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    (Original post by NX172)
    I'm a self-made 24 year old from a low income family...
    PRSOM.

    Even more impressed now.
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    (Original post by NX172)
    If I wasn't being taxed 40% on profit, the savings could be passed onto you.
    Don't be absurd, no they wouldn't. If your taxes went down your profits would go up, the renter would be unaffected.

    That may sound great but without a supply of rental properties, all you're going to get is higher rents due to a tiny supply pool. In order for a healthy market to exist, rental properties need to exist. Not everybody is there with £25k cash in hand ready to buy a property and rentals are necessary. I know in my scenario that if BTL rentals were eradicated, I would have nowhere to rent and I didn't have the budget to compete with wealthy foreigners looking to buy a home in the UK, I would have to leave London altogether.
    Yes there needs to be a healthy supply of rental properties but I don't agree that without BTLs rent would substantially increase. There's only so much more it can go, rent is already outstripping wage increases in London and much of the South East. It seems to me that as long as BTLs exist and are providing homes for people who can (just about) afford the rent, the government is never going to really face up to the housing shortage. It's easy to ignore people who have a roof over their head, even if they don't own the roof.

    Why do people need to "profit" from housing?

    Because good landlords add value.

    As part of a community of responsible landlords who follow best practices, I wholeheartedly agree that landlords who provide inadequate housing conditions and charge a high rent should not be allowed to do so. This gives the good landlords a bad name.
    No they don't. Paying twice, sometimes three times what the landlord pays in mortgage repayments for a house is not worth having your boiler fixed in a day.

    My tenants are happy with the level of service and are able to live in comfortable homes with peace of mind.

    I may charge £1600 pm but given a 4 bedroom property and its decent location, I think £400 per person isn't a "high rent". For someone with a modest salary of £24,000 / £1600/mo it's only 25% of their earnings on rent. (Recommended by experts is <30%).
    I doubt they're happy with the arrangement at all, and if they are it is only because they've been conditioned into believing high rents are a fact of life.

    £400 a month would get you a spacious 2/3 bed flat in most German cities. Germany actually only has around 10 million more households than the UK does, and it a much larger population. I don't think you can simply say rents/houses prices are higher here because of supply and demand. Clearly there's something else at work.
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    (Original post by Snufkin)
    Don't be absurd, no they wouldn't. If your taxes went down your profits would go up, the renter would be unaffected.
    This is why I say Could. Depends on elasticity of demand. If I could charge £300 more due to lower taxes but noone's willing to pay £300 more, what can I do?

    (Original post by Snufkin)
    I don't agree that without BTLs rent would substantially increase. There's only so much more it can go, rent is already outstripping wage increases in London and much of the South East.
    It'll go as much as people are willing to pay - it costs around £2k/week to live in central London and it's rippling down to the rest of the UK. I'm living first hand in an area where I went to a viewing and a few minutes later it was already gone. There's no way I can buy a home in Chiswick yet, and definitely if there were fewer properties here, I'd find it even more expensive as it's more competitive.

    (Original post by Snufkin)
    It seems to me that as long as BTLs exist and are providing homes for people who can (just about) afford the rent, the government is never going to really face up to the housing shortage. It's easy to ignore people who have a roof over their head, even if they don't own the roof.
    This is more speculation than factual. I really don't think the government are ignoring people because they have a roof over their heads...

    (Original post by Snufkin)
    No they don't. Paying twice, sometimes three times what the landlord pays in mortgage repayments for a house is not worth having your boiler fixed in a day.
    BTLs are on interest only mortgages. If it was a residential i.e, repayment mortgage, you'd be paying almost double anyway.

    (Original post by Snufkin)
    I doubt they're happy with the arrangement at all, and if they are it is only because they've been conditioned into believing high rents are a fact of life.
    I think you can basically make up anything here. I'm saying the truth, you don't want to believe, it, which is fine and I have no more to say regarding this. It's upto you.

    (Original post by Snufkin)
    £400 a month would get you a spacious 2/3 bed flat in most German cities. Germany actually only has around 10 million more households than the UK does, and it a much larger population. I don't think you can simply say rents/houses prices are higher here because of supply and demand. Clearly there's something else at work.
    Comparing capital cities, there's only 3.5m people in Berlin compared to London's 8.5million. A more similar comparison would be NY or Hong Kong, where there is similar rent prices and a respective population of 8.4million / 7.1million.

