[url= http://www.bbc.co.uk/news/business-35154420 ]Us nasty landlords will make even more money[/url]
[i]The cost of renting in the UK could rise faster than house prices over the next five years, surveyors have warned.
At the end of that period tenants could find themselves having to pay at least 25% more than they do now, according to the Royal Institution of Chartered Surveyors (Rics).
[b]Simon Rubinsohn, Rics chief economist, blamed government moves to discourage buy-to-let landlords.[/b][/i]
It's not a hate campaign, it's still a state-sponsored gravy train.
It always was going to upset a market - rented and buying.
Im fairly sure they must have employed a rocket scientist to see this.......
Im sure stw predicted this when announced.
Only folks benifiting are the gov tax coffers
I dunno how you worked out you'd make more money, and even if you do the government will be taking more in tax anyway.
[i]Im sure stw predicted this when announced. [/i]
Yes I said the same the other day, if you restrict supply, then unless demand changes, price will go up. The government strategy of trying to get more people to buy houses suggests that they don't know why many people rent rather than buy.
[i]I dunno how you worked out you'd make more money, and even if you do the government will be taking more in tax anyway.[/i]
Rent goes up, profit goes up, I won't pay more tax unless the tax rate for landlords changes.
You can't blame landlords.
Its Governments of both colours that have manipulated the housing market for their own short-term political ends, that have created this absolutely dysfunctional car crash. And now it is just no longer sustainable
Someone at some point has to get a grip and acknowledge that the primary objective of housing should be to actually put roofs over peoples heads, rather than provide returns for investors, and an artificially inflated cash machine for lucky baby boomers to borrow against to buy more shiny things.
I doubt this will help. It needs a proper house building program, not more politically motivated tinkering
Someone at some point has to get a grip and acknowledge that the primary objective of housing should be to actually put roofs over peoples heads, rather than provide returns for investors
Massively this.
Effectively this is happening. I'm not a landlord, but I believe that from 2017 you'll be paying tax on the whole of the rental income, rather than the difference between mortgage payments and income. (feel free to correct me if I'm wrong)I won't pay more tax unless the tax rate for landlords changes.
But you're assuming that everyone who has a BTL has a mortgage on it. And the people who don't make much profit, so the tax changes will have a big impact on them, will be selling their properties. Which will restrict supply, which will push the price up of rented accommodation. Obviously that's a very simplified look at it, as demand will fall as suddenly many renters will be able to afford a house (yeh right).
Yes, I know the new rule favours those who don't. I'm sure most BtL-ers have some kind of loan, usually interest only. - edit - I hope the final point of your sneaky edit comes true, enabling those who would prefer to buy to get on the ladder.
This may be the bubble-busting event for an overheated market that the financial crash didn't quite make happen. Houses are far too expensive, and have been for years.
[i]Yes, I know the new rule favours those who don't. I'm sure most BtL-ers have some kind of loan, usually interest only.[/i]
yes but the new rules will only filter out people with a BTL who are making minimal, or no, profit and are relying on increase in the house price to turn a profit. If they start making a loss they'll sell.
But you're assuming that everyone who has a BTL has a mortgage on it
BTL means they do have a mortgage on the property, if they don't then they are just a landlord.
There may be some short term pain, but ending the BTL market as it is needs to happen. It will be much worse if the current situation is allowed to continue.
Frankly creating a market so reliant on mass loans for investment has just been ****ing insanity.
Some people may have 'bought to let' and paid the mortgage off, BTL has become a catch all phrase for small scale landlords.
[quote=Gary_M ]
Yes, I know the new rule favours those who don't. I'm sure most BtL-ers have some kind of loan, usually interest only.
yes but the new rules will only filter out people with a BTL who are making minimal, or no, profit and are relying on increase in the house price to turn a profit. If they start making a loss they'll sell.If they start selling then supply will increase and prices will fall?
I don't think landlords can complain too much. Government are also doing their level best to murder the low cost competition from housing associations and councils.
