Social housing investment

[Cousin Jack]

The local authority will be Potters Tenant, not the person living in the house, the Local Authority are sub letting it to them

Yes, you lease a property to the government for 5-25yrs and they have to pay you every month regardless of what happens. Then they must return it to you at the end of the lease in the condition they took it.

I imagine that a maintenance and lifecycle replacement agreement would need to be made, like an agreement to replace doors at year 10, central heating at year 20 - as an example.

If you can get such an agreement, and your solicitor says it is watertight, fine. Just be aware that Local Authorities 'have' to maintain their own properties, but somehow that never gets done.

[asmethurst99]

It would be ironic if I bought ex-council houses and leased them back to them

Doesn’t this go on already ?
I’m sure our council is doing this on a limited scale .
A friend looked into it - it seemed better than the local wideboy estate agents managing his property.
He didn’t want to commit for the minimum period though.

[Asian Boss]

I think the time when additional houses were a good investment has past. Maybe if house prices come down a bit it might be more viable.

[Mr Moofo]

Have rented out houses ( mainly because work moved me abroad for years) from 2002 until 2016.
In general, I hated the experience. We had two sets of tenants that were fine in that time. The rest were arses.
Yield is northing like what you expect, tenants can damage the weirdest things - and thing it is you fault ( cracked ceramic kitchen sink, jay clothes being flushed down the sewer etc). And rental agents do nothing.
However the increase in value in the property worked well by the time we sold the second one.
Re Potters question - I wouldn't go anywhere near a contact with a local authority / council

[DefTrap]

I had some tenants that allowed water to leak behind the sink to such an extent that it rotted (rotted!) an actual hole in in the worktop that then ruined the floor. You could put your arm through the hole btw.

So many questions?
Why (as a tenant) would you not mention that?
Why (as the representative managing the property) would you not mention that?
Would have been more than happy to resolve and pay for any problems to stop them becoming horrid.

This is the tip of the iceberg of the the sort of shit you might have to put up with when it comes to both tenants and paid management not giving a shit and avoiding responsibility

[Hoonercat]

I looked into this about 4 years ago but it wasn't financially viable for me as the rental yield would have been too low. On paper it sounds great, but the repair agreement is usually limited to £X amount per year and didn't include repairs to things like floor coverings, even if the tenant was at fault and doesn't cover major repairs. The agreement to return your property in the same condition is subject to fair wear and tear, having read the experiences of a few people a council/HA's idea of fair wear and tear can be very different to the home owner's. You are responsible for annual boiler servicing/inspections and you will still need insurance, but many insurance companies will not cover you for PSL schemes as you have no control over vetting the tenants (and sub-letting is not always allowed under landlord insurance which could void your policy).
One thing that popped up regularly was the agreement to put the property back to the condition it was in at the start of the lease (minus wear and tear). Sounds great, but often the homeowners were forced to pay for the repairs themselves so they could get the property back on the market due to the council/HA giving a ridiculously long timeframe before they could start the repairs. You may also find management fees are applied to rents if you use a HA scheme (from memory it was 8% when I looked into it).

[Hoonercat]

Another thing to consider is that many of these tenants will be in low paid jobs/zero hours contracts/self employed so the thought of reporting damage and taking time off work in the hope that the council actually turn up isn't overly attractive if the damage isn't impacting on their life. My ex is a classic example, she doesn't get paid if she doesn't work so never bothers the landlord with smaller repairs. As she rents privately, it's not such a big deal for the landlord (probably better for him actually) but if you contract is limited to £X amount per year in minor repairs (it would have been £500 per year in my case) and you can't carry that limit over to other years then it could make a dent in your already-reduced rental income.

[The Martian]

I think the time when additional houses were a good investment has past. Maybe if house prices come down a bit it might be more viable.

When the arse falls out of the housing market (I give it between one and two years) I'll be looking to buy up cheap, refurbish and rent for a couple of years then punt on when the market recovers.

[Cousin Jack]

If things keep going the way they are then the rich are going to get richer and the poor will get poorer, a few badly invested people will take a haircut but I'm not sure I see a glut of cheap houses on the horizon.

That's the way it has been for the last 100 years, I can't see any change happening soon.

