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

mwpt

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.

Please note, I'm not having a go at you, I've got no problem with your personal actions.

Why do you think people are not buying this particular property? There could be a number of reasons.

One guess is that it is in a not very desirable area to own and live for longer periods, and people who live in this area might be LHA tenants or short term (2 years) renters who just need to be there. In that case, BTL is performing a good service.

If on the other hand, the flat is simply priced higher than what an OO values it at and/or beyond local ability to buy. Since you are paying the higher price, then there can be no other conclusion than that you have outbid an OO. It doesn't matter that you see the value as £85k as a BTL landlord. Or rather, it does matter, because that has been the point of many people on this thread and of the article. BTL landlords can value properties higher than OOs because they are able to use the tools at their disposal to do so.

Note that it seems more likely that option 1 applies to your case, but option 2 is a fact in many other areas.

mwpt

seven-day-weekend wrote: »

I think most working people can afford £85k.

But that misses the point. Value is defined as what someone is willing to pay for it, not what they can afford. If OOs value it at less and you value it at more, then you have outbid them. There is no sentiment or judgement in this conclusion, it just is.

seven-day-weekend

mwpt wrote: »

Please note, I'm not having a go at you, I've got no problem with your personal actions.

Why do you think people are not buying this particular property? There could be a number of reasons.

One guess is that it is in a not very desirable area to own and live for longer periods, and people who live in this area might be LHA tenants or short term (2 years) renters who just need to be there. In that case, BTL is performing a good service.

If on the other hand, the flat is simply priced higher than what an OO values it at and/or beyond local ability to buy. Since you are paying the higher price, then there can be no other conclusion than that you have outbid an OO. It doesn't matter that you see the value as £85k as a BTL landlord. Or rather, it does matter, because that has been the point of many people on this thread and of the article. BTL landlords can value properties higher than OOs because they are able to use the tools at their disposal to do so.

Note that it seems more likely that option 1 applies to your case, but option 2 is a fact in many other areas.

It is on a very popular new development, the flat itself is two years old. Originally it was overpriced as the seller priced it the same as the brand new ones.

We are not paying the higher price we are paying £85k, which is less than the final asking price. A FTB could have done the same. They are all quite happily paying £10k more for brand new apartments on the same development.

Graham_Devon

seven-day-weekend wrote: »

It is on a very popular new development, the flat itself is two years old. Originally it was overpriced as the seller priced it the same as the brand new ones.

We are not paying the higher price we are paying £85k, which is less than the final asking price. A FTB could have done the same. They are all quite happily paying £10k more for brand new apartments on the same development.

Agree with you here. A FTB could have done the same.

Whether it's suitable to most people to purchase as a home though is another matter. I know I would never purchase a flat as a home. Different though as an investment and different as a renter.

Theres just too many problems associated with flats when it comes to buying them, hence they are ignored by buyers. I've said before, I would quite like to see entire apartment blocks created for renting out.

And on that note I wish you good luck! Buying a flat as a BTL now with BTL getting hammered it seems and increased costs is brave!

makeyourdaddyproud

Graham_Devon wrote: »

...Theres just too many problems associated with flats when it comes to buying them, hence they are ignored by buyers. I've said before, I would quite like to see entire apartment blocks created for renting out...

But that isn't always the case is it? HUTH regularly showcase wet-behind-the-ears buyers chomping on the bit for tiny flats across England?

Don't forget that a flat is still a rung on the ladder. In a fast moving market that has got to be better than doing nothing and seeing prices for all skyrocket, right?

HappyMJ

makeyourdaddyproud wrote: »

But that isn't always the case is it? HUTH regularly showcase wet-behind-the-ears buyers chomping on the bit for tiny flats across England?

Don't forget that a flat is still a rung on the ladder. In a fast moving market that has got to be better than doing nothing and seeing prices for all skyrocket, right?

Not really. The costs of buying and selling can outweigh any profit made on the increase in sale price between purchase and sale.

Most people do not aspire to live in a flat their whole lives. Most of us want to live in a house that we can do anything we want to without having to ask someone. Flats aren't generally owned. They are just about always leasehold which means you still have a landlord and you need to ask before undertaking any major works to the property. You can't go knocking walls down to make an open plan lounge/diner. A house is usually freehold and if you want to knock down walls or build a new room in the attic then subject to planning permission you can do that.

I would never buy a flat to live in. It's an ideal investment property though.

Electrum

...Theres just too many problems associated with flats when it comes to buying them, hence they are ignored by buyers. I've said before, I would quite like to see entire apartment blocks created for renting out...
Originally posted by Graham_Devon


I can see this happening soon, huge blocks of flats being build especially for renters.

With all the talk about rent controls, there will be very cheap properties to rent, lots more supply being added to the already oversupply of properties.

makeyourdaddyproud

HappyMJ wrote: »

Not really. The costs of buying and selling can outweigh any profit made on the increase in sale price between purchase and sale.

Most people do not aspire to live in a flat their whole lives. Most of us want to live in a house that we can do anything we want to without having to ask someone. Flats aren't generally owned. They are just about always leasehold which means you still have a landlord and you need to ask before undertaking any major works to the property. You can't go knocking walls down to make an open plan lounge/diner. A house is usually freehold and if you want to knock down walls or build a new room in the attic then subject to planning permission you can do that.

I would never buy a flat to live in. It's an ideal investment property though.

Do you not see the irony? If people were to take your view, then this is a less than "ideal" investment for you.

kinger101

mwpt wrote: »

Please note, I'm not having a go at you, I've got no problem with your personal actions.

Why do you think people are not buying this particular property? There could be a number of reasons.

One guess is that it is in a not very desirable area to own and live for longer periods, and people who live in this area might be LHA tenants or short term (2 years) renters who just need to be there. In that case, BTL is performing a good service.

If on the other hand, the flat is simply priced higher than what an OO values it at and/or beyond local ability to buy. Since you are paying the higher price, then there can be no other conclusion than that you have outbid an OO. It doesn't matter that you see the value as £85k as a BTL landlord. Or rather, it does matter, because that has been the point of many people on this thread and of the article. BTL landlords can value properties higher than OOs because they are able to use the tools at their disposal to do so.

Note that it seems more likely that option 1 applies to your case, but option 2 is a fact in many other areas.

BTL mortgages have higher interest rates than residential mortgages. Given the rate on a 90% LTV is 2-2.5% at the moment, the repayments on a 25 yr mortgage is £300-£350 a month. Buying is cheaper that renting. Provided it's somewhere you're going to stay for a few years because of the fixed costs associated with buying and selling.

The flat probably didn't appeal to OO because people don't view small flats as long term options. It's better to stretch yourself a bit and go straight for a 2 or 3 bed semi and not have to move again in 3 years.

kinger101

makeyourdaddyproud wrote: »

Do you not see the irony? If people were to take your view, then this is a less than "ideal" investment for you.

No. You missed the point. He said he wouldn't buy a flat to live in. It doesn't mean he wouldn't rent one (if he were just starting out).