Is BTL Immoral?

abaxas

Morality has nothing to do with it

Maybe the problem is that there is a natural monopoly here via the planning system?

Hence there is an unfair advantage to those already 'in the system'.

Exocet

Whoa there. Good job I have a few minutes spare to share my wisdom. Obviously it is not immoral to invest in something and make some money - the essence of capitalism which lets assume for the sake of the argument is 'moral'. Otherwise it gets very complicated and a bit too highbrow.

When every FTB property is being snapped up by Mum and Dad investors looking to make quick gains from an HPI bubble built on lax credit then I think there is some cause for doubt. There was a time a couple of years back when there were no properties, nothing, within FTB territory becuase they were being sold as soon as advertised by equity or cash rich investors, or borrowing speculators.

Now it is not immoral as such for people to choose to invest in something and inadvertently price FTB's out of the chance of buying their own property but... it is possible to see why some may decide that it is.

Perhaps unfair would be a better term. Unfair that those who profited from HPI could then increase that profit by borrowing against their inflated asset and taking the bottom rung away.

However this is an old argument. All areas are different of course, but I see a whole bottom rung of houses and flats coming back onto the market, and this time they are not being snapped up. So perhaps 'morality' is returning to the market, or maybe everyone is now broke.

I haven't voted because it's a silly poll and after last Thursday who knows where my vote will be counted.

DCFC79

No

Ho would BTL be immoral, someone is providing a service and as long as its done to a satisfactry standard then its all good

LisbonLaura

DCFC79 wrote: »

Ho would BTL be immoral, someone is providing a service and as long as its done to a satisfactry standard then its all good

So you don't think that someone attempting to put a roof over their head in the land of their birth should have priority over those who already have a roof trying to enrich themselves?

Or maybe you don't class housing as a necessity?

Cleaver

P!ss off to the beach and leave us alone. Mate.

LisbonLaura wrote: »

So you don't think that someone attempting to put a roof over their head in the land of their birth should have priority over those who already have a roof trying to enrich themselves?

Whether one should have priority over the other isn't the question being asked. The question asked was whether owning a property to rent out is immoral. Which it clearly isn't.

Your question above is a strange, hypothetical one. As I've tried to say before, I could turn this around and ask: do you think it's right that people spend excess money eating out in restaurants when there are people in our own country who cannot afford to buy food for their children? Well, I don't want to see people go hungry. But then I'm not going to start calling people who eat in restaurants 'immoral'. Or it's like saying, "well, shouldn't nice people have a better life than nasty people"? Well, yeah, they should. But life isn't like that, is it?

Exocet summed up the situation nicely in their post. There has been a climate for people making money in property at the expense of FTBers, which isn't a great situation for this country. But it is what it is. It's not immoral, and taxing the industry to death isn't the answer. The answer is to build more affordable property, stop the madness of last decade where people could buy property with 100% mortgages and rent it out and create an environment where good landlords are more visable, and therefore thrive, compared to poor landlords.

LisbonLaura wrote: »

Or maybe you don't class housing as a necessity?

Housing is indeed a necessity. Owning a house, on the other hand, is clearly not a necessity.

macaque_2

No

Generali wrote: »

People keep banging on about the morality of BTL. Ascribing a moral status to BTL seems deeply suspect to me as an idea as there is no moral imperative for people to be able to own a house in a particular area or indeed at all.

I think it's a lousy investment but that's not about morality, just an opinion.

BTL is not immoral but this response comes with caveats:

1. The disruption and damage that an irresponsible or incompetent landlords can do to a renter's life is severe. For people to involve themselves in the letting market without the necessary skills or commitment is immoral.

2. The feeding frenzy for property we have seen over the past few years was largely be driven by BTL speculation. As a result, house prices were pushed beyond the reach of first time buyers. Many of these properties now lie empty as the owners hold out for optimistic rents. At the same time, young families are having to live in cramped accomodation. In my book that is immoral.

PrivatisetheNHSnow

Cleaver wrote: »

Your question above is a strange, hypothetical one. As I've tried to say before, I could turn this around and ask: do you think it's right that people spend excess money eating out in restaurants when there are people in our own country who cannot afford to buy food for their children? Well, I don't want to see people go hungry. But then I'm not going to start calling people who eat in restaurants 'immoral'.

but would it be immoral if the reason that food was unaffordable is because a group of people had hoarded all the food? that is more like a situation where a significant chunk of the residential housing market is owned by people who use it as an investment.

residential real estate is not like other investments like shares, bonds. people have to live somewhere.

it hinges on whether btl causes house prices to be higher/unaffordable in the first place.

Cleaver wrote: »

Exocet summed up the situation nicely in their post. There has been a climate for people making money in property at the expense of FTBers, which isn't a great situation for this country. But it is what it is. It's not immoral, and taxing the industry to death isn't the answer.

if we had a blt mania on agricultural land, and as a result food prices increased by 10%, do you think there would be no argument for penalising such activity through taxation?

if a few people do an activity that is harmful for society as a whole (raising the cost of houses, raising the cost of food) that has no social benefit, don't you think it should be penalised through taxation? is it better to have a society divided into a few rentiers and a mass of tenants, or a society with wider levels of home ownership?

Cleaver wrote: »

The answer is to build more affordable property

why wouldn't btl landlords just buy the new affordable housing?

Cleaver wrote: »

As another example, I borrow £20k from my bank, add this to the £10k I already have and start a lovely pet shop. I sell rabbits, guinea pigs and goldfish at reasonable rates to kids and adults. They like my prices and customer service and the business is a success. I make £80k profit the next year, pay back the bank and pocket the rest.

