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

cells

ukcarper wrote: »

Have you got any proof for that and even if they are would like have the means even if house prices were lower.

This is easy to answer. Prices two years ago in London were about 25% cheaper. Were hordes of FTBs buying in London at those crash prices?

What about 5 years ago when London was 50% cheaper, hordes got to buy?

There needs to be an excess of property or a declining population in London for affordability to be high. AKA what happened between 1970 to mid 1990s London population fell and at the same time more homes were built such that by the mid 1990s London was priced unsustainable low.

POPPYOSCAR

mwpt wrote: »

But Conrad, that isn't an answer to my question. Are lending standards now tighter and more restrictive than historical norms?

I would say so.


Without going in to detail we have just renewed our fixed rate deal. We have ended up redeeming part of it because it would have been at a higher rate than the rest because it is a shorter term.(The lenders fault but that is another story)


We could have applied to extend it but was told it would not be accepted.(Self-employed) Could possibly have argued the point but they are so concerned with 'ticking the right box' and not actual reality and so could not be bothered.


The stupidy of it all is we can afford it ten times over.


I laughed out loud when at the end our mortgage payment came to the grand total of £118.00 per month and was asked if we could afford this amount.

wotsthat

mwpt wrote: »

And if food was rising to historically high levels and unaffordable, people would resent supermarkets.

You've argued it's stupid to equate accommodation to food but now you're saying the resentment is only related to the price rather than the essential being sold.

Like I said it's getting over emotional. If people want to resent landlords for high rents they're blaming the wrong people. Pretty sure you've made the point more than once that landlords don't set prices. Same as supermarkets don't set the price for bread.

HornetSaver

cells wrote: »

There needs to be an excess of property or a declining population in London for affordability to be high. AKA what happened between 1970 to mid 1990s London population fell and at the same time more homes were built such that by the mid 1990s London was priced unsustainable low.

If it wasn't economically viable to build, those houses wouldn't have been built.

Be aware that "unsustainable" is not a synonym for "wouldn't allow me to make as healthy a margin as I currently do". There are plenty of other euphemisms you could more credibly use to portray the current system in a positive light.

cells

HornetSaver wrote: »

If it wasn't economically viable to build, those houses wouldn't have been built.

Be aware that "unsustainable" is not a synonym for "wouldn't allow me to make as healthy a margin as I currently do". There are plenty of other euphemisms you could more credibly use to portray the current system in a positive light.

a lot of the building going on in London in the 1970s, 1980s and 1990s were council and HA not the private sector.

Also you can have a situation where the existing stock is too cheap but new stock is viable to build for example new stock could be in better locations or of better size and quality or fixtures to demand a premium.

Prices twenty years ago were DEFINITLY unsustainable low in a lot of London. For instance the AVERAGE price in waltham forest was £70k for a terrace.

If I give you free land, can you build a terrace for £70k?
Before you claim you can, most the volume builders cant. Even 20 years ago when wages and cpi was lower it would have been a very difficult task.

Why people think £70k for a terrace house was sustainable is beyond me and remember that was the average terrace house which means half the units sold got less than that!


in the same way, some places in England are currently unsustainable low priced. For example stoke-on-trent average terrace house costs just £43,652 (and remember that means half the homes sold for even less!). You can not build a house for that even with free land even if your mates did half the work so half the labor was free!

The price for stoke is unsustainable if the population of stoke is to grow. Now if its going to see de-population then prices could go lower and lower all the way to £0. Thats pretty much what happened in London. Population fell for a couple of decades and prices were selling for a continuation of that trend towards a declining London

Graham_Devon

cells wrote: »

What about 5 years ago when London was 50% cheaper, hordes got to buy?

There needs to be an excess of property or a declining population in London for affordability to be high.

Neither of which were the case when property, as you state, was 50% cheaper 5 years previous.

So maybe you are missing a trick in your assessment?

cells

Graham_Devon wrote: »

Neither of which were the case when property, as you state, was 50% cheaper 5 years previous.

So maybe you are missing a trick in your assessment?

five years ago the owner sector in London was shrinking, which suggests that would be owners could not bid to buy at the prices five years ago

which goes back to what a lot of people have been saying, mortgage rationing is limiting ownership. You can also point to the fact that cheap places like the north and midlands is experiencing the same, a growth in renting because a lot of renters are now locked out of the owning market (no interest only no self cert too restrictive a salary multiple etc)


London got really cheap and ownership increased from 1970 --> mid-1990s as the population fell by more than half a million and half a million additional properties were built.

cells

Graham_Devon wrote: »

Neither of which were the case when property, as you state, was 50% cheaper 5 years previous.

So maybe you are missing a trick in your assessment?

oh I see what you mean, when I said affordability I meant what way ownership and rental was going. eg if ownership is increasing and renting falling it suggests affordability (as renters are buying). Whereas if ownership is falling it means affordability is low

So five years ago London was more affordable in that prices were low, but it was not affordable in that clearly renters were not able to buy and only landlords and other capital rich people were.

What do you think of the most recent data which suggests more than 440,000 rentals were added to the stock last year in 2015? To compare the number of BTL mortgages given out was closer to 100,000 so its clearly not all down to borrow-to-buy-to-let

HornetSaver

cells wrote: »

What do you think of the most recent data which suggests more than 440,000 rentals were added to the stock last year in 2015? To compare the number of BTL mortgages given out was closer to 100,000 so its clearly not all down to borrow-to-buy-to-let

Those figures (assuming accuracy as a token of good faith) imply one or more, though not necessarily all, of the following:

That the public sector added a huge number of rentals.

That some of the properties are multiple rentals (a four bed house could have four rooms rented out separately, and in certain parts of the country the office and cupboard under the stairs too. Personally I suspect this is the single biggest cause, but in the interests of balance I will try to explore more possibilities.

That mortgage free people who are upsizing, downsizing or relocating might be choosing to mortgage their new primary home and rent out the old one.

That a lot of properties are purchased outright to rent out.

That the figures are wrong.

That the figures were wrong in previous years, resulting in lopsided YoY comparisons.

That owners of previously derelict properties have brought them back into habitable condition and onto the market.

That private developers are directly renting out new builds.

That non-habitable properties, such as garages, are included in the rental figures.

Some of those options are unlikely to make a statistically significant difference, one or two while possible might even be absurd. But my point is that even when trying to consider other possibilities, I keep coming back to the BTBTL sector. I'm not going to pretend to be objective on this topic - the housing system does not serve the needs of the majority of people in my corner of the country - but that doesn't mean that I'm not open to giving those with a different view the chance to prove that I'm wrong.

And finally

a lot of the building going on in London in the 1970s, 1980s and 1990s were council and HA not the private sector.

So in other words, Margaret Thatcher's borderline communist approach to housing was responsible for house prices becoming "unsustainably low"?

Generali

I suspect that a 2 bed terrace on flat land would cost c £70k FWIW. I can buy a fully kitted out 4 bed house with double garage and air con for c. £120k in Aus built to order.