Debate House Prices


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43000 people forced to move because of benefit cap

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Comments

  • The point is that food and SHELTER are necessities of life. Housing shouldn't be treated exactly as a business model. For most citizens/families in the UK it's not exactly an 'optional' requirement is it ?
    We live in a Capitalist region, if you don't like it then move to somewhere that suits your ideals.......

    And for those going on about 'capitalism at work', 'business models' and 'market forces'..if that's right, why is the Housing benefits bill so high then ? Why ?
    And why so many landlords raking it in or charging full whack topped up by/off state payments ? That's not capitalism or pure 'private markets' at work is it ?

    Perhaps it's you who should move. Because as it is, a lot of landlords only exist off the largess of the state at the moment. So I'd review the 'capitalist region' nonsense sweeping statement if I were you. Fact is, that if it wasn't for the state and the ( undeniable ) huge monthly UK-wide housing benefit paid out.. there would be a lot less landords out there crowing about fantasy 'business models' and such like.
    It all seems so stupid it makes me want to give up.
    But why should I give up, when it all seems so stupid ?
  • dkmax_2
    dkmax_2 Posts: 228 Forumite
    Part of the Furniture Combo Breaker
    We live in a world of finite resources. There are nearly 7 billion people on this planet and it'll reach 10 billion in the lifetime of many people today. The problems concerning social housing are but a trivial side show to the greater issues of dwindling supplies of food and water and increasing disease and war that will blight all nations in the decades to come.

    Start addressing the burgeoning population and the other problems will sort themselves out.
  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
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    Percy has the right idea, just isn't conveying it too well.

    Look at the German rental market. The UK standards are simply not allowed.....probably due to the fact that allowing the same type of "controls" we have in the UK allows for the problems we have in the UK.

    The US, they have rent controls.

    There is plenty you can do with percy's general statement, before you start writing it off as dumb and comparing it to other business (all of which have their own business controls dependent on sector).

    For instance, on Cleavers list. Tesco's. They can't just build wherever they like and do whatever they like. Strict competition, planning and bribery laws stop this from happening.

    Barclays, currently have different rules being applied to them from the UK and the EU government, through regulation.

    Destroying a point because it's not written too well is easy. But the underlying message from Percy is hard to ignore. The BTL sector is possibly one of the most under regulated sectors we have. Yet it has potential to destroy lives on a far higher scale than building a few tescos a bit too close to each other could.
  • Cleaver
    Cleaver Posts: 6,989 Forumite
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    Percy has the right idea, just isn't conveying it too well.

    Look at the German rental market. The UK standards are simply not allowed.....probably due to the fact that allowing the same type of "controls" we have in the UK allows for the problems we have in the UK.

    The US, they have rent controls.

    There is plenty you can do with percy's general statement, before you start writing it off as dumb and comparing it to other business (all of which have their own business controls dependent on sector).

    For instance, on Cleavers list. Tesco's. They can't just build wherever they like and do whatever they like. Strict competition, planning and bribery laws stop this from happening.

    Barclays, currently have different rules being applied to them from the UK and the EU government, through regulation.

    Destroying a point because it's not written too well is easy. But the underlying message from Percy is hard to ignore.

    Sorry, but where in my post did I say that I would object to more stringent standards around letting or that I would object to certain BTL-specific policies? I didn't, because I agree with you that all industries need specific legislation or policies to regulate and deal with them. But Percy wasn't talking about this. Percy wasn't saying this. Percy was suggesting that you pick BTL as one specific industry and introduce a whole new tax law which states that you cannot post a profit until your business is completely debt free. Here's his post again:
    Percy1983 wrote: »
    The end of the day a landlord should only be able to make a profit once the property is paid for, up until that point there profit is the fact they are gaining a free property.

    As far as I know there is no business in any capitalist system that isn't allowed to make profit whilst also borrowing money for assets, running costs, stock etc. etc. This model is pretty much at the heart of how business runs: you borrow money to expand and make more money. Percy was suggesting that we change this rule just for BTL, as he sees it as immoral. So whilst there are some things we could do in this country to make BTL a better industry, this rather naive idea, based on a personal feeling, surely isn't the way forward?
    The BTL sector is possibly one of the most under regulated sectors we have. Yet it has potential to destroy lives on a far higher scale than building a few tescos a bit too close to each other could.

    Is it though? Can you demonstrate how it is one of the most unregulated sectors we have? For example, if you contrast someone who has bought a propety to rent out compared to someone who starts a hairdressers, or a shop, or becomes and electrician, or starts a software consultancy, or becomes a public speaker etc. etc.

