How does Buy to Let END!

[spygirl]

1 hour ago, Wight Flight said:

Oh dear...

https://www.property118.com/tenant-refuses-to-leave-until-council-re-house-her/#comments

Hi, I have an issue with a tenant who is refusing to leave after I served a section 21 notice. I am forced to sell as my mortgage has soared over £3,000 a month and rental income is only £1,600!

S21 is served. Then you *WAIT* for the eviction day.

If theyve not gone then you apply to court to get bailiffs.

Kudos to actually getting a legal S21 in place.

It tends to be struggle for most LL who need 3-4 times with WH Smith 'Im a lawyer!' forms before they PAY  for a competent solicitor.

 

Many landlords are facing similar issues. When applying for the court order for possession ask the court to add a penal notice to the order warning the tenant that if they fail to comply with the order, they may be held in contempt of court.

Excellent advice from another LL.

Of course these fuckwits wont have to let to single mum on bennies would they .....

 

 

 

[MrXxxx]

3 hours ago, Wight Flight said:

Oh dear...

https://www.property118.com/tenant-refuses-to-leave-until-council-re-house-her/#comments

..and all because [I assume] they became an 'Accidental' landlord as a result of not wanting to "give the property away" i.e. sell at market value or slightly below at the time they bought their second property.

[AlfredTheLittle]

I kind of almost feel sorry for the landlord in this situation, however they'll presumably still come out of it at a profit after 6 years of the tenant paying their mortgage. 

It does show what a fucking state this country is in at the moment. There are huge amounts of houses that are either empty, or used as holiday lets, the tax system could easily be changed to bring them into residential use, but the government are still doing the opposite and giving out tax incentives to use homes as holiday lets.

[Funn3r]

I too almost feel kind of sorry for the landlord. What a rotten position for another human to be in. But FFS how long has this been coming and why have they not seen it. As a private renter myself it gives me shivers to think that the whole thing could collapse and the fact that all the BTL range-rover spivs had finally met their Waterloo would be cold comfort if it meant I could find nowhere else to rent in the future. 

Then again that situation would certainly mean a sharp downward movement on house prices and maybe I could just buy instead. 

[Wight Flight]

2 hours ago, AlfredTheLittle said:

I kind of almost feel sorry for the landlord in this situation,

Nope. Struggling to see where the sympathy comes from.

They tried to profit from people farming.

They lost.

Shit happens.

[Funn3r]

2 hours ago, Wight Flight said:

Nope. Struggling to see where the sympathy comes from.

They tried to profit from people farming.

They lost.

Shit happens.

They were too stupid to see it like that

• I'm being savvy me
   
• Everyone else is making money why not me
   
• Doing people a favour with a roof over their heads
   
• If I do this right I could get some more and be a milyunair like that fat Angus bloke

I'm not one of those who likes seeing stupidity punished. Evil, yes.  Stupids should get mild whack and told not to do it again. This poor bloke is properly fucked. I bet his housing bennie tenant is cackling at least. 

[Ash4781b]

it’s a business but many aren’t set as limited companies. mortgage payment £1600 to £3000 reads like quite a large interest only loan. Over £500K ? Half a million? 

[King Penda]

On 07/02/2023 at 16:56, One percent said:

He’s going to try and offload property with tenants in situ?   Good luck with that.  

Someone in my home village is trying to off load 2 with tenants 

[Boon]

1 hour ago, Funn3r said:

They were too stupid to see it like that

• I'm being savvy me
   
• Everyone else is making money why not me
   
• Doing people a favour with a roof over their heads
   
• If I do this right I could get some more and be a milyunair like that fat Angus bloke

I'm not one of those who likes seeing stupidity punished. Evil, yes.  Stupids should get mild whack and told not to do it again. This poor bloke is properly fucked. I bet his housing bennie tenant is cackling at least. 

Instinctively you might feel a bit bad for him but this kind of emotional pulling of the heartstrings leads to people pleading for taxpayer funds to help. Nobody told him to sink so much money into it that it starts to be material to him. 

