Starter homes being bought by BTL LLs

IveSeenTheLight

paul1964 wrote: »

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.

BTL doesn't deny FTBers.
I once offered on a 2 bed property and was 4th in the bid with FTBers outbidding me.

I didn't bid any higher as it would have impacted the RY achievable for that property.

It's a market and free for anyone to offer what they think is fair and for sellers to accept it or not.

The properties I have now are 2 off 4 bed houses and a 2 bed flat.
The houses are rented to professional people (One a Proffesor who initially wanted to rent for a year after going through a diverce and have now been there 6 years, the other a family who immigrated to the country, bought a property elsewhere in the country and want to rent in the area through work commitments.
the flat has been rented to professionals moving to the area in the past but are now rented to students.

There needs to be a rental market to allow those that don't want to buy or can't afford to buy.

It's not about pricing anyone out.

Now, I think we agree there is a shortage of properties, which if resolved would ease house prices and rent.

That is the root cause you should be focussing on instead of one part of the market that is providing a necessary service.

IveSeenTheLight

Percy1983 wrote: »

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

Let's assume there were to be rent caps (Which the government are against).
Then you'd make it not worthwhile for investors and drive out rental properties all together.

Where would the people stay that wanted to choose to rent?

Just because you want prices to reduce for your personnel circumstance, it's not reflective of the needs of society.

Percy1983

IveSeenTheLight wrote: »

Let's assume there were to be rent caps (Which the government are against).
Then you'd make it not worthwhile for investors and drive out rental properties all together.

Where would the people stay that wanted to choose to rent?

Just because you want prices to reduce for your personnel circumstance, it's not reflective of the needs of society.

I didn't say cap at £100 a month did I?

I am talking fair prices, to which yes I am talking lessor profits for landlords.

Yes some won't like it and withdraw, but I qould say many would stay in it.

IE, if I bought a rental property on a repayment mortgage and only make £10 a month at first (will increase as rent caps move up with inflation) then yes there will be very little profit and potentially a loss if maintenance is involved, but hey after 25 years I will either have a small profit or loss and a free house worth £120k (random figure).

Still seems a worth while investment, yes I am talking an extreme, but even at a loss of £50 per month I would get £120k worth of house for only £15k.

ILW

Percy1983 wrote: »

I didn't say cap at £100 a month did I?

I am talking fair prices, to which yes I am talking lessor profits for landlords.

Yes some won't like it and withdraw, but I qould say many would stay in it.

IE, if I bought a rental property on a repayment mortgage and only make £10 a month at first (will increase as rent caps move up with inflation) then yes there will be very little profit and potentially a loss if maintenance is involved, but hey after 25 years I will either have a small profit or loss and a free house worth £120k (random figure).

Still seems a worth while investment, yes I am talking an extreme, but even at a loss of £50 per month I would get £120k worth of house for only £15k.

So you are now saying the government should legislate the amount of profit a private business is allowed to make?

Mr._Pricklepants

Percy1983 wrote: »

Still seems a worth while investment, yes I am talking an extreme, but even at a loss of £50 per month I would get £120k worth of house for only £15k.

Good idea.

I suggest all renters demand their LL's to drop the rent and take a loss.
In case your LL doesn't agree, tell him he'll have a free house after 25 years.

You're so naive, Percy.

dryhat

Percy1983 wrote: »

I didn't say cap at £100 a month did I?

I am talking fair prices, to which yes I am talking lessor profits for landlords.

Yes some won't like it and withdraw, but I qould say many would stay in it.

IE, if I bought a rental property on a repayment mortgage and only make £10 a month at first (will increase as rent caps move up with inflation) then yes there will be very little profit and potentially a loss if maintenance is involved, but hey after 25 years I will either have a small profit or loss and a free house worth £120k (random figure).

Still seems a worth while investment, yes I am talking an extreme, but even at a loss of £50 per month I would get £120k worth of house for only £15k.

But Percy, remember all that these "investors" are doing is sub-letting a property and hoping for capital gains.