    I know it's hard to compare one industry to another, but what extra legislation could you put in the BTL sector to make an overall change that was better to society but also wouldn't ravage the industry so that people didn't want to do it? Because whilst a dozen or so people on here would cheer if all landlords went bust, remember that most people in society don't really have this vitriol and just see it as a service that they may want or need to use. So we don't want to force it out of business.

    I can think of maybe a landlord register? But I have no idea whether that would give much benefit. Other than that, what extra legislation would you bring in?

    And lastly, how does BTL 'destroy lives'? Bit of a emotional statement isn't it.
  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    edited 25 June 2011 at 10:35AM
    Cleaver wrote: »

    I know it's hard to compare one industry to another, but what extra legislation could you put in the BTL sector to make an overall change that was better to society but also wouldn't ravage the industry so that people didn't want to do it? Because whilst a dozen or so people on here would cheer if all landlords went bust, remember that most people in society don't really have this vitriol and just see it as a service that they may want or need to use. So we don't want to force it out of business.

    I can think of maybe a landlord register? But I have no idea whether that would give much benefit. Other than that, what extra legislation would you bring in?

    And lastly, how does BTL 'destroy lives'? Bit of a emotional statement isn't it.

    Heres a few...

    1. Rental controls. Happens in the US, Germany etc.

    2. Capital gains on BTL properties increased (or some sort of tax system on profits outside of capital gains).

    3. Longer term tanancies, minimum two years.

    4. Controls over who can become a landlord. I can't just start selling alcohol from my house. I can't just start selling milk from my house. I can't just start using my house as a creche. I have to take steps to apply for permission in all circumstances. I can, just let my house out however, bar a couple of safety checks. I personally don't have to do a thing.

    As for the destroys lives. Change it to "severely upsets" in some cases.
  • Cleaver
    Cleaver Posts: 6,989 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Heres a few...

    1. Rental controls. Happens in the US, Germany etc.

    I personally don't think rent control is a good thing from an economic viewpoint. But fully appreciate that this is just my opinion.
    2. Capital gains on BTL properties increased (or some sort of tax system on profits outside of capital gains).

    I don't agree that BTL should be subject to different capital gains taxes than any other industry. If the entire housing market, as a whole entity, was looked after and regulated correctly then there shouldn't be any need for a different capital gains structure.

    3. Longer term tanancies, minimum two years.

    I don't really understand this one. Do you mean that if people want to rent a place for two years there should be a rule in place that says they can have that? I agree, seems a good idea. Not sure if it's a major issue though, as I know that most landlords are fairly long term and if a tenant came and said "I want to rent your house and I'd like to sign a contract for two years please" most landlords would bite their hand off. When we rented out a house one of the tenants asked for an 18 month deal and we were so pleased to have security for that period that we gave them a slight rent reduction.
    4. Controls over who can become a landlord. I can't just start selling alcohol from my house. I can't just start selling milk from my house. I can't just start using my house as a creche. I have to take steps to apply for permission in all circumstances. I can, just let my house out however, bar a couple of safety checks. I personally don't have to do a thing.

    What extra controls would you put in place? At the moment I have to do the following to become a landlord:
    • Either own outright or get a BTL mortgage / permission from my lender
    • Ensure that all furniture and fittings meets the required legal standard
    • Ensure all electrical items meet the required legal standard
    • Get a gas safety check and get one done every 12 months
    • Put the deposit in a scheme
    • Register myself for self-assessment and fill in a tax form
    • Ensure that I meet section 47 of the Landlord and Tenant Acte
    • I'm legally obliged to ensure that the structure of the property is of a decent standard, ensure water gas and electricity are supplied, ensure all appliances delivering these things are in good working order
    • I'm covered by the Protection from Eviction Act
    • I have CGT to pay
    • I'm covered by all the usual policies that a business has to follow that deals with people: data protection, race discrimination, sex descrimination, disability decrimination etc. etc.
    After all this you have a property. The consumer can then choose whether or not they want to rent that property, and you're down to a typical market economic situation.

    What other 'controls' would you put in place? Specifically? You say that you "don't have to do a thing", but there's quite a few things that you have to think about and do, otherwise you could find yourself in hot water with authority or you won't have a product / service that people will want.
    As for the destroys lives. Change it to "severely upsets" in some cases.

