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.

Quick snap a few more up to add to your portfolio.

One of the main reasons England thrived was that, from very early on, it had secure property rights. This means that what belongs to you (house / field / car / horse / jewellery) will not be taken from you and the rules by which you hold those possessions will not change. The introduction of punitive taxes is a substantial change that undermines property rights and has a domino effect that reduces prosperity for everyone over time. There are far better ways to ensure the affordability of housing, like restricting foreign ownership (Denmark and Australia among others do this) and restricting how much banks can lend.

Actually Miley over the next 2 years I shall be selling 4 of my houses ahead of EPC as not financially viable to get from a D to a C as single skinned terraced houses and would need internal cladding. This will mean evicting 8 adults and 9 DC including 1 DC with severe SEN who might struggle to find something in the same area as her special school. I expect you will be glad about that though.

I am a LL through circumstance rather than deliberately investing in oroperty. My house is currently rented to a lovely woman who has lived there over 5 yrs & is welcome to live there as ling as she need until I sell it in approx 15syrs time (after I retire). Not all LL are renting out slums for extortionate rents. Here in Scotland the rental matket is quite tightly regulated & we cant just increase rent when we please. My tenants rent is not that
much higher than it would be for a similar council house. There is deffo a place for private renting in the housing market.

Some people openly state they do not want to buy a house.

People who say they "will never invest in property": can you be sure that your pension (if you have a defined contribution one) is not invested in property in some way?

Thats interesting.

I just did the same experiment, within 3 miles of my post code, houses only, 2 bed minimum, no retirement, shared ownership or auction properties and got 118 results. We are in the south east, 80 miles south of London

I also have a DC in their 20s who will be moving a few times over the next few years and currently has no wish to buy. Competition for rental is high in the area they are looking for and they are getting really stressed about trying to find something.

Don’t know why that is in that area but it is happening here and as far as I can tell that is due to the number of landlords selling up due to the various changes coming in. Prices haven’t fallen and it is putting more pressures on people needing rentals so sadly we frequently have posts on local Facebook group from people desperately looking for places to rent but can’t find anything.

IMO the issue isn’t so much buying, it’s the cost of renting.

I’ve never rented but I do rem when private rents were affordable (say £6-700 for a 1 bed on a 1.6k salary) allowing people to move around for careers with ease.

Now those 1 beds are £1.5k plus bills on a £2k salary.

Low income families using HB to pay £2k+ to rent insecure private homes that used to be affordable council.

High rents are strangling our economy as people have less money to spend locally while we also have an astronomical housing welfare bill to pay rents to private owners.

This must be one of the most ridiculous, poorly thought out, reductionist argument I’ve read on here.

1. they might not want to own the property for various reasons - could be a short term key prior to moving and don’t want the associated legal fees for buying/selling. They may have money invested elsewhere which is making more money than the rent is costing. The person may not have the desire or financial means to deal with ongoing maintenance etc.
2. why on earth does person A buying a property mean person B cannot afford it - this makes zero sense. Person B’s finances and ability to afford a property is the same whether person A is a landlord or “regular” home buyer. If you’re trying to argue landlords push the price up then that doesn’t hold water - it’s the market generally which leads pricing. Someone who falls in love with a property and wants it as a home is actually more likely to pay over the odds than a purely money focussed landlord.

I accept there is an issue with “rich Londoners” buying up second homes in desirable areas (eg Cornwall) making it unaffordable for locals - but that is a tiny percentage of the housing problems in this country.

The real issue is the lack of good social/council housing which drives people towards renting.

Yes this is going to be a huge problem, like that post above where properties have to be sold because they're not going to be up to the EPC standards which are arbitrarily chosen
Our house, which we own wouldnt come up to that standard either!!

I looked this up. About 51% of UK adults are homeowners. Of the remainder, about 64% aspire to be at some point in future.

So, about 80% own or want to own, 20% have no desire to. I couldn’t find stats for what % would want to own right now, so we can treat 80% as the upper bound for that.

