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My Theory On Btl

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In the past, renting out a property was a risky business as the law was heavily in favour of the tenent's rights. As a result of this, the rental market was very small and primarily consisted of three main groups.

(1) Short term lets. These tenants tolerated high rents because it was only for a short time.

(2) Lettings to companies (for foreign employees). These tenants tolerated high rents because someone else was paying the bill.

(3) Lettings paid by local councils. These tenants tolerated high rents because someone else was paying the bills.

Then the law changed and lots people started to get into the BTL market. Today there are simply not enough type 1,2 and 3 tenants to go round. As a result of this, landlords are now having to find tenants from a much wider pool of people. These new renters however simply can't (or won't) surrender a big percentage of their take home pay for rent. They are also proving a very difficult group to extract rent rises from.

The rental market has clearly stalled and if the BTL boom continues, we could end up like France where BTL is very common and rents are a third of the UK.

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In the past, renting out a property was a risky business as the law was heavily in favour of the tenent's rights. As a result of this, the rental market was very small and primarily consisted of three main groups.

(1) Short term lets. These tenants tolerated high rents because it was only for a short time.

(2) Lettings to companies (for foreign employees). These tenants tolerated high rents because someone else was paying the bill.

(3) Lettings paid by local councils. These tenants tolerated high rents because someone else was paying the bills.

Then the law changed and lots people started to get into the BTL market. Today there are simply not enough type 1,2 and 3 tenants to go round. As a result of this, landlords are now having to find tenants from a much wider pool of people. These new renters however simply can't (or won't) surrender a big percentage of their take home pay for rent. They are also proving a very difficult group to extract rent rises from.

The rental market has clearly stalled and if the BTL boom continues, we could end up like France where BTL is very common and rents are a third of the UK.

I think some of us would settle for that. That's the reason why we are so adament to own our own homes in this country. Why rent for 25 years when you can buy a house over the same period? If rents were a third of what they are now then I'd be more than happy to carry on renting.

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In the past, renting out a property was a risky business as the law was heavily in favour of the tenent's rights. As a result of this, the rental market was very small and primarily consisted of three main groups.

(1) Short term lets. These tenants tolerated high rents because it was only for a short time.

(2) Lettings to companies (for foreign employees). These tenants tolerated high rents because someone else was paying the bill.

(3) Lettings paid by local councils. These tenants tolerated high rents because someone else was paying the bills.

Then the law changed and lots people started to get into the BTL market. Today there are simply not enough type 1,2 and 3 tenants to go round. As a result of this, landlords are now having to find tenants from a much wider pool of people. These new renters however simply can't (or won't) surrender a big percentage of their take home pay for rent. They are also proving a very difficult group to extract rent rises from.

The rental market has clearly stalled and if the BTL boom continues, we could end up like France where BTL is very common and rents are a third of the UK.

Maybe that wouldn't be such a bad thing.

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In the past, renting out a property was a risky business as the law was heavily in favour of the tenent's rights. As a result of this, the rental market was very small and primarily consisted of three main groups.

(1) Short term lets. These tenants tolerated high rents because it was only for a short time.

(2) Lettings to companies (for foreign employees). These tenants tolerated high rents because someone else was paying the bill.

(3) Lettings paid by local councils. These tenants tolerated high rents because someone else was paying the bills.

Then the law changed and lots people started to get into the BTL market. Today there are simply not enough type 1,2 and 3 tenants to go round. As a result of this, landlords are now having to find tenants from a much wider pool of people. These new renters however simply can't (or won't) surrender a big percentage of their take home pay for rent. They are also proving a very difficult group to extract rent rises from.

The rental market has clearly stalled and if the BTL boom continues, we could end up like France where BTL is very common and rents are a third of the UK.

I don't understand your thinking.

People cannot live at home forever. Sooner or later they will need to start families.

My observation is that people pay whatever rent they have to ... to some extent ... and if the rent is a big percentage of their take home pay, they have less to spend on other things ... they make do.

Before we ever end up like France Shorthold Tenancy Agreements will have to be replaced with Long term ones. How can rents ever be a third of what they are now. It makes no sense.

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The real problem is that 45% of BTL's were bought in the last few years, and represent a high risk investment - but the muppets who bought them (and are still doing so) don't realise this. Plus I doubt many have any clue as to the true costs of renting and problems tenants can pose.

It is likely that when sentiment changes, and the sheeple realise that they are in debt, and not going to get a pension from their properties, that they will panic and sell on mass. This I believe is what will cause a crash. The longer the crash is in coming, the worse it is likely to be. There simply isn't the money out there to support yields on BTL. Living costs are rising fast, wages are surpressed through immigration, and interest rates likely to rise further. Any muppet believing his BTL will rise so much he will get a pension and pay off an IO mortgage is in for a big, big shock... It will however take time as people are reluctant to sell until too late. Then they panic.

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I don't understand your thinking.

People cannot live at home forever. Sooner or later they will need to start families.

My observation is that people pay whatever rent they have to ... to some extent ... and if the rent is a big percentage of their take home pay, they have less to spend on other things ... they make do.

Before we ever end up like France Shorthold Tenancy Agreements will have to be replaced with Long term ones. How can rents ever be a third of what they are now. It makes no sense.

Rents which reduce people to poverty are not sustainable. In the end people will always make arrangements to minimise high rent burdens. By delaying leaving home, people reduce the overall demand on property (since fewer years of their lives require independant accomodation). People also have the option of living in smaller properties (which are more numerous) flat sharing, moving to other locations or moving abroad.

In France (and many other countries) rents are 1/3rd of the UK. The reason for this is that they have a free market and a plentiful supply of rented property. Until the laws changed, the UK did not have a free market and there were very few properties to rent. Now, with the BTL boom, renters can pick and choose (I am paying £600 less a month than I was 3 years ago).

In order to find a wider pool of customers, rents will have to adjust to what the wider pool of customers can afford. This is a simple consequence of supply and demand. As more BTL properties enter the market, rents are inevitably going to continue falling (and hopefully to levels we see in other parts of the world).

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  • 301 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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