[Yorick]

I think the time when additional houses were a good investment has past. Maybe if house prices come down a bit it might be more viable.

When the arse falls out of the housing market (I give it between one and two years) I'll be looking to buy up cheap, refurbish and rent for a couple of years then punt on when the market recovers.

I'm not sure I see the arse falling out of the UK property market any time soon.

I'm not getting into the BTL market, but I'm currently looking at buying our final house (i.e. the place we'll live in retirement) and then I'll sell our current one. I could be wrong, who knows, but I'm worried I've already missed the curve, from what I can see atm I only see property holding or going up over the next few years. There is a lot of talk about financial market corrections but I don't see people flapping over their property portfolios.

If things keep going the way they are then the rich are going to get richer and the poor will get poorer, a few badly invested people will take a haircut but I'm not sure I see a glut of cheap houses on the horizon.

Buy the biggest you can afford. Then downsize to retire.

[The Martian]

the rich are going to get richer and the poor will get poorer

Well of course, always the way. Just the dividing line between the two that moves.

The economy is going to crash within a couple of years though I think - hangover from C19 and energy prices on a global scale with the added fuckery of Brexit adjustment for the UK

[Mussels]

I'm not sure I see the arse falling out of the UK property market any time soon.

I'm not getting into the BTL market, but I'm currently looking at buying our final house (i.e. the place we'll live in retirement) and then I'll sell our current one. I could be wrong, who knows, but I'm worried I've already missed the curve, from what I can see atm I only see property holding or going up over the next few years. There is a lot of talk about financial market corrections but I don't see people flapping over their property portfolios.

If things keep going the way they are then the rich are going to get richer and the poor will get poorer, a few badly invested people will take a haircut but I'm not sure I see a glut of cheap houses on the horizon.

You'll pay double stamp duty on a second property, reclaimable if you sell the first within the months. Might be better to sell first.

[Mr Moofo]

The economy is going to crash within a couple of years though I think - hangover from C19 and energy prices on a global scale with the added fuckery of Brexit adjustment for the UK

Agreed, I see an economic pinch, but that doesn't mean that house prices will crash.
The economy crashing doesn't necessarily mean a house price crash, I don't think it's been inflated to a point where it's ready to deflate quickly.

You have to ask, why would people start to sell houses cheaper than they are doing now?
Stocks, funds, etc, maybe, but I don't see property ready to go. In fact it might even shoot up when people are looking for somewhere to park their money when the markets dip because of interest rates and cash is getting more expensive to trade.

Certainly the rampant growth of the housing market will slow. But it is being driven by Londoners moving out of town just incase isolation / lockdown ever happens again. In Sussex pricing is absolutely stupid - esp if you are near a station with good links to the Smoke.
Martian raised Brexity fuckery - well, add into that Russia invading Ukraine, the Baltic States will be next . The EUs response has been noticeably pathetic - mainly because of the exposure they have to Russia in terms of money. Any war in Ukraine will lead to a major downturn in the EU - and real exposure of its poor leadership. Germany is in economic decline - it will not be able to bank roll the EU is the same way.
Add in the Russia / China pact and the declaration to reduce the power of "The West". Biden's hopeless presidency , the threat of Trump coming back, the rise of the right / far right everywhere, the social tensions that continued migration from Asia and Africa will have on "safe" Europe, corruption in Southern Europe, the rise of SE Asai as the new economic powerhouse etc etc.

I would just buy a house where you like it, and not worry about the other things - worry about the things you can control, because it is going to build into an almighty clusterfuck.

[dayglo jim]

It depends if you're looking at long term and how much you want to make.
A mate of mine and his sister were requested a house from their godmother. Both of them (at the time) earned good money and were in their family homes so they put in trust for their kids and leased it to a Housing Association (it used to be the council housing dept.) for twenty years. They only took funds from the trust to cover insurances and other fees and at the end of the lease the house was flogged and the accumulated funds split between the four kids/adults and it was a tidy sum. I don't know the exact figures but it was tax efficient.
He never moaned about the situation so I assumed it was reasonably pain free and arms length*. He probably could have got more money renting it privately but he would have had to organise a lot more himself.

* Him and his sister did not want any dealings with tenants or to know who they were.