Thursday, 30 April 2020

World's tiniest violin

From The Telegraph:

"Coronavirus means I'm losing £4,100 per month" (1): how landlords' businesses are under threat

Coronavirus means some tenants are breaking contracts (2), cutting landlords' cash flow and leaving them with empty properties they can't fill

For Jamie Moodie, a landlord in south-west London, the fallout from corona virus has hit hard.

His monthly income from his portfolio of 23 properties (3) has dropped by £4,100 since lock down began.(1)

Some of Moodie's European tenants left the country before lock down (4), leaving two properties empty (5). He has little hope of getting back the lost rent, as currently he “can’t fill those properties, I can’t show them to anyone”. Some of his tenants have also lost their jobs and are no longer paying rent. (6)

He is one of many landlords feeling new pressure. The outbreak is set to cause lasting damage to the sector that could mean disastrous problems for renters further down the line (7).

1) Not clear, is he actually making a loss of £4,100 a month, or has his income fallen by £4,100?

2) The landlord is no longer providing what was agreed, i.e. a home close to well-paying jobs, a nice local park, a good local school. So the contract has no substance.

3) He expects sympathy?

4) Sensible thing to do, you can't fault them for that.

5) If he doesn't like owning empty homes, he can just sell them. It's a free world.

6) But who cares about somebody losing their job? Pfft! The landlord is not collecting rent, that's the tragedy here!

7) Our old friend, the Missing Homes Conundrum makes a late appearance.

And landlords aren't businesses, they just own too many homes. The homes are not "under threat", whatever happens, they will still be there when this is all over.


Rich Tee said...

They won't let people comment without a subscription anymore. But I won't subscribe as I don't want to fund a landlordism publication. So they will get fewer contradictory opinions and it will just become an echo chamber there.

No worse than The Times though I suppose which has been subscription-only forever.

Lola said...

First three comments...

James Smith
29 Apr 2020 8:34AM

So he had a monthly income of over £20,000. I don’t think there’s a nano-violin small enough.
Paul Wallace
29 Apr 2020 8:08AM

Its hard to feel sorry for someone with 23 properties who you wouldn't have heard anything from if things were going well.

I laugh when i remember the times people have said to me 'dont bother putting money into a pension you need to buy property, thats where the money is'. It seems property is just as much as a risk as pensions and the stock market.

James Williams
29 Apr 2020 8:23AM

I agree with you. And what is with all these “pensioners” buying BTLs to “provide their pension”. Are they insane? That was always horribly risky. Pensions should be based on a diversified portfolio with a large element of guaranteed income. Lots of good will come out of this crisis, and destroying “get rich quick” BTL will be one of them

Looks like there might be a slight glimmer of a very small light at the end of a very long tunnel a long way in the distance.

Mark Wadsworth said...

RT, see Lola's reply

L, excellent, thanks!

mombers said...

BTL has been such a profitable endeavour for so long because you have a captive audience of people who have to participate in the market (you're not allowed to build your own home and the supply of at cost (council) housing is shrinking). But that means that you are utterly dependent on this captive audience. Not having to compete with anyone (you can't rent a good value Scunthorpe home in London) has the downside that you can't move into other markets if things sour.

Mark Wadsworth said...

M, all surpluses go to rent, all deficits come out of rent :-)