Every seven minutes a private renter in England is given eviction notice even though they have done nothing wrong.

I have never bought a buy to let but I have inherited property which I rented out. I was lucky that the tenants understood that although I had no intention of selling, I would require them to vacate if my children needed to move in. And when our daughter did this, we charged her the same rent. Likewise when we wanted to sell and access our assetss, she too was given notice.
Trashing a property must be awful, and stressful to deal with. A bit like a joy rider smashing up your car (your asset).

Germanshepherdsmum

When my mother rented out her Mum’s home after she died, because she couldn’t bear to sell it, before the tenants left, owing a lot of rent, they smeared the walls with excrement and my Mum cleaned it up herself. That’s trashing a property.

That's awful!
My Mother had friends who were burgled - not only did they steal valuables but they did that too.

Germanshepherdsmum

When my mother rented out her Mum’s home after she died, because she couldn’t bear to sell it, before the tenants left, owing a lot of rent, they smeared the walls with excrement and my Mum cleaned it up herself. That’s trashing a property.

... and?

If I were to invest assets in an account which I was told in advance was a "notice" account, I wouldn't expect to be able to access them at short notice.

Of course; you're absolutely right growstuff. And that's exactly the same as a property owner renting his house (asset) out to a tenant for an agreed length of time (fixed term tenancy) and then reviewing at the end of that fixed period as whether he wants to leave his investment where it is, or liquidate his assets (sell it). That's a fixed term tenancy. But why do you think that he shouldn't be allowed to sell his own property/ies if he decides he needs/wants to?

That's why I think we should move towards rental properties owned by housing associations (or similar), who know where they stand in law and don't regard the property they own as a liquid asset.

Firstly, properties are not classed as "liquid assets"; liquid assets are funds that are readily available in banks accounts and can be quickly converted into cold hard cash.

All of the properties that are owned by housing associations, or similar, are their "assets portfolio". They purchase properties, in exactly the same way as private individuals do - they just buy more of them. They rent them out to tenants, at a profit, in order to sustain their company, satisfy shareholders and be a sucessful and profitable business like any other business in the marketplace. If a property becomes "inequitable" (perhaps the necessary modernisation, or reparation to bring it up to standard, outweighs the rental profit ratio) they sell it - tenants or not.

The housing rental business, no matter who the landlord is, or how big or small their portfolio is, is a business out to make a profit. There is no largess in business - no matter what it's commodity is.

Not strictly true Glorianny flats are cheap here,you can buy a nice 2 bedroom flat for around £70k but newly weds or young couples dont want them they buy the new 4 and 5 bedroom houses on the new estates .

Chewbacca I don't think that the landlord shouldn't be able to sell. However, the buyer would be buying a property with a sitting tenant. It will still be worth something to the buyer because he/she will be able to collect rent.

BTW I'm not totally ignorant about this. My ex-husband is a professional landlord and started his business before we separated and divorced. I'm not sure how many properties he now has, but I think it's about 20. I don't usually have nice things to say about him (for all sorts of reasons), but I do think he's a good landlord.

He used to factor in the costs of maintenance, bad tenants, empty periods, fees, mortgages, etc and still made between 5-7% profit on his assets ( I suspect he still works on that basis). I know he sometimes buys properties with sitting tenants and collects the rent until the tenants themselves want to move out. He then values the property (he's a trained surveyor) and sometimes decides to sell, if he thinks it will make him a good profit or re-let if not. He's never evicted anybody, as far as I know. Most of his properties are in the same area and I actually came across somebody who said he has a good reputation - and tenants know that.

It is possible for landlords to have a good income, while providing secure, well-maintained homes for tenants.

I’m perfectly sure you know exactly what I mean by tenants trashing a property before they are evicted growstuff.
It most certainly isn’t normal wear and tear.

Touch wood we have been lucky over the years with our tenants but it is the fear of inadvertently getting a rogue one which persuaded us to take out the rent guarantee insurance, even though that (unlike the rent we charge) most definitely does go up every year.

What price peace of mind though?

Properties with sitting tenants typically sell at approximately 30% below market price; we've had one on our books for 2 years now with no interest, even from investors. If this becomes law, all that will happen is that tenants will quickly be served with a Section 21 notice before the law is changed, their will be a surge of properties dumped on the market, the tenants will be homeless, the wealthy will snap all the properties up at bargain prices and they'll then be relet, at inflated rental prices to accommodate the fact that they cannot be sold on the open market and that their investment has little/no leverage and the tenants will bear the brunt of that by paying even more rent.

I too am not totally ignorant on this subject.

I wonder why all the FRNL Party aren't supporting this. It's their parties policy.

Chewbacca

Properties with sitting tenants typically sell at approximately 30% below market price; we've had one on our books for 2 years now with no interest, even from investors. If this becomes law, all that will happen is that tenants will quickly be served with a Section 21 notice before the law is changed, their will be a surge of properties dumped on the market, the tenants will be homeless, the wealthy will snap all the properties up at bargain prices and they'll then be relet, at inflated rental prices to accommodate the fact that they cannot be sold on the open market and that their investment has little/no leverage and the tenants will bear the brunt of that by paying even more rent.

