Wow!

CLAPTON

Bantex wrote: »

Money may be cheap, but the criteria to borrow it is a lot stricter for a FTB than a landlord. One has do demonstrate high enough earnings etc etc etc, the landlord only has to show that someone else can afford the rent.

is it not generally so, that BTL mortgages require 25% deposit as well as demonstrating that the rent is 125% of the mortgage cost?

IveSeenTheLight

Bantex wrote: »

What proof do you need? The stock of housing cannot keep up with demand due to building restrictions. The available stock can either go to OO or rental. Increase one and the other falls. As shortfall increases (in either sector) prices rise. Just maths really.

Your looking short term immediate generation and not the impact on future generations.

As an example. a social home may have been rented through the council for 40 odd years. (As in my G-I-L)

It's then sold under RTB (so the property can be improved), so I understand you consider 1 less renter and one new OO

however..........

A few years after that, the G-I-L was taken into care and the home sold to another OO to pay for the health care. (Still no problem you say)

Consider then, that this home would historically have been recycled for social housing for the next generation.

Where do the next generation go now?

Have you read / seen the council house waiting lists?

As I said, BTL was a PARTIAL SOLUTION, to the root cause of social housing sell off under the RTB.

Without BTL, there would be a chronic problem with renting and the flexibility it provides.

IveSeenTheLight

PasturesNew wrote: »

I've been trying to buy a house and have been told by multiple EAs that landlords are flocking en-masse round every house that's in my price range.

Even the house I bought a LL had already put an offer in on it (and I suspect bought the next one that month too).

Sometimes it sounds to me that I am the only OO buyer in my area.

Most houses I've viewed in the past 6-9 months have appeared as rentals.

I pity the area you reside in PN with the low (pre 1997) labour rates and yet such demand for rental properties and the rental market means that there is sufficient gap in the market for investors to invest.

Bantex_2

CLAPTON wrote: »

is it not generally so, that BTL mortgages require 25% deposit as well as demonstrating that the rent is 125% of the mortgage cost?

Most landlords already own their own home, so raising the 25% can be fairly straightforward. Showing 125% of rental is fairly straightforward also. I believe the criteria takes into account that if IRs rise then a landlord can just increase rent to cover, whereas it is not acceoted that an OO can automatically get a pay rise to cover an increase in mortgage payments.

The market is weighted in favour of those that "already have".

IveSeenTheLight

PasturesNew wrote: »

I couldn't outbid the BTLs... they have more leverage at their fingertips than me; I am searching at the top of my budget for a house half of what I'd like. An OO is limited by their provable salary - a BTLer uses other tools to 'prove' they can pay it back.

The yield (at 100% occupancy) of what I am buying is about 5% from a LL's perspective.

I thought you had substantial money in savings having previously sold a property (possibly at the top of the market)?

Could it be that your expectations are not realistic (you want twice as much for the budget you have)

PasturesNew

IveSeenTheLight wrote: »

I thought you had substantial money in savings having previously sold a property (possibly at the top of the market)?

Could it be that your expectations are not realistic (you want twice as much for the budget you have)

I was trying to simplify my answer to fit in with "most people" so to speak. I am actually a cash buyer, I am unmortgageable ..... but I am not buying a big/flash house, just a little two-up-two-down. A home that's a starter home size for people earning quite good money .... if I were relying on what I could earn round here and a mortgage I'd be having to buy something smaller to be honest (single income). Probably one of the cheapest 1-bed flats in a less great area....

So my answer represented a situation that could occur if one were getting a mortgage....

I did sell at the top of the market, but it wasn't a mansion! It's just buying me a little terraced house Not even a drive, garage, en-suite, conservatory, utility ..... I sacrificed that lot for location, where location puts me closer to services/jobs potential (and not stuck 3 miles inland without either).

I just looked it up - where I am buying, the average price of a terraced house is 15-20% more than what I am paying.

CLAPTON

PasturesNew wrote: »

I couldn't outbid the BTLs... they have more leverage at their fingertips than me; I am searching at the top of my budget for a house half of what I'd like. An OO is limited by their provable salary - a BTLer uses other tools to 'prove' they can pay it back.

The yield (at 100% occupancy) of what I am buying is about 5% from a LL's perspective.

are you sure that if BTL didn't exist, that the ex-renter flood of people won't out compete you for the stock of houses?

Bantex_2

CLAPTON wrote: »

are you sure that if BTL didn't exist, that the ex-renter flood of people won't out compete you for the stock of houses?

Unlikely with current borrowing restrictions.

CLAPTON

Bantex wrote: »

Unlikely with current borrowing restrictions.

why is that?
which restrictions are you referring to?
why will prices fall with the same number of people looking for property?

Bantex_2

CLAPTON wrote: »

why is that?
which restrictions are you referring to?
why will prices fall with the same number of people looking for property?

Because the amount a homebuyer can borrow is more restricted than an investor (demonstrate affordability at 7% rates, no IO, etc etc)