Put it this way, do you like to see stupidity being rewarded? Because had this dude been a decade earlier he might had doubled his money, not because he was smart but because interest rates stayed low and every man and his dog piled in to the same asset class.

If it is fair that people can reap rewards then it's also fair that they lose money if it goes wrong. If he wanted risk free there are appropriate investments for that. 

[Boon]

1 hour ago, Ash4781b said:

it’s a business but many aren’t set as limited companies. mortgage payment £1600 to £3000 reads like quite a large interest only loan. Over £500K ? Half a million? 

It very much sounds to be like a London new build bought at the peak if £1,600 is the rent, but also the loss of value that leads it unmortgageable.

I am guessing he must have borrowed £400k at c.1% on a residential mortgage for 30 years (initial payment £1287).
Moved out after a couple of years and got consent to let so stayed around that figure. But now gets bummed onto a BTL deal at SVR because SVR is now way too high. Barclays rate is 8.49% so £400k on 30 years is £3073.

There must be quite a lot of properties out there that are like this. But it doesn't seem widespread yet. I have seen an uptick in the tenant in situ type properties, but not many at firesale prices. 

[spygirl]

2 hours ago, Ash4781b said:

it’s a business but many aren’t set as limited companies. mortgage payment £1600 to £3000 reads like quite a large interest only loan. Over £500K ? Half a million? 

Again, the btl harridan from Mrs spys babyclass has 3 or 4 - since 2016ish.

Touching 1m in IO debt.

Weve not seen her since rates went up, from the 3% she started at, to the 5% they where last time Mrs spy met up, pre coof.

Shell be paying 8%+ nowish.

Call it 1m and shes got 80k a year to find. On top of the s24 taxes. And the voids.

Sure theres s lot of HB in tge paper, whinging.

But tenants paying with their hard earned are disappearing.

 

 

[spygirl]

‘We have never raised the rent’: accidental landlords reveal their top tips for property investors

Being an amateur property investor is no walk in the park

https://www.telegraph.co.uk/property/uk/have-never-raised-rent-accidental-landlords-reveal-top-tips/

And shes so pretty too.

Becky Lloyd Pack and her husband Joe became first-time landlords in 2020 after being unable to sell their one-bedroom shared ownership flat in Islington, London, when the building failed fire safety checks because of cladding. The couple needed to move to Nottingham after Joe had been offered his dream job as a design manager.

Oh two years. How often does she think she can raise rents?

And Id be surprised uf she can let a shared ownership flat.

Still, shes too pretty to be burned alive.

Just as well renters are ugly.

Here she is again

Out n about, doing LL stuff, like drowning puppies in a bucket or stealing lollipops off babies.

“I’d describe us as unwilling landlords and naïve when we started out,” says Becky, 33.

“We went to a letting agent for help but they quoted us thousands of pounds to manage the property. It was too expensive so we went with an online platform called OpenRent that provides landlord services instead which was much cheaper.”

Eh?

Becky and Joe, 37, a design manager, paid an upfront fee of £203 to the platform to advertise their flat, manage the deposit, create contracts and carry out tenant referencing. They also make sure the couple comply with all necessary regulations. They pay £5 a month for the company to collect the rent but they manage the property themselves using WhatsApp to communicate with their tenants who have lived in the property since Becky and Joe moved out.

Joe checks in with the tenants monthly to find out if there is anything wrong with the property or if there is anything they need.

No expense soared.

Living more than three hours away, Becky says it’s important to establish strong ties with tradespeople based near the flat so if something goes wrong they can call on local help.

In London??

Despite saving money by managing the property themselves, Becky, owner of Story by Design, says they made an expensive mistake.

“We actually made a loss because we didn’t realise we’d have to pay tax on our rental income,” she says. “At first we thought we would almost break even but then my accountant told me we would have to pay tax as well which of course seems obvious now.”

Over a year, Becky and Joe collect £23,240 in rent and pay £25,836 to their mortgage lender which agreed to let them rent out their home without converting to a buy-to-let mortgage under a “content to let” agreement. But the couple are faced with a £4,620 tax bill for the property which they had not factored in.