I too am not totally ignorant on this subject.

Yes, I realise there would be unintended consequences, but I also think a solution needs to be found because there is an increasing number of people who cannot afford to buy, unless they inherit money. They deserve to have a secure home as much as anybody else.

The "wealthy" who snap up the bargain properties would have to be stopped from evicting and re-letting at a higher rent. I don't object to big companies owning property, if they are treating their tenants fairly and professionally. I live in a road, where the majority of houses (originally "affordable" housing) is now privately let. Most of the homes are owned by big companies and people know where they stand. I have never known anybody to be evicted, even when the ownership has changed hands. I'm the exception because my landlord only has one property and I know that I could be evicted, if he dies or decides to sell for some other reason - and it's been a worry, which has hung over me. If the UK were to adopt German laws, I would at least have nine months' notice to find somewhere else.

JenniferEccles

I’m perfectly sure you know exactly what I mean by tenants trashing a property before they are evicted growstuff.
It most certainly isn’t normal wear and tear.

Touch wood we have been lucky over the years with our tenants but it is the fear of inadvertently getting a rogue one which persuaded us to take out the rent guarantee insurance, even though that (unlike the rent we charge) most definitely does go up every year.

What price peace of mind though?

No, I have no idea what trashing a property means. Thinking about my own house, I really don't know what I could do to trash it.

As I wrote, the landlord knows he would have to redecorate, lay new carpets and buy new white goods when I leave. If he has had any sense, he's been putting away 15% over 8 years of my rent to pay for that (approx £12,000). I'm obliged to pay for professional cleaning or have the amount deducted from my damage deposit. The walls would all be washed down/redecorated anyway and the landlord needs to factor that in to his tax deductible expenses.

Like everything else, if you're renting out as a business, you need to accept business expenses like insurance, just as I used to pay for insurance when I tutored pupils at home.

growstuff

Germanshepherdsmum

You said houses are homes, not income generators. They are assets. You have seen evidence above of good landlords who charge a lower rent than they might in order to keep a good tenant. Not all landlords are grasping villains. But it’s unreasonable to expect any landlord to be unable to lawfully evict a tenant in order to sell their asset. It may provide a decent home for others for a long time but not for ever. Everyone has to be able to access their assets no matter what form they take.

So you agree that one person's home is just an asset to others?

Yes, one person’s home is just an asset to others. If you buy a house with a mortgage, the bank or building society will view your home as their asset.

If you cannot pay the mortgage, then they want their asset back and will repossess your home. They have every right to do so because they are the rightful owner of the property.

They only relinquish their charge / control on the property when you have paid the mortgage in full.

SporeRB

growstuff

Germanshepherdsmum

You said houses are homes, not income generators. They are assets. You have seen evidence above of good landlords who charge a lower rent than they might in order to keep a good tenant. Not all landlords are grasping villains. But it’s unreasonable to expect any landlord to be unable to lawfully evict a tenant in order to sell their asset. It may provide a decent home for others for a long time but not for ever. Everyone has to be able to access their assets no matter what form they take.

So you agree that one person's home is just an asset to others?

Yes, one person’s home is just an asset to others. If you buy a house with a mortgage, the bank or building society will view your home as their asset.

If you cannot pay the mortgage, then they want their asset back and will repossess your home. They have every right to do so because they are the rightful owner of the property.

They only relinquish their charge / control on the property when you have paid the mortgage in full.

Sorry, that is a ludicrous distortion of the 'asset' discussion.

A bank or building society lend people money with which to buy a house. The house they lend against is a security for the loan. It isn't an 'asset' which would show up in their accounts or give it a value if the said bank or b/s were being sold. The actual value giving asset is the loan, which engenders their profits. (It was the bundling of 'loans' to sell off, regardless of whether or not they were likely to be repaid, that was a root cause of the 2008 global financial crisis.)

The lending institution, unlike a landlord, is unable to arbitrarily repossess the house just because it wants to sell it, get someone else in it with a mortgage which yields more profit, or live in it themselves. It is not an investment vehicle for them.

Your ex sounds like one of the good ones Growstuff.
Unfortunately many aren't.
More Social housing is best way forward.

Given that selling a house with a sitting tenant can only be achieved, if at all, at very much less than its value with vacant possession, why would any sane person buy a house with a view to letting it if the ability to evict tenants in order to sell is removed? Can one of you who doesn’t like someone’s rental home being referred to as the owner’s asset please give me an answer?

Germanshepherdsmum

Given that selling a house with a sitting tenant can only be achieved, if at all, at very much less than its value with vacant possession, why would any sane person buy a house with a view to letting it if the ability to evict tenants in order to sell is removed? Can one of you who doesn’t like someone’s rental home being referred to as the owner’s asset please give me an answer?

