Not a time to be a buy-to-let landlord

cells

ok using some ONS dada,
and I had to make an assumption for the size of homes (1 bed = 38sqm, 2 bed = 50 sqm, 3 bed = 75 sqm, 4 bed = 110sqm, 5 bed = 130sqm)

That gives average rental property size as 58 sqm and average owned as 78 sqm

Which suggests an owner home converting to a rental home houses 33% more people

which is very close to my old estimite of 30% +

There will also be a regional difference maybe with London higher density for renters than the rEngland


The reason why some quote the ONS as saying renters live less dense (BTW its quoted as 2.4 for owners 2.3 for renters but that is a rounding making it look a bigger difference than it is. It might be more like 2.37 vs 2.34. Anyway the reason that is an unfair statement is it does not take into account this




So it would be better to say owners and renters both live at virtually the same 2.35 but owners take up on average 33 sqm of space while renters take up 25 sqm of space.

anchovypizza

wotsthat wrote: »

Sounds like wishful thinking. I don't see how taxing some housing is going to reduce the cost of housing overall.

We're going to see an interesting game of deckchair shuffling is about all. Made more interesting because only a relatively small numbers of landlords have been selected for taxing and future sole trading BTL's will likely be deterred from entering because of the stamp duty changes. They've ample time to exit at leisure but I don't really see a mass exodus - some incorporation, some passing of houses to lower taxed spouses, some paying down of debt etc.

I'll shed no tears if the 118 club all go bust - they have even less self awareness than the HPC crew. Wouldn't be too surprised to see the changes watered down to be honest.

Not that your opinion is less valid than anyone else's, but not many people seem to be agreeing with you

THE TELEGRAPH

Tory peer condemns his party's 'attack on buy-to-let'
Lord Flight slates the Government's 'sudden attack' on landlords, warning of a 'sharp fall' in prices and 'insecurity' for tenants
By Nicole Blackmore
http://www.telegraph.co.uk/finance/personalfinance/investing...

Lord Flight, a former Conservative Shadow Chief Secretary to the Treasury, has attacked the Government’s buy-to-let tax changes, warning they could destabilise Britain's housing market by triggering "a sharp fall in prices, if not a crash".

He said the Government's policies also threatened to "put thousands of tenants’ security at risk", predicting that landlords would rush to sell to sell properties having first evicted tenants. ...

AT A GLANCE
Tory MPs and their buy-to-lets. ...


Buy-to-let tax raid: Landlords raise full £50,000 for judicial review
Some 740 backers contributed the full amount in just one week
By Nicole Blackmore
http://www.telegraph.co.uk/finance/personalfinance/investing...

The property investors mounting a legal challenge to the Government’s proposals to increase tax on buy-to-let investments have raised their £50,000 funding target in just one week.

Private landlords Chris Cooper and Steve Bolton said they plan to launch a new funding phase if their judicial review application is successful. ...


THE TIMES

Buy-to-let reforms ‘risk causing property crash’
Michael-Savage
http://www.thetimes.co.uk/tto/life/property/article4657713.e...

George Osborne’s “sudden attack” on people investing in buy-to-let property risks triggering a crash in prices, a Conservative peer has warned.

Lord Flight, a former frontbencher, said that a series of new measures would put the security of thousands of tenants at risk.

He warned that the changes would lead to many people selling up and few wanting to buy the properties. This “clearly has the ability to create a sharp fall in prices, if not a crash”, he said. ...


I can only go on anecdotal evidence, and for one reason or another a lot are getting jumpy, read all the BTL/landlords, property investment or speculation websites and they all have a large contingent of landlords considering heading for the exit, the ones entering BTL more recently are doing all the shouting and screaming and lawyer hiring.

I think it is a case of clause 24 and everything else that could happen. It is underestimated in my opinion but an exit from the EU could do more damage than anything else, more so than the small rate rises we are likely to get, but even that can change over a few inflation and world interest rate rise hikes.

wotsthat

anchovypizza wrote: »

Not that your opinion is less valid than anyone else's, but not many people seem to be agreeing with you

Thanks for the links. It seems that the Property118'ers and HPC'ers are agreed that things will be just awful as a result of this. The 118'ers are lobbying to reduce the hit on profit and the HPC'ers just permanently live in hope.

I'm sticking with my prediction of things being interesting rather than overly exciting.

westernpromise

mwpt wrote: »

Isn't it amazing how rents always go up. Rents go up while BTL sector expands. Rents go up while BTL sector shrinks. One thing is certain, property bulls will use renters as blackmail to protect their interests.

You guys are as ridiculous as the HPC nuts.

Well, except we tend to be right, whereas they are always wrong.

Rents go down or stagnate when house prices rise.

The place I rented for £275 a week in 1998 I now own and let for £550 a week. The rent has gone up 100% in 18 years, but the property value has gone up from 288%. For lengthy periods the rent has stagnated, and on one or two occasions has fallen, because buying was more attractive.

Garethgrew

What's clause24

westernpromise

antrobus wrote: »

Apparently not.

