefit for high rents as they have childcare costs and are still working up the ladder in regards to salary. It makes it very hard to save to buy.

I agree that there is a need for a rental market but the rental costs should be fair for an average family to afford without the need for help. Everytime someone needs housing benefit this money is lining the landlords pocket not the tenants.

I've voted YANBU because we do need private rentals but there should be control over the numbers in an area. At the moment the demand for houses is partly driven by people buying to let.

I don't think there is anything wrong with private landlords, but absolutely believe that there should be a cap on the amount of rent they can charge (or even better fixed rents depending on property types) - we are getting to a point where people can't afford anywhere to live and that is unacceptable

It is not a greed, it is an investment decision. Based on this post I think you should try to move to a different more regimented country where people don't have a choice or money to do these thiggs. Try North Korea

I do agree with the crazy prices! My best friend currently owns 6 terraced houses and we live in an area where can sell for 90-100k (lucky us)! But she snaps them up and rents then for over 900 a month (excluding bills) and it really upsets me that FTBs will never be able to get a foot in the due to people like my friend, (she’s one of many in the area that do this) I want her to succeed in life and fair enough if she just owned an additionally one to her own property but she’s in the process of buying another (and another after that) and I can’t help but think of younger people who won’t be able to buy their own house due to greedy landlords!

We are very lucky to in a position to buy a second home if we want to but ethically I just can’t do it!

@Sparklfairy

Tenants have no idea of the costs involved to landlords.

To get a BTL mortgage you need at least 25% deposit (sometimes up to 40%). The mortgage is usually interest only, which sounds great in principle but a big lump sum will need to be found at the end of the term to pay it off.

Letting agent fees have changed as they were ripping tenants off and so a lot of the money lost to agents has been transferred to the landlord in increased fees their end.

Then there's maintenance, certificates required by law, tax etc.

And of course non paying or late paying tenants. I know loads of people who rent and see that particular bill as 'non essential'. They'll stall and pay late and pay only part or just generally dick around. One gleefully told me that 'there's not much my LL can do, it'll take so long and cost so much to get me out, better for him to get something than nothing at all' If I stopped paying my rent today I probably would be evicted for a year, and even if they chased me for £7 grand+ of unpaid rent I'd have no assets to pay it with. So potentially I could pay it off at £5 a week or whatever.

Not to mention repairing damage and redecorating costs every tenant cycle.

If you actually sit and did the maths, it's really not greed or profiteering. The most it is, is a long term investment, gambling on the value of the property going up enough that when you go to sell it was worth your while. Factor in solicitors fees and everything else at that point and the stress and time involved in no-rent months and shitty awkward tenants and it's not something I would want to get into myself.

Really annoys me that MN look with such envy at people who have something they don't. We all have to muddle through as best we can and attacking landlords when the huge influx of Air BnBs for example where people really do just want to make a quick buck are far more damaging to the housing market and community.

All of this.

It’s like insta vs reality!

I agree completely although you'll get a lot of anger about it. There is a huge shortage of houses and we all know how fast the prices go up. It's incredibly difficult to get on the housing ladder and buy-to-letters just push the price up further.
If it were the case that property prices were reasonable and that people were able to buy a first property as long as they could demonstrate they could make the payments, then it wouldn't bother me, but it's not.
I wouldn't consider buying a property just to rent it out. I think it's unethical.

I agree that there were down sides to renting, I had a cat for many years and it was always a worry that the next landlord wouldn't allow her. And a couple of times we had to move, once with a very new baby, when we hadn't expected to. We did generally do some decorating though, always improving the place and no landlord ever complained about the new paint or garden decking. Overall though, I am glad we did it that way, we got to live in much nicer areas and houses than we would have it we had bought (never managed to save a deposit).

I rented at the start of my career when I didn't have a big enough salary to be able to buy.

We rented our house out when we moved temporarily for work reasons, knowing we'd be back in a few years. We let it mainly to people who were themselves relocating; one tenant was reluctant to commit to the area and went back home, another did find a new place locally to buy. Another tenant was local, but came home one day to find his wife in the arms of another, and needed somewhere to live until the divorce went through which was close to his work and children's school, with enough space for his children to stay.

So yes, there are legitimate reasons to be tenants and landlords.

If the landlords didn't exist, where are people going to live? There is no stockpile of council houses/HA and very few are built - most which come up are given to councils as part of new estate projects.

There definitely needs to be far more stringent regulations on the rental market. Our mortgage is roughly the same as room in a nice HMO. Which is just mental.

Until the government decide to finally build more themselves we will forever be in this position. Its going to be quite scary the cost of housing benefits when people my age and younger get to retirement with less and less people purchasing.

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

Around 1997 I think was when it started to become really noticeable. Loads of people started talking about property in terms of being their pension. It was completely predictable back then what would happen if the government didn’t act. I can remember discussing with my friends that the next generation would suffer the consequences.