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OK not to be melodramatic about this but actual DOOOOOM right?
Donny Darko's … 26 May 23 06:41
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So mortgage interest rates are spiking again. The SVR's (or whatever they are called these days) of most banks are now north of 6% and the affordability nonsense for re-mortgaging doesn't seem to have been sorted out. People are going to be utterly fvcked as they roll off their fixed rates. Even for those who can get a deal it is going to be north of 5%. That means people are looking at their mortgage interest payments going up by something like 250% to 400%. 

I just don't see a way we avoid mass repossessions if rates stay this high over the next 12 months. The rental market is still incredibly tight as well so landlords are going to look to push at least some of the cost increase (much of which is not tax deductible) onto tenants. 

The press are surprisingly quiet about this.  All the focus is still on food costs and energy bills which I guess reflects the boomer bias of our media but this is surely going to wipe out vast numbers of Gen X and down.  

I guess as society becomes more and more unequal, personal connections with wealthy people will become increasingly important. This must have been what feudalism was like

Strong “land ownership is immoral” vibes ITT. Is chill Captain Swing? 
 

Not sure “corporate landlords” are going to save the day tbh. Have you lot missed all the news about how just about everyone with a flat in London is complaining how the housing companies overcharge them for management fees and repairs, and the properties are still shyt? That’s what’s gonna happen.

For “corporate landlords” to make sense only multi-storey apartment blocks will work. But they won’t work since the brits just don’t like flats. But you need flats because there now too many people on this island for terraced houses to remain viable.

TLdr shouldn’t have had world domination ambitions being such a small island with flat-hating mentality. These ambitions resulted in guilt that now drives the constant stream of incoming migration, and now you gotta start liking flats.

i mean well done to her if she’ll never have to work, lucky her
 

^ are you fvcking joking or did you not actually read my post just made up post you want it to be 

sorry ob i did misread it at first so maybe i’m getting it wrong

your friend’s sister works at the convenience store and has for 25 years

her parents (in their 70s) have bought a btl flat to ensure her an income in the long term?

oh sorry ob

when you say “she’s a simple soul” do you mean that in the country way?

i thought you just meant “she likes working in a shop and doesn’t want to move to a city”

This just seems really dickish towards normal small time landlords who earn fook all compared to most roffers. The uber rich sneering at the plebs who try to better themselves.

Maybe Chill is Seamus Milne not Owen Jones lol.

"Millionaires aren't uber rich not like my girlfriend whom I hold in contempt but 🤑"
 

Eh? I don’t hold her in contempt at all. Very mean-spirited post. Due to massive property price inflation being a “millionaire” is definitely not equivalent to being “uber rich”, sorry. Roffers have done well in professional services, meanwhile there are 171 billionaires in the UK. 

To contextualise it chimp most of the roffers complaining about individual resi landlords will be on 100-400k. Those who are partners on significantly more. You have a rich gf and will earn mega dolla in oz.

If you don't see why someone on 200k sneering at someone on 25k plus 10-15k in rent is a bad look can't help you.

Chatting to a mate who is doing v well at DB - and he was very worries about the rates resetting. (Not personally - hes minted - but for the sake of the economy).

But lets be clear its already all over for people that tried to borrow reponsibly over the past 20 yrs and/or used fixed rates. Their financial position has been ruined as they are in houses that are too small for them and will have lost out massively v people with high leverage and variables rates. Remember many people on Trackers have been paid to borrow post GFC. If you fixed at 5/6% back in tbe day at sensible 3x - you aint ever catching up with them in terms of size of property and  financial position etc.

Now when the reckoning comes this will be forgotten about (in fact nobody is aware of it today) - and  the misery for ordinary youngsters lured into the insanity of the last 10 yrs will be so bad they will be bailed out obvs.

First Help to Buy - within next few years they will actually call it Help to Sell.

So we will be taxed to bail these people out and everyone will cheer because everyone is leveraged up to the eyeballs post a decade of ZIRP.

You have to be in the herd just not too close to the edge.

If we do finally have a proper reset there will be tremendouse radicalisation as a whole generation of relatively  succesful  people will lose their houses and be ruined.

So just as the Boomers finally toddle off after their 30 yr retirements in big houses that turned out not to be pensions after all (as they had such amazing 30 yr pensions for free) those that followed will face the delights of being taxed on their houses or having them natuonalised by the backdoor (by reg/taxation etc).

Should have taxes wealth not  income 20 yrs ago. Should never have let this property bubble run so wildly out of control for so long. Its all too too late to do anything now.

Lets see what happens but it could be a complete fooking mess. Hope Im wrong tbh as I dont think the UK will get any better as this plays itself out. The pain will very much be shared and the winners and losers will be arbitrary.

If you don't see why someone on 200k sneering at someone on 25k plus 10-15k in rent is a bad look can't help you.
 

As I discussed Clive it’s not about the level of earnings. I guess from your comment you would be absolutely fine with the identical criticism being made by people earning less than £100k - don’t worry, there are plenty of people with no money willing to criticise BTL landlords too.

