Same old Tories - completely out of touch

[Herr Tubthumper]

I know Germany is more rentals than home ownership. It does seem to be a British thing, having to buy homes.

The difference in German/Brit attitudes towards homes is stark. And it's not just the concept of buying either. "Where you live" is much more a utilitarian idea than the uk. The 13% you typically pay in taxes and fees when you buy puts a break on things as well.

 

[GT49er]

The difference in German/Brit attitudes towards homes is stark. And it's not just the concept of buying either. "Where you live" is much more a utilitarian idea than the uk. The 13% you typically pay in taxes and fees when you buy puts a break on things as well.

Which is just what a house should be - a home, a place to live in - not a potential means of profit.

 

[vegster]

Actually greedy landlords are a symptom of the problem, which is under supply in the housing market. The real solution is to build more houses and ensure they are lived in by residents of the UK and not sold as investment opportunities in the far east.

It's not all foreign investors... I had a holiday in Cornwall a few years back and when visiting a picturesque old fishing village was shocked to find that 90% of the properties were holiday homes to let ! One of the few locals in the post office said that the village effectively shut down between November and April as there was only about 40 people left.

 

[Mellor 3 Ward 4]

Actually greedy landlords are a symptom of the problem, which is under supply in the housing market. The real solution is to build more houses and ensure they are lived in by residents of the UK and not sold as investment opportunities in the far east.

There are 800,000 empty houses in the UK

Problem is they're all in the wrong places.

 

[yxee]

It was always difficult to find a deposit although in the SE, it's almost impossible now. It's one of the reasons I went up north when I was first married as it was easier to buy houses up there.

This will sound like a naive question, but why don't governments cap rents? It's greedy landlords who are causing a lot of problems.

Buy-to-let landlords often have slim margins between mortgage payments and rental incomes. Forcing rents down by 5% could wipe out 50% of their profits, and potentially drive many from break even into losses. That will make them either sell their house. If too many sell, the house price will drop and put the rest into negative equity, which could then prevent the rest from selling, causing a wave of defaults on mortgages, and foreclosures. In both cases, the tenants get booted out.

Price controls will inevitably hit the end user, the renter.

This is the theory, anyway. In practice, if Labour does it they'll be hailed as heroes and if Tories do it they'll be the cruel villains who lead to the evictions of thousands.

 

[Herr Tubthumper]

Buy-to-let landlords often have slim margins between mortgage payments and rental incomes. Forcing rents down by 5% could wipe out 50% of their profits, and potentially drive many from break even into losses. That will make them either sell their house. If too many sell, the house price will drop and put the rest into negative equity, which could then prevent the rest from selling, causing a wave of defaults on mortgages, and foreclosures. In both cases, the tenants get booted out.

Price controls will inevitably hit the end user, the renter.

This is the theory, anyway. In practice, if Labour does it they'll be hailed as heroes and if Tories do it they'll be the cruel villains who lead to the evictions of thousands.

Alternatively prices drop so the renter can afford to buy the place? This way the user gets a home and a mortgage and the buy-2-let landlord has to find another way to make some dollar.

 

[beorhthelm]

This will sound like a naive question, but why don't governments cap rents? It's greedy landlords who are causing a lot of problems.

because economics. if you cap rents, you risk artifically distorting the rent market, leading to less rental property, poorer quality and maintained. caps might address short term issues, prices are a signal and if you suppress that signal you get to a bad state. rising prices tell us we need more of something, so provide it or prices will rise further. build more housing stock is the answer, not stop the price rises which would lead to odd and unexpected outcomes as the demand isnt addressed. we probably seeing these already emerging in the egregious practices of letting agents such as charging fees just to look at properties.

rent will be more than mortgages because on top of the cost of the mortgage you have mangement fees, some amount for maintainance, insurance, maybe cover defaulting (though the deposit should do that), and taxes. £680 noted above soon turns into over a grand once you add that. the real question is why we rely on private landlords for so much rental stock, i cant answer that, its one of the mysteries of our country. its also partly why rent markets are different else where like US, Germany, where they have companies own buildings or blocks at a time (rather like the old housing associations) so they dont have the same cost structures.

 

[Herr Tubthumper]

because economics. if you cap rents, you risk artifically distorting the rent market

One man's "artificial distortion" is another's control of the market though. The governments have plenty of tools at their disposal to do what they want with housing and ensure that, by-and-large, the people they want to help get helped.

