How does Buy to Let END!

[spygirl]

3 minutes ago, No One said:

From FT, seems LL are either selling or banging up the rents innit

Private tenants in London are facing “increasingly unaffordable” rents, the homeless charity Shelter has warned, as high demand and a shortage of properties in the capital have led to intense competition to secure accommodation. The shortage has led to landlords demanding that prospective tenants compete in a bidding process for properties, while others were being asked for up to 12 months’ rent in advance, according to Ruth Ehrlich, Shelter’s policy manager. “We are hearing from people every day who are battling increasingly unaffordable private rents, who are struggling to find somewhere to live,” Ehrlich told the Financial Times’s Money Clinic podcast. “And when they do, they’re being forced to jump through really extreme barriers just to access that home.” Research from property site Zoopla found that rents increased by nearly 20 per cent in inner London in the first quarter of 2022, and by 10 per cent in outer London. That compares with growth of about 2 per cent in the first quarter of 2019. But agents said that in many cases much higher rent increases were being pushed through. “We’re seeing reports of 40 per cent rent increases year on year, and on top of the cost of living crisis, it’s pushing a lot of families into financial hardship,” said Greg Tsuman, director of lettings at Martyn Gerrard estate agents in north London and president-elect of trade body Propertymark. He added that he had “never seen anything like it for the 20 years that I’ve been in the business”. Supply of private rented accommodation has fallen sharply in London to a five-year-low after buy-to-let investors sold up or reduced their exposure during the coronavirus pandemic. On average, letting agencies had 11.8 homes to rent in the capital in the year to date, compared with 21.8 in the five years to 2021, a fall of 48 per cent, according to Zoopla. Richard Donnell, research director at Zoopla, said: “A lot of the focus has been on the sales market, but there’s actually an even greater supply squeeze in the lettings market and it’s worst in London.” Will, a 28-year-old renter based in east London, who did not want his full name used, said that trying to find a new place to live after being forced out of his previous flat earlier this year when the rent was put up had been “really hard work”. One letting agent asked how much he was willing to offer on a property for rent, warning him that others were offering £300 over the asking price. He said he went to seven viewings last week, adding that about half the properties he saw listed online had been snapped up by the time he responded. “I called for a property I saw listed the same day, and the estate agent said ‘I’ve already given out 30 spots for viewing.’” Some prospective tenants said they were being charged simply to view properties. Daniel, 25, who also did not want his surname used, said he was asked to pay a £600 deposit to view a three-bed home in the London Fields area, equivalent to one week’s rent. Tsuman said a lack of housebuilding and landlords selling up — initially because of the introduction of a stamp duty surcharge in 2016 and then to take advantage of soaring house prices during the pandemic — meant demand was far outstripping supply. “In May 2020, we had approximately five people competing for each property . . . May this year, that figure jumped to 35 people,” he said.

Id suggest anyone young n renting in London, just leaves it.

Cluskerfuck, about to blow - or implode.

 

 

[No One]

1 hour ago, spygirl said:

Id suggest anyone young n renting in London, just leaves it.

Cluskerfuck, about to blow - or implode.

 

 

Exactly, do work from home from somewhere well outside London. Midlands or above, or move in with your parents and save up. Maybe chip in for bills, 

If that's not an option find a job outside London.

If you are from abroad you'd be best off abroad. Working from wherever or working in another country.

[Wight Flight]

4 hours ago, No One said:

