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.

But what do you think you should do if you need to rent somewhere to live then??

I rented for like 20 years, and in my 20s had no interest in buying somewhere.

I don’t know where I would have lived if it was not possible to rent. And although it would be handy (!), I can’t see how free housing would be feasible.

A landlord (who follows the law) will do repairs, spend time maintaining the property and tenancy and have other overheads to pay.

I’m not a landlord myself so have no skin in the game, but can’t see why someone would (or should) run a rental property for free.

Or do you think all rental properties should be provided by local authorities?

Given that that is not how the current system is set up, how do you think tenants and landlords should operate instead?

Just curious.

Well we will have to agree to disagree as you seem to be under the impression that you have in some way been mistreated when it is clearly not the case. You just carry on wallowing in your victimhood.

I think the anger is because most tenants are involuntary tenants. They have done surveys and something like 90% of private tenants would prefer to own if possible. If there was an option to buy or rent subsidised housing built by the local authority for those who can't afford to rent or buy on the private market (including average earners) and renting was something people did when they were students or on temporary job contracts or wanted something more upmarket than what is offered by the council, it would be very different.

Back in the days before the deposit scheme EVERY single landlord, and I mean EVERY single one managed to keep our deposits for bullshit reasons. Including the one we considered a friend. We always keep our rental places immaculate, looked after etc.
many people have had experiences like this - where greed takes over any sense of fairness or right and wrong which is why many consider BTL landlords utter cunts.

I think you make a good point. We've only ever rented to tenants, in professional jobs who need relatively short term accommodation for career reasons. So we've never had to deal with the bitterness and vitriol seen on here. Thank God.

Interesting question. My sister keeps talking about her BTL landlord ambitions. We get along well, but she and her DH are flashy people (mortgaged up to the eyeballs, new cars on finance, lots of credit card use.) They talk about this idea of buying a second property to let as if it’s perfectly normal and the logical next step in life!

I thought it was just them being slightly detached from reality, but it sounds like this is an aspirational thing?

They couldn’t afford to do it anyway so I just nod and smile when she brings it up!

No sure I totally get that – however given that that system does not currently exist here – there is not LA-subsidised housing available for most renters – what should landlords and tenants do in the meantime?

E.g. a previous landlord of mine had inherited his property mortgage free from his mum when she died. He didn’t need to live there and rented it out at average market prices and was responsive with repairs and sympathetic when there was a cash flow issue (an employer closed down and didn’t pay anyone). I needed to rent somewhere at the time, wasn’t in a position to buy, and was happy with the price and the accommodation. What should he have done differently?

Obviously some are unscrupulous (have definitely met some of those) but I’m just not quite sure why landlords should by default be considered ‘evil bastards’.

Thats how it should be, social housing should never have been outsourced to the extent it has been to the private sector, over the last 30 or 40 years.

Whether you like it or not, lower paid workers, who will never be able to afford their own property, provide essential services that society needs, having them in insecure housing, at the whim of a BTL who wants to sell up, helps no one.

What nasty person you are.

The problem though with the uk social housing system is that it only catered to the lower income earners and increasingly due to shortages, it catered to only the poorest and most vulnerable. Which meant that society at large didn't feel that social housing was worthy of investment as most people would not benefit, and a lot of social housing fell into disrepair and there wasn't pressure to build more.

The reality is that it needs to cater to a wide range of people including middle income earners in order for people to feel like they have a stake in it. And middle income earners would expect more than basic housing and they would probably prefer to own. My dad supports the social housing scheme in my home country despite having never lived in it because it is used even by well paid young professionals as a first step on the housing ladder and he knows that having this scheme means that he will never need to give a penny to his children to buy their first homes. Any government program needs wide scale support in order to be sustainable . If it only catered to the poor, it is very easy to axe it as for now, 70% of the uk population consider themselves 'middle-class'

It's about to become a status symbol of losing loads of cash.

Mortgage rates going up = property prices down.
Ever increasing difficulties and costs managing tenants.
Considerable improvements in tenants rights eg evictions.
Costs of maintenance and difficulty getting work done ever increasing.

This sector is a busted flush and the smart money has already exited.

Absolutely but then what happens to the millions of people and families who rent and now being evicted?
LL's are selling up, main reasons seem to be, taxation, fear of no fault evictions going and the changes to EPC regs.

No one, Tory or Labour have any plans for the "what next?" moment.

This, it’s so short sighted. People baying they hate landlords, but then in desperate situations as they can’t find any where to rent as many are selling up. Sleeping in a hostel, overcrowding with extended family, or in other temp accommodation, is a fuck ton worse and that’s what it’s coming to with so many landlords exiting.

who are they selling to, that is the question.

I did once read that LLs selling to owner occupiers is not the magic solution or may not benefit FTBs as much as previously thought. For example, a LL selling a 5 bed HMO (which would have provided homes to 5 people from different families) is likely to be bought by existing homeowners on their second or third house or by a builder who would convert to 'luxury' flats which would lie empty for at least two years before being sold to downsizers or wealthy FTBs (who probably could afford a lot of the existing housing stock anyway).

There are few investments where you can have such leverage, that is one reason. Another is that many people are more comfortable in investment in one specific physical asset they can actually see. Both of these factors however increase risk. Many existing investors did it at a time before tax rules were changed so it was treated like any other income - although still less favourably taxed than capital gains even then. I suspect many didn't understand the implications of that fully and the difference it would make with compound interest, or the amount of hassle it would involve or additional risks from tenant non-payment or the risks of not diversifying properly. Ultimately it is a very risky and not very profitable investment, especially not any income is taxed punitively with tax levied on revenue rather than profit, effectively. No wonder there aren't many private rentals available now.

Houses don't disappear when landlords sell them.

Each one either goes to a private owner, a council or maybe a housing association.

The market is sticky and the "you can't go wrong with bricks and mortar" crowd will hang on to the bitter end. The liquidation will occur over a long timescale.

In answer to the OP’s question, I don’t think it’s a status symbol so much as this has long been considered a sensible investment if you could afford to buy a second property. Although obviously as you say the financial sense of it is contested nowadays. I think it’s such a firmly established idea and probably lots of people have it in their heads as a way to create financial security without having looked into the nuts and bolts of it. In some parts of the country it would also make far more sense than others.

You don't say!

Which council or HA buys up private housing on the open market for rental at social rents? Ans is very few if any, some have bought back ex council homes sold in the Right to buy scheme but council housing stock is at all time lows.

There will be some that will be more readily available to those in rent who have been priced out of the market but for the majority, it will mean even more hardship as rents increase and properties decrease.

In my council area, there are 11,000 on the 3 bed Council/HA waiting list, with around 150 properties becoming available each year, the city council does not buy properties.

'I think the anger is because most tenants are involuntary tenants. '

Totally understandable that people are pissed off that they or their kids can't afford to buy a house ( = security) or even afford to rent a decent one with a half decent landlord when there are people who own several houses for 'investment' reasons.