Why do people resent buy-to-letters so much?

chucknorris

Crashy_Time wrote: »

How do you see falling house prices impacting the economy?

You've (unsurprisingly) got things back to front, it is a falling economy that impacts house prices.

westernpromise

lush_walrus wrote: »

It's an interesting read, I remember when I first joined this site more than ten years ago the same old chat of house prices are going to crash, btl pushing prices up.

It goes back earlier than that. I have excavated Usenet posts from newsgroups as far back as early 1996 in which people asserted that prices were still falling. One loony even thought they had another 90% to fall. It is quite hard to follow threads and posters via Google Groups but that chap was last seen in about 2011, still sure that a 90% crash was coming. I am not sure if he was still married.

There comes a crossover point for every crash troll where they have delayed buying for so long, and squandered so much on rent, that no possible price crash can reimburse them or put them back into a better position than they'd have been in had they paid up years ago.

As you observe, the point is that if you genuinely want a home you will be happy to buy at any price and spend the next 10 years making a big dent in the mortgage. After that sort of time, you are immune to pretty much any downturn, because a/ they don't last that long and b/ you'll have repaid more than the property has fallen - so no negative equity - so you can still move.

One of the reasons I tend to despise crash trolls is that they tend to be people who want what others have but want to pay less than it costs. They want a sure thing, essentially, which is not a hallmark of financial maturity.

Renters suffer worse in a crash because their rent goes up, but their security of tenure goes down because their landlord may still go bust, in which case they're looking at re-registering with letting agents and moving as often as that happens.

Aberdeenangarse

Crashy_Time wrote: »

People are laughing at BTL`ers now, didn`t you notice? :rotfl:

Not as many as laughing at you and your HPC cronies.:D

cells

BananaRepublic wrote: »

In my past experience landlords do not do much work, apart from the frantic rush when purchasing the property.

Landlords do a hell of a lot of work, how do you think they build/buy the house in the first place?

If I go out and spend two years working 80 hours a week to build a house virtually all by myself. And also take a second job working part time to buy the materials. And a third job to buy the land and other fees. All that work, all that capital, and all that risk up front so a landlord can charge £750 per month (in a lot of places in England) of which 40% goes to tax.

The work is not the work in changing a broken window handle or repainting a room. The work is the capital that the house is, be it when built, or indirectly when bought.

Like I said most people renter or not simple dont understand capital

BananaRepublic wrote: »

Neither do they pay much tax while letting the house. The house is taxed when sold, as CGT, as per other investments, but that is only on the gain, and since it is highly geared, the profits are potentially high, so they cannot complain.

I don't know a single landlord that does not pay 40% or more in income tax.

The profits are high so they cannot complain. This is generalization. The profits in London have been very good, in the SE good, but in a lot of the rest of the country there has been no capital growth for a decade. Landlords in the NE have actually seen prices fall over the last 10 years and when geared by a mortgage the loss is magnified. Landlords in the NW/E-Midlands/W-Midlands have seen prices flat for a decade so no capital growth. Just what they can make from rental surplus post costs

Herzlos

As a new buyer, I found it nearly impossible to buy anything in the studenty area I rented, as everything seemed to go for £30k+ over the asking price. As the area was probably 75% rented I assume that the people doing the buying were landlords.

As a renter, my only real experiences of landlords was in the same area where everything was left to fall apart as the landlords didn't care (my landlord had about 50 properties and the one we rented was bought about 40 years earlier and as far as he was concerned it'd paid for itself decades ago so if it fell down he didn't care), all of my contemporaries rented crappy flats with dodgy landlords and it seemed to be completely the norm. You'd either get shafted by a landlord who didn't care, or you'd get shafted by a landlord and a letting agency who didn't care.

This was 10 years ago, so I assume things have improved a bit, but I'd wager a lot of the people buying now (aged about 30) were renting back then (aged 20) and so the negative experience has carried forwards.

The only positive experience I'd heard of was an older lady that rented to some friends of mine fairly cheap, she'd paid off the mortgage so it was just pocket money (I assume she moved in with a partner) and as she only had the one property she was interested in it's upkeep.

Graham_Devon

cells wrote: »

I don't know a single landlord that does not pay 40% or more in income tax.

They can't possibly exist then.

seven-day-weekend

Corona wrote: »

Perhaps because BTLs are in direct competition with those trying to buy their first house - as they often go for small, cheap, easy to rent and easy to maintain houses? Another demand just pushes prices up, so that first time buyers are often priced out of the market. I know someone in his 50's who has just bought a small terraced house for cash (and so outbid the first time buyer who also wanted it but couldn't top his price) and plans to let it out "for my pension". When I asked him why he didn't just invest the money, he pointed out that renting it out (even after putting money aside for maintenance, etc) would yield about 5% on the money; the most he could get my investing it would have been 2.5% so, over a number of years, the difference was huge, in terms of his retirement income. With final salary pensions disappearing and very low interest rates, it's not surprising that people are choosing this route rather than putting their money into pensions. Sad for first time buyers though.

We are in the process of buying an apartment to rent out. It had been fro sale for nearly a year, then the price was reduced, which was when we saw it. We are buying it for £85k. A FTB could have done the same but didn't. We haven't priced anyone out and it will give someone who wants to rent a good home at a decent rent.

Don't see the problem.

stator

seven-day-weekend wrote: »

We are in the process of buying an apartment to rent out. It had been fro sale for nearly a year, then the price was reduced, which was when we saw it. We are buying it for £85k. A FTB could have done the same but didn't. We haven't priced anyone out and it will give someone who wants to rent a good home at a decent rent.

Don't see the problem.

If you don't buy it the price will come down more until someone can afford it.

CLAPTON

stator wrote: »

If you don't buy it the price will come down more until someone can afford it.

but that person may be a IRA loving, Mao admiring, Nazi sympathising, ISIL supporting landlord who packs people 10 to a room and sells them into slavery : so better that Seven_Day buys it.

seven-day-weekend

stator wrote: »

If you don't buy it the price will come down more until someone can afford it.

I think most working people can afford £85k.