Ban BTL landlords from buying new builds

Graham_Devon

What you think?

Landlords should be banned from buying new-build properties and have less access to buy-to-let lending to address the wealth gap between them and their tenants, a thinktank has suggested.

The Strategic Society Centre said there was a huge disparity between private landlords and tenants, which threatened to undermine the government's attempts to help new homebuyers by boosting the supply of new homes.

The SSC's analysis of the sector, based on official figures, found that private sector landlords tended to be wealthier than the general population, with an average of £75,103 held in savings, bonds and other investments. In contrast, private renters had an average wealth of £9,506. While 50% of landlords had accrued wealth of up to £20,500, the same proportion of tenants had just £398.

It's a kind of rich get richer poor get poorer article....but with lots of stats to prove it's point!

My thoughts would be to do things the other way around. If landlords are to be banned from buying certain properties, ban them from buying existing ones, and allow them to buy new builds only.


http://www.guardian.co.uk/money/2013/jul/04/ban-landlords-new-build-properties

CLAPTON

it's a nonsense article that says that people who run a business letting property tend to be richer than people who don't

because they are richer it is unfair they compete with people who are poorer


maybe it will show that people that run other sorts of businesses are richer than people who don't own a business and that that is unfair too

utter nonsense

Graham_Devon

CLAPTON wrote: »

it's a nonsense article that says that people who run a business letting property tend to be richer than people who don't

because they are richer it is unfair they compete with people who are poorer


maybe it will show that people that run other sorts of businesses are richer than people who don't own a business and that that is unfair too

utter nonsense

I think the basic gist of the article though is not about that. It's about the increasing wealth gap and the effect that has on society. In that there is an effect of trapping those with less means into a perpetual circle as they get poorer each month and therefore are unable to escape it.

This isn't something that happened with the social housing of yesteryear - there was a route out as renting was basically cheaper than buying. But with buying and renting now being unafforable to millions, and millions on benefits in order to pay said rent, the ability to move out of that trap is declining almost monthly.

Shelter is a basic human need. It's not like a business where you can choose whether you will use it or go without.

It talks about the increase in landlords, which is just shy of 100% since the year 2000, increasing rents and the ability of landlords to buy houses before anyone else get's a chance.

I think it's more than what you describe.....in that it's about the rich getting richer at the expense of keeping the poor, poorer, and what's more, trapping more and more into the poorer circle.

That's what I took from it anyway. Not that I agree with their proposals anyway!

CLAPTON

Graham_Devon wrote: »

I think the basic gist of the article though is not about that. It's about the increasing wealth gap and the effect that has on society. In that there is an effect of trapping those with less means into a perpetual circle as they get poorer each month and therefore are unable to escape it.

This isn't something that happened with the social housing of yesteryear - there was a route out as renting was basically cheaper than buying. But with buying and renting now being unafforable to millions, and millions on benefits in order to pay said rent, the ability to move out of that trap is declining almost monthly.

Shelter is a basic human need. It's not like a business where you can choose whether you will use it or go without.

It talks about the increase in landlords, which is just shy of 100% since the year 2000, increasing rents and the ability of landlords to buy houses before anyone else get's a chance.

I think it's more than what you describe.....in that it's about the rich getting richer at the expense of keeping the poor, poorer, and what's more, trapping more and more into the poorer circle.

That's what I took from it anyway. Not that I agree with their proposals anyway!

I didn't see anything in the article about the rich getting richer;
it was about how unfair it was that landlords tend to be richer than non landlords

something I would expect to be true, just as I expect other people with substantial assets to be 'richer' than people that don't

if fact one could say it almost definitionally obvious.

chucknorris

I hate to generalise but I wouldn't tend to consider a new build property anyway unless you are talking about self build, new build flats (and houses) have always looked awful value to me compared to period houses IMHO.

Graham_Devon

CLAPTON wrote: »

I didn't see anything in the article about the rich getting richer;

???????????

"Most private landlords are not "getting rich off the taxpayer", but instead are receiving transfers of income and wealth from tenants, who are significantly poorer than they are. In this way, it would appear that the PRS [private rental sector] increases wealth inequality in society," Lloyd wrote.

Road_Hog

It's all cockwaffle. Currently, BTL are providing a service, there is a shortage of rental properties, not an oversupply.

The government needs to get at the root cause. Mass unfettered immigration, which is having a two pronged effect. Firstly it is letting in millions that are chasing the housing market, leading to increased prices in the most over populated areas. Secondly, it is leading to an over supply in the labour market which is causing wage deflation, which is aggravating the problem.

The other issue is the lack of council house building, which offers a long term rental solution for those than may never be able to get onto the property ladder or who need to save for a deposit.

Private rental is a short term solution which provides a service, for any number of reasons. Such as job relocation, moving out of the parents home, selling a property and don't want to wait in a chain etc.

Sort the problem not the symptoms. The ONS said in 2011, that we would have 4.5 million net immigrants in the next 10 years in England alone. That's a lot chasing rental properties, banning landlords from buying properties isn't going to help the rental market and it just means the big boys will get all the properties, because they'll buy them through companies etc. to get around the rules.

Generali

"Most private landlords are not "getting rich off the taxpayer", but instead are receiving transfers of income and wealth from tenants, who are significantly poorer than they are. In this way, it would appear that the PRS [private rental sector] increases wealth inequality in society," Lloyd wrote.
[\QUOTE]

You could make the same claim about Tesco. There is a transfer of income from shoppers to shareholders and the shareholders are likely as a group to be richer than the shoppers. That will particularly be the case with value bread but perhaps less so with champagne.

Should we therefore ban Tesco from buying cheap bread but force them to buy more champagne?

The logic is flawed. Do I think house prices are expensive in the UK? Yes. Will this solve that? Nope.

Thrugelmir

Graham_Devon wrote: »

I think the basic gist of the article though is not about that. It's about the increasing wealth gap and the effect that has on society.

People who save over their working lifetime will be wealthier. Of course we are all only human. So it's a cycle.

N1AK

Graham_Devon wrote: »

What you think?

It's a kind of rich get richer poor get poorer article....but with lots of stats to prove it's point!

My thoughts would be to do things the other way around. If landlords are to be banned from buying certain properties, ban them from buying existing ones, and allow them to buy new builds only.

Firstly there are already thousands of BTL properties out there, making it harder for people to buy them in future does nothing about the people who already own them. It could actually harm social mobility.

Secondly the article is unclear about what this is supposed to achieve. It may decrease the value of new build properties, but almost certainly not property as a whole and it would discourage builders from creating more new builds; thus slow house building.

If there are 10,000 new build properties in an area short on property (both to buy and rent) then BTL can quickly make some of those available; with less BTL rents in the area would actually increase. That would make non-new build properties even more attractive to BTL potentially driving the price up even higher!

Your reversed proposal makes more sense, in my opinion, but still shares enough of the flaws that I don't think it is a good idea.

Running_Horse

My concern is more to do with the make up of communities than the rights or wrongs of BTL. It used to be developers built houses for FTBers, who had a common purpose and built a sense of community. If you are building for BTL the area will be more transient, and you will be building tiny flats rather than family homes. The days of builders building 2 & 3 bed houses seems to be over round here. In reality you cannot legislate who can or cannot buy property, but you could influence planning regulations in favour of houses over flats.