Starter homes being bought by BTL LLs

IveSeenTheLight

paul1964 wrote: »

Or you could compare BTL to the hotel trade (both are renting out space in a property). A hotel owner pays VAT and business rates. When a property is changed from standard residential use to hotel use, the owner needs permission from the local authority before operating as a business from that premises.

As BTL is a business, perhaps it should be subject to more of the costs and planning regulations associated with running a normal business.

You could also consider holiday lets as an example where council tax is exempt.

Consider this in your example?
What is the average monthly rate for a hire of a room in a hotel and how does this compare with the monthly rental rate which provides far more (more rooms (on average), private kitchen, private lounge).

Do you consider that the hotel rates cover the business costs?

What would be the affect on property rental if there were additional costs associated?

You guys are looking at how BTL could be taxed more but you don;t consider what the effect would be on the tenants.

Percy1983

IveSeenTheLight wrote: »

In hindsight, had BTL not stepped in, I think it has been shown that prices were affected by 7% as a result, so property would be 7% cheaper.

You'd also probably have seen rents much higher as a result of the fewer supply

On the flip side if houses were 7% more would have been able to buy so there would be less need for rental properties.

I think we can both agree its a shortgage of houses which is the problem, my arguement isn't its wrong that gap has been filled with private rentals, my arguement is against how they can what they want and do essentially have many tentants backs against the wall with no power to do anything about it.

I do think measures need to be brought in the sense of rent caps, it may make it less profitable but hey you get a free house out of it, what more do they want.

Is it really fair a tenant should have to pay an increase in rent because they can't afford to move and there landlord wants a new car?

Percy1983

IveSeenTheLight wrote: »

You could also consider holiday lets as an example where council tax is exempt.

Consider this in your example?
What is the average monthly rate for a hire of a room in a hotel and how does this compare with the monthly rental rate which provides far more (more rooms (on average), private kitchen, private lounge).

do you consider that the hotel rates cover the business costs?

Do you give your tenants clean towels everyday?

ukcarper

Percy1983 wrote: »

On the flip side if houses were 7% more would have been able to buy so there would be less need for rental properties.

I think we can both agree its a shortgage of houses which is the problem, my arguement isn't its wrong that gap has been filled with private rentals, my arguement is against how they can what they want and do essentially have many tentants backs against the wall with no power to do anything about it.

I do think measures need to be brought in the sense of rent caps, it may make it less profitable but hey you get a free house out of it, what more do they want.

Is it really fair a tenant should have to pay an increase in rent because they can't afford to move and there landlord wants a new car?

Is that strickly true as I understand it most BTLs are interest only so the mortgage is not reducing and the yields aren't high enough to cover repayment mortgages.

paul1964_2

IveSeenTheLight wrote: »

You could also consider holiday lets as an example where council tax is exempt.

Perhaps holiday letting should also be subject to normal business costs.

Consider this in your example?
What is the average monthly rate for a hire of a room in a hotel and how does this compare with the monthly rental rate which provides far more (more rooms (on average), private kitchen, private lounge).

Yes, you are right, a hotel is not a good option for a long term stay.

do you consider that the hotel rates cover the business costs?

Yes I do.

All that I am saying is that, if we assume the premise that it is not desirable for newly built affordable housing to go to BTL, then increasing the business costs of BTL would be one way of helping FTBs compete with LLs.

On the subject of holiday homes, I once booked a holiday let over the internet for a week. When we got there, it was obvious that it was a starter home designed to get FTBs onto the housing ladder. Made me feel a little grubby that our holiday was in a very small way helping deny a young family the opportunity to live there.

grizzly1911

ukcarper wrote: »

Is that strickly true as I understand it most BTLs are interest only so the mortgage is not reducing and the yields aren't high enough to cover repayment mortgages.

In an ideal world the rents would provide capital reduction as well. HPI also helps as you benefit from the rising equity.

A false market has been created built of straw for many.

IveSeenTheLight

Percy1983 wrote: »

Do you give your tenants clean towels everyday?

I've booked a week at Centreparcs and hotels are only provided (not cleaned everyday I think) if you take one of their upgraded chalet's.

It's going to cost me over £100 for a week for two bikes and a trailer.

The cheek of it having to pay for something to have ownership for an agreed period.

IveSeenTheLight

paul1964 wrote: »

All that I am saying is that, if we assume the premise that it is not desirable for newly built affordable housing to go to BTL, then increasing the business costs of BTL would be one way of helping FTBs compete with LLs.

Your not getting the point.

If the costs increase, what's the effect going to be on the tenants.

Think of Utility companies. What happens when the cost of wholesale gas increases? That's right, the cost of your gas increases.

Percy1983

IveSeenTheLight wrote: »

Your not getting the point.

If the costs increase, what's the effect going to be on the tenants.

Think of Utility companies. What happens when the cost of wholesale gas increases? That's right, the cost of your gas increases.

This is why we need rent caps, its the only fair way.

CLAPTON

Percy1983 wrote: »

Do you give your tenants clean towels everyday?

actually, very few hotel give clean towels everyday: you're a little behind the times.