Thats consent to let fkwit. The problem usnt mortgage lender itll be TsnCs on the leasehold.

The couple hope to sell this summer after the cladding has been replaced.

Hope the tenant reads this and fucks off.

25k/y fir a crapoy 1br flat. Jesus.

Londons been falling for 7 years. Flats have plummeted. They are prob 50% negative equity.

LL tales continue...

Now thats s LL!

 

 

 

 

 

[Boon]

One thing, it does strike me as strange why people go on these things. They are not exactly gonna get their mortgages paid off. 

Her name can be googled and you can imagine that these are the type of people that shared ownership love: not in jobs well paid enough to afford the flat outright, but want to keep up with their friends somehow.

Can they raise the rent? They are charging almost £2k for a 1-bed flat, so it seems unlikely.  There are 243 1-beds in Islington and many are below that price.

So they are making a loss of £2596 after paying the mortgage, I love how that is rationalised as 'almost breaking even'. 

After paying the tax bill that is £7216 loss. And that is assuming nothing breaks in the flat. Or the consent to let does not expire.

It's strange, because that is about as bad a situation as you can get, but its not reported as such. 

Instead the inference is that they are doing some kind of noble deed or making a great social contribution by not raising the rent. But nobody ever points out the other side, if you have reliable tenants why bother fucking them off for a tiny gain? Good tenants with a long track record that require no hand-holding are very much worth the below market rent. 

[Ash4781b]

“Over a year, Becky and Joe collect £23,240 in rent and pay £25,836 to their mortgage lender ”

£26k to the mortgage lender! Each year. Fuck

[AlfredTheLittle]

39 minutes ago, Ash4781b said:

“Over a year, Becky and Joe collect £23,240 in rent and pay £25,836 to their mortgage lender ”

£26k to the mortgage lender! Each year. Fuck

They'll be paying off some of the capital (or rather their tenant will be) so it's not all bad for them. They're no doubt hopeful that ever rising house prices will help them come out with a decent profit.

[spygirl]

10 hours ago, Ash4781b said:

“Over a year, Becky and Joe collect £23,240 in rent and pay £25,836 to their mortgage lender ”

£26k to the mortgage lender! Each year. Fuck

ON a shred ownership flat!!!

How much does she share 25% 50%????

Id guess this is a repayment loan.

Even then shes paid 500k ish for a crappy 1 br in London.

And when di she buy it?

5y ago?

They are going to be down 50% at the mo. There are so many shitty tiny inflammable flats in London. I guess these will eventually  be selling for 10p in the £

Theyve lost 250kish.

And they are holding that position at a  cost of 7/k.

And shes fucking smiling!!!!

 

 

 

[spygirl]

9 hours ago, AlfredTheLittle said:

They'll be paying off some of the capital (or rather their tenant will be) so it's not all bad for them. They're no doubt hopeful that ever rising house prices will help them come out with a decent profit.

They are going under water

Id be working out my finances to find a way to transfer some money to a brother then going bust.

 

 

[UmBongo]

16 hours ago, spygirl said:

Oh two years. How often does she think she can raise rents?

And Id be surprised uf she can let a shared ownership flat.

I don't think Shared Ownership properties can be subletted. I wonder if the Housing Association is aware of this arrangement?  Can't be much profit to be gained doing this as the freeholder will always want their service charge and rent on the other share.

In other news, a couple of student housing portfolios have been listed in my neck of the woods. One is on for £3.5m (13 houses) and the other is around £2.7m (?8 houses). Both with the same Estate Agent. I assume the same slumlords/partners in crime. I'll post a link of them if anyone's interested. 

[Boon]

14 hours ago, AlfredTheLittle said:

They'll be paying off some of the capital (or rather their tenant will be) so it's not all bad for them. They're no doubt hopeful that ever rising house prices will help them come out with a decent profit.

I think that is the mindset of those accidental landlords.

Not very face saving to take a loss on a property now, so stick it on to rent and sell it 'when the market recovers'.

Trouble is these types of property are gonna lag any market recovery because things have changed quite a lot.

The obvious one is that flats, especially small ones with no outside space have dropped out of fashion due to the pandemic.