    Anyway, Not like population size correlates rental prices. Much of it is simply because there's more demand to live here.
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    This is my fam btw
    House value: 2 million something
    Mortgage value: Paid upfront
    Location: London
    Purpose for buying: ie. Live in
    Gross Salary: n/a
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    (Original post by NX172)
    Comparing capital cities, there's only 3.5m people in Berlin compared to London's 8.5million. A more similar comparison would be NY or Hong Kong, where there is similar rent prices and a respective population of 8.4million / 7.1million.

    Anyway, Not like population size correlates rental prices. Much of it is simply because there's more demand to live here.
    Why are you comparing capital cities? Berlin is not London, it is nothing like London. The point is rent is cheap in Germany even though it has, relative to population, about the same number of houses we do.

    There may be more foreigners who want to live, or at least buy here; but that doesn't really impact the cost of rent in northern cities, or Wales, where prices are still high compared to Europe.
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    (Original post by Snufkin)
    There may be more foreigners who want to live, or at least buy here; but that doesn't really impact the cost of rent in northern cities, or Wales, where prices are still high compared to Europe.
    I said rents are high in general because there is a housing shortage.

    (Original post by http://www.bbc.co.uk/news/uk-34311522)
    The National Housing Federation estimated 974,000 homes were needed between 2011 and 2014 but figures from 326 councils showed only 457,490 were built
    (Original post by https://england.shelter.org.uk/campaigns_/why_we_campaign/the_housing_crisis)
    Shelter provides support and advice 365 days of the year to those facing bad housing or homelessness. But we know we will never fix the root causes of the problem unless we build enough decent, affordable homes.

    For decades, successive governments have failed to build the homes we need. By 2008, the number of new homes being started had fallen to its lowest peacetime level since 1924 – and house building has barely recovered since then.

    This means that every year more and more people are being priced out of home ownership. It means rising rents and more people competing for every single home.
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    (Original post by NX172)
    I said rents are high in general because there is a housing shortage.
    Yet Germany has the same number of houses and rents are low.
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    (Original post by Snufkin)
    Yet Germany has the same number of houses and rents are low.
    http://www.theguardian.com/money/201...y-germans-rent

    http://qz.com/167887/germany-has-one...nership-rates/

    Apparently the difference is that Ownership is not an obsession in Germany. If there is no demand to buy a property, then the price goes down, and so does the rent.
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    (Original post by NX172)
    I think the first topic is rent and how and why it is what it is.

    I'd like to clarify that rent cannot be set at a whim, it is governed by price elasticity, supply and demand.

    The rental market is hot right now, many people fight over a single property. I'm renting right now and I had to fight hard to get it. People outbid eachother, why? Because demand far outstrips supply. So unless the underlying problem, that is - a lack of supply due to not enough properties being built to fulfill demand, is solved, government intervention to disrupt the market can have appear to have short term effects but always at the same time bring a negative side effect for artificially tampering with the market.

    An example of what they introduced recently, is to charge tax on landlords' mortgage interest. It'll definitely deter potential and small landlords. However, many experts believe all this is going to do is drive rental prices up (due to a reduction of rental supply) and barely dent the house prices. This is because BTL landlords only make up 20% of all house purchases. If landlords are paying £100 more tax, then they'll put the rent up £100 to cover their costs. Government isn't helping.

    Personally I wouldn't care if I'm charging £400 for rent if my costs were £100. Or if I was charging £1200 but my costs were £900. Either way, it's £300 profit. If I wasn't being taxed 40% on profit, the savings could be passed onto you.

    Sure, the government can impose rent caps. However, if the true cost of providing a rental is significant, then the BTL business is no longer worthwhile. That may sound great but without a supply of rental properties, all you're going to get is higher rents due to a tiny supply pool. In order for a healthy market to exist, rental properties need to exist. Not everybody is there with £25k cash in hand ready to buy a property and rentals are necessary. I know in my scenario that if BTL rentals were eradicated, I would have nowhere to rent and I didn't have the budget to compete with wealthy foreigners looking to buy a home in the UK, I would have to leave London altogether.

