Is Buy-To-Let Bust?

Cleaver

carolt wrote: »

Yes, of course I do. It's hardly the first time I've written on the subject.

Why, does it hurt?

Does what hurt?

JonnyBravo

carolt wrote: »

I think there is a place for private renting for people who want to rent - but that rights of security of tenure and rent controls should be restored so that those who rent could genuinely have a 'secure' roof over their heads.

I wonder how appealing that would be to all those Jonny-come-lately landlords?

Absolutely fine by me.
The house I rent out has only ever had one tenant. I'm not turfing them out.

Their rent would go up of course as they currently get it below market value.

:rolleyes:

carolt

JonnyBravo wrote: »

There are over 1 million people on council housing waiting lists.
Who's going to pay to build those 1 million houses?
How long will it take to build them?
Where will these people live in the meantime?

It's all well and good talking about what you wish to happen but realistically it's not going to happen.

I think right-to-buy was a lousy policy - or would have been an acceptable policy IF it had come with a clause stating that for every property sold, another needed to be built, to ensure there was sufficient council stock for future needs.

Obviously, we can't re-write the past, but ending right-to-buy immediately would at least protect the stock we have.

If the govt wants to help support the economy in these troubled times, it could do worse with its current borrow-and-spend plans than spending on a massive programme of council house building, to help give jobs to all those now out of work in the construction sector.

It won't do that, of course, because it would be terrified of causing house prices to crash even further.

In reality, the crash in house prices will have the effect of (a) reducing the need for council housing because ordinary families will be able to afford a place of their own, (b) have a knock-on effect on rents in the private sector, thus also reducing need for council housing and (c) increase the amount of social housing as inner-city BTL blocks get bought up by housing trusts etc, as is already starting to happen - so demonstrating social housing can be increased without any new building being required.

Also, if rights of security of tenure/fair rents were to be reintroduced (as exist in virtually every other EU country), then I think you'd find that there was far less speculation in the UK and that houses became viewed - as they used to be in this country - as a home not an investment, and therefore priced at more reasonable levels. Thus further reducing the need for social housing.

puddy

but for the majority of people in social or council housing who are on benefits, how will they be able to afford to buy, they wont, so they need to carry on renting. lots of people in receipt of benefits who cant get social or council housing are also in privately rented properties,, so they cant buy either, i dont think its as simple as you are suggesting. this is not people on good or regular incomes here, this is people who have irregular or unstable incomes, benefits, or who are ill, they wont be able to buy property

carolt

Er, no. That's why we need more council housing.

So we agree.

Or did I get confused here?

JonnyBravo

Interesting post, thanks.

carolt wrote: »

I think right-to-buy was a lousy policy - or would have been an acceptable policy IF it had come with a clause stating that for every property sold, another needed to be built, to ensure there was sufficient council stock for future needs.

Agreed. It was of course a short term vote winner targetting those who saw they stood to benefit, a group who previuosly certainly wouldn't even have entertained the thought of voting Conservative.
It also of course removed a cost from the govt as maintenance on this aging stock was costing a bomb.

carolt wrote: »

Obviously, we can't re-write the past, but ending right-to-buy immediately would at least protect the stock we have.

If the govt wants to help support the economy in these troubled times, it could do worse with its current borrow-and-spend plans than spending on a massive programme of council house building, to help give jobs to all those now out of work in the construction sector.

It won't do that, of course, because it would be terrified of causing house prices to crash even further.

It won't do that cos it can't afford it. Borrowing is through the roof as it is and you want them to build/buy houses as well? Or is something being cut to spend on this?
The cost of this would make the NHS bill look like peanuts, never mind the then ongoing costs which we would start to pick up again.
It's easy to ask for, hard to pay for. No actually, it's impossible to pay for.... at least in the present.

carolt wrote: »

In reality, the crash in house prices will have the effect of (a) reducing the need for council housing because ordinary families will be able to afford a place of their own, (b) have a knock-on effect on rents in the private sector, thus also reducing need for council housing and (c) increase the amount of social housing as inner-city BTL blocks get bought up by housing trusts etc, as is already starting to happen - so demonstrating social housing can be increased without any new building being required.

Agreed. So why worry about BTL? The bad ones (either with poorly thought through business models or with poor landlords) will go out of business, the good ones will continue to thrive.

(I'm really not convinced that huge tranches of BTL are being bought up by housing associations though.... isolated blocks etc yes, but I've not seen any evidence of this happening in large numbers..... they can't get hold of the money like anyone else.)

carolt wrote: »

Also, if rights of security of tenure/fair rents were to be reintroduced (as exist in virtually every other EU country), then I think you'd find that there was far less speculation in the UK and that houses became viewed - as they used to be in this country - as a home not an investment, and therefore priced at more reasonable levels. Thus further reducing the need for social housing.

Not so sure. IMO human nature and our desire to compete will mean boom/bust is with us for the foreseeable. (Not just in housing but in most aspects of our lives.)
(There was of course speculation in the past too but it was only carried out by an elite which is why it doesn't spring to mind.)

Jonbvn

Interesting thread. In essence it does seem to come down to choice between socialism and capitalism. Are we headed the way of Europe where the majority rent? Personally, given the OCD most Brits have with property, I just can't see us adopting the same attitude.

Some posters are claiming that BTL is making money from peoples misery. If you extend this argument to it's logical conclusion then all money making is bad. History has proven this to be a misplaced ideology.

carolt

Jonbvn wrote: »

Interesting thread. In essence it does seem to come down to choice between socialism and capitalism. Are we headed the way of Europe where the majority rent? Personally, given the OCD most Brits have with property, I just can't see us adopting the same attitude.

Some posters are claiming that BTL is making money from peoples misery. If you extend this argument to it's logical conclusion then all money making is bad. History has proven this to be a misplaced ideology.

Confused.

Most of Europe isn't socialist to my knowledge, but they do rent in far greater numbers.

Or was I missing your point?

carolt

JonnyBravo wrote: »

It won't do that cos it can't afford it. Borrowing is through the roof as it is and you want them to build/buy houses as well? Or is something being cut to spend on this?
The cost of this would make the NHS bill look like peanuts, never mind the then ongoing costs which we would start to pick up again.
It's easy to ask for, hard to pay for. No actually, it's impossible to pay for.... at least in the present.

On the contrary, the govt. is talking about borrowing to fund large new infrastructure etc projects in attempt to give a Keynesian kick up the backside to the economy. This WILL happen - they're hoping it will lessen the recession. Time will tell.

As I stated above, though, I doubt they'll 'invest' in council housing, however desirable it might be long-term, because of the short-term effect on house prices.


(I'm really not convinced that huge tranches of BTL are being bought up by housing associations though.... isolated blocks etc yes, but I've not seen any evidence of this happening in large numbers..... they can't get hold of the money like anyone else.)

Again, this is happening - not that much yet, as prices in most areas still make it financial insanity, but I'm sure once it becomes sufficiently good value - and once the councils have got some of their money back from Iceland :rolleyes: - it will happen more frequently.

Interesting discussion, anyhow.