Crisis-point: Huge buy to let sell-off imminent according to new figures

But get ready for shelter and government using usual propaganda channels to report ‘landlords continue to evict tenants’.

• NW Landlord
• 02 May 2019 08:07 AM

Who cares what they say I certainly don’t

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I’m selling some properties cashing my chips in so to speak I really have had enough it’s just getting harder and harder

• Simon Shinerock
• 02 May 2019 08:22 AM

Yes but what are you going to do with the cash? Spend it, reinvest it, I’d really like to know. The truth is that if you have made a decent gain after tax in a low yield area, it makes sense to redeploy some funds into higher yield areas with growth potential but other forms of investment just aren’t that attractive as far as I can see

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• S l
• 02 May 2019 10:13 AM

Yes selling is fine but what about the tax due to increase in property value? You still have to pay a really high tax by selling. what do you do?

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We're seeing former BTL investors selling up and reinvesting in the commercial property sector where net yields range from 5.5% to 7%. However, as always, the higher the yield, the greater the risk. Arguably, the yields in this sector have peaked and in some cases they are being driven down by these new entrants. It's a great sector to invest into, but carrying out thorough homework is crucial to minimise risk.

Like much of the UK property market this is most likely due, in significant part, to changing demographics

Many BTL investors piling into the market from 1988 onwards will now be at least retirement age. BTL was their pension plan.

Increased regulation and government interference has made property far less of a straightforward, bordering in passive, investment.

Unsurprisingly (like me) it’s easier ti bail out, pay the taxes, sit on a pot of cash and book three months a year on the Queen Mary rather than deal with all the crap that comes from owning what is, in many cases, a depreciating asset.

The threat of brexit has already driven down demand both in tenants looking for homes in HMOs and for investors. Yet still the so-called housing crisis persists.

There isn't a housing crisis.
There is an affordability crisis and mortgaged sole trader LL have nothing to do with this.
LL buying do NOT force prices up.
If anything they depress prices as few LL buy at retail prices.
Rarely will a LL outbuy an aspirant homeowner.
Nope it is all to do with buyers not having sufficient resources for whatever reason to buy properties.
Not the fault of mortgaged sole trader LL that this is occurring.
How about Govt getting rid of HTB and introducing MIRAS on any property again for FTB up to a £350000 property.
That would get FTB buying!

Sell up and buy commercial, leave the housing to councils, sorry clueless councils. Cant wait.

Brexit is not the problem.

• Suzy OShea
• 02 May 2019 16:21 PM

Steve Sykes:

On what do you base this statement that Brexit is not the problem.

Here are some brexit-related facts that have adversely affected my properties since this benighted referendum:

1. Migration from EU based job-seekers over the passed two years has dropped from 291,000 in 2016 to a mere 50,000 in 2018.

2. This is directly due to the following factors which are all brexit spawned!

a) drop in the value of the pound due to brexit uncertainty;

b) A more hostile environment in England due to the disgusting xenophobia unleashed by UKIP and brexit leading to numerous documented violent attacks even on foreign women for speaking in a foreign language on their mobiles! Disgraceful.

c) Who would want to come to a country and invest years working there only to face possible expulsion after Brexit? This is why numbers of migrants from the EU have dropped from 291,000 in 2016 to a mere 50,000 in 2018.

All these brexit-spawned factors have adversely affected my rental business for the past two years!

So don't tell me that this downturn has nothing to do with brexit. that is just an idiotic bare-faced lie like so many of the lies spread by Brexit campaigners!

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Yep personally I can't wait to sell up and buy a 4 bed resi house to take in lodgers.
More net income than on 4 BTL properties
14 homeless tenants.
No LL will buy my flats.
So a total loss to the PRS.
My buyers won't be former tenants or potential tenants

