Rent with no income but large savings - Renters rights laws ?

user1977

monkey-fingers said:

BlisteringBarnacles said:

Grumpy_chap said:

Where / why / how do you get the understanding that flats lose value?

Most in my town in Berkshire seem to depreciate considerably. Several decent looking apartments in my City centre - Sold for £200K in 2008 (£320K in today's money) but now listed on rightmove for £170-180K - the flats themselves look spacious - 2 bedroom, 2 bath, balconies too. 87 to 100 to even 120 years left on lease, service charges £3000 per year. There are several like this in the same building listed on rightmove. 

Here is an example from a different town : Wokingham in Berkshire. I mention it because Wokingham is considered one of the most desirable places in UK. And this in particular is the kind of flat I would like : balcony, spacious living room etc. But even in Wokingham, the price in seems to drop nominal terms let alone in real terms.   https://www.rightmove.co.uk/properties/169766432#/?channel=RES_BUY

Another (extreme) example : Pan Peninsula luxury towers in Canary Wharf. 2 Bedroom 2 bath on 19th floor. 
Sold for £660K in 2009 (almost a million in today's money). Now listed for £525K 
https://www.rightmove.co.uk/properties/164308001#/?channel=RES_BUY

At one time such high-rise apartments were my dream : Pan Peninsula in London, Beetham Tower in Manchester, John Hancock Tower in Chicago. I now understand they are more like buying a fancy car, depreciating as soon as you drive out of the showroom. 

In the UK, new builds lose money. Period.

And in particular, those built immediately prior to the 2008/9 crash will have lost loads (and objectively were never worth what the developers were asking). They're hardly typical of what happens with property values overall.

BlisteringBarnacles

monkey-fingers said:

In the UK, new builds lose money. Period.

You need to compare apples with apples.

Let's compare some older properties. I went with Brighton, simply because I know it and know that it has a lot of period property for sale.
There are many flats that sold in the mid to late 2000s for around £195k now actually being sold at >£800k.

Find me 100 year old flats and apartments and I doubt you'll find many that haven't increased since 2009.

Thanks - just looked up "period conversion" flats, even in Berkshire and they indeed look spectacular, thanks ! Often long leaseholds, low ground rent and they seem to hold their value / appreciate too. I now follow what it means to say homes have "character" and perhaps this is the origin of the old expression "Englishman's home is his castle". The builders of those old homes had taste ! 

Been reading about period conversion flats further and heat insulation could be a problem which can be fixed with some upgrade - perhaps £10,000 to £20,000 for a 1 to 2 bedroom period conversion flat ? But (lack of) sound insulation seems to be another often reported problem. Not sure if soundproofing is possible for an old building. 

They are also expensive, almost costing as much as a freehold terraced. Obviously I cant have it both ways : something that holds its value yet inexpensive. Wonder which one is a "better" buy : freehold terraced or period conversion flat with long lease. 

Wokingham 1 BR period conversion 150 year leasehold : truly charming : £260K : https://www.rightmove.co.uk/properties/164811266#/?channel=RES_BUY

Reading 2 BR period conversion 125 years Grade II listed building : £230K : https://www.rightmove.co.uk/properties/163862549#/?channel=RES_BUY

Freehold Desirable areas of Bracknell (RG42) below : 
- 1 BR Semi : £260K : https://www.rightmove.co.uk/properties/168159959#/?channel=RES_BUY
- 1 BR End Terrace : £275K : https://www.rightmove.co.uk/properties/170214830#/?channel=RES_BUY
- Coach house 2 BR 2 BA : £310K : https://www.rightmove.co.uk/properties/169026653#/?channel=RES_BUY - sounds too good to be true. 

Any thoughts on the above ? Also No job means no mortage. At 57 age I dont think I want a mortgage anyway. 300 to 325 is the max cash I can spend. I do have more funds but tied up in stock index funds in Taxable (CGT upon sale) or in tax sheltered (ISA, SIPP) which I would rather not take out. And if I go away for good then plonking 400K in a UK property may not be a wise financial decision. 

Thanks. 

BlisteringBarnacles

No comments on any of the above ? The £260K period conversion looks too good to be true at 800 sq ft. What are some things to watch out for when buying something like that ? Comments on the "coach house" ? It seems attractively priced : 2 bedroom 2 bath for only £310K 

As a single person I dont need a large dwelling with multiple rooms but the other freehold one bedrooms above look too small. 

Buying is a huge decision and I am contemplating it only because I may become ineligible to rent. Mentally I still want to continue to rent if I can. Living off my portfolio, I can probably afford rent forever. 

