My uncle was chartered in the same profession that I am but he didn't have to go to university first. In his 20s, he built his own house in the countryside and provided for a stay-at-home wife and a family. I have three degrees, the same profession as him but I live alone in a shared-ownership flat of a social landlord. I am not the only one in this boat but my case says it all: the devaluation of jobs, money and qualifications. I am thinking about going to the Middle East.
I'm sure many young people today don't see this contrast, they know only the time they live in. There are so many parts to society which have led to this change, the expansion of universities since around the 90's where many more people get degrees now it does devalue them. Governments just seem so keen on seeing house prices rise and do anything to fuel them with help to buy for example. Population increase is another keeping demand high.
@@jerryorange6983 Except that's highly dependant on getting an apprenticeship which are like gold dust, I trained as a Plasterer couldn't find anyone to get an apprenticeship and know loads of would be Electricians and Plumbers that had the same issue.
@@hammerofolympia3716 -- on getting an apprenticeship - this is your local politicians and the goverment fault. Crazy idiots in power import people when they don't train locals. What can we do when people vote for them?
Well I’ve been a Landlord for 40 years. Most tenants have been with me for many years. No mortgage and I keep my rents low. Main difficulties are getting tradesmen in for repairs. Trouble is I’m getting older and I’ll have to sell within the next five years, so any regulation coming from the government giving more tenant rights, though not affecting me directly, will make me think about selling earlier, as when the new regulations come in, I feel that there will be a rush of Landlords selling and therefore prices of property falling, as I’d be selling with the tenants in place, not empty properties.
I am one of these small landlords who has started to sell up, i fit right into what was said in the report, about to retire, sick and tired of all the hassle and the extra govt legislation, and of course with interest rates how they are i can sell up now and simply put the capital in the best interest rate account i can and sit back !!! God help the tenants though, they are in absolute nightmare land.
@monkswhiskers3354 What a LL does with rent is none of the tenant's business .A tenant pays for accommodation services. It is irrelevant if a LL uses some or all of the rent to pay for a mortgage.
@@shanginadildoYep I watch all property related videos. It took me 8 years to get out of the PRS. This I wanted to do when dopey Osborne introduced S24 in 2016. My mortgage lender was extremely obstructive preventing me from selling up. BTL is a busted flush. Personally I will be going down the lodger route which means I can EVADE any taxation. I will have my own home and take in lodgers. I will also have a narrowboat where I will spend a lot of my time. At least once per month I will occupy my home. I aspire to buy a 3 bed home near a canal. I will not declare any rent in excess of the RFRA of £7500. My home will not be subject to any tenancy requirements. If I sell there will be full PPRR. No EPC compliance required. I will be able to make untaxed profit of about £23000 plus my pension will leave me with a rather nice untaxed income. I will generate far more lodger income than I ever achieved with tenants. The new investment strategy is lodgers. Many LL will reduce their leverage to zero on one property. Then lodgers may be taken on. Of course the lodgers can't be families. Only single unrelated lodgers will be taken on and will make more profit than with tenants. Lodgers used to be far more prevalent back in the 60's when there were ridiculous tenant regulations which meant there were very few LL. We could see the return of the lodger as a business model. After all there are only about 28 million spare rooms in England!!
This is all by design. The aim is to consolidate property ownership into a few feudal conglomerates. There is one letting agent I know of that is buying up as many letting agencies as possible-big ones and independents. Why? So that they can grab the market share forcing landlords to have rent through fewer options and see their margins cut. The government is doing the bidding of their paymasters.
Totally agree with you on the politics. We don’t need stamp duty free periods and other support for housing they just drive up demand even further. We need more supply. I remember then during the pandemic and knew immediately house prices were about to shoot up, which they did. Government has a track record of failing on the supply side of the issue. Utter incompetence.
How was thatcher responsible for the 10 million population increase since 2000? Be it social housing, buy to let , mortgage OR own outright. 10 million more people need housing today than in 2000. It was not thatcher who started/encouraged that population growth , was it?
@@patdbeanShe destroyed social housing. Strange that proper countries have been able to cope with an increased population. Your post brexidiot tory government has imported more people than ever before and done nothing to improve things over the last 13 years. Granted the last Labour government didn't help.
@@stephanguitar9778 the housing she sold off sill exists, it still houses people. If you are saying we should have built replacements , i agree.... what other western European country has had a almost 20% population increase since 2000? Can you name one? Over those years the french population has done from 60 to 64 million, the population of Germany has gone from 80 to 82 million, Italy 56 to 58...... etc etc Who else has had the population growth the UK has had?
@@patdbean On 2021 figures, the UK had about 14%. Switzerland, Norway, Sweden and Spain had higher growth but France isn't far off Switzerland 21.15% increase from 7.184 to 8.703m. Norway 20.43% increase from 4.491 to 5.408 Sweden 17.46% increase from 8.872 to 10.42 Spain 16.88% increase from 40.57 to 47.42. UK 14.32% increase from 58.89m to 67.33 France 11.21% increase from 60.92 to 67.75.
@@Talkathon408 Your 67.34 million UK figure is from 2021 at least another 1.2 million since then. Also you are not picking comparable countries. The UK population density is 280 per sq. Km. Spain 95 France 101 Switzerland 100 Sweden 26 Norway 11 The only one that comes near is Germany at 231
Keeping house supply low while increasing the money supply would never increase affordability - it will only fuel the speculation and keep normal people in debt. I never understand why 2% interest rates are being granted at first place for buying the home while actually this free money should be given to only home builders and something what is fundamental to economy like - Research, education and infrastructure development..
In Germany, tenants can make repairs (buy a new washing machine for example) and then deduct the amount from their rent. Would be amusing to see the reaction from British landlords if that law was adopted.
Landlords are unhappy with the hassel and the returns. People cant find a home and struggle with far to high rents. Who is to blame? Politicians obviously. Restrictions, provisions (this energy saving bs) and artifically limit the supply of land available to build mixedused multi-family homes, causes the people to suffer. Good intentions, but as a result bad outcomes for everybody, except the politicians themself. They are cashing in all the way in this process.
The energy efficiency of the old housing stock that was built for the poor at the first place 100 years ago is already a disgrace. We should not let living standards to be any worse or people will vote with their foot.
Why anyone would be a landlord is beyond me. With increased taxation, regulation, tenant rights, registrations and even when you sell (GCT) just simply avoid 🤦♂️
yep I rentted out my old house for 10 years, sold before covid due to tennants trashing the house and owing rent, agency stole £7k in rent and ran away leaving a bad tennant in my home, and then the gov started with all their tax changes and laws in favour of tennants over me. Then the sale took 8 months to go through with no tennants and all the costs involved to be covered by me for an empty house. NEVER again.
@monkswhiskers3354 Nah as a former LL I would NEVER do as you suggest. I could lose all my capital in one of your suggested ventures. So I invested in rental property. I consider property as a safe bet Now have sold up due to all the anti-LL policies. Now my capital sits in a high interest accounts which I would suggest is socially useless. Previously my capital was socially useful in that it housed 16 people. Now it houses nobody and sits socially useless in a savings account.
When interest rates where low and you could only get 0.5% return on 100k cash invested in a fixed period investment at a bank, but you could get a 5% return on a 100k one bedroom studio flat, then obviously it was more favourable to buy the studio flat and rent out. Especially if you also had potential future profit from uplift in value of the property. Now you can get 5% with a fixed term investment. The studio might now might be getting 6% but its value is dropping - plus you have the hassle of managing the flat, repairs, maintenance, cost in time and money of tax return. So as things are property investments are not attractive - especially to small investors who do it as an additional income source.
@@1414141x correct. It worked when interest rates were low. It even worked when the interest was a business expense and was offset against tax, but now I am paying tax on full rent income with no capacity to offset a mortgage which has increased x3. Makes no financial sense.
The other thing putting people off buying to let (which is something I did, sold out 2 years ago) is if the tennent decides they are staying and don't pay, it is almost impossible to remove them, the legal system pretty much on the side of the tennent staying and not paying, VERY costly legal fees, court gives eviction date, tennent doesn't leave or pay. My Father is going through this at the moment, it's been a year now, no rent payments, ignores court orders to pay or leave. Having to goto high court to get bailiffs to forcibly remove them. the system is a joke there is no way I would buy to let again in the UK.
@@valuetraveler2026 improved Section 8 protections for landlords are to form part of the new Renters (reform) Act. The basic premise of busby's is wrong though. The UK does not have strong rental laws that protect tenants, it has some of the most lax laws in the whole of Europe. No other country has the equivalent of Section 21 for example.
@Talkathon408 You are totally INCORRECT! The UK has very strong tenant regulations that favour them. These regulations are scheduled to become even more tenant favourable That is why LL are selling up. You simply can't prevent LL from selling up due to the one sided tenant regulations. This is scheduled to become even worse with the abolition of S21 etc It is going to ve disastrous for tenants. It won't really affect LL beyond being very annoying that they gave to sell up etc. LL in the main DONT need to be LL. They can invest their capital elsewhere There is really no more financial incentive to remain a LL. That is why I sold up. It doesn't seem to register with the PTB that LL DONT need to be so When those LL sell up who is going to house the millions of homeless tenants!?
Same in Canada. So unfair. Most of us landlords are just hardworking people trying to get by. No one knows this until they have to go through the system with a dead beat renter.
@@paulgbar666 Look, no country in Europe has the equivalent of Section 21. Tenants have much stronger rights in pretty much every other country in Europe, countries with strong rental markets like Germany. Landlords in the UK don't require any professional qualifications either. Well apart from Wales and Scotland. We're just in a period of transition at the moment. The houses aren't going to magically disappear, they will be bought up by more corporate landlords and hopefully standards will improve, not this mom and pop 'accidental landlord' bullshit that we have now. Also let's not forget how many landlords don't declare, well didn't until relatively recently. Such landlords are fraudsters that should have had their arses handed to them by HMRC by now and would have done so in most other European countries. Literally billions of pounds in tax evaded but then HMRC do have 20 years to pursue them.
Don't forget, solicitors fees have been going up too. Probably about £3k at the moment depending on complexity. Up north that's a significant portion of the value of a flat.
The limited company thing is probably more to do with Clause 24 than it is big corporate landlords buying up properties. It's likely mainly landlords with small to midsized portfolios trying to avoid tax that's driving it.
@@Solihul886 The terms are interchangeable. Even the .gov website sometimes refers to it as Clause 24. Not sure if that's where it originated as I do agree that it's better to refer to it as Section 24.
Why shouldn't LL attempt to avoid the evil S24 turnover tax!? In reality the costs of converting to a corporate entity from being a mortgaged sole trader LL are unviable. Selling up is a more practical response. OR converting to other forms of letting. This is why STL has surged in popularity. Though many STL are fraudulent as LL are still using their BTL mortgages for STL which is mortgage fraud. Nobody is prepared to detect mortgage fraud. Only a National register of all letting properties of all types will detect mortgage fraud as all LL would be required to provide Consent to Let letters from lenders. That would cause many LL to stop letting. If it was detectible more LL would have to sell up. Which would mean even fewer properties available for STL and LT L.
@boxingtruth2167 you need to stop jumping to conclusions. I said they're leaving the sector to avoid having to pay the extra tax. If we're talking about avoiding tax though, historically a lot of landlords have failed to declare which is evasion of tax. This practice was absolutely rampant before S24 and is probably still quite common. If you take Newham for example, in 2017 it was found that half the landlords in the borough were failing to declare.
