BTL carnage anecdotal

[The Angry Capitalist]

21 hours ago, Bear Goggles said:

I agree.

I think what's happened is that mortgagee BTLers have been swept away by rising interest rates and tighter lending criteria, so it's just cash buyers now, and they are by definition more financially savvy than your average BTL debt monkey.

Don't count on it.

There are a  lot of stupid people out there who are cash buyers too.

[winkie]

1 minute ago, The Angry Capitalist said:

Don't count on it.

There are a  lot of stupid people out there who are cash buyers too.

.....because they have never earned money the hard way.....a property has made it for them......easy come, easy go.

[Timm]

12 minutes ago, Notting Hell said:

It's obviously an HMO...

https://www.oxford.gov.uk/info/20113/houses_in_multiple_occupation/910/register_of_hmo_licences

No licence at the moment, and it is unoccupied. Address is 105 Botley Road.

 

7 minutes ago, Notting Hell said:

105 Botley Road Oxford OX2 0HB

Only planning applications are from 1958! Oldest I have seen recorded online.

https://public.oxford.gov.uk/online-applications/search.do?action=simple&searchType=Application

Thanks.

In that case, they will need to demonstrate that the house has been in use as an HMO since 25 February 2012.

https://www.oxford.gov.uk/info/20067/planning_policy/319/planning_control_for_hmos

If they can't - they need planning permission.

[Notting Hell]

10 minutes ago, Timm said:

If they can't - they need planning permission.

I dot know the exact rules - but maybe PP wasn't necessary if it was operating as an HMO before 2012?

Why do they need to demonstrate anything?

[Frankie Teardrop]

By the decor, Id guess that place has been operating as a HMO for decades.

[Notting Hell]

@Timm Sorry I see what you are saying. Depends on what the buyer wants to do with the property I suppose.

[Timm]

1 minute ago, Notting Hell said:

@Timm Sorry I see what you are saying. Depends on what the buyer wants to do with the property I suppose.

It would be worth more as an HMO, but that does not appear to be it's legal status.

[Timm]

9 minutes ago, Notting Hell said:

I dot know the exact rules - but maybe PP wasn't necessary if it was operating as an HMO before 2012?

Why do they need to demonstrate anything?

Because they risk planning enforcment action if they operate as an HMO.

[DarkHorseWaits-NoMore]

Obviously, change the agent and relist at 750k enit!
6 months have passed so it must be worth more now 😝.

[Notting Hell]

15 minutes ago, Timm said:

It would be worth more as an HMO, but that does not appear to be it's legal status.

Assuming it was operating as an HMO before 2012, I wouldn't assume it has lost its HMO PP status just because it is currently unoccupied? PP for HMO and licence are two different things. Its legal status is probably "HMO PP by pre-2012" but no operating licence as it is unoccupied (and not on the register). A corner shop doesn't lose planning permission just because it doesn't have anyone operating it.

The main risk here is to the buyer, who might buy it assuming it was operating with HMO PP or pre-2012 status, but when the new owner applies for an HMO licence, discovers it needs planning permission, which the council then refuses. That is of course assuming that HMO licensing bothers to check HMO planning. Depends how the council determines whether it was operating as an HMO before 2012-- I guess the onus lies on the person seeking licence to show it has valid PP or has been operating before 2012.

That's my understanding anyway.

There could be a scam here... rough up your property (scuff the old gloss- HMOs still have masses of gloss off as they are never redecorated), install fire door closers, drop an iron on the hallway carpet. i.e. make it look like an old HMO then jack up the price 🤡 

Edited June 16, 2023 by Notting Hell

[shlomo]

1 hour ago, Timm said:

 

I meant legally...

Dous it have a license? Does it have planning permission?

If we knew the number, I could check...

If it was licensed it would be mentioned as it could get a higher price probably, 

[Notting Hell]

1 minute ago, shlomo said:

If it was licensed it would be mentioned as it could get a higher price probably, 

I don't think that's right - the licence isn't transferable. The new owner would still need to apply for a licence. Ltd structure probably gets you around this if you sell the company rather than the freehold.

PP is however

Edited June 16, 2023 by Notting Hell

[Lagarde's Drift]

50 minutes ago, The Angry Capitalist said:

From a BTL purpose that is a poor yield.

You can get around 5% on a 1 year US treasury.

There are no maintenance costs. No worries about a tenant not paying the rent. No stress to evict a tenant. No insurance costs etc.

Just sit idly by and collect the 5% yield without any hassle.

Furthermore, it's only for 1 year so you can look at potential other options in 12 months time and see if the property comes down in price offering a better potential yield.

 

 

 

For many years BTL has made no sense based on yield. You got better returns on a S&P tracker for ages.

BTL has been all about leveraged bets on capital gains. Hence despite rents being stupidly high the yields aren't that great on current property value.

[msi]

19 minutes ago, Lagarde's Drift said:

For many years BTL has made no sense based on yield. You got better returns on a S&P tracker for ages.

BTL has been all about leveraged bets on capital gains. Hence despite rents being stupidly high the yields aren't that great on current property value.