If they start making a loss they'll sell.
a) Or find themselves in negative equity, so facing the choice of loss of capital or monthly cost.
b) Perhaps enough will sell, causing the market to deflate.
c) See A
the primary objective of housing should be to actually put roofs over peoples heads, rather than provide returns for investors
Well yes but I would be very careful about attempting to make a clear distinction between the two.
Britain experienced its biggest house building programmes in the years following WW2 when the country was completely skint. This was only made possible through borrowing, and the borrowing in turn was made possible due to the certainty of returns for investors.
Calling this a hate campaign is a tad melodramatic. The housing market in its present state is a ticking time bomb sat at the heart of the economy. The BofE are trying to slowly deflate another potentially catastophic housing bubble and prevent it from exploding and taking half the economy with it.
If you think these proposals are bad, how do you think that alternative scenario would play out for you financially?
If they start selling then supply will increase and prices will fall?
Supply of houses will increase, not supply of houses on the rental market.
Calling this a hate campaign is a tad melodramatic.
It was tongue in cheek.
If you think these proposals are bad, how do you think that alternative scenario would play out for you financially?
I didn't say it was bad, a restriction in supply, and the subsequent increase in rent due to restricted supply, of rental accommodation suits me fine.
The housing market in its present state is a ticking time bomb sat at the heart of the economy.
Yep. I've heard it said that when, not if, the bubble of unaffordable rent collapses/bursts, the devastation wrought will be unprecedented. It will among other things totally shaft those who have based their retirement plans on income from rented property.
[i]It will among other things totally shaft those who have based their retirement plans on income from rented property.[/i]
Meanwhile serious property investors who don't have mortgages on their properties, for example large corporations, will be sitting pretty. So the little guy gets shafted, big business wins. It's almost as if the tories planned it that way.
the subsequent increase in rent due to restricted supply, of rental accommodation suits me fine.
You don't seem to appreciate that housing rents can't simply to continue to rise indefinitely.
Well not continue to rise above the rate of increase to wages/income.
People simply can't afford rent which exceeds their income. Obviously.
[quote=ernie_lynch ]People simple can't afford rent which exceeds their income. Obviously.It's OK. the Government will just have to increase benefits accordingly.
[i]You don't seem to appreciate that housing rents can't simply to continue to rise indefinitely.[/i]
Well you would think that, but restricting supply won't benefit the tenants that's for sure.
It's OK. the Government will just have to increase benefits accordingly.
Won't they just.
The UK's population is growing by 500,000 a year. That's a lot of houses that need to be built for supply to start outstriping demand.
... for example large corporations, will be sitting pretty. So the little guy gets shafted, big business wins...
Do many large corporations hold large numbers of residential properties as rental portfolios?
Well you would think that
No I can guarantee that. As I said, people simply can't afford rent which exceeds their income.
The sky is not the limit.
... for example large corporations, will be sitting pretty. So the little guy gets shafted, big business wins...
Are you somehow unfamiliar with the usual beneficiaries of neoliberal economics?
Do many large corporations hold large numbers of residential properties as rental portfolios?
[url= http://www.theguardian.com/money/2015/jun/08/wilson-buy-to-let-homes-sold-25m ]like this?[/url]
Here's an interesting quote :
[b][i]Housing is the first of the social services. It is also one of the keys to increased productivity. Work, family life, health and education are all undermined by crowded houses. Therefore, a Conservative and Unionist Government will give housing a priority second only to national defence.[/i][/b] - Conservative Party election manifesto 1951
And they were true to their word :
[img] 
[/img]
Do many large corporations hold large numbers of residential properties as rental portfolios?
Like this?
No, I was more thinking of your FTSE 100 types. I haven't heard of many big corporations that make private housing rentals their business.
Britain’s biggest buy-to-let landlords after their hobby “simply got out of control”
Quite
Gary_M - Member
It will among other things totally shaft those who have based their retirement plans on income from rented property.Meanwhile serious property investors who don't have mortgages on their properties, for example large corporations, will be sitting pretty. So the little guy gets shafted, big business wins. It's almost as if the tories planned it that way.
