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

letsdothisnow

antrobus wrote: »

i have a theory.

many people moan about 'greedy' landlords, in the same way as they moan about 'greedy' energy companies, insurers, or the local supermarket for putting up the price of butter. On the other hand, apple, they're simply wonderful, and the same people fall over themselves to buy the latest i-whatever repackaging of £100's worth of chinese electronics into a £600 consumer must have.

I think it's because 'people' have this odd idea that somehow it's wrong to make a profit out of something that is viewed as essential.

excellent post

Samsonite1

I do agree that hating BTL landlords is just stupid. Investing money in the most stable commodity is not evil. You want to bet on your pension? You can do that. Why hate people who want to invest their money in housing? Getting shafted from the government is one thing, but people hating for no good reason is pretty silly. Renting out a house is still providing accommodation - how is that worse than leaving it for sale - same amount of housing available whatever the outcome. The difference being that it is rented instead of bought. Many people cannot get a mortgage, but can rent so this is a good thing for many.

All that understand in all of this is that the government is taking more money of those more fortunate - a very left-wing idea. No problem if that was the end of it, but the uneducated hatred of people trying to invest for the future annoys me just a little.

princeofpounds

I'm not going to go into a long-winded explanation given the length of the thread already, but if people want to understand why BTL landlords seem to be hated on such an intuitive level, the best thing to do is a little reading on something called rentier economics.


https://en.wikipedia.org/wiki/Rent-seeking


(NB - the 'rent' economist talk about is not quite the same thing as the rent you pay to live in a property; it's a more general concept).


Whenever there is a crucial resource - like housing - which is artificially restricted in supply and owned by a therefore privileged section of the population, the owners of that resource will be able to extract a rent from the rest of the population in excess of the underlying value of the resource itself (Which in the case of a house, would be the value of agricultural land plus the cost of construction to build an alternative house, NOT the value someone paid for it which already incorporates the premium value of the rentier status).


In extreme cases, the rentier can extract all the surplus value in an economy (https://en.wikipedia.org/wiki/Law_of_rent), leaving the tenant class with the most marginal of economics.


An analogy would be a town with farmers on one side of a river, and a market on the other. Selling grain in the market get the farmers an economic profit of 10 per bag.


However, let's say that 6 of the farmers own the only bridge that is allowed to be built. The other four farmers have no choice but to use it. Even if the charge for using the bridge is 9 per bag. Most of the value produced by the land and labour of the disadvantage group is transferred to the advantaged group by simple virtue of the fact that they have the bridge-building privilege.


It's a term which originated in Marxist economics, and whilst the modern understanding of it is quite different to the way Marx talks about it, there is still a perfectly valid general point there.


Profits are not bad (quite the opposite in fact, when they incentivise investment in supply to meet consumer demand). BTL LLs are not bad (they are largely just responding to incentives, as we all so).


But a rentier system is not healthy and naturally inspires resentment.


People intuitively understand that the amount of money that they pay for housing is much higher than the value of land and bricks. They don't generally understand why, but in the UK the primary driver is the restricted legal privilege know as planning permission.

mwpt

Samsonite1 wrote: »

I do agree that hating BTL landlords is just stupid. Investing money in the most stable commodity is not evil. You want to bet on your pension? You can do that. Why hate people who want to invest their money in housing? Getting shafted from the government is one thing, but people hating for no good reason is pretty silly. Renting out a house is still providing accommodation - how is that worse than leaving it for sale - same amount of housing available whatever the outcome. The difference being that it is rented instead of bought. Many people cannot get a mortgage, but can rent so this is a good thing for many.

All that understand in all of this is that the government is taking more money of those more fortunate - a very left-wing idea. No problem if that was the end of it, but the uneducated hatred of people trying to invest for the future annoys me just a little.

Maybe the enormous profits made from capital growth and seeing the people who hate you stuck in rental accommodation because of this capital growth can help you feel a bit better. I'm off to plant an egg to grow a chicken. Or the other way round, I can't recall.

Samsonite1

mwpt wrote: »

Maybe the enormous profits made from capital growth and seeing the people who hate you stuck in rental accommodation because of this capital growth can help you feel a bit better. I'm off to plant an egg to grow a chicken. Or the other way round, I can't recall.

I am not a landlord by the way. I only became one when once I lived abroad and paid rent while renting out my only house (not a second home).

But I am in a position where I do not want to bank on my pension alone and want to invest in property. I can do that, but it is almost seen as a crime at the moment.

I do not think it is right to blame people who are "doing well" for the misfortune of others. That just infers a lack of ambition in life which probably seems like an equally unfair assertion.

mwpt

Samsonite1 wrote: »

I am not a landlord by the way. I only became one when once I lived abroad and paid rent while renting out my only house (not a second home).

But I am in a position where I do not want to bank on my pension alone and want to invest in property. I can do that, but it is almost seen as a crime at the moment.

I do not think it is right to blame people who are "doing well" for the misfortune of others. That just infers a lack of ambition in life which probably seems like an equally unfair assertion.

Go for it. But just accept the fact that speculating and profiteering from the basic human need in life, with regular working people unable to afford the houses that BTL landlords can afford because of debt, IO and rental cover, will result in you being resented. If you don't care about that and are prepared to bet that increasing numbers of renters will not at some point command political clout, then go for it. I won't hold it against you in particular, I will still resent the mechanisms that make it possible though and continue to advocate they change those systems.