What this country need is a Government that believes in affordable social housing like the one I grew up in the 1950/60's. I lived in a pretty rural village in the South East my dad was the local postman. Now, even the wealthiest house hunters have to dig deep to afford a home there. No hope for the young or working class being able to live or bring up a family in such a place. We will just end up with ghettos for the rich and poor.
Do you understand why RTB was expanded upon!? Well I'll tell you. Social Housing costs fortunes to maintain mostly because of the feckless layabout occupants. So Govt determined to offload these exorbitant expenses onto homeowners. This was achieved by bribing tenants to buy their council rental properties. Govt avoided all the maintenance costs for over 2.9 million properties. Of course what actually happened is that the feckless firmer Council tenants sold the properties and wasted the money such that many of these feckless are now back in council housing Thise former council homes were invariably bought by LL as few other buyers were interested in buying. So now LL legitimately make profit from those former Council properties. In actual fact it has proven that retention of Council Houses even taking into account the excessive maintenance costs are still more effective than using HB to house such tenants. The PRS is now too expensive for HB tenants. It would be far more cost effective for there to be adequate Social Housing provision. Govts have to accept that the lower social orders have to housed adequately. The PRS with its justifiable PROFIT motive is not fit for purpose for lower class tenants. Only Social Housing can achieve this There needs to be an immediate restoration by whatever means of the 2.9 million properties lost to RTB. Then over the next 10 years an additional 5 million Social Housing properties. But these properties must NOT be allocated on alleged need. They should be allocated on where you are on a list. So if you are a single white male ahead of the list of an Afghan family then the white male gets the property offer FIRST. Eventually the Afghan family goes up the list to obtain Social Housing. Alleged needs based allocation of Social Housing just rewards the feckless.
@Tourdjore I state things as they are. Nothing to do with any mindset. The truth is whatever it is which is all I state. Seriously are you suggesting I am NOT stating the truth!?
@@paulgbar666it shouldn't even be based on need or a list. It should just be much more common so that it provides competition for the open market to keep prices low.
Just sold our last BTL property. Complete this coming Monday. No longer a viable business model given all the headwinds landlords now face. All our tenants over 20+ years have been excellent and we improved every property along the way. Where will these tenants go in the future?
Sold my last buy to let property this month (had 3 originally). Margins just not there anymore for high rate tax payers when mortgaging the property as well. Are better tax protected investments around.
This is a development seen across most of the Anglosphere; people working and living in their cars or in tents. All English speaking countries have failed in supplying housing, whereas Europe has made far more attempts to resolve the issue.
Have you watched DW lately? It's the German state TV outlet. It's had several documentary pieces over the last couple of years about the German rental crisis that's developed over the past decade. Same old story, regional authorities tinkering with the rules, 'rent freezes' and ownership models. Net result, rents up 50%, a black market developing with cash under the counter changing hands with agents so that even professionals can secure an actual rented apartment.
Well for me, I owned a property outright value aprox £200K, the capital value of the property was falling, tax, agent fees, general hassle, cost every time a tennant leaves to vet and find another, it just about made sense when intrest rates were rock bottom but now that £200K can earn 4.2% instant access or 6% on a 12 month bond, no hassle, tax taken care of, no risk.....no brainer!!! so thats what I did, was a very sensible move for me now no worries and £12,000 p.a intrest with no risk of the property value crashing or a nightmare tennant PLUS I really dont want to screw a hard pressed tennant for even higher rent, it just didnt make me feel good.
@@mrjelfs3705 Not as much as I would have lost on the property, sold for £200K, would be lucky to get £170K now and thats if I could sell it, it was 100% a good decision, plus I have the money available if I need it PS I now get 5.4% on that money, so not really losing in any case. Also I will eventually be using that money towards something which is falling in price (a house), not food, gas or electricity, so it will actually buy me more not less, Inflation does not apply to everything
The major reason for the drop in rental properties is the increase in taxation (combined with interest rates) essentially you are effectively no longer taxed on profit made on rental income, you are taxed on turnover (unlike any other business). This means that for the vast majority rental peoperties that would previously have been profitable to own are now actually costing the landlord to own on a monthly basis. The only ways around this are (1) Be rich enough to be able to buy and own properties outright, with no mortgage. (2) wrap the rental in a limited company, which in all honesty is only worth doing if you intend to operate a portfolio of rental properties. The outcome then is that: (1) only the wealthy elite and corporate companies are able to rent properties effectively now and "accidental landlords" who might only rent one property their entire lives, are squeezed out. (2) Due to 1, there is less supply of rental properties, causing the rental market to spike, and price reflects availability. Also who do you think is more likely to provide the better tenant experience ? A fairly average accidental landlord who only has one property to focus on, and still maintains the house as if it were their own abode ?, and has a vested interest in keeping a long term tenant happy there ..... Or a person/company with a portfolio of multiple properties to run, who is entirely focused on the bottom line, and is business driven ?. Still. The legal and taxation changes worked out well for the hugely wealthy didnt they ?. I guess its just a coincidence, thanks government, great work.
George Osbourne Screwed the Landlords inn 2016 ( christ knows why ) then Jeremy £unt who is surprisingly a commercial Landlord with 7 properties in Southampton screwing it for the small landlords ... 20 years ago I was thinking of buying one or two properties ... oh yeah then tax relief from BTL mortgages , more tenants rights and EPC to get older properties up to C standard - costing thousands to upgrade ... Jeez .. you might as well park your monies in a 5 year Bond giving 5% ... so much easier and less hassle !!!
As a landlord, I am flexible. I am prepared to make rental profit or capital appreciation. When I have concerns about both I beat a tactical withdrawal.
No mention of the rent cap 3% max in Scotland ? Initially no increases allowed for 6M and now 12m maximum increase capped at 3% or 6% in the Social Sector. Landlords that are remaining are increasing prices by 20/25% when a tenant leaves so the caps have not worked.
In ancient times, slaves were rowed on galleys. Now it has taken a “civilized” form, you are provided with a lifetime housing loan. (the cost of this real estate exceeds its real value several times).
Landlords need to sell to save their capital. They know that values will still fall and if they have high gearing they may lose their capital. On the other hand owner landlords can weather the storm and dont need to sell. In the early 90's new builds were taken over by social landlords which kept a good part of rental provision.
Small landlord in Wales for 15 years. Tenant has 8 times refused access to inspect property. Formerly I could issue a section 21 notice giving 2 months notice. Now it’s 6 months! Everybody forgets that landlords are volunteers replacing the failure to build social housing. If that was reversed BTL would disappear.. Time to sell up and invest elsewhere. Unintended consequences of short sighted legislation.
Govt need to reinstate interest offset relief and the 10% wear and tear. Also radically cut the 2nd property stamp duty, and raise the CGT threshold (not cut it to 3k next year). They literally need to encourage MORE landlords and not sting them, > IF < they want rents to reduce (and the govt subsidy bill to reduce) IE for supply to increase, not decrease radically. You need to send this video to Jeremy Hunt.
It's never better or cheaper to rent. Let's go forwards 20 years, those rents you mentioned at £1250 a month will be £2500, yet that same home on a mortgage would roughly br £1000 a month for the life of the term. So the renter now needs £2500 a month and owns nothing. Yet the person with a mortgage still pays £1000 yet own a 500k property. This WEF nonsense about owning nothing and being happy is downright disgusting
Housing is the greatest policy failure of the last 40 years. We need social housing for rent without right to buy.The problem is if Labour do this, the Tories will reverse it and depressingly, it’s a vote winner
I can't stand the current Labour Party but maybe they should use the recent RAAC controversy as an argument to level housing estates across the UK. Plenty of examples of ageing, poor quality social housing that aren't very fit for purpose and very inefficient use of space.. The govt' could reduce costs by embarking on a mass building programme and simplifying and standardising designs. Lord Adonis has been making this argument for over a decade now.
@@Talkathon408 The poor quality of social housing was a key reason for the government wanting to get out of it. Rising costs and liabilities at a time of high spending deficits made it an easy decision, that coincided with the then-government's political instincts.
@@user-dq8ey6mi4f That's a bit harsh, but what is happening is that when councils build social housing they only have a tiny budget, so very little in terms of volume, gets built. The most vulnerable on the council house list go to the top, which makes sense, admittedly some may be unsavoury characters, but this is the nature of poverty, it is a brutalising experience, so you can understand why some people are driven to crime and their anti-social activities will, of course, be more visible to you. You don't see the well behaved residents, as they are not as visible. Anyhow, this is sort of beside the point, there simply isn't enough social housing being built, because to do so would bring overall house prices down, which neither Labour nor the Tories really want. But if we, as a society, still hold dear, the values of fairness and prosperity for all, we need to start building now and whilst we build, the state needs to buy up existing houses and make them council houses.
@@user-dq8ey6mi4f But that isn't really true is it? Those at the bottom of the income scale work incredibly hard for very little money. Value in a product is inbued by working class labour, which is then appropriated by the capitalist, whereby surplus value is taken by the capitalist, when a product is taken to market. The owners of production are almost always rewarded with the spoils of profit. It is the basic premise of capital accumulation. Under the capitalist mode of production, money (rewards) flow upwards (to business owners) away from the productive class (the producers, the working class). I'm not the sharpest tool in the box, but this is pretty clear to me as the basic function of a free market economy.
@@user-dq8ey6mi4f OK, firstly, the poor don't get free homes. Most housing in the UK is privately owned and those who do qualify for the few council houses that there are, still have to pay rent. If you look at the overall statistics for where outgoing welfare payments go, a big chunk is in pension payments and another big chunk is in-work benefits for working people where employers have failed to provide a living wage and need topping up by the state. Britain has an endemic problem with not providing the skills for people. Often people have to rely on their own resources, but if you are poor, it is very difficult. Furthermore, many employers refuse to train lower grade workers, so this means they cannot progress in the workplace. If you look at the cosy deals the government makes with rich people and the massive tax loopholes still in place it is the rich that get the free ride in the UK, not the poor. We are the ones that work hard to create prosperity. we work in your factories, we work in your care homes, we work in your offices. Our labour is extracted from us, keeping us poor.
This is simply a supply vs demand.. but governments have been taxing landlords harder and harder, plus in courts allowing tenants to not pay rents for over a year in some cases while landlord is forced to pay fees to fix.. who would be a landlord now? Everyone is selling up and only the brave are left as they understand the rents will rise as a result
Well said and thankyou. During Covid my tenants threatened not to pay rent only because the government said they can. They had a whole year of full salary without going to work only the government told them they can. Of course I was close to selling.
@@身不由己人在江湖-p2y landlords have been treated as poorly as possible and this has been engineered (upping taxation of full rents, upping EPC standards, taking legal rights away from landlords) as a result the private rental market is a mess and now big businesses are applying for, and winning planning permission to build huge “ghettos” of rental stock that can make the gov seem like they are being proactive, while also privatising the rental market for big firms.. i believe biggest players currently are john lewis, lloyds and a few others, all have no doubt been given the inside scoop 3-5yrs ago… money talks
@@身不由己人在江湖-p2y Same story in Canada. Lazy losers rushed not to pay rent, because they could get away with it, and collect government handouts during COVID are the same ones complaining about inflation and demanding affordable housing not realizing it's a problem they've helped create. The sheer stupidty of the public and government cattering to these idiots is on full display in the West as of late.
HMO regulations are now making many perfectly suitable properties not fully lettable by disallowing bedrooms on the wrong side of a lounge !! These layouts are original and not conversions.