That's exactly what the bank of england (if not the government) want to do - BTL (not being a landlord, but taking an interest only mortgage and gambling on the house price increasing without taking out any other endowment) as a retirement plan is massively risky in the current financial climate and they have realised that the vast majority of people would be better off without this (well actually BoE see the risk to the financial institutions who have lent the money - when these properties turn into negative equity the banks can't recover their initial outlay as it's an interest only purchase).
OP - I'm sure you well know that the effort to kill BTL is as much about trying to prevent a bursting of the bubble in the housing market as anything political - read what Mark Carney has to say about it - there's simply way too much debt underpinning it, whatever your individual setup.
Given that both government and consumers are in more debt than we were in 2008, another housing-led bust will lead to far worse consequences than last time in terms of people's livelihoods... we'll be in a desperate state - which will hit people poorer and older more than the average STWer and BTL landlord...
I'll give you that Osborne is a highly political creature and both his boosting of house prices and undermining of BTL have, IMO, highly political objectives, but BTL is a crisis in the making and I don't think you can dismiss the very real negative consequences that another bust will have for us all just because it spoils the plans you have for yourself...
Besides all this 'rent will go up' is propaganda - no-one knows what will happen - there's more to housing than supply and demand. it's more about supply of ability to pay.
As the letting agent I spoke to last week said, rent comes from post-tax pay, not credit supply so tenants can't just be forced to spend more like mortgage payers can. Landlords need to remember that - if people can't afford the rent they'll just make other arrangements like staying with friends, parents, or emigration...
Super high rents and mortgages are killing the real economy because it reduces the amount of disposable income we have - especially with wages largely stagnant for 10 years.
BLTers need to remember there's a bigger picture than their own desire for enrichment or pension provision and when they UK is in such a parlous state I don't think complaining is going to go down to well amongst the masses - take a look at the comments on any news story on house prices and BTL and you'll get a feel for the sentiment
Happy Xmas...
he people who don't make much profit, so the tax changes will have a big impact on them, will be selling their properties. Which will restrict supply, which will push the price up of rented accommodation.
...but will increase the supply of houses for sale, which will depress sale prices, which will cause some people to buy instead of rent which will cause rental demand to fall which will cause rents to fall AND the lower purchase prices will cause some people to buy to let which will increase supply of rental properties which will cause rents to fall, which will cause some people to rent instead of buy which will...
It's a dynamic and complicated market with all sorts of oddball human "noneconomic" behaviour. You can't just say that x will cause y and then everything stops.
What konabunny says plus BTL actually amplifies the house price cycle beyond limits which would otherwise occur.
BTL investors tend to enter the market if house prices are rising and exit if they are falling.This bandwagon buying and selling mentality acts to amplify the motion of prices, decreasing demand further when prices are going up and conversely releasing more supply into the market when prices are on their way down.
In a rising house price environment, this positive feedback loop could lead to more people taking on more debt to buy more expensive houses, which could pose a risk to financial stability.
When prices fall, landlords would be likely to try to sell their properties, especially if it meant rental income fell below the amount of interest necessary to service their mortgages. This would depress prices further.
http://www.moneyobserver.com/news/21-12-2015/government-warns-buy-to-let-risks-to-economy
There a really simple solution to all this though isn't there - build council houses and make them available to everyone.
If the BTL brigade and other private landlords had decent, affordable competition which was based on demand rather than profit, they would have to step in line or go bust.
How did a council house turn into something undesirable? The whole point of them was that you would have a manual worker and a bank manager side by side - was that just the tories or did something else happen?
It does annoy me slightly that i'm with binners on this one...
It's OK. the Government will just have to increase benefits accordingly.
Or they can work a few hundred more hours.
The whole point of them was that you would have a manual worker and a bank manager side by side - was that just the tories or did something else happen?
It's something that we can in all honesty blame Thatcher for: her first Tory government stopped building new council houses, then allowed people to buy the existing stock for pennies, then kept the capital receipts rather than letting councils re-invest in new-build.
