Treatment of BTL in the budget?

cells

Jason74 wrote: »

Generally speaking, I would agree with you. If you have a collection of cars, fine art, watches, pianos or suits (for a few examples), what you do with those is absolutely nothing to do with the state, and as long as you are not asking the state for support ,it should basically leave you to do whatever you please with those assets.

But whether people like it or not, housing is unlike almost any other owned possession, because it has two qualities that, when taken together, make it pretty much unique. Those qualities are (1) it is essential for human life and (2) there is a shortage of it relative to need. Because of that combination, it is absolutely right that there should be a certain amount of Government influence regarding how that resource is used.

Of course, once you (in the generic sense, I acknowledge that you personally accept no such thing) get into the realm of accepting that Government should have an influence in how residential property is used, there does then become the issue of degree. Your deliberately absurd example illustrates very well that left unchecked, government interference could produce some very silly and undesirable outcomes.

But I personally think that at present, there is remarkably little government intervention in housing given the issues that we currently face. For me, the growth in BTL, along with the decline in social housing, is certainly a big part of the problem around UK housing. With that in mind, for me, the tax changes around BTL are not "a nonsense tax that is not in the tenants interest, and needs to be cast aside". They are a good start.

There are varying degrees of excess of homes in the north and midlands. In about half the country prices for the median terrace are about 2 x joint full time wage in some towns its lower than 1x joint full time wage

There is no lack of land materials people or capital to build more homes the question you need to ask yourself is why if there is a shrotgage of homes more arent being built

cells

littlegreenfrog wrote: »

Wouldn't that have more to do with the fact that renters are typically younger and poorer?

yes renters rent the smaller properties and flats that tend to be smaller and cheaper than what owners own. They share while owners mostly dont

The problem then should be clear to you. How do you take the renters and make them owners without building lots of additional homes?

You cant. Think of it in the most basic way. A 100 square meteer three bed house with two girls and two boys each living in one of the bedrooms plus the living room so 25 square meters each. One pair form a couple and the landlord sells the rental to them. Well they dont want the other two living with them so they get the boot and become owners at 50 square meters each. What happens to the two that got the boot?? well they only have three choices. A live under a bridge B move into a rental property and make rentals even more dense or C move into a new build.

Of all of the options A B and C the most desirable is C as it does not push up prices and all the renters are better off. A is stupid and we can discount making millions homeless as an option. B is what we would have if we put into place taxes and rules that shifted the market from renting to owning. More owners living at low density and the remaining renters having to live at higher and higher density and pay more and more for the pleasure.

Obviously if you're renting and saving for a deposit then you will probably want to keep your costs down by flat sharing to save as much money as possible. But whether they succeed in buying or not, they will still get older, and there comes a time when people just don't want to live like students any more, whether they are renters or home owners. People get into long-term relationships and settle down, and they want to live with their other half alone, not flat share with four other people. People with children can't realistically flat share either. Even people who are single with no kids generally get to an age where they don't want to flat share any more if they can afford not to.

yes that is all true people generally dont want to flat share where they can help it and they will bid as much as they can in rent to avoid it hence why we have high rents.

littlegreenfrog wrote: »

The only way someone is going to carry on living with a group of flatmates into their 30s or 40s is if they don't settle down and have children.

yes and may people have willingly or unwittingly made this choice.

Also its not so much to do with house or rent prices. rents and prices in germany are much lower yet their birth rates per woman are much much lower

westernpromise

littlegreenfrog wrote: »

The elected government is perfectly entitled to change the rules about what people may or may not do with their own property, or what taxes they must pay..

Sure, sure, sure. Whatever. The elected government can pick on anyone it likes. I'm just suggesting on whom I think it should pick, and how.

Oddly enough, people proposing new taxes, regulations, and state oppression always propose that they be visited on other people, and never on themselves. It always happens that the right, the moral, the fair, the wise and the socially responsible thing to do to other people turns out to coincide exactly with the agenda and personal greed of the party suggesting the new taxes, regulations, and state oppression.

So I'm doing what you're doing. I'm not a tenant, I don't know any and what happens to them is a matter of indifference to me, so obviously I'm going to decide that they are the problem and they need to be penalised by the state. It's the right, the moral, the fair, the wise and the socially responsible thing to do.

Here's another suggestion for anti-tenant measures. A widely bandied statistic on rental properties is that you get 2 months' void a year. This means, if true, that at any given time one-sixth of the rented sector is empty. So at a stroke of a pen, here's the cure: it should be illegal for a tenant to vacate a property until it has been re-let. No voids, ever, by law. Huge fines on tenants who deliberately and selfishly leave a property empty.

