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I always find Graham worth listening too
And I would like to reply and give my own views on his latest interview:
BTL is not Dead and it's not in a coffin! If it was I would not be making more money today in 2019 than I have ever made before from yields
I'm a NE Landlord and I believe Landlords in the North are in a sector alone (We are Different ) in such a lot of ways and because we are different ,Grahams opinions don't match my own. I think Graham made two strong points about Labour :
1 Rent Control
2 Landlords forced to sell to their Tenants
So what would rent control do (it has been said it would be set at around a third of average earnings).
Average earnings in the North would be around £18K a year so an average rent would be £6K.
That would cover all of my rents in the NE
So I don't really worry about Rent Control - Seen it before, been there
Now let me look at Right To Buy
A great number of my customers would not get a mortgage for one reason or another so am I worried? - no I'm not
I have believed for a long long time S24 Stamp Duty Rent Control and Right To buy will have far more effect in the SE of England and I think Graham is totally correct in his views
He is a Geordie but has not lived or worked in the NE for a long time. He now lives in the south and I believe his views are from the south
I would think Graham's target market would be with Landlords who already have wealth ie a southern landlord who has done well with capital growth and now wishes to sell because they are starting to see the writing on the wall
So they will sell and look to invest their profits with the help of Graham
Since S24 came along I have changed my view on BTL and part of that change for me was to look at Pensions and ISA investments. I have purchased Forestry and Farm Land too
The above is my "plan B" ...
Now let's look at the North again. There is an old saying what you never had you never miss
Would Corbyn be good for the NE on the face of it he can be no worse than the past Govts. We have always had high unemployment, so no change there
In a nutshell I can see great harm coming to the SE If Corbyn wins and If he did not win the Next Govt will bring in a lot more regulation which will hurt the SE more
Graham has called it right - he sold three years ago And I think the savvy investor would have sold then to in the SE
If you are sitting on millions in capital growth, why hang around - Get out Now and invest in other asset classes
And I agree with him - Landlords just look at history and just because in the past 30 years BTL has done well
The plus points for me I am getting on now and my Old age pension is around the corner. Corbyn and Co want to look after the old and the NHS so why should I really worry about Corbyn in No 10 ?
The Tories have done more harm to me than any other Political Party. At Least Corbyn is honest from what I can see unlike the Tories who are sly and stab landlords in the back and laugh at us
Summary: Graham is correct but it all depends where you invest .
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
> Average earnings in the North would be around 18k a year so an average rent would be 6k
How would you determine average rent on a 1, 2 3 or 4 bed property? Are you saying that the rent for a 1 bed would be the same as a rent for a 4 or 5 bed property?
My own view is LHA data would be used to answer your question
and If I look at my own Business it would be spot on far a rent charged
I did a very interesting calculation last week a dug out some old files from 1983
at the time I was just starting out and I looked at the Rent which was fixed by local auth
and I used the bank of England inflation calculator
The rent I charge to day with LHA is the same as the rent I charged in 1982
So the Data is there all a Govt has to do is join the dots
Its a vote winner and the haters of BTL would welcome it
Nothing is really new in life its just packaged up a bit different that makes it look new.
But my point still stands that if the gov't want to cap rents at 1/3 of average earnings, then how do they apply the same rate across multiple different sizes of properties, and across multiple different qualities of accommodation?
It might be a vote winner, but they'll never be able to implement it.
Average earnings in London (according to google) is £34,473. So a third of that would be £11,491 or £957pcm. So I can choose to live in a 1 bed studio in Dagenham (no offence to anyone from Dagenham!) or a 5 bed luxury penthouse in Mayfair for the same price?
When policies are inspired by Labour then its almost impossible to expect them to make rational economic sense.
The truth is our Political Masters wish to see the end of BTL
and they will come up with the detail when Rent Control Comes
You are looking at Rent Control from a commonsense view and your right But from what I have witnessed in the
past I cant see a lot of political commonsense in the PRS
Rent control will just push a lot of LL's underground or will force more to sell up.
It may just affect house prices as well, as someone looking to do a standard BTL will have their figures set in stone and won't be able to improve the property to meet a higher niche.So, as you already know DL, rent control will result in less property available to rent AND at a lower level.
So, that's my answer to Liebore - provide satisfactory answers to the above and I will listen. I don't expect to hear them though!
The reason Rent Control will come is because it sounds good and it will get votes
If you were an MP sitting in your office talking to constituents who are haveing problems paying there rent because of cost I think you would side with them
Rent Control would cause harm and a lot of it It will force landlords to sell and a lot would sell in areas of greatest shortage ie SE of England
But so has other changes in the PRS of late
The top and bottom is we are not seen as home providers by Govt we are seen as greedy and taking vantage of a shortage of property in the uk
Our reputation is poor and any changes against us in general will be welcomed by everyone but us
I remember the old days quite well and we are going back to the old days with rent control
Of course the out fall would be serious it could cause house prices to slump as landlords relise they cant cover the Mortgage Payments or pull there money out to invest elsewhere
I have never trusted Govt since s24 and I don't trust them now and in the future.
You've hit the nail on the head! Corbyn & co shooting from the hip to attract the young and envious, but without the detail about implications and consequences. We saw it during the last General Election when he said he would cancel student loans, and then back-tracked; surprise! surprise!
Politics are all smoke and mirrors
Corbyn wants power and he and his party will do anything to get it
I have to agree with a lot of points made in the vid - loved the comments about looking around in airports etc at modern Britain's electorate - there is a very real prospect of a Labour government! People want free stuff and don't care that it can't be paid for!
As a northern LL i'm also not so worried about rent controls and RTB (as long as not discounted) but I think the real threats will be other taxes from the mushrooming LA's of jobsworths needing to justify their existence, and additional annual property taxes to be paid for by the LL, mansion taxes et al.
There is already precious little profit per unit so not sure how this is going to be funded by small LL's so the big players will take over.
You will need to expand massively to survive or exit.
I am guilty of just wanting to stay with BTL as it is something I understand but agree it has probably had its heyday.
Geared BTL is actually wonderfully egalitarian allowing 'normal' people of modest background to aquire assets the rich only once had access to!