It's something that we can in all honesty blame Thatcher for: her first Tory government stopped building new council houses, then allowed people to buy the existing stock for pennies, then kept the capital receipts rather than letting councils re-invest in new-build.
We can also blame Gordon Brown who did nothing to fix the situation but let the banks overlend, we can blame Osborne who just added fuel to the fire and has quite happily let a tidal wave of crooked money into London, and we can blame those of our fellow citizens who're daft enough to believe the myth that property is somekind of surefire winner, and get defensive when you point out the damage they do when they hoard a scarce, essential good: no-one forces you into borrowing a load of cash to buy a second home after all...
It's something that we can in all honesty blame Thatcher for: her first Tory government stopped building new council houses, then allowed people to buy the existing stock for pennies, then kept the capital receipts rather than letting councils re-invest in new-build.
The right to buy was almost certainly Thatcher's most popular policy, it was an appeal to personal enrichment with absolutely no consideration of the long term effects.
I prefer to blame all the people who voted for shortsighted policies rather than Thatcher herself - she couldn't have done it without their support.
The right to buy was almost certainly Thatcher's most popular policy, it was an appeal to personal enrichment with absolutely no consideration of the long term effects.
In itself, the policy wasn't a disaster: had the homes been sold for their re-instatement cost, and the receipts used to build new stock, then the outcome would've been very different.
It was pretty self-evident that the purpose of the policy was to rid Britain of social housing as much as possible, you would need to be some sort of political illiterate not to realise that. But too many people just didn't care, they were only concerned with what was in it for them.
Binners is spot on, 40 years of neglect and short termism resulting in an alright jack group of vultures leeching off generations of young workers. It's a national disgrace and damaging to the economic cycle as a whole, not to mention a massive concern for anyone with children, remember those you was one once!
Unfortunately this meddling solves nothing and I suspect theres no real political will to really solve the problem, just to paper over the cracks appeasing people being seen to be doing something as usual.
I suspect theres no real political will to really solve the problem
You make it sound as if there is no alternative to the present state of affairs.
Well now there is :
......the only way that the housing crisis for the majority of people can be resolved, is by the building of large number of Council houses. The last Labour government, (1979) even towards the end, was building 100,000 new Council homes a year. This eventually fell to 0 under the Tories, and under the early years of New Labour. The philosophy of the government since 1997 has essentially been to tack social housing as an add-on to private sector development, and say that social housing is only affordable if accompanied by high priced private developments. This philosophy has to be challenged. We should be building Council housing because we need it as a national priority.For a government that is dedicated to getting value for money in the public sector, it is incredibly wasteful to refuse Local Authorities the opportunity to build new Council houses whilst at the same time, through the Housing Benefit system, shoring up the worst aspects of the private landlord system.
We have the opportunity to turn things around and produce housing for need, and to stop our obsession with feeding the voracious private sector market.
http://jeremycorbyn.org.uk/articles/housing/
Of course people might decide that this alternative policy is far too "left-wing" and would rather not opt for it.
And they will of course continue to moan and complain that they don't like what they have voted for.....
Well for starts why don't the government smack foreign buyers and non-residents with a Singapore style 20-30% stamp duty for one?
Regarding the article; this is a ludicrous attempt by various landlord's associations to try and spin us. The chancellor should warn them, that if rents rise, then they will be taxed heavily FOR IT.
Well for starts why don't the government smack foreign buyers and non-residents with a Singapore style 20-30% stamp duty for one?
Because they love foreign money and helping the worlds billionaires make money out of the UK housing market appeals to them, it's the deserving Rich vs the underserving UK poor / middle classes.
[quote=ernie_lynch ]The right to buy was almost certainly Thatcher's most popular policy, it was an appeal to personal enrichment with absolutely no consideration of the long term effects.
I prefer to blame all the people who voted for shortsighted policies rather than Thatcher herself - she couldn't have done it without their support.
You can blame them, but it's hard to blame individual men and women and families for looking after themselves first rather than casting their problem on society, when that's exactly what they were being told was their duty 😉
Personally (and this might surprise you) I reckon it's accurate to blame Thatcher for this one - or as ransos points out at least for the deliberate policy of social engineering by not replacing them.