Like I said to OB trying to defend residential landlordism on the basis that they are “little people” who are “just trying to make it” as strictly laughable

Hah touche chimp. I think that would be more palatable. Not even necessarily disagreeing with most of the proposed reforms (aside from chills proposed abolition of landlords and everyone in govt homes) its the venom and invective towards normal people by a bunch of city walkers that's a little grating.

+1 for “the pain will be shared and the winners and losers will be arbitrary”. This is what happens when you build an economy heavily reliant on leveraged asset price inflation. It can’t end well, but by refusing to play the game and take on crazy debt to buy a basic house for yourself, you don’t win when the economic headwinds finally change.
 

People who sat out the 2000s waiting for a crash never got their moment to buy when the GFC happened. Instead, zirp bailed out the leveraged speculators, and encouraged a whole new batch.

zirp bailed out the leveraged speculators, and encouraged a whole new batch.
 

That’s the lesson of the past 15 years - whatever needs to happen to maintain asset prices will happen. I don’t blame people for acting with that in the backs of their minds

Key points to take away:

- Make sure you have rich parents with a big/London based house thats already paid off

- Have cash ready to drop

- Failing all thag make sure you have the skills and flex to move abroad for a few years. Income and direct taxes will go to the moon to fix this mess out.

 

Re the difference between rent seekers investing in buy to let vs productive investment, that famous communist, Winston Churchill, had this to say: http://www.andywightman.com/docs/churchill.pdf

You could replace the reference to the bridge toll with crossrail and you have a great modern example of public investment enriching landowners who have done nothing to earn their  windfall gains.

Big Winnie is careful not to vilify individual owners - it’s the system that’s the problem.

If a modern politician wrote that, he would be called an extreme left Corbynista. But it was a Tory hero who wrote it, and Milton Freeman had similar views. 

sorry if i’ve come across as venomous clive - as i said i don’t blame the individual landlords, they were doing what they were supposed to do

i don’t think a lot of people have realised the scale of the fundamental changes that need to occur though so maybe my rhetoric is a bit ott when chatting to tories who think it would be simply terrible for a government to allow a crash in the housing market because it would be very unfair on property owners who think of their second and third houses as their “pension”

 

comrade chill’s advice to any btl landlords would be a) sell up as soon as humanly possible and b) move the cash into literally anything other than property, ideally outside the uk (i hear portugal has very favourable inheritance tax rules if that’s your main concern, but obvs am in no way an expert)

maybe if we’re lucky the uk has another three to five years of runway but then the runway will run out

I sold most of mine in 2017. Mostly a function of it feeling a bit toppy post-Brexit vote, but also new job on the other side of the Atlantic meant I didn’t really want the tax or admin hassle.

I think I probably did it a little bit early as missed out on a 2nd pop, but not regretting it now. There’s a lot more pain coming. 

Characterising the comments here as “venom” towards “normal people” from “city w**kers” is nearly as ridiculous as saying landlords are “nurses and teachers” who people just don’t want to “get above their station”. Lol, just lol.

I dont really have a problem with retail landlords (tho many are indeed ventitled Boomers who, like most humans, lack the intelligence to empathise properly with others, such as their tenants and treat them pretty badly).

The real problem is the planning, fiscal, and, finally monetary, policies that enabled this madness.

More regulation of retail landlords is clearly happening and coming. Im a bit meh about it tbh. It may just cause loads of bureaucracy and even push up rents. 

It may just cause loads of bureaucracy and even push up rents. 
 

I think this will be the main effect at least in the short to medium term. Lots of people who are leveraged will drop out, reducing supply, people with paid-off rentals or cash will benefit. More concentration

The only thing that will really make a difference is punitive taxation on multiple property ownership - but that would hurt a lot of the genuinely wealthy and powerful so probably won’t happen.

Re Portugal, good for income tax as an expat/ digital nomad, iht unlikely to be relevant as much harder to lose UK domicile, in either case you actually have to leave the UK, regardless of where you put your assets.

You don’t need punitive taxation on multiple property ownership, just fair taxation.

Easy thing for labour to do would be to shift liability for council tax on to owner rather than occupier, then do long overdue council tax revaluation and add new bands at the top end to make owners of expensive properties pay tax commensurate with property value. Owners of ‘buy to leave’ flats then have greater incentive to let them out. 

Re Portugal, good for income tax as an expat/ digital nomad, iht unlikely to be relevant as much harder to lose UK domicile, in either case you actually have to leave the UK, regardless of where you put your assets.

good point eeyore - as i say not an expert at all!

Chimp some the comments have been pretty nasty and punching down. Like I said not even disagreeing with some of the comments substantive points.

No worries Chill tbf part of it was I assume playing up a bit.

Which jurisdiction are you thinking of moving to if not too outy? Canada is only place that springs to mind that's Team Chill aligned? Or maybe Ireland?

