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Post by Telemachus on Feb 11, 2024 9:54:51 GMT
Caring is all well and good. Would you spend £200K on something then hand it over to a stranger on a never ending contract, knowing that signing the contract reduced its value to £100K? I think the point is though that BTL should be discouraged in favour of owner-occupation. There should be room for both. Lots of people don’t want to go through the hassle and expense of buying a house, especially young people who have not really settled into a location-specific career. i rented as a student in Bristol and later when I worked for British Aerospace. I rented when I moved to Aberdeen in 1981. I rented when I lived in Sarawak for a year 1982-83. I rented when I returned to Aberdeen. I rented when I left Bristow to be a gliding bum for a couple of years and I rented when I had a job in electronics in 1987. I rented when I returned to Bristow and finally bought my first house in 1989 aged 33. I did not buy a house before that because I didn’t want to, not because I couldn’t afford to or because there was insufficient housing stock. I bought a BTL flat in 2014. I have had about 6 tenants since then, firstly foreign oil workers who had 1 year contracts, then a junior doctor (who moved to a different area to get his consultant job), then I had a student, then another student, all of whom just wanted somewhere to live for a year or so. I now have a couple who were students but liked the flat so much they have stayed on since graduation, they’ve been in for over 2 years now. I have already mentioned that if they wanted to buy the flat I would go with that, but so far they are quite happy renting. So I think it is important to remember that lots of people rent because they want to. Most landlords are entirely reasonable and offer a good service to tenants who can’t get social housing from councils or housing associations. There are certainly a few bad apple slum landlords but they are in a tiny minority. I would certainly support action to clamp down on them, but not to presume that all landlords are bad people. That would just be ignorant.
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Post by on Feb 11, 2024 10:25:28 GMT
I would certainly support action to clamp down on them, but not to presume that all landlords are bad people. That would just be ignorant. Obviously people vary that is normal. There is an ugly side to BTL which you may not have considered. "Starter homes" Quite often BTL property is at the lower end of the market. So you get a couple with jobs and a kid who can afford to pay a mortgage. They go to the estate agent. At the same time a BTL is interested. Who is more likely to get the property in this situation? The BTL will get better mortgage rates so can offer more for it than the couple with the kid. Basically you can have a situation where people who can afford to buy and want to buy are competing with people who are just investors. The logical outcome is all property ends up belonging to one person and they can fuck people as much as they like. It doesn't affect me as the others live in a local authority (not housing association) owned property and I have Boats but BTL, if it were encouraged too much, could harm society. Fortunately .gov realises this and puts in measures to prevent a snowball effect.
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Post by Clinton Cool on Feb 11, 2024 11:14:10 GMT
I would certainly support action to clamp down on them, but not to presume that all landlords are bad people. That would just be ignorant. Obviously people vary that is normal. There is an ugly side to BTL which you may not have considered. "Starter homes" Quite often BTL property is at the lower end of the market. So you get a couple with jobs and a kid who can afford to pay a mortgage. They go to the estate agent. At the same time a BTL is interested. Who is more likely to get the property in this situation? The BTL will get better mortgage rates so can offer more for it than the couple with the kid. Basically you can have a situation where people who can afford to buy and want to buy are competing with people who are just investors. The logical outcome is all property ends up belonging to one person and they can fuck people as much as they like. It doesn't affect me as the others live in a local authority (not housing association) owned property and I have Boats but BTL, if it were encouraged too much, could harm society. Fortunately .gov realises this and puts in measures to prevent a snowball effect. The potential landlord could possibly offer more, but they will be constrained by the motive of profit. A typical gross yield on a buy to let is 6%. It could be 10% in dodgy areas but likely 3-4% in 'better' areas. That's before considering maintenance, costs and risk. The investor could get 5% in a bank account with no costs, and no risk. No headaches, no accusations from the public that he or she is the son or daughter of Satan. Contrary to popular opinion monthly activity on buy to let isn't really profitable. There are numerous better avenues for capital, if the motive is profit. Buy to let is all about capital growth. It's speculation. The value of houses always goes up, right?
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Post by Mr Stabby on Feb 11, 2024 11:23:18 GMT
What will curtail BTL is if there are further rises in interest rates. I know they are predicted to fall this year but accurate forecasts are almost impossible to make as they are dependent on factors outwith the Bank of England's control. Already I'm getting 8% interest on a limited deposit savings account and 4.5% on an unlimited deposit account. This already matches or exceeds BTL returns and if the base rate does rise further I'd expect to see falls in property values which could lead to a stampede for the exit.
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Post by on Feb 11, 2024 11:31:29 GMT
Too much vested interest.
On the PM list of interests there is a rental property in London. I thought Sunak would be a multiple owner but I am guessing he uses the wife for that who is not an MP.
Collapse of the BTL market is not going to be allowed.
