This ghastly expression "The property ladder"

clutton_2

"" only hopes that interest rates put enough BTLers out of business so house prices suffer a collapse and things are bit saner...""

if BTLers lose their properties it will be tenants who suffer also. BTLers have, to large extent, provided housing which councils have been prevented from building for the past 20 year or more.

i think there is a lot of jealousy about folks owning more than one house. Professional landlords provide a good service (and yes there are awful landlords, but, there are good ones also) and i get quite irritated at the constant sniping that goes on

ascollen

Alan M said it better than I could have done. The point I was making was with regard to new BTL investors coming in after a crash or existing BTL'ers buying up more (assuming they have any capital available).

I'm a BTL newbie and due to a less than perfect cr. score had to put up such a whopping deposit that it would take a mammoth crash to put me in the position you suggest. Also, property in the North West is still pretty reasonably priced....

I would feel sorry for those who're remortgaged up to the hilt however as they would probably end up in a bad way.

There do seem to be a lot of BTL bashers about, but I think the days of "dodgy landlords" are pretty much over. Where we are there's such a lot of competition that tenants can afford to be choosy and the standard of rented property is pretty high. It's increasing legislation that's more likely to put dodgy landlords out of business than anything else.

ascollen

Oops, forgot the other point I wanted to make....

For me, I'm not investing just for capital growth or just for rental income. I'd like both pieces of pie. If a property can't deliver both then I'd probably look for something else. I'm not looking for a get-rich-quick, I'm in it for the long term, but if I get some short term payback as well that's great.
So if the crash was to come, I'll try to ride it out of the other side - it will always recover, whether it be 5, 10 or 15 years.

Cannon_Fodder

if BTLers lose their properties, maybe the renters can buy them up....!!!
instead of paying more in rent than a mortgage costs, as BTLers seem to think they deserve not only an amount for "loaning" the property, but also the purchase of the property in the first place to be paid for by other people...AND then benefit from house price inflation, on top.
Why do renters agree to pay so much more than a mortgage but own nothing at the end of it? Madness.

lynzpower

There do seem to be a lot of BTL bashers about, but I think the days of "dodgy landlords" are pretty much over. Where we are there's such a lot of competition that tenants can afford to be choosy and the standard of rented property is pretty high. It's increasing legislation that's more likely to put dodgy landlords out of business than anything else

I dont. You only need to hang about on here for a few days to see umpteen people coming on saying LLs refusing to do maintainence, LLs refusing to refund deposits. LL coming into the property letting themselves in unannounced etc.

I agree with clutton tho, there is a lot of LL bashing goes on here, not sure how fair it is. Sweeping generalisations do no one any favours ( all EAs are scum, Inland revenue are rubbish, etc) like every profession there are good and bad. No one sings about thier great LL do they? Like everything- we only tend to hear the bad news :cool:

Cannon_Fodder

To clarify, I am not commenting on BTL from the good/bad landlord angle.
Its the dent they've made in housing supply that has prevented other getting on this ghastly ladder, that I don't agree with.

lynzpower

but cannon have they prevented supply? This is the bit I dont get.

For example, if I was a BTL LL and I sold my BTLflat to the tenan for example, why does that reduce supply? If anything it might do the opposite, as LLs are more likely to sell off a property as a business decision/ stremlining assets/ fancy doing something else with time & money, whereas a resident inthe main will live there regardless of financial priorities and wait for the repo man? Surely?

westernpromise

Cannon_Fodder wrote:

if BTLers lose their properties, maybe the renters can buy them up....!!!
instead of paying more in rent than a mortgage costs, as BTLers seem to think they deserve not only an amount for "loaning" the property, but also the purchase of the property in the first place to be paid for by other people...AND then benefit from house price inflation, on top.
Why do renters agree to pay so much more than a mortgage but own nothing at the end of it? Madness.

Is that actually true though? In the south-east at least, rental yields are around 5% and so are interest rates, so a tenant gets to occupy the property cheap considering the landlord still has to insure and maintain it, and usually provides a free warranty on everything in it as well.

There is no economic difference between renting a property at 5% of its value versus renting the money to buy the property at 5% interest rates.

The ££ difference lies in the fact that a tenant doesn't have to pay any more than the rent, but misses out on any capital gain. The buyer does get the appreciation, but he's also exposed to downturns, plus it is costly and time consuming to downsize or otherwise move on.

There must be very few cases left of tenants paying rents equivalent to, much less above, the monthly mortgage payments including the capital. Maybe if the house was bought a long ago, perhaps. If the tenant in the above example did want to buy that house, then on a typical 25-year repayment 100% mortgage, the monthly outlay to own is going to be way more than just the rent. Not only does he have capital to repay, he also has to fund maintenance and upkeep.

Cannon_Fodder

Supply - if you sell the flat you're no longer a BTLer, no. Its that fact you live somewhere, buy something else you don't need - that takes the flat out of supply in the first place...

Supply - if someone who owns 1 house, decides to use equity within their property to do BTL, then does it a couple of more times in a couple of years and suddenly has a portfolio of 4 houses, SURELY that must be 3 houses out of supply that would previously have been IN SUPPLY....surely?

If there was no profit to be made from BTL, you wouldn't be doing it - so you must be charging the cost of the mortgage, PLUS landlord costs, PLUS some profit IN RENT...your not charities, are you?


"LLs are more likely to sell off a property as a business decision/ stremlining assets/ fancy doing" - you have to own it in the first place, that makes it OUT OF SUPPLY.................bang head on wall.....

Cannon_Fodder

"There is no economic difference between renting a property at 5% of its value versus renting the money to buy the property at 5% interest rates"


EXCEPT, they own it at the end and can stop paying the mortgage after 25 years, instead of renting for life.......