BTL to lose more?

[Wolfie84]

Just been thinking about BTL LLs being forced to sell up through all the measures which are coming in... With them out of the market, these would be places being bought up by OO at lower prices anyway (as otherwise the BTL buyer wouldn't have had the place in the first instance).

So what happens as a result of all the 'improvements' they've made to the house when they sell it back to OO?  I have my shared flat in mind.  The house is in London has been split into two flats.  We share the upper flat and has a 'master' bedroom which has a tiny en-suite shower-room shoe-horned on to it.  There are then two smaller double bedrooms.  One of which had some space taken from it to shoe-horn in a small bathroom for these two rooms to share.  There's also a combined kitchen/reception room that's a decent size.

This set up works okay as a shared house, but I'd be scratching my head as to what to do with it if it became a family home.  Certainly, there'd need to be some re-configuration of the rooms so that it would work.

My point is this though, if this flat was switching from HMO to OO use, the buyer is going to need to spend some cash to change it around and make it work.  This surely means that for a BTL LL looking to sell it, they're going to have to wear some of this cost in the price that it sells for, leading to lower prices than would have otherwise been the case.  Obviously, the irony of this is that they'd have  spent a load of money on the place "adding value" when in actual fact it ends up costing them money.

I wonder how big a problem this might be (I guess relatively small in the grand scheme of things)?  Any thoughts?

 

 

[This time]

It would probably knock more off the price than it would cost to do the work to fix it since most BTL properties would only really be attractive to FTBs and any money needed to do work would have to be taken from the deposit. 

[AvoidDebt]

There's been a flood of properties in London which would have traditionally gone to families but have been bagged by BTL'ers and chopped up into hideous bedsits. Entire streets obliterated.

This looks like a BTL panic sell off. 

http://www.rightmove.co.uk/property-for-sale/property-56613703.html

Horrific price considering what houses on this street were selling for even two years ago. The entire country probably needs rebuilding street by street after this BTL shitfest has been totally unwound.

http://www.rightmove.co.uk/house-prices/HA9/ELMSTEAD-AVENUE.html?country=england&locationIdentifier=STREET^923158&searchLocation=Elmstead+Avenue

[BearlyBegun]

I definitely think I'm seeing an increase in property for sale that is being offloaded by BTL - they are more likely (as you suggest) to have been "improved" in the way you describe, i.e. butchered and bodged to cram rooms in more tightly and therefore be rented for more.

Every time I see an obvious example like this on Rightmove, my immediate thoughts are about how much it might cost to rectify if I were buying as an OO.

 

So I agree, this is going to work against the BTL seller on the way out as an OO will naturally offer lower to cover the cost of the changes that would be needed to restore the property to a proper acceptable layout!

[mattyboy1973]

Fixtures and fittings, kitchens, and general decorative order will usually be below par as well - to put it mildly. No doubt in my mind that ex-BTL will sell for quite a discount to ex-OO properties on average. They might, of course, go to another LL who can make the yields work with the new tax structure, and who isn't relying on capital gains for profit - but it is a long way down before we reach that point.

[999house]

16 minutes ago, AvoidDebt said:

There's been a flood of properties in London which would have traditionally gone to families but have been bagged by BTL'ers and chopped up into hideous bedsits. Entire streets obliterated.

This looks like a BTL panic sell off. 

http://www.rightmove.co.uk/property-for-sale/property-56613703.html

Horrific price considering what houses on this street were selling for even two years ago. The entire country probably needs rebuilding street by street after this BTL shitfest has been totally unwound.

http://www.rightmove.co.uk/house-prices/HA9/ELMSTEAD-AVENUE.html?country=england&locationIdentifier=STREET^923158&searchLocation=Elmstead+Avenue

 

6 bedrooms for rent. Heres the living area. Greedy *****s.

Seems to be alot of this in Reading.

Edited December 9, 2016 by 999house

[Patient London FTB]

40 minutes ago, Wolfie84 said:

Just been thinking about BTL LLs being forced to sell up through all the measures which are coming in... With them out of the market, these would be places being bought up by OO at lower prices anyway (as otherwise the BTL buyer wouldn't have had the place in the first instance).

So what happens as a result of all the 'improvements' they've made to the house when they sell it back to OO?  I have my shared flat in mind.  The house is in London has been split into two flats.  We share the upper flat and has a 'master' bedroom which has a tiny en-suite shower-room shoe-horned on to it.  There are then two smaller double bedrooms.  One of which had some space taken from it to shoe-horn in a small bathroom for these two rooms to share.  There's also a combined kitchen/reception room that's a decent size.

This set up works okay as a shared house, but I'd be scratching my head as to what to do with it if it became a family home.  Certainly, there'd need to be some re-configuration of the rooms so that it would work.

