Owner Occupiers > BTL Landlord

mwpt

cells wrote: »

Dont you think it would be a lot more sane to look at who the BTL bought from?

More than 95% of my purchases were from other landlords, so by in large landlords tend to buy off other landlords.

This makes sense as the properties people buy and rent tend to be different. I am not going to be buying a 5 bed detached where the owner has spent £200k in renovations it would make no sense as a rental. Likewise if I were looking for a home to own for the next 20 years I would not be looking at studios or 1 bed properties.

This forum is filled with advice for FTBers to buy studios or one bedroom properties as a stepping stone. I've lived in five rental properties in London and would have considered buying every one of them at the right price. EDIT: Thought a little more, one of them was just a convenience place that I would not really like to own. It would have to have been significantly discounted.

But you do have a point that several renters combining can outbid an owner occupier. BTL finance is the mechanism that makes this possible on such a scale.

westernpromise

When I bought my current BTL I was renting it myself and bought it off the landlord. There were only two bidders, and it went to me even though I bid £20,000 less than the other bidder.

When we bought the current house it initially went for £990k to someone else, who intended to BTL his own house. He came up £100k short on the mortgage offer, so it came back to us at £968k.

In fact I've bought four properties over the years, and I'm struggling to think of a time when I’ve been the top bidder. I don't think I ever have. Maybe the place I bought in the Midlands in '86 for £25.5k, where the builder sold them all at the same price, although ISTR they finished 2 “phases” simultaneously and the later ones were £27k. Amazing really, that’s less than we spent on stamp duty last time around. Or even on the kitchen for that matter.

The fact is that some buyers are just more proceedable than others.

cells

mwpt wrote: »

This forum is filled with advice for FTBers to buy studios or one bedroom properties as a stepping stone. I've lived in five rental properties in London and would have considered buying every one of them at the right price. EDIT: Thought a little more, one of them was just a convenience place that I would not really like to own. It would have to have been significantly discounted.

But you do have a point that several renters combining can outbid an owner occupier. BTL finance is the mechanism that makes this possible on such a scale.

Good news that we both now have some common ground. Landlords are just the medium by which renters bid for homes.

However you are wrong to think that BTL mortgages is what allows renters to bid for homes. Most rentals come to being outside of the BTL-Mortgage market. I think its close to 80% / 20%. That is to say 20% of rentals are due to BTL mortgages and 80% due to equity.

Even if you get rid of BTL totally just ban it altogether, there would be landlords and renters bidding for homes via their landlords. This should be quite obvious as pre BTL mortgage days there was plenty of renters. I think it was as high as 60% renters in 1940 how did those landlords that owned 60% of the housing stock come to be?

cells

mwpt wrote: »

This forum is filled with advice for FTBers to buy studios or one bedroom properties as a stepping stone. I've lived in five rental properties in London and would have considered buying every one of them at the right price. EDIT: Thought a little more, one of them was just a convenience place that I would not really like to own. It would have to have been significantly discounted.

But you do have a point that several renters combining can outbid an owner occupier. BTL finance is the mechanism that makes this possible on such a scale.

to continue with the idea of renters proxy bidding via landlords

To get rid of the landlords in this transaction, you need to allow the renters to bid directly.

This could mean you allow mortgages of 4 parties and 4 wages to be acceptable. So a group of 4 renters has the choice to buy rather than have to bid via the landlord

The most realistic way of doing that is by allowing self cert. So a tenant or a couple can self cert that they are confident they can service a mortgage and rent out the spare rooms to make ends meet. You still have the same 4 people in the same house but you got rid of the landlord as the middleman taking their cut

I feel the disappearance of self cert and interest only is one of the big reasons why the rental market grew so much quicker in the 5 years between 2010-2015 than at any other time in history.

groups of renters found it far more affordable and doable to proxy bid via landlords than to be forced into a 2 persons wages repayment mortgage with 20% down and the rental market boomed (and most of the boom happened outside the BTL mortgage market)


why dont the crash wishers understand this?

westernpromise

cells wrote: »

To get rid of the landlords in this transaction, you need to allow the renters to bid directly.

This could mean you allow mortgages of 4 parties and 4 wages to be acceptable.

The Graham Devon mentality is that it all went to hell when Lawson removed the sexism from the tax system so that women's wages counted equally to men's. This appalling error caused house values to go from their right and proper level of 3x a man's salary to the immoral level of 3x the man and the woman's combined salary. It's disgusting is what it is. There ought to of been a lor.

Now you're proposing 3x FOUR salaries!!!

Will nobody think of the children? If my houses ever reached those sorts of values I'd give them a damn good thrashing.

Graham_Devon

westernpromise wrote: »

The Graham Devon mentality

Playing the man instead of the ball is bad enough.

But making things up in order to play the man? That's on a different level.

westernpromise

Graham_Devon wrote: »

Playing the man instead of the ball is bad enough.

But making things up in order to play the man? That's on a different level.

Was that not an accurate summation of your view of house prices, Graham? You think they should be 3x the main salary and 1x the other, do you not? - which as I have shown you is an artefact of a long-repealed bit of taxation sexism?

I simply took that view and identified you with it, which seems fair enough.

Graham_Devon

westernpromise wrote: »

Was that not an accurate summation of your view of house prices, Graham? You think they should be 3x the main salary and 1x the other, do you not?

No.

Though you should have no problem quoting me saying that if it's an accurate summation of my views. So feel free.

I won't hold my breath for either a quote or a reference.

(Text removed by MSE Forum Team)

westernpromise

Historical standards have always been based on 3x one income and 1x the other income.

in this post
https://forums.moneysavingexpert.com/discussion/comment/70055025#Comment_70055025

The context was that you were maintaining current house prices aren't cheap compared to historic multiples. I went on to explain to you how those were driven by obsolete, long-repealed, sexist taxation.

Apologies if I have misunderstood you. Are you saying that 3x plus 1x made houses too cheap, too expensive, or the right price?

Graham_Devon

westernpromise wrote: »

Perhaps you can clarify then what you actually meant when you said

Seems you have clarified it yourself.

I was suggesting houses, at 2 x DUAL income were not "cheap" compared to any historical standard.

Nothing like what you have inferred above.

I don't really care what you decide to make up, as clearly you are unable to take a position without falsehoods. But I will point them out and ask you to back them up.