Philosophically I'm with JC here, even if as always with his policies I'm unsure about the practicalities.
The BofE are trying to slowly deflate another potentially catastophic housing bubble and prevent it from exploding and taking half the economy with it.
Really? [s]stealing[/s]QE seems to be designed to deliver exactly the opposite. The BoE doesn't even pretend that encouraging bank lending is a part of it. Instead, misprice risk and force people to make bad investment decisions while buying them off with a short term wealth effect.
Do we never learn?
The UK's population is growing by 500,000 a year.
Not for long. The european economies are starting to grow again. Many young people who came to booming Britain looking for work, and who rent, may soon be returning home. If we vote to leave Europe it could be more of a stampede.
In itself, the policy wasn't a disaster: had the homes been sold for their re-instatement cost, and the receipts used to build new stock, then the outcome would've been very different.
couldn't do that though, as a tory, would be tantamount to nationalizing house building. Who would buy a new house when you can buy one of the council for less than cost.
Not for long. The european economies are starting to grow again. Many young people who came to booming Britain looking for work, and who rent, may soon be returning home. If we vote to leave Europe it could be more of a stampede.
This is interesting... I had a chat with a colleague of mine - a market researcher who spends her time talking to people about all kinds of stuff - she herself is Italian and has been here 5+ years.
We both agree that one of the reasons London has become so expensive (and wages kept low) in the last 3-4 years has been an influx of European youth looking for work accepting any old accommodation and any old salary - with youth unemployment so high back home, the Italians, Spanish, French etc have come to London to get a job and will take anything cos it's better than nothing that they'll get at home.
IF - and this is definitely an if, there are more jobs back home, combined with London turning out to be too expensive for them to live in, we may well see a reversal. Which won't do rent and house prices any good as the bottom falls out of the BTL market which is already showing too low a yield to be worth it anymore (in London at least)...
Be interesting to see what impact a Brexit would have on this dynamic...
To a degree I'm quite glad now I missed out on buying in SE London in 2013 - I'd be balls deep in debt for a small flat and more than a little bit worried about negative equity
aracer - MemberPhilosophically I'm with JC here, even if as always with his policies I'm unsure about the practicalities.
Why are about unsure about the practicalities?
Harold Macmillan was daunted by the task entrusted upon him by Churchill after the 1951 Tory election victory. This is what he wrote in his diary after been summoned before Churchill :
[i]He asked me to “build the houses for the people.” What an assignment! I know nothing whatever about these matters, having spent 6 years now either on defence or foreign affairs. I had of course hoped to be Minister of Defence and said this frankly to Churchill. But he is determined to keep it in his own hands…Churchill says it is a gamble – make or mar my political career. But every humble home will bless my name, if I succeed. On the whole it seems impossible to refuse – but, oh dear, it is not my cup of tea…I really haven’t a clue how to set about the job.[/i]
Yet Macmillan succeeded totally, as the graph on the previous page shows.
And remember 200,000 council houses a year were being built straight after WW2 despite the war leaving a devastated UK economy, a huge and unprecedented lack of skilled labour, massive debt, and widespread shortages - rationing didn't finally end until 1954.
All it required was the political will.
And I'm quite frankly staggered aracer that a Tory voter as yourself should apparently think that today's neo-Conservatives lack the skill and competence to fulfill the very basic societal requirement of affordable housing for the people. Shame on you.
.
Btw just to be clear, with reference to your remark, I do not blame anyone for grabbing the opportunity to buy their council home for not much more than peanuts. I do however blame people for voting for policies which it was absolutely crystal-clear would have long-term devastating consequences.
Increased stamp duty will encourage Buy2Let'ers to buy in the cheapest areas (up north) as it will be more tax efficient to buy say 2 x £50k houses than 1x £100k? This could put upwards pressure on house prices and downwards pressure on rents in these areas?
What an assignment! I know nothing whatever about these matters
Possibly the last time a politician told the truth.