At a stroke, I have just increased the rental supply by 17%, I have increased my income and I feel really great about myself for being piously, morally holier than someone else. A win-win, all at the expense of people I don't care about.,

So you see we can all play this game.,

westernpromise

Jason74 wrote: »

Generally speaking, I would agree with you. If you have a collection of cars, fine art, watches, pianos or suits (for a few examples), what you do with those is absolutely nothing to do with the state, and as long as you are not asking the state for support ,it should basically leave you to do whatever you please with those assets.

But whether people like it or not, housing is unlike almost any other owned possession, because it has two qualities that, when taken together, make it pretty much unique. Those qualities are (1) it is essential for human life and (2) there is a shortage of it relative to need. Because of that combination, it is absolutely right that there should be a certain amount of Government influence regarding how that resource is used.

Of course, once you (in the generic sense, I acknowledge that you personally accept no such thing) get into the realm of accepting that Government should have an influence in how residential property is used, there does then become the issue of degree. Your deliberately absurd example illustrates very well that left unchecked, government interference could produce some very silly and undesirable outcomes.

But I personally think that at present, there is remarkably little government intervention in housing given the issues that we currently face. For me, the growth in BTL, along with the decline in social housing, is certainly a big part of the problem around UK housing. With that in mind, for me, the tax changes around BTL are not "a nonsense tax that is not in the tenants interest, and needs to be cast aside". They are a good start.

But what you're doing, Jason, is conflating the right to shelter with the right to own. They aren't the same. Nobody is entitled to buy a home.

I'd also question that there's a shortage. If this were so, there would be people sleeping on the streets in their millions. There aren't. Whether the ownership is by a landlord or an owner, the supply of shelter is the same, except that property rented out tends to shelter more people. That suggests we need fewer owner occupiers, not more. We should impose swingeing taxes on owner-occupiers as greedy, selfish house-hogs, and we should give tax breaks to encourage landlordism.

Much of what is wrong with housing is, IMHO, because there is too much state interference,m not too little.

westernpromise

littlegreenfrog wrote: »

This type of policy shift would make potential homebuyers out of people who are currently condemned to rent indefinitely because they have been priced out by investors. These are often people with decent jobs who aren't eligible for social housing or any kind of benefits. Currently not rich enough to be able to afford to buy, and not poor enough to qualify for any kind of state support.

Clearly it is always going to be very difficult for people earning the minimum wage to buy their own property, especially if they live in a more expensive part of the country. And we are always going to need cleaners and shop assistants in London and Surrey.

Everyone should have the right to a secure and stable home. Home ownership should be realistically achievable for anyone earning a decent wage, and people who are on very low incomes should be supported in other ways, for example, by building more social housing.

So basically you favour things that will assist middle class professionals like yourself and people you know. You and your mates are entitled to special state assistance to expropriate people you dislike to your personal advantage.

Poor people, on the other hand, should just accept that the likes of themselves have no right or expectation ever to buy, and can just go hang, lump it, whatever, and die poor.

Jason74

westernpromise wrote: »

But what you're doing, Jason, is conflating the right to shelter with the right to own. They aren't the same. Nobody is entitled to buy a home.

I'd also question that there's a shortage. If this were so, there would be people sleeping on the streets in their millions. There aren't. Whether the ownership is by a landlord or an owner, the supply of shelter is the same, except that property rented out tends to shelter more people. That suggests we need fewer owner occupiers, not more. We should impose swingeing taxes on owner-occupiers as greedy, selfish house-hogs, and we should give tax breaks to encourage landlordism.

Much of what is wrong with housing is, IMHO, because there is too much state interference,m not too little.

Thanks for the considered reply. We come at this from very different starting points, so I doubt we'll find much common ground. But the reasonable response (something all to often lacking on here) deserves the courtesy of an honest reply so here goes.

I'm not confusing the right to shelter with the right to buy a home. However, I do believe in the idea of a (for want of a better term) social contract, whereby those who go out and attempt to do the right thing gain certain reward for doing so. And part of that reward is a secure home. That doesn't have to mean home ownership (although the more people who own their home the better imho, for a whole host of reasons). But it does mean a far better deal than that offered by the private rented sector.

Broadly speaking, I believe that everyone who works full time should be able to access either home ownership, or a rented home that meets their needs (and here the emphasis is on needs rather than wants) on a model broadly based on traditional council tenancies (ie, with truly affordable rent full security of tenure). For me, this is as much an obligation of government as providing a police force and making sure that every child has a place at a decent school.

