is it still worth buying a second home to let?

wolfplayer

seven-day-weekend wrote: »

We own our B TL outright and bought it at the beginning of 2016, before the stamp duty increase came in.

Having said that, it was £85k. (For a two-year-old 2-bed flat). We get £550 a month for it. Service charges, ground rent and insurance come to around £1000 a year. Tax will be at 20%. I don't expect there to be much maintenance , and there is no gas so I don't have to fork out for a landlord's certificate.

I think we have a good deal here.

So I would say to the OP, whether it is a good idea or not to buy a BTL, depends upon several variables. If your property is expensive it may not be worth it, especilly with the extra stamp duty.


(I would also like to ask those who seem to be against BTL Landlords - where would the rental housing come from otherwise? There is very little social housing being built).

Where are the homes going to come from for all those in rented wanting to be homeowners, in a housing crisis, with homeownership levels that have plunged to such lows?

Less about thinking of tens of millions of people who have the "dream of renting"as so many BTL investors see themselves as 'providing' and more about seeing BTL investors wiped out by a BTL & property-investor correction and tens of millions getting opportunity to become owners.

I've got a good memory. Was it this house?

http://www.rightmove.co.uk/property-for-sale/property-49496849.html/svr/2717

or this house?

http://www.rightmove.co.uk/property-for-sale/property-53023820.html

Anyway Section 24 is coming for all the leveraged property investors including the 'clever' guy buying loadsa houses in the North. And tightening regulation that gives tenants and advantage, especially in getting repairs, and BTLers not being able to serve a S21.. hehe.

wolfplayer

seven-day-weekend wrote: »

I accept your point may apply in some areas.

With my own BTL flat, it was £85k, had recently been reduced from 98k. No-one bought it at £98k. I'm sure most people could afford £85k. And many BTL places are at the cheaper end of the market.

That's you own market view.

£85K is still a fortune of money in many areas for younger people to find or apply to borrow vs incomes.

My view is you have outbid someone for home-ownership.

Hopefully many property-investors to find that out, with a correction that specifically targets property-investors, and sees those houses hitting the auction rooms for FTBs. Not investors with S24 and higher SDLT surcharge to thwart those who would turn those looking to own into renters.

wolfplayer

And my memory seems to recall you got in good financial position, which appears to have 'gone into property' via an unexpected £ inheritance.

I'm with all the younger people who just want one home for homeownership, not for investors to deny them that opportunity and totally outbid them for houses, to milk them for rent.

Section24 and SDLT surcharge. Appears Gov and HMRC got the BTL property investors targeted too.

seven-day-weekend

wolfplayer wrote: »

Where are the homes going to come from for all those in rented wanting to be homeowners, in a housing crisis, with homeownership levels that have plunged to such lows?

Less about thinking of tens of millions of people who have the "dream of renting"as so many BTL investors see themselves as 'providing' and more about seeing BTL investors wiped out by a BTL & property-investor correction and tens of millions getting opportunity to become owners.

I've got a good memory. Was it this house?

http://www.rightmove.co.uk/property-for-sale/property-49496849.html/svr/2717


or this house?

http://www.rightmove.co.uk/property-for-sale/property-53023820.html

Anyway Section 24 is coming for all the leveraged property investors including the 'clever' guy buying loadsa houses in the North. And tightening regulation that gives tenants and advantage, especially in getting repairs, and BTLers not being able to serve a S21.. hehe.

The bungalow is the one I live in now. The terraced house is the one I lived in for the best part of forty years (now sold).

Neither of them is the property I rent out.

seven-day-weekend

wolfplayer wrote: »

And my memory seems to recall you got in good financial position, which appears to have 'gone into property' via an unexpected £ inheritance.

I'm with all the younger people who just want one home for homeownership, not for investors to deny them that opportunity and totally outbid them for houses, to milk them for rent.

Section24 and SDLT surcharge. Appears Gov and HMRC got the BTL property investors targeted too.

Yes, I received a very unexpected inheritance and it seemed better to put the money into property than leave it in the bank.

I don't think at £85k I outbid anyone, the same flats are on the market now for just under £100k and selling at near that price, the guy wanted a very quick sale which we were able to provide.

I know it is difficult for young people, we had to help our own son with a deposit for his flat, which had been for sale for two years!, so any other FTB could have bought it during that time. He got it for 65k (asking price £69950).

Hoploz

I don't agree that landlords are always out-bidding FTBs and driving prices up.

For example, I have a property in a seaside town in East Sussex. Here, there is abundant supply of 1-2 bed flats suitable for the FTBs. Prices are relatively low compared to elsewhere in the south east. I've just done a search and within 1 mile of the town centre, 173 1-2 bed results come up on Rightmove. It seems people just have their reasons for not buying them. It's not a wealthy town. People tend to rent. Perhaps they don't feel they have job security, perhaps they are unemployed. Perhaps they just don't want the responsibility. Perhaps they just don't have any interest in owning their home - maybe it's a surprise to hear that not everyone wants to! I personally feel I am not taking a property that a FTB would buy. There are so many others constantly available.

seven-day-weekend

Hoploz wrote: »

I don't agree that landlords are always out-bidding FTBs and driving prices up.

For example, I have a property in a seaside town in East Sussex. Here, there is abundant supply of 1-2 bed flats suitable for the FTBs. Prices are relatively low compared to elsewhere in the south east. I've just done a search and within 1 mile of the town centre, 173 1-2 bed results come up on Rightmove. It seems people just have their reasons for not buying them. It's not a wealthy town. Perhaps they don't feel they have job security, perhaps they are unemployed, perhaps they can't find exactly what they're looking for. Perhaps they just don't want the responsibility. People just seem to rent in the area. I personally feel I am NOT taking a property that a FTB would buy. There are so many others constantly available.

Some people forget that there are places other than London. The market elsewhere is different.

iantojones40

Hoploz wrote: »

I don't agree that landlords are always out-bidding FTBs and driving prices up.

For example, I have a property in a seaside town in East Sussex. Here, there is abundant supply of 1-2 bed flats suitable for the FTBs. Prices are relatively low compared to elsewhere in the south east. I've just done a search and within 1 mile of the town centre, 173 1-2 bed results come up on Rightmove. It seems people just have their reasons for not buying them. It's not a wealthy town. People tend to rent. Perhaps they don't feel they have job security, perhaps they are unemployed. Perhaps they just don't want the responsibility. Perhaps they just don't have any interest in owning their home - maybe it's a surprise to hear that not everyone wants to! I personally feel I am not taking a property that a FTB would buy. There are so many others constantly available.

The obvious reason for FTBers not buying them is the price is too high... but that price is being pushed up, or at least sustained, due to the demand from BTL who have preferential access to credit and are prepared to pay a premium as a result.

Marktheshark

Here are the basic economics from those with longer in the tooth experience.

Can you afford to pay both mortgages on both properties at 20%.

If the answer is no, then like all the buy to let landlords that are living on a hope, you are taking the chance of losing not only the buy to let but the security in your own home.

We have had 17% when we left the exchange rate mechanism , with Brexit, (which has not happened yet) anything is possible.

Only gamble what you can afford to lose

Hoploz

iantojones40 wrote: »

The obvious reason for FTBers not buying them is the price is too high... but that price is being pushed up, or at least sustained, due to the demand from BTL who have preferential access to credit and are prepared to pay a premium as a result.

Landlords are in business for profit. They don't want to pay a premium. The numbers are what count. Conversely, people looking for their dream home (whatever form that dream may take) are likely to fall in love and be willing to pay more.