Most of Europe has bigger racism issues than us so would preclude that- and the US blue states are vulnerable to gun violence even if professionals are fully Team Chill there?

heh! 

i wouldn’t be picking jurisdictions based on how team chill they are on gender issues clive
 

clearly the most important consideration is how successfully they embraced lockdown measures during the pandemic - that post isn’t going to wash itself

The common characterisation of landlords is as evil on this thread.

my anecdata of the landlords I know are regular people with various jobs / situations - nurse, teacher, scientist, chip shop, builders, elderly parents trying to support their daughter, me - none of those people are evil, none of them have tenants living in squalor and squeezing them out of every penny, they provide good accommodation to people that need it. If they all withdraw, where do their tenants go? My friends out in the sticks really struggled to find a property to rent as so many small landlords had exited the market.
 

as above, most are trying to top up lower wages than the average roffer who we agree are all £100k + earners so the outrage is a bit shitty because how else do those people try and top up and provide for their families. Not by sophisticated st James wealth management that’s for sure - not sure it even exists in the shittier bits of the regions, not without fear of being ripped into a ponzi or fake development scheme 

me i assume?

i don’t think landlords are evil at all - they are however extremely privileged to be able to have other people working to provide them with a second income and they ought to appreciate that

one of the problems with the culture wars atm is people who are privileged thinking they’re being called “evil” if someone points out that privilege

as has been mentioned - everyone posting on this board is extremely privileged to a greater or lesser extent, there’s no moral judgment being made about it

Rent-seeking behaviour is just not good for any of us in the long term. Yes, I get that some people feel they have “no choice” due to inadequate wages or social provision - that’s a problem that should be addressed in itself, not papered over via speculative property investment and rent extraction 

As the author of multiple pieces of vitriol on this thread I want to state that I stand by all of them, and every single fictional sympathetic landlord invented above would still be a parasite if they actually existed.

I don’t care to engage in most of this topic because I’m not very well informed. Two things though:

1.  I’m in the camp of FTB of an overpriced house, bought just before interest rates went crazy, and hoping things are more affordable in 4 years’ time when the fix ends.  I bought as soon as it was feasible to do so, knowing the market was messed up but with no foresight of how long it would continue before it crashed.  Lots of people will be in the same boat, but will be lumped in with people who bought in the late 2000s/ early 2010s and took advantage of a long period of low interest rates and capital appreciation. It’s not clear to me what fair outcome to the housing crisis doesn’t completely bugger the late millennial cohort.

2. We decry landlords who use BTL to fund retirement as it’s morally reprehensible to crush people with high rents. The alternative, presumably, would be to invest in stocks etc, where the shareholders are indirectly or directly responsible for business practices which suppress wages, poison people, or encourage destruction of the environment, in order to maximise their returns.  Whatever you do, extracting money is going to fvck other people.

It’s not clear to me what fair outcome to the housing crisis doesn’t completely bugger the late millennial cohort.

unfortunately every outcome to the housing crisis will completely bugger the late millennial cohort

The alternative, presumably, would be to invest in stocks etc, where the shareholders are indirectly or directly responsible for business practices which suppress wages, poison people, or encourage destruction of the environment, in order to maximise their returns.  Whatever you do, extracting money is going to fvck other people.
 

I mean you’re just saying that capitalism is inherently bad - that’s a different argument entirely. At least investing in businesses creates growth, buying a flat to rent it out doesn’t do that.

yes correct - unless their parents were wealthy enough

though tbh as their parents start to die off, i can see some serious divisions of inequality even within that generation between those millennials who “played the game” and got on the ladder a bit too late vs those who had wealthy/lucky enough parents to avoid the worst of the coming repercussions 

might even generate as much anger as from the zoomers tbh

with some exceptions the general consensus here is that BTL landlords are not evil just in a system that has historically incentivised this kind of investment

the issue is that system needs to change as it is no longer sustainable 

The issue is it was never sustainable.

But an entire generation of middle class people have gorged on it regardless.

The Boomers will eacape scot free.

If you are Gen X and have, no doubt through very hard work or good fortune, done OK you should be thinking about escaping before the politics gets extreme.

I mean we might have gotten away with it had we not also been running vast, pension ponzi schemes too.

And then shot one foot with Brexit. And another with Covid overreactions.

As it is, we are pretty much fooked.

Politicos have worked out the only viable answer. Ponzi population. Renege on the lies about controlling population size and go for low quality growth by opening up floodgates. Keep the pensions in payment for a bit longer. Support house prices, whilst people are forced into ever smaller uglier homes and multi generational housing ghettoes.

GDP per head wont improve much. GDP may just be enough to support Boomers in their dotage. The cost will be overcrowding and declining working age services and infra. But they can probably delay the worst for a bit longer.

what cw said and i would also recommend gen x and older millennials getting the hell out of the uk for the next 20 years or so

property prices are literally never going to be better it’s a good time to sell up!

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