Friday, 6 July 2007

Buy to let is bad for tenants too.

People speak of buy to let tenants as is if we are all ‘yuppies’ (do people still say that?) or trust funded wastrels with pots of money carelessly oozing away, when we should invest in property. The truth is simple: we aren’t rich, and just need a home.

Rarely mentioned are the problems caused for tenants by saturation buy to let. Rookie landlords often fly by the seat of their pants. They are reluctant to employ contractors for repairs (owners often arrive grumpily at 2am brandishing new spanners bought from the garage). The state of the building requires a high level of commitment when it comes to stumping up for professionals.

For buy to let tenants, there is the endemic apprehension that your landlord might not be keeping up with their own payments. Friends have been given notice after years of blameless occupation, meticulously paying the rent, keeping the place spic and span, because the property has been repossessed.

In certain blocks, buy to let tenants are the bane of everyone’s life. New owners economise, avoiding letting agencies (which to be fair, are extortionate) but often don’t check references, or police their tenant’s behaviour. This isn’t a matter of surveillance, or ‘control,’ but about ensuring the property is maintained and no disruptive or criminal activity takes place. Would you want to live next to a brothel? Or an improvised nightclub?

Buy to let increases rent. Many are the cases of one flat in a council block costing much more than its neighbour. This means going cap in hand to the council, explaining why your flat costs twice as much as the identical one next door. This is divisive on council estates, and in even private property, one neighbour can pay less; for example strong minded tenants might bargain a landlord down if the flat has been empty. This is problematic for tenants on benefit, where a standard rate is permitted for housing costs.

Developers don’t think ahead. More affordable, accessible housing, built on brownfield sites, is required rather than paving over the green belt with buy to let hutches for the comparatively wealthy to use as a pension plan. These are barely big enough for one person, let alone a couple, so when people wish to trade up, or need more space than their allocated microcapsule, two bedroom flats are rare, and large one bed flats are non existent.

An emerging and all consuming sense of impermanence is proving corrosive. I can’t imagine a positive campaign group being formed from an area dominated by buy to let flats (especially newbuilds, which are the majority). Most of these conquered colonies have no schools, and no doctors surgery. They seem to be built on the understanding that a six month lease is all that’s required. Many are on nine month leases, which is betrays the fact that these blocks are aimed at students, rather than a vibrant, lasting, organic community, one which will contribute to an area. The spectre of negative equity means that even buy to let owners lose out in the end.

1 comment:

Raj said...

There are several reasons why we believe investing in buy to let market is, has been, and always will be as good a place for your money as there is out there! Firstly, the worldwide housing market is limited in supply and the population is ever-increasing at an exponential rate. This is true with most local markets as well as demand for housing continues to outstrip supply, pushing prices up and causing cities to expand. Simple supply and demand tells us that as demand grows faster than supply, prices must rise! Of course, investing in the right market and at the right time are integral to your success in property investment. Not all markets are rising, or have good rental returns; but if you are able to find the ones that are, you will do very well in the world of property investment!