    Ahh, okay. Yes, I agree that BTL does seem to upset some people.
  • vivatifosi
    vivatifosi Posts: 18,746 Forumite
    Part of the Furniture 10,000 Posts Mortgage-free Glee! PPI Party Pooper
    Cleaver wrote: »
    Is it though? Can you demonstrate how it is one of the most unregulated sectors we have? For example, if you contrast someone who has bought a propety to rent out compared to someone who starts a hairdressers, or a shop, or becomes and electrician, or starts a software consultancy, or becomes a public speaker etc. etc.

    I can think of maybe a landlord register? But I have no idea whether that would give much benefit. Other than that, what extra legislation would you bring in?

    Apologies for the selective pasting Cleaver. For me the big issue is the BTL at the fringes: for example people who don't declare their BTL property because they live together, but have two mortgages, one on a BTL. We have one of these near me and it is a nightmare. The poor people move in there, find the heating doesn't work, goodness knows the last time things were tested properly (thankfully electricity rather than gas but still has a potential to be dangerous). These people fly below the radar in much the same way as dodgy builders etc and I do think they should be legislated. When I think of BTL having a bad name, its this unregulated, black market of the sector that I think of.

    In terms of the broader dislike of BTL,which I don't personally hold, I wonder if it goes back to the concept of the rentier and rentier capitalism? This critique of capitalism is one that appeals to those who don't like property ownership (which can be intellectual capital as much as bricks and mortar). It is a central tenet of Marxism and some more left of centre ideologies. Because their activity is seen as unproductive - as opposed to running factories etc - it is seen as a less desirable form. The owners are seen as doing nothing productive themselves while holding onto something that as a result the masses don't have access to. I'm not saying that this is correct, but do think that it is well trodden ground and has been since at least Marx and is often a basis in the 'I don't like BTL' arguments around these parts.
    Please stay safe in the sun and learn the A-E of melanoma: A = asymmetry, B = irregular borders, C= different colours, D= diameter, larger than 6mm, E = evolving, is your mole changing? Most moles are not cancerous, any doubts, please check next time you visit your GP.
  • Cleaver
    Cleaver Posts: 6,989 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    vivatifosi wrote: »
    Apologies for the selective pasting Cleaver. For me the big issue is the BTL at the fringes: for example people who don't declare their BTL property because they live together, but have two mortgages, one on a BTL. We have one of these near me and it is a nightmare. The poor people move in there, find the heating doesn't work, goodness knows the last time things were tested properly (thankfully electricity rather than gas but still has a potential to be dangerous). These people fly below the radar in much the same way as dodgy builders etc and I do think they should be legislated. When I think of BTL having a bad name, its this unregulated, black market of the sector that I think of.

    They are legislated though. They fall completely under all the legislation, rules and controls that already exist and, presumably, if they were caught they'd be punished. Maybe what we're saying is that we don't feel that these rules are enforced enough? Or that the punishments aren't strict enough? I guess that's a different debate.

    vivatifosi wrote: »
    In terms of the broader dislike of BTL,which I don't personally hold, I wonder if it goes back to the concept of the rentier and rentier capitalism? This critique of capitalism is one that appeals to those who don't like property ownership (which can be intellectual capital as much as bricks and mortar). It is a central tenet of Marxism and some more left of centre ideologies. Because their activity is seen as unproductive - as opposed to running factories etc - it is seen as a less desirable form. The owners are seen as doing nothing productive themselves while holding onto something that as a result the masses don't have access to. I'm not saying that this is correct, but do think that it is well trodden ground and has been since at least Marx and is often a basis in the 'I don't like BTL' arguments around these parts.

    I think you've summed up very nicely why BTL is disliked. On an operational level the industry tends to attract people who, on the whole, like to make money whilst not really doing a lot. And I think society tends to look down on these types of people (probably for good reason).

    Simply put, it's annoying paying rent to someone who is seen to be doing nothing and taking your money, isn't it? Therefore, if you think along these lines, additional taxes for landlords seems a great idea because they then have less money. I don't really see what general benefits it would bring to the sector though.
  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    edited 25 June 2011 at 11:10AM
    Cleaver wrote: »
    I personally don't think rent control is a good thing from an economic viewpoint. But fully appreciate that this is just my opinion.



    I don't agree that BTL should be subject to different capital gains taxes than any other industry. If the entire housing market, as a whole entity, was looked after and regulated correctly then there shouldn't be any need for a different capital gains structure.




    I don't really understand this one. Do you mean that if people want to rent a place for two years there should be a rule in place that says they can have that? I agree, seems a good idea. Not sure if it's a major issue though, as I know that most landlords are fairly long term and if a tenant came and said "I want to rent your house and I'd like to sign a contract for two years please" most landlords would bite their hand off. When we rented out a house one of the tenants asked for an 18 month deal and we were so pleased to have security for that period that we gave them a slight rent reduction.



