Should landlords receive tax breaks..

Cornucopia

ukcarper wrote: »

If BTL landlords can make it work with interest rates of 5% why can't the government make it work a interest rate of 0.5%.

Because this is still not about the cost of borrowing, but the availability of capital.

I'm struggling to understand why people cannot get their heads around this very simple principle: the Government is basically bankrupt. It cannot go and borrow what would need to be £Billions in order to restructure social housing. It especially can't do that whilst a viable solution exists that doesn't require borrowing of £Billions.

And the other reason is that when a private landlord borrows £200k to BTL, you can be sure that they will do everything they can to get at least £200k out of it at the end. Government... not so much. Somehow they (a) can't seem to fund maintenance properly, (b) put lots of problem tenants in the same place and (c) don't manage their housing stock with retention of investment value in mind. Therefore loss to the taxpayer when estates are knocked down or sold off for £1.

wotsthat

Graham_Devon wrote: »

Yer - because they can be. It's running itself....showing exactly what most have been stating.

Your problem appears to be that the max amount of money isn't being extracted.

If anything, "market value" is subsidised by housing benefit, pushing the value up.

If I invest money then I want the best return on capital. If the government invest on my behalf why shouldn't I demand the same?

I have very little issue with further housing benefit cuts being implemented by the way.

wotsthat

ukcarper wrote: »

Subsidised in that they could be rented out at a higher rate but that rate would still be paid by the government/us.

If BTL landlords can make it work with interest rates of 5% why can't the government make it work a interest rate of 0.5%.

That subsidy is paid by the taxpayer whether or not the occupier is entitled to benefits. Why should the taxpayer be subsidising the rents of people that aren't entitled to benefits? They should move to non-subsidised housing.

The subsidy should also be explicit so that the true cost to the taxpayer isn't hidden.

The government can't make it work at 0.5% because governments are far less efficient at allocating investment capital than individuals. They don't have the capital either - a couple of years ago Osborne could have borrowed £billions at virtually 0% with 100 year repayment period (Osborne bonds) - they bottled it. Not suggesting that investing in housing for the least dynamic in society would be the best use of capital but the option was there.

Graham_Devon

Cornucopia wrote: »

I'm struggling to understand why people cannot get their heads around this very simple principle: the Government is basically bankrupt. It cannot go and borrow what would need to be £Billions in order to restructure social housing. It especially can't do that whilst a viable solution exists that doesn't require borrowing of £Billions.

Of course it can.

And it can do so at extremely low interest rates to boot.

wotsthat

Graham_Devon wrote: »

Of course it can.

And it can do so at extremely low interest rates to boot.

Maybe a couple of years ago. There has been a downgrade since then. I'm not sure how well a plan to borrow billions to provide free housing for the most unproductive members of society would be greeted - with a mixture of incredulity and horror I'd guess.

Thrugelmir

Graham_Devon wrote: »

And it can do so at extremely low interest rates to boot.

Ok where from?

Name investors, private, insititutional or international who are happy to accept sub 2% returns.

Graham_Devon

Thrugelmir wrote: »

Ok where from?

Name investors, private, insititutional or international who are happy to accept sub 2% returns.

I can't.

Though I keep getting told on the news they can. And on here.

This is the sort of thing that would create jobs, growth etc. It's not just about providing "free housing".

Thrugelmir

Graham_Devon wrote: »

Though I keep getting told on the news they can. And on here.

I suspect the reform will come in the shape of incentives for companies to run professional regulated social housing operations. Not subsidys for BTL LL's.

ukcarper

wotsthat wrote: »

That subsidy is paid by the taxpayer whether or not the occupier is entitled to benefits. Why should the taxpayer be subsidising the rents of people that aren't entitled to benefits? They should move to non-subsidised housing.

The subsidy should also be explicit so that the true cost to the taxpayer isn't hidden.

The government can't make it work at 0.5% because governments are far less efficient at allocating investment capital than individuals. They don't have the capital either - a couple of years ago Osborne could have borrowed £billions at virtually 0% with 100 year repayment period (Osborne bonds) - they bottled it. Not suggesting that investing in housing for the least dynamic in society would be the best use of capital but the option was there.

That is a different argument new tenants are going to have different rules applied to them but subsidised housing is needed for low paid workers especially in the south east.

£160k interest only at 5% is £800 a month while at 1% it is £160 or £600 on a 25year repayment and the government would have an asset at the end.

ukcarper

Thrugelmir wrote: »

Ok where from?

Name investors, private, insititutional or international who are happy to accept sub 2% returns.

How much is set aside for funding for lending scheme