Retiring landlords risk fuelling rental shortage

[Deleted User]

[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.

BTL is already relatively unattractive given changes in law that have already taken place a number of years ago  under George Osbourne.  Misplaced calls to increase taxes, control rents and having inadequate systems for fault evictions, has resulted in lack of available properties to rent, and house prices have increased vastly in the same time period. 

[Deleted User]

GDB2222 said:

[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. 

We need to reduce demand for rentals by enabling people to buy. If all the people who would rather buy but can't afford it left the rental market, there would be plenty left for the people who do want to rent.

[Deleted User]

[Deleted User] said:

[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.

BTL is already relatively unattractive given changes in law that have already taken place a number of years ago  under George Osbourne.  Misplaced calls to increase taxes, control rents and having inadequate systems for fault evictions, has resulted in lack of available properties to rent, and house prices have increased vastly in the same time period. 

It's clearly not enough because buy-to-let has been pushing up prices for years. It's very hard for people, especially FTBs, to compete with buy-to-let.

newsgroupmonkey_

[Deleted User] said:

GDB2222 said:

[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. 

We need to reduce demand for rentals by enabling people to buy. If all the people who would rather buy but can't afford it left the rental market, there would be plenty left for the people who do want to rent.

We've had this conversation time and time again.

Firstly, not everyone wants to buy.

Secondly, even if houses were £100k and only needed a 5% mortgage, many people live so hand to mouth that they can't afford to save £5k.

Finally, many people have bad credit ratings, so they couldn't get a mortgage even if they could afford it.

Bringing in rent controls and no-fault evictions won't stop them selling when people leave. As I said in my post, AFAIK, they've never kicked anyone out. They may have issued S8s before, but I don't remember ever mention of an S21. They wait for people to leave, then sell. One less home on the rental market.

The BTL market isn't causing the surge in house prices over the last few years. It may have done back in the 1990s when my folks bought many of theirs and prices were cheap.

[Deleted User]

[Deleted User] said:

[Deleted User] said:

[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.

BTL is already relatively unattractive given changes in law that have already taken place a number of years ago  under George Osbourne.  Misplaced calls to increase taxes, control rents and having inadequate systems for fault evictions, has resulted in lack of available properties to rent, and house prices have increased vastly in the same time period. 

It's clearly not enough because buy-to-let has been pushing up prices for years. It's very hard for people, especially FTBs, to compete with buy-to-let.

I do not regard your viewpoint as logical. At face value, it sounds attractive. But look more closely. We have had years if increased regulation and high tax in BTL. We need different solutions, not more of the same. 

dimbo61

Many renters want to rent for a number of reasons.
Flexibility,  poor credit history. Not able to afford a mortgage, students, unemployed, young people moving cities for work.
The government attacks on Landlords is forcing many to leave the sector.
Let's  hope the Government  and local  councils are going to build the millions of new energy efficient  homes people from the whole of the UK and the rest of the world want !
Don't  hold your breath.

landsbeyondthesea

We shall see if, perhaps, in a constricted market there has been an oversupply of housing for private rental. Perhaps there are a huge number of renters who want to buy and have been restricted by high prices caused by BTL speculation. If sufficient landlords leave the sector to induce a price adjustment which means these folk can finally purchase a house this could be good for everyone - there will be less competition for housing benefiting those who only want to rent.

[Deleted User]

landsbeyondthesea said:

We shall see if, perhaps, in a constricted market there has been an oversupply of housing for private rental. Perhaps there are a huge number of renters who want to buy and have been restricted by high prices caused by BTL speculation. If sufficient landlords leave the sector to induce a price adjustment which means these folk can finally purchase a house this could be good for everyone - there will be less competition for housing benefiting those who only want to rent.

Private rents are through the roof due to lack of supply. 

_Penny_Dreadful

Since the majority of landlords in the UK are over 55 it is hardly surprising that the time has come for many to start selling up.  The rumours about potential EPC of C, removal of the Section 21, the messy way the new rental contracts in Wales were launched and what Patrick Harvey MSP is doing in Scotland has probably just accelerated some landlords' retirement plans.  With the average age of the FTB increasing year on year there are not large enough numbers of people entering the BTL market to replace the pensioners cashing out.  Sooner or later this was always going to happen.

badmemory

I am afraid that some peoples logic is seriously flawed.  If there are 200 households needing rental properties & there are only 100 available then there will be 100 unable to find a property.  If the landlords sell 10 of them leaving 90 properties but now 190 households looking making the odds worse.

The basic problem is too many households & not enough properties.  There are only 2 answers to this.  Build more properties or kill off a lot of people.  The way things are going recently the second option would appear to be the most likely.