I put mine on the market today, The tenants have moved out but can't find anything anywhere! For every viewing, they are seeing 10 offers! Councils are inundated with people living on the street! I am tired of being blamed for the housing shortage and the cost of compliance! Over to you Gove, you better deliver the electoral what you promised
@@DP-co8ro This has a lot to do with Government policy and their war against small landlords than your property I am afraid. Unfortunately, there is no quick fix, we have to take the pain, some may never come back, but I can guarantee you this, next set of government will ALL be pro home building
Unless you own the property outright that you are renting out the work involved is not worth the hassle with the higher savings/ investment rates now available
We are renting our London home as we moved north. We also own one (tiny) flat each ( none of those are mortgaged anymore). Even without mortgage, the cost, especially charges for the flats, are forever increasing. Mine is near 3000 pounds a year, plus repairs, decoration and upkeep every time I get a new tenant. My husband’s flat is even worse at nearly 4000 pounds charges. Add agency fees, and all other fees etc…. The profit done is marginal even without mortgage. We would make much more now in placing all in some building society getting 5% a year. Hassle free. We are looking at selling too.
After only 10 days this article is slightly out of date. We have had a base rate freeze. Maybe mortgage rates will start to edge down. Lenders should be noticing less appetite for their expensive money. I can get 8% return by paying down my SVR mortgages. I can’t remortgage until I comply with rent ratios and equity ratios demanded by lenders. By selling some properties I can use some of the proceeds to pay down other mortgages. Of course the government takes a capital gains tax first. Sorry renters, but I don’t see any prospect of increased supply or falling rents for a few years. With property still expensive and mortgages expensive and hard to get, renters are in an impossible situation currently.
So, when a landlord has had enough and decides to sell who buys the property - probably another landlord ! I would like to know if this is the case or not because if landlords purchase off 'retiring' landlords, then the rental stock is not decreasing. Only if a property that was formerly let is bought by people or person intending to live in it, will reduce the rental stock. Does anyone know if this is what is happening or not ? I tend to think not.
If you own a property, that you mortgaged and paid for fully or partially, then you move in with a partner or family member and it becomes vacant, then yes by all mean rent it out. But buying up properties on interest only mortgages just to rent them out and live off the difference isn't a profession. Its leeching onto people looking for a place to live. That's the definition of a parasite. A "Landlord" should not be a profession. Taking advantage of a broken system. If these parasites didn't exists, people will buy the portieres they rent and live happily ever after.
'rented my house out through a company called Leaders after months of no rent being paid finally managed to get my house back no help from the letting agency And what I walked into was a bomb site ,house was wrecked Why would I want to rent a.house out again
In the area I live in £300k houses that a landlord would typically rent out (3 bed terraced houses ) and have a £200k-ish mortgage on the rents have gone from £1100pcm in 2019/20 to £1600pcm plus now. So I’d say the LL’s in my area may not have gained any extra profit but their able to pass the higher interest rate mortgage costs on. So if interest rates fall back a bit as you’ve predicted they will? LL’s will be in a bit better of a cash flow profit situation.
Not really. Wage increases of 25%+ are nowhere in the UK. Indeed, wages are falling again. So where are tenants going to find an extra 33%? Lol. Ease off the hopium.
House prices have gone down around 8% in my area. A large newbuild plot has increased the house prices by 80k in this time. Building houses won't get us out of this mess.
Social housing sold off so basically the govment outsourced it to private, is more costly for shoddy unreliable supply... they still pay housing costs don't forget
I'd hardly say that the reason why younger generations aren't landlords is because it's not cool. That has nothing to do with it at all. It's entirely down to the fact they can barely afford one house, so a second is almost always out of the picture. Sadly not a single mention of the short term (airbnb) sector that is one of the largest reasons for the shortage in rental housing. Landlords aren't selling up in droves we just don't see that in the sale price of houses at the moment. For many especially in cities and rural areas it's far more profitable to short term let the property. Much less risk and potentially massive returns.
I've managed to avoid selling up as I use fixed rate mortgages so I can see increase in needed rents before they hit. I follow the philosophy that if a tenant keeps the house well then they should not have increase in rents if it can be avoided (mortgage rates sometimes makes it unavoidable) I am concerned about the changes but I'm also aware that there are issues in the market. The changes won't resolve the underlying cause (only housebuilding can do that) but maybe it can help with slum landlords.
One of the reasons landlords are selling up is I think due to the crazy high rents that is reducing the chance of getting tenants. A large portion of renters are on Housing benefit which cap the amount that they are willing to pay. Estate agents have a big hand in recommending rent costs……based on a load of reasons and they are pricing the renter’s out of the market. Meanwhile the smug government stands by and does little to help the situation🤬🤬🤮🤮🤮
@@jamesohara8464 Yes indeed there are plenty of properties they just aren't where people wish to live So they rent. You can't force people to buy even they could afford it in a certain area. As you suggest people need more mortgage credit to afford where they want to buy But you can't always get what you want! Nobody has now he right to have a certain property in a certain area. You always have the usual idiot whingers moaning they can't afford to buy whey they were brought up As though they have some sort of entertainment to do so!!!!!
They aren't too high. Prices are just a result of the prevailing market which is as it is for a wide variety of reasons. This isn't the fault of LL. They just respond to the market and price accordingly. LL will not reduce their rents unless the prevailing market prevents them from charging the rents they are currently able to achieve Many people have many suggestions as to how to reduce rents. Rent controls aren't one of them as rent controls NEVER work.
We need laws to stop large companies buying homes and more smaller land lords, but when the goal is you will own nothing and be happy, you know that will never happen
You stated that a contributing factor was the sale of social housing under the right to buy. What happened to all the affordable housing provided by house builders and 106 payments from developers? Surely there have been tens of thousands built by now, where are these houses in the figures?
@@iLacoste1 You can't just say greed and laziness without justifying what you're saying. I rent houses out myself. What do you suggest I do? Make a loss? Give them away? I already pay way more tax per pound than pretty much any other self employed person or business in the UK as I cannot offset interest against the rents. (Maybe your anger should be directed at those that don't pay fair taxes like Amazon and Costa). Or maybe at the government for taking interest relief away and forcing up rents. Or maybe at the BoE for putting up rates and the banks profiting from it. It's not "simple stuff" at all. And yes, I have a family to feed too. I worked my nuts off for years to get the deposit to buy a rental in the first place. What do you suggest I do? As renting is now cheaper than owning a home, (as shown in this video), what do you suggest my tenants do? Sensible answers please. 😀
I remember not long ago I need to wait for tenants, even rent reductions. Now the pendulum swung and tenants do not like it. It will swing back some day and be your turn again.
You’ve mentioned net migration to the UK. Although, it means higher demand for housing but at the same time wouldn’t that mean more human capital which impacts overall GDP long term? Would be great to hear your views on that point.
Gdp per person is going down and decreased significantly over the last 20 yeasrs as many of the new arrivals have poor education from the 3rd world... GDP is not everything if the cake gets divided by more people.
@@eltax100 poor education from the 3rd world? Not really possible wiht the Immigration and Social Security Co-ordination (EU Withdrawal) Act 2020. To be honest, the requirements for a work visa are way too strict currently and it's damaging our economy.
8:29 after finally getting away from slumlords and now living in a "commercial private equity" owned building - yes it's a good thiing for renters 100x over.
First net immigration has been going down by over 10% annually since 2018 so less of an effect on the market. But what you didn't mention are the number of mortgage paying owners who have to move for their job (promotion, career etc). These have the simple question: sell up and cash in and get interest or do I invest in an uncertain market. A no brainer for 2023.
I wanted to sell my East London house a bit more than a year ago for 850k when rent was 4k. Now rent is 5.5k so i would not even consider selling it for 850 anymore. No rush here, cheers guys!
Landlords are not generic, there used to be a speculative player element- people buying using interest only and planning to be landlords for 1 or 2 years- that has vanished now, due to stamp duty and the housing sell off. 20 years ago the plan was to buy then use the tenant income to repay the mortgage - if you took a long view, after 10 years the tenant would have paid off half the mortgage. With interest rates today, this takes a lot longer. A big deterrent is the UK has become unreliable/ untrustworthy, one of these countries with too much debt, that changes its mind every 5 minutes. You used to be able to rely on EU migrants coming in and stable govt policies. These days, the UK govt is like Henry VIII - basically taxing /raiding any sector/ business area that is doing well. The tax rules change overnight and the business plan goes out the window. France has been a big beneficiary of Brexit and prices in Paris have rocketed, maybe too high. When I started as a landlord in 2001 my leverage was c. 85% now it is 5%. If I inherited a property I would rent it. I am not a buyer now. A lot of people my age (>50) have a similar thinking, they wait to inherit.
I mean, I'd HOPE it's evidence that the good landlords are leaving the market, unable to live with their consciences having to put rents up so high due to the mortgages. To be clear the hope there is that there are good landlords. I don't actually want the good ones to leave the industry cos obviously that only leaves bad landlords - I am just hoping this is evidence that "good" landlords are out there.
I rented out my old house and sold after 10 years a few years ago due to tenants trashing house and gov changing rules and also agent stealing £7k in rent, was an absolute ball ache but I did everything I could to make it good for the tenants, I put new boiler in , new double glassed windows and fixed everything straight away as it broke, I had no mortgage so I charged minimal rent too, after that experience I am not interested in doing it for a living with multiple properties and mortgages on each one. I do know a few landlords who have a lot of properties and they are always stressed, and they do the absolute minimal to each house because they are just in it for the money and every pound they spend fixing up is less profit.
No LL needs to have any sort of conscience. They are business people seeking to maximise PROFITS for their property assets. That is how a market economy works. LL legitimately increase rents to achieve the maximum profits. If LL are unable to do so even to cover existing costs then they sell up leaving homeless tenants. That is what is happening now. The Govt imposed burden of unsustainable costs is resulting in LL selling up.
It cost me £15,000 last year to repair my property to make it suitable for my new tenants after the previous one. It’s already cost me all my profits this year due to a roof leak. Given I can get 5% on an investment. I’m very close to selling up, given the new legislation coming in. Think that will be the tipping point. Just worry what will happen to the lovely young family who currently rent my property.
Have you considered whether your worry would be reduced if you gave them first refusal on purchasing the property and accepted lower than market value for it? Cos that's what a good landlord would do. It's not what an *investor* would do, but then I think the entire mentality that teaches property-is-always-an-investment is one that is all built atop a house of fundamentally flawed cards anyway. Investments can go up and down, terms and conditions apply. Never invest more than you can afford to lose. Why would property be any different?
@jezlawrence720 Only a idiot LL would not attempt to obtain the best sale price achievable. LL are in the game to make money when they enter and exit the PRS. A good LL would attempt to maximise profit. Usually that means giving NTQ to the tenant. Rarely is a top market price achievable with a tenant in situ. That is why a vacant possession property sells usually for top market price. A good LL considers himself FIRST Tenants are of secondary importance. If a LL is able to achieve a top market price with a tenant in situ then fine. This very rarely occurs.
And individual landlords will be replaced by institutional real estate funds as in the US who have zero respect for tenants, and treat them purely as a profit line on a balance sheet.
Those landlords who will survive are those who do not have mortgages. Those who bought properties once designated as slum clearance in 1970s for what is now less than 6 months rental income are surviving. The challenge will be how will their children cope when they are gone i.e. will their estate planning work in practice.
It’s a lot of stress and trouble.I rented out a flat , then a house years ago and it was bad 25 yrs ago.Now people don’t respect stuff so it’s much worse.The only way to deal with all this crap is a collapse of the economy and no welfare.
