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  • Entrepreneurs

    Impact of net immigration on the private rented sector

    (Moderator note: This thread was created by splitting posts off another thread to create an independent discussion as this tangent was not relevant to the thread where it first appeared.

    Unfortunately, the first post by GreatApe did not come across, so it is replicated below.  Apologies to all contributors for this error.*).

    GreatApe Monday at 13:08

    82.27.53.91

    I will make some comments here that very few people in the industry seem to understand yet is critical to understanding the housing market in the UK.

    Firstly I was a renter for 10 years and then a Landlord so I have seen both sides

    As a tenant I had mostly good experiences I found my rents were affordable and the majority of Landlords were good Landlords. Over the 10 years of renting I had a total of 5 different Landlords. It goes without saying that having the option to rent privately was necessary because I moved for work and needed to rent so there is definitely a need for private rentals in the UK.

    Of the 5 properties I rented only one Landlord was what I would call a bad landlord. Not horrifically bad but bad enough for me to leave after 6 months

    Before I start remember 4/5ths that's 80% of my landlords were perfectly good Landlords.

    The one bad Landlord I had was a HMO rental who unfortunately rented one of the rooms to a difficult problem young adult who did not work and was probably on drugs. That young adult quickly turned the rental from an ok rental to a bad rental.

    For instance on one occasion we had a group of thugs knock on the door and ask for the young adult we didn't let them in and the young adult ran out the back fearing for his life. Needless to say it wasn't our job to police this type of behavior and it was a bad experience for everyone.

    In the landlords defense he probably did not know the extent to which this young adult was involved in drugs and violence but he did know he was on benefits and the rest of the household were full time workers and most landlords would not make the mistake of mixing non working and working tenants together.

    The working class renters in the household especially hated the fact that this young adult was not working. That was the main problem with that Landlord there were also smaller problems.

    For instance the landlord had some work done but he did not inform me that he was having the work done so I had workers go into my room and carry out work but I wasn't informed that this was going to happen so I had my laptop and wallet and other possessions in the room and felt it was not nice that the landlord didn't inform me.

    Nothing was stolen but none the less I should have been informed so I could have put away my things.

    Other small problems in HMOs are that you have often 4-6 unrelated young adults and cleaning becomes an issue the tenants argue about cleaning and it ends up in a position where nobody does any cleaning and the property standards deteriorate.

    This isn't really the landlords fault as the renters should be cleaning the property and taking out refuse etc but the fact remains that in most HMOs the tenants just dont do it and argue among themselves who should do what cleaning etc so HMO landlords should make sure they hire a cleaner for the properties and set their rents to cover that.

    -----------------------------------------------------------------------------------------------

    Ok now fast forward and as a Landlord these are my experiences.

    Some tenants are absolutely perfect and independent. They will rent a property and they look after it as it was their own. They keep the property spotless and clean and tidy.

    Some tenants are absolute pigs. They live in filth. Often these are students or young adults who almost never clean or put things away but they should have grown out of it by their 20s/30s.

    Worst of all it makes life for the other tenants in the group hell. This is not the landlords fault but I suspect the tenants think it is or at least it results in an unhappy rental which by extension makes the tenants feel negatively of their landlord. But rentals are not hotels the Landlord is not responsible for emptying the bins cleaning the toilet cleaning the bathroom hoovering the floors etc.

    Before I became a landlord I thought it would have been the young men who were messy and dirty but I can say its both the sexes. My worst messy tenants was a a group of young woman one in particular every inch of her bedroom floor was covered in dirty cloths just thrown there

    And some are in between the two groups. Roughly 1/3rd are fantastic 1/3rd live like pigs and 1/3rd live in between.

    I feel most of my tenants are happy with the service they get from me. The biggest problem I have in some properties is mold. This is partly to do with the buildings themselves (solid wall construction doesn't help) but also how the tenants live. One of the biggest problems were tenants drying cloths indoors without opening windows. The moisture from the cloths evaporates and condenses on the walls causing damp and mold.

    So I replaced all the washing machines with combo washing machine and tumble dryers and that has greatly reduced condensation and mold.

    I also wattapp them at the beginning of a tenancy a youtube video about damp and mold which explains what it is and how to minimize it. This means most properties are damp and mold free I only have 2 properties which are still a problem but it is a structural problem that cant be fixed. For those properties I inform the tenants before the tenancy and have them cleaned and repainted twice a year.

    I am a landlord in London where rents are a lot more expensive than the rest of the country. However what I find is that London tenants either earn more or live more densely and thus share the rent among more people.

    For instance when I was a renter up north I rented a 3 bedroom house with just one of my friends who it was just the two of us sharing rent and bills. In inner London a 3 bedroom house might be rented by 4 young working friends and they share the rent and bills and per person their rent is not much more than a renter in a cheaper part of the country living less dense.

