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

westernpromise

Thrugelmir wrote: »

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..

How are tenants any different?

cells

I think there is a reasonable explanation why landlords and tenants relationships can sometimes be difficult. Its because its personal and long-ish-term.

If you go to Tesco and a member of staff is a bit negative to you, you dont blame Tesco nor do you take it to heart. You probably would go to tesco again and if you saw that person you didn't like you probably wouldn't even remember who they were. Likewise if the price of bread goes up in tesco you dont think, that a-hole tesco had no need to wrong me in this way and put up the price you just think ok the price of bread is a bit higher now.

I dont believe most tenants resent their landlords. I rented when I was in university and for three or four years after that and I don't think I resented any of my landlords. I did dislike one of them a bit but certainly not enough to resent them.

Why do people resent landlords so much?

Im going to go with, most people dont resent landlords, let alone rent them so much

cells

westernpromise wrote: »

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.

I have a lot of sympathy for the 'crash-trolls'

Many of them are quite smart at least smart enough to think and have a view. The problem is the internet. It allows a way of group think and confirmation bias not possible in the real world.

The worst are the 'crash-trolls' that live in very cheap affordable areas (about half the country) and are still awaiting a 30% plus crash. The 'crash-trolls' in London are just unlucky, London is heading towards 75% renters so the average person in London cant complain if they are renting because most everyone else will be too.

kinger101

cells wrote: »

I have a lot of sympathy for the 'crash-trolls'

Many of them are quite smart at least smart enough to think and have a view. The problem is the internet. It allows a way of group think and confirmation bias not possible in the real world.

The worst are the 'crash-trolls' that live in very cheap affordable areas (about half the country) and are still awaiting a 30% plus crash. The 'crash-trolls' in London are just unlucky, London is heading towards 75% renters so the average person in London cant complain if they are renting because most everyone else will be too.

It would be good if you could manage at least one post without telling us how affordable housing is in half the country. It's becoming really boring now.

BTW - part of the reason housing is expensive in London is because everyone wants to move there. If they really wanted to own, they could always f-off back up north.

cells

kinger101 wrote: »

It would be good if you could manage at least one post without telling us how affordable housing is in half the country. It's becoming really boring now.

BTW - part of the reason housing is expensive in London is because everyone wants to move there. If they really wanted to own, they could always f-off back up north.

I think I need to say it a couple more dozen times to sink in......

did you know, in half the country .....

earlywormgetsthebird

cells wrote: »

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.

This has been an excellent thread.

Sure, most people don't understand capital, nor basic economics for that matter. Most people just aren't, to put it truthfully, smart.

Landlords (I'm not one currently...) are increasingly seen as parasites living off those who desperately need a roof over their heads. The "I've got 5 BTLS. Yet I must buy me a sixth to make sure I can keep up the holidays in Barbados and fly the family business class return" are the most loathed type; The "all-right jacks" of advanced capitalism. They are widely perceived as people who make money from being repeatedly lucky - lucky enough to own something of value which happens to generate consistent capital, without anything like the effort required to work in, e.g., a coalmine. Money that comes from great effort is that which is esteemed most by those who least have it. Alas, this is no capitalistic fairytale... Nonetheless, compared to some jobs, being a landlord, particularly if you have prime tenants, is rather an enviable way of making a living. And for obvious reasons.

Speaking of which, it's interesting that you don't see the masses getting quite as distressed with certain others who also make (or are perceived to make) a great living while doing comparatively little in return - such as top models, celebs, pop stars and their ilk. The luck of the latter is just accepted as being pure luck, the kind which is not seen to 'hurt' others even indirectly - as opposed to the landlord's luck - which is widely perceived to carry a continuing and ever increasing 'societal cost' upon desperate others. And that is where the feeling of wide dissent lies.

Then again, if I suddenly had a large amount of money to spend on an investment right now, a BTL would be not the first thing I'd currently consider. This poster has frankly far more interest in that dwindling oil price, which is surely in advanced negative bubble territory as I write. Enjoy the under a pound a litre while it lasts folks! Within two to three years, nothing is surer than that the oil price will be hurtling beyond eighty dollars a barrel again. So that's where I'd be looking to invest today, (sigh) if only my pockets were deeper; and while everyone else, and their dog, is expecting oil to continue downwards. The market always has a habit of doing exactly what is least expected of it, which is why most lose overall. But I digress.

It's indeed a very interesting discussion.

stator

I haven't read this thread but BTL LL are usually very bad landlords and neglect their properties and their tenants.
Add to that the fact that they push up house prices and rents and you can see that no-one likes them. There's no need for them to exist, they provide nothing to society. Like a ticket tout they just buy up limited resources so they can make a profit.

ging84

BTL landlords are cashing in on the fact they have the money to outbid poorer people, that isn't what makes them scumbags, that is just business

What makes them scumbags is that they are not professionals they are investors, what they bring to the table is money, not necessarily any experience or expertises so often are not really very accountable to thier tenants. Even when they employ agents who are supposed to be professional, these companies are often total scum themselves, totally unregulated and again totally unaccountable to the tenant, they just work for the landlord not the tenant.

There are all sorts of things the majority of BTL landlords may not know about managing property, because they are investors, not professional property managers so why would they. And unfortunately even if they employ an agent, how are they suppose to know if they are acting responsibly if they don't really know what a responsible property manager should be doing.
The result is BTL tenants on the whole get a terrible service on what is by far thier biggest expense, no wonder they think BTL landlords are scumbags.
How many BTL landlords will go through and really carefully consider every clause in thier tenancy agreement, and consider how it applies to their property and the sort of business they want to be running, and ultimately how it will affect thier customer the tenant. I can tell you the answer is certainly not that many.

One example i will give which is actually quite serious, every rental property i've ever lived in has had a clause along the lines of you are not allowed to attach anything to the walls without permission from the landlord, and the letting agents have always just dismissed it as well as long as you make good at the end it doesn't matter.

But consider this, every year thousands of children are injured, and several killed by furniture tipping over, which would have been easily preventable by attaching it to the walls and a high % of these accidents are in rented accommodation.
Now in that context, how can any landlord reading this claim not to be a scumbag, if they a) have clause in thier tenancy which would give them the right to say to a tenant no you can't attach your furniture to the walls, or b) knows so little about thier business they don't know if they do or do not have such a clause.
If you would never deny a tenant the right to attach furniture to the walls, why have such an all encompassing clause in there in the first place?
And if you are the sort of landlord who would even consider putting your right to have undamaged walls above the safety of a tenants children, then you absolutely are pure scum.

worried_jim

Very interesting thread. Helen the teacher must be kicking herself, she's had 21 years to buy in London and that chance must now be gone, I hope she has a plan B lined up.

I bought my first 3 bed house for £50k in 1999 and rented it out and made about £30 pm profit on an io mortgage. I then sold it in 2003 after the tenant didn't pay me for four months but i did sell it for £100k which enabled me to move to the south coast. I have now turned that £50k into £150k. As some one else has mentioned at some point I will F off back up north into a much larger property I have now and maybe somewhere else as well in the sun. BTL has been the best investment i have ever made, glad my friend talked me into it, just wish I'd bought the street!

AG47

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.....

Rent caps would be a vote winner, the small group of btlers would hate it, but they would be wise to sell up now before the crash.

If there is a cap on rents for each area, then only the nicest places would be that maximum rent, the more humble places would have to be less or they will never find tenants.