Housing market
- Thread starter matt j
- Start date
Ponty
pfm Member
Bide your time. Places like that are a busted flush IMHO. Same as Cornwall where I grew up. It got absolutely smashed to pieces in the early 90’s recession. Thinking about this time, it could be worse. Folks flocked down that way during covid, paying daft money for very ordinary property, thinking they could WFH forever or fly from Newquay / Exeter etc to City airport cheaply. Oooops.
Mike Reed
pfm Member
Indeed not. After freezing the initial rent of my maisonette for nearly 3 years, I've now mentioned an increase not exceeding 5 or 6% in December, as the tenant's circumstances are not what was envisaged when he took the lease and he now wants to continue for possibly another 2 years (or more?). The initial plan was for me to sell up (or he buy it) this autumn/winter.
I really hate changing the status quo, but feel that a modest increase is warranted, considering increases in maintenance, new boiler & shower etc. and he has a secure, well-paid job, but still.......... I'm really too old for this landlord business but he's a reliable tenant.
mandryka
pfm Member
What do you do when you just can't be bothered any more? Or when you just aren't well enough? Too old to run around installing new tenants? My plan is to put it all in the hands of a reliable agent, pay them their rip off fees, and sit back and hopefully watch the asset value grow. Effectively run it as if I'm an expatriate landlord.
Re rent increases, my thought now is it's best just to send them a Form 4 Section 13 notice, and wait for the reaction. If they want to negotiate down or even say it's not fair at a tribunal, so be it.
Ponty
pfm Member
Yes, it’s a PITA. A friend has a tenant who has fallen on hard times after losing his job. He was paying under market price anyway but said to the guy don’t worry about the rent, get yourself back on your feet. Fortunately he’s a wealthy chap and can afford to decide to give him a break. Many highly leveraged types wouldn’t.
Mike Reed
pfm Member
Rather than re-leasing the flat to the council, with guaranteed return, (almost?) fuss free, I sold last year to a lady to did exactly that. She said to me that she wanted 'to put sth back into society'. Still can't figure that one out as a needy tenant is a needy tenant, regardless of who or what provides them. The term is 1 year on trial, as it were, followed by a 3 year fixed term. Bit of a no-brainer, ostensibly, as the rent is guaranteed regardless and all maintenance done by the council at a small mark-up).
Sorry, Mandryka, but I've had my fill of agents over the last 35 years; bad enough having them find a tenant.
You are obv. much more divorced from your tenant(s) than I am and have been, which is prob. the right approach, but for me, a friendly, personal approach seems more natural (and probably appreciated as far as landlord-tenant relationships allows).
mandryka
pfm Member
If you lease to the council the people they put in there may be the sort of folks who can't find a private rental -- people with a record of anti-social or criminal behaviour. They may damage the house. Insurance may be hard to get while the council has the property. When you want to get the house back, the council tenants are still there, with all the rights of an AST. The council may not do any maintenance beyond repairs for normal wear and tear.
Re rent increases, I just think that the Section 13 form 4 document is really well done, because it informs the tenants very clearly about their responsibilities and rights. It makes sure that they get a good period of notice for the increase, and that they know exactly what to do if it's a problem. That's why I think it's good to use it, even when you get on well with the tenant.
Re rent increases, I just think that the Section 13 form 4 document is really well done, because it informs the tenants very clearly about their responsibilities and rights. It makes sure that they get a good period of notice for the increase, and that they know exactly what to do if it's a problem. That's why I think it's good to use it, even when you get on well with the tenant.
Mike Reed
pfm Member
None of this applies to a council leasehold property such as my one (was two). It's the council's insurance and their guarantee that the prop'y will be returned to you (vacated) in a similar state as when acquired (barring fair wear & tear).
About the only downsides are: poor tenants could affect the situation of adjacent flats (3 in that case); you get a lower than market rent (but uplifted annually by inflation) and lastly, you never know how much maintenance or repair is really warranted. Sth I've just thought of, and I don't know the answer, is whether you need to pay service charges when re-leasing.
andyoz
pfm Member
Yes, we are witnessing one hell of a cycle here and it will be in fast forward too like most things COVID related.
Prices can fall faster than they rise. All it takes is buyers to think it'll be cheaper in 6 months and job done...they sit on their hands/cash.
Look at crude oil prices this last week.month...that's just an example of what happens when demand side of the equation exerts it's influence.
The 'COVID Years' will be Economics degree fodder for decades to come.
mandryka
pfm Member
That’s interesting, @Mike Reed . I wonder how they can guarantee vacant possession. Maybe the council have a right to move the tenant to another suitable property if they wish.
