To not believe people who claim to think housing is an uncontroversial investment

[PowerfulFishRiver]

Inspired by the wind up thread about the not-quite-millionare, but also a recent conversation with a family member who claimed to be shocked at my strong feelings when they said they wanted to buy a BTL.

I get that people sometimes have to do things that they're not comfortable with because life is tough and often having principles is expensive and sometimes we just can't be the people we want to be. I sometimes do cocaine, fly long-haul, and eat meat, even though I feel deep down like these are all morally wrong. But I would never try to pretend they're morally neutral, especially the drugs.

If someone said they knew treating a home as an investment was wrong, but they literally couldn't see any other way to make enough money to not be in poverty in retirement, or something, I feel like I would have a bit of sympathy.

But I just don't believe people when they claim to believe "it's just a business" or "just an investment". Surely everyone realises there is a finite amount of land on this planet (and especially on this island!), and if someone buys more land/property than they need, they're depriving someone else of it, and therefore making it harder for someone else to have a stable home, which is one of the basic things a human needs to have any sort of wellbeing in their life?

I just can't see how anyone can genuinely think buying up an existing asset and depriving someone else of it is anything like investing in stocks and shares or turning inputs into outputs like an actual productive business does.

Or in OP's case, a white line.

Go and read. Then read more. Then read more 💕

When DD was looking to buy her first flat, just over two years ago, she asked us to go with her for a second opinion. One place she looked at was a one bedroom flat and it was tiny. We soon realised that the other people interested were all looking at it as a BTL opportunity and we could see why.

You say in your post that people are looking for a permanent home. There is no way anybody would have wanted to buy this as their permanent home. It's location was good and handy for things like the University and the City Centre, but there was hardly any storage space. No room to swing a cat. It was the sort of place you would probably take if you had a 6 - 12 month placement for example but I can't believe anyone would want to buy it as their permanent home for the foreseeable future. In this sort of case I genuinely think BTL is justified.

Disclaimer: the only property we own is the one we live in.

That’s a massive oversimplification. Not everyone can or ever would be able to afford to buy. I would agree with you more if the government hadn’t sold off all the social housing. But there aren’t enough rental properties for people to live in which is making rents really high. Those people need somewhere to live that’s affordable now. And that can only be via private landlords in the short term.

In the longer term we should stop selling off social housing and heavily invest in rebuilding our stocks. Once that’s done, I think there’s more room for your argument.

Sorry, I disagree. There is a need for a rental market in houses as well as owner-occupied houses. You are not depriving people of homes. There is nothing morally wrong with being a fair landlord. You are only depriving people of homes if you own houses and leave them empty.

What about car rental companies? Are they immoral? They are depriving people of their ability to own their own cars.

i havent read the thread but who do you think people rent from? Not everyone can afford to buy, not everyone wants to buy, it’s suits them for what ever reason to rent. Therefore they have to rent from someone who has actually bought that property

I know MN hates landlords but most are very good and provide a service for which there is a market

better focusing on giving up the cocaine ( and the damage it’s causes not just to you but youngsters caught upon county line activity etc) than moaning about a family member wanting to become a landlord, as least that legal

I try to compensate for being an evil landlord by doing right by my tenants and keeping rents low.

Is that acceptable? 🫣

How do you know that? Plenty of people happy to rent.

Why is property that people may use as homes wrong but it’s fine for people to profit off food, water, utilities which are equally basic needs? Why do you specifically draw the line at homes but not basic food items?

As long as the person doing the letting is a decent person, then I can't see the issue.

People rent for varying reasons, including can't afford to buy.

Just saying people can't BTL isn't going to magically solve the housing crisis.

I have been in negative equity and ended up letting out the property I had a mortgage on, as I couldn't afford to sell it and take the £20K loss, and then renting another property in a town closer to my new job.

I was a fair landlord, and actually it was me that got screwed over by a tenant doing a moonlight flit owing a couple of months rent, and leaving the place needing a complete redecoration.

Ok thought experiment. Landlords sell up and property prices drop. Why do you think the property that becomes available will be equitably shared amongst those currently renting?