My point is this though, if this flat was switching from HMO to OO use, the buyer is going to need to spend some cash to change it around and make it work.  This surely means that for a BTL LL looking to sell it, they're going to have to wear some of this cost in the price that it sells for, leading to lower prices than would have otherwise been the case.  Obviously, the irony of this is that they'd have  spent a load of money on the place "adding value" when in actual fact it ends up costing them money.

I wonder how big a problem this might be (I guess relatively small in the grand scheme of things)?  Any thoughts?

It sounds like the kind of property that a cash (or low LTV) BTL buyer would pay more for than an OO. 

 

[winkie]

Also streets that used to be OO family homes, and blocks that were first time buyer OO are now divided into small units and bedsits to rent out to make money on, nobody has a stake in the care of the building, the garden, the communal area, nobody knows who any new neighbour will be, how long they will live there, how noisy or neighbourly they will be......you would only buy a place like that if the price was right I would have thought.....;)

[Wolfie84]

1 hour ago, Patient London FTB said:

It sounds like the kind of property that a cash (or low LTV) BTL buyer would pay more for than an OO. 

 

Probably true in my case.  Brings me to another personal bug-bear.  There's a reasonable sized new build block going up near me with a bunch of two bed flats.  Each have a en-suite master and separate main bathroom.  Perhaps it says more about me, but I'd rather have bigger rooms and one bathroom / less space and lower prices.

[Wolfie84]

1 hour ago, AvoidDebt said:

This looks like a BTL panic sell off. 

http://www.rightmove.co.uk/property-for-sale/property-56613703.html

Yeah, "currently arranged" as separate flats.  I wonder how they've butchered it up?  It will be interesting to see the floorplan when available.

[Patient London FTB]

3 minutes ago, Wolfie84 said:

Probably true in my case.  Brings me to another personal bug-bear.  There's a reasonable sized new build block going up near me with a bunch of two bed flats.  Each have a en-suite master and separate main bathroom.  Perhaps it says more about me, but I'd rather have bigger rooms and one bathroom / less space and lower prices.

And bet those flats have got an open-plan kitchen reception, maybe a balcony. Built with one eye on the BTL market. 

[Starla]

18 minutes ago, Wolfie84 said:

Probably true in my case.  Brings me to another personal bug-bear.  There's a reasonable sized new build block going up near me with a bunch of two bed flats.  Each have a en-suite master and separate main bathroom.  Perhaps it says more about me, but I'd rather have bigger rooms and one bathroom / less space and lower prices.

Which reminds me of this on a recent search http://www.rightmove.co.uk/property-for-sale/property-56915986.html

Not a butchered BTL, the architect got there first. What is the point of having 2 toilets (one described as a "family bathroom" ) and a utility room and a "storage space large enough to fit a single bed" when it's a ONE bed flat. Surprised they didn't put "excellent local schools" in the blurb. I just want to re-draw the floorplan and make it a workable 2 bed. 

Edited December 9, 2016 by Starla
Edit: To add Floorplan

[Madcrash]

1 hour ago, Wolfie84 said:

Probably true in my case.  Brings me to another personal bug-bear.  There's a reasonable sized new build block going up near me with a bunch of two bed flats.  Each have a en-suite master and separate main bathroom.  Perhaps it says more about me, but I'd rather have bigger rooms and one bathroom / less space and lower prices.

Exactly the issue I have. All new build in London seems to be configured as 2 bed, 2 bath which is a complete waste of space for an OO. I live in a rented 2 bed, 2 bath and I go into the main bathroom perhaps once a week to check there's nothing wrong with it. It would be fine to use the 6-7sqm it takes up if I had 100sqm to play with but with 65sqm it's completely pointless. And don't get me started on all the wasted hallway space in these blocks too...

[Madcrash]

3 hours ago, AvoidDebt said:

There's been a flood of properties in London which would have traditionally gone to families but have been bagged by BTL'ers and chopped up into hideous bedsits. Entire streets obliterated.

This looks like a BTL panic sell off. 

http://www.rightmove.co.uk/property-for-sale/property-56613703.html

Horrific price considering what houses on this street were selling for even two years ago. The entire country probably needs rebuilding street by street after this BTL shitfest has been totally unwound.

http://www.rightmove.co.uk/house-prices/HA9/ELMSTEAD-AVENUE.html?country=england&locationIdentifier=STREET^923158&searchLocation=Elmstead+Avenue

Who in their right mind is paying £3100 a month for that dive?

[Arpeggio]

Good point. Borrow To Leach dividing up a house was for profit. Now they might have to sell to an OO who isn't looking to make a profit and just wants to live there, so wont be interested in future profits to be gained being considered in the price they pay. 

Adapting the house back again. A loss for a loss to prevent a greater loss.