    Of course the London renters have less space but most London renters work full time and some work 60 hours a week and when you take into account London commuting times the property their rent is primarily just for sleeping as they are out 15 hours a day so having less space isn't a huge problem for younger tenants.

    For the family renters, rents are more expensive than outside of London but London has more full time jobs and better paid jobs than the rest of the uk

    -----------------------------------------------------------------------------

    Now for the idea of a housing crisis in the UK I think that is a big misconception

    Firstly houses outside the south east are cheap. If you look at the land registry the average terrace house price for the regions are as follows

    Norther Ireland = £89k
    North East England = £108k
    Wales = £118k
    North West England = £121k
    Scotland = £124k
    Yorkshire and The Humber = £125k
    East Midlands = £140k
    West Midlands = £149k

    Remember that is the average terrace which means half the terrace properties in those areas are cheaper than the average.

    If we look at for example Yorkshire and Humber the average terrace is £125,000
    If someone puts down a 20% deposit they can get a 5 year fixed mortgage for 1.69% fixed with no fees
    Their repayment mortgage would be £409 a month and they are paying down the mortgage and the house will be theirs in 25 years time

    £409 per month to buy a house is cheap it is very affordable. By comparison the average social rent in the UK is £381 for 2015/2016 and social rents increase each year while the mortgage is fixed. If social rents are cheap and affordable which by definition they are, then buying a home in most the uk is also cheap and affordable. £381/month in social rent vs £409/month to buy a house in Yorkshire&Humber. One you rent indefinitely the other is a mortgage for 25 years followed by £0/month mortgage.

    By any reasonable metric 8 of the regions in the UK are very affordable

    This then brings up the question why did home ownership peak around 2004 and has fallen since then?

    The answer is primarily because of large migration levels since 2004

    If you look at the statistics 75% of recent migrants rent privately that should be no surprise if you just moved to a new country like the uk you have to rent privately as the social stock is full and you cant buy a house the moment you move to an area. With 75% of recent migrants renting privately the more migrants we have the bigger the rental stock needs to grow to accommodate them. If 2.5 million migrants come to the uk we need roughly 1 million more private rentals to house them if 5 million migrants come to the uk we need roughly 2 million more private rentals to house them. its not too difficult to grasp this obvious fact but most in the press and politicians seem to overlook.

    Migrants rent privately there is no other choice for them in the short term and more migrants means more private rentals.

    There are also other structural reasons why rentals have grown.

    For instance the increase in the number of students over the last 15 years has played its part. More students = the need for more private rentals.

    Likewise more single mothers or divorcees generally means one or both end up poorer and have to rent. Yet another factor is the fact that people are getting married later and later or not at all and marriage has traditionally been a trigger from renting to buying a house together.

    Another factor is the difference in the mortgage market. before the recession older people could get mortgages more easily and the self employed could get mortgages more easily but they were knocked out of horsemanship post 2008 so ownership fell and renting increased.

    This has somewhat gotten better with banks now beginning to lend more to older borrowers and the self employed but a generation of people are now too old to make use of these more common sense practices. So the 2008-2015 tougher mortgage regulations have unfortunately meant a number of people who could have become homeowners might now never be able to.

    Also worthwhile noting is that private renters are typically only renting privately temporarily. Like myself I rented for 10 years then I bought my own home. For the majority of renters it is a transitional tenure not a permanent one. People rent until they get better and more stable jobs or move to cheaper areas or get a pay rise or get an inheritance etc etc its the normal course of life.

    PAUL BARRETT'S RESPONSE

    Interesting perspectives

    Do you'll agree that your alleged bad LL  wasn't really was he!?

    OK he had an unemployed  tenant.

    Well any tenant can become unemployed

    Is that the LL  fault!?

    But yes from a tenant choice perspective most LL  would pick all working tenants.

    Perhaps your LL  couldn't source any working ones.

    It really doesn't make the LL bad if the tenant turns into a wrongun.

    So basically all your LL  were actually good.

    Totally agree about property affordability

    But everything is viewed through the London and SE prism.

    So housing policy etc is distorted  towards satisfying the metropolitan  elite.

    As you suggest and is something that Govt doesn't want to mention that mass uncontrolled  immigration has caused the housing crisis.

    Remove the EU migrants  that were never wanted from the UK and the housing crisis magically disappears.

    Nobody will admit what mass uncontrolled  immigration  has done to this country and it certainly  has been of no net benefit.

    A political decision was made by the Labour Party to rub the Tories noses into diversity by opening g the borders to effectively  anyone.

    No surprise then that millions came from free welfare and rubbish plentiful jobs made viable by  WTC.

    Which is why Brexit is occurring.

