England, as dysfunctional as Ireland in tenancy laws

RETIRED2017 said:
Laws to be strengthened to protect against non-payment of rent etc.
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Why wait[/QUOTE]

I suspect that a large proportion of the reason for non-payment of rent is due to the high cost of rent. The high cost of rent being driven, amongst other things, the outstanding mortgage repayments.
We could strengthen eviction laws now, but we would exacerbate the homeless situation. Thats cold comfort for landlords under pressure for loss of rent, but my underlying point is that we have two sectors in the housing market - ownership and rental. The two sectors are too entwined via the mortgage market.
My hope would be that a system is devised that offers a real competitive alternative to the mortgage ownership market, insofar, that people, families of all walks of life, may seriously consider between home ownership or home rental.
 
TheBigShort said:
Why wait
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I suspect that a large proportion of the reason for non-payment of rent is due to the high cost of rent. The high cost of rent being driven, amongst other things, the outstanding mortgage repayments.
We could strengthen eviction laws now, but we would exacerbate the homeless situation. Thats cold comfort for landlords under pressure for loss of rent, but[/QUOTE]

The 30% not paying there rent to there local council is because of high rent??? , what you are proposing failed to work in the past because rents could not be collected,
 
In other words the high cost of rent is a reflection of the high cost of property. In a market with a shortage of supply.

Also it's reflection of the war chest a LL has to have to mitigate against loss like over holding or damage. Which can't be recovered from the tenant usually.
 
AlbacoreA said:
In other words the high cost of rent is a reflection of the high cost of property. In a market with a shortage of supply.
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Yes. That is understood. So I have suggested a concept that dramatically reduces the cost (designated properties to let the mortgage costs which are spread over 100-150yrs, the lifetime of the property), any suggestions yourself?
 
TheBigShort said:
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.
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A lifespan 100-150 years is totally unrealistic. You have to calculate significant costs (ie. total refurb) at least every 25 years, plus major (potential structural) work every 50 (roof, etc.) if you want to keep up with safety, buidling regs, etc.
For tax write off purposes, most western industrialised countries allow for about a 40 year lifespan over which a property can be written off.
 
Darn it! There I thought I had the whole housing market crisis solved within a handful of off the cuff posts on AAM.

Alas, not yet time to put away the drawing board. Nevertheless, perhaps cleverer people than me can see a way where the private rental market offers a viable competitive alternative to mortgage ownership?
 
When there is over supply and the rental is significantly cheaper than mortgage repayments.

I remember those debates on the forums...
 
TheBigShort said:
As it is the two sectors are too entangled with each other with too many small LL's banking on their tenants to pay the cost of their mortgage over 25/30yrs in the hope that it supplement their pensions.
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BS, you have made numerous references in this thread about the influence on the rental market of small landlords dependent on rents to pay their mortgages. Have you any idea what proportion of small landlords have mortgages on their investment properties versus those who own them mortgage free? I would suspect it is a lot less than you think, judging from your posts.
 
AlbacoreA said:
When there is over supply and the rental is significantly cheaper than mortgage repayments.

I remember those debates on the forums...
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Where there is oversupply also tends to drive prices down leaving lots of mortgage holders in negative equity.
Oversupply, undersupply, at particular points leads to market dysfunction.
 
llgon said:
BS, you have made numerous references in this thread about the influence on the rental market of small landlords dependent on rents to pay their mortgages. Have you any idea what proportion of small landlords have mortgages on their investment properties versus those who own them mortgage free? I would suspect it is a lot less than you think, judging from your posts.
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To be honest, I do not know what the ratio is. I have made a generalised assumption based on the Celtic Tiger property boom that had favourable mortgage interest tax deductions for buy to let investors.
I think it is generally accepted that this was, in part, fuel to the fire for house price rises, that is, thousands of people who wouldnt ordinarily be landlords took the opportunity to become one.
 
TheBigShort said:
To be honest, I do not know what the ratio is. I have made a generalised assumption based on the Celtic Tiger property boom that had favourable mortgage interest tax deductions for buy to let investors.
I think it is generally accepted that this was, in part, fuel to the fire for house price rises, that is, thousands of people who wouldnt ordinarily be landlords took the opportunity to become one.
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I don't know the ratio either but I think your assumption would have been more accurate 10 years ago than it is now. As far as I know the vast majority of buy to let properties purchased in the interim have been by cash buyers. I'll admit that I don't have any figures to back this up though.
 
TheBigShort said:
Where there is oversupply also tends to drive prices down leaving lots of mortgage holders in negative equity.
Oversupply, undersupply, at particular points leads to market dysfunction.
Click to expand...