If you can't beat the system, you had better join it, I guess.

Samsonite1

mwpt wrote: »

Go for it. But just accept the fact that speculating and profiteering from the basic human need in life, with regular working people unable to afford the houses that BTL landlords can afford because of debt, IO and rental cover, will result in you being resented. If you don't care about that and are prepared to bet that increasing numbers of renters will not at some point command political clout, then go for it. I won't hold it against you in particular, I will still resent the mechanisms that make it possible though and continue to advocate they change those systems.

If you can't beat the system, you had better join it, I guess.

I completely agree with you - if the shoe was on the other foot...

Personally I am in favour of high taxes in general - this is a way to redistribute wealth as long as the government is doing it properly (which is often hard to tell).

To turn this on its head though - I would say that the haters here show the same mentality as a high-earner might show when paying huge income taxes and holding some resentment towards people on benefits. I am just not a fan of resenting any group of people personally. I understand that resentment exists, but that does not make it right - in fact resenting people who are simply thinking about BTL when weighing up options seems very petty!

cells

mwpt wrote: »

Go for it. But just accept the fact that speculating and profiteering from the basic human need in life, with regular working people unable to afford the houses that BTL landlords can afford because of debt, IO and rental cover, will result in you being resented. If you don't care about that and are prepared to bet that increasing numbers of renters will not at some point command political clout, then go for it. I won't hold it against you in particular, I will still resent the mechanisms that make it possible though and continue to advocate they change those systems.

If you can't beat the system, you had better join it, I guess.

to be consistent you really should also hate the social housing sector which also blocks home ownership and forces renting (dont come back with, they charge less, as about half the country private rents are close to social rents and private rented homes also pay taxes)

also you are trying to do the impossible. in a shortgage of homes situation the rental sector must expand. This has been true since about 2004 when the population really started to boom and house building did not go up

on the other hand when house building is good and population growth low the owner sector must expand. This was true from 1950 - 2004

So its basically a matter of simple math.
Build more homes than people so people can live less dense in the owner sector at 33 sqm/capita, or built to few homes so people have to live more dense in the rental sector at 25 sqm/capita


there is no evil or good to it. you simply cant have the owner sector expand and the rental sector shink at our current population growth and house building rates

66z

The big part of the issue here is that landlords are rising prices not because they have to but because they CAN. And not just that, they are doing many other things because they CAN. As a tenant you are paying an extortionate price for a tiny room or flat with countless imposed limitations after going through hell of even getting to one (ohh, and you're still lucky, if you managed to get one from landlord instead of having to go through agents). And with all that, you don't feel like a valued customer but rather a beggar. God forbid, you fall into one of more undesirable categories, like student, DSS, self-employed or having a pet. Landlords are very choosy -- again, because they can.

While that's a direct result of free market, supply/demand and all that -- in my view it's the opposite of what it should be. The competition is not between the sellers, it's between the buyers, like it was auction of some antique luxury item. But we are talking basic human necessity here! People feel that everyone including government, councils, developers, etc have ganged up on them, changing the landscape in a way that more and more money could be extracted from each square metre, destroying social housing, driving up prices of private sector -- and in the end people are just being sucked dry, working their asses off all while giving most of their earnings away, getting nowhere or even worse off as the years go by, and their often greedy, controlling and dismissive BTL landlords just put the face to this whole system.

I wouldn't think most of those people are dumber or less hard working than the landlords, and yet they are in much worse position. Is it then surprising that landlords are hated?

cells

66z wrote: »

The big part of the issue here is that landlords are rising prices not because they have to but because they CAN. And not just that, they are doing many other things because they CAN. As a tenant you are paying an extortionate price for a tiny room or flat with countless imposed limitations after going through hell of even getting to one (ohh, and you're still lucky, if you managed to get one from landlord instead of having to go through agents). And with all that, you don't feel like a valued customer but rather a beggar. God forbid, you fall into one of more undesirable categories, like student, DSS, self-employed or having a pet. Landlords are very choosy -- again, because they can.

While that's a direct result of free market, supply/demand and all that -- in my view it's the opposite of what it should be. The competition is not between the sellers, it's between the buyers, like it was auction of some antique luxury item. But we are talking basic human necessity here! People feel that everyone including government, councils, developers, etc have ganged up on them, changing the landscape in a way that more and more money could be extracted from each square metre, destroying social housing, driving up prices of private sector -- and in the end people are just being sucked dry, working their asses off all while giving most of their earnings away, getting nowhere or even worse off as the years go by, and their often greedy, controlling and dismissive BTL landlords just put the face to this whole system.

I wouldn't think most of those people are dumber or less hard working than the landlords, and yet they are in much worse position. Is it then surprising that landlords are hated?

once more that is a generalisation, the market is completely different in London and parts of the SE than it is elsewhere. In about half the country private rents are close to social rents

Also I fully understand and agree that rents in say London are very expensive but how can they be otherwise? Probably 10-12 million people want to live in London but there is only space of 8.5 million.

If you force a landlord to rent out for below what the market rent is, then they will just sell instead and renters would be no better off

Plus in a lot of cases about 40% of the rent you pay to the landlord goes straight to the government as tax.