From FT, seems LL are either selling or banging up the rents innit

Private tenants in London are facing “increasingly unaffordable” rents, the homeless charity Shelter has warned, as high demand and a shortage of properties in the capital have led to intense competition to secure accommodation. The shortage has led to landlords demanding that prospective tenants compete in a bidding process for properties, while others were being asked for up to 12 months’ rent in advance, according to Ruth Ehrlich, Shelter’s policy manager. “We are hearing from people every day who are battling increasingly unaffordable private rents, who are struggling to find somewhere to live,” Ehrlich told the Financial Times’s Money Clinic podcast. “And when they do, they’re being forced to jump through really extreme barriers just to access that home.” Research from property site Zoopla found that rents increased by nearly 20 per cent in inner London in the first quarter of 2022, and by 10 per cent in outer London. That compares with growth of about 2 per cent in the first quarter of 2019. But agents said that in many cases much higher rent increases were being pushed through. “We’re seeing reports of 40 per cent rent increases year on year, and on top of the cost of living crisis, it’s pushing a lot of families into financial hardship,” said Greg Tsuman, director of lettings at Martyn Gerrard estate agents in north London and president-elect of trade body Propertymark. He added that he had “never seen anything like it for the 20 years that I’ve been in the business”. Supply of private rented accommodation has fallen sharply in London to a five-year-low after buy-to-let investors sold up or reduced their exposure during the coronavirus pandemic. On average, letting agencies had 11.8 homes to rent in the capital in the year to date, compared with 21.8 in the five years to 2021, a fall of 48 per cent, according to Zoopla. Richard Donnell, research director at Zoopla, said: “A lot of the focus has been on the sales market, but there’s actually an even greater supply squeeze in the lettings market and it’s worst in London.” Will, a 28-year-old renter based in east London, who did not want his full name used, said that trying to find a new place to live after being forced out of his previous flat earlier this year when the rent was put up had been “really hard work”. One letting agent asked how much he was willing to offer on a property for rent, warning him that others were offering £300 over the asking price. He said he went to seven viewings last week, adding that about half the properties he saw listed online had been snapped up by the time he responded. “I called for a property I saw listed the same day, and the estate agent said ‘I’ve already given out 30 spots for viewing.’” Some prospective tenants said they were being charged simply to view properties. Daniel, 25, who also did not want his surname used, said he was asked to pay a £600 deposit to view a three-bed home in the London Fields area, equivalent to one week’s rent. Tsuman said a lack of housebuilding and landlords selling up — initially because of the introduction of a stamp duty surcharge in 2016 and then to take advantage of soaring house prices during the pandemic — meant demand was far outstripping supply. “In May 2020, we had approximately five people competing for each property . . . May this year, that figure jumped to 35 people,” he said.

I think there is a possibility that the country is finally full.

I must admit I thought London was OK as a lot of them had moved out.

[Guest]

New prediction that average gas+electric bills could go past £5k pa next year:

https://news.sky.com/story/cost-of-living-latest-updates-uk-could-face-blackouts-this-winter-under-crisis-plans-12615118

If it happens this will absolutely destroy rents. I wonder how many BTLers have worked out what happens to their portfolio with rents reduced by £300-400pcm.

Edited August 11, 2022 by Guest

[Boon]

Sorry chap I find it snide how these estimates are coming out.

The £5k to me seems to be a crude calculation, taking the December/January usage and annualising it. Thus ignoring the obvious effect than when it gets warm you don't need heating.

Then the frothing poor take the figure as gospel and use it for further outrage.

[JohnnyB]

Next 12 months are going to be a clusterfuck as the BTLers try to jack up rents by £2/£300 as 'their costs' have gone up, whilst people have a similar hit to their finances from inflation and energy. Looking at a £600 delta compared to 2021 figures.

Suspect they will come across the interesting scenario where the only people  who agree to the overpriced rents are the ones with no intention to pay after month 1

[Boon]

Tend to think this might not happen in a large scale, especially in areas where the market is well defined to start with and the property type is in good supply. 

What might be at more risk is those large HMOs where utility bills are included. Can imagine those houses might be the ones having £1k bills if the tenants have no regard for usage (ie heating on all day, mining bitcoins, etc)

 

[Wight Flight]

1 hour ago, JohnnyB said:

Next 12 months are going to be a clusterfuck as the BTLers try to jack up rents by £2/£300 as 'their costs' have gone up, whilst people have a similar hit to their finances from inflation and energy. Looking at a £600 delta compared to 2021 figures.

Suspect they will come across the interesting scenario where the only people  who agree to the overpriced rents are the ones with no intention to pay after month 1

As I posted on the other thread one has just come on the market at £1,500 whereas it would have been £1,000 two years ago.

And whoever gets it will need to pay at least six months upfront so little risk to the LL.