I think that one point of view is that houses should be regarded as primarily homes, not investment vehicles. In which case the sale of a house with a sitting tenant is not a tragedy. The tenant keeps their home, the new owner gains an income and the former owner gets some cash, having had the advantage of an income from owning the house (unlike a homeowner who pays out continually for no monetary gain ?)

I think that this point of view is equally as valid as that of the 'make as much money as you possibly can out of your 'investment' point of view. There is no 'natural' or god given reason why homes should be such 'investments' It's not a human right...

Sorry, that doesn’t answer the question. If you had money to invest then you wouldn’t actively set out to lose a big chunk of it would you? You would expect to invest it in a way which gave you an income but at the same time retain the underlying value of the asset, subject to payment of tax on sale.
Nobody with money to invest in buying a house to rent out is going to look at that house as anything other than an income producing asset however much you want to call it a home.

Germanshepherdsmum

Sorry, that doesn’t answer the question. If you had money to invest then you wouldn’t actively set out to lose a big chunk of it would you? You would expect to invest it in a way which gave you an income but at the same time retain the underlying value of the asset, subject to payment of tax on sale.
Nobody with money to invest in buying a house to rent out is going to look at that house as anything other than an income producing asset however much you want to call it a home.

I agree that some, perhaps most followers of Thatcherism, want what the Banks wanted when they bought up the Estate Agents between 1985 and 1989. The Banks, and Insurance Companies, spent ridiculous sums to buy into the "market" in houses that Thatcher had started to create by selling off council houses.

They wanted a steady return on their money, often as much as 10% on 10% annually. These pen-pushing marketeers didn't understand the sales of homes went up and down to the rhythm of the people's economic means. They wanted to create a "market" in goods; they didn't care if only they profited. They were the black marketeers of the 1980s.

This, and changes in the rental laws, certainly encouraged the entry into the market of the wide boys wanting a "buy to let portfolio". At the time when we could watch the disappearance of the family-run and grown Estate agent we also still had those renting lovely houses on low and secure rents in our town. These were people who were then about the age I am now. They had never thought of buying a house and the owner of their home would not be able to sell it until they move out. The owner wanted a steady and secure income; not a get rich quick one. It worked. We had a family member renting in just that way. When she finally moved out she moved into a council bungalow. As a Conservative Councilor, she could only think of voting in her "betters". Sadly now these "betters" are more like the street gangs of old - I doubt she would have recognised today's so-called Conservative Party.

And the wide-boys continue to make pseudo markets out of the necessities the nation had paid for. I simply have no sympathy for those that take advantage of the weaker members of our society. So you will earn less on your investment. You will have to wait for a lifetime to get your capital back. The current chimaera Conservative, made up of all the extremes they can find, does not deserve sympathy for not being about to get quite so rich, quite so quickly at the expense of others.

That must have been a very interesting conversation MerylStreep with your ex tenants client; I can understand why you were amused.

There would be a lot of people with no where to live if not for private landlords. Of course those who rent view the property as their home. Some people look after the place they live and some don't, whether they own them or not.

Great posts GSM. Property is an investment and rent provides additional income. Our flat was lovely, and will be again and we can only hope that if we do decide to get another tenant, they will look after it.

A section 21 gives the tenant 4 months notice, 4 months minimum to find somewhere else. I say minimum because if the tenant refuses to leave, court proceedings must be undertaken.

"It's not a human right" to trash/disrespect someone else's property Maizie, to refuse to pay rent, to complain about problems within a property and refuse access to workmen provided by the landlord to undertake repairs but it happens, and the changes that have already been made and are on the horizon, are making it very difficult and extremely expensive for private landlords to get their properties back.

Great post DaisyAnne.

I had no intention of answering your question, GSM.

I just feel that is more than one valid point of view on 'investment' in rental properties and they should be given equal weight.. You don't have any god given right to 'invest' in anything at all. If investing in rental property were made more difficult, or less profitable then it's hard luck. Investing is always a gamble...(unless it's in government bonds)

If the government cared more about human rights they would provide housing.

Good post Smileless. If the law is changed to restrict the ability to evict tenants for no fault then as soon as there’s a whiff of that going through there will be a mass serving of s21 notices and sales of rented properties. That would leave huge numbers of people homeless and turning to local authorities and housing associations who simply don’t have the ability to house them all.
I have yet to receive an answer to my question as to why, if they won’t be able to realise their asset at full market value when they want to, anyone would choose to be a private landlord. Why would anyone invest in any asset that stood a good a chance of falling in value by say 30%? The answer is that they wouldn’t.
A large part of the problem on this and similar threads is an underlying deep dislike of anyone who has a reasonable amount of money.

Maizie, you’re not going to answer my question because you know there is only one answer and exactly what that answer is, which doesn’t fit with your argument.
I and every other capable adult in this country has complete freedom to invest their money as they wish and to obtain whatever return on their investment suits them. What you don’t like and will never admit is that you don’t like people having money than they actually need for day to day living. Having money to invest and using it for both income and capital appreciation is a sin in your book.