    At the end of the day, the government need to build more homes and there's only so much they can circle around the problem.




    Why do people need to "profit" from housing?

    Because good landlords add value.

    As part of a community of responsible landlords who follow best practices, I wholeheartedly agree that landlords who provide inadequate housing conditions and charge a high rent should not be allowed to do so. This gives the good landlords a bad name.

    BTL is a service provided to people who cannot or currently do not wish to make a commitment to paying a mortgage. Whether taking BTL out of the picture will vastly change house prices is debated, but as I described above, for many reasons it would only make life more difficult. Either way, in order to provide the service, the investment needs to be worthwhile to the investor. In my example, what's the point of me spending 6 months of my time and money, every single weekend to renovate a house on the verge of deterioration and turn it into quality housing if the return on effort, let alone investment, is barely anything? Should I halve the price of the property for charitable purposes such as to simply make you happy? Should I have simply left the house to rot, thereby the house drops in price cheap enough for a first time buyer to buy and live in? Then only for them to live in a dated house with rainwater seeping through the walls?

    Personally I've always got things like boilers and radiators fixed within 1 day, and most queries resolved within 2 days, including my weekends. My tenants are happy with the level of service and are able to live in comfortable homes with peace of mind.

    I may charge £1600 pm but given a 4 bedroom property and its decent location, I think £400 per person isn't a "high rent". For someone with a modest salary of £24,000 / £1600/mo it's only 25% of their earnings on rent. (Recommended by experts is <30%)

    I do agree with certain countries' laws where, I believe in Germany, they only allow rent increases in line with certain levels of home improvements being made.
    Ah, thanks for answering.

    I don't know the details around rent pricing, but I assume there are some regulations in terms of how much you can raise rent by. Theoretically though you can just raise rent at the end of the contract and force people to not renew, most students (including myself) have problems with their landlord/agency. I also don't really think you have elasticity in the market, since as you say you have a short supply and can always find a tenant since places are in short supply.

    I think landlords have the upper hand in the market, so you're right in the sense that a tax will probably just get passed on to the renter, and yes I too attribute this to the lack of supply, so interfering in such a closed market doesn't help much.

    I also don't agree with reducing the tax however, I'm delighted that you would but I'm highly sceptical that a tax cut would be matched by reducing the rent, why would they? They'll still find someone to rent it out. Because of such demand it gives landlords the power to overcharge for rent, compared with if houses were council owned where we could fix the rent.

    I do think renting is necessary, students progress from temporary renting at uni to buying if they're settled and working, my point would be that we should be having NFP student housing. At the very least, cheap, simple public housing, versus a more expensive, better quality housing (which could be privately owned) that way theres alternatives.

    Do good landlords add value? Probably, but ultimately renters will have to pay for it, what if I only want a cheap, no frills house, but the landlords decides he wants to gentrify it? I'll have to pay more in rent or move out. The market should reflect the people, poor students shouldnt be sacrificed because foreigners will pay OTT for a little bit of luxury and the landlord can make a bit of extra. They add value but will still have to profit out of the value.

    Your next point is valid, you should make a profit from working for 6 months to improve a property such as that, I'm glad you at least obey good practice, some landlords are solid enough. I would look at private renting as a luxury positive, by all means, take dilapidated housing, refurbish and sell for a profit, heck, rent it out for tourism, or whatever, but the problem is that whilst landlords still target students, they control the lowest priced housing, people who NEED housing should get one cheaply, those who WANT another one, or a nicer one and can pay for it should be encouraged to go private.

    That's excellent and very much above the norm, there are some nasty tricks that landlords have played (removing light bulbs, then replacing the cost of new lightbulbs from my deposit because "I destroyed them." IMO landlords shouldnt have the easy ability to shaft renters that they currently do, as a tenant I would ask for a bit of fairness, e.g. if a washing machine breaks, give us the instruction manual so we can attempt to fix it, if we can't then someone has to be paid to check it out, then if it needs to replaced, who pays for it? The landlord who deliberately bought a piece of **** knowing hed get the students to buy him a new one or the students who had it for a month. Id be delighted if more landlords were honest and not using any excuse to nick my deposit.