But also these things are always being built in London now, hundreds and hundreds of developments. So supply exceeds demand, it's not like a 3-bed house with a garden where nobody builds them. So this sets a natural ceiling on price, why would anyone buy a second hand flat for x amount when a new almost identical one costs the same plus a load of incentives and 10 year home guarantee.

Third is that even if nothing is paid for the cladding service charges have generally risen because of it. The freeholder companies run for profit and nothing seems to stop them putting up the costs 10-20% a year. The tenants could revolt and go RTM but for large blocks with many absent landlords actually getting the required numbers is tricky. 

Last, it is shared ownership, that means you cannot just undercut everyone on the market to exit and the price has to be agreed with the other owner.

I can see real life examples near me.... flats that sold for £450k in 2016 are now at £375k asking price and not sold. The service charge started at just over £2k in 2016 and now sits at just under £4k today. 

Even at this price if you put down £200k your mortgage comes to £1,000 a month. But service charges and ground rent come to near £400 a month. The kind of achievable rent, much like those people in the article is £1600. Once you add in tax, then you're back to managing the property yourself if you want to stay in profit. But the net yield is then what? 

It is true that bankruptcy might be a decent option for some of these people, especially if you're young.

Maybe that will be one of the things that changes in mindset. Nobody thinks you can ever make a bad property purchase because eventually prices rise. But I do think eventually things might change, people might accept some of these flats on some of the schemes were just terrible purchases.

[BurntBread]

A above, Boon, I think we have had a whole generation who have never considered bankruptcy to be a sensible financial move when it comes to property debt. People have had too much to lose, and learned from the experience that bad investments tend to become OK ones, through the effects of bail-outs. Even those people still "trapped" in 2007 interest-only mortgages are doing everything they can to hold on as they won't be able to get anywhere comparable to live if they sell "their" home.

If younger people start looking at bankruptcy seriously, surely that has to lead to a re-pricing of mortgage debt in general? Banks would no longer be able to assume people will hang on to losing positions indefinitely, and that could lead to a bigger spread on mortgage rates over BoE, even if the base rate falls in a recession.

That doesn't mean housing becomes cheap, as population continues to soar while building grinds to a halt, but it does make credit scarce. It would actually mean things get a lot worse: many people moving into lower and lower quality shared accommodation, while ownership gets further out of reach, and also having to compete for the rentals with the recently bankrupted.

[Ash4781b]

I bet that mortgage looks good on the lenders books. Switches from good loan to possession? Imagine how that looks in a chart!

[spygirl]

3 hours ago, BurntBread said:

A above, Boon, I think we have had a whole generation who have never considered bankruptcy to be a sensible financial move when it comes to property debt. People have had too much to lose, and learned from the experience that bad investments tend to become OK ones, through the effects of bail-outs. Even those people still "trapped" in 2007 interest-only mortgages are doing everything they can to hold on as they won't be able to get anywhere comparable to live if they sell "their" home.

If younger people start looking at bankruptcy seriously, surely that has to lead to a re-pricing of mortgage debt in general? Banks would no longer be able to assume people will hang on to losing positions indefinitely, and that could lead to a bigger spread on mortgage rates over BoE, even if the base rate falls in a recession.

That doesn't mean housing becomes cheap, as population continues to soar while building grinds to a halt, but it does make credit scarce. It would actually mean things get a lot worse: many people moving into lower and lower quality shared accommodation, while ownership gets further out of reach, and also having to compete for the rentals with the recently bankrupted.

Theres all sort of reason why housing debt is going to get more expensive.

SVB going bust n CS point to banks needing to hold more capital, therefore credit costs more.

Banks holding too much gov binds means they need to drop bonds, meaning higher bond yields meaning more expensive credit.

Only way out of 2008 was always less debt at higher rate.

[spygirl]

4 hours ago, Boon said:

I think that is the mindset of those accidental landlords.

Not very face saving to take a loss on a property now, so stick it on to rent and sell it 'when the market recovers'.

Trouble is these types of property are gonna lag any market recovery because things have changed quite a lot.

