Generation rent has forgotten how lucky it is

[s1962a]

https://www.telegraph.co.uk/property/renting/gener...
https://archive.ph/fajqH

You wot mate? Talk about being out of touch with the reality of housing shortages and rent increases.

And I speak as a landlord. Renters do not have it better than homeowners.

[anonymous-user]

Wow.

[ant1973]

I wanted to scream when I read this.

Utterly despairing that any sensible person could realistically hold this view in this country.

The property ponzi is a massive reason why we are in this mess. ZIRP and the laughable money printing was only required to sustain house prices. So you might think that they would use the post GFC period to ensure house prices flatlined so that over time housing would become relatively affordable again. Nope. Ramp, ramp and ramp some more. At some point the ponzi is going to come tumbling down. The longer it goes, the worse it will be.

The only irony is that one of the reasons that monetary policy is so ineffective against inflation is that so many folk own their homes outright now ...

Edited by ant1973 on Friday 7th July 12:16

[bitchstewie]

It's the Telegraph.

Many of their recent opinion pieces make the Mail sound like the voice of reason.

[otolith]

It is correct, however, to point out that recent first time buyers might not be in a good place.

[ant1973]

otolith said:

It is correct, however, to point out that recent first time buyers might not be in a good place.

Completely agree. But if you wanted to start a family, have some measure of security of tenure there were not terribly many good choices for those first time buyers.

[s1962a]

otolith said:

It is correct, however, to point out that recent first time buyers might not be in a good place.

Look at what happens if they get in trouble.

first time buyer can't pay their mortgage - banks will do everything in their power to make sure they help. refinancing, mortgage holidays, whatever it takes, and the government are strongly discouraging repossessions..

renter falls behind on their rent - this is grounds for an eviction. there is no government guidance on providing payment holidays, or try to reduce eviction. Yes the renter can stop paying till they are evicted, but the courts will eventually evict them.

homeowners have far greater protection.

[Rivenink]

fk sake.

Let me be clear. There are landlords who are decent, are not beholden to interest rate rises, and will not arbitraly raise their rents by punishing amounts just because they can. Rental properties are needed because not everyone is in the position to deal with owning a home. Students, people working temporarily in an area, and such. Good landlords provide an essential service.

However, too many landlords are over exposed with buy to let mortgages. They will be passing on as much of the interest rate rises to their tenants as possible, because otherwise their business loses money. The massive prolifation of buy to let mortgages was huge mistake. And it will cause misery, both to BTL landlords who cannot afford their mortgages, and those who rent from them who're finding their already excessively high rents jacked up even more. BTL made prices of starter homes go up, forcing people to rent rather than buy.

If it all crashes, the BTL landlords and their tenants are in the st together.

[otolith]

s1962a said:

otolith said:

It is correct, however, to point out that recent first time buyers might not be in a good place.

Look at what happens if they get in trouble.

first time buyer can't pay their mortgage - banks will do everything in their power to make sure they help. refinancing, mortgage holidays, whatever it takes, and the government are strongly discouraging repossessions..

renter falls behind on their rent - this is grounds for an eviction. there is no government guidance on providing payment holidays, or try to reduce eviction. Yes the renter can stop paying till they are evicted, but the courts will eventually evict them.

homeowners have far greater protection.

Much easier for renters to move somewhere cheaper, though.

[OutInTheShed]

I'm pleased not to subscribe to the T'graph if it's full of such limp pointless waffle.

[rpguk]

Rivenink said:

fk sake.

Let me be clear. There are landlords who are decent, are not beholden to interest rate rises, and will not arbitraly raise their rents by punishing amounts just because they can. Rental properties are needed because not everyone is in the position to deal with owning a home. Students, people working temporarily in an area, and such. Good landlords provide an essential service.

It may be over-exposed BTL landlords who push up the rents, but even the nicest landlord will advertise at the newly arrived at market rate when the time comes. I've had some very nice landlords when I rented but even the best of them only went a little under market to get the right tenants. None were offering rent based on a reasonable operating profit (never mind capital gains)

I don't blame them, it's a structural problem that's not going to be solved by landlords who are in the business of extracting what they can.

[JagLover]

otolith said:

It is correct, however, to point out that recent first time buyers might not be in a good place.

Yes

The author seems to be comparing renters with people their own age who have recently bought and so he may well be not too far off in saying that many renters are in a better place than someone who, say, overextended themselves when they bought in the last two years and will soon come off a two year fix.....

