Is a buy to let a status symbol in the UK?

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I can't quite understand why everyone I know who has a little spare cash on the side (I am 30 so people I know are generally in that age group) talks about buying a buy to let. Even in today's economic circumstances (high mortgage rates) and unfavourable tax conditions. I live in London so most people in my age group would be paying 40% tax if they got a BTL though I guess they would be buying it under a corporation. However, they don't have years and years of savings or equity so would presumably not be buying in cash..

It doesn't make any sense to me but I realized that fairly flashy people I know always talk about their BTLs so it got me thinking, is it a status symbol in the UK? I am not originally from the UK so I really didn't know. I understand it made sense for a lot of older people in the past to supplement their pension. I am from a country which prizes home ownership (89% home ownership) and own my flat too so I understand this drive to 'own' property and of course your own home. But in my country, I hardly hear perfectly ordinary and average people 'aspire' to be landlords. And from a financial perspective, it doesn't really make sense these days with all the regulation so the only way to explain the public's obsession with it is that it is emotional

My dad was always a landlord but he does it as a full time thing and mainly invests in commercial property and is more into the 'development' aspect. And he certainly doesn't think of it as a status symbol more like his career, and he has had a life long interest in property. He would not do it as a side hustle and certainly not if it was as regulated/taxed as it is here.

I wouldn't say it was, but for someone in their 30s to be suggesting they have a little money they can spend on one suggests the people you know are pretty wealthy to start with!

Buy to let used to be a relatively cheap way of owning another property as an investment vehicle really. You could get an interest only mortgage and the rent would cover the mortgage and provide some profit. Historically property has always gone up in value so some people invested with a plan to sell for their retirement or invested inheritance or pension money.

We make a decent profit from ours and the value of the property has gone through the roof since we bought it. It's a very good investment.

A lot of it is timing I guess. But now it's 40% tax unless you buy through a corporation, high mortgage rates and now rent reform means end to no fault evictions and the tenant can take you to tribunal if rent increase is too high. It's not that I don't support these measures but I am sure there are better ways of investing money at this moment than buying into something that is literal political dynamite.

All this is under a Conservative government. When labour gets in, there would be rent freezes in London because Sadiq khan has been asking it every year.

And then the whole EPC thing...

I am sure lots of landlord who have built up equity are still making a lot of money. But to aspire to a BTL when there is so much uncertainty means it can only be emotional or people haven't gotten the memo.

It marks you out as a greedy immoral low life. Private landlords are typically despised.

Only if you're a slum or bad landlord.

Plenty of decent landlords out there.

What do you think would happen to all the people who currently rent if all the private landlords suddenly disappeared overnight?

I wouldn't buy one now. But yes, plenty of people who mention they have been idly thinking about it for a couple of years possibly haven't looked into the tax/limited company/mortgage rates on interest-only loans yet.

This also includes people who are not quite there yet but talking about future plans. But of course they probably do have some money at the moment for it to be a 'viable' plan. I know a few people who live in extended family set ups which they are comfortable with talking about buying additional properties as an 'investment'.

I also know a teacher who has two buy to let flats he bought at £100k each!

So they are not rich,they just have the circumstances that make it possible either now or in the future.

I am British and early 30s, but I have had the same kind of thoughts as you, OP. Lots of my friends talk about BTLs or holiday homes as aspirational, or as the logical next step for financial security. I find it quite bizarre and completely disagree but it does seem to be almost part of the culture. My view is that it is very hard to make good money now from BTLs, and casual landlords renting out one or two properties tend to be pretty poor as landlords. There's more money to be made in holiday lets/ airbnbs, but I consider itmorally indefensible to take homes off the market and away from people who need them. Proper long term plans for financial independence I.e. steady saving, pension contributions, making good use of ISAs/investing in balanced funds etc is too boring I guess for most people.

Not all landlords are bastards. I work with a lot in my line of work and it's a real mix. Some slum landlords (who I've refused to do business with) and some who care about the people living in their property and do everything by the book and more. You sound jealous to be honest.

@ArmWrestlingWithChasNDave - they do seem to be largely. On Mumsnet. To profit from providing a home for someone else makes a person an evil bastard.

You could say that about anything. What about those evil bustards making profit out of selling food and clothes?

Food and clothes are mass produced and are often imported. So it is possible in a sense to have almost an infinite supply of those things particularly with technological improvements. There is enough food and clothes in the UK for everyone and honestly if it was better managed, no one or very few people would be using food banks. I mean in 2008, only 70,000 were using food banks but it is 10 million today.

Homes are different. you need land and planning permission to build the homes and labour. We don't have enough homes in the UK and no one quite knows how we can build enough homes...