Part of the move to "Corporate Ownership" is driven by landlords who want to be able to claim mortgage interest tax relief. If you operate your rental business through a 'company' then business expenses such as financing-interest are allowable. Corporate purchasing also pays 3% minimum stamp duty. So the government has removed from the individual a number of easements which are available to companies and hit the individual with all the 'extras' which corporates have to handle. The downside is that corporate mortgages require typically smaller LTV ratios and may not attract the best interest rates.
@@paulmessenger9836 Thanks for the advice. I wouldn't buy somewhere simply because I can afford it anyway and luckily, I don't value property just because the market says it's worth X amount.
The bankers always win. First, they accelerate inflation by distributing loans to everyone, then they sharply raise interest rates on the loan. Politicians lobby the interests of bankers in order to make a fortune in a short period of time. Bankers promote their people into politics, so politicians cannot and do not want to solve the problems of the people.
I only have two properties no mortgage so don't fall to interest rates. I don't raise rents on my trusty tenants who have been with me for years. However as soon a they leave i'm selling up. Had enough. I don't make much profit out of the properties apart from capital growth.
Don’t know how you work out renting is cheaper than buying. The rent most renters pay is at least as much as the mortgage the landlord is paying and usually more. All the rent that renters pay is just throwing money away that could have went towards a mortgage- if they could get one. Regardless of how long they have been renting, there has been no increase in their wealth. However if they had bought their own property, all of the rent would have went towards paying off the mortgage. At the end of the mortgage the property is then worth considerably more and they no longer have a mortgage. The renter though, would have thrown away 25 years of money that could have went towards a mortgage and have absolutely nothing to show for it. Still don’t own a property and all the rent they paid, went to paying off the mortgage for the landlord, who now has a large asset. The landlord had to do very little work to receive this unearned asset, other than take out a mortgage and some administration work. I’m happy for landlords to operate in the housing market and increase their assets substantially in the long term, but please stop telling first time buyers it’s cheaper to rent than buy. It’s not cheaper in the short term and certainly not cheaper in the long term. If that was the case, nobody would ever think of buying a house and we would all rent. This is a myth spread by letting agents and landlords and has been debunked many times.
Housing demand should NOT be confused with housing wants. In practice, housing demand is determined by little more than the supply and demand for mortgage credit.
Absolute twaddle there is massive pent up housing wants. Wanting doesn't translate into demand unless the financial resources are there to create a demand. Wages etc do not facilitate what lenders require for the commensurate mortgage credit required. With continuing mass legal and illegal immigration property prices won't reduce. There is a massive want for property but no demand as there are insufficient resources to pay for such wants.
If immigrants can only borrow £50K that's all that they will be able to pay, plus whatever they have saved. The more that people can borrow, the more they can pay, and this inflates house prices. However, the reverse process occurs during a credit contraction. We are just at very start of a credit contraction now. You may have noticed interest rates rising.@@paulgbar666
"Private equity firms replacing private landlords, whether that'll be a good thing for renters or not is an unknown question" Lmfao. Erm we know the answer... it'll be horrific for renters. We need to get housing, a necessity, away from business and get rich quick schemes.
@@paulgbar666 the market can't be trusted when it comes to basic necessities that people need. We've seen this time and time again. Look at the chaos in water now.
@@barry9741 I'd agree that when private provision becomes too expensive then Social provision which isn't subject to the profit motive needs to come up with affordable social provision. But such social provision is very expensive. Unfortunately the taxpayer has to accept that social Housing is needed and will need to be subsidised by the taxpayer.
@@paulgbar666 I have no issues with developers having a profit motive as long as those buying are buying to live in. I think most people are on the same page in that regard.
@@barry9741 No any property built is offered on the open market. Anyone who can satisfy the vendor's requirements gets the property. Money is always the arbiter of who purchases property. No private property should be restricted in who can buy. If it means FTB outcompete all other prospective buyers then fair enough. If LL outcompete all other buyers then fair enough. If corporate LL outcompete all other buyers then fair enough. He who is prepared to offer sufficient monies to persuade a vendor to sell then fair enough. Money talks. The status of any buyer is IRRELEVANT.
@@jonsnow6741yep! People fail to realise that this is a massive problem for the renting sector. Already loads of complaints about lack of property to rent, and obscene amounts of viewings, crazy offers for properties that are around. There have been articles about LLOYDS bank looking to buy something like 10000 homes to rent by 2025. So maybe they’re looking to buy these properties at discount amid currency devaluation through the sticky inflation.
Feedback: I think giving graphs more screen time would be useful. Have to stop the video to understand the graphs, which is really annoying. Maybe you can put your face on the corner while the graphics on.
TLDR; the market has clearly hit a ceiling and there's only one way for it to go. Rents cannot rise beyond the affordability of tenants and landlords have no profit absent capital gains, which won't be coming because there are no 'investors' left to keep inflating the market.
@@muratdagdelen8163 not with Section 24. I can't stand high rents but I can't blame cash buying landlords for trying to cash in on the high rents at the moment. There are gains to be made. I think it's ethically very suspect to cash in on peoples misery to be honest but admittedly that's sadly the nature of our economy.
If people don't feel confident in investing in the markets buying houses is the way to go government needs private landlords for the growing population and taxes will be lowered to encourage new landlords
Building more houses is entirely doable if the political will is there to drive it through. Furthermore, it presents the opportunity to incorporate good insulation and readiness for green energy.
what do you mean by average rents? Median or mean? on a room or on a flat? On a one bed flat or a studio? This sounds meaningless unless you explain the meaning
Really? When first married I lived in a rental. It was disgusting - damp, mouldy, and rat infested - but in those days there was no real rental market and we had no choice. I am now fortunate to be able rent a house out, which I inherited from my parents. It’s a lovely, modern, warm home, just as I want it to be for my tenants. However last year it cost me £15,000 to repair the damage I was left with from the previous family - smashed windows, light fittings ripped off the wall, carpets ripped to bits and drawn on, smashed mirrors and walls where a fist had gone through, ditto with smashed windows etc. Everything was a total mess. I had it all repaired, redecorated throughout, put down new carpets, all so it was lovely for the new tenants, who are a really great young family with children. This year there has been a leak in the roof. It’s taken out all this years profit - and then some - to get it fixed. At the moment I’m certainly making no money, only a loss. I can sell up, invest the money, and get 5% clear - money that as someone retired and only on a pension I could really use. But if I sell up what about my tenants? Where will they go? My rental agency tells me they are inundated with folk desperate for a rental property because so many of their long term landlords ‘ the good ones who look after the property and have kept rents low’ are doing exactly that. Government policy is forcing us out. I used to get 3 months council tax free between tenancies, all of which it took to repair the damages from the last lot. However that’s gone now. Have to pay £1800 each month it’s empty - which would have been the time - and money - I’d spend on improvements between tenants. Can’t afford to do that now. Living on a pension I simply can’t afford to take that loss each year. I greatly fear that the changes planned will have the opposite effect. How would you feel if it was you?
Why should YOU determine what an asset should be!? A property can be a home and an asset. There is no robing right that a property should just be a home. People wish to exploit their assets which is the right of every homeowner to do so. Many homeowners remortgage to carry out home improvements. Many did this but instead used the remortgage monies to invest in a BTL property. There was their prerogative to do in a market economy. It is standard business practice to leverage increased asset values to make profit.
@paulgbar666 Well firstly I DON'T determine what an asset should be. It's just an opinion. And I agree it's their prerogative to be a landlord. But I don't think it should be a n option. I believe homes should be lived in. Not rented out for profit. I believe more affordable homes should be built for the mortgage market and more social houses should also be built so private landlords can be squeezed out the market. They're parasites and I disagree with the business model. So I'm there-fore I'm glad they're beginning to struggle and being a landlord is beginning to be less affordable. A lot of housing benefits are used to top up rents for the private housing market. I'm not a fan of that either!!
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My uncle was chartered in the same profession that I am but he didn't have to go to university first. In his 20s, he built his own house in the countryside and provided for a stay-at-home wife and a family. I have three degrees, the same profession as him but I live alone in a shared-ownership flat of a social landlord. I am not the only one in this boat but my case says it all: the devaluation of jobs, money and qualifications. I am thinking about going to the Middle East.
I'm sure many young people today don't see this contrast, they know only the time they live in. There are so many parts to society which have led to this change, the expansion of universities since around the 90's where many more people get degrees now it does devalue them. Governments just seem so keen on seeing house prices rise and do anything to fuel them with help to buy for example. Population increase is another keeping demand high.
Qualify as a plumber, £500-600 a day easily to get.
there is too many peoples with degrees and not enough people who can work with their hands.
@@jerryorange6983 Except that's highly dependant on getting an apprenticeship which are like gold dust, I trained as a Plasterer couldn't find anyone to get an apprenticeship and know loads of would be Electricians and Plumbers that had the same issue.
@@hammerofolympia3716 -- on getting an apprenticeship - this is your local politicians and the goverment fault. Crazy idiots in power import people when they don't train locals.
What can we do when people vote for them?
@@hammerofolympia3716 whats the root of the problem? Are they afraid of training up someone who will leave?
Well I’ve been a Landlord for 40 years. Most tenants have been with me for many years. No mortgage and I keep my rents low. Main difficulties are getting tradesmen in for repairs. Trouble is I’m getting older and I’ll have to sell within the next five years, so any regulation coming from the government giving more tenant rights, though not affecting me directly, will make me think about selling earlier, as when the new regulations come in, I feel that there will be a rush of Landlords selling and therefore prices of property falling, as I’d be selling with the tenants in place, not empty properties.
I am one of these small landlords who has started to sell up, i fit right into what was said in the report, about to retire, sick and tired of all the hassle and the extra govt legislation, and of course with interest rates how they are i can sell up now and simply put the capital in the best interest rate account i can and sit back !!! God help the tenants though, they are in absolute nightmare land.
Same here.
@@bethzolin6046 Well done, let a young family buy their own home and secure a stake in society rather than pay your loan off.
@monkswhiskers3354 What a LL does with rent is none of the tenant's business
.A tenant pays for accommodation services.
It is irrelevant if a LL uses some or all of the rent to pay for a mortgage.
@@paulgbar666did you watch the video?
@@shanginadildoYep I watch all property related videos.
It took me 8 years to get out of the PRS.
This I wanted to do when dopey Osborne introduced S24 in 2016.
My mortgage lender was extremely obstructive preventing me from selling up.
BTL is a busted flush.
Personally I will be going down the lodger route which means I can EVADE any taxation.
I will have my own home and take in lodgers.
I will also have a narrowboat where I will spend a lot of my time.
At least once per month I will occupy my home.
I aspire to buy a 3 bed home near a canal.
I will not declare any rent in excess of the RFRA of £7500.
My home will not be subject to any tenancy requirements.
If I sell there will be full PPRR.
No EPC compliance required.
I will be able to make untaxed profit of about £23000 plus my pension will leave me with a rather nice untaxed income.
I will generate far more lodger income than I ever achieved with tenants.
The new investment strategy is lodgers.
Many LL will reduce their leverage to zero on one property.
Then lodgers may be taken on.
Of course the lodgers can't be families.
Only single unrelated lodgers will be taken on and will make more profit than with tenants.
Lodgers used to be far more prevalent back in the 60's when there were ridiculous tenant regulations which meant there were very few LL.
We could see the return of the lodger as a business model.