Contract this to a BTL landlord who borrows £90k from the bank, adds this to the £45k he already has and buys a lovely flat. He gets some tenants, looks after them really well and makes a success of the business. Five years later the flat has risen in value, he sells, pays back the bank and pockets the rest.

These scenarios are both the same: people borrowing money to fund a business.

So as a question to you Privatise, are both of these businesses immoral, one of them immoral or neither of them immoral?

well a pet shop provides goods and services for an economy that didn't exist before.

btl in theory provides affordable rental accommodation that didn't exist before, although of course the landlord didn't create the property - it already existed.

it depends whether you think that btl causes property to be unaffordable in the first place, because then btl landlords would be simultaneously making property unaffordable for the many, and forcing them to rent property from them.

Cleaver

P!ss off to the beach and leave us alone. Mate.

I thanked your post as you raised some good points there.

PrivatisetheNHSnow wrote: »

but would it be immoral if the reason that food was unaffordable is because a group of people had hoarded all the food?

People 'hoarding' and manipulating the price of food is happening all over the world right now. I'm not sure it's immoral though.

PrivatisetheNHSnow wrote: »

it hinges on whether btl causes house prices to be higher/unaffordable in the first place.

Oh, I'm sure it does. It'll be one of about 50+ factors that causes house prices to rise.

PrivatisetheNHSnow wrote: »

if we had a blt mania on agricultural land, and as a result food prices increased by 10%, do you think there would be no argument for penalising such activity through taxation?

There already is a market for different land, which in turn effects the price of food and there is a system of taxation that deals with it. Food has, and does, increase and decrease in price because of supply and demand and a variety of other factors. No different to other markets, such as property.

PrivatisetheNHSnow wrote: »

if a few people do an activity that is harmful for society as a whole (raising the cost of houses, raising the cost of food) that has no social benefit, don't you think it should be penalised through taxation?

It's your perception that BTL is 'harmful to society as a whole'. When I was a student I was pleased there were properties to rent, as I didn't want to buy one. Remember that this wrath for landlords is really reserved for internet forums like this. The vast majority of society see the rental sector as just another business, and have no real moral objections to it.

What would you hope to achieve by raising taxes? I presume you feel that this would stop people becoming landlords, and thus would drive down the price of houses for people that wanted to buy them?

PrivatisetheNHSnow wrote: »

is it better to have a society divided into a few rentiers and a mass of tenants, or a society with wider levels of home ownership?

http://www.statistics.gov.uk/cci/nugget.asp?id=1105

Around 17.5 million owner occupied properties, 3.8 million privately rented and 4.5 million social houses. So only 14% of places are rented. Home-ownership is the highest it's ever been, unless I'm mistaken. This is after 10 years when every man and his dog seemed to want to become a landlord.

PrivatisetheNHSnow wrote: »

well a pet shop provides goods and services for an economy that didn't exist before.

btl in theory provides affordable rental accommodation that didn't exist before, although of course the landlord didn't create the property - it already existed.

I'm afraid you've lost me a bit with this one. 'A pet shop provides goods and services for an economy that didn't exist before'. That doesn't make sense.

PrivatisetheNHSnow wrote: »

it depends whether you think that btl causes property to be unaffordable in the first place,

It's one more person trying to buy an asset than there was before so, theoretically, it's one of the factors that increases the price of a property. Whether it's the sole factor which caused property to be 'unaffordable' is another question really, and I don't think it was.

PrivatisetheNHSnow wrote: »

because then btl landlords would be simultaneously making property unaffordable for the many, and forcing them to rent property from them.

No one forces anyone to do anything. The market just works as it works. That link I posted up earlier shows that owner-occupation has increased 8% since 1997. So in the midst of the BTL mania of the last ten years, owner-occupation has increased.

I imagine if we had a chat about this we'd agree on a lot of things. Many BTL landlords are sh*te, mainly owing to the trend of idiots getting in to it over the past ten years. There isn't a lot of help for renters out there and landlords should be held more to account. There should be far more done about landlords who don't follow the law or regluations when it comes to BTL. The government should do more to ensure that property prices don't get out of control. I suggested building more houses, and you said what would stop BTL landlords buying them. Well, if more houses were built, the price of houses would drop and it wouldn't be such an attractive investment for landlords. Fairly simple really. Same as a share: if you double the amount of shares in your company, you dilute the value of each share and make them far less attractive to investors.

The one thing we don't agree on is calling BTL 'immoral' and I certainly don't think that taxing landlords more is a suitable solution to a very complex problem. It simply wouldn't achieve anything for anyone.

The-mouth-of-the-south

BTL is bad for the country as a whole and I would like to see it banned. Allow house prices to fall back in line with wages and allow normal working people to be able to get a house.

The people who will get burnt are the "have a go" landlords and because of there greed I care not for them.

Cleaver

P!ss off to the beach and leave us alone. Mate.

The-mouth-of-the-south wrote: »

BTL is bad for the country as a whole and I would like to see it banned. Allow house prices to fall back in line with wages and allow normal working people to be able to get a house.

The people who will get burnt are the "have a go" landlords and because of there greed I care not for them.

The people who will be burnt are the 14% of people in private rental accomodation, as they would be turfed out on to the street.

Just one specific question: how would you see the millions of university students being housed in their third and second years if it isn't in private, rented accomodation?