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cashinmattress

£700M Welcome Boost For Build-To-Let Homes

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The price falls will come causes by S24, lots of forced sellers. 

January 2019 is when the SHTF for many leveraged BTL’s. 

Should start to see forced sellers pile up towards the end of this year. 

for many in BTL they will have to give reasonable notice to tenants, hence the pile up on volume towards the end of this year.

the thing with forced sellers is they have to sell, and with no more heavy BTL expansion those forced sellers have to meet the new market level of MMR FTB, which is easily 20-30% lower than current asking prices. 

so much is coming down the line to leveraged BTL. 

I’m going to wait until next year to pick up either a cheap repossession or a bargain. 

I’m sure a lot of us have noticed the obvious Ex BTL houses coming to the market, certainly much more than in previous years, and these will not be forced sellers yet. Give it 12 months though... the media is already spouting BTL is dead. 

And most post 2000 BTL are not sophisticated investors, they will happily pile out of BTL just as fast as they all pilled into BTL 

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1 hour ago, TonyJ said:

. Normally, if an OO moves, their property would be released on to the market again, but with BTL, when a tenant moves out, the property does not get released for sale again, it just gets passed to the next tenant.

Or ends up on Airbnb.

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4 hours ago, yodigo said:

So right, it's been obvious since knocking out the "little people" with S24 - only the big boys will be allowed to make money from renting property. What a screwed up country we've become.

Woah that’s a flash back.. 

so glad it’s all changed for the better..

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On 4/18/2013 at 3:00 PM, cashinmattress said:

link

So let me get this right... government gives what looks like a grant to some private firm so that they can create commercial housing?

Thought I'd rephrase it a bit for you:

"So let me get this right... government gives tax payers money to some private firm so that they can create commercial housing to rent back to taxpayers?".

A bit like if you need a taxi but a taxi driver doesn't have a car to use, so you buy them a car for them to own.....then you can hire their services. Or if you want to go to the cinema, you buy a cinema for someone else, then you can buy tickets from them to see your film.

It is repulsive.

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5 hours ago, yodigo said:

Well you would if it was your mum & dad, son or daughter. Suck what up? Doesn't affect me, but it's just a nasty, unnecessary action supported by idiots who don't see the bigger picture.

None of my family are that stupid. If yours are then that's tough s***.

Few on HPC are malicious, most are more intelligent than average and understand UK housing is a zero sum game. You need to understand that when you participate or exacerbate a zero sum game, intelligent people who are forced to part-take against their own will, will have their logic over-ride nicey touchy feelings. Bit like life and death situation there is no room for emotion only logic, it really is nothing personal.

Edited by Arpeggio

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9 hours ago, yodigo said:

Well you would if it was your mum & dad, son or daughter. Suck what up? Doesn't affect me, but it's just a nasty, unnecessary action supported by idiots who don't see the bigger picture.

Something that's not been mentioned in the comments so far that is important here - the secret is in the name. BUILD to rent. 

The government does see the bigger picture. It seems they see it perfectly. If you think they are making a mistake, you're missing the point that the policies they have implemented are specifically to discourage the use (ie monopolising) of pre-existing housing stock as rental units via btl, because they want it going back into owner occupied hands. Instead they're encouraging new rental units to be added -  specifically for the purpose of being rented out, so not monopolising or reducing owner occupied stock  - by build to rent funds. 

If you parents (or whoever) want to invest in a build to rent fund, they are free to do so. They are also free to continue to try to create 'their pension' through buy to let... but they should have read the signs a few years ago that the system is no longer being weighted in their favour, and they need to assess whether its worth the effort when they can probably get better yield with no effort in other ways. 

Buy to letters have been keen to be seen as savvy business people. In that case, whilst I feel sorry for any individual who makes a mistake and find themselves in hard times as a result, they did make their own choices and knowingly go into business extracting rent out of other people. As arpeggio says above, this is a zero sum game - it adds no value,  it merely extracts rent from the person who wasn't able to snatch the asset first. The government recognise this, and the danger it poses to society (and their political tenure). This is the 'bigger picture'.