For those who are still renting and haven't yet bought there will likely be good buying opportunities in the next couple of years.

[ant1973]

Rivenink said:

fk sake.

Let me be clear. There are landlords who are decent, are not beholden to interest rate rises, and will not arbitraly raise their rents by punishing amounts just because they can. Rental properties are needed because not everyone is in the position to deal with owning a home. Students, people working temporarily in an area, and such. Good landlords provide an essential service.

However, too many landlords are over exposed with buy to let mortgages. They will be passing on as much of the interest rate rises to their tenants as possible, because otherwise their business loses money. The massive prolifation of buy to let mortgages was huge mistake. And it will cause misery, both to BTL landlords who cannot afford their mortgages, and those who rent from them who're finding their already excessively high rents jacked up even more. BTL made prices of starter homes go up, forcing people to rent rather than buy.

If it all crashes, the BTL landlords and their tenants are in the st together.

There was a time when falling prices followed by stabilisation was a signal to buy - the system had cleared, and lower prices had found demand.

It would give renters a chance to purchase (accepting that some rented provision was always required).

That is no longer permissible. People say that capitalism has failed, but in truth it is never allowed to function as it should.

But the system is rigged.

BTL were able to outbid first time buyers and had an economic advantage because interest and other costs could be set against tax.

Supply of new housing has deliberately constrained.

Migration has risen.

Completely insane

[Carl_Manchester]

OutInTheShed said:

I'm pleased not to subscribe to the T'graph if it's full of such limp pointless waffle.

full? no, and the comments from DT subscribers on this article are fairly brutal.

[Ari]

Rivenink said:

fk sake.

Let me be clear. There are landlords who are decent, are not beholden to interest rate rises, and will not arbitraly raise their rents by punishing amounts just because they can. Rental properties are needed because not everyone is in the position to deal with owning a home. Students, people working temporarily in an area, and such. Good landlords provide an essential service.

However, too many landlords are over exposed with buy to let mortgages. They will be passing on as much of the interest rate rises to their tenants as possible, because otherwise their business loses money. The massive prolifation of buy to let mortgages was huge mistake. And it will cause misery, both to BTL landlords who cannot afford their mortgages, and those who rent from them who're finding their already excessively high rents jacked up even more. BTL made prices of starter homes go up, forcing people to rent rather than buy.

If it all crashes, the BTL landlords and their tenants are in the st together.

Thank you for writing 'let me be clear' at the beginning, it definitely made your post clearer. Somehow.

No less wrong though, rents are set by the market. Tenants don't voluntarily pay more just to altruistically help out their impoverished landlords, if the market doesn't bear the rent being asked no one will rent it (why would they, if they can rent elsewhere for less?). Likewise, landlords without mortgages to pay aren't letting their properties for free, they are also letting them based on market values.

Let me be clear . If a 3 bed in area x will attract a maximum of £1,000/month, no renter is going to pay £2,000 to help pay the landlord's mortgage (not their problem) and to landlord is going to ask £50/month because they have no mortgage, thery're going to ask market value.

[Panamax]

ant1973 said:

Supply of new housing has deliberately constrained. Migration has risen.

That's the bottom line.

If you have 600,000 net immigrants every year and are only building 200,000 new homes the outcome is absolutely clear simply according to the basic rules of supply and demand.

[otolith]

Ari said:

Let me be clear . If a 3 bed in area x will attract a maximum of £1,000/month, no renter is going to pay £2,000 to help pay the landlord's mortgage (not their problem)

If your landlord can't pay their mortgage, they aren't the only one with a problem.

[s1962a]

Panamax said:

ant1973 said:

Supply of new housing has deliberately constrained. Migration has risen.

That's the bottom line.

If you have 600,000 net immigrants every year and are only building 200,000 new homes the outcome is absolutely clear simply according to the basic rules of supply and demand.

Do you think generation rent should count themselves lucky then, according to the article?

[Panamax]

otolith said:

If your landlord can't pay their mortgage, they aren't the only one with a problem.

So the landlord goes bust and his bank inherits a tenant. Can't say I've met many banks who are keen to run a BTL business of their own. Bank sells the landlord's interest and the tenant gets a new landlord.

[otolith]

Panamax said:

otolith said:

If your landlord can't pay their mortgage, they aren't the only one with a problem.

So the landlord goes bust and his bank inherits a tenant. Can't say I've met many banks who are keen to run a BTL business of their own. Bank sells the landlord's interest and the tenant gets a new landlord.

Who is going to buy an asset that doesn't cover its finance costs?