Ban BTL landlords from buying new builds

JencParker

IveSeenTheLight wrote: »

Well, I am a BTL LL, but I am also a tenants at the moment.
This is because I am building my own home.

I could have provided notice to one of my tenants and reduced my costs, however I also believe in looking after my tenants and are happy for them to stay as long as they want.

I initially signed up for 12 months as I was optimistic the build would be completed in that time frame, however unfortunately we have had to agree a 6 month extension to cover the hurdles we faced

That said as a business, you need to have exit strategies / options.




I have one professionally employed tenant of 6 1/2 years where I have not increased their rent in those 6 1/2 years.
Initially, they wanted to stay only 12 months till they found a place of their own.

The rent I received is way below the market value, but I have rewarded them as tenants looking after the home and as I have also seen increased profits through reduced mortgage rates.

They are on a periodic tenancy, meaning they have totally flexibility to move with 1-2 months notice and I have no intention to provide notice to them, however in theory they are at risk such that should I need to adjust my business model, I also have to be prepared such that should I receive notice, I am ready to move immediately to ensure little or no voids

That's good to hear and I do not think all landlords are rogues
However, as you said, you could give them notice at any time. Having know families that have had to move every year or so, who have put down roots in an area (ie children at school, work etc) and seen the stress and expense of having to do so, it is not a lifestyle I would wish on anyone. Yes, there are those who need or desire to be mobile so a short term tenancy is right for them, but too many are being forced into that position by the current housing problems.

IveSeenTheLight

JencParker wrote: »

I would say state intervention would be necessary.

If you look into the root cause for the shortage of rental properties, I would envisage that you will find it is as a result of the Council House sell off under the RTB scheme.

Your then requesting that the government step in to put in regulations for the benefits of the tenants.

However........

The government is reliant on the private rental sector, David Cameron even said that they want this market to expand.

The reason that they want this to expand is because it increases competition and tenant options without the need for government administration.

If you place increased conditions on LL's it's likely to contract the market, meaning less competition and less options for tenants.

If you want rental properties to be cheaper, then you need a vast increase in supply / options for the market to compete with each other.

In my own VI area, there are waiting lists for different types of properties ready to accept leases when they become available.
Often you can call up about a property to be told it is gone.

IveSeenTheLight

JencParker wrote: »

Having know families that have had to move every year or so, who have put down roots in an area (ie children at school, work etc) and seen the stress and expense of having to do so, it is not a lifestyle I would wish on anyone.

Then they should ask for a longer tenancy.
That's what I would do to secure an area, ESPECIALLY if I was considering my kids.

What you're effectively looking for is a return to council housing of the 70's (pre RTB).

You may wish to consider why, if renting was so secure back then that people opted to buy their homes.

There is a statistic that has shown that the rental market quality has improved since the council house sell off and move to the private market.

JencParker

IveSeenTheLight wrote: »

Then they should ask for a longer tenancy.
That's what I would do to secure an area, ESPECIALLY if I was considering my kids.

What you're effectively looking for is a return to council housing of the 70's (pre RTB).

You may wish to consider why, if renting was so secure back then that people opted to buy their homes.

There is a statistic that has shown that the rental market quality has improved since the council house sell off and move to the private market.

Asking and getting are two very different things. Particularly in London and the SE. A tenant has no control or influence all the time supply is short.

People opted to buy their homes because of the huge discounts they were given and the money they could make on it. How many council house tenants bought at the full value?

IveSeenTheLight

JencParker wrote: »

Asking and getting are two very different things. Particularly in London and the SE. A tenant has no control or influence all the time supply is short.

REALLY!!!!!!!.

A tenant cannot ask for a longer lease?

JencParker wrote: »

People opted to buy their homes because of the huge discounts they were given and the money they could make on it. How many council house tenants bought at the full value?

So when they sold, did they buy another place?
Was that more of less than the property sold for?

My G-I-L bought her council house after about 40 years because the council would not modify the home to suit her elderly condition (stair lift which attached to the wall and could be removed after / bath with a seat and shower).