These changes are well signalled by the government, with years of warning. If your family are in trouble, I'm afraid they only have themselves to blame 

Edited by Foreverblowingbubbles
Detail

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10 hours ago, Foreverblowingbubbles said:

Something that's not been mentioned in the comments so far that is important here - the secret is in the name. BUILD to rent...

You may be right about what they think they are doing, however what this really is, is another 700M worth of demand for land.  

So it will only push up prices, although probably not as much as BTL and 700M isn’t a huge amount. 

Edited by BuyToLeech

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15 hours ago, Arpeggio said:

None of my family are that stupid. If yours are then that's tough s***.

Few on HPC are malicious, most are more intelligent than average and understand UK housing is a zero sum game. You need to understand that when you participate or exacerbate a zero sum game, intelligent people who are forced to part-take against their own will, will have their logic over-ride nicey touchy feelings. Bit like life and death situation there is no room for emotion only logic, it really is nothing personal.

Good post. Logic above anything else. The only outcome that can be calculated.

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11 hours ago, BuyToLeech said:

You may be right about what they think they are doing, however what this really is, is another 700M worth of demand for land.  

So it will only push up prices, although probably not as much as BTL and 700M isn’t a huge amount. 

There's only a finite supply of renters, so I would expect that for every build to rent unit that becomes occupied, it will (eventually, after some voids somewhere in the btl system) free an existing buy to let property to be released back to the owner occupied market. You see this already happening in student towns, btr has the potential to do that to large parts of the btl market

I don't really see why people on here have a problem with build to rent. Genuine social housing construction would be preferable, but this is as close as we're likely to get. Sure it would be great if individuals also got incentives to build their own place, but that's not likely to bring on a new flood of supply in the way build to rent will. individuals would build detached homes, not blocks of units

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5 hours ago, Foreverblowingbubbles said:

I don't really see why people on here have a problem with build to rent. Genuine social housing construction would be preferable, but this is as close as we're likely to get. Sure it would be great if individuals also got incentives to build their own place, but that's not likely to bring on a new flood of supply in the way build to rent will. individuals would build detached homes, not blocks of units

Individuals would generally build better quality homes. Doing so they would vacate other properties for those not in a position to self build. Overall quality of housing stock would increase as would supply. It's an important piece of the solution and UK self build numbers are terrible compared to the rest of Europe and beyond. It should be encouraged.

Build to rent is just swapping one set of landlords for another. It's a moderate improvement on some of the amateurs but it's pretty defeatist to accept it as all we're likely to get. It's also unlikely to solve much if you, like me, don't believe supply is the major cause of HPI. It's a debt bubble being pumped into house prices. Now also taxpayer money inflating it further. It will take an exceedingly unlikely increase of supply to make a serious dent in prices alone. Besides it'll all just be snapped up by foreigners anyway to make money laundering people farms. Tad hyperbolic but whatever.

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1 hour ago, Parkwell said:

Individuals would generally build better quality homes. Doing so they would vacate other properties for those not in a position to self build. Overall quality of housing stock would increase as would supply. It's an important piece of the solution and UK self build numbers are terrible compared to the rest of Europe and beyond. It should be encouraged.

Build to rent is just swapping one set of landlords for another. It's a moderate improvement on some of the amateurs but it's pretty defeatist to accept it as all we're likely to get. It's also unlikely to solve much if you, like me, don't believe supply is the major cause of HPI. It's a debt bubble being pumped into house prices. Now also taxpayer money inflating it further. It will take an exceedingly unlikely increase of supply to make a serious dent in prices alone. Besides it'll all just be snapped up by foreigners anyway to make money laundering people farms. Tad hyperbolic but whatever.

I don't think self build is likely to become a big % of houses in the uk. In Europe people build kit houses, they're not genuine self build in the sense we think of here, and British style of brick housing doesn't really suit those kit houses.

I agree self build tends to be best quality, but not sure we have the number of niche builders in the uk capable of scaling up to make a dent in the numbers, unless people start desiring to live in wood and panel houses. I've not researched it, that's purely gut feel but we don't have the brickies from what I can tell. 

