That’s a nonsense and there is no logic to what you’re saying.
Landlordism is very lucrative right now, maybe these people need the capital for something else but there is serious money to be made by being a landlord now.
You’re the one arguing its an attractive market despite clear evidence that people are leaving it. I’m fairly comfortable that the “specious reasoning” isn’t starting with me …
Is it fair to sum your argument now as “It’s a really really attractive market but people are leaving it because of some undefined other factors that mean its still really really attractive but they just don’t want to benefit”?
1 Like
There is logic to it to be fair.
House prices are high again for sale and there is a huge demand for purchasing. People will sell for profit now and clear their own debts, especially with interest rates and inflation looking cagey
A lot of people have been sitting on properties for 10 years bought in the downturn. Its peak time now to pick those cherries
1 Like
To follow your point through - why aren’t the ones who “need capital for something else” (which is more attractive?) being replaced by others who see the potential for “serious money”?
They are by institutional investors but the data shows that they are not by private investors.
Inflation and interest rates are set to rise. Rent prices are maxed out
Yes but he’s saying people are getting out of landlordism because it’s not lucrative, that is false.
People might have their own present needs to get access to some capital, maybe move to a bigger and better house, maybe do a renovation on their family home, maybe finance their own children buying or upgrading their own home. All that means is they need the money up front, rather than landlordism is not profitable.
Somewhat backing up my point that there is a cohort out there who ended up with these investment properties by accident and are keen to get out when they can having already been stung.
1 Like
Capital.
You need capital to enter the landlord market.
You’re capable of much better than this. Clearly it’s an attractive market. I think it’s bizarre to say otherwise. Obviously there are other factors at play that people way up, like the fact that house prices have jumped significantly and their other option is to cash out.
It’s completely specious reasoning to look solely at one piece of evidence -people leaving the market- in isolation to everything else, like you are doing.
2 Likes
That doesn’t mean it’s not a landlord’s market. Really odd reasoning.
1 Like
It might be now but getting in to the game is a long term play
People are looking down the tracks at whats coming.
Id be selling the fuck up right now if I had a property out
Landlords have two options.
Cash in and get a wad up front right now.
Hold on and have a steady income over the future and an asset that will probably appreciate or stagnate in value in that time.
What will influence their decision is whether they need capital for some reason, buying a new family home, buying one for their child or some other reason or if they have enough money on hand there is likely no real incentive to get out of landlordism. Maybe they’re just a lazy cunt who doesn’t want the hassle of tenants etc.
That was very insightful, thanks
4 Likes
It’s an attractive market to some participants (i.e. mainly institutions currently) and they are entering the market in a large way. I don’t think it’s particularly attractive to individual/small landlords through a combination of factors including taxation, regulation, risk etc despite the higher rents of recent years (although they are effectively fixed). Once again I’d suggest the data backs that up.
To address your second point about cashing out - in any market there will be churn - those who exist and those who take their place. In this case we are seeing a net exit (of small investors) which again does not support your argument that it’s attractive for that cohort.
I don’t think anything I’m saying is particularly controversial, political or even a new argument. It just is what it is.
1 Like
What? Why? This is a really attractive market don’t you know!
Buy to let is pretty much a ridiculous proposition right now for individuals.
You’re buying at a crest, with unknown interest rates into a pretty much fixed rental price
You’d want your head examined
Would you?
We’re in a housing crisis, planning regulations are becoming much more stringent, population is steadily rising. Unless you have any short term cashflow needs then getting rid of property or land is a silly long term decision IMO.
If you are comfortable financially and have property or land, it’s stupid to divest so people are going to hog it and make loads of money on it. The policy of govt should be to not make it rewarding but then again most govt TDs are probably landlords, land owners or have multiple properties so they benefit from these policies.
I really just don’t your line of reasoning, it ignores too much.
It is an attractive market. It may be that other factors that you choose to ignore are more attractive.
There is a lot of uncertainty. Loan to value will likely never be better than it is right now. Interest rates are only going one way.
It might make sense if you have no existing debt on the property
1 Like
Private landlords are leaving the market. Data is clear on that.
Institutional landlords brings its own issues but seems to be future.
The pandemic showed that people can stop paying rent and be left in situ. If you are an institutional landlord that’s something you can afford but as a private landlord that’s more difficult.
It’s also difficult to evict for nonpayment of rent which again is something institutional landlords better able to handle.
I suspect most private landlords are selling up as no longer in negative equity and it’s too much of a hassle and a risk to manage for them and the reward is not that great on a cash flow basis once tax and other fees are paid.
1 Like