@suzy O'shea
Oh dear I think you have got your proverbial knickers in the twist.
UKIP as was who I totally and fully support only espoused a controlled immigration policy based on the Australian points based system which has worked very effectively for Oz and NZ for the past 70 years!!!
Granted the current incarnation of UKIP has drifted towards an element of xenophobia so my support would be for the Brexit Party.
No xenophobia at all as a rule from those wishing to leave the EU.
Just managed migration which UKIP fully accepted was the way to manage any immigration.
Uncontrolled borders do not allow such control.
The reason I mainly voted out was to control UK borders IRRESPECTIVE of any effects on my LL business.
If reduced or controlled immigration results in less tenant demand then so be it and good.
The only reason the PRS has expanded to the size it has is because of MASS UNCONTROLLED IMMIGRATION which over 51% of the UK population have voted that they don't want.
The UK will of course ALWAYS need and want immigrants for certain roles that for whatever reasons the BRITISH workforce are unable to qualify for.
Such migrants are to be welcomed.
Seasonal workers are to be welcomed but with NO entitlement to the NHS and welfare including WTC.
But please stop this immigrant rant.
The UK when it controls its borders will be able to choose the immigrants it wants.
If that affects your sensibilities and your business that is simply TOUGH!!
In light of hopefully controlled borders you might wish to re-evaluate your business model in light of potentially much reduced demand from those former UNCONTROLLED EU migrants.
If you extrapolate the problem MASS UNCONTROLLED IMMIGRATION has caused the PRS it could be stated that S24 has resulted from this UNCONTROLLED IMMIGRATION.
Without migrant demand the PRS would probably be a far smaller industry and therefore S24 may not have been intoduced.
Of course we will never really know but a good guess could be that migrants HAVE caused S24 to occur.
I will NOT mourn the loss of my EU migrant tenants at all.
They will be effectively causing their own homelessness as I am selling up due to S24.
LL need to carefully consider what the new status quo might be without UNCONTROLLED EU migrants.
It seems that non-EU migration is continuing at about 150000 per year so perhaps there will still be sufficient migrant tenants to take the place of reduced numbers of EU migrants.
It is really all up in the air at the moment and as such LL need to take a bit of a gamble.
Selling off properties and reducing leverage would I suggest be a more resilient method to maintain business effectiveness rather than be out there on the ragged edge desperately relying on continued demand from UNCONTROLLED EU migrants which could soon be controlled.
Things are gonna hopefully change very soon.
Time to plan based on your assessment of how the market will look when hopefully MASS UNCONTROLLED EU MIGRATION ends!!
Unfortunately it may have to be accepted that your business model will need to change.
That's business.
It is a dynamic thing.
You must surely understand this concept.
I would go as far as to say that without UNCONTROLLED EU migrants only one of my properties could be let.
Like you EU migrants have been the majority of my tenants.
This situation along with S24 is sufficient now for me to exit the AST PRS.
I will convert to a lodger LL in my new resi property if I can afford it!!!
New business model in reaction to changed circumstances.
Just one of those things.
Remember NOBODY owes a LL a living!!

I rent to Polish, Bulgarians, Romanians,in fact just let another flat to a polish chap, also have Portuguese and Brazilian. Brexit has nothing what so ever to do with a so called down turn in the rental market far from it. Are you Suzi one of the same that blames the down turn in cars sales, not admitting its all to do with diesel and government pressures, same as stupid HMO rules, stupid council tax rules, stupid taxation rules, horrendous fees charged by Agents, glad to see the latter with be capped and controlled and No we professional b2l LL do not need agents, we can rent out without them and they know that,

Sorry Suzy.

Paul Barrett,

i shall try to discuss some of your points without lowering my debating style to the hostile and insulting style you have chosen to adopt.

1. When you write about S24 would you by any chance be referring to this benighted administration's paltry vote catching attempt to kill Section 21 which allowed landlords to regain possession of their properties within two months? isn't it typical of brexiteers that they always get their facts wrong?

2. On the one hand you state that the arrival of job-seekers from EU countries, who are in Britain to improve their prospects through honest work has led to growth in the private rented sector, with which I fully concur. Generally, i have found such tenants to be reliable and pleasant, both in paying their rents in a timely manner and in helping to maintain the property by reporting problems like mice etc, which a cleaner may not always see. This helps me to find a timely and effective solution!

Now veering into the politically incorrect. I would rather house such hard working polite tenants who appreciate the comforts of a well-maintained home, than house some of our nastier home-grown varieties of weeds who come from a tradition of scamming and stealing from landlord and the tax-payers who fund the rental help schemes run by all councils, who treat the property and their neighbours with no respect and who from jealousy, only seek to destroy the environment provided for them in order to cause as much trouble as possible. if this is the variety of tenant with whom you will be sharing your home as lodgers, because you think that a lodger's letting license gives them fewer rights, good luck to you. Your health and sanity, never mind your finances won't last long!

