Property prices thread

[Gups]

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I'm seeing lots of stories lately bemoaning how landlords are dropping out of the game due to how hard its becoming for them with tightening regulations (what? A house fit for habitation? Ridiculous!) and rising interest rates.
Oh dear, tiny violins at the ready.

How do these tighter regulations benefitting tenants and hurting rich landlords fit with your view of the Tory party as always being on the side of the rich?

Actually, what's really killed the smaller scale private sector rental market is the removal of the right to offset mortgage interest against tax. They have been replaced to a certain extent by build-to-rent developer/landlords but there's no reason to celebrate the decline of the sector.

[Josquius]

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I'm seeing lots of stories lately bemoaning how landlords are dropping out of the game due to how hard its becoming for them with tightening regulations (what? A house fit for habitation? Ridiculous!) and rising interest rates.
Oh dear, tiny violins at the ready.

How do these tighter regulations benefitting tenants and hurting rich landlords fit with your view of the Tory party as always being on the side of the rich?

Amidst massive pressure and growing public outcry they slowly roll out half hearted reforms that fix part of what needs fixing?
Do you think they're idiots and could get away with delivering absolutely nothing that voters want?

Actually, what's really killed the smaller scale private sector rental market is the removal of the right to offset mortgage interest against tax.

This hasn't come up in any of the moans I've seen curiously.
But that does sound like something very dodgy so a good move.

They have been replaced to a certain extent by build-to-rent developer/landlords but there's no reason to celebrate the decline of the sector.

A house which already exists in the housing market being repurposed explicitly for someone to profit rather than being bought by someone who wants a house to live in for the mid to long term, vs. nothing being replaced with a home available to rent... This sounds like a good thing to me.

[Gups]

Amidst massive pressure and growing public outcry they slowly roll out half hearted reforms that fix part of what needs fixing?
Do you think they're idiots and could get away with delivering absolutely nothing that voters want?

Actually I do think they are idiots. I don't think there has been massive pubic pressure except on Greenfell which has affected developers, not private landlords. I doubt that more than 1 in 1,000 boters have even heard of the Housing (fitness for Human Habitation) Act 2018 which was pretty minor in its effect. 

This hasn't come up in any of the moans I've seen curiously.
But that does sound like something very dodgy so a good move.

It was not dodgy per se. It was just a standard set off against profit since it was a cost, similar to repairs. Personaly I agrred with its abolition nevertheless. It's had a very significant effect since rates went up.

A house which already exists in the housing market being repurposed explicitly for someone to profit rather than being bought by someone who wants a house to live in for the mid to long term, vs. nothing being replaced with a home available to rent... This sounds like a good thing to me.

Not everyone wants to buy a house or live in it for teh mid to long term. Most/all European countries have a substantial private rented sector and seem to have far fewer problems than the UK where house owership is an unhealthy obsession.

[Sheilbh]

It was not dodgy per se. It was just a standard set off against profit since it was a cost, similar to repairs. Personaly I agrred with its abolition nevertheless. It's had a very significant effect since rates went up.

Yeah what I've heard is that it's about tax. Personally I think the rental sector would generally benefit from professionalisation and big housing companies rather than small landlords. Though I've only experience of the small landlord.

Not everyone wants to buy a house or live in it for teh mid to long term. Most/all European countries have a substantial private rented sector and seem to have far fewer problems than the UK where house owership is an unhealthy obsession.

I don't think that's right.

I think German speaking countries - Germany, Austria and Switzerland - have very large private rented sectors. Lots of Europe have owner-occupier as the norm. The UK rate of owner-occupiers is slightly below EU27 average. From my understanding, UK stats are pretty similar to France, both in terms of proportion of owner-occupier but a far bigger social rent sector than most of Europe.

[HVC]

It was not dodgy per se. It was just a standard set off against profit since it was a cost, similar to repairs. Personaly I agrred with its abolition nevertheless. It's had a very significant effect since rates went up.

Yeah what I've heard is that it's about tax. Personally I think the rental sector would generally benefit from professionalisation and big housing companies rather than small landlords. Though I've only experience of the small landlord.

You don't trust a big government agency with elderly lives, but you do with their homes? Something that effects more people and is easier to screw with?

