Buy to let – sell now before you get into deep poo.

you’re ignoring the fact that developers are individual actors, not as a cartel.

I’m assuming that they are operating individually. My point remains that there is little incentive for the developers to increase productivity, even at a local level, because it would increase availability and choice, which if profits and dividends are to be maximised, doesn’t help.

deepreddave – Member
Moving jobs out of the SE appears to be a stayed aim of every government with no GENUINE effort to do so, including the civil service.

If they only have the will there will always be a way. Some sort of incentives in the form of lower regional tax regime would easily change that, but as usual you get plenty of shouting unfair or uneven playing field.

House prices are starting to hurt buisnesses in the south as well as they cant gind people willing to live nearish to work. Oxford seems to be suffering a shortage on unskilled and semi skilled workers because of coats….how long before industry starts being hit really hard?

Me andy wife can put 10k to 12k a year away by living like students….seriously conaidering doing this and buying a nice property in Manilla with no mortgage.

Oxford seems to be suffering a shortage on unskilled and semi skilled workers because of coats….how long before industry starts being hit really hard?

There was an economist article comparing Oxford with Cambridge wrt houses. In one year Oxford has built only a few 10s of houses whereas Cambridge had added over 1000.

http://www.economist.com/news/britain/21639495-how-and-why-fortunes-englands-two-ancient-university-towns-diverged-trailing-its-wake

My point remains that there is little incentive for the developers to increase productivity, even at a local level, because it would increase availability and choice, which if profits and dividends are to be maximised, doesn’t help.

But… but…. ‘The Market’ sorts out everything doesn’t it? Thats what I’ve always been told. Oh…. I forgot… buy-to-let is effectively subsidised by the rest of us. As is the housing market generally through the idiocy of selling off housing association properties, and the utterly bonkers lunacy of Help to Buy.

Repeat after me…. house price rises are not an economic recovery, house price rises are not an economic recovery, house price rises are not an economic recovery… house price rises are not an economic recovery.

I hope the whole house of cards comes falling in, and houses revert to being places where you live rather than investment opportunities. The housing ‘market’ in this country is utterly and completely dysfunctional. It prioritises making profits for the few, or allowing people to use their homes as cash machines to prop up a failing economy, rather than actually supplying places where the population – all of them – can actually live. Its perverse and needs sorting.

matt_outandabout – Member
I ask again for those who want house prices to fall – how much do they need to fall by for you to buy the place you rent? (% / current value)

By more than 30%.

😮

Lack of affordable housing is a national problem. Buy to let grew precisely because of it. Deal with that, other issues calm down.

I gave up my career to move north to have the house and lifestyle we wanted. Appreciate others may not want to do that.

There will always be a rental market. Large amounts of cheap rentals are beneficial if you want a mobile population.

If you have to purchase property in order to go to university or to move jobs you restrict everyone.

The way this is handled in many other countries is that housing developments are built by companies just for renting. The unique thing about the UK at the moment is that the money generated by the rental market is (for at least part) fed back to the general populace rather to a massive corporation with google style tax payment policies…

This is not to say the system is working well. Construction companies build shitbox style properties aiming at the buy to let market as people will rent places they wouldn’t consider buying…

A lot needs to change but no political party is going to try to put in place a transformation plan that needs to last for generations. So tax hikes, credits and U-turns just before the election are what e can expect.

Thanks Chekw.

matt_outandabout – Member

Thanks Chekw.

To be more specific 30% or more as I live in the city centre other locations may vary. 😀

here was an economist article comparing Oxford with Cambridge wrt houses. In one year Oxford has built only a few 10s of houses whereas Cambridge had added over 1000.

http://www.economist.com/news/britain/21639495-how-and-why-fortunes-englands-two-ancient-university-towns-diverged-trailing-its-wake

Thanks footflaps….that article made me cross eyed with rage.

But Cambridge built 1,020 homes in 2014—three times as many as in 2009. Oxford built just 60 last year.

60 is almost a rounding error…

We’ve also got to accept that building on ‘green belt’ is just something we’ll have to do – no different to the past when the houses most of us live in were built on ‘green belt’ land. It’s just that this was before the ‘green belt’ was created.

The housebuilders own large tracts of land with outline planning permission, but they have a disincentive to build becuase that land is appreciating in value, whilst rates are not levied on it. There are also disincentives to bilding on brownfield sites, as they are more expensive to develop.

Small changes in tax law could remedy both of these, and increase the supplyo of houses. In the 30 or so years that we have been selling off public housing to private individuals, the population of the UK has increased by several million. So demand has increased tremendously.
I also seem to remember that there are 200000 empty properties in London alone. If they were compulsorilty purchased, at their original cost + inflation, then many people could be housed.

Green belt bollix!

There are enough empty properties and brown field sites to meet the majority of our needs. Especially as we need more smaller properties for smaller households.

