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What the UK could learn from Germany


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I have to say that Germany and it's attitude to BTL is a real eye opener.

Tenants have security of tenure, even if the landlord sells the flat. They also get first dibs on the purchase of the flat. Since tenants tend to stay so long, properties are rented out unfurnished which means landlords have less maintenance. When tenants move out, with all their furniture, it is a commonplace to have the house repainted and the flooring re-done and why not, since the place is completely empty and it is easy to do.

The most interesting part for me is that apparantly, one would not be able to get a mortgage for more than 1 BTL. Not sure if that is true. What I do know to be true, is that there are no interest only mortgages, and definitely no equity release possibility. If you want to release the money tied up in your home, you have to sell it.

I don't understand why it is so hard for the UK Govt to cool down the BTL market.

 

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I have to say that Germany and it's attitude to BTL is a real eye opener.

Tenants have security of tenure, even if the landlord sells the flat. They also get first dibs on the purchase of the flat. Since tenants tend to stay so long, properties are rented out unfurnished which means landlords have less maintenance. When tenants move out, with all their furniture, it is a commonplace to have the house repainted and the flooring re-done and why not, since the place is completely empty and it is easy to do.

The most interesting part for me is that apparantly, one would not be able to get a mortgage for more than 1 BTL. Not sure if that is true. What I do know to be true, is that there are no interest only mortgages, and definitely no equity release possibility. If you want to release the money tied up in your home, you have to sell it.

I don't understand why it is so hard for the UK Govt to cool down the BTL market.

 

Who owns the properties that are rented?

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Theres a lot the uk could learn from the Germans...but wont until we are forced to.

They hit rock bottom in 1945 and built from there...although they got preference with the Marshall program money. We on the other hand have had years of delusion having been the "winners". We weren't, next to the axis powers it could be argued that we lost the most and were the target of the US/USSR who wanted to take over from us as the world superpower(s). This comes with the caveat of course that the USSR lost 27 Million in WW2 compared with our few hundred thousand.

The Germans "greatest" generation were from the baby boom era, their "repulsive" generation was the generation that fought the war...opposite to us.

They know how to run an economy because they have had to. They have also heeded the lessons of the 20's.

 

I've had a feeling for a while now that this credit bubble being pricked by the COVID pin may be the event that makes the UK finally see itself in true context, thus setting us on a road to a real recovery...but it wont be easy.

Of course we have tried the property mini boom out of desperation but hopefully its been seen as a fools errand, however I am not betting on it.

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I have to say that Germany and it's attitude to BTL is a real eye opener.

Tenants have security of tenure, even if the landlord sells the flat. They also get first dibs on the purchase of the flat. Since tenants tend to stay so long, properties are rented out unfurnished which means landlords have less maintenance. When tenants move out, with all their furniture, it is a commonplace to have the house repainted and the flooring re-done and why not, since the place is completely empty and it is easy to do.

The most interesting part for me is that apparantly, one would not be able to get a mortgage for more than 1 BTL. Not sure if that is true. What I do know to be true, is that there are no interest only mortgages, and definitely no equity release possibility. If you want to release the money tied up in your home, you have to sell it.

I don't understand why it is so hard for the UK Govt to cool down the BTL market.

 

A good FT article on this a few years back

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It wasn't that different in england before thatcher. 

All she changed was 1. Abolish security of tenure. 2. Abolish rent controls. 

Germany could be ruined by doing the same. 

The interesting question is why politically that can't happen in Germany and why it happened so easily in  england. 

The difference is social cohesion vs the tory party. 

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Theres a lot the uk could learn from the Germans...but wont until we are forced to.

They hit rock bottom in 1945 and built from there...although they got preference with the Marshall program money. We on the other hand have had years of delusion having been the "winners". We weren't, next to the axis powers it could be argued that we lost the most and were the target of the US/USSR who wanted to take over from us as the world superpower(s). This comes with the caveat of course that the USSR lost 27 Million in WW2 compared with our few hundred thousand.

Not a lot of people know that we actually got more Marshall plan aid than Germany but we also took out a massive loan on top of that. Unfortunately the government still thought we could be a third superpower alongside the USA and USSR, but this was an illusion.

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Not a lot of people know that we actually got more Marshall plan aid than Germany but we also took out a massive loan on top of that. Unfortunately the government still thought we could be a third superpower alongside the USA and USSR, but this was an illusion.

Jolly generous describing USSR as a superpower. Let us not forget they were armed by the British via the Artic Convoys. They arguably have the worlds strongest army but limited ability to project power.

in 1945 the population of the British Empire outside of Britain was 700m, but 1965 is was 5m and 3m of those were in HK. We'd effectively mortgaged the empire to wage war and not it was being cashed in. 200+ years of global economic and military prestige destroyed by complacency, arrogance and nepotism. That said the orderly divestiture of an empire ain't cheap and offers limited returns given the year of investment of capital. 

I believe to this day that the US delayed intervention in WW2 to ensure that the ultimate outcome was a unipolar world of their making and to which they would benefit. 

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Anyone here lived in Germany? 

I have, in Munich, Berlin and Darmstadt renting there is nothing like BTL.

Once you are in the place is effectively your own. The landlord does not have a key and will never enter it. On the other hand all maintenance is your responsibility. If you want a room redecorated or even new kitchen/bathroom it is your responsibility to arrange and pay for.  

The property is yours for as long as you wish, the landlord has no ability to reclaim the property for as long as you are paying the rent; which can only be raised in accordance with the contract you signed.  

Landlords are in it for the very long term, either property companies or wealthy families looking for a long term home for money that will be handed down the generations. Nobody buys property in Germany with a large mortgage and a deposit raised on credit cards.   

There is a downside to this ,short term rental is hard to come by and very expensive. Back in the 90s I lived in the Munich City Hilton for almost 2 years because the long term deal I had there was cheaper than renting, 

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It wasn't that different in england before thatcher

All she changed was 1. Abolish security of tenure. 2. Abolish rent controls. 

Germany could be ruined by doing the same. 

The interesting question is why politically that can't happen in Germany and why it happened so easily in  england. 

The difference is social cohesion vs the tory party. 

Yawn.  Anything Thatcher did Blair could have reversed. 

Instead house prices shot up like lightning between 2000 and 2007.

Whilst it would be nice for you to be able to pin everything on the Tories, it just isn't the case.  All parties have contributed over the last 30 years.

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Anyone here lived in Germany? 

OP here. I have lived here now, for 10 years. Not to say house prices are not crazy here too - here in Munich, they are not that far off London prices, but most of the landlords are huge companies who run their portfolios efficiently.

Rent rises are capped and most companies don't even seem to rise rents in line with the caps - It's very common to find people who have been paying the same rent for decades.

And of course, I love the security of tenure and the fact that pretty much all properties are unfurnished, so you can really make your place your home, instead of just a place where you put up with Argos tat.

The other thing is that you will not find a mortgage here for less than 10 years, most are considerably more. 

But yeah, I'm fascinated by the fact that you can't re-mortgage here.

 

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Anyone here lived in Germany? 

Stuttgart area for 18 months. Wonderful the appartment costs were all in apart from phone / internet. Came fully furnished and when a chair broke they apologised and replaced it free of charge.

The appartment was owned by the local housing authority who also took private tenants.

Was cheaper for 18 months than 7 months in UK. 

Of course none of this sits well with the crowd who think England is superior to Europe or make fun of Euroland saying its worth it not to speak German, but there you go.

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  • 439 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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