In reality those with higher incomes and good credit ratings will use the reduced prices to get more space for themselves. The graduate living with their parents who has saved a sizable deposit will get a one bed. The couple in a one bed will upgrade to a two bed to have a study. The well off family of four in a three bed will grab a larger house with a bigger garden that used to be an HMO rented to seven.

Yes some of the people renting will be able to buy. Others would become homeless. Owner occupied housing is less densely inhabited than rental property.

No real comparison to cocaine where people are being shot and teenagers stabbed tbh.

I have never and would never take drugs. I thinks it’s a vile business, which encourages exploitation of others at all levels. I do however own a second home, which I bought with my own, earned money, which I paid tax on. And I have paid and continue to pay, a fuck ton of tax on that second home. You have precisely zero right to judge me.

Were I your family member, I would be quite comfortable defending my ownership of a buy to let against your use of cocaine.

A friend has lived in the buy to let for 5 years now, paying between 50-60% of market and with an extra bedroom she absolutely couldn't afford in the market. This allows her to teach music as a sideline. She can also have a cat. I like cats. A lot of landlords don't.

When I bought it the only other bidder was an investment trust who own multiple buy to lets (I agree there's a discussion to be had, however, re "hobby" landlord versus professional; there are quite a few accidental landlords out there who aren't as well informed as they should be; there are also unpleasant multiple landlords, and unpleasant tenants).

The cocaine however...only losers.

I would lay off the nose candy and read up on some basic economics on supply and demand.

I know people who rent properties they could never afford to buy.

For the sake of argument, house prices falling to £100k or so would only really be of assistance in economically depressed areas of the NE, Wales and Scotland. Those are areas where people can, and do, buy already on public sector salaries.

The median house price in greater London is around half a million quid and for it to fall by 80% would suggest something so apocalyptic had happened to the economy that buying houses would be the last thing on people's minds!

Agreed, although how would it help the first set of areas you highlight when many are areas that have house prices of that level anyway? Or do you mean areas within those areas where the prices are higher perhaps if they're tourist destinations?

There are good and bad landlords. I rented for 11 years

We need btl’s because there’s times in your life you need to temporarily rent! As long as you are a good landlord I don’t see the issue

I think both things can be true - BTL can price people out of the housing market and a certain amount of rental properties are needed.

Off the top of my head -
-students (undergrad and post grad)

• junior doctors
• recently separated couples
• people on temporary contracts
• people new to an area
• people who's house may be uninhabitable due to refurb/flood/damage etc

All types of people (I'm sure there are other circumstances) that need to rent. How would you otherwise house those people? When I was an apprentice I moved out of home age 22. I didn't even earn minimum wage, but (this was 1990s) I could afford a house share.

The OP mentioned "house prices falling to £100k" so I had a quick look to see where the average is around £150k, because that would make them significantly more affordable without tanking the local economy.

It's hard to see anything changing much without a major uplift in real incomes and/or a large housebuilding programme of houses for social rent, although more purposebuilt retirement housing would help I suppose: it would help the ageing population manage at home for longer and free up houses that are hard to retrofit for older people.

The lack of construction workers is another major issue, whether that be for building or maintenance.

There is no shortage of cars. There IS a shortage of homes.

In the areas where I've been looking, there's no shortage of "retirement" homes, i.e. with a requirement of being over 50 or over 55. In a particularly city, if you search rightmove for flats under £250k, there are several dozen. When you filter out the retirement flats there are less than 5! Same in my current city, virtually no affordable small flats for "normal" people, but if you filter for retirement complexes there are dozens of them. If anything, I think councils should temporarily halt planning permissions for retirement complexes as there are clearly too many already and not enough homes for younger people to buy.

Only in the sense of them being unaffordable for some people. As are cars.
Admittedly it was far from a perfect analogy, but it was making the point that there can be a useful role for a rental market as we well as an ownership market.

Moreover, preventing buy to let would not create more homes. It would just shift the balance completely away from renting towards ownership. Owned houses would become cheaper, but renting would become infinitely expensive. It's not clear that that is an improvement! If anything, it would probably reduce the supply of homes, because one important market would have been removed.

If anything, I'd prefer to see restrictions on holiday home ownership in places where house prices (for buy or for rent) are extremely high relative to local incomes. But more important is to reduce restrictions on building. Increasing supply is ultimately what brings prices down.