Are the Torys real Torys?

mwpt

princeofpounds wrote: »

BTL landlords are a rentier class, in the true economic sense, not just the collecting money sense!

That 'contrived exclusivity' pretty much defines how we arrange our housing in this country.

Rentiers have and will exist in some form, forever (or until we reach zero scarcity). I think you've hit a good point that it's the scale of the thing that causes the most ire, when we ration the land so scarcely in the UK.

<rant incoming>

I've said many times here that I don't have a problem with BTL in general. It's self obvious that if you have renters (and many people want to rent) that we then have a corresponding need for a landlord. So, a couple of issues with that.

1) The ability of landlords to acquire this scare resource has diverged in the wrong direction from the ability of someone involved in another means of production. In other words, regular OOs who do other work, are now at a disadvantage when trying to acquire this resource due to income lending limits vs landlord rent cover limits. This resource also happens to be one of our basic human needs (or rights if we're being more progressive).

2) BTL must surely be defined as a very low productivity activity in itself (vs OO). It takes a scare resource that would be used by someone else and allocates it according to how much debt someone is willing to take on. I saw a quote on another forum that struck me. If you engage in a productive business whereby you create (actually create) something that people want, and you sell this thing, you've enriched yourself while enriching others. BTL does no such thing. It is dominated mostly by people willing to take on debt to corner a scare resource then rent this scare resource back to more productive people.

I'm sorry if that view offends some people, because I know many of you here are landlords. I am not blaming the player here, just playing the game in front of you.

mwpt

michaels wrote: »

Lots of blocks of flats in Northern cities (which as it happens did very badly in the 'crash') were only built because of demand from BTL landlords.

In general landlords putting capital into the housing market must all else being equal lead to higher prices and thus more supply.

Could you show me some data to back it up please? It's ok to speculate on a forum but to really make your point you'd have to show me.

Thrugelmir

lawriejones1 wrote: »

My point was that BTL is a business that successive Governments have encouraged people to invest in..

Where's the evidence to support this assertion?

Thrugelmir

Generali wrote: »

Why are exports so great?

Better than importing perhaps. Given the imbalances in the UK economy. Been the challenge for the past 20 years yet no real signs of improvement.

I like to get a haircut, have a pint, eat a bacon roll and have my car serviced locally. I reckon the majority of what I consume on a week-to-week basis is produced locally.

Compared to the interest paid on debt servicing that then flows abroad. The amounts pale into insignificance. The UK has always had a preference for lower prices rather than buying British products.

CLAPTON

mwpt wrote: »

Could you show me some data to back it up please? It's ok to speculate on a forum but to really make your point you'd have to show me.

do you have the evidence that all those flats were bought by OOs?

mwpt

CLAPTON wrote: »

do you have the evidence that all those flats were bought by OOs?

You're involved in some pretty flimsy "stats" right now. The assertion was that BTL was high productivity because it caused economic activity of house building. I didn't make that assertion and I think it needs to be shown that the correlation exists. I'm very sceptical, but willing for someone to prove me wrong.

lawriejones1

Thrugelmir wrote: »

Where's the evidence to support this assertion?

Let's look at the attractive tax breaks offered to those investing in BTL that Osbourne has begun to crack down on. That's a start.

The Government is also aware of the housing crisis that this board is full of - huge speculation on the housing market is pricing many people out of the opportunity to buy a home.

In both of these ways the Governments failure to do anything must be read as tacit approval for the BTL market.

CLAPTON

lawriejones1 wrote: »

Let's look at the attractive tax breaks offered to those investing in BTL that Osbourne has begun to crack down on. That's a start.

The Government is also aware of the housing crisis that this board is full of - huge speculation on the housing market is pricing many people out of the opportunity to buy a home.

In both of these ways the Governments failure to do anything must be read as tacit approval for the BTL market.

the 'tax breaks' for a rental business were just the same as for any other business i.e. one can offset one's costs against one's turnover to establish the profit.
I guess the 10% ware and tear allowance was a 'special' but such specials are not uncommon for ease of calculation rather than a tax reduction.

what has happened now is that a rental business now have special extra taxes levied which other businesses don't.

no idea for you ascertain of 'a huge speculation' .. the majority of property transactions arise from buy and selling individual properties by people like you and me.

westernpromise

mwpt wrote: »

Rentiers have and will exist in some form, forever (or until we reach zero scarcity). I think you've hit a good point that it's the scale of the thing that causes the most ire, when we ration the land so scarcely in the UK.

<rant incoming>

I've said many times here that I don't have a problem with BTL in general. It's self obvious that if you have renters (and many people want to rent) that we then have a corresponding need for a landlord. So, a couple of issues with that.

1) The ability of landlords to acquire this scare resource has diverged in the wrong direction from the ability of someone involved in another means of production. In other words, regular OOs who do other work, are now at a disadvantage when trying to acquire this resource due to income lending limits vs landlord rent cover limits. This resource also happens to be one of our basic human needs (or rights if we're being more progressive).

2) BTL must surely be defined as a very low productivity activity in itself (vs OO). It takes a scare resource that would be used by someone else and allocates it according to how much debt someone is willing to take on. I saw a quote on another forum that struck me. If you engage in a productive business whereby you create (actually create) something that people want, and you sell this thing, you've enriched yourself while enriching others. BTL does no such thing. It is dominated mostly by people willing to take on debt to corner a scare resource then rent this scare resource back to more productive people.

I'm sorry if that view offends some people, because I know many of you here are landlords. I am not blaming the player here, just playing the game in front of you.

This is all a very monolithic view of landlords, of course.

When I got together with the current Mrs. Promise, we each had a 2-bedroom London flat. What we needed, with a child inbound, was one property with a value similar to the two flats combined, but with things like a garden and nearby schools.

We didn’t sell up and buy one because we didn’t know where to do so - the school situation was not sorted. Nor did we sell up and not buy one because we wanted a house price hedge. So we let ours out and rented a house, using the rental income to pay our own rent.

Note that we were both landlords and tenants; we never bought a property intending to let it; we did not want at that time to buy; we did want to rent; and we occupied property more efficiently, by letting our two flats to four or five occupants where previously there had only been one of us in each.

I would no doubt be regarded by the HPC rabble as an evil BTL parasite, but then I tend to regard them as evil parasites with a sense of entitlement to have their choices funded by other people.

Graham_Devon

michaels wrote: »

In general landlords putting capital into the housing market must all else being equal lead to higher prices and thus more supply.

What higher supply though? On a macro level we are building more since the recession, which is just about the lowest level you can measure from in the last 50 years.

Supply has increased at a tiny rate compared to HPI since 2009 and looks set to drop this year - and HPI is still running at 5-9% dependent upon the index you choose to look at.