A few years after (and after the modification helped her stay in her family home for those additional years), the house was sold privately and the proceeds used to put her into full time care.

Nett result is one less council house for the next generation

CLAPTON

JencParker wrote: »

Firstly, there is no shortage of food that meets people's needs (not desires) so the comparison does not apply. And secondly, if food had increased in price at the same rate as housing chicken would cost around £50, a loaf of bread would cost around £5, a carton of milk would cost around £10.....
And if food DID cost that amount then YES, I would say state intervention would be necessary.

The reason why there is no shortage of food in the UK is because we have a fully function competitive market place in both the supply and distribution (with regulation on safety and animal welfare).

If the government controlled the food supply it would be similar to the USSR supply (famine in the bread basket of the world), no variety, shops open 9-5 a few days a week.

The reason we have a dysfunctional housing market isn't because of the 'greed' of individual BTL owners but our dysfunctional planning system, combined with our social housing and housing benefit system.

If we allowed the housing market to work more effectively, supply would increase and price fall. There is of course need for regulation and planning but we need less 'social' engineering and more market forces.


And just to add, people die very day due to shortage of food.

IveSeenTheLight

JencParker wrote: »

And if food DID cost that amount then YES, I would say state intervention would be necessary.

Interesting post regarding state controlled food supply.

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?

JencParker

IveSeenTheLight wrote: »

REALLY!!!!!!!.

A tenant cannot ask for a longer lease?

They can ask, but doesn't mean they will get it. When demand is high and supply is low, they hold all the cards.

So when they sold, did they buy another place?
Was that more of less than the property sold for?

Ex-council property now sells for the same as any similar sized house in my area.

My G-I-L bought her council house after about 40 years because the council would not modify the home to suit her elderly condition (stair lift which attached to the wall and could be removed after / bath with a seat and shower).

A few years after (and after the modification helped her stay in her family home for those additional years), the house was sold privately and the proceeds used to put her into full time care.

Nett result is one less council house for the next generation

Would not modify or would not pay for it to be modified? Regardless, it seems a failing to me, however the result is the same - one less council house for the next generation.

Before I bought, I lived in a private controlled rent flat. Rent was reasonable and on a par with council rents. We had security of tenure and could have lived there as long as we liked. We put in a new kitchen - and were happy to do so - rent was reasonable and we wanted to make it a home (and the kitchen was pretty old). When we wanted to start a family and needed more space, we bought - there was nothing else available as by then rent control had been abolished and rents had jumped to a level where it was cheaper to buy.

IveSeenTheLight

JencParker wrote: »

They can ask, but doesn't mean they will get it. When demand is high and supply is low, they hold all the cards.

It costs to re-advertise, credit check, new lease signed etc.
It's therefore cost efficient for LL's to have longer leased tenants.

JencParker wrote: »

T
Ex-council property now sells for the same as any similar sized house in my area.

So the bought council houses (at a reduction) does not "make any money" on the sold properties, as they have to buy elsewhere on similar / increased costs.

JencParker

CLAPTON wrote: »

The reason why there is no shortage of food in the UK is because we have a fully function competitive market place in both the supply and distribution (with regulation on safety and animal welfare).

If the government controlled the food supply it would be similar to the USSR supply (famine in the bread basket of the world), no variety, shops open 9-5 a few days a week.

The reason we have a dysfunctional housing market isn't because of the 'greed' of individual BTL owners but our dysfunctional planning system, combined with our social housing and housing benefit system.

If we allowed the housing market to work more effectively, supply would increase and price fall. There is of course need for regulation and planning but we need less 'social' engineering and more market forces.


And just to add, people die very day due to shortage of food.

Who said anything about state controlled SUPPLY of food.

And no, it isn't BECAUSE of BTL landlords, they have simply cashed in it. They are not the cause, but they are part of the problem purely because they can and they want part of the action. Interestingly, I know a couple of BTL landlords who ended up selling up because they came to the conclusion that it was morally wrong as things are now. I suspect they are in a very small minority.