Buy-to-let is back and it's meaner than ever

It's very dodgey to scapegoat a generation. It may sound a bit cliched but we are all of our time. It is very difficult to stand against the economic and social system you happen to find yourself in. All anyone can do is act as rationally and morally as you can and even that is not always clear cut. It's our first job as humans to survive and when you're part of a society you need to get on with living (surviving) in that society whilst also trying to modify it for the better in the ways open to you. These ways are very limited even in our much vaunted democracy... we get to vote every four or five years for a party whose general policy leans more in a direction we think it should than another party's. Then when they're in they take their mandate and do things in compromised way after compromised way... There's actually very little each of us can do to change things as individuals. But, that's not to say there's nothing we can do... We can lobby our prospective MPs to get better representatives for a better whole society, we can make sure we vote ( for the greater good as far as possible) and we can get out there and actually participate in our communities and similar. And, if you happen to have invested your savings into a BTL ( and in a capitalist system it is not really much difference whether you invest in BTL or in various pensions or shares like arms, oil, etc etc ... actually there's an argument it is morally better to be in BTL ) then you can be a good responsible landlord and make the best of it ...knowing that you are providing a home to someone who otherwise would not be there ( and as others have said not actually making much and with a lot of worry and responsibilty). A critical view is often destructive unless accompanied by a viable attempt at a solution which addresses the whole problem.

This is complete twaddle and totally at odds with a money week magazine advert posted out on 19 oct via Love money which states in no certain terms if you have investment in BTL property " get out now ,at all costs " as they expect interest rates to rise forcing many landlords to sell as they canmt afford mortgage repayments thus flooding the market with property nobody wants causing house prices to drop sharply. If you read their report ( via video ) it makes sense ,.the housing market is so fragile it wouldnt take much to push it over the edge and with inflation rising fast the Bank of England is under pressure to raise rates to offset inflation. I have 4 BTL let properties and as "matchmade " says renting property is not a profitable straight forward business . The first property i bought in 1995 for £27k was fantastic ,a victorian terrace on which i have made good returns being bought at the right time . But from then i bought a 2 bed starter home in 2004 for £90k which i doubt i would get more than £85k for now ,this returns £300 a month in rent after agent fees so is less than a 4% return BEFORE tax and repairs come into play . I also bought a modern 2 bed n suite plush flat 5 years ago for £120k which i doubt is worth more than £95k now , the rent is £495 a month but after agents fees and the cripling £65 a month ground rent i see about £350 a month ,about £4k a year before tax liabilites and matinence which is hardly a good return on a £120k investment . I am actually selling this flat now as the builders were such a bunch of cowboys in 4 years since it was new i have had mould growing on interior walls 3 times , water leaking through bathroom roof where the plumbing wasnt connected properly from new , i"ve had the NHBC out to it 4 times to sort out problems . Also had the flat almost completley decorated twice as a result of damage from water/mould , all electric radiators and oven replaced ( presume failed through damp from water leak ). So in conclusion BTL is only a sound investment if you 1.Buy at the bottom of the market 2.Buy a sound property , dont touch a new build 3.Get sound tenants that pay on time and look after the property 4.Dont consider less than letting for 10 years as your costs in buying/decorating/fees/selling will eat up your money in that time Also , dont forget ,if you reguarly read BTL reports on here and other sites every 3 or 4 months it"s " great time to be a landlord " then "is it time to sell btl ?", you cannot keep changing your mind on whether being a btl landlord is a good investment or not ,a minimum 10 year view is needed . When i"ve sold the problem flat i will be sitting on the sidelines to see how things develop,i will keep my other 3 properties as i see them as a long term investment but i dont think now is a good time to be investing in btl ,the market is too fragile and long term interest rates have to go up ,when is the question ...

Harvey's figures are all over the place: renting property is *not* a profitable business venture by any stretch of the imagination. Most BTL mortgage rates are 5.5% for a 75% loan, with hefty fees running to the thousands. This is *not* "cheap finance", and many landlords can't just remortgage their existing properties - usually they will get a worse deal now than their existing BTL mortgage, and with house prices down to 2003 levels, they've often had their embedded capital largely wiped out too. Meanwhile, homebuyers can get 4% fixed for ten years, which is a brilliant deal provided they can raise the deposit, and that's always been a struggle for any first-time buyer, now or in the 1970s r 80s when interest rates could hit 15%. If BTL was such a great investment, large companies would be getting involved and buying up thousands of houses for rental. Business people know however that owning property, except for specialist markets like commercial premises, student housing or retirement housing, is a mug's game: full of risk, unexpected expenditure, potential for disaster if you get a tenant from hell, and with a very poor return on investment compared to other lines of business. As for supposed "high" rents, the average return for BTL landlords is only 6% gross and still barely covers the mortgage interest and associated costs. If for example you bought a fairly ordinary good-sixed 2-bed flat for £190K in my area (Reading), you'd have a mortgage of £142,500 and monthly interest of £653. A likely rent is £900 a month, so there's a surplus of £247 a month. However from this you have to pay for marketing fees, gas inspections, income tax, inventories, EPCs, a certain amount of furniture and fittings, the repair and maintanence costs of the property, maintenance fees to the management company, whilst also suffering void periods and having to deal with all the petty issues involved in looking after tenants, who are continually degrading the decor which will need redecorating every 2-3 years. It's highly unlikely you'll make much profit, so all the tenant is doing is covering the mortgage interest whilst the investor-landlord is going to make little or no inroads into the mortgage debt. What is the point of a landlord owning a depreciating asset where the debt never reduces and all the tenant is doing is helping you to stand still? So who exactly is being a "parasite"? I can't see the landlord is making any gain at all, unless house prices go up, which is no longer guaranteed with changes in demographics, a failing economy and the government's plan to considerably increase the building of new houses. House prices are unlikely in my view to return to their 2007 levels until 2020, so the prospects of capital gain for the next ten years are minimal. Meanwhile the tenant is effectively living for free off the landlord's capital tied up in apartment, and has none of the onerous responsibilities and hard work involved in owning and maintaining a property. When you look hard at the month-on-month economics of BTL, it's the tenant who really gains, because if he or she owned a house, it would be a similar running cost to renting once you factor in maintenance, but as a tenant there is none of the downside risk and a generally very easy life, as long as you can cover the rent. If you can't cover the rent you won't be able to cover a mortgage either, but at least a tenant can easily move somewhere cheaper or go on benefit, whereas homeowners are stuck trying to sell their house and get no help at all from the state.