    So, it is simply down to lack of supply, I'm glad in your case you do seem to be a decent landlord (and as a previous tenant your experience probably helps) but I just don't think, as a rule, landlords should have the privileges that they do.

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    (Original post by That Bearded Man)
    Ah, thanks for answering.

    I don't know the details around rent pricing, but I assume there are some regulations in terms of how much you can raise rent by. Theoretically though you can just raise rent at the end of the contract and force people to not renew, most students (including myself) have problems with their landlord/agency. I also don't really think you have elasticity in the market, since as you say you have a short supply and can always find a tenant since places are in short supply.

    I think landlords have the upper hand in the market, so you're right in the sense that a tax will probably just get passed on to the renter, and yes I too attribute this to the lack of supply, so interfering in such a closed market doesn't help much.

    I also don't agree with reducing the tax however, I'm delighted that you would but I'm highly sceptical that a tax cut would be matched by reducing the rent, why would they? They'll still find someone to rent it out. Because of such demand it gives landlords the power to overcharge for rent, compared with if houses were council owned where we could fix the rent.

    I do think renting is necessary, students progress from temporary renting at uni to buying if they're settled and working, my point would be that we should be having NFP student housing. At the very least, cheap, simple public housing, versus a more expensive, better quality housing (which could be privately owned) that way theres alternatives.

    Do good landlords add value? Probably, but ultimately renters will have to pay for it, what if I only want a cheap, no frills house, but the landlords decides he wants to gentrify it? I'll have to pay more in rent or move out. The market should reflect the people, poor students shouldnt be sacrificed because foreigners will pay OTT for a little bit of luxury and the landlord can make a bit of extra. They add value but will still have to profit out of the value.

    Your next point is valid, you should make a profit from working for 6 months to improve a property such as that, I'm glad you at least obey good practice, some landlords are solid enough. I would look at private renting as a luxury positive, by all means, take dilapidated housing, refurbish and sell for a profit, heck, rent it out for tourism, or whatever, but the problem is that whilst landlords still target students, they control the lowest priced housing, people who NEED housing should get one cheaply, those who WANT another one, or a nicer one and can pay for it should be encouraged to go private.

    That's excellent and very much above the norm, there are some nasty tricks that landlords have played (removing light bulbs, then replacing the cost of new lightbulbs from my deposit because "I destroyed them." IMO landlords shouldnt have the easy ability to shaft renters that they currently do, as a tenant I would ask for a bit of fairness, e.g. if a washing machine breaks, give us the instruction manual so we can attempt to fix it, if we can't then someone has to be paid to check it out, then if it needs to replaced, who pays for it? The landlord who deliberately bought a piece of **** knowing hed get the students to buy him a new one or the students who had it for a month. Id be delighted if more landlords were honest and not using any excuse to nick my deposit.

    So, it is simply down to lack of supply, I'm glad in your case you do seem to be a decent landlord (and as a previous tenant your experience probably helps) but I just don't think, as a rule, landlords should have the privileges that they do.

    Posted from TSR Mobile
    I agree, giving such power in landlords' hands can easily be turned to greed which can translate to others' hardship.

    Unfortunately, there aren't any regulations that I'm aware of. That's right, it's very easy to replace tenants if they're not happy with the rent increases.

    There's alternatives to privately renting an entire flat or house. Perhaps the alternatives aren't well communicated but for students and minimum wage workers, there's plenty of affordable options. Live-in landlords receive government incentives to renting out a room in their home. When my gf was a student, she was only paying £350 all bills included in the centre of Bristol this way. Whereas a private 1 bed flat would cost double. spareroom.co.uk is pretty good for this.

    I agree, not everyone requires a fancy place to live in. Although realistically, landlords will want to make improvements to the house to keep it marketable, I doubt many will sink that much money to "gentrify" it as such.

    I also agree, when landlords control the entire market, from the cheapest entry level housing to the luxurious, there should be some sort of regulation. Although trust me, many landlords such as myself look down on landlords that work to cram as many people in poor spaces as possible for their personal gain.

    Landlords who do those kind of tricks as you describe are just the lowest of the low and probably an extreme example but obviously should not be held as a representative example of every landlord. Not every landlord is an angel, but I can guarantee that not every tenant is an angel, either. I've had some that have had clearly no respect for the property and run up a huge cleaning or repair bill. There is always a fair wear and tear allowance but any that goes too far I wouldn't hesitate to use their deposit to pay for the cleaning charges if they weren't willing to be responsible or make it right. I'm fair.