[wherebee]

Wow.  That fine really would have told them it wasn't worth no fixing stuff, eh.

https://www.shropshirestar.com/news/local-hubs/telford/2022/08/12/property-company-fined-after-rising-damp-found-at-house/

 

[spygirl]

2 hours ago, wherebee said:

Wow.  That fine really would have told them it wasn't worth no fixing stuff, eh.

https://www.shropshirestar.com/news/local-hubs/telford/2022/08/12/property-company-fined-after-rising-damp-found-at-house/

 

Crossing threads ..

Sub continentals. Sikhs.

https://find-and-update.company-information.service.gov.uk/company/06230335/officers

 

[spygirl]

As theres a Dr - and I assume medical one - someone needs to petition the GMC to get him struckoff.

How could a supposed professional be let to run such a shoddy shithole?

Professional bodies remove people for less.

 

[Herby]

6 hours ago, wherebee said:

Wow.  That fine really would have told them it wasn't worth no fixing stuff, eh.

https://www.shropshirestar.com/news/local-hubs/telford/2022/08/12/property-company-fined-after-rising-damp-found-at-house/

 

On reading that, it seems the property was not ideally habitable. 

The fines are for the prosecutor, plus the legal costs, and £190 Victim Fee, but no sign of:

1. Was the property actually occupied

2. Was the occupant awarded anything for living in a poor condition?

[OurDayWillCome]

On 11/08/2022 at 20:08, Boon said:

Sorry chap I find it snide how these estimates are coming out.

The £5k to me seems to be a crude calculation, taking the December/January usage and annualising it. Thus ignoring the obvious effect than when it gets warm you don't need heating.

Then the frothing poor take the figure as gospel and use it for further outrage.

I agree, they should be calculating it based upon an average households usage during a 12 month period - that’s how the cap is supposed to be calculated. I just don’t see how the average household will be consuming approximately £600 of energy every month in winter to reach the £5k yearly tally. That’s insane! Last winter the average costs during winter months for a household was £100.

Edited August 14, 2022 by OurDayWillCome

[Bilbo]

Another lifeline Today's Guardian. Of course we pay....

Afghan refugees in UK told to find new homes on Rightmove

Home Office urges Afghans who fled Taliban a year ago to look for accommodation in private sector.

Link.

https://www.theguardian.com/uk-news/2022/aug/15/afghan-refugees-in-uk-told-to-find-new-homes-on-rightmove

 

[spygirl]

DOUBLE WHAMMY FOR LANDLORDS Interest Rate Rises AND Section 24

https://www.property118.com/double-whammy-for-landlords-interest-rate-rises-and-section-24/

Until the recent interest rate rises started to bite into cashflow, many larger portfolio landlords had taken the decision to pay the extra tax resulting from the Section 24 restrictions on finance cost relief as opposed to restructuring their business. It might be said that the level of pain they were enduring from Section 24 wasn’t enough, but for many more, IT IS NOW!

There comes a point for everyone when they have to admit to themselves “enough is enough”.

These landlords can no longer bury their heads in the sand. Either they take advantage of the buoyant property market to exit the business altogether or make other radical changes to the ownership structures of their property rental businesses. Either way, they desperately need some good quality tax advice.

...

Since the beginning of this year, the Bank of England has increased base rates from 0.1% to 1.75%. This equates to an annual loss of £16,500 of cashflow on every £1,000,000 landlords have borrowed. To make things worse, this additional expense can no longer be offset against rental income. Instead, an additional tax credit of just £3,300 (20% of the increased finance cost) is applied, based on the same example.

Some landlords will not have felt the pinch quite yet, because their mortgage interest rates will be fixed. However, when those fixed rates expire they will find themselves in a new World of pain.

At what point will YOU be saying “enough is enough”?

UK is still in the grassy, sunny lowlands of IR hikes.

[spygirl]

Landlords coming to the end of their buy-to-let mortgage deals face a 'profit tipping point' as fixed rates reach highest level in almost a decade

https://www.thisismoney.co.uk/money/buytolet/article-11182341/amp/Fixed-mortgage-rates-reach-highest-level-decade.html

• Average 2-year fix BTL deal is now 4.47% - highest since March 2013
• Five-year fixed deal is 1.23 percentage points higher than five years ago 
• There are now no fixed rate deals below 3% with most now above 3.5%
• Landlords advised to lock in rates ahead of their current deal ending 

[spygirl]

The bulk of IO btler are let on sub 4% yields.