After all there are only about 28 million spare rooms in England!!
This is all by design.
The aim is to consolidate property ownership into a few feudal conglomerates.
There is one letting agent I know of that is buying up as many letting agencies as possible-big ones and independents. Why?
So that they can grab the market share forcing landlords to have rent through fewer options and see their margins cut.
The government is doing the bidding of their paymasters.
Outstanding analysis as always. You put many broadcast journalists to shame!
And politicians.
Totally agree with you on the politics. We don’t need stamp duty free periods and other support for housing they just drive up demand even further. We need more supply. I remember then during the pandemic and knew immediately house prices were about to shoot up, which they did. Government has a track record of failing on the supply side of the issue. Utter incompetence.
Cheers Thatcher.
How was thatcher responsible for the 10 million population increase since 2000? Be it social housing, buy to let , mortgage OR own outright. 10 million more people need housing today than in 2000.
It was not thatcher who started/encouraged that population growth , was it?
@@patdbeanShe destroyed social housing. Strange that proper countries have been able to cope with an increased population. Your post brexidiot tory government has imported more people than ever before and done nothing to improve things over the last 13 years. Granted the last Labour government didn't help.
@@stephanguitar9778 the housing she sold off sill exists, it still houses people. If you are saying we should have built replacements , i agree....
what other western European country has had a almost 20% population increase since 2000? Can you name one? Over those years the french population has done from 60 to 64 million, the population of Germany has gone from 80 to 82 million, Italy 56 to 58...... etc etc
Who else has had the population growth the UK has had?
@@patdbean On 2021 figures, the UK had about 14%. Switzerland, Norway, Sweden and Spain had higher growth but France isn't far off
Switzerland 21.15% increase from 7.184 to 8.703m.
Norway 20.43% increase from 4.491 to 5.408
Sweden 17.46% increase from 8.872 to 10.42
Spain 16.88% increase from 40.57 to 47.42.
UK 14.32% increase from 58.89m to 67.33
France 11.21% increase from 60.92 to 67.75.
@@Talkathon408
Your 67.34 million UK figure is from 2021 at least another 1.2 million since then.
Also you are not picking comparable countries. The UK population density is 280 per sq. Km.
Spain 95
France 101
Switzerland 100
Sweden 26
Norway 11
The only one that comes near is Germany at 231
Keeping house supply low while increasing the money supply would never increase affordability - it will only fuel the speculation and keep normal people in debt. I never understand why 2% interest rates are being granted at first place for buying the home while actually this free money should be given to only home builders and something what is fundamental to economy like - Research, education and infrastructure development..
Turning a human necessity into a spiv’s paradise will be the undoing of this country.
It hasn't undone germany and usa.
100%
I'm interested , what do you say about cities like Berlin, where most of the population rent?
@@kth6736Germany has rent regulations. Let's wait and see what happens in the US, crisis is brewing.
In Germany, tenants can make repairs (buy a new washing machine for example) and then deduct the amount from their rent.
Would be amusing to see the reaction from British landlords if that law was adopted.
Landlords are unhappy with the hassel and the returns.
People cant find a home and struggle with far to high rents.
Who is to blame? Politicians obviously.
Restrictions, provisions (this energy saving bs) and artifically limit the supply of land available to build mixedused multi-family homes, causes the people to suffer.
Good intentions, but as a result bad outcomes for everybody, except the politicians themself.
They are cashing in all the way in this process.
The energy efficiency of the old housing stock that was built for the poor at the first place 100 years ago is already a disgrace. We should not let living standards to be any worse or people will vote with their foot.
Why anyone would be a landlord is beyond me. With increased taxation, regulation, tenant rights, registrations and even when you sell (GCT) just simply avoid 🤦♂️
Most stressful way of making a small living, with one property. Never again...
@@anneb5603 good luck to the government building enough social houses 🤦♂️
yep I rentted out my old house for 10 years, sold before covid due to tennants trashing the house and owing rent, agency stole £7k in rent and ran away leaving a bad tennant in my home, and then the gov started with all their tax changes and laws in favour of tennants over me.
Then the sale took 8 months to go through with no tennants and all the costs involved to be covered by me for an empty house.
NEVER again.
Yes, go and do something productive with your capital like start a business/employ people, much more rewarding for everybody.
@monkswhiskers3354 Nah as a former LL I would NEVER do as you suggest.
I could lose all my capital in one of your suggested ventures.
So I invested in rental property.
I consider property as a safe bet
Now have sold up due to all the anti-LL policies.
Now my capital sits in a high interest accounts which I would suggest is socially useless.
Previously my capital was socially useful in that it housed 16 people.
Now it houses nobody and sits socially useless in a savings account.
Mortgages are through the roof. There’s no money in renting so selling up and reducing mortgages burden is all we can do.
When interest rates where low and you could only get 0.5% return on 100k cash invested in a fixed period investment at a bank, but you could get a 5% return on a 100k one bedroom studio flat, then obviously it was more favourable to buy the studio flat and rent out. Especially if you also had potential future profit from uplift in value of the property. Now you can get 5% with a fixed term investment. The studio might now might be getting 6% but its value is dropping - plus you have the hassle of managing the flat, repairs, maintenance, cost in time and money of tax return. So as things are property investments are not attractive - especially to small investors who do it as an additional income source.
@@1414141x correct. It worked when interest rates were low. It even worked when the interest was a business expense and was offset against tax, but now I am paying tax on full rent income with no capacity to offset a mortgage which has increased x3. Makes no financial sense.
Bit of a Doom Loop building up. How are these tenants going to afford even realistic rents when real wages are falling again?
Best they can do is rent a room between 3 people all on different shifts
The other thing putting people off buying to let (which is something I did, sold out 2 years ago) is if the tennent decides they are staying and don't pay, it is almost impossible to remove them, the legal system pretty much on the side of the tennent staying and not paying, VERY costly legal fees, court gives eviction date, tennent doesn't leave or pay. My Father is going through this at the moment, it's been a year now, no rent payments, ignores court orders to pay or leave. Having to goto high court to get bailiffs to forcibly remove them. the system is a joke there is no way I would buy to let again in the UK.
good point. That will likely get worse as government protects them though landlords may get paid to keep them as during Covid?
@@valuetraveler2026 improved Section 8 protections for landlords are to form part of the new Renters (reform) Act. The basic premise of busby's is wrong though. The UK does not have strong rental laws that protect tenants, it has some of the most lax laws in the whole of Europe. No other country has the equivalent of Section 21 for example.
@Talkathon408 You are totally INCORRECT!
The UK has very strong tenant regulations that favour them.
These regulations are scheduled to become even more tenant favourable
That is why LL are selling up.
You simply can't prevent LL from selling up due to the one sided tenant regulations.
This is scheduled to become even worse with the abolition of S21 etc
It is going to ve disastrous for tenants.
It won't really affect LL beyond being very annoying that they gave to sell up etc.
LL in the main DONT need to be LL.
They can invest their capital elsewhere
There is really no more financial incentive to remain a LL.
That is why I sold up.
It doesn't seem to register with the PTB that LL DONT need to be so
When those LL sell up who is going to house the millions of homeless tenants!?
Same in Canada. So unfair. Most of us landlords are just hardworking people trying to get by. No one knows this until they have to go through the system with a dead beat renter.
@@paulgbar666 Look, no country in Europe has the equivalent of Section 21. Tenants have much stronger rights in pretty much every other country in Europe, countries with strong rental markets like Germany. Landlords in the UK don't require any professional qualifications either. Well apart from Wales and Scotland.
We're just in a period of transition at the moment. The houses aren't going to magically disappear, they will be bought up by more corporate landlords and hopefully standards will improve, not this mom and pop 'accidental landlord' bullshit that we have now.
Also let's not forget how many landlords don't declare, well didn't until relatively recently. Such landlords are fraudsters that should have had their arses handed to them by HMRC by now and would have done so in most other European countries. Literally billions of pounds in tax evaded but then HMRC do have 20 years to pursue them.
Don't forget, solicitors fees have been going up too. Probably about £3k at the moment depending on complexity. Up north that's a significant portion of the value of a flat.
The limited company thing is probably more to do with Clause 24 than it is big corporate landlords buying up properties. It's likely mainly landlords with small to midsized portfolios trying to avoid tax that's driving it.
S24
@@Solihul886 The terms are interchangeable. Even the .gov website sometimes refers to it as Clause 24. Not sure if that's where it originated as I do agree that it's better to refer to it as Section 24.
Why shouldn't LL attempt to avoid the evil S24 turnover tax!?
In reality the costs of converting to a corporate entity from being a mortgaged sole trader LL are unviable.
Selling up is a more practical response.
OR converting to other forms of letting.
This is why STL has surged in popularity.
Though many STL are fraudulent as LL are still using their BTL mortgages for STL which is mortgage fraud.
Nobody is prepared to detect mortgage fraud.
Only a National register of all letting properties of all types will detect mortgage fraud as all LL would be required to provide Consent to Let letters from lenders.
That would cause many LL to stop letting.
If it was detectible more LL would have to sell up.
Which would mean even fewer properties available for STL and LT L.
@boxingtruth2167 you need to stop jumping to conclusions. I said they're leaving the sector to avoid having to pay the extra tax.
If we're talking about avoiding tax though, historically a lot of landlords have failed to declare which is evasion of tax. This practice was absolutely rampant before S24 and is probably still quite common.
If you take Newham for example, in 2017 it was found that half the landlords in the borough were failing to declare.
@boxingtruth2167 Also it's a complete joke to call this overregulated given you don't even need a licence or any qualifications to operate in it.
What this country need is a Government that believes in affordable social housing like the one I grew up in the 1950/60's. I lived in a pretty rural village in the South East my dad was the local postman. Now, even the wealthiest house hunters have to dig deep to afford a home there. No hope for the young or working class being able to live or bring up a family in such a place. We will just end up with ghettos for the rich and poor.
I totally agree, we have the right Government,Rishi Sunak will bring back prosperity to this great nation and will make Britain great again !
Do you understand why RTB was expanded upon!?
Well I'll tell you.
Social Housing costs fortunes to maintain mostly because of the feckless layabout occupants.
So Govt determined to offload these exorbitant expenses onto homeowners.
This was achieved by bribing tenants to buy their council rental properties.
Govt avoided all the maintenance costs for over 2.9 million properties.
Of course what actually happened is that the feckless firmer Council tenants sold the properties and wasted the money such that many of these feckless are now back in council housing
Thise former council homes were invariably bought by LL as few other buyers were interested in buying.
So now LL legitimately make profit from those former Council properties.
In actual fact it has proven that retention of Council Houses even taking into account the excessive maintenance costs are still more effective than using HB to house such tenants.
The PRS is now too expensive for HB tenants.
It would be far more cost effective for there to be adequate Social Housing provision.
Govts have to accept that the lower social orders have to housed adequately.
The PRS with its justifiable PROFIT motive is not fit for purpose for lower class tenants.
Only Social Housing can achieve this
There needs to be an immediate restoration by whatever means of the 2.9 million properties lost to RTB.
Then over the next 10 years an additional 5 million Social Housing properties.
But these properties must NOT be allocated on alleged need.
They should be allocated on where you are on a list.
So if you are a single white male ahead of the list of an Afghan family then the white male gets the property offer FIRST.
Eventually the Afghan family goes up the list to obtain Social Housing.
Alleged needs based allocation of Social Housing just rewards the feckless.
step away from the higrade@@CUNDUNDO
@Tourdjore I state things as they are.
Nothing to do with any mindset.