About five years ago I met someone who had done it in LB Wandsworth, and seemed to be really happy. I had a house come up in LB Merton and I thought I’d investigate. But Merton council weren’t set up to do it, they referred me to a housing association who didn’t pick up the phone or reply to emails , , ,
About five years ago I met someone who had done it in LB Wandsworth, and seemed to be really happy. I had a house come up in LB Merton and I thought I’d investigate. But Merton council weren’t set up to do it, they referred me to a housing association who didn’t pick up the phone or reply to emails , , ,
mandryka
pfm Member
https://homes-2let.com/croydon-coun...MIldSv9tSH-gIVj0AVCB1UWwOaEAEYASAAEgI_1_D_BwE
The above just came up on the banner ads at the top of the page. If house prices plummet as @andyoz predicts, then it might not be a bad idea for someone buy one in Croydon, and if the scheme isn’t too rip off, why not give it a go? Croydon is reasonably well served by public transport, there are low rent neighbourhoods. Potentially a good investment for anyone with cash.
(I just rang them . . . they don't pick up the phone . . . )
The above just came up on the banner ads at the top of the page. If house prices plummet as @andyoz predicts, then it might not be a bad idea for someone buy one in Croydon, and if the scheme isn’t too rip off, why not give it a go? Croydon is reasonably well served by public transport, there are low rent neighbourhoods. Potentially a good investment for anyone with cash.
(I just rang them . . . they don't pick up the phone . . . )
Ponty
pfm Member
Yep. As things get tougher in the employment market, firms in town will insist people are in the office more and more. That overpriced / bidding war remote house suddenly doesn’t seem such a good idea.
To be fair you never know how much maintenance is reasonable. When I was renting I took advantage of the 6 monthly inspections to ask for maintenance, before I staretded doing this I got none, afterwards I got the place spruced up a bit. It helped I suppose that I was a good payer and the place was not being abused. It was a better place when I moved out than when I arrived.
hifinutt
hifinutt
interesting idea . I recall a property next to mine run by a very well known estate agent in Birmingham [ rubery] for the expatriate owner . When we had the scaffolding up we could see this houses gutters full to the top with moss . never been emptied and water gushing down the wall causing damage. the tenanat is elderly and wouldnt have a clue. i contacted them and they cleared it out . in fact just had a call this weel to say mine is leaking again and no doubt this has happened again.
so now i would NOT leave in the hands of an agent , i am not convinced any of them are any good at all
hifinutt
hifinutt
i have a wonderful tenant in a similar situation , recently he was beaten up very badly and unable to pay most of the rent . the week before we had a sermon on the good samaritan [ if you recall a man was beaten up and left for dead , all the religious men walked past and ignored him but the `despised` samaritan` put him on his horse and took him to an inn and paid for him to be looked after ] Anyway so this chap continues on a reduced rent for the time being and hopefully they will get back on their feet soon !!! otherwise one might be in a pickle
andyoz
pfm Member
One thing not getting talked about enough is the China housing issue.
As I understand it, buying off the plan there means putting down a deposit of 30 to 50%. But Developers are using that money to finish off the previous scheme they are working...it's a Ponzi.
Housing has been the main solid investment play in China for a few decades now as other investments have been all over the shop (it was virtually illegal to own a house about 30 years ago so you can imagine the frenzy). They've ended up with loads of apartments being built and sold at prices 30x to 40x the average salary in the area. So there is bugger all rental yield potential and the whole 'investment' angle relies on capital gains which has stopped now (and reversed) and that's why it's a massive issue....owners can't 'yield' their way out of the position with some patience.
They may be able to contain it to within China but a housing crash causes economic chaos in any country and we will feel it throughout the West. China is a major consumer of our goods and not just a producer anymore.
As I understand it, buying off the plan there means putting down a deposit of 30 to 50%. But Developers are using that money to finish off the previous scheme they are working...it's a Ponzi.
Housing has been the main solid investment play in China for a few decades now as other investments have been all over the shop (it was virtually illegal to own a house about 30 years ago so you can imagine the frenzy). They've ended up with loads of apartments being built and sold at prices 30x to 40x the average salary in the area. So there is bugger all rental yield potential and the whole 'investment' angle relies on capital gains which has stopped now (and reversed) and that's why it's a massive issue....owners can't 'yield' their way out of the position with some patience.
They may be able to contain it to within China but a housing crash causes economic chaos in any country and we will feel it throughout the West. China is a major consumer of our goods and not just a producer anymore.
Joe Hutch
Mate of the bloke
I think the point is that BTL landlords are big-hearted souls who rent out properties purely as a social service, and that we should a) give them lots of tax-breaks and b) humbly thank them for their open-handed generosity.