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Post by Clinton Cool on Feb 11, 2024 11:59:40 GMT
Interest rates won't rise in the medium term. Inflation will soon be forgotten. Government will be under pressure not to bump up borrowing too much. So, being unable to moderate their spending, it will be back to quantitative easing to 'drive the growth'. We will then go back to another round of inflation. And so it will go on. Successive governments, each obsessed with globalism, each burdened by ever increasing debt will try to encourage more growth in a country which grows ever less competitive in the global market they desire.
Screwed? Most definitely.
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Post by Telemachus on Feb 11, 2024 12:04:50 GMT
What will curtail BTL is if there are further rises in interest rates. I know they are predicted to fall this year but accurate forecasts are almost impossible to make as they are dependent on factors outwith the Bank of England's control. Already I'm getting 8% interest on a limited deposit savings account and 4.5% on an unlimited deposit account. This already matches or exceeds BTL returns and if the base rate does rise further I'd expect to see falls in property values which could lead to a stampede for the exit. It may reduce BTL funded by mortgages, but lots of landlords including me bought with cash. I could have chosen just to keep my money in the bank but instead I spent it on something useful to others.
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Post by kris on Feb 11, 2024 12:05:10 GMT
There’s a recession coming. The Chinese economy isn’t doing very well, their property market is collapsing. Evergrande owe 300 billion dollars, a lot of their creditors will be western investment banks and pension management companies. So there will be a knock on effect for the rest of the world.
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Post by Telemachus on Feb 11, 2024 12:05:47 GMT
I would certainly support action to clamp down on them, but not to presume that all landlords are bad people. That would just be ignorant. Obviously people vary that is normal. There is an ugly side to BTL which you may not have considered. "Starter homes" Quite often BTL property is at the lower end of the market. So you get a couple with jobs and a kid who can afford to pay a mortgage. They go to the estate agent. At the same time a BTL is interested. Who is more likely to get the property in this situation? The BTL will get better mortgage rates so can offer more for it than the couple with the kid. Basically you can have a situation where people who can afford to buy and want to buy are competing with people who are just investors. The logical outcome is all property ends up belonging to one person and they can fuck people as much as they like. It doesn't affect me as the others live in a local authority (not housing association) owned property and I have Boats but BTL, if it were encouraged too much, could harm society. Fortunately .gov realises this and puts in measures to prevent a snowball effect. BTL mortgage rates tend to be higher than for own-use buying.
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Post by on Feb 11, 2024 12:09:01 GMT
Really? Thats odd.
Shows how much I know !
ETA I see it is because the BTL can get an interest only mortgage. So they pay less per month over the course of the mortgage.
So in effect although they pay out the same overall the deal is better.
Presumably the fact a tenant is paying the mortgage is quite attractive.
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Post by Telemachus on Feb 11, 2024 15:01:12 GMT
Really? Thats odd. Shows how much I know ! ETA I see it is because the BTL can get an interest only mortgage. So they pay less per month over the course of the mortgage. So in effect although they pay out the same overall the deal is better. Presumably the fact a tenant is paying the mortgage is quite attractive. Owner occupiers can get interest only mortgages too if they want to. BLT rates are higher because if you are a business and go bust you only lose the property, you don’t lose your home. So there is more incentive for avoiding repossession if it’s your home.
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Post by Jim on Feb 11, 2024 15:16:50 GMT
Caring is all well and good. Would you spend £200K on something then hand it over to a stranger on a never ending contract, knowing that signing the contract reduced its value to £100K? I think the point is though that BTL should be discouraged in favour of owner-occupation. There are some houses , doer uppers, that aren't eligible for a mortgage until they are done up, that can cost 20 - 30k easily, on top of the purchase price. Once done up then get a btl mortgage and move on to the next one. Not straightforward though because it's rarely possible to release much more than 75% if you are after a good deal. Housing stock gets improved, there's a tidy house available to rent. Another issue for renters is the LHA rate, what housing benefit will pay, eg in Rochdale the single person allowance is going up from 395 to 475 in April yet actual private rents are way more than that. The rents can in turn be dictated by btl interest rates and mortgages going up.
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Post by kris on Feb 11, 2024 17:15:55 GMT
Anyway with out some sort of UBI our society will go to shit. A capitalist/consumer society can’t function without people to buy the products. If they are replacing labour with robotics and AI making lots of people redundant, who is going to buy the products to make the profits? So it will make sense to the people at the top to give the mass populace enough money to buy the products.
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Post by kris on Feb 11, 2024 17:20:41 GMT
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Post by Mr Stabby on Feb 11, 2024 17:25:51 GMT
Anyway with out some sort of UBI our society will go to shit. A capitalist/consumer society can’t function without people to buy the products. If they are replacing labour with robotics and AI making lots of people redundant, who is going to buy the products to make the profits? So it will make sense to the people at the top to give the mass populace enough money to buy the products. Robotics and AI are nowhere near being able to replace human labour. Some sectors may be affected but the labour force will simply be deployed elsewhere. I was being told 20 years ago that I wouldn't be working up until retirement age because trucks would all be autonomous by 2025.
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