The truth is whatever it is which is all I state.
Seriously are you suggesting I am NOT stating the truth!?
@@paulgbar666it shouldn't even be based on need or a list. It should just be much more common so that it provides competition for the open market to keep prices low.
Just sold our last BTL property. Complete this coming Monday. No longer a viable business model given all the headwinds landlords now face. All our tenants over 20+ years have been excellent and we improved every property along the way. Where will these tenants go in the future?
Did you get lower than you expected, due to high interest rate etc?
I'm in the same position and thinking to hold on, but not sure
Sold my last buy to let property this month (had 3 originally). Margins just not there anymore for high rate tax payers when mortgaging the property as well. Are better tax protected investments around.
Where do you invest now? Aren’t you in it for the capital appreciation?
Same here I have two properties to sell. As soon as tenants decide to leave they are gone. I invest now in my SIPP will retire in 5 years.
This is a development seen across most of the Anglosphere; people working and living in their cars or in tents.
All English speaking countries have failed in supplying housing, whereas Europe has made far more attempts to resolve the issue.
The UK is in Europe!
Have you watched DW lately? It's the German state TV outlet. It's had several documentary pieces over the last couple of years about the German rental crisis that's developed over the past decade. Same old story, regional authorities tinkering with the rules, 'rent freezes' and ownership models. Net result, rents up 50%, a black market developing with cash under the counter changing hands with agents so that even professionals can secure an actual rented apartment.
@@21michaelhillNot like that. Adopts a lot of American style social economical planning. Not like continental European countries.
Blackrock will own it all!
Well for me, I owned a property outright value aprox £200K, the capital value of the property was falling, tax, agent fees, general hassle, cost every time a tennant leaves to vet and find another, it just about made sense when intrest rates were rock bottom but now that £200K can earn 4.2% instant access or 6% on a 12 month bond, no hassle, tax taken care of, no risk.....no brainer!!! so thats what I did, was a very sensible move for me now no worries and £12,000 p.a intrest with no risk of the property value crashing or a nightmare tennant PLUS I really dont want to screw a hard pressed tennant for even higher rent, it just didnt make me feel good.
Problem is: inflation has been much higher than 4.2%, so you have been losing money.
@@mrjelfs3705 Not as much as I would have lost on the property, sold for £200K, would be lucky to get £170K now and thats if I could sell it, it was 100% a good decision, plus I have the money available if I need it PS I now get 5.4% on that money, so not really losing in any case. Also I will eventually be using that money towards something which is falling in price (a house), not food, gas or electricity, so it will actually buy me more not less, Inflation does not apply to everything
The major reason for the drop in rental properties is the increase in taxation (combined with interest rates) essentially you are effectively no longer taxed on profit made on rental income, you are taxed on turnover (unlike any other business).
This means that for the vast majority rental peoperties that would previously have been profitable to own are now actually costing the landlord to own on a monthly basis.
The only ways around this are (1) Be rich enough to be able to buy and own properties outright, with no mortgage. (2) wrap the rental in a limited company, which in all honesty is only worth doing if you intend to operate a portfolio of rental properties.
The outcome then is that: (1) only the wealthy elite and corporate companies are able to rent properties effectively now and "accidental landlords" who might only rent one property their entire lives, are squeezed out. (2) Due to 1, there is less supply of rental properties, causing the rental market to spike, and price reflects availability. Also who do you think is more likely to provide the better tenant experience ? A fairly average accidental landlord who only has one property to focus on, and still maintains the house as if it were their own abode ?, and has a vested interest in keeping a long term tenant happy there ..... Or a person/company with a portfolio of multiple properties to run, who is entirely focused on the bottom line, and is business driven ?.
Still. The legal and taxation changes worked out well for the hugely wealthy didnt they ?. I guess its just a coincidence, thanks government, great work.
George Osbourne Screwed the Landlords inn 2016 ( christ knows why ) then Jeremy £unt who is surprisingly a commercial Landlord with 7 properties in Southampton screwing it for the small landlords ... 20 years ago I was thinking of buying one or two properties ... oh yeah then tax relief from BTL mortgages , more tenants rights and EPC to get older properties up to C standard - costing thousands to upgrade ... Jeez .. you might as well park your monies in a 5 year Bond giving 5% ... so much easier and less hassle !!!
As a landlord, I am flexible. I am prepared to make rental profit or capital appreciation. When I have concerns about both I beat a tactical withdrawal.
No mention of the rent cap 3% max in Scotland ? Initially no increases allowed for 6M and now 12m maximum increase capped at 3% or 6% in the Social Sector. Landlords that are remaining are increasing prices by 20/25% when a tenant leaves so the caps have not worked.
In ancient times, slaves were rowed on galleys. Now it has taken a “civilized” form,
you are provided with a lifetime housing loan. (the cost of this real estate exceeds its real value several times).
Because they are making it uncomfortable for small landlords so big hedge funds can buy the properties. Then renters can be more uncomfortable.
Landlords need to sell to save their capital. They know that values will still fall and if they have high gearing they may lose their capital. On the other hand owner landlords can weather the storm and dont need to sell. In the early 90's new builds were taken over by social landlords which kept a good part of rental provision.
Small landlord in Wales for 15 years. Tenant has 8 times refused access to inspect property. Formerly I could issue a section 21 notice giving 2 months notice. Now it’s 6 months!
Everybody forgets that landlords are volunteers replacing the failure to build social housing. If that was reversed BTL would disappear..
Time to sell up and invest elsewhere. Unintended consequences of short sighted legislation.
Govt need to reinstate interest offset relief and the 10% wear and tear. Also radically cut the 2nd property stamp duty, and raise the CGT threshold (not cut it to 3k next year). They literally need to encourage MORE landlords and not sting them, > IF < they want rents to reduce (and the govt subsidy bill to reduce) IE for supply to increase, not decrease radically. You need to send this video to Jeremy Hunt.
He'd only ignore it - lives in his own little Westminster bubble like the rest if the wan kers down in Londonistan !
It's never better or cheaper to rent. Let's go forwards 20 years, those rents you mentioned at £1250 a month will be £2500, yet that same home on a mortgage would roughly br £1000 a month for the life of the term.
So the renter now needs £2500 a month and owns nothing.
Yet the person with a mortgage still pays £1000 yet own a 500k property.
This WEF nonsense about owning nothing and being happy is downright disgusting
Housing is the greatest policy failure of the last 40 years. We need social housing for rent without right to buy.The problem is if Labour do this, the Tories will reverse it and depressingly, it’s a vote winner
I can't stand the current Labour Party but maybe they should use the recent RAAC controversy as an argument to level housing estates across the UK. Plenty of examples of ageing, poor quality social housing that aren't very fit for purpose and very inefficient use of space.. The govt' could reduce costs by embarking on a mass building programme and simplifying and standardising designs. Lord Adonis has been making this argument for over a decade now.
@@Talkathon408 The poor quality of social housing was a key reason for the government wanting to get out of it. Rising costs and liabilities at a time of high spending deficits made it an easy decision, that coincided with the then-government's political instincts.
@@user-dq8ey6mi4f That's a bit harsh, but what is happening is that when councils build social housing they only have a tiny budget, so very little in terms of volume, gets built. The most vulnerable on the council house list go to the top, which makes sense, admittedly some may be unsavoury characters, but this is the nature of poverty, it is a brutalising experience, so you can understand why some people are driven to crime and their anti-social activities will, of course, be more visible to you. You don't see the well behaved residents, as they are not as visible. Anyhow, this is sort of beside the point, there simply isn't enough social housing being built, because to do so would bring overall house prices down, which neither Labour nor the Tories really want. But if we, as a society, still hold dear, the values of fairness and prosperity for all, we need to start building now and whilst we build, the state needs to buy up existing houses and make them council houses.
@@user-dq8ey6mi4f But that isn't really true is it? Those at the bottom of the income scale work incredibly hard for very little money. Value in a product is inbued by working class labour, which is then appropriated by the capitalist, whereby surplus value is taken by the capitalist, when a product is taken to market. The owners of production are almost always rewarded with the spoils of profit. It is the basic premise of capital accumulation. Under the capitalist mode of production, money (rewards) flow upwards (to business owners) away from the productive class (the producers, the working class). I'm not the sharpest tool in the box, but this is pretty clear to me as the basic function of a free market economy.
@@user-dq8ey6mi4f OK, firstly, the poor don't get free homes. Most housing in the UK is privately owned and those who do qualify for the few council houses that there are, still have to pay rent. If you look at the overall statistics for where outgoing welfare payments go, a big chunk is in pension payments and another big chunk is in-work benefits for working people where employers have failed to provide a living wage and need topping up by the state. Britain has an endemic problem with not providing the skills for people. Often people have to rely on their own resources, but if you are poor, it is very difficult. Furthermore, many employers refuse to train lower grade workers, so this means they cannot progress in the workplace. If you look at the cosy deals the government makes with rich people and the massive tax loopholes still in place it is the rich that get the free ride in the UK, not the poor. We are the ones that work hard to create prosperity. we work in your factories, we work in your care homes, we work in your offices. Our labour is extracted from us, keeping us poor.
This is simply a supply vs demand.. but governments have been taxing landlords harder and harder, plus in courts allowing tenants to not pay rents for over a year in some cases while landlord is forced to pay fees to fix.. who would be a landlord now? Everyone is selling up and only the brave are left as they understand the rents will rise as a result
Well said and thankyou. During Covid my tenants threatened not to pay rent only because the government said they can. They had a whole year of full salary without going to work only the government told them they can. Of course I was close to selling.
@@身不由己人在江湖-p2y landlords have been treated as poorly as possible and this has been engineered (upping taxation of full rents, upping EPC standards, taking legal rights away from landlords) as a result the private rental market is a mess and now big businesses are applying for, and winning planning permission to build huge “ghettos” of rental stock that can make the gov seem like they are being proactive, while also privatising the rental market for big firms.. i believe biggest players currently are john lewis, lloyds and a few others, all have no doubt been given the inside scoop 3-5yrs ago… money talks
@@身不由己人在江湖-p2y Same story in Canada. Lazy losers rushed not to pay rent, because they could get away with it, and collect government handouts during COVID are the same ones complaining about inflation and demanding affordable housing not realizing it's a problem they've helped create. The sheer stupidty of the public and government cattering to these idiots is on full display in the West as of late.
Landlords are a punchbag for everyone to throw combinations, governments, banks, councils and tenants.
HMO regulations are now making many perfectly suitable properties not fully lettable by disallowing bedrooms on the wrong side of a lounge !! These layouts are original and not conversions.
The rental market is not a long term stable business
Such a great overview much appreciated 👍
I put mine on the market today, The tenants have moved out but can't find anything anywhere! For every viewing, they are seeing 10 offers! Councils are inundated with people living on the street! I am tired of being blamed for the housing shortage and the cost of compliance! Over to you Gove, you better deliver the electoral what you promised
I just had over 50 applications for my flat in 7 days. People kept paying the deposit before even viewing which I had to reject.
@@DP-co8ro This has a lot to do with Government policy and their war against small landlords than your property I am afraid. Unfortunately, there is no quick fix, we have to take the pain, some may never come back, but I can guarantee you this, next set of government will ALL be pro home building
i really don't miss your any videos,, thank you soo much
Excellent analysis with credible data. Thank you!
Good. House prices will come down.
