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.

They're certainly a lightning rod for opinions on MN

@pigsDOfly

No i am not picking holes, i am stating the reality, LLs age, don't want the hassle and sell, which you also have said may well happen in your case.

That means someone who has made a home for many years gets booted out, its happening to me, its happening to friends i know, sect 21 notices are on the increase, changes to taxation, EPCs and aging LLs mean this will only go one way.

I'm sorry you cannot see the distress this is causing, we simply cannot all afford to buy a house, huge numbers of essential but very low paid workers will never earn enough, their security is at the whim of a private LL and his/her retirement plans.

Incidentally, i don't blame the LL's but a system encouraged by both Tory and Lab that has allowed this to happen.

I've never seen it as a status thing but rather as an investment to secure an income in later life. We are landlords and I never talk about it to others; I find it a bit embarrassing really.

Blame the system not the landlords. In Germany section 466 of the civil code prevents landlords from kicking out tenants when they sell the property. It could easily be implemented here if there was a will.

So what is your solution? Forcing people to keep their their properties - including post death/ when not economical (due to the constantly more restrictive tax rules) - so you can live in them?

Not a status symbol, but it horrifies and disgusts me how little effort people seem to think it will be. "Oh I have a few grand spare so I will 'just' buy a property and let it out for a bit of pocket money" - NO. You are setting up a residential lettings business. There are so many rules, regs, paperwork, obligations to follow. It's not something to go into lightly.

Buy to lets are still a very good long term investment, especially if you’ve managed to accumulate a decent deposit/ cash sum so your mortgage isn’t too high. I know quite a few people who have channelled savings into one, they get a decent return now and plan to sell in 5-10 years time to either cover tuition fees or give their kids a leg up on the property ladder. It’s working out well for them so far, but it wasn’t a status symbol, no.

And yes, this country very much needs private landlords- especially those who have one or a couple of houses and not a massive empire, who IME are usually the most decent. I used landlords exactly like this (professionals who had bought a larger place, or retirees) for the first 3 years after I left uni and wasn’t sure where I wanted to work. I was a good tenant, they were decent landlords. The arrangement worked well for us both. And what’s the alternative for people who can’t (or don’t want to) buy?

Not really
Property is seen as an investment

Holiday homes are a status symbol
Buy to lets are usually
a) the ones that need the rental income to pay the mortgage or
b) people that do property letting as a business

a lot of properties that have been bought in the past 10 years have been bought by btl - far more than ever in the past so I am aware that it is easy to demonise btl owners as the reason why a person cannot get on the housing ladder.

But people still need places to rent.

what we don’t have in this country is investment by pension funds etc in privately-owned leased accommodation blocks. Imagine instead of btl, a company built blocks containing 100-200 2/3/4 bed flats and rented them out. They would get a steady income, the tenant would get a lease that they would think had some sort of permanence and the small time btl owners would lose tenants and be forced to sell up. A sort of classier version of Council housing blocks.

This. This is why I thought it must be a status symbol or at least some sort of financial milestone one should aspire to if they had some cash on the side, like a fancy car for example (though of course a car has some utility).

People seem to think of getting a BTL like a BMW. Oh I have some spare money, I should go into BTL, the rent will definitely pay the mortgage/all expenses and everything will be hunky dory

Not complaining about it but it does mean that it makes far less sense to rent out property if it's under your name..

A lot of people are very naive about how profitable BTL is and don't understand the tax. It's not a great earner for most if just starting out now.

All correct. The fund I invested £20K in a few years ago has outperformed that, and I can realise the financial gain easily by logging into my account and filling out a form. Small time BTL is over in the UK.

For those of you hating on landlords.

Through circumstances not of my making (Liz Truss) has put me in the accidental landlord category.

If the tennants wanted to buy my property the mortgage would cost in the region of £1900 pcm. They rent for £800pcm. I would say I'm providing a public service opposed to being a greedy or evil.

I'd much rather have cash in the bank and not be a landlord.

So to answer your question OP. Some people might derive status from being a landlord. I certainly do not.

No such thing as an accidental landlord. At some stage, you have CHOSEN to start a residential lettings business.

I never bought a property with the intent to become a landlord. I tried every best effort to sell it. I was backed into a corner to make financial ends meet.

As far as I'm concerned I'm an accidental landlord.

have CHOSEN to start a residential lettings business

A business is something that is done for profit. I have not chosen to start a business. I am not making money. Let to buy in my circumstances is not a business venture.

Practically any property will find a buyer if it’s priced at a level that someone will pay. Being a landlord, even a not for profit one, is a hassle, especially if you don’t want to be!

And this is why you are a bad landlord. YOU ARE RUNNING A BUSINESS. Doesn't matter if it is profitable or not. Your poor tenants had better hope you're up to date with all the correct, current legislation and safety regs etc.

What i would do is as LLs sell, the state buys the property at the avg market level in that area.
So should not be forced to keep on properties.

Funded by the rent collected, huge reduction in council temporary accommodation costs inc limiting children missing school, not too mention keeping people in the area, work etc, rents could then more closely matched to what people can afford.
Also, an appreciating asset on councils books.

Longer term, a move towards council housing, as this happens, private properties that were bought, would then be sold on the open market if people wanted to be in a newer council house, if not stay where they are, with secure tenancies.

Alright, well at the minute that's not an option for PP because the state is not offering to pick up all these properties. So it's a bit out of order to make out like she is some evil money grabbing capitalist LL because she says she wants to sell sometime in the future.

And in your position, you need LLs to exist. Because - as you say yourself - you can't buy and currently alternatives (other than private rentals) don't exist.

Pardon me? How do you know I'm a bad landlord? 😂

I think for most small landlords it's a pension rather than a status symbol. We've considered it ourselves. According to some advisors every £100k in your pension pot gives you £4k pa pension. Where I live £300k buys you a 3/4 bed detached that will give a rental of £12k pa, so you have a continuous income plus the capital. Its a no brainer really.

It is free money for those with no conscience.

There's not a lot of point in my responding to your above post as you're clearly not reading what I've actually written.

But what I would just say is, yes, I said that I might possibly sell the house at some time in the future. But as I also said that will not happen unless, or until, the current tenant decides to move out. I will not sell it until then so how would I be booting someone out of the home they've lived in for years?

Far from not being able to see the distress having to leave a home after years causes, I am very much aware of it, having had to move my three children out of the only home they'd known following my divorce, which is why I wouldn't ask my tenant to leave so I can sell the house; not that I have any plans to sell anyway.

If you want to have a sensible discussion it really helps to listen to, or in this case read, what the other person is saying, something you're clearly not doing with my posts.

You're, understandably, clearly very upset about having to leave your home. I hope you find another house that you can enjoy in the same way.

@pigsDOfly

what you re are missing is the general point, some specifically applies to you but in the main applies to the vast majority of private LLs, you seem far too heavily invested in being seen to be a good LL.

Yes i wonder why i am so upset? who'd have thought it eh!

As for finding another home, thats unlikely and even if i did, whats to say in a few months/years some else decides to sell up?

The new renters reform bill does nothing to stop this from happeningto many others all over again, private LLs are the new slave traders, making monies out of other peoples misery.