Plus brownfield sites are usually already close to employment and transport links, reducing commuting issues. And usually closer to schools, medical and shopping facilities.

Some rural/greenfield building is required. But it should be prioritised for affordable rental housing for locals, who are otherwise forced out by rich city folk living the dream and then complaining about church bells and chickens 👿

A house price drop would penalise and trap many people like myself who have saved for a long time and just managed to buy a house. Better to have a stagnation of prices. This stops housing becoming an investment opertunity but allows people who have bought a house still the possibility to move about when needed.

There is no shortage of homes in this country. If there were there’d be hundreds, thousands of families on the street – there ain’t. The people perpetrating this story are the same ones who’ll be queuing to snap up newly built houses for buy to let. There is a shortage of homes to buy at the price that enables first time buyers to get on the ladder however, but that is not solved by building more. The competition faced by first time buyers is predominantly not from other first time buyers.

And those concerned about the effect these initiatives have on your own house value. Consider your house may have been over valued for the last 15 years precisely because of an out of control market for starter homes.

Not everyone bought 15 years ago!

There is no shortage of homes in this country

That is incorrect and correct. (But mainly wrong)
Many, many people are in homes too small, or shared, or living with parents.
There are many others living in homes too big for them.

There are enough empty properties and brown field sites to meet the majority of our needs. Especially as we need more smaller properties for smaller households.

Yep, Cambridge is having a huge building frenzy at present, all on brownfield, many old industrial plots that have been moved out of the City and replaced by huge flat complexes. Lived here 40+ years and never seen so many building sites. However, house prices are still rising, demand far outstrips supply.

All for lots of brownfield building but saddened by the lack of sustainable housing/social housing. Lots of cheap technology and district-wide schemes that could be installed (Scotland seems to do well at this), but profit margins = stack em high, build em cheap.

It surely makes sense for those on lower incomes to have small heating / electric bills, not to mention climate targets – would be great to see it in law.

A question for someone who understands things better than me.
Can you set up as a company providing a rented house? Then use that revenue to rent elsewhere and as such showing zero profit (or even a loss). Would you have to pay tax on anything?

Building houses isn’t (I don’t think) going to reduce prices.
Mr Developer isn’t going to sell his new housing estate for anything less then the maximum he can get, and as you only get a few hundred new homes a year in any town/village, this isn’t enough to swamp the market and cause a price drop.
Too many people have an interest in keeping prices high.

Too many people have an interest in keeping prices high.

The Chancellor being No. 1. So far he’s done everything in his power to inflate house prices to keep the housing boom going. So much for rebalancing the economy…

Can you set up as a company providing a rented house? Then use that revenue to rent elsewhere and as such showing zero profit (or even a loss). Would you have to pay tax on anything?

no, the house you live in would be seen as a benefit in kind so you would have to pay the tax on it.

All I know is that unless something happens to massively devalue the current housing stock I have very little hope of buying my own place unaided. I’ve tried for years to get a decent deposit together but the costs of having to rent in the meantime and being single means that I’ve never been able to keep up with the price increases. I was very close to achieving it but the mortgage rules changed putting me a lot further back, the new ‘stress test’ really limits how much mortgage I can borrow with just my income.
The added problem is that if I was to buy further away from work in the cheaper areas up in the Valleys the extra costs of commuting (currently ride 4 miles to work across town) would push my finances to breaking point.

My only option close to work are one of the flats so loved by buy-to-let landlords similar to what I currently rent. A poorly built place with no garden and management fees to pay on top of a mortgage does not appeal at all.

I earn a good wage but the only feasible way I can see myself buying is if my parents snuff it and I get a lump sum from the sale of their house, which ironically would enable me to buy something just with cash!! My parents aren’t rich by any measure but my dad bought a house in a scummy backstreet for £7k back in ’76 which has now become a very desirable town, the fact it has a decent garden and off-street parking for 4 cars means it’s recently been valued at just under £300k!

Flats and houses available to buy around here from about £55k, new build flats from about £75k, houses £90k ish. They don’t exactly sell quick. Housing market at the cheap end is on it’s arse. Go higher up, beyond £150k and the market is fairly keen. If you can raise finance to buy, you can probably raise enough to bypass the cheap areas and they are being left behind. Cheap fixer upper terrace houses can be had from £40k here. 97 minutes on the train to Kings Cross.

Wow, bunch of unhappy people here. The thing is if this tax indeed hits the baby boomers most won’t then have a pension provision. That is why many invested in property cos pensions went to the wall. So they sell the house and pay the tax and then have no pension or a much smaller pension which in turn means the state then has to provide more support. You might think, great more tax means better services but that just never happens. Personally however you look at this issue I fail to truly see an answer, somebody always will end up pretty miserable. No win. We now pay the price of the old mantra that home ownership is some sort of right. Historically it never was. Ownership was a privilege and it looks like we are heading back to that.