On the other hand, you blame the migrants from the EU as being instrumental in the government's decision to crush the section 21 clause! Let me just make one point here clear: itinerant migrant workers are not interested in setting up 'homes' in other people's property. They usually rent a room to keep down costs further so as to maximise their earnings. They can stay for as long as five or more years but ultimately they are ambitious and seek to buy their own property whether in their home countries or in Britain.

May's pandering to generation rent is trying to encompass a different client, those who do rent whole properties such as flats or even houses and want greater security than the AST can provide. In that, I can't blame them, since moving is such a stressful chore. In Germany, three year contracts are the norm, with a break clause after one year. Even if the landlord 'benefits' by regaining possession of his property sooner, he can not put up the rent further than any inflationary increase between the start of the rental contract and its termination. Therefore landlords in Germany have no interest in shortening rental contracts or disposing of existing tenants to push up rents. It does not happen. It would be good to introduce such a system into the British rental market rather than making it more difficult to evict troublesome tenants.

3. Now I should like to address the myth of 'uncontrolled' migration from Europe. It always has been a myth since it depends on getting a job. If the economy is buoyant it will attract and employ more migrants. If it is not thriving those migrants will not come in the first place because they have other choices. None that I have met want to sit on social benefits, unlike many native Brits, who sponge off the tax-payers!

Having done our best to discourage the migration of industrious, motivated workers from the EU to Britain who are content with moderate wages, though we have seen a huge fall in their numbers from 291,000 per annum in 2016 to a mere 50,000 in 2018, has this in point of fact led to a reduction in total migration to Britain? Far from it! This government has done nothing to impede the rise of immigration from the other four corners of the globe to Britain, since their numbers within two years have risen from the steady 300,000 per annum to 561,000 in 2018, leading to an overall annual increase in immigration from just over half a million a year to a 10% increase in just two years of an extra 50,000 annually, and it has led to an increase in their numbers of 85%. tell me please, how is this government using perfectly legal devices to control immigration to our shores. Do you think such new blow-ins won't be registering with our schools, medical centres and other welfare benefits programmes? Of course they will because that was part of their decision to come to Britain in the first place. There is a far higher portion of these immigrants whose only ambition is to sponge off British tax payers than there ever was amongst the EU migrants. This is due in part to their being housed in depressed areas of Britain where even the native British struggle to find a job, and it is also due to the restrictions placed on them in even seeking work, for which they are given a meagre allowance.

Has anyone ever thought of a more stupid scheme: Britain through Brexit discourages fit and healthy young motivated workers who actively contributed to the NI and tax systems to replace these with others who are deliberately kept idle whilst their requests for asylum are reviewed? how is this controlling so-called uncontrolled immigration to Britain? And don't even get me started on the 800,000 illegal immigrants who have arrived in Britain since the French closed the jungle camp in Calais. these will just swell the ranks of homeless criminals and make our streets even more unsafe than they currently are. How Paul Barrett is any of this lack of governance by this fraud of a Conservative government controlling uncontrolled immigration to britain. It does nothing to control it and your dream of a points based system has already been sunk by the reality of the situation!

Furthermore, I would be very reluctant to house any of these illegal immigrants from the third world, not only because it is illegal for landlords to do so, thank God, but because many of their cultural norms diverge from European civilised behaviour so far, as to make them impossible to house with 'normal' people!

Once again, we see that the Brexiteer lie of wanting to control immigration to Britain has turned to deceitful ash in their mouths and greater crime on our streets for the rest of us to try and avoid.

Brexiteers are treasonous wreckers of Britain. Some, were hoodwinked by the deceitful bilge they were sold into voting for this criminally run referendum, which had it had legally binding status would have been struck down for all the criminal corruption of the Leave campaigns! The fact that Britain is saddled with a bloody dishonestly stupid woman who chose to nail her colours to the criminally obtained tiny majority of the vote, but then tries to deliver a secret adhesion agreement in her Withdrawal Agreement is no more than brexiteers deserve. No wonder parliament has rebelled to try and save the economy on which we all depend as the most vital interest to this country! It would be grossly irresponsible of them to do otherwise!