Of UK housing stock, about 30% is rented, so not too far out of line. 9% (or about a third of total rented) is BTL.

I’m not seeing a big distortion here. Obviously there are bad landlords, but that’s not the issue you are raising.

Overall, I think YABU on BTL, and YABVU on your broader point which seems to be that it’s unreasonable for others to have a different moral views from you.

Considering that the minimum energy rating is an E and plans to raise that have been scrapped, your excuse is pretty weak. I'm sure you have offered the tenants the opportunity to buy the properties at the same price you paid for them, since you're such a generous soul. I wonder what energy rating your own home is.

My home is a D rating.

Clearly the OP can’t see that or indeed much at all.

Well I think there’s a lot of people who don’t want to buy or are unable to buy so if people weren’t landlords where would all of these people live ?

I’ve got rental properties and not one of the tenants could buy - they are mainly on benefits / low incomes or only in the area for a year or two for work and therefore don’t want to buy.

In fact I have offered to sell to tenants at a reduced amount but still they haven’t wanted to buy

Im now selling most of the properties as although I agree tenants need to be protected from bad landlords, it’s become impossible to get rid of bad tenants - I’ve had tenants move out and they have completely wrecked the place - that was done up top to bottom before they moved in, then costs thousands to put it right

Then of course the ones that just don’t pay their rent , even though they get it paid via benefits

So now those tenants all need to find new rentals as I’m selling mine

the narrative that all landlords are profiteering from tenants is just not true once you take into account repairs , unpaid rents, wrecked houses etc

and as I said at the beginning of my post - not everyone wants / can buy a house - where do you propose these people live ????

That's interesting.

It would also be interesting to know who would rent even if they could afford to buy, if the rents were reasonable and properties were well maintained and there was some security of tenure (as some other European countries achieve).

I currently maintain a BTL (80s, EPC C, easy to look after) and live in a 70s house (not sure what the EPC is but not up to C). The 70s house only gets expensive things wrong with it. It was simply not designed for today's climate. I'd be tempted by a maintenance free life as I age, for sure!

So where do you live if you don't want or can't afford to buy?

I don’t personally have a BTL, but the thing is that I think people can’t have it both ways. It’s a similar argument to private education (my kids are in state school btw). We live in a capitalist society. Generally, most of us want that system or at least aren’t comfortable with more socialist, stronger welfare state approaches to the economy.

You can’t pick and choose. If you want capitalism, you get capitalism. That means the rich own the means of production. They also own a good chunk of the land and property. They can buy out of state systems, like healthcare and education.

Now personally, I’m highly critical of capitalism, even though I’m probably one of the haves rather than the have nots. But you can’t be okay with children being exploited to make your iPhone, but angry because Bob at the pub has a little cottage he rents out as a nest egg and think he shouldn’t be allowed, while not caring about the billionaires getting rich on women and children being trafficked.

@mindutopia I think capitalism is a terrible system, and I don't understand why more people aren't critical of it.

"Capitalism is the worst system. Apart from all the alternatives."

Breathtakingly original take

Like your post, OP? I mean, BTLs have never been discussed on here before 🙂

The government are still pressing ahead with making LL have EPC C. These plans have not been scrapped.

I got a couple of quotes to do the internal cladding as single skinned terraced houses. They are currently a high D between 1 and 3 points below a C standard. I've done everything except the expensive internal cladding that would also be very disruptive to tenants. I've been quoted between £11k and £14.5k for each house. This is to save £37 per year and £58 per year. It's just not financially viable because if I invested that much on upgrading I'd have to hike rent up so much. It's just not worth it and I know a lot of LL's and about 30 percent of the ones I know will be selling in next 2 years. I'll sell a couple next year and 2 more the following year as better for CGT. In 2 years time the number of rentals available will shrink by at least 20 percent. This will likely mean demand will further outstrip supply so remaining ones will probably get price hikes.