Base rates held (what's new?)

lisyloo

I didn't think water of food were luxuries - unless of course that was sarcasm.

Yes owning doesn't work short term.

MobileSaver

Generali wrote: »

Did rents fall as interest rates fell? I believe the answer is no.

If that is true, why would rents rise with interest rates? If interest rates rose and my LL wanted to put up my rent as a result I'd tell her to f off

I'd disagree with this and have posted about it before regarding Crashy's wasted sixteen years of renting. My view is that landlords keep the additional profit when interest rates drop but will pass on any additional costs when rates rise again.

MobileSaver wrote: »

While your rent has apparently stayed the same for the last 16 years, your landlord's mortgage rate has dropped from 9% to 2.5% so your landlord must be quids in while you continue to pay his mortgage for him.

So on a typical £150,000 mortgage, even ignoring the indisputable HPI factor, your landlord is £800 a month better off than he was.

You may tell your existing LL where to go but sadly that's little comfort if all the other BTL landlords are also having to deal with increased interest rates and so increase rents accordingly.

lukeh23

There is nothing wrong with BTL essentially. Some people need to rent and others may make good landlords and provide a good service.

The problem is that far too many people are defaulting to BTL as some sort of investment portfolio, where they don't essentially want to be landlords, but need some way of getting their money to work for them. This is a problem as it increases the price and they compete with FTB's for starter homes (1/3 bed flats / small houses).

People who want to buy a property to live in it for many years, raise a family there and set down roots are having to compete with BTL investors who have already established themselves on the ladder and built up capital over a period when property prices were a lot lower (due to housing been built at a much larger scale).

BTL should be sometime you go into as you want to be a LL, not because it has better returns then any other options available. I can't blame people for doing so, we all want more money, but the situation is serious as housing is an essential element to society).

michaels

Generali wrote: »

The difference is that housing is an essential item as opposed to luxuries like food, water and heating which are provided by the private sector.

I just knew you should have used the sarcasm tags

Bantex_2

lukeh23 wrote: »

There is nothing wrong with BTL essentially. Some people need to rent and others may make good landlords and provide a good service.

The problem is that far too many people are defaulting to BTL as some sort of investment portfolio, where they don't essentially want to be landlords, but need some way of getting their money to work for them. This is a problem as it increases the price and they compete with FTB's for starter homes / flats (1/3 bed flats / small houses).

People who want to buy a property to live in it for many years, raise a family there and set down roots are having to compete with BTL investors who have already established themselves on the ladder and built up capital over a period when property prices were a lot lower (due to housing been built at a much larger scale).

BTL should be sometime you go into as you want to be a LL, not because it has better returns then any other options available. I can't blame people for doing so, we all want more money, but the situation is serious as housing is an essential element to society).

Exactly
I have no desire to be a landlord, but the powers to be have decided that any savings I have should be slowly taken off me.

michaels

If BTL really offered a good balance of risk and reward then surely companies would invest it in rather than individuals, there are obviously economies of scale etc so it would seem if very odd that individuals are involved at such a high proportion of suppliers. My guess is they (the individuals) are incorrectly assessing the risk/reward trade off due to the familiarity of the 'product'.

Carl31

lukeh23 wrote: »

There is nothing wrong with BTL essentially. Some people need to rent and others may make good landlords and provide a good service.

The problem is that far too many people are defaulting to BTL as some sort of investment portfolio, where they don't essentially want to be landlords, but need some way of getting their money to work for them. This is a problem as it increases the price and they compete with FTB's for starter homes / flats (1/3 bed flats / small houses).

People who want to buy a property to live in it for many years, raise a family there and set down roots are having to compete with BTL investors who have already established themselves on the ladder and built up capital over a period when property prices were a lot lower (due to housing been built at a much larger scale).

BTL should be sometime you go into as you want to be a LL, not because it has better returns then any other options available. I can't blame people for doing so, we all want more money, but the situation is serious as housing is an essential element to society).

Good post

I think LL simply forget/ignore that the service they provide affects peoples lives. The simple decision to sell means a family has to be uprooted and risk moving away from their life, just because someone has decided they don't want to play any more

I have friends living in filth and damp, health risks basically as their landlords are obviously too tight to pay out to get repairs done. In any other market, providing a product that is a risk to health would see you in court

lisyloo

My guess is they (the individuals) are incorrectly assessing the risk/reward trade off due to the familiarity of the 'product'.

I think you're right.
A lot of individuals are prepared to do DIY and maintenance themselves where possible.
I'm not sure that everyone prices in the value of their time fully.
If you enjoy painting & DIY or are at least prepared to do it then I can see that this works well because you can effectively do it for free which a business can't.

Many people are perfectly happy to accept they need to put in their free time and effort for their investment which is why it works for many people, although if you priced it in at business rates it might not.

I agree that the balance has become wrong, however there is nothing immoral about providing the service.

I have friends living in filth and damp, health risks

Sorry Carl, but your friends do need to take some action over this.

In any other market, providing a product that is a risk to health would see you in court

Have your friends reported this to the appropriate authoriries?
Why aren't they taking the landlord to court where you are implying they would for any other business? as they have the ability to withold rent then surely they are in a powerful position.

Thrugelmir

lisyloo wrote: »

I think you're right.
A lot of individuals are prepared to do DIY and maintenance themselves where possible.
I'm not sure that everyone prices in the value of their time fully.
If you enjoy painting & DIY or are at least prepared to do it then I can see that this works well because you can effectively do it for free which a business can't.

If only it were that simple.

lisyloo

If only it were that simple.

If you're saying that my proposal that individuals doing property management for free is too simplistic (which I'm sure it is BTW), then could you please enlighten me/us. Cheers.