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)

A lot of the worries about greedy small landlords will become irrelevant soon. Tax changes (supported, no doubt, by those who hate btl) mean that the money vs the hassle is just not worth it for many people now.

Of course, in reality, this will mean that big landlords/companies with hundreds of houses will continue to grow.

But people still need to rent and I can't see the gov stepping in with more social housing.

It sounds like your jaded and jealous OP.

Not all landlords have extortionate rents and poorly maintained properties.
My mum rents her house out via a housing association the rent she receives each month gives her £50 once she has paid insurance, mortgage and other costs such as the garden maintenance.

@Porcupineintherough

Out of interest, whyis it so much worse to make money out of housing than out of food, or energy, or water or medical supplies? Should they all ne provided on a not for profit basis also?

You raise a very interesting point that comes down to basic supply and demand.

If for example Say a group of people bought up all the bread in a town then tried to sell it on a higher price then shoppers pay up or instead might go to a different town, bakers might make more bread, bread could be imported from a different country or simply shoppers skip bread for a day or two and eat something else. Until the supply and demand were matched at the market prices.

Unfortunately the difference with housing is that house builders are not free to just build more houses because of Government created planning restrictions, you cannot import houses, there is no comparable alternative to living in a house though sleeping on the street or flat share could be seen as forced alternatives. I would also view shelter (housing) as much as a basic necessity as food, water, energy and medical supplies.

Interestingly on medical supplies at the start of the pandemic there were cases in the press of individuals buying up large quantities of face masks then trying to sell them on at a profit as there was a mismatch between supply and demand. This is also capitalism at work and not illegal but I would be interested to hear if you view this as acceptable or not.

We’ve just bought a holiday home which we will use as a family and rent out during peak season. I don’t feel at all guilty we’ve worked hard to pay our own mortgage off and afford this. It’s a good investment in a beautiful spot. In all honesty, whilst I don’t wish anyone ill will, I don’t have any guilty feelings at all about doing this. I, like most people, only genuinely care about myself and my loved ones.

To me, this is the people who are causing the most damage. Not good landlords who are providing homes for people who aren't able to or don't want to buy. It's those with the, 'I only care about me and my family' attitude whilst forcing locals to relocate and decimating communities by buying up local homes for holiday homes.

We also have the pattern of NIMBYism over planning

The cost of land means developers over develop a site to maximise profit. Which means people are more likely to object.
E.g your going to object to that old house at the bottom of your garden being knocked down and turned into 40 flats with underground car parking.
If it was 5 two beds with a nice size garden, that nice tree could stay and wildlife would stand a chance. There would be ten neighbours not 60 and less impact on the community.

About 5 years ago I sold a 2 up 2 down for £50k. No one wanted to buy it to live in, I basically only had interest from buy to let investors. £50k is very affordable as housing goes. It was a 2 minute walk to a main road where all the buses go, a 5 minute walk to a park and a 3.5 minute walk to a row of shops, bookies, hairdressers (plural) and pub. It was just too small for my family of 4 (had been ample for us as a young couple). It had taken us ages to decide to put it in the market as DHs job was insecure and we could manage the bills easier on one wage in a cheap house. We jumped a couple of rungs up the housing ladder when we moved. I don't think people do that first stage of the traditional housing ladder any more, they want an ample family home straight away. A few people told us to keep it on as a rental but we didn't want the stress, plus the small matter of needing the equity as a deposit for our new home.

YANBU. Often the first response on the Money boards when someone has a little money to invest is "buy an investment property" or "a holiday let". i.e. line your pockets with no regard for the wider impact on society.

I think BTL is downright immoral.

I have a rental flat in London. It's furnished and specifically aimed towards international renters who come to work in London for a few years, although we are open to rent to anyone of course. There would be nowhere for them to rent if there wasn't for private landlords, unless they want to stay in serviced apartments, but that's not really designed for longer term. So far we have had both couples but also a small family with a child renting from us.

We rent in a non tourist area and I really feel for those that do.

How do you stand a chance when a landlord could rent a house for £1000 a week for 6 months of the year vs £800 a month for long term.

I have felt for some time that there should be a property limit on buy to let. People who cannot afford to buy still need an option to rent a home, but I don't think people should be allowed to own 7 and 8 houses. You can surely make a decent living owning 1 or 2 and thus giving people somewhere to live at the same time. There is such a shortage of affordable homes that no one should be allowed to own 7 or 8 properties nowadays.

Neighbours a couple of houses down, I mean we can see their children playing on their trampoline are moving out because their landlord increased their rent. In THIS climate!!

Once there was a thread where the OP was asking about increasing the rent on their tenants because rents had supposedly gone up. Many posters who owned BTL said that they would never increase the rent on a sitting tenant which was at least good to read.

@Scottishskifun

It sounds like your jaded and jealous OP.

Not all landlords have extortionate rents and poorly maintained properties.
My mum rents her house out via a housing association the rent she receives each month gives her £50 once she has paid insurance, mortgage and other costs such as the garden maintenance.

But paying the mortgage is increasing her capital. So £50 spending money, plus increased capital. Unless it is an interest only mortgage.

