why do some people own more than one property?

amblondon

want2bmortgage3 wrote: »

It does seem funny that the government sold off so much council housing, when they are now paying rent directly to private landlords in order to accommodate the long lists of people needing housing via benefits.

Funny? Nope, probably one of the biggest policy mistakes of the last fifty years, handing out the country's assets at cut price to those who happened to be living there at the time.

Or maybe that's just my view!

princeofpounds

AlexMac, thanks for the enjoyable post.

People like property for a million reasons, but some of the following are very significant:

1) House prices have gone up a lot, and nothing makes an asset class more popular than making people a lot of money, as illogical as that rationale is.

2) It is one of the few ways the man on the street can access massive amounts of cheap debt to leverage their investment. This is basically the foundation of hte BTL business model, and it works great on the way up (not so much on the way down).

3) Various tax breaks are accessible (things like MIRAS historically, also primary residence capital gains relief, interest offset etc) which can make it relatively tax-efficient compared to other investments

4) It can be argued that government policy has typically benefitted homeowners, whether that is with abnormally low interest rates, cutting back the rights of tenants, statutory mortgage interest support and so on.

5) It is a real asset and so somewhat resistant to inflation (in a way that cash and bonds are typically not). This makes it very suitable for long-term investment.

6) There is the psychological benefits of 'bricks and mortar'. People like an investment they can touch.

and so on...

Some of the reasons are good, and some are not. Some are permanent reasons, others may reverse. The past is no guide to the future.

But I think it is pretty understandable why there is such interest in property as an investment rather than just for accommodation.