The obvious one is that flats, especially small ones with no outside space have dropped out of fashion due to the pandemic.

But also these things are always being built in London now, hundreds and hundreds of developments. So supply exceeds demand, it's not like a 3-bed house with a garden where nobody builds them. So this sets a natural ceiling on price, why would anyone buy a second hand flat for x amount when a new almost identical one costs the same plus a load of incentives and 10 year home guarantee.

Third is that even if nothing is paid for the cladding service charges have generally risen because of it. The freeholder companies run for profit and nothing seems to stop them putting up the costs 10-20% a year. The tenants could revolt and go RTM but for large blocks with many absent landlords actually getting the required numbers is tricky. 

Last, it is shared ownership, that means you cannot just undercut everyone on the market to exit and the price has to be agreed with the other owner.

I can see real life examples near me.... flats that sold for £450k in 2016 are now at £375k asking price and not sold. The service charge started at just over £2k in 2016 and now sits at just under £4k today. 

Even at this price if you put down £200k your mortgage comes to £1,000 a month. But service charges and ground rent come to near £400 a month. The kind of achievable rent, much like those people in the article is £1600. Once you add in tax, then you're back to managing the property yourself if you want to stay in profit. But the net yield is then what? 

It is true that bankruptcy might be a decent option for some of these people, especially if you're young.

Maybe that will be one of the things that changes in mindset. Nobody thinks you can ever make a bad property purchase because eventually prices rise. But I do think eventually things might change, people might accept some of these flats on some of the schemes were just terrible purchases.

 

3 hours ago, BurntBread said:

A above, Boon, I think we have had a whole generation who have never considered bankruptcy to be a sensible financial move when it comes to property debt. People have had too much to lose, and learned from the experience that bad investments tend to become OK ones, through the effects of bail-outs. Even those people still "trapped" in 2007 interest-only mortgages are doing everything they can to hold on as they won't be able to get anywhere comparable to live if they sell "their" home.

If younger people start looking at bankruptcy seriously, surely that has to lead to a re-pricing of mortgage debt in general? Banks would no longer be able to assume people will hang on to losing positions indefinitely, and that could lead to a bigger spread on mortgage rates over BoE, even if the base rate falls in a recession.

That doesn't mean housing becomes cheap, as population continues to soar while building grinds to a halt, but it does make credit scarce. It would actually mean things get a lot worse: many people moving into lower and lower quality shared accommodation, while ownership gets further out of reach, and also having to compete for the rentals with the recently bankrupted.

Bankruptcy is the only means by which anyone under 40 who bought one of the crappy flats, thrown up in London, 2012-2020ish, can walk away n live some sort of life.

Cranes lift London to towering height over rest of UK

https://www.ft.com/content/dafd13d4-b3fc-11e2-b5a5-00144feabdc0

From 2013.

The results show a remarkable degree of concentration in London and its surrounding counties, signifying a gulf between the optimism about a prosperous future for the capital and pessimism in the rest of the UK.

With London home to only one in eight people in the UK, it has seen more tower cranes notified to the HSE than all the rest of the UK put together.

Almost eight in 10 cranes were in London, the southeast and the east of England. Across the whole period from 2010 to 2013, there has been more than one crane in every square kilometre of London.

No other region comes close to this density.

In the northeast, there is one crane every 120 sq km while that drops to one crane every 290 sq km in Scotland. There were only three tower cranes notified in Northern Ireland over the whole three-year period, with a crane only every 4,500 sq km.

[MrXxxx]

21 hours ago, Boon said:

if you have reliable tenants why bother fucking them off for a tiny gain? Good tenants with a long track record that require no hand-holding are very much worth the below market rent. 

Unfortunately from my experience most landlords don't think like that, all they see is the £s they may not be getting, and so by their greed end up paying the 'price' of bad tenants!

 

[MrXxxx]

5 hours ago, UmBongo said:

I don't think Shared Ownership properties can be subletted. I wonder if the Housing Association is aware of this arrangement?

Well they are now if they have read the newspaper article! :-)))...As @Boon pointed out above, why do these people 'Wash their dirty laundry in public'?