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

mwpt

CLAPTON wrote: »

It is indeed so that the egg could have come before the chicken or vice versa : that was exactly my point.

As I think the fundamental point in the UK market is the lack of sufficient housing I don't think anything other than building lot more will be effective.

Once we have another couple of million homes (up rated for any population growth) then it will be more meaningful to see what the problems are at that time.

Disagree. We should work on both angles at the same time, for better results.

cells

mwpt wrote: »

My position should be clear by now, but some people find it hard to understand.

I am in no way against the rental sector. It is absolutely vital in fact. What I am against in the housing market is huge transfers of wealth, boom and bust and the mechanisms that make this possible at the expense of late comers or "have nots".

My belief for the rental sector is that it should be more in line (but maybe not completely) with the German model. Investment in housing should not be seen as a risky speculation with huge returns. It should be more like bonds, very safe, low yield, low but steady capital gains, but also come with the additional responsibilities of housing people.

In order to facilitate that, additional stamp duty is a good thing. You have to be in the game for the long haul. Stamp duty write offs or discounts for investment to fund new builds. No interest only mortgages! Higher BTL mortgage rates than OO. Rental cover I would look at but unsure how to set this.

Biggest issue is tenancy agreements. It would be mandated, with lenders forced to comply, that every tenancy agreement issued was an automatic long term agreement on the landlords side. Tenant may terminate early with reasonable notice. Rent increases within the tenancy period tied to some inflation measure. Easier eviction of problem tenants (well defined definition of problem). Arbitrage disputes should landlord have a valid reason to retake possession of the property.

Of course there would need to be alterations to planning laws and some sort of incentives to new builds to get everything moving.

The german model needs the UK to have 4.5 million more homes instantly and to continue to build 250,000 homes per year on top of that. How long do you think it might take to get to that?

If you wanted to transition to it over a period of 10 years you would need to build 700,000 homes a year.......impossible not to mention likely very destabilizing!

all the other stuff is fluff.
tax and regulate BTL more cos I dont like my landlord is as smart as saying tax and regulate the supermarkets more. In both cases they are vital and doing more tax and regulations will lead to higher prices

lisyloo

chucknorris wrote: »

I don't think that being a millionaire has any relevance (no offence intended). I don't want to debate with someone that approaches me like that, he was obviously fishing for an argument.

Money buys the freedom to do what you want with your time, so I would assume you're here to debate because you enjoy it. I would have thought you would relish the chance to debate subjects close to your heart.
However I can see this poster has overstepped the mark.

mwpt

cells wrote: »

all the other stuff is fluff.
tax and regulate BTL more cos I dont like my landlord is as smart as saying tax and regulate the supermarkets more. In both cases they are vital and doing more tax and regulations will lead to higher prices

No, it's not fluff. We have to start somewhere. It's not the same as supermarkets at all, as has been explained repeatedly.

CLAPTON

mwpt wrote: »

Disagree. We should work on both angles at the same time, for better results.

why do you think thta extra stamp duty will lead to an extra house being built?

why do you think that changing tenancies will lead to an extra house being built.

why do you think owning houses with low financial return will lead to an extra house being built?

Once we have sufficient houses then I guess your wish list would be fulfilled by market forces anyway.

cells

CLAPTON wrote: »

maybe the German model works in Germany only because there is sufficient housing.

also what a lot of the German fans do not realize is that in Germany there are quite a lot of institutional landlords. For instance one REIT company in germany owns over 300,000 homes and there are a lot of residential REITs in Germany.

These companies will never sell to owners they will only transact in volumes of thousands between themselves. This means that in Germany and any "german copy cat" ownership can not go as high as in the UK model whereby a middle age landlord buys one house and can only hold onto it for 20-30 years before age/divorce/death forces a sale and an opportunity for the public to buy.


Personally I think a mix of the two would be better.
The UK needs a few residential REITs so investors who want housing exposure need not become landlords themselves just buy REIT shares. But also I think its quite good to have the option of small time landlords (majority of landlords only have 1 property) who perfer to have a house as a savings/pension plan rather than pay some London banker and fund manager to manage some shares portfolio

lisyloo

mwpt wrote: »

My position should be clear by now, but some people find it hard to understand.

I am in no way against the rental sector. It is absolutely vital in fact. What I am against in the housing market is huge transfers of wealth, boom and bust and the mechanisms that make this possible at the expense of late comers or "have nots

i am pro rationing of housing.
I haven't thought through a system and no doubt it's not easy, but I'd like to see holiday homes taxed in a highly punitive way. I realise that there would be difficulties around defining what is a holiday home and how you prove occupancy.
Maybe also those with excess housing taxed as well (yes a bedroom tax). Ideally I'd like to see that fairly imposed so those with spare rooms In use (like disabled people) are not penalised. In my view a spare room for a university student is fair game for taxation. It shouldn't be an automatic right to take up 2 homes whilst living in 1.

None of this is in my personal interest and I don't hate landlords, in fact I quite like them.

mwpt

CLAPTON wrote: »

why do you think thta extra stamp duty will lead to an extra house being built?

why do you think that changing tenancies will lead to an extra house being built.

why do you think owning houses with low financial return will lead to an extra house being built?

Once we have sufficient houses then I guess your wish list would be fulfilled by market forces anyway.

Sorry, we don't see things the same way. I think the reforms are necessary anyway. House building is part of the same wider problem but both can be addressed at the same time. Measures to encourage stable returns in investing in new builds needed.

mwpt

cells wrote: »

Personally I think a mix of the two would be better.

That is why I said approaching but not completely the German model.

cells

mwpt wrote: »

No, it's not fluff. We have to start somewhere. It's not the same as supermarkets at all, as has been explained repeatedly.

A lot of what you seek already exists

Cheap rents: Exist in much of the north and the midlands scotland and wales where more than half the country lives. Often very close to social rents (and the landlords pay income tax and CGT on those properties while social landlords do not)

Limit rent increases to CPI/RPI: Lots of landlords limit rent increases to 0%. One landlord I know has not increased the rent on the same tenant who has been there for 16 years. If you want the german model with REITs imposing 3-4% mandatory increases annually then some tenants are going to be pretty !!!!ed off the 0% model is gone. To date I have not increased rents on a sitting tenant.

Tenants to stay long term: I would say more than half of landlords would love this but tenants (at least in London) dont go for more than 12 months (although plenty stay longer they just don't want to commit for any longer than 12 months). There are of course some !!!! landlords who sell and evict no fault tenants. These will be mostly the one property landlords. There could be something done about this. Maybe £1,000 compensation for any evicted tenant that has not broken any of the rules.

Letting agent fees: yes get rid of them for tenants.


but the idea to just tax landlords more and more and regulate higher and higher isnt going to help those who need to rent and will make the housing problem worse. see my sig, tenants live more dense so forcing the housing market to swing a little more to ownershoip means the remaining tenants need to live even more dense