Where are all the rental properties?

[Butteryflakycrust83]

A few years ago when we moved, Rightmove would be updating easily 20 or so properties a day. There were many to choose from, and it was relatively easy to find yourself as a first viewer.

I always like to keep an eye on what's on the market and for the least year, I would say a mile radius now has probably 2-3 properties a week. Initially we put this down to reluctance to move during lockdown, but what is causing the shortage now?

Are people reluctant to move while the economy is so unstable?
Are LLs selling properties instead?

As a private renter I always have a worry that if we were to be given notice, we would seriously struggle to find somewhere. I saw a family who have had to buy a tent because they cannot find any properties in their area.

Curious as to thoughts as to what has happened for the stock to drop so dramatically?

many landlords do not have mortgages

Well then almost all the rent is profit, so no reason to say it's not profitable to rent out

I will be selling that property because the profit is currently 3k a year for my £100,000 investment.

And how much will you be selling it for? Given how much house prices have skyrocketed, probably quite a bit more?
This is what I mean, your overall profit is not £3K a year, it's that plus whatever profit you have when you sell.

I don't mean to criticise you personally but can you not see how it sounds, you sitting there with multiple mortgage-free properties that presumably earn good money, aiming to sell one because 'it's not profitable enough'. Obviously that's good business sense for you but it's really shit when your home is just another investment to some wealthy person.

That is how business works. Profit is made from energy, fuel, food, textiles. If there is no profit, the business will fail. How can businesses employ people if there is no money with which to pay their salaries or purchase goods to sell?

Sainsburys, Aldi, M & S, Cos, they all make money. You can choose whether to purchase a loaf of bread at £4.50 or £0.45. Properties to rent are exactly the same. There is a bottom end of the market and a top end. I can't afford to rent a top end property, my income is too low in comparison to the rent. I can't afford to live either renting or buying in London because the rents are too high in relation to my income. So I make a choice. So do tenants.

How much profit will there be after sale? How long is a piece of string? It's a risk that by hanging on and not selling now, the property will be worth less and then there's CGT. However, I have a lovely tenant in that property who is getting on a bit, and I really don't want to turf him out, even though I know he would be perfectly fine if I did ask him to leave at some point. I could equally have a really shit tenant who trashes the place and it costs me thousands to put right, it happens not infrequently, particularly at the very bottom of the market. That's the risk you take on when you develop a business. Unfortunately the risks have increased along with the costs to the business and that is why many landlords are leaving, their capital can be protected by investing into a different business or product at less risk.

If the only intention is to make money from property, shouldn't the landlord just buy a nicer house or in a nicer area with the 100k? No capital gains tax and the landlord gets to actually enjoy the property. He can downsize at a later age and release the equity. Also detached houses with land are actually more likely to increase in price relative to typically smaller rental properties..

The problem is that London is also some people's home. It is where my DH grew up, it is where his family is, it is where his job is. We are lucky to be able to buy a flat in London, but not everyone is so lucky. Almost every flat we viewed was a BTL flat; I am now trying to sell my current flat to buy another ex BTL flat from a landlord who is in quite a lot of debt and is potentially willing to let it go for 70k less than what she paid for it.

I disagree with the displacement of poorer londoners as it does affect the rest of the country and displaces locals in other parts as well. Housing insecurity is one of the reasons for our low productivity; if people spend so much of their money on rent or housing, there is less to spend on other things and our economy cannot grow. I understand that landlords have no obligation to stay in the market to house people as that is the government's responsibility.To me, it is wrong that there is even low end rental housing... Rentals should be for people with disposable income and possibly few obligations like young professionals. Who can easily afford moving costs when their landlord sells up and where moving from Brixton to Bromley would not pose too much of a problem (you can commute to the City for both). For poorer people with connections to the local area i.e. mum and sister does their childcare, kids go to local school, they need specialist medical facilities, losing their home because their landlord wants to sell up is a very different experience! Compared to a young professional who rents a flat in the Barbican for £4000 per month; he can easily afford to move and can probably find many flats in his budget within a 15 minute radius of where he lives.

onthefencesitter I totally agree with you. It IS government's job to ensure there is a coherent comprehensive housing policy that ensures those people who cannot afford the PRS are effectively and safely housed. Do you think the policy of right to buy which will reduce the amount of social housing within areas is going to do anything except make a bad situation even worse? The sad fact is that the number of housing possession cases I was seeing between 2007 and 2014 had a disproportionate number of ex council house tenants who had exercised the right to buy.

There is this idea that people should be able to house themselves within the current housing structures but that isn't the case, and it's never the case with a Tory government, and certainly not this one, which has proved ineffective at pretty much everything it touches, not to mention the huge increase in street homelessness.

It isn't about capital increases for most landlords, it's about having a monthly return on your money, i.e. income. It is actually my only income at present and has been for the last 10 years.

The main insanity with Right to buy is that it is allowed to be sold on to landlords. They could easily have put in a rule that it is only allowed to be sold onto people who earn below XXXX amount etc. Yes that would mean council housing would appreciate at a far lower rate than their private counterparts but so what? The government does not build council housing so that people can make money. These are homes built using taxpayer monies, not speculation objects.

Another problem with council housing isn't just right to buy. There is not much public support for building council housing because most people know they would not benefit directly from council housing being built. A lot of people view council housing as housing for the unemployed and the underclass; though we are actually spending more money as a nation paying housing benefit. I am in London and I don't know a single person in my social circle who rents from the council. I know people who can't afford to buy (in London or otherwise) and even have a homeless friend (but she does have 50k in premium bonds so will qualify for no help despite her mental health problems). If council housing also catered to the middle income (people who can theoretically afford the PRS but would be out of pocket if the landlord raised the rent; or who would struggle paying the rent if also paying childcare; or who cannot raise a deposit to buy locally), there would be more public support as such people form a significant swathe of the population. Middle income people value home ownership and can also afford the costs of it e.g. replacing a boiler unlike the low income who probably shouldn't be encouraged to buy. I am sure many would buy council housing rather than rent privately even if it came with lots of restrictions on who they can sell it to or even a blanket ban on renting it out.

That does explain it. my DH is a higher rate taxpayer and we realized long ago that it is no use keeping our flat if we bought a new flat because we would lose any profit to tax. Its also why our ex neighbour makes no money from renting out her flat, she would definitely be a higher rate tax payer as she is an executive director for a pension fund.