    I voted out to control our borders and to take back sovereignty over the UK

    It looks like mass uncontrolled  immigration  will occur for a few more years yet!

    Where they are going to live beats me as LL  depart the PRS.

    There will be an increasing  difficulty  in London as councils like Southwark determine any property with more than two households is an HMO with all the fees etc that goes with such a designation

    So LL  might have to remove one tenant to avoid HMO status and that means all these London workers will have to start commuting like the rest of us had to to do!

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    He was a bad landlord in that he did not care much at all about his property or his tenants. Admittedly he wasn't a terrible landlord just not a good one. The young adult did not lose his job he was clearly a troubled individual to start with so he should not have been placed in a working HMO as the young mans troubles became the troubles of the other tenants.

    I don't mind migrants at all I was just pointing out that the increase in private rentals had a lot to do with the large influx of migrants post about 2004 coupled with other factors like the recession, more students, more divorce, more single mothers etc all meaning we needed more private rentals to meet the demand.

    And like I said earlier there is no uk housing crisis most of the country is very affordable.

    London is expensive and because the government and media is mostly based in London they think everywhere is the same which it clearly is not.

    Even London is easy to explain, prices are set not by income but by wealth. A generation ago there was a lot less wealth in London so house prices were set more by income whereas now there is a huge amount of wealth in London so wealth sets prices not incomes.

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    Did the chicken come before the egg or vice versa?

    Migrants caused LL  to invest in the PRS

    Migrants didn't come because they knew there were lots of spare rental properties

    They came because of free welfare and health services.

    Plenty of low waged and low skilled jobs not being done by lazy British

    The PRS increase was a reaction to mass uncontrolled  immigration along  with organic population  growth.

    Even low waged jobs paid 7 times more than the wages where the EU migrants came from.

    Most formerly Communist countries

    As for your bad LL  then yes his tenant choice could have been better

    He didn't do himself any favours by picking that wrongun tenant.

    An error of judgement perhaps?

    Does that make him a bad LL! ?

    Picking people is not exactly a science more of an art.

    Not all of us are good artists though we aspire to be!

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    It does make him a bad landlord because he must have clearly known this individual had problems yet to avoid a void he put him there. The landlord got what he deserved because that individual from what I heard stopped paying his rent and caused the landlord problems too. Yes you can see it as a learning experience for that landlord but that is not a reason to forgive the landlord for his choices.

    Put it this way if you went to get a haircut and the person gave you a terrible haircut but at the end of it said stop complaining I am new at this and am just learning... would that make it any better?

    As for the migrants if you have nothing nice to say I would suggest you keep your views to yourself. The migrants dont displace the locals onto welfare or unemployment that is a myth.

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    I think you will find that 52% of the population  agree with me that uncontrolled  mass immigration  is a big problem

    Nothing wrong with migration  providing it is controlled

    Australia have a very effective migration system.

    That  is all that UKIP wanted and I agree with them

    Are you saying that Australia is anti migrant because the last time I looked they have long lists of migrants they want to emigrate to them.

    The usual Doctors and Nurses etc

    Funnily enough no Big Issue Sellers; car washers or scrap  metal collectors

    Oh and no welfare

    You either work or support  yourself or leave the country

    Seems fair to me.

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    Despite the risk that a topic lock-down may be coming....

    GreatApe is acknowledging the effect of net immigration, it is undeniable.  Check out Migration Watch for the latest.  This chart was prepared in 2012, but the growth pattern has been maintained.  Frightening prospect:-


    Current net-immigration c.250,000 p.a.  Current dwelling completions 160,000 p.a. (up from 120,000 p.a. 2010 -2015).  I think GreatApe's ratio of 2.5:1 is optimistic as many/most immigrants come solo.  I suggest 1.5:1 may be a better guess.  This means that dwelling building is JUST about keeping pace at last.

    Not that paul_barrett was being rude imo, I must just comment that in the interests of good debate it is not right to allow only "nice" comments to be made, despite what Thumper said in Bambi.  Better to listen to Shakespeare, "The truth will out".

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    The local economy determines house prices not migrants.

    If you look at say the north of England, or Wales or Scotland, prices have not increased over a decade in fact they are down about a quarter in real terms and house prices are cheap yet all those areas have had historically high migration rates too

    Anyway if you want to discuss migration and house prices start a separate thread for it dont just bring it up everywhere

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    But building is coping  as there is the organic housing  demand to consider

    No idea what that is.

    But I suggest that demands the same number of houses that migrants need

    So who gets the house?

    A migrant or an existing population  member?

    The facts are that mass uncontrolled  immigration has seen unsustainable  demand for existing available  property.

    This  along  with all the other negative effects of this has compounded the detriment  that migrants have caused

    They weren't wanted or needed and it was only stupid Labour  that allowed them to come flooding in.

