Retiring landlords risk fuelling rental shortage

[Deleted User]

The problems are many.

Many landlords are selling up due to increased costs and regulations.

https://www.bbc.co.uk/news/business-65298662 

tacpot12

My experience is that landlords tend to remain landlords longer than they remain working because, day-to-day, the effort involved is relatively small, especially when they have been landlords for many years and know what is involved.

I expect the main issue causing landlords to sell is the cost of getting their properties upto Band C, as this is expensive and many landlords will not have put anything like enough money by to do the work. The government needs to be clearer to landlords that this policy is not going to change, and they probably need to incentivise landlords to save money to undertake the improvement works.

bunnygo

one solution is for rental payment history to count towards mortgage affordability - which would allow the tenants to buy the properties.

too easy?

[Deleted User]

On the plus side it means more properties available to buy, and lower prices.

ArbitraryRandom

bunnygo said:

one solution is for rental payment history to count towards mortgage affordability - which would allow the tenants to buy the properties.

too easy?

That was one of the only (if not the only) commitment Liz Truss made that I agreed with - not as the only consideration, but it should be one of them.

I think I remember an MSE article a few years back for a company you could register with who would report your rental payments onto your credit report; So I'm guessing there are some lenders out there who would consider them?

silvercar

tacpot12 said:

My experience is that landlords tend to remain landlords longer than they remain working because, day-to-day, the effort involved is relatively small, especially when they have been landlords for many years and know what is involved.

I expect the main issue causing landlords to sell is the cost of getting their properties upto Band C, as this is expensive and many landlords will not have put anything like enough money by to do the work. The government needs to be clearer to landlords that this policy is not going to change, and they probably need to incentivise landlords to save money to undertake the improvement works.

I suspect it will be delayed and delayed.

https://www.landlordzone.co.uk/news/breaking-landlords-to-be-given-three-more-years-to-reach-epc-minimum/

newsgroupmonkey_

My folks are exactly the people that are being quoted in the above article.

Over the years, they've bought around 15 properties and are now down to the last handful. Due to private pensions not being pushed to working class people (as they are now) in the 1970s and 80s, they bought some houses initially for their own family reasons rather than to make a killing. As interest rates got lower, it made sense for them to keep them. They then bought the houses next door to some of the existing ones.

I wouldn't say they were accidental landlords, but certainly initially, it was simply a way of getting some money for their retirement.

They were far from the "rich property owners", certainly at the beginning. They remortgaged their house to borrow to buy the first couple.

Now they're in their 70s, they need to start drawing on that money. And they are also aware that the properties have dragged them into IHT. So as people leave (they've always had long-term tenants, one was even inherited), they've sold.

There are a few properties which they'll keep until death because of tactical family reasons, but they fully intend to get under the IHT amount.

They're more than aware too that they may have to pay for their senior care.

Sarah1Mitty2

[Deleted User] said:

On the plus side it means more properties available to buy, and lower prices.

Yes, the average person who wants to buy an ex-BTL has seen their borrowing power greatly reduced, many of these properties will be getting offloaded on the cheap.

newsgroupmonkey_

Sarah1Mitty2 said:

[Deleted User] said:

On the plus side it means more properties available to buy, and lower prices.

Yes, the average person who wants to buy an ex-BTL has seen their borrowing power greatly reduced, many of these properties will be getting offloaded on the cheap.

As above, my parents aren't finding this. Because they tend to be smaller properties (2 up 2 down), they're very, very popular as they're affordable to those with a decent deposit.

[Deleted User]

newsgroupmonkey_ said:

My folks are exactly the people that are being quoted in the above article.

Over the years, they've bought around 15 properties and are now down to the last handful. Due to private pensions not being pushed to working class people (as they are now) in the 1970s and 80s, they bought some houses initially for their own family reasons rather than to make a killing. As interest rates got lower, it made sense for them to keep them. They then bought the houses next door to some of the existing ones.

I wouldn't say they were accidental landlords, but certainly initially, it was simply a way of getting some money for their retirement.

They were far from the "rich property owners", certainly at the beginning. They remortgaged their house to borrow to buy the first couple.

Now they're in their 70s, they need to start drawing on that money. And they are also aware that the properties have dragged them into IHT. So as people leave (they've always had long-term tenants, one was even inherited), they've sold.

There are a few properties which they'll keep until death because of tactical family reasons, but they fully intend to get under the IHT amount.

They're more than aware too that they may have to pay for their senior care.

Those good pensions haven't been available for decades, so more and more people are looking at BTL.

The only solution is to change the law to make it unattractive, e.g. get rid of no fault evictions and bring in some rent controls.

GDB2222

[Deleted User] said:

newsgroupmonkey_ said:

My folks are exactly the people that are being quoted in the above article.

Over the years, they've bought around 15 properties and are now down to the last handful. Due to private pensions not being pushed to working class people (as they are now) in the 1970s and 80s, they bought some houses initially for their own family reasons rather than to make a killing. As interest rates got lower, it made sense for them to keep them. They then bought the houses next door to some of the existing ones.

I wouldn't say they were accidental landlords, but certainly initially, it was simply a way of getting some money for their retirement.

They were far from the "rich property owners", certainly at the beginning. They remortgaged their house to borrow to buy the first couple.

Now they're in their 70s, they need to start drawing on that money. And they are also aware that the properties have dragged them into IHT. So as people leave (they've always had long-term tenants, one was even inherited), they've sold.

There are a few properties which they'll keep until death because of tactical family reasons, but they fully intend to get under the IHT amount.

They're more than aware too that they may have to pay for their senior care.

Those good pensions haven't been available for decades, so more and more people are looking at BTL.

The only solution is to change the law to make it unattractive, e.g. get rid of no fault evictions and bring in some rent controls.

That would certainly have the effect of discouraging landlords. However, the heading of this thread is that there aren't enough properties available to rent.