Jump to content
House Price Crash Forum
Sign in to follow this  
Sancho Panza

London LL says rents down,voids up.Worst in 25 years.

Recommended Posts

From the BTL thread,deserves a thread of it's own.

Hattip A third of everything.

10 hours ago, A third of everything said:

 

OP asks:'Would you buy a flat to let and become a landlord now?'

 
'thecatneuterer Sat 22-Jul-17 11:12:08

Professional London Landlord of over 25 years here. No, no way! Prices are very high now compared to rents. You would do well to just cover the interest costs, but there are so many more costs that aren't considered. My average maintenance spend per property per year is £3000. I suppose new flats may have less maintenance, but you'd be surprised how stuff adds up.

If you have to evict someone for non payment of rent it can take a year to get rid of them and you will lose a whole year's rent. It's something you need to consider. Or take out expensive rental guarantee insurance, but that will limit your potential tenants as the insurance companies are very fussy about who they will accept.

Also now of course interest payments aren't counted as an expense for tax purposes over the standard rate of tax. So if your normal income plus your rental income takes you into the 40 per cent tax band then you could end up paying tax on income you haven't actually made. The chances are that even those paying the lower rate of tax will be unable to claim this in a few years, and certainly if another government gets in.

Rents are falling. Certainly in London. Brexit is already having an effect. When it actually happens this will only increase. Demand for property is falling because of the fall of the number of Europeans coming here. Supply is increasing, particularly in London. For the first time in 25 years I have void periods despite lowering rents. From my point of view the bottom has absolutely fallen out of the rental market, although I haven't seen this widely reported in the LL press, so may be it's just a feature of the particular market I'm in (houseshares for mainly EU professionals visiting London for work/internships has been my main market).

Regulation is becoming ever more onerous and expensive. Licensing is coming in all over the country and there is a charge for this.

There is a very strong chance of a shift to more secure tenancies. This can make life very much more difficult for landlords.

I can't see how all the above can't result in a large number of LLs selling up. While this will have the effect of stabilising rents (less supply) it will also act as a depressor on house prices.

This is the first time in 25 years when I would categorically not recommend becoming a LL under any circumstances.'

 

Share this post


Link to post
Share on other sites
Quote

Estate agent says that rental market is booming and these flats will hold their venue due to location...

I think if we bought, we would go for the full tenant management service - due to having our fingers burned by crap tenant years ago when last we rented out a property.

Words cannot contain the level of stunned contempt I have for this persons mental faculties.

Share this post


Link to post
Share on other sites

i wonder whether this spike in inflation (in particular food costs which are likely to represent a large proportion of the household budget) will cause a spike in BTL arrears? BTL could be in trouble with the increased regulation, finance costs, tax changes to be compounded by slowing household incomes and a slowing economy. In fact I imagine this would  cause much anxiety with lenders. They may decide to exit BTL lending! (Let Nationwide do all the BTL lending :) )

Edited by Ash4781

Share this post


Link to post
Share on other sites
1 hour ago, Bruce Banner said:

Estate agents are the same the world over..... "Yes, I agree, prices are falling, but not in [add location] because [ add hair-brained excuse]".

It's the owners too. I was recently told by the owner of a small holder in Wales that prices are coming down but not in this valley because there is more "economic activity". Not quite sure what he mean't.

Share this post


Link to post
Share on other sites
14 minutes ago, Uncle_Kenny said:

It's the owners too. I was recently told by the owner of a small holder in Wales that prices are coming down but not in this valley because there is more "economic activity". Not quite sure what he mean't.

If its the valleys then steroid dealing. Thats the only economic activity ive seen.

 

Share this post


Link to post
Share on other sites

I know of 3 unrelated people who are going back to Europe. Brexit has changed a lot of sentiment and unless you really love the UK, why come here when you can go to somewhere cheaper with better quality of life and better pay, like Germany?