I am still thinking about the following courses of actions : 

1) Stay put at current place and face whatever happens end of 2026 : As a procrastinator this will force me to get a job or buy a house or leave the country. Optimistic outcome : Landlord may just have another place he may let out to me even if I am unemployed. He knows me for decades, I am like a government bond, reliable coupon payment, no defaults

2) Tell the landlord / letting agent rightaway I am looking to sign a new lease in a new flat and I am not working. Try to offer 6 to 12 months rent upfront and put that on the dotted line. (Legal before May)

Thanks

saajan_12

BlisteringBarnacles said:

Buying is a huge decision and I am contemplating it only because I may become ineligible to rent. Mentally I still want to continue to rent if I can. Living off my portfolio, I can probably afford rent forever. 

Why? If you can afford to and you expect to live in the same place for a long time (5+ years), then the stability could be benficial and avoid situations like the current. What's the mental block against this? 

BlisteringBarnacles said:

I am still thinking about the following courses of actions : 

1) Stay put at current place and face whatever happens end of 2026 : As a procrastinator this will force me to get a job or buy a house or leave the country. Optimistic outcome : Landlord may just have another place he may let out to me even if I am unemployed. He knows me for decades, I am like a government bond, reliable coupon payment, no defaults

2) Tell the landlord / letting agent rightaway I am looking to sign a new lease in a new flat and I am not working. Try to offer 6 to 12 months rent upfront and put that on the dotted line. (Legal before May)

However regardless, you're overthinking the LL interactions. There's nothing to be gained by telling them now - its a total gamble whether they'll have some emotional reaction to your honesty or just treat it like the business it is. It may indeed be harder to find a place due to the renters rights act so start looking sooner (whether to buy or rent) and if you find something suitable then give your own notice and jump then. 
 

silvercar

Why would a landlord evict a reliable tenant who he’s known for years and hasn’t ever not paid the rent? Your problem is more likely to be that you are harnessed to this landlord for the long term.

poseidon1

BlisteringBarnacles said:

No comments on any of the above ? The £260K period conversion looks too good to be true at 800 sq ft. What are some things to watch out for when buying something like that ? Comments on the "coach house" ? It seems attractively priced : 2 bedroom 2 bath for only £310K 

As a single person I dont need a large dwelling with multiple rooms but the other freehold one bedrooms above look too small. 

Buying is a huge decision and I am contemplating it only because I may become ineligible to rent. Mentally I still want to continue to rent if I can. Living off my portfolio, I can probably afford rent forever. 

I am still thinking about the following courses of actions : 

1) Stay put at current place and face whatever happens end of 2026 : As a procrastinator this will force me to get a job or buy a house or leave the country. Optimistic outcome : Landlord may just have another place he may let out to me even if I am unemployed. He knows me for decades, I am like a government bond, reliable coupon payment, no defaults

2) Tell the landlord / letting agent rightaway I am looking to sign a new lease in a new flat and I am not working. Try to offer 6 to 12 months rent upfront and put that on the dotted line. (Legal before May)

Thanks

I live in a 1 bed conversion of a 4 storey victorian town house ( London), and around 700 square ft ( value around £430k ). Retired and age 68 for context.

Had traded down from a 4 bed semi, but admit to myself that I really need a 2 or three bed flat so will be trading back up to  another suitable sized conversion but outside London .

Period conversions have a lot of charm, but can have certain challenges.

Wood sub floors mean sound travels between each unit. In my case I very occasionally  hear neighbours talking in their basement kitchen from my bathroom above on the upper ground floor. Sometimes hear my neighbours  walking in the 1st floor flat above. My flat is single glazed all round ( 7 foot high sash windows, 10 foot high ceilings), so a fair bit of heat loss in winter. The property is in a conservation area.

On the plus side we collectively own the freehold so have total and complete joint control of our building.

 I would never buy a leasehold with a separate Freeholder having ultimate control. Similarly would never ever consider buying a new build flat in England under any circumstances. However as regards conversions I would avoid listed buildings, structural maintenance can be a financial nightmare often requiring a sinking fund and expensive ongoing service charges.

I am single with no dependents, so for my next move, not overly concerned about the flat losing money in years to come. In fact I will be taking out substantial equity release to fund my lifestyle and assist in mitigating a hefty future IHT exposure. 

You are 10 years younger, so maintaining your property value is important should you wish to move on in future. Period conversions can assist but subject to the points I made. A more modern freehold house ( if within your budget ) might be more suitable for you, and involve less compromises inherent with period flat conversions but of course far less charm and character if that is important to you. For me that charm and character is non negotiable. I pay the premium to get it and accept the compromises.

Perhaps others can offer similar relevant insight?