You wanted to know when rental is competitive with ownership. Well that is when. You might call it dysfunction but is it not simply the market balancing itself out. At that time some people sold up, rented for a while then bought again when it started to swing back.

I think what you are asking is some economic system where renting, is competitive in the longer term. I'm not sure that even possible. Someone has to supply the housing and maintain it. It makes no sense to do that unless there is a return for the person doing it. The only exception to that is where the Govt is doing it. But those systems have ended up being rife with corruption, or abused, so that there was indeed someone making a profit on it.
 
TheBigShort said:
To be honest, I do not know what the ratio is. I have made a generalised assumption based on the Celtic Tiger property boom that had favourable mortgage interest tax deductions for buy to let investors.
I think it is generally accepted that this was, in part, fuel to the fire for house price rises, that is, thousands of people who wouldnt ordinarily be landlords took the opportunity to become one.
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Thats very true, and we are still paying the price of that today.
The irony also there is, I know some folk who couldnt wait to get rid of the property, and now with the improvement in the market, have decided to embrace the prospect of being a LL again, if they get a non favorable tenant, and all they need is one.. then their back to square one, no rent, big mortgage and phone calls from the bank.

I do agree, folk out there thought it would be a great idea to buy a property and get others to pay for it and become a LL and all would be rosey in the garden, what a mess.

llgon said:
I don't know the ratio either but I think your assumption would have been more accurate 10 years ago than it is now. As far as I know the vast majority of buy to let properties purchased in the interim have been by cash buyers. I'll admit that I don't have any figures to back this up though.
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Its very very difficult to obtain a loan on a but to let, and if I were selling, i would reduce the price for a cash buyer. Having bought one last year, i went grey with the hoops, I was made go through, and while I appreciate due diligence must be done, common sense has gone completely out the window in this field.

The Minister says he working hard to improve the housing crisis, well this Country need LLs to do their bit, provide quality accommodation, we/I have been tarnished by the absolute despicable LLs out there who are out for the quick bucks, knowing we dont have a system to put right a wrong doing .

Dont get me wrong, I not some doo gooder trying to be a savior to the nation, I do expect a return in a reasonable time, not 100/150 years, but thats my gamble.

I shouldnt have had to increase my rents, I was happy with my return and happy with my tenants, I treated them well, and they looked after the place as if it was their own, I know its a business, but it should be a business with humanity. That is evaporating with every involvement by ministers thrown to sort out a market they dont understand.

If I were a Minister, I would draught new laws which would come down on Bad LLs like a ton of bricks, and the same for goes for tenants who trash someones property, or renters weather the be on s/w or not abusing the system while not passing on rents etc. It cant have been always like this, its greed on a huge scale by a few that ruin it for the majority. You need to know that if you do wrong in this market, there will be consequences.

I love being a LL, I like sourcing the property, closing the deal, putting my mark on it, putting it on the market, dealing with the tenants sorting out issues that arise, and they do arise, only last week I received a call to say the shower tray was leaking, but I expect these calls, I make allowances for them, and I sort the issue out.

So in short, This market needs private LLs, the likes of me, while I still enjoy doing it. But everyone has their breaking point...
 
I agree with a lot of your post, but just to clarify,

LS400 said:
I do expect a return in a reasonable time, not 100/150 years, but thats my gamble.
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The return wouldnt be made over 100/150yrs, it would be made over the term of the leasehold, say 25yrs.

Instead of being a small LL with a €200k mortgage to carry, the leasehold of say €50,000 is paid with the leaseholder/landlord providing quality accommodation over the 25yrs. The LL charges rent at much lower prices.
Depending on the standard of accommadation, the price will vary, but people, families would have a real competitive option between wanting to buy a place of their own or renting, instead of renting because of having no choice.
 
Think of it like a shopping centre. A developer builds it and a property management comp leases the units to various retailers.

A housing development could have designated letting properties. If im interested I put up €50,000 for 25yrs. All things being equal I put another €50k (tax deductable costs) for furnishings, fixtures, maintenance etc. Thats €100k outlay over 25yrs. Or €4,000 rent price to tenants to break even, excluding tax deductable business costs for maintaining the property to spec.
Can you see how, with competition, how rents might fall while standards improve? Or am I missing something?
 
Maybe I'm being greedy now, on those figures, after 25 years I'm only getting my money back.

I would want rent at a min double that, which isn't exactly too far off the mark before all the Government interference on bed sits etc.

I see where your going with this, but it's a one sided coin. Tenants would love it, it wouldn't be my cup of tea, then again, maybe that's the idea.
 
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