Its true that the council have stopped building houses and this is a huge reason for the homeless problem. They were costing it seems a lot of money and in arrears hugely however I can never understand why it wasn't possible to take any rent/ maintenance owing from the income of the tenant. People went into arrears as they knew they could and the council couldn't get it from them. I believe council housing should be built again but rules should be stricter. More should beexpected from the tenants. As to the private sector LL. - if a tenant does damage or doesn't pay I again believe it should be the law that it can be recovered over time from the income of the tenant. If you had to pay you wouldn't do damage!!
England, as dysfunctional as Ireland in tenancy laws
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RETIRED2017
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If you take it one step further LL are taking over the problem from the local authorities including the 30 % in arrears ,The 30% are still there ,
What protection do think exists in either sector. The deposit? No protection really.
TheBigShort
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As stated earlier.
Instead of having a large batch of small 'landlords' with the objectives of getting others to repay their mortgages obligations, passed off as a rental market we could abandon this concept by developing designated letting properties. These properties could be leased as going concerns to let. Property managers could then go about the business of affording good accomodation at very affordable rates.
Eg: Council builds a house designated for letting for €250,000. Council leases the property to a property manager as a going concern. This could be set at a very affordable rate by the council - lets say, €2,500 pa. The property manager will also require, say €50,000 deposit returnable at the end of leasehold, to secure the property.
The property manager will be required to furnish and maintain property to a required minimum standard. The property manager, competiting with other others will set a rental price on the basis of the quality of the home they are trying to rent rather than trying to cover the mortgage repayments over 25yrs. Effectively €2,500 pa + furnishing & mainteance (as costs).
This way the council is detatched as the landlord, the property manager/landlord is detatched from mortgage obligations. The laws are tightened re non-payment etc.
And a viable alternative to rent high standard high quality accomodation instead of mortgage ownership opens up in the housing market.
There is little of no profit (potential losses certainly) in your business model require to attract anyone to invest in it. So they won't.
Even in the model that exists now which has better potential (and potential losses), the supply of rental market is decreasing.
How making it even less attractive will increase supply is a mystery.
TheBigShort
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Of course there is.
For one, if the council builds the house it only needs a return to cover the costs over a 100yrs or more.
Ditto a developer. Say any city centre development will require 10% letting properties. If the cost of the property to build is €250,000, then €2,500 payable over 100yrs, all things being equal, will break even. The real profit will be on property sales.
Furthermore, conditions could be set if rentals go over a certain threshold, the lease will increase.
Admittedly there would be a lot of maths to work out, but the concept is a viable option I would consider.
Yes because councils and govt and politicians are always looking for something that gives a return after they are dead.
The whole market is looking at short term gains only. Especially big business and organisation.
The only people looking for a long term return are those people looking to use it as a pension. But you want them out of the market.
The whole market is looking at short term gains only. Especially big business and organisation.
The only people looking for a long term return are those people looking to use it as a pension. But you want them out of the market.
RETIRED2017
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Looking at some of the posts on hear from time to time you will see people saying they are lease to the council as a better option the council are not able to look after there own property why do people expect them to do a better job when the don't own the property,You think ?
Some councils do a fair enough job of looking after there property and managing there tenants some councils do a very bad job of managing there tenants and collecting there rent any LL who hands property over to this lot are in trouble ,
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So all the painting currently being done free of charge by the small time landlord will have to be done by painters on a wage. Unionised ? Paying pension contributions, entitled to sick leave, maternity leave?
Don’t ever start a business.
TheBigShort
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I dont consider 25/30 yrs in the lifetime of a property to be long-term.
That is part of the problem. Returns are sought after 25/30yrs which cover the full cost of the property + interest repayments + maintenance + sufficient profit.
As a consequence, a dysfunctional market.
TheBigShort
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As a small landlord. I am effectively in the position you suggest. My mortgage interest is less than €2,500 per annum. While my business is profitable based on me putting in my time for free, there wouldn’t be much left if I charged for my time. If the property manager had hundreds of properties to recover the costs over, I Think the costs per property would not go down. A management layer would be needed and need to be paid for.
In fact you would be back to something close to the LA model which has failed.
In fact you would be back to something close to the LA model which has failed.
No offence but doesn't matter what we think. What matters is what the people investing think.
The Govt doesn't want to cover the cost of that is effectively a loss making service. Only problem neither does anyone else.
The reason for a dysfunctional market is a lack of supply.
TheBigShort
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What is the mortgage amount?
Perhaps, it just a notion anyways. As much as the LA model has failed, it pales into comparison to how the private housing market is now in boom, bust cycle.
A market failure if there ever there was one.
My concept is considerate that any house built to standards and maintained properly will have a minimum life span of 150yrs or more. Yet there is a compulsion in property 'investors' to have all mortgage etc paid by 25/30yrs.
My proposal is to have designated properties which be available to let for 100, 150yrs etc. This takes the onus from small LL's to have mortgage paid by 30yrs.
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Where is the money going to come from,
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You are right that the current practice is that the entire capital cost of the mortgage must be repaid in 25/30 years and that is not a long time in comparison with the expected life of a house.
The last people to have this insight were Bank if Scotland and others who gave out interest only mortgages to investors. I actually have one of those and it has worked out well for me and indeed to a less extent for my tenants. I charge a rent the market will bear but not being under excessive pressure, I can do repairs etc when needed, I always give back the deposit.
However long term interest only mortgages didn’t on the whole work for either landlords or banks.
The last people to have this insight were Bank if Scotland and others who gave out interest only mortgages to investors. I actually have one of those and it has worked out well for me and indeed to a less extent for my tenants. I charge a rent the market will bear but not being under excessive pressure, I can do repairs etc when needed, I always give back the deposit.
However long term interest only mortgages didn’t on the whole work for either landlords or banks.
..maybe the aim was to raise property value and attract investors, while reducing costs to govt....
TheBigShort
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Yes I agree, the problem with interest only mortgages, as I see it, the principal still has to be paid within the investors earning lifetime?
So taking the idea that a €250,00 property is designated by a local authority as a letting property, and that its lifespan is of the order of 100-150yrs, then any prospective 'landlord/property manager' will not require a mortgage for the full amount, but rather a leasehold (say for 25yrs or 0.25 of €250,000 100yrs = €62,500 or, 0.16 of €250k 150yrs = €41k ).
After the leasehold is up, the investor exits the market with whatever profit (if any) they made, that depending on the quality of accommodation provided and rent charged.
Laws to be strengthened to protect against non-payment of rent etc.