BlisteringBarnacles

Thanks again for the replies.

saajan_12 : Mental block yes, psychological problem. Buying a house feels like a commitment. I generally don't buy anything easily. Took me years to decide on buying trivial things such as running shoe / cologne / sunglass that I liked, obsessing for months, trying many different models and then once I liked a brand, I never changed it. I just buy the same. With a house I will take forever to decide. At least with renting, if I don't like, I can move out. With buying there is a cost involved in selling up, getting a new place etc. I may not have good neighbours, I may end up buying a lemon with hidden mold problems etc. And then I will be stuck. 

Also, with my level of funds, I may be able to rent forever (assuming landlords are willing to let to me). And if the tax situation gets punitive here, I could go away to Cyprus, Malta, etc. Single with no dependents. 

Having said all that, the period conversions have me smitten Not that I would know how to go about buying one - or actually making a damn decision. If I could meet an expert on that, and if we could figure out how to insulate using modern materials from a heat and sound standpoint, then I may consider it ... That's why I sent one of the links above - looks like a treehouse. At 800 sq ft its perfect for me. 260K is also not a lot. poseidon1 : Thanks for all the details on period conversions. From the few listings I saw, it looked like period conversion leasehold flats seem to hold their value and even appreciate unlike new build flats. 

Thanks. 

WIAWSNB

You are a funny mix, BB! On one hand you appear very switched on regarding investments, and have yourself in a very fortunate position indeed. Very envious 😃 
And on the other, you appear - no disrespect - surprisingly naive regarding properties and how to 'deal' with them. This includes your 'dilemma' over whether to tell your current LL that you don't 'earn'! Well, d'uh, why would you?! It has no bearing on anything. 
But I suspect very strongly that if you were to tell him, he'd be like me - envious only! But, I wouldn't - just no need.
Also the buy vs rent dilemma. For 99% of folk, that's a no-brainer - buying is an investment, renting a constant irreplaceable loss. And you can afford to buy cash?! My! But, of course, you have your reasons - you wish to have access to that money, and fair do's. But, if you can buy, the general consensus would be 'buy'. 
You have looked into whether using just 'money' to pay rent could be a problem going forwards, and that's sensible to check. You seemingly have discovered the answer is 'no', and that makes complete sense; there must be lots of folk in your position, using savings and investments to bolster their income, and it would make no sense at all for such tenants to be penalised for this. But, yes, keep asking - keep investigating.*
It's been covered by others, but your comment about the falling values of flats surely fails at the first logical glance - all you'd need to do it wait and buy one cheaper and cheaper and cheaper...
All properties have their own value, and - yes - some flats can be more susceptible to loss but only because of issues like a short remaining lease, or increasing maintenance charges. But these things apply to individual properties, and not as a rule.
I'm with you - these period buildings are dreamy, and would unquestionably be my choice over a purpose-built or modern flat. I think living in one of these would have a huge influence on your quality life - you would actively look forward to coming home to it. It would feel very very good 😊 
All flats will suffer to some degree from noise transmission. Of course, so do semi and terraced houses. And you aren't completely immune in a detached property either, if you live next door to an 'ole. 
For flats, I would suggest a few things, but they ain't rules;
Period properties are likely to be better and more solidly built. As a 'house' they will have been built to not allow intrusive sound between floors, 'cos no-one likes to hear the footsteps and noise from upstairs. But, some noise will travel. 
Uncarpeted floors, especially original wood floors, will almost certainly transmit some footfall, and airborne sounds like TVs and speech. The Q is, how much. All you can do is ask on viewing, and listen carefully to their answer. It can be mitigated by laying insulation and carpets over it, but of course you may lose some of the charm doing this. My first property was a flat in an Edwardian house - I compromised by leaving the hallway bare wood, but carpeting elsewhere. (Some leases may insist on carpet).
Part-solution - buy the top flat Yes, some sounds can still travel upwards, but they won't include footfall, and the occupant in the flat below would be at your mercy should you wish to retaliate...


* There's a Landlord site called 118. I've used that years ago to get info on something, and they were very helpful and informed. I might still have the logon details! It costs nothing to join, and they have a forum type section.

WIAWSNB

Oh, re the other potential 'issue' with period properties of low heat insulation - I would personally not consider this a major problem at all. 
Yes, you'd do what you easily and affordably could to improve the insulation value, but you'd be daft to expend much, 'cos you are unlikely to recoup the outlay. Loft insulation - cheap and effective. Carpets with thick underlay - makes sense when they need redoing. Everything else, no, at least not unless you got a sizeable grant towards it.

There is a solution, tho'; turn the TRVs down in the rooms you ain't using, and turn the 'stat up where you 'live'. Ie, sod the pitiful few £undred extra in winter fuel bill which you can easily afford, and just enjoy.

It is no significant cost in the scheme of things. 

horsewithnoname

You asked earlier about a guarantor. I have been one, basically it means having an income and credit check much as you do as a tenant, and if the tenant doesn’t pay, then the landlord can get the money off the guarantor. So it needs to be someone who trusts you totally.