Yields weren't needed as there were some juicy tax breaks.

When you can't get yield or capital growth, then your 'business' is nothing more than smoke

[VancouverGuy]

24 minutes ago, Lagarde's Drift said:

You got better returns on a S&P tracker for ages.

But with the S&P 500 you'll never experience the pleasure of fishing an Iguana out of a toilet at 2am.

[msi]

Just now, VancouverGuy said:

But with the S&P 500 you'll never experience the pleasure of fishing an Iguana out of a toilet at 2am.

or boasting how you 'provide' to the poor.  Just like Jesus, really

[NoHPCinTheUK]

With the S&P you’re not providing a service and you’re not making sure that millions of houses won’t disappear from the planet. 

[NoHPCinTheUK]

@TheCountOfNowhere any news from our favourite index? 

[Lagarde's Drift]

6 minutes ago, NoHPCinTheUK said:

With the S&P you’re not providing a service and you’re not making sure that millions of houses won’t disappear from the planet. 

I would disagree slightly. Controversial perhaps but there is merit to the old school idea that business is good for society, creating wealth, jobs and innovation and of course generating tax for govt programmes. Countered by companies tendency towards evil behaviour for profits.

[Lagarde's Drift]

11 minutes ago, VancouverGuy said:

But with the S&P 500 you'll never experience the pleasure of fishing an Iguana out of a toilet at 2am.

Gwan there must be a story behind that

[The Angry Capitalist]

50 minutes ago, Lagarde's Drift said:

For many years BTL has made no sense based on yield. You got better returns on a S&P tracker for ages.

BTL has been all about leveraged bets on capital gains. Hence despite rents being stupidly high the yields aren't that great on current property value.

Yes.

It was a gamble that house prices would go into the stratosphere that attracted BTL speculators not the yield per se. 

Although in some circumstances air b n b/holiday lets have yielded good returns in some places and might have been attractive in some cases.

However, both prospects were/are based on money printing and not an increase in production and thus higher wages.

Artificial interest rates always encourages gambling and a misallocation of resources.

[Timm]

1 hour ago, Notting Hell said:

Assuming it was operating as an HMO before 2012, I wouldn't assume it has lost its HMO PP status just because it is currently unoccupied? PP for HMO and licence are two different things. Its legal status is probably "HMO PP by pre-2012" but no operating licence as it is unoccupied (and not on the register). A corner shop doesn't lose planning permission just because it doesn't have anyone operating it.

The main risk here is to the buyer, who might buy it assuming it was operating with HMO PP or pre-2012 status, but when the new owner applies for an HMO licence, discovers it needs planning permission, which the council then refuses. That is of course assuming that HMO licensing bothers to check HMO planning. Depends how the council determines whether it was operating as an HMO before 2012-- I guess the onus lies on the person seeking licence to show it has valid PP or has been operating before 2012.

That's my understanding anyway.

That's my understanding too.

A new buyer might find it hard to provide evidence - rental contracts, rent books ect). Of course, the existing owner could make a legal statement that it has been operating as an HMO for all that time, which the council might accept if they had no evidence to the contrary. The existing owner might not want to make such a statement, as the penalties for making a false statement are similar to perjury.

My point is, if they could demonstrate it is lawfull as an HMO, would they not have done so?

1 hour ago, Notting Hell said:

There could be a scam here... rough up your property (scuff the old gloss- HMOs still have masses of gloss off as they are never redecorated), install fire door closers, drop an iron on the hallway carpet. i.e. make it look like an old HMO then jack up the price 🤡 

 

[Bear Goggles]

2 hours ago, Timm said:

 

I meant legally...

Dous it have a license? Does it have planning permission?

If we knew the number, I could check...

Number 105 😉 - edit - seen someone else has replied

Edited June 16, 2023 by Bear Goggles

[Notting Hell]

21 minutes ago, Timm said:

My point is, if they could demonstrate it is lawfull as an HMO, would they not have done so?

Yes, I see now.

It could just be the listing of course, lazy EA, loads of reasons.

It's like when leasehold flats are advertised. Often they won't describe the tenure at all (I've never been able to determine why  EAs don't just offer the information transparently upfront instead of wasting everyone's time), some of the time they have >100 year leases etc. (i.e. acceptable length), some of the time they have very short leases. 

The main takeaway is that you have to be so shrewd if you're getting involved in this stuff. If you don't DYOR and get a poor quality solicitor (whom lots of people believe will hold your hand), you could so easily get screwed.

Perhaps this is why this particularly property has dropped in price (rather than HPC): it might have been operating as an unlicensed HMO and therefore its price is its value as a family home.

[Notting Hell]

Then again, looking closely at the photos:-

- smoke alarms in every room

- fire doors

- fire door closers

- fire extinguisher in kitchen

- fire blanket in kitchen

... these very much look like things you would do only if you were running an HMO legally.

So it would be strange to have provided these things, but to be operating unlicensed.

 

Unless the intent is to lead the tenants to believe that it was being run properly... but then we are well into the realms of wild speculation....

Edited June 16, 2023 by Notting Hell