Is Buy to Let dead?

itchyfeet123

MyOnlyPost wrote: »

I just wanted to highlight this and contrast it with all the stories in the news about landlords being responsible for homelessness. Clearly in this instance the tenant is responsible for their own homelessness and it is behaviour like this (As well as non payment of rent) which is responsible for the vast majority of evictions.

A few landlords may evict a tenant to get another at a higher rent or to sell the house but most would never evict someone who looked after the property and paid their rent, it's counter productive.

Do you have any evidence to support your assertions here? I do research in related areas for a living, and I have yet to come across any data that would even allow these assertions to be tested.

JuicyJesus

MyOnlyPost wrote: »

Realisitcally the hardest hit will be parents in the 40% tax bracket who decided to buy a house some time ago for their childrens future and maybe rented out just to cover the mortgage and expenses over time. They would previously have been breaking even and would now be making a loss. Those cases are a small fraction of BTL LL's but more common than maybe people realsie as this was very popular in the mid to late noughties

As someone whose prospects of buying are slim, my heart bleeds for those poor much better off people who are looking to give their darling kids a free house and make a profit in the meantime.

MyOnlyPost

MyOnlyPost wrote: »

A few landlords may evict a tenant to get another at a higher rent or to sell the house but most would never evict someone who looked after the property and paid their rent, it's counter productive.

itchyfeet123 wrote: »

Do you have any evidence to support your assertions here? I do research in related areas for a living, and I have yet to come across any data that would even allow these assertions to be tested.

And who do you speak to for your research exactly? Do you think a tenant who has been evicted for non payment of rent will own up to that? Or that tenants who trash a house will be forthcoming? I have heard of tenants growing weed in their rented home (went to court so not hearsay), but I doubt they admitted that if asked why they were evicted by a researcher.

If you actually spoke to a cross section of landlords you would get the data you have never seen. I don't know of a single landlord (and I know a lot, I am a member of a landlord association) who doesn't just want a tenant who pays rent on time and to respect the property. Every landlord I know would hate to lose such a tenant and so would never evict them. Do you think it is beneficial to a landlord to evict a good tenant and pay all the associated costs of finding a new one who may not be so good for a little extra rent?

Or were you refering to a different assertion?

MyOnlyPost

JuicyJesus wrote: »

As someone whose prospects of buying are slim, my heart bleeds for those poor much better off people who are looking to give their darling kids a free house and make a profit in the meantime.

Is that supposed to be a dig? I was making an illustration not a social commentary. I nor my family fall in to that category. My dad was a miner, my mum a cleaner and the only reason I could afford a house is that I am old enough to have bought one in the early 90's

As for your chances of buying a house being slim, their are houses all over the country that you could buy with a personal loan if you have a good credit score. You may not be able to afford in your current area but you have the freedom to move if home ownership is so important to you.

Bossypants

MyOnlyPost wrote: »

I just wanted to highlight this and contrast it with all the stories in the news about landlords being responsible for homelessness. Clearly in this instance the tenant is responsible for their own homelessness and it is behaviour like this (As well as non payment of rent) which is responsible for the vast majority of evictions.

Could you clarify this statement? I've heard a lot about landlords being responsible for people being unable to get onto the property ladder, but assuming that the vast majority of landlords are filling their properties, how do they contribute to homelessness, when the properties would be lived in one way or the other?

itchyfeet123

MyOnlyPost wrote: »

And who do you speak to for your research exactly? Do you think a tenant who has been evicted for non payment of rent will own up to that? Or that tenants who trash a house will be forthcoming? I have heard of tenants growing weed in their rented home (went to court so not hearsay), but I doubt they admitted that if asked why they were evicted by a researcher.

If you actually spoke to a cross section of landlords you would get the data you have never seen. I don't know of a single landlord (and I know a lot, I am a member of a landlord association) who doesn't just want a tenant who pays rent on time and to respect the property. Every landlord I know would hate to lose such a tenant and so would never evict them. Do you think it is beneficial to a landlord to evict a good tenant and pay all the associated costs of finding a new one who may not be so good for a little extra rent?

Or were you refering to a different assertion?

With all due respect, "all the landlords you know" isn't really helpful as a data source. I have access to things like court records, and the data just doesn't exist to say "it's mostly tenants" or "it's mostly landlords". I'm sure in the circles in which you move you do encounter mostly decent landlords, or at least LLs who present themselves that way to you, but that doesn't say much about what LLs are like in general. I only know tenants who are great tenants, but I don't assume they're representative of the population.

To be clear, I don't think LLs are the devil. I have a great LL, and I have no desire to be a LL. There are terrible tenants and terrible LLs. There are also good people --LLs and tenants both-- who have all the best intentions but screw things up now and again. Depending on which side of the fence you sit it's easy feel your side is scapegoated.

