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

westernpromise

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.

I don't understand why there is such a fetish made of first time buyers (just as nurses and teachers tend to be fetishised by the Labour Party. In particular I find it baffling that people on the average wage expect to be able to afford the average house; the average house only has a 55% mortgage on it, so if they brought the average equity to the purchase they'd be able to.

If one wanted to identify a single demographic most responsible for house price inflation it would be women. By joining the workforce they increased household earnings, and that in turn increased house prices. Of course it's harder to hate 50% of the population than just to hate the Wilsons.

I wonder who crashtrolls will blame next once there are no landlords?

westernpromise

Masomnia wrote: »

And the very people who want to buy homes no doubt. Some of my friends are quite pro a house price crash, and I always tell them to be careful what they wish for. No good if prices tank and you lose your job because the economy goes with it!

This is a point the envy brigade always misses. If you can't afford a house when the economy is doing well, why would you be able to afford one at any other time?

I managed to stay in a job all the way through the 1989-1992 recession but my flat fell in value from £85k to £60k, I had a £72k mortgage and at 15% interest rates I was paying off 3% of it every 5 years. In theory lower prices should have gifted me a bargain, but in fact I was screwed.

Those renting at the time were no better off.

cells

Graham_Devon wrote: »

As I said on another thread, this bit of the article summed it up for me...



Anyone or anything using a shortage of any basic need for their own personal gain isn't going to be the most popular person around. As a BTL landlord himself on that article suggests, the behaviour of other BTL landlords exasperates him....and he's not the only one to have come forward and said that sort of thing. It simply got ruined by all out greed.

We've seen it before with water shortages where people sell water at £5 a bottle. The anger it causes leads to violence.

There is ample supply and prices are cheap in more than half the country. Only London really sticks out especially inner London

Somerset

BananaRepublic wrote: »

There are millions of decent people who cannot afford to buy a house. BTL pushes up prices, so it's hardly surprisingly landlords are despised.

Just curious, if the btl'ers disappeared overnight, where would the renters rent ? Some might buy Obviously I'm taking councils and HA's out of the equation as they can't service the current demand. So where do the renters live ?

Thrugelmir

mwpt wrote: »

Food shops provide food in abundance at reasonable prices.

Markets where they still exist still offer highly competitive prices for fresh food products. The discounters attack on the supermarket majors shows how much we've been overcharged for years.

I remember when a meal out was a steak at a Bernie Inn. Restaurants didn't open Mondays of Tuesdays as there wasn't the trade.

Thrugelmir

Many BTL owners have the same characteristics as bankers. It's all about the money. It's the culture of grabbing the biggest piece of pie for oneself. No empathy for others. Good time of the year to reflect how lucky many of us are these days. When others through no fault of their own aren't so fortunate in this world.

cells

AG47 wrote: »

I feel the same as: "I really cannot wait for the stampede as the BTL parasites all start panic selling when the bubble bursts." Another: "BTLs are just another business created for greed, not for homing people." Someone comments: "The worst type of human - those greedy, vulture like exploiters."

It's obvious why btlers are hated so much, it's because renters now outnumber owners and for a political party to win they just have to appeal to the largest number of voters.

The hate rhetoric wil continue until the next election, the Tory plan will backfire though because Labour will capitalise on this hate rhetoric with rent caps that are quite low so they can reduce the housing benefit outgoings.

There will be max rents allowed to be charged for each area, it doesn't matter if the LL can't afford his mortgage repayments, it's his fault for being greedy in the first place.

This is a win win situation, labour get tons of voters on their side, the housing bubble will burst and the banks will repossess millions of properties. The benefits bill will be reduced getting the deficit under control and the only ones who lose are the Greedy LLs.....

Landlords pay a lot of tax. As a guess its in the region of £20B a year. Most housing benefit's go to councils and HA not private landlords. So if the private rental sector was destroyed which taxes would the government have to raise to make up the £20B lost from landlords?

missbiggles1

michaels wrote: »

And yet I bet the food retail market overall makes a higher margin and return on capital than the property rental market so in terms of 'profiteering fro a basic human need' the food retailers are clearly much more culpable than landlords.

Food costs are a much smaller percentage of household income than they used to be, housing costs have moved in the opposite direction.

cells

Landlords are seen as bad becuase most people simply don't see or understand capital. They probably think the landlord only does a few hours work a month and gets £2k not realizing its a hugely capital intensive business that is also highly taxed.

westernpromise

cells wrote: »

Landlords pay a lot of tax. As a guess its in the region of £20B a year. Most housing benefit's go to councils and HA not private landlords. So if the private rental sector was destroyed which taxes would the government have to raise to make up the £20B lost from landlords?

As an aside, have a look at the BoE's quarterly report at http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2015/q4.aspx

in particular at charts 4 and 6 on page 45. These charts - Measures of financial distress for mortgagors (chart 4) and for renters (chart 6) back to 1990. Note the green line, which measures Difficulty with accommodation payments.

The distress of renters in 1990, when interest rates were at 15%, was pretty much as high as among mortgagors - but more importantly, it follows almost exactly the same path as interest rates fell. Despite the widespread belief among crashtrolls and landlord-haters that what they want is some nice high interest rates and hence a price crash, to which they as renters will be wholly immune, the actual history shows that these events are every bit as painful for tenants as they are for owners.

How can this be, when supposedly being a renter is the smart thing ahead of a crash? The answer, of course, as I am on a one-man campaign to remind people, is that in a world where capital values are falling, the owners of rented property just charge the capital hit to their tenants. Tenants have limited choices in response. They can refuse to pay more rent, and own instead (though not always - in a falling market they need a huge deposit and usually they are only renting in the first place because they haven't one, and / or can't get a mortgage). But in that case, they are forced to buy in a falling market, meaning they take the capital hit.

Or they can accept the rent rise and take the capital hit via higher rent. So either way, they pay for falling values. Their rent goes up as interest rates go up and and as capital values fall. If the new rent is beyond them, they just trade down in size or quality and accept less property for more rent.

Note also in that report the difference between renters' and owners' unsecured debt position. 70% of renters have unsecured debt, but only 40% of owners. In other words, owners are a lot more resilient financially and less likely to be festooned with things like credit card debt, which is pretty much a defining feature of someone who's always going to be a renter. Their debt habit probably has a lot to do with why they can't get a mortgage.

So any damage to the private rental sector is not going to be limited to just a loss of tax revenue. As rents get bid up, either HA will have to follow it, or the state will have to let tenants get evicted and then put them up in B & Bs.

As has been said, crash trolls need to be careful what they wish for.