[Closed] Looks like the government hate campaign against BTL landlords may backfire

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 - Member

Philosophically 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 - Member

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.

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!

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10787462/Landlords-9bn-housing-benefit-fuelling-bubble.html

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 - Member

My 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!

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.

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.

I think agent007's provincial/suburban £300,000 house is more likely to suffer a crash than trailrat's £425,000 London flat. There's gonna be x million people moving to the UK in the next twenty years and they're not going to be moving to Oban, S****horpe or Rhyl.

There's gonna be x million people moving to the UK in the next twenty years and they're not going to be moving to Oban, S****horpe or Rhyl.

Yet where will they live if prices stay high?

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