Unless you own the property outright that you are renting out the work involved is not worth
the hassle with the higher savings/ investment rates now available
We are renting our London home as we moved north. We also own one (tiny) flat each ( none of those are mortgaged anymore). Even without mortgage, the cost, especially charges for the flats, are forever increasing. Mine is near 3000 pounds a year, plus repairs, decoration and upkeep every time I get a new tenant. My husband’s flat is even worse at nearly 4000 pounds charges. Add agency fees, and all other fees etc…. The profit done is marginal even without mortgage. We would make much more now in placing all in some building society getting 5% a year. Hassle free. We are looking at selling too.
Private equity are wealthy folks pooling their money. The top 1% have the wealth to invest in all forms of assets.
After only 10 days this article is slightly out of date. We have had a base rate freeze. Maybe mortgage rates will start to edge down. Lenders should be noticing less appetite for their expensive money. I can get 8% return by paying down my SVR mortgages. I can’t remortgage until I comply with rent ratios and equity ratios demanded by lenders. By selling some properties I can use some of the proceeds to pay down other mortgages. Of course the government takes a capital gains tax first. Sorry renters, but I don’t see any prospect of increased supply or falling rents for a few years. With property still expensive and mortgages expensive and hard to get, renters are in an impossible situation currently.
So, when a landlord has had enough and decides to sell who buys the property - probably another landlord ! I would like to know if this is the case or not because if landlords purchase off 'retiring' landlords, then the rental stock is not decreasing. Only if a property that was formerly let is bought by people or person intending to live in it, will reduce the rental stock. Does anyone know if this is what is happening or not ? I tend to think not.
If you own a property, that you mortgaged and paid for fully or partially, then you move in with a partner or family member and it becomes vacant, then yes by all mean rent it out.
But buying up properties on interest only mortgages just to rent them out and live off the difference isn't a profession. Its leeching onto people looking for a place to live. That's the definition of a parasite. A "Landlord" should not be a profession. Taking advantage of a broken system.
If these parasites didn't exists, people will buy the portieres they rent and live happily ever after.
Are Tesco leeching off people by selling groceries? Utility companies by selling electricity?
How are rich people going to make money?
'rented my house out through a company called Leaders after months of no rent being paid finally managed to get my house back no help from the letting agency
And what I walked into was a bomb site ,house was wrecked
Why would I want to rent a.house out again
The housing market is broken
For over 35 years
In the area I live in £300k houses that a landlord would typically rent out (3 bed terraced houses ) and have a
£200k-ish mortgage on the rents have gone from £1100pcm in 2019/20 to £1600pcm plus now.
So I’d say the LL’s in my area may not have gained any extra profit but their able to pass the higher interest rate mortgage costs on.
So if interest rates fall back a bit as you’ve predicted they will?
LL’s will be in a bit better of a cash flow profit situation.
What’s section 24?
@@tomjones8715Loss of no fault eviction.
Not really. Wage increases of 25%+ are nowhere in the UK. Indeed, wages are falling again. So where are tenants going to find an extra 33%? Lol. Ease off the hopium.
@@BigHenFor No hopium mate just stating the facts of the market rents in my area!
@@tomjones8715 Not being able to deduct the cost of mortgage interest from the rental income!
House prices have gone down around 8% in my area. A large newbuild plot has increased the house prices by 80k in this time. Building houses won't get us out of this mess.
The gov hasn’t got the money. They need more landlords to foot the bill
30 years when all these renters expect the pension to cover what will likely be even more insane rent prices is when the 💩 will hit the fan.
Social housing sold off so basically the govment outsourced it to private, is more costly for shoddy unreliable supply... they still pay housing costs don't forget
I'd hardly say that the reason why younger generations aren't landlords is because it's not cool. That has nothing to do with it at all. It's entirely down to the fact they can barely afford one house, so a second is almost always out of the picture.
Sadly not a single mention of the short term (airbnb) sector that is one of the largest reasons for the shortage in rental housing. Landlords aren't selling up in droves we just don't see that in the sale price of houses at the moment.
For many especially in cities and rural areas it's far more profitable to short term let the property. Much less risk and potentially massive returns.
I've managed to avoid selling up as I use fixed rate mortgages so I can see increase in needed rents before they hit. I follow the philosophy that if a tenant keeps the house well then they should not have increase in rents if it can be avoided (mortgage rates sometimes makes it unavoidable)
I am concerned about the changes but I'm also aware that there are issues in the market. The changes won't resolve the underlying cause (only housebuilding can do that) but maybe it can help with slum landlords.
One of the reasons landlords are selling up is I think due to the crazy high rents that is reducing the chance of getting tenants.
A large portion of renters are on Housing benefit which cap the amount that they are willing to pay.
Estate agents have a big hand in recommending rent costs……based on a load of reasons and they are pricing the renter’s out of the market.
Meanwhile the smug government stands by and does little to help the situation🤬🤬🤮🤮🤮
One thing I never hear questioned is why are there so many renters? The answer is prices are too damn high
Why are they too high!?
Ans mass immigration and insufficient housing
@@paulgbar666 no the availability of credit drives them up. There are literally over 1 million houses for sale in the country supply isn’t the problem
@@jamesohara8464 Yes indeed there are plenty of properties they just aren't where people wish to live
So they rent.
You can't force people to buy even they could afford it in a certain area.
As you suggest people need more mortgage credit to afford where they want to buy
But you can't always get what you want!
Nobody has now he right to have a certain property in a certain area.
You always have the usual idiot whingers moaning they can't afford to buy whey they were brought up
As though they have some sort of entertainment to do so!!!!!
They aren't too high.
Prices are just a result of the prevailing market which is as it is for a wide variety of reasons.
This isn't the fault of LL.
They just respond to the market and price accordingly.
LL will not reduce their rents unless the prevailing market prevents them from charging the rents they are currently able to achieve
Many people have many suggestions as to how to reduce rents.
Rent controls aren't one of them as rent controls NEVER work.
Salaries are too damn low.
Who's going to pay these increases ? .... its not going to end well for either landlords or tenants.
I think rents are soring because landlords are selling, more selling less houses available on the market, simple demand and supply
Someone’s living in those houses.
Yes, fewer people per house or apartment than before.
Economic investigator Frank G Melbourne Australia is still watching this very informative content cheers Frank
We need laws to stop large companies buying homes and more smaller land lords, but when the goal is you will own nothing and be happy, you know that will never happen
All tax breaks have been abolished for individuals but still exist for corporations.
@@MrEdrftgyuji Wholly designed to make sure we plebs know our place......
You stated that a contributing factor was the sale of social housing under the right to buy. What happened to all the affordable housing provided by house builders and 106 payments from developers? Surely there have been tens of thousands built by now, where are these houses in the figures?
Greed. Simple .
Urm no. Educate yourself and make a sensible comment.
Greed and laziness. Nothing to "educate" here. Simple stuff
@@iLacoste1over population and depressed wages.
@@iLacoste1 You can't just say greed and laziness without justifying what you're saying. I rent houses out myself. What do you suggest I do? Make a loss? Give them away? I already pay way more tax per pound than pretty much any other self employed person or business in the UK as I cannot offset interest against the rents. (Maybe your anger should be directed at those that don't pay fair taxes like Amazon and Costa). Or maybe at the government for taking interest relief away and forcing up rents. Or maybe at the BoE for putting up rates and the banks profiting from it. It's not "simple stuff" at all.
And yes, I have a family to feed too.
I worked my nuts off for years to get the deposit to buy a rental in the first place.
What do you suggest I do?
As renting is now cheaper than owning a home, (as shown in this video), what do you suggest my tenants do?
Sensible answers please. 😀
@@travellingtom6091Give your houses to charity
In my experience landlords are just de leveraging. Not totally selling up.
Your experience is just that. 330,000 selling up have a different one.
they wish they could de leverage LOL . they are loosing money hand over fist now and can't sell as no buyers .
Lots of angry tenants here 😅
You are correct milky. My portfolio can easily implode and I can’t remortgage if the loan to value is too compromised. Contraction is a good strategy.
I remember not long ago I need to wait for tenants, even rent reductions. Now the pendulum swung and tenants do not like it. It will swing back some day and be your turn again.
Yes as tenants we have had to pay a 40% increase to cover the new tax system for buy to let landlords
Rents are causing a homeless situation. Rents way too high. When rents are more than a month's income ,something will go bang.
You’ve mentioned net migration to the UK. Although, it means higher demand for housing but at the same time wouldn’t that mean more human capital which impacts overall GDP long term? Would be great to hear your views on that point.
Net migration can have economic benefits especially when you have ageing population and labour shortages. But, it exacerbates housing shortage.
Gdp per person is going down and decreased significantly over the last 20 yeasrs as many of the new arrivals have poor education from the 3rd world... GDP is not everything if the cake gets divided by more people.
@@eltax100 poor education from the 3rd world? Not really possible wiht the Immigration and Social Security Co-ordination (EU Withdrawal) Act 2020. To be honest, the requirements for a work visa are way too strict currently and it's damaging our economy.
looking around do you see an increase in GDP likely in absolute terms not just per capita?
Great presentation.Thanks.
8:29 after finally getting away from slumlords and now living in a "commercial private equity" owned building - yes it's a good thiing for renters 100x over.
The myth of greedy landlord debunked. Very good analysis. But government can reduce regulations and taxes and thus the cost of housing.
First net immigration has been going down by over 10% annually since 2018 so less of an effect on the market. But what you didn't mention are the number of mortgage paying owners who have to move for their job (promotion, career etc). These have the simple question: sell up and cash in and get interest or do I invest in an uncertain market. A no brainer for 2023.
I wanted to sell my East London house a bit more than a year ago for 850k when rent was 4k. Now rent is 5.5k so i would not even consider selling it for 850 anymore. No rush here, cheers guys!
Time to invest in companies manufacturing tents.
Any scheme for rent to buy
Landlords are not generic, there used to be a speculative player element- people buying using interest only and planning to be landlords for 1 or 2 years- that has vanished now, due to stamp duty and the housing sell off. 20 years ago the plan was to buy then use the tenant income to repay the mortgage - if you took a long view, after 10 years the tenant would have paid off half the mortgage. With interest rates today, this takes a lot longer. A big deterrent is the UK has become unreliable/ untrustworthy, one of these countries with too much debt, that changes its mind every 5 minutes. You used to be able to rely on EU migrants coming in and stable govt policies. These days, the UK govt is like Henry VIII - basically taxing /raiding any sector/ business area that is doing well. The tax rules change overnight and the business plan goes out the window. France has been a big beneficiary of Brexit and prices in Paris have rocketed, maybe too high. When I started as a landlord in 2001 my leverage was c. 85% now it is 5%. If I inherited a property I would rent it. I am not a buyer now. A lot of people my age (>50) have a similar thinking, they wait to inherit.
very useful - thank you.
Great video mate 👍
I mean, I'd HOPE it's evidence that the good landlords are leaving the market, unable to live with their consciences having to put rents up so high due to the mortgages.
To be clear the hope there is that there are good landlords. I don't actually want the good ones to leave the industry cos obviously that only leaves bad landlords - I am just hoping this is evidence that "good" landlords are out there.
I rented out my old house and sold after 10 years a few years ago due to tenants trashing house and gov changing rules and also agent stealing £7k in rent, was an absolute ball ache but I did everything I could to make it good for the tenants, I put new boiler in , new double glassed windows and fixed everything straight away as it broke, I had no mortgage so I charged minimal rent too,
after that experience I am not interested in doing it for a living with multiple properties and mortgages on each one.
I do know a few landlords who have a lot of properties and they are always stressed, and they do the absolute minimal to each house because they are just in it for the money and every pound they spend fixing up is less profit.