    At the end of the day, I think it's a case of don't hate the players, hate the game. Some good landlords, some good tenants, some bad landlords, some bad tenants. Without some regulation, especially on basic housing, some will always abuse the privilege they have. The government's latest schemes to help people buy a home is restricted to new builds. So at least the BTL investors aren't snapping those up entirely. Still, there's some way to go.
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    (Original post by NX172)
    I agree, giving such power in landlords' hands can easily be turned to greed which can translate to others' hardship.

    Unfortunately, there aren't any regulations that I'm aware of. That's right, it's very easy to replace tenants if they're not happy with the rent increases.

    There's alternatives to privately renting an entire flat or house. Perhaps the alternatives aren't well communicated but for students and minimum wage workers, there's plenty of affordable options. Live-in landlords receive government incentives to renting out a room in their home. When my gf was a student, she was only paying £350 all bills included in the centre of Bristol this way. Whereas a private 1 bed flat would cost double. spareroom.co.uk is pretty good for this.

    I agree, not everyone requires a fancy place to live in. Although realistically, landlords will want to make improvements to the house to keep it marketable, I doubt many will sink that much money to "gentrify" it as such.

    I also agree, when landlords control the entire market, from the cheapest entry level housing to the luxurious, there should be some sort of regulation. Although trust me, many landlords such as myself look down on landlords that work to cram as many people in poor spaces as possible for their personal gain.

    Landlords who do those kind of tricks as you describe are just the lowest of the low and probably an extreme example but obviously should not be held as a representative example of every landlord. Not every landlord is an angel, but I can guarantee that not every tenant is an angel, either. I've had some that have had clearly no respect for the property and run up a huge cleaning or repair bill. There is always a fair wear and tear allowance but any that goes too far I wouldn't hesitate to use their deposit to pay for the cleaning charges if they weren't willing to be responsible or make it right. I'm fair.

    At the end of the day, I think it's a case of don't hate the players, hate the game. Some good landlords, some good tenants, some bad landlords, some bad tenants. Without some regulation, especially on basic housing, some will always abuse the privilege they have. The government's latest schemes to help people buy a home is restricted to new builds. So at least the BTL investors aren't snapping those up entirely. Still, there's some way to go.
    That said, you have admitted yourself that you will exploit and will charge as much as they will pay, which is alot.
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    (Original post by That Bearded Man)
    That said, you have admitted yourself that you will exploit and will charge as much as they will pay, which is alot.
    What are you referring to? It doesn't make sense to me to charge under market value. If I'm investing time, money and effort to provide quality housing, I'm charging the going rate - it is not a charity.

    Moreover, there is a market for everything. A 4 bedroom done-up house is not for the needy. They chose it because they wanted the luxury of location, size and decoration and were happy to pay for it. I don't see what there is to exploit.
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    (Original post by NX172)
    My latest BTL purchase was in Sept 2014

    Value: At the time? £275,000 asking price, bought for ~£247,000 after negotiations.
    Mortgage: ~£186,000 or so, whatever 75% is. Paying £527/mo interest only.
    Location: Southville, Bristol
    Purpose: BTL
    Rent Charged: £1600/pm
    Gross Salary: £32,000 at the time excluding other BTL or rental income.

    Original Rental estimate was £850 - £950pm by estate agents.
    Sank around £25,000 worth of renovations into the property to make it high standard. Re-valued at £1450-£1500 pm rental. The property was popular and people fought amongst themselves so finally received a rental offer of £1600.
    Property itself was valued by an estate agent right after renovations at £325,000 (~April 2015). Now worth around £365,000 according to Zoopla with "100% confidence level".

    Looking to add a loft conversion for an extra bedroom + en-suite before selling the property.
    Congrats on your housing success, BTL gets too much hate.

    I have a potential investment with 1 large bedroom, 1 small bedroom and 1 small bathroom. Now i was thinking that i could convert the loft into a large bedroom and convert the small bedroom into a large bathroom. How much value would this (if done reasonably well) add vs the cost?
 
 
 
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