Right to buy on privately rented homes

chucknorris

Cakeguts wrote: »

Correct. I don't care. I have been a landlord since 1990 however I am getting too old now to bother with all these changes so that politicians can keep their jobs. They don't care about tenants or landlords they only care about their jobs and being elected again.

I know exactly what you mean, you have one year in more than I have, 1991 was my first year, we've already started started selling.

chucknorris

Sailtheworld wrote: »

Based on what you've been saying why would anyone be considering getting into BTL at the moment when this government (possibly inadvertently), or a Labour government (definitely on purpose) are intent on destroying it.

I certainly wouldn't get into it now, but leaving is another matter though, mainly because of the capital gains tax bill. It is usually financially better to keep that tax amount invested and working for you you. But it has become a lifestyle issue with me now, the money is secondary.

Cakeguts

Sailtheworld wrote: »

Based on what you've been saying why would anyone be considering getting into BTL at the moment when this government (possibly inadvertently), or a Labour government (definitely on purpose) are intent on destroying it.

The experienced landlords who are already letting property will (hopefully) understand the risks. The people who should not be considering letting their property under any circumstances now are those who have inherited their parent's property, anyone working away for a short time, anyone who can't sell their house. These would all be single ownership of one property and the last two might have mortgages and be at serious risk of repossession because of not being able to raise the rent in line with costs. The short term lets will now all be at risk.



Anyone thinking of getting into Buy to Let as an investment needs to study some history about the rent acts and security of tenure because you have to know what you are getting into and you have to know what happens if rents do not keep up with earnings and costs. Only being able to raise the rent by the official inflation rate won't help you if you live in an expensive area and earnings are rising faster than that rate. Your income and investment will be slowly eroded while your tenants housing costs will be getting cheaper and cheaper to the point where you will be subsidising their lifestyle. Once people get really cheap rents and the landlord is unable to raise them to market levels they stay put and don't move which causes the rents to become even more out of line and of course because the tenants have security of tenure they don't have to move.


Last time this happened with the rent acts over time the rents became so low that landlords could spend a whole year's rent on one repair. The tenants eventually got a house with a very low rent at someone else's expense. If the government wants low rents for tenants then they need to build more social housing. It is not right to expect private individuals to lose their investments in this way.

DannyGold

Sailtheworld wrote: »

Based on what you've been saying why would anyone be considering getting into BTL at the moment when this government (possibly inadvertently), or a Labour government (definitely on purpose) are intent on destroying it.

Nobody in their right mind is getting into BTL, the question is will anybody in their right mind who know what is going on try to get out of BTL all at the same time?

Who will they sell to?

Sailtheworld

DannyGold wrote: »

Nobody in their right mind is getting into BTL, the question is will anybody in their right mind who know what is going on try to get out of BTL all at the same time?

I think the posts above give a clue. Longer term BTL investors will be getting out when they they start feeling like they're getting a bit old for it. Even then it'll take time selling houses as tenancies end.

There's not going to be a mass exodus - if you look at the government's tax relief changes they've taken a few years to be fully implemented so plenty of time to prepare.

The only people left when fully implemented will be those without much leverage willing and/ or able to take the risk. It's not as if those risks haven't been well trailed.

Hopefully the % of owner occupiers will slowly rise as a result rather than nutters buying them to rent out again.

chucknorris

DannyGold wrote: »

the question is will anybody in their right mind who know what is going on try to get out of BTL all at the same time?

The property that I currently have on the market is quite profitable, at the lowest price that I am prepared to sell it for, that releases equity that I would need to get a yield of 7.3% on, to be in the same position. That obviously isn't going to happen. So you could actually argue that I am not in my right mind for trying to sell it. But as I said above, it is a lifestyle choice rather than a financial one. If I can't sell it I will make more profit than than alternative, so it isn't exactly armageddon.

Cakeguts

DannyGold wrote: »

Nobody in their right mind is getting into BTL, the question is will anybody in their right mind who know what is going on try to get out of BTL all at the same time?

Who will they sell to?

The ones that are going to get out first are the ones with the nice houses in the nice areas because they are the people who have the most to lose. A few extra houses coming onto the market in a desirable area it won't make any difference to the housing market in that area. It might make a difference to the housing market where the people are moving from but it all depends on how many and where.