No LL needs to have any sort of conscience.
They are business people seeking to maximise PROFITS for their property assets.
That is how a market economy works.
LL legitimately increase rents to achieve the maximum profits.
If LL are unable to do so even to cover existing costs then they sell up leaving homeless tenants.
That is what is happening now.
The Govt imposed burden of unsustainable costs is resulting in LL selling up.
It cost me £15,000 last year to repair my property to make it suitable for my new tenants after the previous one. It’s already cost me all my profits this year due to a roof leak. Given I can get 5% on an investment. I’m very close to selling up, given the new legislation coming in. Think that will be the tipping point. Just worry what will happen to the lovely young family who currently rent my property.
Have you considered whether your worry would be reduced if you gave them first refusal on purchasing the property and accepted lower than market value for it?
Cos that's what a good landlord would do.
It's not what an *investor* would do, but then I think the entire mentality that teaches property-is-always-an-investment is one that is all built atop a house of fundamentally flawed cards anyway.
Investments can go up and down, terms and conditions apply. Never invest more than you can afford to lose.
Why would property be any different?
@jezlawrence720 Only a idiot LL would not attempt to obtain the best sale price achievable.
LL are in the game to make money when they enter and exit the PRS.
A good LL would attempt to maximise profit.
Usually that means giving NTQ to the tenant.
Rarely is a top market price achievable with a tenant in situ.
That is why a vacant possession property sells usually for top market price.
A good LL considers himself FIRST
Tenants are of secondary importance.
If a LL is able to achieve a top market price with a tenant in situ then fine.
This very rarely occurs.
And individual landlords will be replaced by institutional real estate funds as in the US who have zero respect for tenants, and treat them purely as a profit line on a balance sheet.
Mate, no point sourcing and making charts if you flash them on screen without allowing time for digestion
Those landlords who will survive are those who do not have mortgages. Those who bought properties once designated as slum clearance in 1970s for what is now less than 6 months rental income are surviving. The challenge will be how will their children cope when they are gone i.e. will their estate planning work in practice.
It’s a lot of stress and trouble.I rented out a flat , then a house years ago and it was bad 25 yrs ago.Now people don’t respect stuff so it’s much worse.The only way to deal with all this crap is a collapse of the economy and no welfare.
Part of the move to "Corporate Ownership" is driven by landlords who want to be able to claim mortgage interest tax relief. If you operate your rental business through a 'company' then business expenses such as financing-interest are allowable. Corporate purchasing also pays 3% minimum stamp duty. So the government has removed from the individual a number of easements which are available to companies and hit the individual with all the 'extras' which corporates have to handle. The downside is that corporate mortgages require typically smaller LTV ratios and may not attract the best interest rates.
Meaning for people like £eremy £unt ... a minister of some sort whose got money and it makes it easier .
Landlords shouldn't be profiting off homes in such despicable conditions anyway. Especially in London.
Always london my advice to you is leave to somewhere you can afford
@@paulmessenger9836 Thanks for the advice. I wouldn't buy somewhere simply because I can afford it anyway and luckily, I don't value property just because the market says it's worth X amount.
The bankers always win. First, they accelerate inflation by distributing loans to everyone, then they sharply raise interest rates on the loan.
Politicians lobby the interests of bankers in order to make a fortune in a short period of time.
Bankers promote their people into politics, so politicians cannot and do not want to solve the problems of the people.
I only have two properties no mortgage so don't fall to interest rates. I don't raise rents on my trusty tenants who have been with me for years. However as soon a they leave i'm selling up. Had enough.
I don't make much profit out of the properties apart from capital growth.
Don’t know how you work out renting is cheaper than buying. The rent most renters pay is at least as much as the mortgage the landlord is paying and usually more. All the rent that renters pay is just throwing money away that could have went towards a mortgage- if they could get one. Regardless of how long they have been renting, there has been no increase in their wealth. However if they had bought their own property, all of the rent would have went towards paying off the mortgage. At the end of the mortgage the property is then worth considerably more and they no longer have a mortgage. The renter though, would have thrown away 25 years of money that could have went towards a mortgage and have absolutely nothing to show for it. Still don’t own a property and all the rent they paid, went to paying off the mortgage for the landlord, who now has a large asset. The landlord had to do very little work to receive this unearned asset, other than take out a mortgage and some administration work. I’m happy for landlords to operate in the housing market and increase their assets substantially in the long term, but please stop telling first time buyers it’s cheaper to rent than buy. It’s not cheaper in the short term and certainly not cheaper in the long term. If that was the case, nobody would ever think of buying a house and we would all rent. This is a myth spread by letting agents and landlords and has been debunked many times.
I have 3.5 years for things to change otherwise I’ll be selling up. Or at least trying to sell up!
Good explanation
Housing demand should NOT be confused with housing wants. In practice, housing demand is determined by little more than the supply and demand for mortgage credit.
Absolute twaddle there is massive pent up housing wants.
Wanting doesn't translate into demand unless the financial resources are there to create a demand.
Wages etc do not facilitate what lenders require for the commensurate mortgage credit required.
With continuing mass legal and illegal immigration property prices won't reduce.
There is a massive want for property but no demand as there are insufficient resources to pay for such wants.
If immigrants can only borrow £50K that's all that they will be able to pay, plus whatever they have saved. The more that people can borrow, the more they can pay, and this inflates house prices. However, the reverse process occurs during a credit contraction. We are just at very start of a credit contraction now. You may have noticed interest rates rising.@@paulgbar666
"Private equity firms replacing private landlords, whether that'll be a good thing for renters or not is an unknown question"
Lmfao. Erm we know the answer... it'll be horrific for renters. We need to get housing, a necessity, away from business and get rich quick schemes.
Complete bunk.
Housing will only be provided by the profit motive.
Social Housing is a Govt subsidised business model
@@paulgbar666 the market can't be trusted when it comes to basic necessities that people need. We've seen this time and time again. Look at the chaos in water now.
@@barry9741 I'd agree that when private provision becomes too expensive then Social provision which isn't subject to the profit motive needs to come up with affordable social provision.
But such social provision is very expensive.
Unfortunately the taxpayer has to accept that social Housing is needed and will need to be subsidised by the taxpayer.
@@paulgbar666 I have no issues with developers having a profit motive as long as those buying are buying to live in. I think most people are on the same page in that regard.
@@barry9741 No any property built is offered on the open market.
Anyone who can satisfy the vendor's requirements gets the property.
Money is always the arbiter of who purchases property.
No private property should be restricted in who can buy.
If it means FTB outcompete all other prospective buyers then fair enough.
If LL outcompete all other buyers then fair enough.
If corporate LL outcompete all other buyers then fair enough.
He who is prepared to offer sufficient monies to persuade a vendor to sell then fair enough.
Money talks.
The status of any buyer is IRRELEVANT.
All those tenants who were bitching about mom-n-pop landlords not get to meet the corporate slumlords. 😂😂
i think they will instead reject full time work. and hasten the complete collapse of the economy.
Moronic. Mom and pop landlords are dodgy too.
@@888ssss govt will bring kn immigrants to do the work. Simple.
Many renters are secretly sub letting inorder to keep their costs down!
is it because they have shafted the landlords ?
The shafters getting shafted 😂
@@stephanguitar9778 All it does is make more people homeless and that is not funny
@@jonsnow6741yep! People fail to realise that this is a massive problem for the renting sector.
Already loads of complaints about lack of property to rent, and obscene amounts of viewings, crazy offers for properties that are around.
There have been articles about LLOYDS bank looking to buy something like 10000 homes to rent by 2025. So maybe they’re looking to buy these properties at discount amid currency devaluation through the sticky inflation.
Feedback: I think giving graphs more screen time would be useful. Have to stop the video to understand the graphs, which is really annoying. Maybe you can put your face on the corner while the graphics on.
The courts in Canada are a sh1t- sh0w. Rents will keep going up as landlords are driven out of business. Probably the same in Britain.
TLDR; the market has clearly hit a ceiling and there's only one way for it to go. Rents cannot rise beyond the affordability of tenants and landlords have no profit absent capital gains, which won't be coming because there are no 'investors' left to keep inflating the market.
I’m not selling and I don’t know any landlord that is selling, rents are going up and it’s a cash buyers market out there,
Buying houses with full cash is a dumb idea.
@@muratdagdelen8163 not with Section 24. I can't stand high rents but I can't blame cash buying landlords for trying to cash in on the high rents at the moment. There are gains to be made. I think it's ethically very suspect to cash in on peoples misery to be honest but admittedly that's sadly the nature of our economy.
If people don't feel confident in investing in the markets buying houses is the way to go government needs private landlords for the growing population and taxes will be lowered to encourage new landlords
Building more houses is entirely doable if the political will is there to drive it through. Furthermore, it presents the opportunity to incorporate good insulation and readiness for green energy.
what do you mean by average rents? Median or mean? on a room or on a flat? On a one bed flat or a studio? This sounds meaningless unless you explain the meaning
A house should be a home, not an investment. Im glad landlords are struggling.
Is ok as they sell up tenants be more happy i guess.
Really? When first married I lived in a rental. It was disgusting - damp, mouldy, and rat infested - but in those days there was no real rental market and we had no choice. I am now fortunate to be able rent a house out, which I inherited from my parents. It’s a lovely, modern, warm home, just as I want it to be for my tenants. However last year it cost me £15,000 to repair the damage I was left with from the previous family - smashed windows, light fittings ripped off the wall, carpets ripped to bits and drawn on, smashed mirrors and walls where a fist had gone through, ditto with smashed windows etc. Everything was a total mess. I had it all repaired, redecorated throughout, put down new carpets, all so it was lovely for the new tenants, who are a really great young family with children. This year there has been a leak in the roof. It’s taken out all this years profit - and then some - to get it fixed. At the moment I’m certainly making no money, only a loss. I can sell up, invest the money, and get 5% clear - money that as someone retired and only on a pension I could really use. But if I sell up what about my tenants? Where will they go? My rental agency tells me they are inundated with folk desperate for a rental property because so many of their long term landlords ‘ the good ones who look after the property and have kept rents low’ are doing exactly that. Government policy is forcing us out. I used to get 3 months council tax free between tenancies, all of which it took to repair the damages from the last lot. However that’s gone now. Have to pay £1800 each month it’s empty - which would have been the time - and money - I’d spend on improvements between tenants. Can’t afford to do that now. Living on a pension I simply can’t afford to take that loss each year. I greatly fear that the changes planned will have the opposite effect. How would you feel if it was you?
Why should YOU determine what an asset should be!?
A property can be a home and an asset.
There is no robing right that a property should just be a home.
People wish to exploit their assets which is the right of every homeowner to do so.
Many homeowners remortgage to carry out home improvements.
Many did this but instead used the remortgage monies to invest in a BTL property.
There was their prerogative to do in a market economy.
It is standard business practice to leverage increased asset values to make profit.
@paulgbar666 Well firstly I DON'T determine what an asset should be. It's just an opinion.
And I agree it's their prerogative to be a landlord.
But I don't think it should be a n option. I believe homes should be lived in. Not rented out for profit. I believe more affordable homes should be built for the mortgage market and more social houses should also be built so private landlords can be squeezed out the market. They're parasites and I disagree with the business model.
So I'm there-fore I'm glad they're beginning to struggle and being a landlord is beginning to be less affordable.
A lot of housing benefits are used to top up rents for the private housing market. I'm not a fan of that either!!