    They could have restricted free movement

    They chose not to with the vast detrimental  effects it has had on their own voting base.

    It was that base that caused Brexit

    The metropolitan  elite failed to appreciate the negative effects  of mass uncontrolled  immigration.

    Housing such a burgeoning population  is now impossible

    It will take decades to build sufficient

    In the meantime there will be much suffering by those  who can't afford to buy.

    The PRS wiĺl continue to shrink.

    Migrants are prepared to live cheek by jowl with each other and so can afford more expensive rents.

    This pushes out British tenants.

    There is simply nothing good to say about mass uncontrolled immigration

    The sooner it is stopped the better.

    The policy has been a disaster for lower income groups and it is they that fundamentally  caused Brexit.

    Who can blame them for voting out

    They have been singularly ignored by the neo liberal elite for decades

    Well not anymore.

    Housing is a massive preoccupation  of mist people

    There simply isn't enough of it of all various tenures made worse with still open borders.

    Once control is allowed at least then a slow clawing back of housing that is needed will occur.

    But it will not happen overnight.

    In a generation  perhaps enough will be built as it will take that long such has been the detrimental  effect of mass uncontrolled  immigration not helped by the propensity of certain groups in the UK to have large families that aren't needed  or wanted.

    It all causes unsustainable  demands on scarce housing

    Housing costs will increase despite what any party tries to do to stop it.

    You can't buck the market

    Controls will be evaded.

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    Here is a simple fact which flies in the face of what you are trying to sell

    Scotland and Wales are two countries which have seen mass migration over the last decade yet house prices are exactly the same in nominal terms as they were ten years ago. That means despite record migrant levels those two countries are now cheaper in real terms than a decade ago so how do you explain that?

    As I keep trying to tell you, house prices are dominated by the local economic performance not by migration levels.

    Stop and think about that before you spend half an hour repeating the same nonsense.

    Also for the tenth time, the UK does not have a housing crisis it is largely a myth. The fact is we have record residential floor area per capita

    The UK has seen a shift in tenure, that is not a crisis that is a shift in tenure. People need to stop making that mistake of thinking a changing tenure is the same as a housing crisis.

    The UK has sufficient homes for its population we only live at an average 2.3 people per home

    London and the SE has boomed in price because the London economy has boomed over the last 20 years. Whole new sectors now exist which did not exist back then. London is perhaps the worlds second most important tech hub you have companies like deep-mind which was set up by a bunch of university kids and got bought out by google for £400 million. You have companies like ARM in Cambridge sold for £24 billion and the buyer doubled the workforce to expand even more.

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    Absolute rubbish mass uncontrolled  immigration has caused unsustainable  pressures on housing markets

    Every market is local.

    Migrants  tend to congregate

    As such they will affect local markets.

    They don't tend to congregate in Wales and Scotland for obvious reasons.

    Migrants that aren't needed are a burden on the UK population

    We don't want them or need them.

    We only want the mIgrants we want and actually need.

    Migration need not be permanent.

    So we can have seasonal workers who we can then ensure return  to their home countries or just leave the UK

    No welfare rights; no free healthcare.

    No WTC

    But the UK will control things not the stupid EU.

     There is a housing crisis  in certain areas

    It is that problem that informs the housing debate.

    This then causes stupid things like S24 etc

    Local problems translate into national policy

    So for the enth time you are wrong.

    As for Wales and Scotland  they have been denuded of population. There are streets of empty properties

    So these areas can easily absorb population increases.

    But they won't be your professionals

    They will be your Romanian types come for free welfare and  healthcare.

    Wales and Scotland  are comparative economic deserts.

    Full of welfare claimants

    The SE has the main problem for obvious reasons

    It is where the jobs are even the rubbish ones.

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    You are simply stating your own views and biases no facts or economics or mathematics

    The population of Scotland is booming and most of that is down to migration yet scotlands house prices are flat on the decade.

    If we look at Edinborough it receives even more migrants than the Scottish average, its population is up 1.6% just on last year which is a faster growth rate than even London but take a look at house prices on the Land Registry for the city of Edinborough and prices are more or less the same as they were a decade ago.

    So clearly there are FACTS that show migrants do not push house prices up feel free to counter that point without jumping to your views and biases. The local economy pushes prices up not migrants. London economy has been booming which is why prices are so much higher than a decade ago. Edinborough economy has not done as well over the decade so prices are flat despite both cities seeing large influx of migrants and population growth.

    While some non EU migrant populations are a net burden the EU migrants are a net benefit to the UK

    I don't intend to reply to you on this topic any more as you are unwilling to look at the point I make and think them through. Let me save you some time, don't reply to this just copy and past your last response it will save you ten minutes saying the exact same thing in a different order yet again

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