BTL'ers are not evil are they??

chucky

wymondham wrote: »

True, and I can only see private BTL increasing rapidly as alternative means of investing offer such poor returns..

This and the different layers around it is a political ticking time bomb that will be very interesting how it is dealt with over time.

I think the government (in place in time) will look after the majority and it isn't the property investors. That group is getting too big, historically it's the elite or and exclusive number who can afford it.

Generali

chucky wrote: »

This and the different layers around it is a political ticking time bomb that will be very interesting how it is dealt with over time.

I think the government (in place in time) will look after the majority and it isn't the property investors. That group is getting too big, historically it's the elite or and exclusive number who can afford it.

That's gotta be the big political risk in BTL, that a (Labour?) Government will grant security of tenure and some sort of mandated rent.

It'll happen if the private rental sector gets big enough. It's so easy to sell to a politician with an arts degree. The economics of it won't work but the politics are dreamy: lower housing benefit payments, lower rents in marginal constituencies and a financial impact to most LLs that won't be felt for years or even decades. Trebles all round!

There are loads of risks in BTL that LLs simply ignore or don't understand. This is the biggie IMHO, apart from the simple bad luck of having a power station/Nightclub/motorway built next door.

LydiaJ

Just because it's an astute choice to follow a particular course of action that will be financially beneficial for the individual doesn't mean that it's beneficial for the nation if lots and lots of people follow that course of action.

It's astute not to work if you'd be better off on benefits. It was astute for MPs to claim as much on expenses as the rules allowed. It's astute for bankers to accept huge bonuses even when their bank's profits are down. And so on. But we're not surprised when the general public doesn't approve.

The trouble is that unless we build more houses, then every house bought by a BTL investor is one fewer to be bought by a prospective owner-occupier. If loads of people choose to own more than one home, then there will be loads of people who can't own a home at all, despite wanting to.

I view those who own BTLs as a bit like lifestyle benefits claimants. I don't blame them at all, but I would like to see the incentives change to make those choices less popular.

Generali

LydiaJ wrote: »

Just because it's an astute choice to follow a particular course of action that will be financially beneficial for the individual doesn't mean that it's beneficial for the nation if lots and lots of people follow that course of action.

It's astute not to work if you'd be better off on benefits. It was astute for MPs to claim as much on expenses as the rules allowed. It's astute for bankers to accept huge bonuses even when their bank's profits are down. And so on.

The trouble is that unless we build more houses, then every house bought by a BTL investor is one fewer to be bought by a prospective owner-occupier. If loads of people choose to own more than one home, then there will be loads of people who can't own a home at all, despite wanting to.

I view those who own BTLs as a bit like lifestyle benefits claimants. I don't blame them at all, but I would like to see the incentives change to make those choices less popular.

The beginning and the end of the problems with the housing market in the UK is that are simply not enough houses.

The Government can mess about with the rest of the market as much as it wants but until more houses are built, there won't be enough houses and people will live in overcrowded situations.

chucknorris

Generali wrote: »

That's gotta be the big political risk in BTL, that a (Labour?) Government will grant security of tenure and some sort of mandated rent.

It'll happen if the private rental sector gets big enough. It's so easy to sell to a politician with an arts degree. The economics of it won't work but the politics are dreamy: lower housing benefit payments, lower rents in marginal constituencies and a financial impact to most LLs that won't be felt for years or even decades. Trebles all round!

There are loads of risks in BTL that LLs simply ignore or don't understand. This is the biggie IMHO, apart from the simple bad luck of having a power station/Nightclub/motorway built next door.

Yes that is definitely the armageddon scenario, I don't think that it is likely, but I agree that it isn't impossible, and if it did happen I think that it would cost us over £1.5m. I don't know if the last time that this happened if landlords were immediately trapped, or did they have a chance to sell before the tenancies were regulated?


I'm not convinced that the financial impact wouldn't be immediate, because a property with a regulated tenant isn't worth as much as one without. Sure that loss would not actually be realized until selling up, but nevertheless a property investor's portfolio value would be hit very hard. More recent landlords could end up with serious negative equity.

Bantex_2

Wonder if the politics will change if and when renters start to outnumber owner occupiers?

If reducing rents became an election winning policy.

Could get messy.

CLAPTON

LydiaJ wrote: »

Just because it's an astute choice to follow a particular course of action that will be financially beneficial for the individual doesn't mean that it's beneficial for the nation if lots and lots of people follow that course of action.

It's astute not to work if you'd be better off on benefits. It was astute for MPs to claim as much on expenses as the rules allowed. It's astute for bankers to accept huge bonuses even when their bank's profits are down. And so on. But we're not surprised when the general public doesn't approve.

The trouble is that unless we build more houses, then every house bought by a BTL investor is one fewer to be bought by a prospective owner-occupier. If loads of people choose to own more than one home, then there will be loads of people who can't own a home at all, despite wanting to.

I view those who own BTLs as a bit like lifestyle benefits claimants. I don't blame them at all, but I would like to see the incentives change to make those choices less popular.

whilst it may be true that every property owned by a landlord is one less that is occupied by an owner occupier, it is also true that every property occupied by an owner occupier is one less that occupied by a tenant.

in general levels of occupancy are higher in rented property than owner occupiers, so a substantial move to higher levels of owner occupancy without building proportionately more housing, will simply mean that tented properties will be more overcrowded.

chucky

Bantex wrote: »

Wonder if the politics will change if and when renters start to outnumber owner occupiers?

If reducing rents became an election winning policy.

Could get messy.

No chance, keep on dreaming.

chucky

LydiaJ wrote: »

Just because it's an astute choice to follow a particular course of action that will be financially beneficial for the individual doesn't mean that it's beneficial for the nation if lots and lots of people follow that course of action.

Let's look at it a different way.

People buy property in the catchment area of particular schools. House prices increase because of this.

Would you be against good schools in particular areas because they increase house prices? It's beneficial for children and the nation to have a good education so would you be against this too?

Masomnia

chucknorris wrote: »

Yes that is definitely the armageddon scenario, I don't think that it is likely, but I agree that it isn't impossible, and if it did happen I think that it would cost us about £2.25m. I don't know if the last time that this happened if landlords were immediately trapped, or did they have a chance to sell before the tenancies were regulated?


I'm not convinced that the financial impact wouldn't be immediate, because a property with a regulated tenant isn't worth as much as one without. Sure that loss would not actually be realized until selling up, but nevertheless a property investor's portfolio value would be hit very hard. More recent landlords could end up with serious negative equity.

Would more security of tenure be such a big issue for you though?

You've said in other threads (I think!) that you've had a lot of long term tenants that you have a good relationship with. If you're looking to buy a BTL and there's one available with a tenant already in, surely that saves you the bother of finding one, less time spent void etc.