Buy2Let'ers to buy in the cheapest areas (up north) as it will be more tax efficient to buy say 2 x £50k houses than 1x £100k?
Yields will still be pretty appalling and growth pretty much stagnant I reckon half of all northern BTL landlords are people who've been forced to keep a house that's in negative equity and let it out to service the mortgage.
I remember when in Australia house prices were relatively cheap compared to annual wages.
At that time to borrow money for a house you were required to have at least 30% deposit and have a high average balance in your savings account over a few years (ie your mummy and daddy couldn't just give you the deposit).
To make houses easier to buy for first home owners these restrictions were removed. Then house prices rocketed...
So a high deposit and average balances may well be the way to bring the house prices down.
Re rent rises it looks as if landlords are able to pass on any increased costs due to govt meddling. My loyal tenants of over 5 years told me last week they were off due to relocation so I instructed the agent to remkt the flat - mkt rent has risen 20% in 3 mths so I just do what the agent advises.
London has become far too expensive - there's no way I would pay that sort of money for a place to live there. The problem is there's a chronic housing shortage - there's nothing else available so the agent just prices any available place at a rate that someone will pay. Having owned this particular place for 10 years now the rent has pretty much doubled, as has the selling price. It's never been empty either.
Also re BTL - I never refer to my places as btl, they are homes & never empty. The real problem is the empty homes in areas of housing shortage. There may well be a law somewhere against it but I know a few places where on paper they may well be occupied (ie, full council tax paid) but for tax reasons they are left empty.
Hope it helps the debate, happy christmas everyone
poolman - MemberRe rent rises it looks as if landlords are able to pass on any increased costs due to govt meddling. My loyal tenants of over 5 years told me last week they were off due to relocation so I instructed the agent to remkt the flat - mkt rent has risen 20% in 3 mths so I just do what the agent advises.
The plural of 'anecdote' is not 'data'. Just because you're able to raise the rent is a far cry from meaning every landlord can. Economics is concerned with aggregates.
Let's not forget if there's a BTL sell-off and they're being sold for current tenants to become owner-occupiers, then intuitively it'll be the tenants with the better financial situation that are the ones buying. Meaning that the average financial situation of the remaining pool of tenants goes down.
[quote=ernie_lynch ]And I'm quite frankly staggered aracer that a Tory voter as yourself should apparently think that today's neo-Conservatives lack the skill and competence to fulfill the very basic societal requirement of affordable housing for the people. Shame on you.
.
Btw just to be clear, with reference to your remark, I do not blame anyone for grabbing the opportunity to buy their council home for not much more than peanuts. I do however blame people for voting for policies which it was absolutely crystal-clear would have long-term devastating consequences.
My vote is between me and the ballot box*, JC isn't neo-con (because the current shower certainly aren't going to implement that even if they were competent enough), and you aren't really are you? But which of them would you rate comparable with Macmillan or Churchill? I've not thought about it too hard, and clearly they managed in the 50s (IIRC they borrowed lots of money from the US, or was that just the Attlee government?) but the biggest issue to me seems to be funding for building all those council houses. Clearly the current system has developers "paying" for social housing (I don't believe for one minute they're losing money on building what they're required to though).
I got what you meant, but then as always with voting in a GE, I doubt many if any were voting for that particular policy, simply other policies or what she or the Tories stood for in general. Condemn them for that if you wish, but I still think that in general it's unfair to blame voters for all the policies of a government they voted for, when for some of us at least it's a case of choosing the set of policies fewer of which we disagree with.
Though I'm slightly disappointed that you either missed or have just ignored where I (mis)quoted most of that first paragraph from 🙁
* I don't think it should surprise you that my political views have shifted since I first started posting on STW - partly due to debates on here, but I think that has made me recognise that my actual feelings about how things should work don't accord with the way I'd instinctively vote
The plural of 'anecdote' is not 'data'.
Good quote!
@ ernie - As you pointed out it's far from an impossible task, difficult given the extent of neglect and opposing interest groups.