Those numbers are the low teaser rates. Theyll be much higher when the fix ends.

 

 

[spygirl]

https://www.telegraph.co.uk/property/buy-to-let/landlords-rush-auction-profits-crash/

Landlords rush to auction as profits crash

But many are struggling to find buyers among fellow buy-to-let investors

ByRachel Mortimer8 September 2022 • 7:00am

Buy-to-let Market Tracker

Landlords have flocked to auction houses in search of a quick sale after tax changes and rising interest rates killed off their profits.

But investors have struggled to find buyers in recent months after appetite for rental properties dropped off, amid an exodus of smaller landlords from the buy-to-let market.

A series of punishing tax changes in recent years has been compounded by soaring interest rates, impending tenant arrears and the threat of costly energy efficiency upgrades mandated by law coming down the track.

The toxic cocktail of higher costs and unreliable income has made it harder for landlords to make a profit on their investment, with many heading to auction in search of a quick exit from the market.

Nathan Emerson, of trade body Propertymark, said there had been a “noticeable increase” in the number of landlords selling at auction. He said: “It is no surprise because incentives for landlords in the private rented sector are diminishing.

“Taxation is getting worse and increasing pressure is being placed on the wider economy, making many investments completely unaffordable.”

Landlords are forecast to lose thousands in rent this financial year as the cost of living crisis pushes the number of households falling into arrears to its highest level in more than a decade.

Meanwhile, the cost of remortgaging has risen rapidly this year, serving as a stark wake-up call to smaller landlords more reliant on debt.

Buy to let mortgages

Stuart Collar-Brown, of auction site My Auction, said: “The benefits of having a rental property have disappeared for many smaller investors, especially accidental landlords.

“Landlords who only have one property with a two- or five-year fixed rate ending in the next few months will be in for a big mortgage shock. For many it won’t be financially worth it anymore.”

Speed and certainty are two of the biggest advantages which attract sellers to auctions, rather than advertising on the open market using an estate agent.

Buyers pay a sizeable deposit once their bid is successful and contracts are prepared prior to the auction date, meaning the risk of a sale falling through is minimal.

Mr Collar-Brown said: “A landlord can sell within four to five weeks of first approaching the auction house, it’s a very quick process and gives them a certainty they can’t find elsewhere.”

But selling properties at auction means targeting mainly other landlords, of whom there are fewer, and cutting out potential owner-occupier buyers.

[Wight Flight]

8 minutes ago, spygirl said:

https://www.telegraph.co.uk/property/buy-to-let/landlords-rush-auction-profits-crash/

Landlords rush to auction as profits crash

But many are struggling to find buyers among fellow buy-to-let investors

ByRachel Mortimer8 September 2022 • 7:00am

Buy-to-let Market Tracker

Landlords have flocked to auction houses in search of a quick sale after tax changes and rising interest rates killed off their profits.

But investors have struggled to find buyers in recent months after appetite for rental properties dropped off, amid an exodus of smaller landlords from the buy-to-let market.

A series of punishing tax changes in recent years has been compounded by soaring interest rates, impending tenant arrears and the threat of costly energy efficiency upgrades mandated by law coming down the track.

The toxic cocktail of higher costs and unreliable income has made it harder for landlords to make a profit on their investment, with many heading to auction in search of a quick exit from the market.

Nathan Emerson, of trade body Propertymark, said there had been a “noticeable increase” in the number of landlords selling at auction. He said: “It is no surprise because incentives for landlords in the private rented sector are diminishing.

“Taxation is getting worse and increasing pressure is being placed on the wider economy, making many investments completely unaffordable.”

Landlords are forecast to lose thousands in rent this financial year as the cost of living crisis pushes the number of households falling into arrears to its highest level in more than a decade.

Meanwhile, the cost of remortgaging has risen rapidly this year, serving as a stark wake-up call to smaller landlords more reliant on debt.