With no capital gains and therefore no more money to borrow, every couple of quid is precious when you have to cover the mortgage on one property and pay back the money you borrowed for the deposit.

grizzly1911

IveSeenTheLight wrote: »

Let's assume there were to be rent caps (Which the government are against).
Then you'd make it not worthwhile for investors and drive out rental properties all together.

Where would the people stay that wanted to choose to rent?

Just because you want prices to reduce for your personnel circumstance, it's not reflective of the needs of society.

Aren't the incoming welfare caps going to act as a crude and in alot of places soft rent cap for a proportion of the market?

IveSeenTheLight

grizzly1911 wrote: »

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.

My BTL's cover the interest, repayment costs, maintenance, factor fees etc and a bit more.

The market sets the rates in which rents can be achieved.

IveSeenTheLight

Percy1983 wrote: »

I didn't say cap at £100 a month did I?

I am talking fair prices, to which yes I am talking lessor profits for landlords.

Yes some won't like it and withdraw, but I qould say many would stay in it.

IE, if I bought a rental property on a repayment mortgage and only make £10 a month at first (will increase as rent caps move up with inflation) then yes there will be very little profit and potentially a loss if maintenance is involved, but hey after 25 years I will either have a small profit or loss and a free house worth £120k (random figure).

Still seems a worth while investment, yes I am talking an extreme, but even at a loss of £50 per month I would get £120k worth of house for only £15k.

You've not factored in the reward for the risk.

Your calling for a cap on rents, why not utilities, council tax, clothing, food, water, football season tickets, cigarrettes, fuel, etc etc etc etc etc.

why not just have a communist state country which defines the cost of everything.

Where is that generali quote on supermarkets and bread?
Here we are

Generali wrote: »

There's a story about a visit by a senior Soviet Union official to the USA during the Cold War. He was taken to a supermarket and asked what, to him, was a perfectly reasonable question upon seeing shelves full of food in a way that would have been unimaginable to a normal USSR consumer at the time:

"Who is responsible for ensuring the supermarket has bread to sell?"

IMHO, the shelves are full because nobody has that responsibility. Someone grows wheat, another mills it, yet another sells the flour and makes the yeast and makes the bread and makes the plastic bags it goes in and drives the lorries and chicks the checkouts...........................

So who is responsible for making petrol the right price?
So who is responsible for making the right number of houses at a right price?
So who is responsible for making the price of money right?
So who is responsible for you getting a job, educating your kids, caring for you, providing you with health care.....?

Do you want to take responsibility for yourself or hope that the man in Moscow can get bread to your local supermarket?

IveSeenTheLight

grizzly1911 wrote: »

Aren't the incoming welfare caps going to act as a crude and in alot of places soft rent cap for a proportion of the market?

Are they? or are you hoping this will be the outcome?

I'm just going to shoot off now, but I will post later the post I made about the average outgoings of a household and how something like 36% of lower priority items could in my opinion and circumstance be allocated to higher priorities like food and shelter

Nevermind, here it is
http://forums.moneysavingexpert.com/showpost.php?p=58376153&postcount=27

Generali wrote: »

This simple version (link) opens as a .pdf.

2011 weights for the RPI:

Food......118
Catering...47
Alcohol.....60
Tobacco...28
Housing...238
Fuel and light...42
Household goods..65
Household services..63
Clothing and footwear..44
Motoring...137
Fares & other travel..20
Leisure goods.....36
Leisure services..64

They will correspond pretty well with how the average person in the UK spends his or her money. The above is out of 1,000 so the average person spends £2.80 on tobacco of every £1,000 they spend in total (that's spend not earn). A smoker will most likely spend a lot more than that and a non-smoker a lot less (probably £0) but Mr Average spends £2.80.

Here is a really good explanation of the RPI & CPI.

Very Good.
Now, forgetting about the percentages for a second, what would most people priorities lie in order of necessities

For me: -
Food......118
Housing...238
Fuel and light...42
Household services..63 (Not sure what this is for given Fuel and Light are above)
Motoring...137
Clothing and footwear..44
Leisure goods.....36
Leisure services..64
Catering...47
Fares & other travel..20 (Motoring is above)
Household goods..65
Alcohol.....60
Tobacco...28

Taking clothing downwards, that's 36.4% that could be reallocated to higher priority on the list.