Share this post


Link to post
Share on other sites
6 minutes ago, fru-gal said:

I know of 3 unrelated people who are going back to Europe. Brexit has changed a lot of sentiment and unless you really love the UK, why come here when you can go to somewhere cheaper with better quality of life and better pay, like Germany?

Indeed, it's about the shock "F U" message the result gave to content Europeans living here, who now feel rather uncomfortable with how the Brits view their presence, regardless of whether Brexit actually goes ahead. I think too many are underestimating the effect this will have on future demand for rentals in major cities in particular, so the BTL sell off in the SE may be balanced by European emigration, keeping rents level.

Edited by Barnsey

Share this post


Link to post
Share on other sites

Know a few people that own a small place outright close to where they live, that they haven't bothered to sell....they let it out without involving agents, low rent, trusted tenants who look after it well.....not all landlords are highly leveraged to get as much rent as they possibly can, in places they don't know to people they don't know or care for.;)

Share this post


Link to post
Share on other sites
15 minutes ago, fru-gal said:

I know of 3 unrelated people who are going back to Europe. Brexit has changed a lot of sentiment and unless you really love the UK, why come here when you can go to somewhere cheaper with better quality of life and better pay, like Germany?

Poles who i thought were settled here with school age kids are going back after close on 10 years. I'm being told things are economically improved in poland and definitely the brexit vote has put the wind up them .

The kids have been in the english school system for a few years and speak english so a big benefit. The parents are worried that their uk savings are losing buying power in Poland so want to cash in and buy a house in their native land . Also told schooling is more advanced but the maybe thats because English is a predominantly a 2nd language in London. Wonder why that is :-)

I'm  not   completely surprised that they are going because their rental life style in London is crap. But I've been told that new younger  poles will replace them . There leaving will effect the market for rentals at the bottom end and local schools. Their jobs here semi skilled at best, so no brain drain .

 

Share this post


Link to post
Share on other sites
3 minutes ago, chicker said:

Poles who i thought were settled here with school age kids are going back after close on 10 years. I'm being told things are economically improved in poland and definitely the brexit vote has put the wind up them .

The kids have been in the english school system for a few years and speak english so a big benefit. The parents are worried that their uk savings are losing buying power in Poland so want to cash in and buy a house in their native land . Also told schooling is more advanced but the maybe thats because English is a predominantly a 2nd language in London. Wonder why that is :-)

I'm  not   completely surprised that they are going because their rental life style in London is crap. But I've been told that new younger  poles will replace them . There leaving will effect the market for rentals at the bottom end and local schools. Their jobs here semi skilled at best, so no brain drain .

 

That's not happening and Brexit hasn't even happened yet; 

http://www.telegraph.co.uk/news/2017/05/25/net-migration-eastern-eurpoe-slows-trickle/

Quote

Net migration from Eastern Europe has slowed to a trickle with as few as 5,000 people arriving in the UK from the countries last year.

I guess tptb will try and get more non-EU immigration to make up for it.

Share this post


Link to post
Share on other sites
4 minutes ago, fru-gal said:

That's not happening and Brexit hasn't even happened yet; 

http://www.telegraph.co.uk/news/2017/05/25/net-migration-eastern-eurpoe-slows-trickle/

I guess tptb will try and get more non-EU immigration to make up for it.

Yes i was surprised when a pole told me this but as they say there is no data in anecdotal . If things are improving in Poland why come to the uk ?

Share this post


Link to post
Share on other sites
3 minutes ago, chicker said:

Yes i was surprised when a pole told me this but as they say there is no data in anecdotal . If things are improving in Poland why come to the uk ?

The skilled, working EE have stopped coming. Mainly due to the fall in the pound against euro and improvements in polish and surrounding economy.

The scummy benefit claiming and non working, ee families are still arrivving.

Share this post


Link to post
Share on other sites
14 minutes ago, chicker said:

Yes i was surprised when a pole told me this but as they say there is no data in anecdotal . If things are improving in Poland why come to the uk ?