Buy to let mortgages

Stuart Collar-Brown, of auction site My Auction, said: “The benefits of having a rental property have disappeared for many smaller investors, especially accidental landlords.

“Landlords who only have one property with a two- or five-year fixed rate ending in the next few months will be in for a big mortgage shock. For many it won’t be financially worth it anymore.”

Speed and certainty are two of the biggest advantages which attract sellers to auctions, rather than advertising on the open market using an estate agent.

Buyers pay a sizeable deposit once their bid is successful and contracts are prepared prior to the auction date, meaning the risk of a sale falling through is minimal.

Mr Collar-Brown said: “A landlord can sell within four to five weeks of first approaching the auction house, it’s a very quick process and gives them a certainty they can’t find elsewhere.”

But selling properties at auction means targeting mainly other landlords, of whom there are fewer, and cutting out potential owner-occupier buyers.

It's all about the capital gains. No problem losing a couple of grand a year on the rent it you are making £20k gain.

Except most landlords can't afford to lose money every month.

[spygirl]

1 minute ago, Wight Flight said:

It's all about the capital gains. No problem losing a couple of grand a year on the rent it you are making £20k gain.

Except most landlords can't afford to lose money every month.

The fkwit btler from Mrs spy's daycare days was scrapping 200/m gross.

That was 4 years ago.

I'd guess shes paying out 400/m now, just for the mortgage.

 

[Guest]

19 hours ago, Wight Flight said:

It's all about the capital gains. No problem losing a couple of grand a year on the rent it you are making £20k gain.

Except most landlords can't afford to lose money every month.

Also most BTLers do little to no maintenance on their properties, so there is a hidden cost of the future repair bill accumulating that almost never makes it into these calculations.

[spygirl]

35 minutes ago, Darude said:

Also most BTLers do little to no maintenance on their properties, so there is a hidden cost of the future repair bill accumulating that almost never makes it into these calculations.

The 'investors' in cheap Northern BTL, who had to exit before IR rose - just too much housing, too many voids - were typically loosing about 40k/house - bought at 80k (eeh, its cheap here ,, Il buy another) then selling at 40k.

 

 

[MightyTharg]

19 hours ago, spygirl said:

The 'investors' in cheap Northern BTL, who had to exit before IR rose - just too much housing, too many voids - were typically loosing about 40k/house - bought at 80k (eeh, its cheap here ,, Il buy another) then selling at 40k.

19 hours ago, spygirl said:

So where can I buy these £40,000 houses? With work-from-home meaning local salaries have gone from £500 a week to £500 a day, that has to be a good deal.

[Guest]

12 minutes ago, MightyTharg said:

So where can I buy these £40,000 houses? With work-from-home meaning local salaries have gone from £500 a week to £500 a day, that has to be a good deal.

Here you go, back up the truck:

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^61326&maxPrice=50000&propertyTypes=bungalow%2Cdetached%2Cflat%2Csemi-detached%2Cterraced&includeSSTC=false&mustHave=&dontShow=retirement%2CsharedOwnership&furnishTypes=&keywords=

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^61308&maxPrice=50000&propertyTypes=bungalow%2Cdetached%2Cflat%2Csemi-detached%2Cterraced&includeSSTC=false&mustHave=&dontShow=retirement%2CsharedOwnership&furnishTypes=&keywords=

Edited September 10, 2022 by Guest

[MightyTharg]

13 minutes ago, Darude said:

Here you go, back up the truck:

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^61326&maxPrice=50000&propertyTypes=bungalow%2Cdetached%2Cflat%2Csemi-detached%2Cterraced&includeSSTC=false&mustHave=&dontShow=retirement%2CsharedOwnership&furnishTypes=&keywords=

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^61308&maxPrice=50000&propertyTypes=bungalow%2Cdetached%2Cflat%2Csemi-detached%2Cterraced&includeSSTC=false&mustHave=&dontShow=retirement%2CsharedOwnership&furnishTypes=&keywords=

So you’re saying prices have shot up 25%? Those were all £50,000 + and a lot of them weren’t even houses.