All of our properties are houses. Most of them are family sized and most of them are in a desirable area. So they would all sell easily to owner occupiers. On the other hand this was probably not sold to an owner occupier. Ex council house in run down area.



https://www.rightmove.co.uk/property-for-sale/property-73274170.html


Or this https://www.rightmove.co.uk/property-for-sale/property-84056645.html


Another ex council house in run down area.



Or this https://www.rightmove.co.uk/property-for-sale/property-82994666.html


So I am not sure what would happen if a load of houses in run down areas all hit the market at the same time. They would probably be all bought cheaply for cash by landlords who didn't mind the risk. Or landlords who had no intention of following the rules.

The-Joker

The emergency low interest rates have to continue because the emergency is not over, it’s just getting worse.

It used to be gfc global financial crisis in 2008

Now it is the great financial catastrophe the gfc of 2019

MobileSaver

The-Joker wrote: »

Now it is the great financial catastrophe the gfc of 2019

Can you give us a clue as to the ramifications of this "catastrophe of 2019", perhaps 50% off house prices by Christmas?

The-Joker

Cakeguts wrote: »

Correct. I don't care. I have been a landlord since 1990 however I am getting too old now to bother with all these changes so that politicians can keep their jobs. They don't care about tenants or landlords they only care about their jobs and being elected again.



The job is being a landlord not a means to keep a policitian in their chosen profession. If they want to buy votes they can do it without causing me to have to give up something which I would have to do if I carried on being a landlord without the benefit of S21.



As a landlord you might only use S21 as we have on a very few occasions but having it available if needed takes a lot of the stress out of being a landlord because if you do get a problem tenant you can get evict them quite quickly. Without section 21 this is going to be a much more drawn out situation.



The point about section 21 is that the number of people who are evicted using this method who are not at fault in some way is so small that there are going to be far more people inconvenienced when it is removed than ever were with it in place. Plus someone who is at fault is never going to admit to it so no one actually knows how small the number of real no fault evictions there have been. The only reason to abolish section 21 is to buy votes at the expense of landlords and I really can't be bothered to work in a business where the regulations can be changed on a whim to suit one person who wants to keep their job and their income.


When I became aware of the section 21 situation I emailed our letting agents who manage a lot of property and they just said that in all the time, years and years they had been managing private rental property they had never had a no fault section 21 There had always been some sort of tenant fault. Of course the tenant may not have been told that they were being evicted because of what they had been doing that they shouldn't have been doing but that is different from no fault. Not being told why they are being evicted is not the same as no fault. But the politicians don't care anyway. They aren't doing this to help tenants and they aren't doing it to inconvenience landlords. They are doing it purely for selfish reasons to keep their jobs.



I find it hard to think of any other business where politicians can change the regulations of that business on a whim with no benefit to any of the parties involved except being to the benefit of the politician.



It is already possible to see which way the private rented market will go because rents are rising due to there already being a shortage of properties and I am sure that that will make no difference they will still abolish section 21 which will show that they are not doing this for the benefit of tenants.



I am still not sure that tenants realise that if section 21 is abolished it will become a lot more difficult for them to rent a well maintained property in a nice area. No one is going to let a nice property in an expensive area if they think that there is the least chance that someone will get security of tenure of it. People will leave their properties vacant instead or sell them.



Once a decent property in a nice area has been removed from the rental market it won't be returned to it because of section 24 and the mortgage interest relief. So once they have been sold off that will be it.




It will be interesting to see what happens when the whole situation backfires and rents rise. It won't bother me because I won't be a landlord in the UK anymore. Might hold onto the ones in an EU country because the politicians there don't interfere in this way and the return on capital is just as good as the UK.



I think the worst thing about the whole situation is that many good landlords will sell up and many tenants don't realise that this isn't going to make it easier for them to rent a nice property it is going to make it harder for them to find anything at all especially if they are relying on any kind of benefit to pay the rent. All tenants will find it more difficult to find somewhere to rent. However all the information from the politicians has implied that it will help tenants but I can't see how that can possibly be true if it reduces the number of rental properties available and increases rents. The only people it will help are the politicians who have decided to do this "because it seemed a good idea at the time."

You sum up all the reasons why so many are choosing to get out of BTL

The question is what will happen as more and more try to sell their rental portfolio all at the same time