I don't agree with ArmWrestling btw. The vitriol private landlords get on here is off the scale.

BTL is one of the few ways an amateur can make a "professional" quality of investment using the financial concept of "gearing". As a simple example, if you borrow £80k and buy a £100k house you have invested £20k (deposit). If the price of the house increases by 10% over the next two years to £110k, you have made £10k on your £20k investment ie. a 50% return! Alongside this the cost of borrowing (mortgage) is cheap and you get someone else (the tenant) to pay the interest!

If you wanted to invest in shares rather than property, as an amateur it would be virtually impossible to borrow money to do this, and even if you could, the interest would be much higher and you wouldn't get someone else to pay the interest. So you would be restricted to investing just your £20k. Even if the shares performed twice as well as house prices gaining 20% after two years, your profit would be only £4k.

BTL investors make money due to gearing, not due to any inherent superior performance of the housing market over other investments.

The £10k you 'make' is a paper gain. Ultimately you only make money when you sell and it can be a lot harder to sell property than sell shares.. property is very illiquid.

Furthermore, while the interest can probably be covered by the tenant, you also have to pay for the mortgage during void periods, repairs, agent fees (as many BTL landlords have day jobs or live very far away). All this can mean that you barely break even in terms of cash flow..a BTL landlord told me that he only made about £2k per year after costs..that probably excluded any major repair fund.

Is making profit from selling foood the same?

Gosh evil Tesco shareholders?

No, a BTL is not a ‘status symbol’.

It’s either a well judged investment by people lucky enough to be in such a position or it isn’t.

Status : meh

People want to (land)lord it over others.

I dont think so.
i’m 34 and own Buy to let 1 bedroom flat. I rent out the flat. I also own mortgage for my main house. I never speak about my BTL. All my friend still renting. They dont even if i’m renting or bought my house. We dont talk about money

Great thread, I've thought the same as you and definitely think there's a big element of status symbol to it. Having said that anyone I know who's done it has just kept their existing flat when they upgraded to a house rather than intentionally going out and investing (apart from one person who has over leveraged themselves with loads of debt and btl's) .
I've thought about whether I should 'aspire' to a Btl with any future savings but it doesn't sit right with me when it's so hard to get one property. Landlords always try to make out that they're doing society a favour but society would be better off if more people could own a place of their own and if we had more social housing.

To profit from providing a home for someone else makes a person an evil bastard.

By that logic anyone who sells anything to anyone is an evil bastard.

All the lenders that provide mortgages to home buyers at a high rate of interest so they can profit from the home buyer: evil bastards, all the massive companies that manufacture and/or sell you food at a profit to stop you starving: evil bastards, all the huge companies that make and sell you your clothes at a profit so you don't go around cold and naked: evil bastards.

No one ever comes on threads calling those people evil.

Everyone seems more than happy to spend their hard earned money on unnecessary clothing that has been made under dodgy circumstances or eat the crappy, unhealthy food provided by fast food outlets and supermarkets.

Do you pay for your mobile? Do you pay for your entertainment? Of course you do; all companies making huge profits.

Yet somehow, paying someone to provide you with a roof over your head is seen as the ultimate in evil unfairness. In whose world do you imagine housing is provided free of charge?

Pretty much anyone who provides anything that keeps you housed, fed, clothed or entertained is an evil bastard, by that logic.

This morning I was popping out to get the Saturday Guardian and met a person at the gate delivering flyers through the doors in our road (Edwardian terrace in north central Bristol). They are for a rental property management company. 'Are you receiving maximum rental income to offset rising interest rates?' and 'Tired of dealing with tenants, disappointed with your managing agent?'. They offer 'Guaranteed rent for 24 months'. The small print for that is 'applies to the first four HMO properties we take on this summer 1st June - 31 August 2023'. I am honestly bemused. I never thought our area would contain enough of the target demographic to be worth the company's while sending these out (glossy, thick card). I am definitely not in that demographic.

We've invested in lots of different things over the years and buying houses to rent out has been our best by far. You're getting rental income and capital appreciation.
Lots of people who are dead against it would do it in a flash if they had the means imo and experience. I'm not sure why people are so against it other than envy. Crap wages, especially for the young are mainly why ftb are priced out. And It's bank of mummy and daddy that have pushed house prices up and created inequality. Back in the 90's when we first bought only extremely wealthy people had help with a deposit.
Your dad is obviously exceptional 🤔👏🙄

'I'm not sure why people are so against it other than envy.'

@Zipps I really don't feel envy towards btl landlords. Sometimes pity when I hear of the miserly ones who have treated tenants badly though.

Does your sympathy extend towards good landlords who have had decent properties trashed by bad tenants? IrishMamaMia