4. You stated that the world does not owe landlords in the PRS a living, with which I agree! we don't seek 'a living from the world' but we do seek a fair playing field for all the work, time, energy and huge financial investment we have put into this sector to provide decent comfortable homes for a fair rate of return, which is our just right. The crushing of section 21 once again tilts the odds against decent responsible landlords so that only the dross and sharks will be left, and they certainly won't be in any mood to repair their properties if Labour wins and rent controls are introduced! Then the price of decent housing will be at a premium because of the scarcity and the rest will just decay into slum dwellings. What a great future for a country which only three years ago was the fifth largest global trading nation!

• 02 May 2019 21:22 PM

Listen I agree with your sentiments except for the migration issue.
Migrants by their very nature inflate the demand for rental property.
We as LL have serviced that demand.
Hopefully migration will be substantially reduced when we leave the EU.
Yes that will affect LL.
But LL have only had the
opportunities they have had as a result of such migrant demand.
Personally I wish all migrants would return home.
You would then find a substantial surplus of rental properties.
It's just how any business would react to changed dynamics.
A reduction in tenant demand would be usually met by reduction in rental properties available which you and I might need to sell all or some of our properties
I have no issue with this; it comes with the territory!!

Of course nobody likes change but as LL we need to adapt or die!
A bit difficult sometimes. I accept when you have lunatic policies like S24 things can become problematic.
But we are where we are!
It is a fact that MASS UNCONTROLLED EU IMMIGRATION has been of no net benefit to the UK.
We don't need or want most of them.
We have millions of economically inactive people not including pensioners.
It is these that SHOULD be doing the work that these EU migrants have been doing.
There is NO xenophobia in wanting controlled borders.
The UK has a population problem in that it is too big for it's existing infrastructure and we certainly don't wish to spend on this to cope with migrants.
It isn't certain what will happen to the PRS in light of reduced EU migrant demand.
My manner by the way is not insulting at all.
Just you have some strange views about controlling borders.
Your attitude is a minority view to those who voted out and only the most stupid liberals and lefties would agree that free movement of people is a good thing.
If everything was equal then fine but I doubt I could fetch up in Spain and demand social housing like is possible in the UK with all welfare paid.
That is why they come here.

So as LL we have to accept a reduction in business.
Controlling borders is something that should always have been the case.
It was stupid Labour that opened the borders.
Remember the same stupid Labour Party that gave the Nene jet engine to the Chinese who then put it in the Mig 15 which killed Allied Personnel in the Korean War.
Labour a criminal party responsible for killing it's own citizens and presiding over Mass uncontrolled immigration.
As this reduces so might our business.
Just suck it up; there is no alternative! !
Err no I reckon I know far more than you etc.
As a Brexiteer my knowledge is pretty thorough S21 is NOT S24!!
Two different things which are both having a very negative effect on the PRS.
I guess you are a remainer so logic is not something you are capable of understanding.
The EU is a political construct which we don't wish to be any part of.
Trading with the EU fine but no free movement.
You don't know much about lodgers do you!
You need to get educated because you are commenting on things you clearly lack understanding of.
Just as an eg regarding lodgers you clearly do not understand that with a 4 bed property with live-in LL subject to any residential lender constraints that it is perfectly possible to have 3 single lodgers on individual lodger agreements with no tenure rights beyond that which was mutually agreed at the beginning of the lodger occupation.
Normally a months notice .
This is basic stuff which you don't appear to know. .
As a remainer you don't know what you are talking about.
What else don't you know! !!??

Leave means leave not based on any agreement.
No deal is better than a bad deal.I am not interested in what Parliament has to say.
If they can't sort out a deal then the UK should have left.
I am largely in agreement with you but migration is a problem.
Yes we have our feckless but they are ours.
We don't wish to import the feckless of Europe.
They cost too much to support.
Remember years ago when students could readily find work in coffee shops etc.
Now they have been forced out by low waged and low skilled EU migrants who aren't wanted or needed despite the benefit they bring to LL.
I'd rather have substantially reduced migration even if it affects my business.
I do get we have a massive proportion of feckless wasters who I believe should be conscripted into work.
No more lazing on the sofa.
Work or no benefits.
It is only because the feckless are given the choice that jobs are available to migrants
Without open borders these migrants would never have come.
As LL we now face a potential major change to our business.
Massive reduction in migration is to be welcomed for the good of the UK.
Let us have British rental accommodation for British Nationals with just some of it for the migrants we want.
That time cannot come soon enough.
I fear it will never come which is why I am out of the AST market ad I just cannot guess what is going to happen.
My biggest fear is Corbyn.
I want to be out of the AST market before he may attain power

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Hi Paul, just to let you know, i had checked with the EHO. Only entitle to 2 single lodgers with 2 separate agreement to live with landlords. If 3 lodgers, it effectively turn into a hmo

• 02 May 2019 22:30 PM

Simply wrong.
There is NO restriction of lodger numbers.