Edited December 9, 2016 by Arpeggio

[Lovely Rum]

good point op

house next door to be have been cut up to house three families

i suppose the landlord will try to sell it as three individual flats

[This time]

1 hour ago, Lovely Rum said:

good point op

house next door to be have been cut up to house three families

i suppose the landlord will try to sell it as three individual flats

I've been seeing a fair bit of the opposite - properties that have been divided into flats being marketed as a house.

[GreenDevil]

22 hours ago, AvoidDebt said:

There's been a flood of properties in London which would have traditionally gone to families but have been bagged by BTL'ers and chopped up into hideous bedsits. Entire streets obliterated.

This looks like a BTL panic sell off. 

http://www.rightmove.co.uk/property-for-sale/property-56613703.html

Horrific price considering what houses on this street were selling for even two years ago. The entire country probably needs rebuilding street by street after this BTL shitfest has been totally unwound.

http://www.rightmove.co.uk/house-prices/HA9/ELMSTEAD-AVENUE.html?country=england&locationIdentifier=STREET^923158&searchLocation=Elmstead+Avenue

What a joke, more chance of ....

 

[spyguy]

22 hours ago, 999house said:

 

6 bedrooms for rent. Heres the living area. Greedy *****s.

Seems to be alot of this in Reading.

Ive had arguments about Reading/Thames Valley on here.

Last time I looked, Reading and Bracknell appeared to be turing most of its housing stock into a massive leverage  BTL play.

For the population, there's not much i nthe way of new jobs going there. Most of the high paying has left or is leaving.

What left seems to be LL chasing housing benefit/tax credit money.

We'll see when the tide goes out.

 

[999house]

11 minutes ago, spyguy said:

Ive had arguments about Reading/Thames Valley on here.

Last time I looked, Reading and Bracknell appeared to be turing most of its housing stock into a massive leverage  BTL play.

For the population, there's not much i nthe way of new jobs going there. Most of the high paying has left or is leaving.

What left seems to be LL chasing housing benefit/tax credit money.

We'll see when the tide goes out.

 

I am thinking of moving there. Can you help explain a little more?

[spyguy]

2 minutes ago, 999house said:

I am thinking of moving there. Can you help explain a little more?

Thames Valley *used* to be the place you went if you did software or hardware. Big computer sued to be expensive - think 1M for a development system.

All the big US companies were there - MS, HP, etc.

All the big, IT firms from post 2000 are struggling. They are laying off staff.

All the new investment is London or elsewhere - computers are cheap these days. The people who add value  are not. Companies are smaller and go to where the people who add value are or want to live. Thats no longer the M4 corridor. The traffic is horrendous now and,b ar Reading, the train service is cr.p. Even then you have to get into Reading to use the fast train, which is impossible from nay direction.

 

[frederico]

OP makes a very good point, most of these BTLs are going to be very difficult to shift.

This is going to see a blood bath.

[Funn3r]

1 hour ago, spyguy said:

Thames Valley *used* to be the place you went if you did software or hardware. Big computer sued to be expensive - think 1M for a development system.

All the big US companies were there - MS, HP, etc.

All the big, IT firms from post 2000 are struggling. They are laying off staff.

All the new investment is London or elsewhere - computers are cheap these days. The people who add value  are not. Companies are smaller and go to where the people who add value are or want to live. Thats no longer the M4 corridor. The traffic is horrendous now and,b ar Reading, the train service is cr.p. Even then you have to get into Reading to use the fast train, which is impossible from nay direction.

 

He's right, I've been here for 40 years. I only came to see a Bob Dylan concert but when I saw the huge scale of IT jobs I just never went back. Very different now and the IT multinational I work for is laying off just like all the others. Traffic is grim and the train is slow. There are some nice things (Wokingham wins the happiest place to live table) but you will have to put your hand deep into your pocket. For normal people doing normal jobs Thames Valley not what it was.

[Dyson Fury]

This thread makes an excellent point. Within 200 yards of my house (a University City in East Kent) I can show you two student HMO's (former family homes) where a detached garage has been converted into an extra "bedroom" by bricking up the entrance, plasterboarding the internal walls, and putting in a window. These garages, of course, were not designed as habitable rooms, and were built with single skin brick walls. We can only imagine the standard of thermal insulation in these "bedrooms". Do they have heating? Is it connected to the system of the main house?  Is there a drinking water supply or any sanitation?  I feel really sorry for the students who are paying £££ in rent to "live" there.

An OO buying one of these houses will not want a flophouse room at the end of the garden - they will want a garage.  The BTLer selling the house will have to pay the reconversion cost, or accept a lower sale price.

 

Edited December 10, 2016 by Dyson Fury

[Sancho Panza]

On 09/12/2016 at 3:53 PM, AvoidDebt said:

There's been a flood of properties in London which would have traditionally gone to families but have been bagged by BTL'ers and chopped up into hideous bedsits. Entire streets obliterated.

This looks like a BTL panic sell off. 

http://www.rightmove.co.uk/property-for-sale/property-56613703.html

 

It's by a tube line...!