[Sheilbh]

You don't trust a big government agency with elderly lives, but you do with their homes? Something that effects more people and is easier to screw with?

That's about society not about big government or not.

Although actually the problem of small landlords is also true with homes for the elderly. In the UK there's loads and loads of very small businesses in the elderly social care sector. Largely, like landlords, people who bought a B&B or small hotels as an investment. They're often family run on incredibly small margins. They're not sophisticated businesses and in the UK they were a large proportion of the really distressed properties after the financial crisis. It's normally funded by local government.

But it's a nightmare to regulate properly, they've got tiny margins so really need to keep costs down (wages for carers, furnitures, food etc for the residents) - I think it's a sector we could really do, like housing, with consolidation.

[crazy canuck]

That article is hilarious. It identifies the harmful effects of the 2008 meltdown, but then lauds the deregulation of the 80s, which created the lack of regulation in which the meltdown could occur.

[Gups]

I don't think that's right.

I think German speaking countries - Germany, Austria and Switzerland - have very large private rented sectors. Lots of Europe have owner-occupier as the norm. The UK rate of owner-occupiers is slightly below EU27 average. From my understanding, UK stats are pretty similar to France, both in terms of proportion of owner-occupier but a far bigger social rent sector than most of Europe.

I was surprised by this but you are right. Zooming out to look at owner-occupation globally, it's surprising to see that the highest percentages are all East European/ex-USSR countries and Asian countries. I wonder if teh definitin of ownershp varies from place to place.

In the UK, holding a 99 year lease would be regarded as ownership but it is very rare that anything other than that or a standard rental is offered for residential property. For example, there is no real market for a 10 year residential lease. I expect that market norms vary considerably by country

[Josquius]

Those countries that are doing better than the UK on housing are generally those that do the unthinkable and actually build more homes.
This should of course be our priority in the UK.
But it does seem really much too popular in some circles to lay into stuff like landlord licensing, rent controls, etc... as if its somehow responsible for the problem rather than merely seeking to control and shift around the fallout that comes from not building.

As I've said before what I really hate about private landlords is those who took buy to let mortgages for say £500 a month repayments purely to make £600 a month renting the property out. Its entirely an investment and one often made by people who can't actually afford it once the system starts to shake a bit.
If you need to work away a few years and you rent out your home, or you're holding onto your gran's old flat until your kids are older, or even you actually have the money to buy a property to rent out...these are different things and far less shitty in my eyes.
Its not the concept of rental housing which is wrong, its buy to let.

Really, ideal world, social housing should be covering a lot more in terms of short term rents.
And right to buy needs to be destroyed. Stuff like this is depressing-
https://www.bbc.co.uk/news/uk-england-norfolk-68601378
I recall when working at a housing association hearing of people who would be offered a place in London...only to turn their nose up at it because it was excluded from right to buy.

[crazy canuck]

What is wrong with private rental?

[Tamas]

Buy to let was scandalous for a quite a while, since until fairly recently you could write off your mortgage payments for the buy to let property as business expense, I believe.

[Gups]

Buy to let was scandalous for a quite a while, since until fairly recently you could write off your mortgage payments for the buy to let property as business expense, I believe.

I covered that above. No you couldn't. You could write off the intereston the mortgage payments against your income tax in general. You now only get a 20% credit on the difference between the rental income and the interest on the mortgage. So if you are a higher rate tax payer (40%) the relief is halved.

[Gups]

Nothing wrong with right to buy per se (originally a 1970s Labour policy promoted by the left of the party). It was the 40-60% discounts against market value and the fact that the receipts couldn't be spent on new housing that was the issue.

[PJL]

Buy to let was scandalous for a quite a while, since until fairly recently you could write off your mortgage payments for the buy to let property as business expense, I believe.

I covered that above. No you couldn't. You could write off the intereston the mortgage payments against your income tax in general. You now only get a 20% credit on the difference between the rental income and the interest on the mortgage. So if you are a higher rate tax payer (40%) the relief is halved.

You may be de jure correct, but Tamas is de facto correct as well, as many buy to let mortgages were interest only in practice.

[crazy canuck]

I still don't understand why writing off interest on a business loan was considered a scandal.