Across England and Wales the average household size was 2.4 people. This figure was the same for owner occupied, but lower for rented households at 2.3 people.

http://www.ons.gov.uk/ons/rel/census/2011-census/detailed-characteristics-on-housing-for-local-authorities-in-england-and-wales/short-story-on-detailed-characteristics.html

Yes, but you get several renting households per property as opposed to only one household per identical owned property.

Garethgrew

anchovypizza wrote: »

Not that your opinion is less valid than anyone else's, but not many people seem to be agreeing with you

THE TELEGRAPH

Tory peer condemns his party's 'attack on buy-to-let'
Lord Flight slates the Government's 'sudden attack' on landlords, warning of a 'sharp fall' in prices and 'insecurity' for tenants
By Nicole Blackmore
http://www.telegraph.co.uk/finance/personalfinance/investing...

Lord Flight, a former Conservative Shadow Chief Secretary to the Treasury, has attacked the Government’s buy-to-let tax changes, warning they could destabilise Britain's housing market by triggering "a sharp fall in prices, if not a crash".

He said the Government's policies also threatened to "put thousands of tenants’ security at risk", predicting that landlords would rush to sell to sell properties having first evicted tenants. ...

AT A GLANCE
Tory MPs and their buy-to-lets. ...


Buy-to-let tax raid: Landlords raise full £50,000 for judicial review
Some 740 backers contributed the full amount in just one week
By Nicole Blackmore
http://www.telegraph.co.uk/finance/personalfinance/investing...

The property investors mounting a legal challenge to the Government’s proposals to increase tax on buy-to-let investments have raised their £50,000 funding target in just one week.

Private landlords Chris Cooper and Steve Bolton said they plan to launch a new funding phase if their judicial review application is successful. ...


THE TIMES

Buy-to-let reforms ‘risk causing property crash’
Michael-Savage
http://www.thetimes.co.uk/tto/life/property/article4657713.e...

George Osborne’s “sudden attack” on people investing in buy-to-let property risks triggering a crash in prices, a Conservative peer has warned.

Lord Flight, a former frontbencher, said that a series of new measures would put the security of thousands of tenants at risk.

He warned that the changes would lead to many people selling up and few wanting to buy the properties. This “clearly has the ability to create a sharp fall in prices, if not a crash”, he said. ...


I can only go on anecdotal evidence, and for one reason or another a lot are getting jumpy, read all the BTL/landlords, property investment or speculation websites and they all have a large contingent of landlords considering heading for the exit, the ones entering BTL more recently are doing all the shouting and screaming and lawyer hiring.

I think it is a case of clause 24 and everything else that could happen. It is underestimated in my opinion but an exit from the EU could do more damage than anything else, more so than the small rate rises we are likely to get, but even that can change over a few inflation and world interest rate rise hikes.

Why would LLs ask tenants to leave before selling?

Oh bless he is worried about tenants? Rubbish, this is good news for tenants, lower house prices and lower rents here we come...

westernpromise

cells wrote: »

when it comes to regulation or taxation why would the interests of landlords and renters be opposed?

Landlords broadly support building because they'd rather have five houses at £200k than four at £250k. The stamp duty's cheaper and the void risk less. So to that extent, landlords and tenants share the same goal.

The faction whose interests really are diametrically opposed to those of renters are existing homeowners. Building more houses dilutes the value of an owner-occupier's home, and building them near his home dilutes it even worse.

The owner occupier therefore bitterly opposes building at all, and especially building in his own back yard.

chucknorris

Garethgrew wrote: »

Why would LLs ask tenants to leave before selling?

Oh bless he is worried about tenants? Rubbish, this is good news for tenants, lower house prices and lower rents here we come...

I've already increased my rents to soften the blow of the forthcoming tax changes, but since then I've noticed rents have climbed again, so more scope to increase further.

westernpromise

cells wrote: »

ok using some ONS dada,
and I had to make an assumption for the size of homes (1 bed = 38sqm, 2 bed = 50 sqm, 3 bed = 75 sqm, 4 bed = 110sqm, 5 bed = 130sqm)

That gives average rental property size as 58 sqm and average owned as 78 sqm

Which suggests an owner home converting to a rental home houses 33% more people

which is very close to my old estimite of 30% +

There will also be a regional difference maybe with London higher density for renters than the rEngland


The reason why some quote the ONS as saying renters live less dense (BTW its quoted as 2.4 for owners 2.3 for renters but that is a rounding making it look a bigger difference than it is. It might be more like 2.37 vs 2.34. Anyway the reason that is an unfair statement is it does not take into account this




So it would be better to say owners and renters both live at virtually the same 2.35 but owners take up on average 33 sqm of space while renters take up 25 sqm of space.

Excellent data and chart. I note particularly how the types of places people want to own are precisely not the sorts of property that they tend to rent, or that landlords tend to buy. But these are exactly the sorts of property that over-leveraged landlords may soon be selling; which points very strongly to other landlords being the likely buyers.