Agree that market is more about debt than it is supply and demand, however btl debt is and has been the major driving force behind the market over last 10 years. Remove a chunk of btl demamd through replacing them with build to rent supply, and I think prices have to adjust to what genuine buyers can support as there will be no btl bid. 

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5 hours ago, TonyJ said:

Just saw this advert for land with planning permission for a 24 HMO (build-to-let). Are we going to see more purpose built HMOs being built now?  What a depressing turn of events.

https://www.zoopla.co.uk/for-sale/details/47200245?utm_source=alert&utm_medium=email&utm_campaign=fs-daily&utm_content=mainbody&t26=cons_6140_price_drop_alerts-original&t18=craig_alert_cta_colour-original&t21=variation5220sort-lowest_price

its the future, like bitcoin. Its all fun and games until someone loses an eye.

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On 27/03/2018 at 2:15 PM, happyguy said:

"You wouldn't understand the bigger picture if it bum raped you."

what a moron 

Well, since no counter argument was forthcoming, I'd have to chalk that off as a win for me. Bleedin BTL snowflakes.

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On 18/04/2013 at 3:13 PM, PopGun said:

Told you so....

I'd gloat if this wasn't so depressing.

Yep, they are going to continue with this rental con and pretend that we all love living this way as they line their pockets, and why shouldn't we love it, the joy of building a life in a community that can be destroyed on a landlords whim in the matter of 2 months, seriously, f*** this country and the way it's going, you have a near exact choice of living conditions if you are forced to rent and earn between £25k and £45k as an uneducated  non working immigrant, worse in some cases.

I don't know what some of us bother working, we are just here to pay some landlords mortgages off, "I rent so for I am"

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47 minutes ago, inbruges said:

Yep, they are going to continue with this rental con and pretend that we all love living this way as they line their pockets, and why shouldn't we love it, the joy of building a life in a community that can be destroyed on a landlords whim in the matter of 2 months, seriously, f*** this country and the way it's going, you have a near exact choice of living conditions if you are forced to rent and earn between £25k and £45k as an uneducated  non working immigrant, worse in some cases.

I don't know what some of us bother working, we are just here to pay some landlords mortgages off, "I rent so for I am"

if I understand the Montague Review correctly, govt support is on a strictly commercial-investment basis - that is it is not a subsidy, but rather seed investment to try to create an industry (corporate Build to Rent) where one did not really exist before in a joined-up form. So the taxpayer is aiming, in this case, to get its money back with an investment return on it.

I'm not that bothered which tenure they build to - fact is they are building houses and apparently good ones - the govt is somewhat schtum on it because it might upset the boomers, but it is a return, finally, to govt actually preparing to get its hands dirty expanding and improving the housing stock beyond giving the occasional nod to Barratt slave boxes.

If they happen to have a return of say 3%, that is the capital values are inflated for whatever reason, then be happy and rent a bargain. At least in this small consideration. Volatility owing to over-valuation can be absorbed by the holding pension funds, and a little bit by the taxpayer.

Major caveat - London living costs, rental prices, and esp. house prices are f***ing mental and I'm glad I don't live there. Different situation.

Edited by Si1

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On 3/25/2018 at 3:13 PM, Democorruptcy said:

The governbankment have realised too many of the middle class were turning to BTL to fund working less hours and early retirement. Therefore the tax had to increase on it to make it less attractive, so they have to work more hours for more years and so pay more tax.

No.  The opposite of this.

Landlording (BTL or not, it’s all the same) means we all have to work harder, because the lifestyles of the unproductive few must ultimately be paid for by everyone else. 

BTL means most people working more hours for more years, including middle class people, including many landlords.

It isn’t magical. If buying an extra house means you can mysteriously afford an extra holiday or a new car, someone has to actually earn the money to pay for that.  Since it isn’t you and it sure as hell isn’t the house, it must be someone else.

Edited by BuyToLeech

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2 hours ago, Si1 said:

if I understand the Montague Review correctly, govt support is on a strictly commercial-investment basis - that is it is not a subsidy, but rather seed investment to try to create an industry (corporate Build to Rent) where one did not really exist before in a joined-up form. So the taxpayer is aiming, in this case, to get its money back with an investment return on it.