It can be very convenient off-shoring your money, only returning from your Mediterranean bolt hole to vote, keep dual nationality going and for the terrible free NHS treatment 😉
I have no faith in the electorate. As many I've spoken to have a moderate agreeable public persona, which is a million miles away from their true divisive mentality, with politicians more than happy to take full advantage furthering their own/parties agenda.
Government are subsidising private landlords by 9.5 billion quid a year housing benefit. Some hate campaign!
I have no faith in the electorate. As many I've spoken to have a moderate agreeable public persona, which is a million miles away from their true divisive mentality
That's what you get with tribal politics
What is your alternative system? Email surveys to the "membership"?
aracer - MemberMy vote is between me and the ballot box*
Well that's fine aracer but if you want to keep it just between you and the ballot box then I suggest that you don't announce how you vote on a public forum 💡
Tell me that you've voted Tory and I'll assume that you're "a Tory voter" 🙂
* I don't think it should surprise you that my political views have shifted since I first started posting on STW .........
I can't say that I had noticed but then I've never considered you to be a serious Tory, certainly not an ideological Tory. Which why I refer to you as "a Tory voter" and not "a Tory". In contrast I consider the likes of jambalaya and THM to be ideological Tories - I wouldn't refer to them as simply "Tory voters".
Btw apologies for the late response but a grumpy mod who presumably wasn't full of festive goodwill decided to ban me the day before Christmas Eve (I strongly suspect that the Christmas Grinch banned several punters). Still never mind, eh?
gwaelod - Member
Government are subsidising private landlords by 9.5 billion quid a year housing benefit. Some hate campaign!
Spin time 🙂
Governments fail to build any social housing, save lots of money which they use to pay private enterprise to provide social housing?
So the solution is obviously to not let people receiving benefits spend it with private landlords. That should sort it all out.
The council house situation is only going to get worse now that Cameron has dropped the requirements for 'affordable' - ie social rented/key worker housing in developer contributions and replaced it with a new requirement for starter homes. Also, his plan to bulldoze sink estates is a laughably transparent plan to give away council land to private developers for new luxury flats, with no clear direction on replacement of the council housing.
For a government that talks so much crap about 'value' and saving money when they're screwing the poor, they're hilariously bad at getting value when there's an opportunity to transfer public assets or money into the hands of private enterprise. Or at least it would be hilarious if it wasn't such a cynical, ideologically driven dismantling of a half century of progress and investment.
Good to see Tory MP's out in force last night to prevent landlords being forced to provide homes fit for human habitation.
"It would reduce their profits, dontcherknow"
A few points:
Landlords cannot simply put the rent up to offset their additional costs. They can only put rents up so high as the local market can sustain - which low and behold happens to be whatever they are charging at the moment. No one rents their flat/house for less than market value do they?
The government do not have a hate campaign against BTL, it's had far too many tax breaks for far too long, skewing the market against hard working young families in the process. BTL has had an easy ride, hence it's got out of control and now risks our economy. Something had to be done.
Even if the amateur BTL brigade have to sell up, then there wont be a shortage of property to live in or rent. Those properties will simply get released from the clutches of overstretched amateur BTL'ers and get snapped up at a cheaper cost by first time buyers, or landlords who have their house more in order. The houses won't simply disappear, they will still be there so no worries there.
'Build to Let' is a different story - this should actually be encouraged as unlike BTL, it doesn't remove property from the market, but actually creates new homes. Tax breaks could help here as 'build to let', unlike BTL, would contribute something positive to the economy and society in general.
If people say that supply and demand is the main long term driver of house prices upwards. Well what's the main factor that influences demand? It's not the number of people who would like a house - it's the number of people who can afford a house and are actively looking. Apart from areas of central London, for the rest of the UK then this is driven almost entirely by what they can afford to borrow, the availability of credit. What has started happening to the availability of credit recently and what may happen in the years ahead? I'll let you draw your own conclusions.
Those properties will simply get released from the clutches of overstretched amateur BTL'ers and get snapped up at a cheaper cost by first time buyers, or landlords who have their house more in order. The houses won't simply disappear, they will still be there so no worries there.
