Ban BTL landlords from buying new builds

CLAPTON

JencParker wrote: »

I am very far from being rich and have had to struggle and work hard all my life. However, if you ONLY apply the laws of supply and demand to basic human needs in a capitalist society you will always find those who are only out to make money at the expense of those less well off. That is why you need some sort of regulation.

There are few (if any) that think there should be no regulation in relation to housing:

however, deliberately increasing demand whilst reducing supply does NOT help the less well off in any way whatsoever.

The path to hell is paved with good intentions, as illustrated by the rediculous housing benefit system, that has done nothing to aid the less well off but plenty to help landlords.

JencParker

CLAPTON wrote: »

There are few (if any) that think there should be no regulation in relation to housing:

however, deliberately increasing demand whilst reducing supply does NOT help the less well off in any way whatsoever.

The path to hell is paved with good intentions, as illustrated by the rediculous housing benefit system, that has done nothing to aid the less well off but plenty to help landlords.

I agree, especially with the housing benefit system that has actually encouraged BTL and made lots for landlords. However, and yes, supply does need to be increased, but to increase supply without having some control will only make more for the wealthy and hit those less well off the hardest, in the same way it has with the introduction of the bedroom tax. The idea is right , but to do it to people already struggling when there is no alternative of smaller accommodation is unfair. Relying solely on supply and demand hits those at the bottom long before it has time to adjust.

CLAPTON

Why is it ok to squeeze family with kids into a small flat but allow a single person a house?

chewmylegoff

If you ban landlords from buying new builds then you may end up with some unwanted consequences. The noble FTB who buys it may find it more difficult to sell as the pool of prospective buyers is smaller and when they can't sell they won't be able to rent it out themselves thus will end up stuck there when they need to move e.g. for work.

JencParker

CLAPTON wrote: »

Why is it ok to squeeze family with kids into a small flat but allow a single person a house?

I never said it was and don't think it's ok, but bringing it in before any consideration has been given to where people will downsize to penalises those who can least afford it.

Graham_Devon

chewmylegoff wrote: »

If you ban landlords from buying new builds then you may end up with some unwanted consequences. The noble FTB who buys it may find it more difficult to sell as the pool of prospective buyers is smaller and when they can't sell they won't be able to rent it out themselves thus will end up stuck there when they need to move e.g. for work.

Wouldn't be a new build at that point though?

Cornucopia

JencParker wrote: »

... BTL isn't the only problem...

I don't think that we've established that BTL is a problem. It's simply a feature of our malfunctioning housing market - one whose basic problem is lack of housing. The existence or otherwise of BTL will do nothing to address that issue. On the plus side, it's another way in which debt has accumulated in private hands, rather than to the public sector.

But the reason it would make BTL disappear is because BTL has to borrow in order to buy, thus requiring rent that covers both a mortgage AND makes a profit for the LL. I wonder how many BTL LL would still be LL if they had to pay for the property in full, without a mortgage.

Although we misuse the term BTL, we are effectively talking about all private landlords - whether there is a mortgage on the rental property or not, and whether that mortgage is a BTL mortgage or not. In practice, the rent is set by the market, not by what a LL needs or wants to charge, The market takes no account of how the purchase of the rental property is funded. This is enforced by lenders' use of rental multiples to assess BTL affordability.

With less and less affordable (LA or housing association) property available, those who have to rent are getting squeezed even more. And it's not just about cost. The lack of security of tenure makes it hugely stressful for renters. Would you like to live with the uncertainty of where you are going to live year in and year out?

I still don't really understand why some people choose to rent. But they clearly do. Some of those are clearly exercising a preference for flexibility of tenure - the flipside of insecurity.

It won't affect me - my mortgage is almost paid off, but I do despair about the society we have left our children. The rents they paid while going through university were ridiculous for a student, but it made the LL happy. In spite of good education and good jobs they will not be able to save the amounts needed while paying the rents at the level they are now having to.

I think you misunderstand how the rental market works. If the market could not bear a particular level of rent, then millions of properties would stand empty, whilst potential tenants slept on sofas. It is the fundamental shortage of housing that creates the market conditions for high prices and moderately high rents, which are at a level the market accepts.

I say moderately high rents, because I'm not clear what people's expectations are. Personally, I don't think that, say, £150-250 per week for a well maintained 2-bed flat is a bad deal - and those rates are typical of outer suburban London/South East.

HAMISH_MCTAVISH

Cornucopia wrote: »

It is the fundamental shortage of housing that creates the market conditions for high prices and moderately high rents, which are at a level the market accepts.

Spot on....

IveSeenTheLight

JencParker wrote: »

Building more houses will also do nothing to help the tenant regarding long term security of tenure.

Are you a BTL LL by any chance

I'm a BTL LL.

If an existing tenant requested a long term contract then I'd be happy to provide for them.

Generally, I see tenants signing up for 2-3 years without wishing to commit to further.

Security goes both ways and if the tenant wants security, they should be prepared to sign up for a longer period.

IveSeenTheLight

JencParker wrote: »

That is why you need some sort of regulation.

In Scotland, LL's are regulated through the Scottish Landlord Register

You can search who the LL's are of properties, report them, formalise property repairs / maintenance.

I once thought it was just a way to collect an administration fee and to monitor against taxes, but I did once receive a letter from the local council advising they had noticed a gutter which needed repair and requested it was fixed within a certain period.

I simply contacted the factoring company to resolve.