I'm not that bothered which tenure they build to - fact is they are building houses and apparently good ones - the govt is somewhat schtum on it because it might upset the boomers, but it is a return, finally, to govt actually preparing to get its hands dirty expanding and improving the housing stock beyond giving the occasional nod to Barratt slave boxes.

If they happen to have a return of say 3%, that is the capital values are inflated for whatever reason, then be happy and rent a bargain. At least in this small consideration. Volatility owing to over-valuation can be absorbed by the holding pension funds, and a little bit by the taxpayer.

Major caveat - London living costs, rental prices, and esp. house prices are f***ing mental and I'm glad I don't live there. Different situation.

This. Glad I'm not the only one thinking this

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On 26/03/2018 at 9:32 PM, Foreverblowingbubbles said:

There's only a finite supply of renters, so I would expect that for every build to rent unit that becomes occupied, it will (eventually, after some voids somewhere in the btl system) free an existing buy to let property to be released back to the owner occupied market. You see this already happening in student towns, btr has the potential to do that to large parts of the btl market

I don't really see why people on here have a problem with build to rent. Genuine social housing construction would be preferable, but this is as close as we're likely to get. Sure it would be great if individuals also got incentives to build their own place, but that's not likely to bring on a new flood of supply in the way build to rent will. individuals would build detached homes, not blocks of units

My problem is that it is more of the same, a corporate cartel stranglehold on resources.

In the case of public sector employees & those on housing benefit.

The private landlords, corporate or micro biz landlords are middle men , taking tax payers money to provide houses. 

As you say, "Genuine social housing construction would be preferable, but this is as close as we're likely to get"

I don't think this justifies it. I suspect the strength of the VI corporate lobby would destroy any serious attempt to build large scale social housing.      

There is plenty of talk of self build, on hpc, but judging by the lack of posts / input to the hpc self build forum, many are unwilling or unable (due to the land hoarding VI's etc ) to organise, collaborate, fund  or discuss the matter in depth. 

Quote

 5.35 million  are public sector employees in Uk ..

There were 26.90 million people employed in the private sector for December 2017, that is, 300,000 more than for September 2017 and 502,000 more than for December 2016; these increases were partly due to the transfer of English housing associations to the private sector.

Excluding the English housing associations reclassification effect, the number of people employed in the private sector increased by 159,000 between September and December 2017 and increased by 358,000 between December 2016 and December 2017.

For December 2017, of all people in paid work, there were 16.6% employed in the public sector and the remaining 83.4% were employed in the private sector.

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/publicsectorpersonnel/bulletins/publicsectoremployment/december2017

 

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1 hour ago, TonyJ said:

If they start building mega-HMOs, because they can cram in more people and make a greater return, are they still good houses?

There's a mega HMO just outside Leeds city centre, must house about 1000 cool young singletons in flats of 4 with ensuites. I'd have happily lived there in my twenties I believe. It's freeing up housing elsewhere I do believe which can go back to non HMO use.

And, if my link works upthread, family houses being built on a BTR basis in the leafy suburbs.

Btw I like your posts. I think we're on broadly the same side.

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18 minutes ago, Saving For a Space Ship said:

My problem is that it is more of the same, a corporate cartel stranglehold on resources.

In the case of public sector employees & those on housing benefit.

The private landlords, corporate or micro biz landlords are middle men , taking tax payers money to provide houses. 

As you say, "Genuine social housing construction would be preferable, but this is as close as we're likely to get"

I don't think this justifies it. I suspect the strength of the VI corporate lobby would destroy any serious attempt to build large scale social housing.      

There is plenty of talk of self build, on hpc, but judging by the lack of posts / input to the hpc self build forum, many are unwilling or unable (due to the land hoarding VI's etc ) to organise, collaborate, fund  or discuss the matter in depth. 

 

The BTR developers, at the very least, are taking govt money only as seeding investment, on a commercial returns basis. Obviously less directly, housing benefit will be thrown in the mix but that's a different question.

Edited by Si1

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