I actually think it is worse than the media is saying. Where I live there are now 10 for sale/fore rent boards in the very near proximity when there have been perhaps 1 or 2, months apart for the last 5 years. Something is definitely happening. 

Share this post


Link to post
Share on other sites

Officialky theres 2m ee in uk since 2004.

Unofficially i reckon 6m.

Of those, despite the hype, 90% are a tax drain - doing low end jobs, on tax credit top ups, with kids in school.

Benefit reforms will the the remaining eeers go back.

Io btl, ees, tax credits, - all part if browns clusterfuk economy.

Share this post


Link to post
Share on other sites
21 minutes ago, fru-gal said:

I actually think it is worse than the media is saying. Where I live there are now 10 for sale/fore rent boards in the very near proximity when there have been perhaps 1 or 2, months apart for the last 5 years. Something is definitely happening. 

Its EEs going back and LHA cuts.

Share this post


Link to post
Share on other sites
20 minutes ago, spyguy said:

Its EEs going back and LHA cuts.

What LHA cuts? In my part of London they still pay 88% of full rent!

Share this post


Link to post
Share on other sites
Just now, fru-gal said:

What LHA cuts? In my part of London they still pay 88% of full rent!

There was a ax credit change where, as sadface tax credit woman cried on telly, rather than reducing tax credits, they dropped rent allowance, which has to be paid for.

I think the drop is about 200/m.

Share this post


Link to post
Share on other sites
4 hours ago, spyguy said:

There was a ax credit change where, as sadface tax credit woman cried on telly, rather than reducing tax credits, they dropped rent allowance, which has to be paid for.

I think the drop is about 200/m.

Do you mean the cap that means when someone claims with a 3rd child they no longer get tax credits and LHA is limited to 2 children or is this a different change to LHA?

Share this post


Link to post
Share on other sites
5 hours ago, chicker said:

Yes i was surprised when a pole told me this but as they say there is no data in anecdotal . If things are improving in Poland why come to the uk ?

To be honest, something is rotten in the state of Poland.

Real household incomes have been on the up for two decades now, and the entire economy was put on rocket fuel in 2004 when Poland joined the EU. In terms of political stability though, it's an asbolute shambles at the moment, and I can see it as a deterrent. Probably not strong enough to convince more people to come here, but strong enough to make anyone trying to go back reconsider.

I used to think that kids would also act as a major road block, but then I realized that tons of Poles were putting their kids into Polish weekend schools, so they are kept up to date with Polish curriculum for language and history. So probably not as big of an issue as I initialy thought.

Share this post


Link to post
Share on other sites
6 hours ago, fru-gal said:

I know of 3 unrelated people who are going back to Europe. Brexit has changed a lot of sentiment and unless you really love the UK, why come here when you can go to somewhere cheaper with better quality of life and better pay, like Germany?

I recently met a very nice Spanish couple who are neighbours of a daughter in Oxford.  They both work in bio-medical research, have been here 14 years, both kids born here and happy at school.  They don't want to have to leave, and I sincerely hope they won't have to.  

They have previously told daughter that despite their academic qualifications it's very hard to get a job in Spain and that  the pay is crap. 

Share this post


Link to post
Share on other sites
9 minutes ago, Mrs Bear said:

I recently met a very nice Spanish couple who are neighbours of a daughter in Oxford.  They both work in bio-medical research, have been here 14 years, both kids born here and happy at school.  They don't want to have to leave, and I sincerely hope they won't have to.  

They have previously told daughter that despite their academic qualifications it's very hard to get a job in Spain and that  the pay is crap. 

If they are not claiming benefits then theyl be fine.

Share this post


Link to post
Share on other sites
1 hour ago, spyguy said:

If they are not claiming benefits then theyl be fine.

Exactly, as they always were before the EU. Isambard Kingdom Brunel was educated in France. The remaniacs  mindset is that without the EU no one will ever be able to migrate or holiday in another country.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Next General Election   94 members have voted

    1. 1. When do you predict the next general election will be held?


      • 2019
      • 2020
      • 2021
      • 2022

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.