Cheap fixer upper terrace houses can be had from £40k here. 97 minutes on the train to Kings Cross.

Where dat?

Doncaster.

I rent at £550 a month for a 2 bed house (just me and the cat,) on a nice quiet estate in Nottingham. Rent as I move around for work but the next move will see me settling down. Can easily afford to buy the house I’m in but when I move (probably Birmingham,) I won’t be able to afford anything near as nice.

I may have grown up in Walsall but my tastes have improved somewhat with age

Hmm, as I understand it, the more capital you have tied up in the property, the less this would effect you. So it would be a great investment move with, for example, a pension lump sum (rather than buying an annuity) but will weed all the ‘easy money’ buy to let merchants, who took out 95 and 100% BTL mortgages that effectivley get paid by the tenant.

Is that right? Sounds like a good thing in that case, no?

“I’m assuming that they are operating individually. My point remains that there is little incentive for the developers to increase productivity, even at a local level, because it would increase availability and choice, which if profits and dividends are to be maximised, doesn’t help.”

cobblers. I could build 1000 flats across the street tomorrow and it wouldn’t have an observable effect on supply in the market. if I could do it 10% cheaper than anyone else, I’d be rolling in cash.

This won’t make houses affordable for first time buyers overnight. In the interim landlords will raise their rent to cover costs whilst selling off their higher value low yield properties in order to own the low value high yield (first time buyer territory!) outright. The first time buyer end of the market will end up saturated with landlord ownership, therefore contributing to the lack of low cost housing. Meanwhile those renting in order to save for a deposit will no longer be able to save for said deposit due to the increase in rent to cover the landlords costs……where now….

I’m no expert, just initial thoughts.

Add in “mansion tax” and you’re forcing the wealthy into a ever narrowing price bracket. This affects us all, as I’d suggest most us live or want to live within this (low to mid end) bracket.

cobblers. I could build 1000 flats across the street tomorrow and it wouldn’t have an observable effect on supply in the market. if I could do it 10% cheaper than anyone else, I’d be rolling in cash.

🙄 By your own statement, you’ve increased supply and choice and lowered the average price by discounting. The object of business is to maximise profits. Fill yer boots then KB!

You will need to try much harder to draw me into a pointless internet argument, which you do seem intent on doing on more than one occasion 😉

So tell me again how removing the incetive to havea large number of the cheapest form of housing (rental) removed from the market ? – that will push rents up and leave more people living at home….

Not everyone wants to own , not everyone can own , not everyone is diciplined enough to get a deposit together.

Somefolk dont want to deal with maintainance of their own house.

Yes rents are going up …. But so are mortgages…..the whole system needs a shake up but i dont think destroying the rental market is the way – although if as above it weeds out the skin of their teeth land lords who cant afford to maintain to a reasonable standard then thats great

By your own statement, you’ve increased supply and choice and lowered the average price by discounting. The object of business is to maximise profits. Fill yer boots then KB!

what you are failing to comprehend is that the housing market consists of so many buyers and sellers that a single buyer or seller is not going to have an appreciable effect on the market.

You will need to try much harder to draw me into a pointless internet argument, which you do seem intent on doing on more than one occasion

I have to admit I don’t remember ever having replied to you before on anything so I think you’re just getting the same argumentative bollocks as everyone else!

Nah, it’s probably my multiple personality order coming to the fore with Mr paranoia 😀

A house price drop would penalise and trap many people like myself who have saved for a long time and just managed to buy a house. Better to have a stagnation of prices. This stops housing becoming an investment opertunity but allows people who have bought a house still the possibility to move about when needed.

This^. I’ve made a lot of sacrifices to buy my place (which I live in), bikes not bought, holidays not gone on etc. Do I deserve to be punished for that because I have the temerity to earn over 40k?

For those of you who like a bit of free market economics Tim Worstall has a relevant piece in the reg.

http://www.theregister.co.uk/2015/08/23/the_good_burghers_of_palo_alto_are_entirely_insane/%5B/url%5D

In summary, taxation isn’t the answer, as value is created artificially through how areas are allocated by use (ie its all about the planning permission). Conclusion, allow building on surreys golf courses if you want cheaper housing!

British economic policy IS housing. It has been so for the last 25 years. We have a housing bubble, particularly in the South East.
But government policy is now changing because voter demographics are changing, i.e. as a voting bloc the young eternal renters/living with parents folks (this now extends to people in their 30s) are becoming increasingly important.
Government’s are now going to have to appeal to this voting bloc to get elected and a surefire why of doing that is taxing homeowners to the hilt.
So in other words housing is becoming less of a sacred cow; Osbourne’s move against buy-to-let is part of a wider campaign against homeowners which is only going to escalate.