Buy-to-let investors 'to sell 500,000 properties' as confidence plummets

GreatApe

There is also a difference in the type of properties people rent and buy.
Flats and terraces and properties in the less desirable (cheaper) area of town tend to be more rentals while 4 bedroom homes tend to be over 90% owner

So if the government wants ownership to increase they need to convince non owners (which is different from FTBs) that they should give up their hopes for 3-4-5 bedroom homes and instead buy the 1 bedroom flats

Rich2808

westernpromise wrote: »

I can't readily find any stats on how many renters there actually are but this link
https://homelet.co.uk/letting-agents/news/article/how-many-landlords-and-tenants-are-there-in-the-uk

says that 5 years ago there were just under 4 million in England.

if a particularly wicked fairy were to wave her wand over England and turn the homes occupied by 4 million renters instantly into owner-occupied homes, they'd only house 3 million people because rented houses are more densely occupied. If such a thing happened, then we'd have a million homeless.

In reality this couldn't happen overnight, so what would happen instead if the PRS were to disappear is that the lowest bidders for rented property would gradually get squeezed out as some was sold and what was left was competed for harder.

The figures are based on households - there are 4.3 million households which rent privately on those figures not 4.3 million people. Those households could be a family of four or a group of 5 friends.

The actual number of private renters therefore is a lot more than 4.3 million. Similarly its also likely that the number of people who own properties (either outright or via a mortgage) is less than 50% - even if nearly 60% of households are in owner occupied homes. Private renters tend to be younger and owner occupiers more likely to be older/middle aged and if they are over 50 more likely to be single person or two person households. And adult kids living in the family home may live in an owner occupied household - but that doesn't make them an owner occupier merely priced out not just of owning but possibly even renting.

So lets not confuse households with people - households can have 5 voters in them or just 1. And the areas with most private renters - London, university towns, parts of the south east - turned away from May last June and cost her majority. If they don't address this problem they lose their base long term ie owner occupiers!

getmore4less

GreatApe wrote: »

There is also a difference in the type of properties people rent and buy.
Flats and terraces and properties in the less desirable (cheaper) area of town tend to be more rentals while 4 bedroom homes tend to be over 90% owner

So if the government wants ownership to increase they need to convince non owners (which is different from FTBs) that they should give up their hopes for 3-4-5 bedroom homes and instead buy the 1 bedroom flats

That's what happened a long time ago, estates of studio, 1 bed cluster and 2 beds were sold to FTB. Along with the ongoing leasehold issues and service charges now hitting freehold builds.

In many areas these are now rental stock they get hard to sell on as people want better places and bypass "starter" homes and really want freehold.

Better would be targeted high density rental stock builds on the HA model. With solo couple and multi share availability.

Some have been built near us to service the needs of a hospital(after they knocked down the old accommodation.

chucknorris

BobQ wrote: »

I am not surprised people are selling. Interest rates are starting to rise, regulation is becoming tighter and many BTL landlords have been making money using other people's money.

We started selling earlier this year, and we sold two properties. I was going to continue doing so, but there are no other assets to invest the equity that offers anywhere near the same profit. So I am going to slow the process down, I'll sell my lowest yielding property when my current tenants move out (but my tenants do tend to stay for quite a few years). I'm flexible but I think that I will wait to sell my other 3 properties in approx 5, 8 and 12 years. My wife is going to wait about 12 years (subject to market conditions) to sell her properties.

AG47

BobQ wrote: »

I am not surprised people are selling. Interest rates are starting to rise, regulation is becoming tighter and many BTL landlords have been making money using other people's money.

Yes interest rates are going up and prices are coming down,smell now to beat the rush

caronoel

I am surprised that Crashy Time hasn't been along to share his wisdom and to tell us all just how the market is collapsing around our ears.

I do hope he is OK. I miss his wildly sensational views.

GreatApe

The vast majority of private renters are only private renters temporarily
I rented from age 18-27 that is 9 years. UK life expectancy is 82 years.
I rented while I was at university and then for about five years after that while I moved around the country for work

That means in my lifetime I would have been a renter for 14% of my adult life.
That is a reasonable estimate of what the bare minimum private rental stock should be a necessity to allow mobility

If we look at the most recent data it has the private rental stock as 19% of the stock

So the housing crisis if it exists at all (it doesn't) is to be found in the 5% between the 14% private rental needed and 19% private rental we have.

Is there any way to explain why private rentals are 19% of the stock rather than the minimum 14% required?

Well yes that 5% is full of

The recent mass Migrants who have to rent privately
Divorced people
People who are both renters and owners (eg I know someone who owns a house in the south and rents one in the midlands)
People who rent a property to relatives for low or zero rent (often infirm parents or disabled kin)

Overall the UK housing market is functioning well and logically
It is only illogical journalists and ignorant politicians who cry housing crisis without the faintest idea of what they are talking about

Cakeguts

BobQ wrote: »

I am not surprised people are selling. Interest rates are starting to rise, regulation is becoming tighter and many BTL landlords have been making money using other people's money.

All businesses make money using other people's money. That is what happens when you buy something. Tenants buy living space.

Pennywise

Geared BTLrs won't start to worry about the tax change on interest until they start seeing their tax bills rise. My experience from my clients is that they're just not listening to what I'm telling them. They either don't believe it or they think the govt will change the rules before they come into force. I suspect an awful lot will try to sell in the next couple of years once they start to really believe the tax changes are happening and start to see their rising tax bills.

Owain_Moneysaver

House sales won't always reflect rented property disposals, as some properties will be held by a Limited Company, and the company will be sold to another investor who takes over the portfolio, rather than the individual properties being sold.

Stamp duty on sale of company shares is 0.5% (compared to the 3% increase on on ordinary stamp duty on second/additional properties)