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excellent views and comments. Thank you all0
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BTL (Sometimes known as Borrow To Leech) creates it's own demand... every property taken off the market by a landlord denies someone from buying that property as an owner occupier.0
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I have no issue with good landlords that are buying properties that FTB can't otherwise afford or doing up dilapidated properties.
My issue comes with cash buyers competing against FTB's on houses that are well within their budget. An FTB only has a finite budget compared to many cash buyers and so in my and many people I knows experience, they lose out all the time to investors who can top even a very high offer from FTB. This means they then rent them out at a higher cost to people like FTB and it inflates the bottom of the property ladder and you can never get on it.
You only have to go on Rightmove to see even a 1 bed property is very expensive, but a 2 or 3 bed isn't really that much more than a 1 bed.
Personally, I'd like to see a law change that prohibits BTL from buying starter homes.0 -
My issue comes with cash buyers competing against FTB's on houses that are well within their budget. An FTB only has a finite budget compared to many cash buyers and so in my and many people I knows experience, they lose out all the time to investors who can top even a very high offer from FTB. This means they then rent them out at a higher cost to people like FTB and it inflates the bottom of the property ladder and you can never get on it.
Owner-occupiers can afford to pay more than sensible landlords, because they don't have the cap of having to return a realistic yield after costs, tax etc - many of which hit smaller properties disproportionately hard. A gas safety check costs the same for a four-bed house as a 1-bed flat, for example.
Which, of course, would then mean no studio, 1-bed, 2-bed "starter" private rentals...Personally, I'd like to see a law change that prohibits BTL from buying starter homes.0 -
Owner-occupiers can afford to pay more than sensible landlords, because they don't have the cap of having to return a realistic yield after costs, tax etc - many of which hit smaller properties disproportionately hard. A gas safety check costs the same for a four-bed house as a 1-bed flat, for example.
Which, of course, would then mean no studio, 1-bed, 2-bed "starter" private rentals...
The problem is way too many people seeing starter homes a san easy way to make money without thinking it through. The market encourages it.
I see your point. Perhaps then the system should be FTB gets priority over a cash buyer then, presuming the FTB offer is at or above asking price. Ultimately something has to be done. Anyone who has been an FTB recently will tell you it is nigh on impossible to compete with cash buyers. It is then incredibly frustrating to see a house you could afford and offered over the asking pride for being let out for double what a mortgage payment would have been. You don't mind losing out to another FTB, at least they're getting they're own home, it stings to lose out to somebody whose not even going to live in it.0 -
The problem is way too many people seeing starter homes a san easy way to make money without thinking it through. The market encourages it.
I see your point. Perhaps then the system should be FTB gets priority over a cash buyer then, presuming the FTB offer is at or above asking price. Ultimately something has to be done. Anyone who has been an FTB recently will tell you it is nigh on impossible to compete with cash buyers. It is then incredibly frustrating to see a house you could afford and offered over the asking pride for being let out for double what a mortgage payment would have been. You don't mind losing out to another FTB, at least they're getting they're own home, it stings to lose out to somebody whose not even going to live in it.
Hold on you want to regulate who can buy property? You see nothing wrong with that?...0 -
I see your point. Perhaps then the system should be FTB gets priority over a cash buyer then, presuming the FTB offer is at or above asking price.
Who gets to decide on when that priority is outweighed, then?
...and this is something, therefore this has to be done!Ultimately something has to be done.
Cash buyers, or landlords? Don't confuse the two. The BtL buyers you're complaining about are usually highly geared, not cash buyers.Anyone who has been an FTB recently will tell you it is nigh on impossible to compete with cash buyers.
...the numbers don't work anywhere NEAR that simply...It is then incredibly frustrating to see a house you could afford and offered over the asking pride for being let out for double what a mortgage payment would have been.
Let's take an example of a £100k property.
MSE best buy mortgage is 2.45% for 90% LTV. That's £402/mo repayment, using the MSE mortgage calculator.
Are you telling me that a £100k flat would rent for £800/mo? That'd be a damn near 10% raw yield. No... Not realistic at all...
I could point you to a very nice 2-bed modern flat in the centre of my local city at £112,500, with service charge/ground rent/management/sinking fund payment slightly north of £110/mo. The rent on it would be around £550/mo. So that's around £440/mo in the landlord's pocket, before other costs and tax - a yield of around 4.7%. Mortgage repayments on that flat would be £448/mo, so £560ish after the service charge. And that flat has been for sale since SEPTEMBER 2015... Simply, it's overpriced. That service charge doesn't help one bit.0 -
Who gets to decide on when that priority is outweighed, then?
...and this is something, therefore this has to be done!
Cash buyers, or landlords? Don't confuse the two. The BtL buyers you're complaining about are usually highly geared, not cash buyers.
...the numbers don't work anywhere NEAR that simply...
Let's take an example of a £100k property.
MSE best buy mortgage is 2.45% for 90% LTV. That's £402/mo repayment, using the MSE mortgage calculator.
Are you telling me that a £100k flat would rent for £800/mo? That'd be a damn near 10% raw yield. No... Not realistic at all...
Bravo! - I cant believe someone would actually suggest that. - and then when it came to selling their property they'd be back on here complaining.
"I have a cash buyer offering more, but have to accept the lower offer of the FTB HELP!!!"0
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