I'd have to guess that without a fall in prices the number of FTB's getting their hands on them won't go up much. The need for a decent deposit is something that you can't let go just to get more people into debt to prop up a housing market.
I'd have to guess that without a fall in prices the number of FTB's getting their hands on them won't go up much.
I'd argue that there will be a fall in prices. Things have gone crazy round here. House that was advertised and sold for £235k 18 months ago has just come up for sale again priced at £349k. Flat in my development that was sold for £190k 8 months ago has had a lick of paint and just sold again for £230k. House I put an offer on 12 months ago at £250, but which was then taken off the market, has now been put up for sale again at £299k!!!
That's a 30% increase in little over 12 months. If that isn't a warning to a crash I don't know what is?
"big business wins. It's almost as if the tories planned it that way. "
No . That's common sense, the way of the world and how anyone would work given half a chance. I dare anyone to prove me wrong 😆
Are housing associations not just "big businesses"?
If that isn't a warning to a crash I don't know what is?
It might just be overpopulation.
or a new tube station being announced.
2 bed flats in Sydenham, a tatty part of south east London were c£250k up until 2012, early 2013. By the end of 2013 they were selling for £300k+
One down the road from where I used to live (a basement flat on a rat run residential road and bus route, with trains the other side of the building) has now gone on the market at £425. I doubt it'll sell at that price though, that's 70% increase in prices from early 2013 to 2015. If that happened to fuel or food we'd be rioting.
I know of 3 flats around the corner which have been on the market at higher prices for up to 18 months and haven't shifted.
I really don't understand the argument for prices to go ever-higher beyond fooling existing owners into thinking they're rich. For a young couple to try and raise close to half a mill for a small, low quality flat in an undesirable area is a) poor quality of life b) leaves them too short of cash for savings, pension, general spending and therefore leaves us looking at zero growth/recession and stagnation due to lack of real consumer spending as well as an unaffordable benefits bill for all those who rent till retirement and are then dependent on housing benefit to pay for their retirement homes
If you think of the economy as a whole and of the macro effects the hyper inflation in London and SE prices is a total disaster. I really don't understand how anyone can defend it outside their own personal interest... by boosting the housing market we've created moral hazard for three generations of homeowners - it's very hard to convince anyone under the age of 80 that housing is not a one-way bet, which has done and will continue to cause massive damage. The sooner we have a proper crash to disabuse us of this notion the better.
Either way, the bears are out in force at the moment. UK housing is not a self-contained domestic market - London market especially is internationally-connected and will not be immune to whatever happens in China and the emerging markets this year.
How did a council house turn into something undesirable?
A question I often ask myself.
Round here if you put the words 'social' and 'housing' together you would think it was an open prison they were proposing. This despite the fact that the entire area is made up of ex LA schemes, most of the houses have been bought and of that a good proportion are still with the original buyers (thanks Zoopla).
To be honest it's got to the point that it's going to be a massive burden on anyone that tries to do it. Oh the money could be found but we would have to forego a few vanity projects from central funds to make up for the lack of income that would allow LHA's to reinvest on any meaningful scale. And who would want that?
Please stop assuming that because prices are going up in one area, all prices are going up.
The policy to address the south, east and Home Counties bubble is not the same as the one required for Middlesbrough, Preston and Oban.
Was looking at financials of our local housing association the other day
They hold over 20,000 properties, brought in 96 million quid in rent, with an operating surplus averaging 20% over the last five years they have more than doubled their cash surplus to £55 million.
And managed to create a grand total of 66 new properties last year 🙄
[i]Are housing associations not just "big businesses"? [/i]
Yep, and created with the use of public assets and now able to operate off-piste:
http://www.insidehousing.co.uk/inside-housing-chief-executive-salary-survey-2015/7011635.article
Undoubtedly, the scale of pay has increased again. Chief executives of the biggest 100 housing associations in the sector were paid an average of £182,780 this year, a 5.5% rise on last year’s average pay of £173,321.