Buy-to-let investors will need 50pc deposit - or no mortgage

chucknorris

mystic_trev wrote: »

I haven't been a Landlord as long as you, but Properties been included as part of my Investment strategy for the last 20 years.

If I was starting out today, I'd be giving BTL miss. I think even if I'd been buying in the last 5 years and had large mortgages on the Properties, I'd probably be selling up.

Some of the media are reporting there could be a rush of BTL Investors buying up Property before the increase in Stamp duty,pushing up prices even further! I've got a nasty whiff of 1988 all over again.



.....and what happened after that?

I'm thinking along the same lines, but don't forget that there was also a serious economic downturn in 1989 too.

padington

Osborne wants innovation now. He's built in the equity to protect the economy, now it's phase 2 ....

He doesn't want the equity made to disappear, he just wants every spare UK penny to go into creating new business or buying the family house . It's a good idea but there is a big BUT ...

Rents are going get fricking stupid and the only thing to remedy it (given the difficulties to build) is rent controls.

Which will give Hilliary Benn one day, a very attractive policy to end Osbornes tenure and ironically mean Osborne may become remembered for ending the housing free market in the UK.

westernpromise

lisyloo wrote: »

Regarding upward pressure on rents? Is it not finite?
Won't people look at other options - for example moving to a northern hell hole (seems to be the term of the moment).

It's circumstantial, I'd say. The rent is the highest bid. If the alternatives to renting get worse or if rental supply dries up and demand doesn't, the circumstances have changed and therefore so will the highest bid.

Thrugelmir

mystic_trev wrote: »

Some of the media are reporting there could be a rush of BTL Investors buying up Property before the increase in Stamp duty,pushing up prices even further! I've got a nasty whiff of 1988 all over again.

Be foolish to do so. Given the clear intent shown this year so far. There's probably more to follow.

michaels

padington wrote: »

Osborne wants innovation now. He's built in the equity to protect the economy, now it's phase 2 ....

He doesn't want the equity made to disappear, he just wants every spare UK penny to go into creating new business or buying the family house . It's a good idea but there is a big BUT ...

Rents are going get fricking stupid and the only thing to remedy it (given the difficulties to build) is rent controls.

Which will give Hilliary Benn one day, a very attractive policy to end Osbornes tenure and ironically mean Osborne may become remembered for ending the housing free market in the UK.

Some one who understands the policy, how does rent control address the issue of an imbalance in supply and demand?

padington

michaels wrote: »

Some one who understands the policy, how does rent control address the issue of an imbalance in supply and demand?

Rent controls don't address supply and demand like building houses do but they will help address a growing chorus of people who will become outraged by the rental situation. The new generation is already called 'generation rent'. If we get 5% more people owning properties we will still have this socio economic group of people identified through their failure to buy. As people get older, this may get more humiliating for them. The anger will rise. Even owner occupiers themselves will wonder what their children will do to survive. Owner occupiers who have no intention of selling ther property will join a growing chorus demanding 'something must be done'. People will have seen a whole raft of heavy measures placed on the house buying sector which kept it rising too much and people will begin to think, why not do something for the rental sector ?

The quick fix to offer 'rent controls' will be too popular for labour to resist or possibly one day too popular for Osborne himself to resist ...

martinsurrey

padington wrote: »

Rent controls don't address supply and demand like building houses do but they will help address a growing chorus of people who will become outraged by the rental situation. ...

they dont address supply and demand, they actively make it worse... (lower price = lower supply and higher demand)

how exactly will it help address the growing chorus?

Its been shown time and time again over the last 50 years that rent controls do 2 things (caused by one main factor).

a) it will the limit supply of rental properties, a fact of limited return;

causes

1) increase wait times, in some European capitals with rent controls and limited housing stocks there are 20+ year wait lists for rent controlled apartments. (Berlin doesn't suffer as it has so much housing stock from the East and a fairly stable population, but look at Stockholm)

2) lower quality of all rentals, back we go to slumlords, also caused by driving a rental black market.

http://www.theguardian.com/world/2015/aug/19/why-stockholm-housing-rules-rent-control-flat

(encase you didn't know the modern effects of rent controls)

Generali

chucknorris wrote: »

I'm thinking along the same lines, but don't forget that there was also a serious economic downturn in 1989 too.

The downturn was caused by interest rates being cranked up to reduce inflation caused by the big increase in the money supply caused by the lending boom.

padington

martinsurrey wrote: »

they dont address supply and demand, they actively make it worse... (lower price = lower supply and higher demand)

how exactly will it help address the growing chorus?

Its been shown time and time again over the last 50 years that rent controls do 2 things (caused by one main factor).

a) it will the limit supply of rental properties, a fact of limited return;

causes

1) increase wait times, in some European capitals with rent controls and limited housing stocks there are 20+ year wait lists for rent controlled apartments. (Berlin doesn't suffer as it has so much housing stock from the East and a fairly stable population, but look at Stockholm)

2) lower quality of all rentals, back we go to slumlords, also caused by driving a rental black market.

http://www.theguardian.com/world/2015/aug/19/why-stockholm-housing-rules-rent-control-flat

(encase you didn't know the modern effects of rent controls)

I doubt generation rent will care. As long as their personal rent is capped that year and they know landlords will suffer, it's all they will worry themselves about.

Look at the recent tax on landlord saga. No uprising there.

chucknorris

Generali wrote: »

The downturn was caused by interest rates being cranked up to reduce inflation caused by the big increase in the money supply caused by the lending boom.

The point I was making was that house prices didn't fall just because they had previously risen rapidly, they fell was because the economy took a turn for the worse.