Is BTL Immoral?

Cleaver

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

Malcolm. wrote: »

The average first time buyer is sadly now over age 30, council house waiting lists are the longest I can remember, and some bulls are trying to say all is well. It's madness.

I have nothing against BTL's, I think they serve a purpose, but I do think there needs to be better (and cheaper) recourse against unscrupulous landlords and/or tenants.

I feel I should clarfiy, in case I'm being put in that 'bull' catagory.

I'm by no means saying that everything is great, there's nothing wrong with the BTL situation and everyone can easily afford houses. That clearly isn't the case. But at the same time I'm arguing that BTL isn't inherently immoral, private rental shouldn't be banned and BTL isn't some massive evil that has been the sole factor for HPI over the last decade. And the idea that higher taxation for landlords would solve the problem of unaffordable housing is laughable.

The last ten years has seen a mass of people getting in to BTL who frankly shouldn't have done. Poor landlords who don't know what they're doing. I agree completely with your second point around regulation for landlords and the industry should be more closely monitored.

People on this forum are, rightly, annoyed that young people struggle to afford houses. And I agree that BTL is one of the many, many factors that has caused this. 92203 has summed this up eloquantly in a number of their posts. But what annoys me slightly is the immature thought process of: "houses are expensive, landlords own houses and make easy money from it, therefore tax them to death, ban them, call it an immoral industry, this will have no consequences, will be great for the younger generation and... wahey, cheap houses for all." This wouldn't work.

And maybe it's the capitalist in me, but there seems a lot of people saying they made money from an asset without doing much work. Well, that's investing in assets isn't it? You take the risk (or the bank does on your behalf) and you reap the rewards or failure. I netted a £2,000 profit from a share recently. I did no work whatsoever for it, aside from risk my capital on the share. Does that make me immoral?

The issue of unaffordable housing is a massively complex issue, and whilst I fully understand calling for landlords to be taxed 90% (boomerangs) or stating that you would ban private rental altogether (mouth_from_the_south) may appeal to a rather juvenille mind, they certainly aren't actions that would benefit the younger generation who are trying to buy houses. They're stupid ideas, in other words. By saying this I'm not arguing that everything is rosy, I'm just saying that ideas such as this, and calling BTL 'immoral', is pretty dumb.

Cleaver

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

DaddyBear wrote: »

I wouldn't say its immoral, IMO second home owning is worse. The ease with which you can own BTL and 2nd homes is what's immoral.
There need to be heavy taxes imposed on multiple homes, essentially to help prevent 'stockpiling' of an assest that is becoming harder to obtain.

I've already said this a million times, but I'll say it again.

As Somerset has said eloquently above me, there is a huge market of people who have no interest in buying and want to rent. Or plan to buy over the next few years, but want to rent right now. Millions of people who want to rent somewhere privately to live for one reason or another.

Just think through what would happen if you imposed your proposal of heavy taxes on people owning another home to rent out. This would firstly cut the number of landlords considerably. So the people who want to rent would have less choice, thus restricting the supply of rental properties, and therefore increasing rents. The ones who do rent would have landlords who now have higher taxes, which would then push up their rent even more. All your proposal does is raise rental costs in one way or another. And not everyone who rents is some annoyed youth who can't afford to buy (although I appreciate a significant minority will be).

Or do you see a different scenario unfolding?

nollag2006

Morality has nothing to do with it

Cleaver wrote: »

...And the idea that higher taxation for landlords would solve the problem of unaffordable housing is laughable.

... agree completely with your second point around regulation for landlords and the industry should be more closely monitored.


The issue of unaffordable housing is a massively complex issue, and whilst I fully understand calling for landlords to be taxed 90% (boomerangs) or stating that you would ban private rental altogether (mouth_from_the_south) may appeal to a rather juvenille mind, they certainly aren't actions that would benefit the younger generation who are trying to buy houses. ....

Fully agree with these points.

Ireland tried to raise taxes on BTL landlords around the year 2000, by disallowing mortgage interest as a write off against tax and by imposing higher stamp duty. The net result was rents sky-rocketed, tax evasion increased, and the measures were quickly reversed.

"Punishing" property investors through mean minded taxation will just decrease rental supply and raise rents and returns for the remaining landlords.

Agree also that some form of landlord registration and regulation, would be embraced by responsible landlords. Again in Ireland, all LLs must register on an annual basis, and make a range of declarations about public liability insurance and other health and safety issues. This will not be without cost though, a cost which ultimately may be passed on to the tenants.

Cleaver

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

F*cking hell Nollag, I've just thanked one of your posts. I'm off for a lie down in a dark room.

nollag2006

Morality has nothing to do with it

It's quite an emotional moment for me too

:rotfl::rotfl:

silvercar

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

The property I bought as a FTB was something like 2.5 x joint salary; our salaries then were new graduate salaries. The same flat can still be had for 2.5 x joint current salaries for the same jobs we had then.

Actually the immediate area has improved, but it is a boring flat in a suburb of London. No ensuite, no modern designer bathroom, tatty kitchen. If you accept that a FTB property is not a luxury pad, accept that you have to limit your outgoings to make that purchase, its all still possible.

harryhound

Morality has nothing to do with it

92203 wrote: »

Although not completely responsible for the house price boom, buy-to-let has played a major part in reducing the affordability of home owenership.

It is somewhat perverse, that the buy to let sector has actually inadvertantly engineered a situation which has placed it in high demand - eg pricing young people out of home ownership, thus forcing them into rented accommodation.

Many private landlords are "baby boomers" who were born into an era where jobs were secure and houses cheap.

To cut a long story short..... the buy to let phenomena has bred an intergenerational inequality. Young people are forced into renting due to unaffordable house prices, thus paying their wages to the baby boomer generation in the form of rent. They will also spend their working lives paying massive amounts of tax to fund the generous pension schemes bestowed upon many of baby boomers, when there is no hope that they themselves will receive such benefits themselves during old age.

Here we are back to the 1970's but with an extra 10 million people to house and a break up of family structure making a huge increase in the number of "households".

Now which of these two am I responsible for?

We have also used up the majority of the natural resources in the form of oil & gas?
Was that my fault too?

We are heading for a situation where the government will control 50% of the country's money, so where is the money to come from to balance out trade & plug the deficit? Back in the 1960's it was nearer 25%.

Times are going to be tough for everyone.

Plan accordingly. The young will be taxed and the old will be taxed by inflation (ie robbed).



Originally Posted by kennyboy66
BTL is not immoral.

What is immoral is that the government taxes work at a higher rate than speculating on house prices.


I think this will be over corrected by 40% CGT & 40% IHT?

Wookster

Morality has nothing to do with it

Cameron has just said on Andrew Marr that second homes aren't the best investment.

Buyers beware!