But if there are more than 4 occupants NOT households then even a residential property would be subject to MANDATORY HMO LICENSING.
There is simply NO way any EHO may prevent lodger numbers subject to HMO and planning regulations etc and overcrowding.
This is why a 4 bed residential property may with a single live-in LL take in 3 lodgers totally legally.
In fact you may not know that a 5 bed property may have 4 occupants and a guest staying in the 5th bedroom for up to 140 days per year I think and for no more than 30 days at a time with NO requirement to be HMO licensed
Explain to your EHO that they are simply wrong!
Refer this ignorant EHO to the very informative posts by Gary Hodge on propertytribes who has the best understanding of lodger LL I have ever seen.
Your EHO is simply WRONG!!
I believe your EHO might be getting it wrong on the basis that most residential mortgage lenders will only allow 2 lodgers and of course any live-in LL would HAVE to comply with lender conditions.
For those live-in LL with mortgages they will HAVE to comply with their lender conditions.
I would though expect that many residential mortgage lenders to remove such lodger restrictions in future a bit like they are for tenancy lengths and DSS tenants.
It clearly makes financial sense for a 4 bed property to be fully occupied with as many lodgers as may be achieved.
In a 4 bed house this would be 3 lodgers.
A lender would then know income would be more than sufficient as any lodger income would be more than the other income the LL used to support the residential mortgage application.
The lodger strategy is an ideal one to beat S24.
Your EHO doesn't seem to understand relevant regulations and planning
Refer him to propertytribes.
Brilliant information resource

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this guy from EHO had use undue duress and got my husband to sign a confession on the day he visited the house that he admit guilty of having hmo without licence on the basis that if he sign, then EHO wont sue him this time. I had refused to sign and wrote to his superior and was let off. I did say that to him but he just said i am wrong and ask if i did have 3 different lodger. The council made a rule against sandwich a property between 2 hmo as well. Its very frustrating being targetted just because we are LL and non white

this guy from EHO had use undue duress and got my husband to sign a confession on the day he visited the house that he admit guilty of having hmo without licence on the basis that if he sign, then EHO wont sue him this time. I had refused to sign and wrote to his superior and was let off. I did say that to him but he just said i am wrong and ask if i did have 3 different lodger. The council made a rule against sandwich a property between 2 hmo as well. Its very frustrating being targetted just because we are LL and non white

• 02 May 2019 23:00 PM

Remember that if you have a 4 bed property and you are a couple then you may only have 2 lodgers unless you want 3 lodgers which means you are then subject to the New MANDATORY HMO regulations.
Most residential homeowners are couples that is why no more than 2 lodgers so a total of 4 occupants; anymore than 2 lodgers requires Mandatory HMO licencing
Obviously you could have 3 lodgers but you would need a HMO licence and be subject to the HMO regulations.
Room size being a major issue here
But the BIGGEST issue here of which I am unsure of is the following.
This is that with a 4 bed house with 3 lodgers and a couple of live-in LL that MANDATORY HMO LICENSING would be required.
What would be the view of the residential mortgage lender!?
Would a residential HMO mortgage be required.
Do such mortgages even exist?
Would there be differential interest rates?
Etc, etc
To avoid all these possible problems keep the number of occupants to 4.
In my case a single person I could have 3 lodgers subject to lender permissionetc etc.
Remember with a mortgage you CANNOT do as you wish.
You MUST comply with lender conditions and requirements.
You may have a 5th occupant as a GUEST subject to certain restrictions.
Essentially there must be NO connection with the address as guests don't have any connection with the property cos they are just guests!

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It was a single person with 2 proper lodgers and 3 others moved in upstairs as my ex is on his own and he works away and rarely in the house. Moreover, he is living downstairs which means one of the lodger is upstairs with 3 empty rooms. Thanks Paul for clearing that up. So he can have 3 lodgers so to speak.