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Tonester

Change In Market To Be More Landlord Rent Driven

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There are a couple of nagging possibilities that are holding me back from STR-ing.

Everyone says that you need FTBs to keep prices rising or stable but they have obviously been replaced by BTL landlords buying the same places as a FTB would then renting it to them. Didn't this happen in Germany and end up in a society where renting is more the norm?

If the idealogy changed from 'must get on the ladder' to 'happy to rent' couldn't we then see a period of stable prices with a different housing structure? Wouldn't this reduce the scale of a crash?

Sure in a worsening economy there will be forced sellers due to unemployment but while interest rates are low what is stopping the BTL still having the upper hand on the FTBs for new properties on the market?

Would there then be an advantage to owning a house before BTL could turn the screws on rents?

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Everyone says that you need FTBs to keep prices rising or stable but they have obviously been replaced by BTL landlords buying the same places as a FTB would then renting it to them.

Who in their right mind is going to buy an FTB property in order to rent it out for a 2-3% yield?

BTL has been driven almost entirely by speculation on price increases, it's little to do with renting. Remember: if an FTB can't afford to pay a mortgage to buy a place, they can't afford to pay the BTL's mortgage on it either.

Didn't this happen in Germany and end up in a society where renting is more the norm?

If I could rent the equivalent of a German house at German rental prices with German tenant protections in the UK, I'd be happy to rent for the rest of my life. The big problems with renting in the UK are the cowboy BTLs and the lack of protection for long-term tenants.

Edited by MarkG

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It looks like rents are cheap now compared to mortgages but would there be any capacity for landlords to improve their yield if it becomes more acceptable to rent - maybe even a strong STR sentiment could build to further increase demand for rent pushing up it's prices.

Maybe I am focusing on a minor chain of events - I'm just interested in being convinced out of my doubt!

What is the motivation for German landlords then if it's so good to rent in Germany?

"Remember: if an FTB can't afford to pay a mortgage to buy a place, they can't afford to pay the BTL's mortgage on it either."

When I bought end of 2003 I was restricted by the mortgage income multiple. I could have afforded to rent a more expensive and better place (although at the time that wouldn't have been the best financial move).

Perhaps now that income multiples are more relaxed you have a point, but there have always been some barriers to entry for mortgages that there aren't for rents.

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There are a couple of nagging possibilities that are holding me back from STR-ing.

Everyone says that you need FTBs to keep prices rising or stable but they have obviously been replaced by BTL landlords buying the same places as a FTB would then renting it to them. Didn't this happen in Germany and end up in a society where renting is more the norm?

If the idealogy changed from 'must get on the ladder' to 'happy to rent' couldn't we then see a period of stable prices with a different housing structure? Wouldn't this reduce the scale of a crash?

Sure in a worsening economy there will be forced sellers due to unemployment but while interest rates are low what is stopping the BTL still having the upper hand on the FTBs for new properties on the market?

Would there then be an advantage to owning a house before BTL could turn the screws on rents?

Tonester,

My rant on this thread may answer some of your questions.

LG

Edited by laughing_goat

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There are a couple of nagging possibilities that are holding me back from STR-ing.

Everyone says that you need FTBs to keep prices rising or stable but they have obviously been replaced by BTL landlords buying the same places as a FTB would then renting it to them. Didn't this happen in Germany and end up in a society where renting is more the norm?

If the idealogy changed from 'must get on the ladder' to 'happy to rent' couldn't we then see a period of stable prices with a different housing structure? Wouldn't this reduce the scale of a crash?

Sure in a worsening economy there will be forced sellers due to unemployment but while interest rates are low what is stopping the BTL still having the upper hand on the FTBs for new properties on the market?

Would there then be an advantage to owning a house before BTL could turn the screws on rents?

Do you think this or any other government will want to preside over falling levels of owner-occupation?

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  • 338 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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