But -- putting on my geek hat -- when you say things like most evictions are due to bad tenant behaviour, unless you've actually crunched the numbers on truly representative data, you're exhibiting what's called confirmation bias. That's not a critcism; it's something we all do. It's the same as how when you buy a car the same make and model is suddenly everywhere. As a scientist, I go to a lot of trouble to gather and analyse representative data so that confirmation bias doesn't affect my results. Unfortunately, the data doesn't really exist to answer the question.

ognum

itchyfeet123 wrote: »

With all due respect, "all the landlords you know" isn't really helpful as a data source. I have access to things like court records, and the data just doesn't exist to say "it's mostly tenants" or "it's mostly landlords". I'm sure in the circles in which you move you do encounter mostly decent landlords, or at least LLs who present themselves that way to you, but that doesn't say much about what LLs are like in general. I only know tenants who are great tenants, but I don't assume they're representative of the population.

To be clear, I don't think LLs are the devil. I have a great LL, and I have no desire to be a LL. There are terrible tenants and terrible LLs. There are also good people --LLs and tenants both-- who have all the best intentions but screw things up now and again. Depending on which side of the fence you sit it's easy feel your side is scapegoated.

But -- putting on my geek hat -- when you say things like most evictions are due to bad tenant behaviour, unless you've actually crunched the numbers on truly representative data, you're exhibiting what's called confirmation bias. That's not a critcism; it's something we all do. It's the same as how when you buy a car the same make and model is suddenly everywhere. As a scientist, I go to a lot of trouble to gather and analyse representative data so that confirmation bias doesn't affect my results. Unfortunately, the data doesn't really exist to answer the question.

To be fair the poster was quoting my post to the question 'is by to let dead' and I was replying with anecdotal evidence from the LLs I know. Of course that is not a scientific data set. It was an answer to a set question on a forum which asks for opinion

As a LL the only person I have ever served an S21 on is the one I quoted previously. No one has asked me about my skills as a LL or my tenants so I have never been included in a scientific study.

I would be interested in your data, your job and Ho w you do it. Could you give further information.

SephirothX

tlc678910 wrote: »

(with a fictional example)
I think the principle of a loss for renting out a property is:
100% mortgage (interest only) of 10K a year
10K in rental receipts
A higher rate tax payer on 40% tax (or one who was pushed into higher tax band by their rental receipts) would only receive a 20% credit against their tax for the mortgage interest and so would owe £2000 tax despite making no profit at all.

Tlc

Your maths are wrong. Your profit there is £8000 per year. Money you pay into a mortgage isn't lost money, it is investment money that you see again one day when you sell the property.

Cakeguts

JuicyJesus wrote: »

As someone whose prospects of buying are slim, my heart bleeds for those poor much better off people who are looking to give their darling kids a free house and make a profit in the meantime.

When I bought my first house in the 1980s I had to move jobs and areas to do it. The area that I first worked in was very expensive and I couldn't afford to buy a house there so I got another job in another area where I could afford to buy a house. The time when I bought was before the law had changed on rental property in the 80s so I was buying at a time when there were no buy to let properties and yet I still couldn't afford to buy a house in the area where I worked so I moved.

What you mean is that you can't afford to buy a house where you live now. In some areas of the country 2 people earning the minimum wage can do it easily..

itchyfeet123

ognum wrote: »

To be fair the poster was quoting my post to the question 'is by to let dead' and I was replying with anecdotal evidence from the LLs I know. Of course that is not a scientific data set. It was an answer to a set question on a forum which asks for opinion

As a LL the only person I have ever served an S21 on is the one I quoted previously. No one has asked me about my skills as a LL or my tenants so I have never been included in a scientific study.

Fair enough.

ognum wrote: »

I would be interested in your data, your job and Ho w you do it. Could you give further information.

I'm a researcher at a university, and I spend my days crunching numbers. There are other people whose job it is to go talk to people for surveys, but I'm pretty removed from that end.

As far as my data, on this topic, there really isn't much around. One of the problems is that to look at something like the causes of evictions in terms of landlords and tenants, you'd need a complete list of both to sample from. It really needs to be done based on random selection. In some areas LLs are now required to register with a council so there is something approaching a list. But even in an area with such a list, who is going to register vs not register? Any attempt to sample from such a list won't include the worst LLs, who are the least likely to register in the first place.

As for tenants, how on earth do you sample them? There's no list and people move a lot. I guess with enough money and a generous ethics approval committee, you could compare names on council tax to names recorded as property owners, but that's not going to catch things like HMOs.

The best bet is probably getting questions added to the major birth cohort studies. These follow thousands of people born in various years and are representative of the whole population. But funding is tight to do things like add questions, and it's not clear there would be enough evictions to study.

In an ideal world, I'd want more than the summary data from court proceedings with the ability to interview people and perhaps have access to linked data, like HMRC, NHS, etc. Never going to happen, for obvious reasons!

Sorry for the hijack!