 

[yxee]

Alternatively prices drop so the renter can afford to buy the place? This way the user gets a home and a mortgage and the buy-2-let landlord has to find another way to make some dollar.

Basically rental prices and house prices are connected, via buy-to-let. If you force rental prices down, you force house prices down (and cause absolute carnage in the process), which reduces the supply of housing (less worth building new homes) and increases the demand. There's no free meal to be had here, someone always loses. Hint: it's not the multi-millionaire who can put their assets elsewhere.

One man's "artificial distortion" is another's control of the market though. The governments have plenty of tools at their disposal to do what they want with housing and ensure that, by-and-large, the people they want to help get helped.

They can do somethings, but pulling bricks and mortar from thin air and magically assembling them onto newly created non-green belt land is not one of them.

Government's job is not to fix everyone's woes. In trying to do so, it will inevitably fail, and probably cause some poor schmuck to lose their life savings in the process.

 

[beorhthelm]

One man's "artificial distortion" is another's control of the market though.

you cant control markets any more than you can hold back the seas. markets can be wrong, they can be irrational, but they wont be controlled. government might nudge them, or use tools to encourage certain outcomes, but when they try outright control they fail.

for fun lets think about an area where there is 2 people wanting to live for every 1 home. how do you allocate the housing without price? a lottery, preference to certain jobs, other preferences... more likley you'll just have corruption. as i understand it in 60-70s London certain boroughs with high proportion of council property, if you didnt have family member in the council, you didnt get a house or not the good ones. in New York rent controled areas they have subletting, or under maintained building as the landlord wont spend anything.

though you are quite right that making cost of being a landlord more will drive some out of the market freeing up some in the market for sales. theres some feedback loops there though, i dont expect one will reduce far enough to allow the must-renters on the ladder in the popular SE locations. get it wrong and you just increase the cost of rents, which appears to be what Osborne has done with his tinkering. tied housing is one practical solution for some roles, more social housing by non-profits for wider population, but they still have the fundemental problem - need to build the property in the first place.

 

[The Rivet]

If there has to be a decimation of the 'buy-to-let' landlord 'greed scheme' then what? More homes (By Govn't) need to be built. I am in favour of exterminating the 'buy-to-let' owner and socially building more affordable rentals or purchase choices. Take from the aid budget if necessary. Private Landlords rape the Benefits system for millions yearly to get wealthy and buy more. Enough! Bloody parasites.

 

[Diablo]

If there has to be a decimation of the 'buy-to-let' landlord 'greed scheme' then what? More homes (By Govn't) need to be built. I am in favour of exterminating the 'buy-to-let' owner and socially building more affordable rentals or purchase choices. Take from the aid budget if necessary. Private Landlords rape the Benefits system for millions yearly to get wealthy and buy more. Enough! Bloody parasites.

Oh dear.....I assume you believe you are owed a living...The parasites are the people(like you ?) who feel they are owed a living by others.

 

[Herr Tubthumper]

you cant control markets any more than you can hold back the seas.

Just like I showed in an earlier post that rents can be adequately controlled I'd recommend a dam for your latter conundrum. Next

 

[Herr Tubthumper]

Oh dear.....I assume you believe you are owed a living...The parasites are the people(like you ?) who feel they are owed a living by others.

How did you come to this conclusion?

 

[Diablo]

How did you come to this conclusion?

Easily is the answer to that....Look up parasite... living of others. His comments are hardly lucid..are they to you?

 

[The Rivet]

How did you come to this conclusion?

Good question HT!

 

[The Rivet]

Easily is the answer to that....Look up parasite... living of others. His comments are hardly lucid..are they to you?

They are very lucid. Can I be any clearer? More social housing LESS buy to let parasites. Comprende?

 

[Wardy's twin]

Says who? Where did this ridiculous generalisation come from?

Have you missed the whole austerity debate? We spend more than we earn as a nation (though not me individually) so not a generalisation.

 

[Herr Tubthumper]

Easily is the answer to that....Look up parasite... living of others. His comments are hardly lucid..are they to you?

Someone indicates a dislike for a certain section of the housing market and you state they feel they're owed a living. That's some leap.

 

[Diablo]

Just like I showed in an earlier post that rents can be adequately controlled I'd recommend a dam for your latter conundrum. Next

A dam to hold back the sea are you serious Canute tried and failed