    What extra controls would you put in place? At the moment I have to do the following to become a landlord:
    • Either own outright or get a BTL mortgage / permission from my lender
    • Ensure that all furniture and fittings meets the required legal standard
    • Ensure all electrical items meet the required legal standard
    • Get a gas safety check and get one done every 12 months
    • Put the deposit in a scheme
    • Register myself for self-assessment and fill in a tax form
    • Ensure that I meet section 47 of the Landlord and Tenant Acte
    • I'm legally obliged to ensure that the structure of the property is of a decent standard, ensure water gas and electricity are supplied, ensure all appliances delivering these things are in good working order
    • I'm covered by the Protection from Eviction Act
    • I have CGT to pay
    • I'm covered by all the usual policies that a business has to follow that deals with people: data protection, race discrimination, sex descrimination, disability decrimination etc. etc.
    After all this you have a property. The consumer can then choose whether or not they want to rent that property, and you're down to a typical market economic situation.

    What other 'controls' would you put in place? Specifically? You say that you "don't have to do a thing", but there's quite a few things that you have to think about and do, otherwise you could find yourself in hot water with authority or you won't have a product / service that people will want.



    Ahh, okay. Yes, I agree that BTL does seem to upset some people.

    Fair enough.

    I can't give you any other controls that I think are fair and also:
    - Don't penalise existing landlords to large extents.
    - Provide security for tenants, existing and future.
    - Make prospective landlords think twice about capital gains (the biggest factor in many cases for prospective landlords).

    You've disagreed with all of my statements pretty much, not on a business level, but purely a personal level. You asked me for controls on a business level.

    As for the minimum tenancy. What you may have done or not regarding tenancies is neither here nor there. I mean a proper mandatory 2 year tenancy. Landlord can't sell in that time etc. As it is, a landlord can currently sell and only inform the tenants when there is a buyer and they need to go.

    On a seperate note...if there are so many things you have to think about and do, howcome we have people succesully (i.e. got tenants) renting their houses out and buying another, but then coming to forums such as these and saying "so, what do I have to do now"?

    The answer is you DON'T have to do all that, before you get tenants. These forums prove it. As people have got tenants and haven't done all of the above. They don't even know half od it exists.
  • Cleaver
    Cleaver Posts: 6,989 Forumite
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    Fair enough.

    I can't give you any other controls that I think are fair and also:
    - Don't penalise existing landlords to large extents.
    - Provide security for tenants, existing and future.
    - Make prospective landlords think twice about capital gains (the biggest factor in many cases for prospective landlords).

    Okay, forget those factors. Graham becomes housing ministers and decides to pass a bill with tougher regulation on the rental market. What tougher 'controls' would you put in? I'm not purposefully being obtuse, I just don't know what else you can do above what we've got?
    You've disagreed with all of my statements, not on a business level, but purely a personal level. You asked me for controls on a business level.

    Huh? No I didn't. I think rent control is not a good idea from an economic and social point of view, hence why it's not a widespread idea and not many countries use it. I don't think CGT should be increased from an economic point of view, not a personal one. I agreed with you that longer term tenancies should be available. I simply can't think of more legislation or controls for landlords and, it seems, nor can you.
    On a seperate note...if there are so many things you have to think about and do, howcome we have people succesully (i.e. got tenants) renting their houses out and buying another, but then coming to forums such as these and saying "so, what do I have to do now"?

    The answer is you DON'T have to do all that, before you get tenants. These forums prove it. As people have got tenants and haven't done all of the above. They don't even know half od it exists.

    Think this one through Graham. You're thinking about renting out your house but you don't have a clue what you're doing, what do you do? This forum would probably be your first port of call. So if you visit the renting board on here you get, unsurprisingly, lots of people asking about the rules around renting a house out. People who know exactly what they're doing probably don't come on these boards and ask questions.

    In terms of the hows and whys about people renting without doing the required things, of course this goes on. Can you think of any industry where it doesn't? Let's say I want to set up a sandwich shop. There are a whole host of health and safety, hygiene safety, building legislation, tax implications etc. etc. that I have go through, by law. But this doesn't mean I go through them. I could rent out a shop tomorrow and start selling sandwiches from it, then it's up to the law about what happens to me. If no one ever checks and the consumers don't seem bothered then I guess I just continue. Same with dodgy BTL. Same with cowboy builders, accountants etc. etc. There's a black market for every industry you care to mention. But the legislation exists.
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