Interesting to read the comments. I of course understand a need for rental homes for some, or for those who enjoy renting. That’s fine.

If the rents can be fixed at a low rate to allow low level earners a chance at a better quality of life. Surely any one with half a brain cell can see how this would positively impact society on every level.

I don't think people do that first stage of the traditional housing ladder any more, they want an ample family home straight away.

There is less of it, but in large part because first-time buyers now tend to be older and more often have children already by the time they can afford to buy.

the rents can be fixed at a low rate to allow low level earners a chance at a better quality of life

Move to a different area.. you don’t have to stay in an expensive area.

I love the way posters on MN always pretend that the only possible way of ensuring that the country has a decent supply of rented housing, in good condition, with flexibility for tenants who may move a lot MUST be for the market to be dominated by private landlords.

The above outcome would be better achieved through the expansion of social housing / housing associations and tighter regulation of how those housing associations are allowed to operate. People who want to boost their pension could invest in housing associations if they want. Or in any other form of business.

Basic human needs shouldn't be hoarded and sold for private profit. That applies to energy, water etc. as well in my view.

@GoldenOmber

I don't think people do that first stage of the traditional housing ladder any more, they want an ample family home straight away.

There is less of it, but in large part because first-time buyers now tend to be older and more often have children already by the time they can afford to buy.

Also the market is moving so fast that by the time you have money to move up or even buy another 25% of your "Help" to buy which has also increased according to market it has become impossible!

@Gothichouse40

I have felt for some time that there should be a property limit on buy to let. People who cannot afford to buy still need an option to rent a home, but I don't think people should be allowed to own 7 and 8 houses. You can surely make a decent living owning 1 or 2 and thus giving people somewhere to live at the same time. There is such a shortage of affordable homes that no one should be allowed to own 7 or 8 properties nowadays.

This ⬆️ Yes! I totally agree with you and in the case of our area and my friend, FTBs are drastically losing out to her and other LLs! It’s not fair! Yes people need housing and somewhere to live but we need more low cost social housing not rich people with a million pound property portfolio! One extra house should be enough for people to rent out and no more than that

I worked in a call centre for a mortgage department in the early 00's. Seems mad now, but a lot of lending was done on 'self-cert' mortgages with little/no deposit where you basically just had to say you had enough income to cover the payments, or could get enough rent. Plenty of people used this to build up quite a portfolio of properties they rented out

@WWYD2020

the rents can be fixed at a low rate to allow low level earners a chance at a better quality of life

Move to a different area.. you don’t have to stay in an expensive area.

What would londoners do if all the low earners did this? No cleaners, no baristas, no retail staff, no cooks or waiters....

Low earners are just as important to the economy of an area as anyone else. All areas need a mix of people to thrive, with jobs and housing for all.

amazing how every single BTL property owner on here is a great landlord not making any profit.

It's a very flawed system. We need much more stringent regulation of the rental market, more powers against shit landlords (and if you're really not a shit landlord, well, you've got nothing to fear, do you?) and if that drives out landlords who can't cope with it - sounds like a win to me.

In the 80’s and early 90’s People didn’t expect to make money on monthly rent. People rented to keep the property in the knowledge the value would go up over time. So the return was on the end sale. The rest of the time you were winning if it paid for itself with zero balance.
The idea you made money on the rent seems to have come about with lower interest rates.

They’re hardly going to pipe up if they’re crap and out to screw people.

I Think there is a need for the rental market (we rent currently and our landlord is fine) as there as some people who want to rent for whatever reason..

BUT that being said it is a problem when people buy multiple buy to let properties as it just pushes the prices up. House prices are crazy and it feels like we're never going to get on the ladder (We've got almost 50k saved but we're both in low earning jobs and it's taken us ages..so we've got the deposit but the area we need to move to is minimum 250/300K so we're going to struggle to get a mortgage when we do want to buy, meaning spending 1K+ on rent every month)

It sort of blows my mind a bit that my partner's grandmother bought her house for about 20k and when the family come to sell it it'll go for over a million (It's a victorian manor house)..Yes she bought it when she was 20. Yes shes now 103 but that's still a crazy increase (i just googled 20k in 1938 equates to 361,769 today)

As for the food argument, there was a really interesting documentary I watched a few months ago that compared this.

If the price of food had gone up at the same rate as the property market a loaf of bread would be about £35.. makes you think a little bit..

@BeenAsFarAsMercyAndGrand

I love the way posters on MN always pretend that the only possible way of ensuring that the country has a decent supply of rented housing, in good condition, with flexibility for tenants who may move a lot MUST be for the market to be dominated by private landlords.

The above outcome would be better achieved through the expansion of social housing / housing associations and tighter regulation of how those housing associations are allowed to operate. People who want to boost their pension could invest in housing associations if they want. Or in any other form of business.

Basic human needs shouldn't be hoarded and sold for private profit. That applies to energy, water etc. as well in my view.

this! I'm perfectly happy to live in a capitalist society, as it goes, but that doesn't mean we can't address social needs through socialist means.