Renting in your 40's and staring into the abyss

Cornucopia

GunJack wrote: »

I thought we were talking about the lender having repossessed, so the lender wouldn't have to buy out the LL?? So it would work as I described, surely?

It's not a bad idea, but the devil would be in the detail...

- Even after repossession, the LL still has a potential financial interest in the property. So there is a question as to what would happen to that?

- The tenants would potentially become sitting tenants should the Lender wish to sell, reducing the marketability of the property and its price. (Thereby potentially compounding the Lender's and LL's loses).

- As wotsthat says, there is a question as to the Lender establishing a Lettings business, and more specifically whether the tax treatment for companies would make the lets even less viable than they were with the (failed) LL. Perhaps the answer to that is to transfer the property to a Housing Association for the purpose of letting and maintenance.

OTOH, as a successful LL, I would have no objection to my Lender raising a fund through a surcharge (of maybe 0.1% of their BTL business) in order to assist tenants whose homes are threatened through no fault of their own.

Thrugelmir

Cornucopia wrote: »

It's not a bad idea, but the devil would be in the detail...

- Even after repossession, the LL still has a potential financial interest in the property. So there is a question as to what would happen to that?

- The tenants would potentially become sitting tenants should the Lender wish to sell, reducing the marketability of the property and its price. (Thereby potentially compounding the Lender's and LL's loses).

- As wotsthat says, there is a question as to the Lender establishing a Lettings business, and more specifically whether the tax treatment for companies would make the lets even less viable than they were with the (failed) LL. Perhaps the answer to that is to transfer the property to a Housing Association for the purpose of letting and maintenance.

OTOH, as a successful LL, I would have no objection to my Lender raising a fund through a surcharge (of maybe 0.1% of their BTL business) in order to assist tenants whose homes are threatened through no fault of their own.

Banks lend money they are not in the business of property letting.
LL's like banks have to operate on a commercial basis. The number of amateurs in the market will increase the cost for the professionals. As the cost ultimately is borne by the customer.

dktreesea

Guiven the latest plans by the government to go after BTL landlords, making both the supply of sub par housing and letting to illegal immigrants criminal offences, I'm not so sure that being a BTL landlord is such a good career move anymore.


Take this, for instance:
http://www.bbc.co.uk/news/uk-33754595

remorseless

dktreesea wrote: »

Guiven the latest plans by the government to go after BTL landlords, making both the supply of sub par housing and letting to illegal immigrants criminal offences, I'm not so sure that being a BTL landlord is such a good career move anymore.


Take this, for instance:
http://www.bbc.co.uk/news/uk-33754595

isn't that what most LL are paying realtors to do? And claim it back against their income?

Cornucopia

remorseless wrote: »

isn't that what most LL are paying realtors to do? And claim it back against their income?

Indeed. All of these extra bits of Government admin get taken on by the Letting Agent, and all you see at the end of the process is a tenant who has passed the various qualification requirements.

I don't have a problem with what the Government are doing, however, people need to understand that putting in differential taxation or introducing lots of additional admin can create distortions in the market.

Far from satisfying the baying property bears, the danger is three-fold: (a) you create more bad LLs, and force further bad LL practises into the market, (b) you disincentivise large LLs, and populate the market with a larger number of small, potentially less experienced, less professional LLs, and (c) you create the situation for the empty shell investors where letting out their properties becomes less and less attractive, and you end up with even more expensive city centre developments standing empty.

Not only that, but whilst these Government initiatives might lead to a trickle of housing back to the open market, if FTBs are still constrained by lack of a deposit, then they will still be unable to purchase. Indeed, it's common sense that if deposit is the issue, then house prices would have to fall to an unrealistic, economy-wrecking fraction of their current price to make any difference.

chucknorris

dktreesea wrote: »

Guiven the latest plans by the government to go after BTL landlords, making both the supply of sub par housing and letting to illegal immigrants criminal offences, I'm not so sure that being a BTL landlord is such a good career move anymore.


Take this, for instance:
http://www.bbc.co.uk/news/uk-33754595

Why would a sensible LL want to let a property to an illegal immigrant, do you really think if they stopped paying the rent that you could successfully sue them? Do you also think that most LL's aspire to let out sub standard properties?

remorseless

Cornucopia wrote: »

...if FTBs are still constrained by lack of a deposit, then they will still be unable to purchase.

How much of a problem is the lack of deposit in the UK?
In Oz, I believe the average couple must save for like 14 years before being able to buy!!! Now that is CRAZY!

lisyloo

How much of a problem is the lack of deposit in the UK?

It's a huge problem for youngsters because whilst they are paying high rents they can't afford to save a significant deposit and even if they are, capital appreciation is exceeding what they can save.
Of course if they are lucky enough to live with mum and dad then they can save, but not everyone can get job near their parents or has living parents with a spare room or a good relationship with them.

My parents got divorced and didn't particularly want their kids cramping their style. They aren't obliged to house young adults.

remorseless

lisyloo wrote: »

My parents got divorced and didn't particularly want their kids cramping their style. They aren't obliged to house young adults.

WOW... well the WOW depends on how old are these 'kids'. Now days the word is used a bit loosely so could be from 15 to 45 and beyond

I don't know what is sadder, the deposit situation or the family morals. I understand kids may need a little push but...

I suppose it would explain why elderly are shoved in a nursing home rather than being looked after! It's pay back time!

I really hope it is not the norm!!!

worried_jim

CLAPTON wrote: »

Fiona, being a uni lectrure and a guardian reader is probably a massive supporter of the EU and rejoices in the fact of 500,000 immigrants each year.
She just loves the cultural diversity they bring and she loves the green belt.
However, being innumerate and economically illiterate she doesn't understand how supply and demand affect the price of houses.

Pretty much sums it up. If my 20 something colleagues are all buying homes in the Brighton area why can't she? There is a pattern, everyone at work who reads the guardian rents.