What is clear, is that we're both a long way from that situation, and moving further from it. Where we part company of course, is that I see that as a problem and you don't. But for me, Government action is absolutely required to reverse that trend. Top of my list of actions to rectify the issue would be large scale public sector housebuilding both for ownership and secure rent. But it's also very clear to me that BTL is part of the problem, so actions to limit this through the tax system are imho a clearly and unambiguously good thing.

CLAPTON

Jason74 wrote: »

T


But it's also very clear to me that BTL is part of the problem, so actions to limit this through the tax system are imho a clearly and unambiguously good thing.

Given we don't have a massive public sector building program, private renting is essential and will continue to be essential for some considerable time.

It would seem reasonable to assume that if private landlord are discouraged and there was a net transfer of properties from rental to OO, then the situation of OOs would be better but at the price that renters would be much worse.

Is that a price worth paying (until the public sector builds)?

littlegreenfrog_2

westernpromise wrote: »

Sure, sure, sure. Whatever. The elected government can pick on anyone it likes. I'm just suggesting on whom I think it should pick, and how.

Oddly enough, people proposing new taxes, regulations, and state oppression always propose that they be visited on other people, and never on themselves.

Yes, that's quite clear, from your post.

westernpromise wrote: »

It always happens that the right, the moral, the fair, the wise and the socially responsible thing to do to other people turns out to coincide exactly with the agenda and personal greed of the party suggesting the new taxes, regulations, and state oppression.

Indeed. My personal agenda is that I believe that people who work hard, find gainful employment, pay their taxes and save what they can each month to give themselves a better future should be encouraged. They should be able to afford to buy themselves a modicum of financial security, which is what home ownership does. As long as you make your mortgage repayments, you can do whatever you like in your own home, no one can force you to move house if you don't want to, and by the time you retire you hopefully own the place outright and can survive on a much smaller income. Renting gives you none of that. If we are getting to a point where property ownership is out of reach for anyone below a certain age unless they are helped out by family, what incentive is there to work hard and better yourself? Very little.

Your personal agenda appears to be that you would like to enjoy your personal wealth and watch it increase in value. Any government policy aimed at sharing some of that wealth around so others can enjoy the prosperity you currently enjoy is anathema to you.

Morality does not exist in a vacuum, and I'm going to go out on a limb here and say I think my agenda is fairer than yours and most people would agree with me.

westernpromise wrote: »

So I'm doing what you're doing. I'm not a tenant, I don't know any and what happens to them is a matter of indifference to me, so obviously I'm going to decide that they are the problem and they need to be penalised by the state. It's the right, the moral, the fair, the wise and the socially responsible thing to do.

Here's another suggestion for anti-tenant measures. A widely bandied statistic on rental properties is that you get 2 months' void a year. This means, if true, that at any given time one-sixth of the rented sector is empty. So at a stroke of a pen, here's the cure: it should be illegal for a tenant to vacate a property until it has been re-let. No voids, ever, by law. Huge fines on tenants who deliberately and selfishly leave a property empty.

At a stroke, I have just increased the rental supply by 17%, I have increased my income and I feel really great about myself for being piously, morally holier than someone else. A win-win, all at the expense of people I don't care about.,

So you see we can all play this game.,

The fact that you see this as a game is very telling. As is the fact that you are inventing absurd examples such as the one you have given above to justify why you think government intervention is A BAD thing.

westernpromise wrote: »

But what you're doing, Jason, is conflating the right to shelter with the right to own. They aren't the same. Nobody is entitled to buy a home.

Why not? There should be some reward for working hard and bettering yourself. Why should young people like me lose a large chunk of their income at source (I pay 40% tax on the top slice of my salary, plus 9% towards my student loan) to pay for, among other things, healthcare for the baby boomers, then lose another large chunk of their income every month to pay off their landlord's mortgage, only to live in poverty when they eventually retire because they were priced out of the property market by greedy investors?

westernpromise wrote: »

I'd also question that there's a shortage. If this were so, there would be people sleeping on the streets in their millions. There aren't. Whether the ownership is by a landlord or an owner, the supply of shelter is the same, except that property rented out tends to shelter more people. That suggests we need fewer owner occupiers, not more. We should impose swingeing taxes on owner-occupiers as greedy, selfish house-hogs, and we should give tax breaks to encourage landlordism.

It's not just about shelter, it's about financial security. Properties exist, it's just that the ownership of those properties is concentrated among too few people.

westernpromise wrote: »

Much of what is wrong with housing is, IMHO, because there is too much state interference,m not too little.

There is very little state interference in the housing market in this country. That's a ridiculous thing to say.

westernpromise wrote: »

So basically you favour things that will assist middle class professionals like yourself and people you know. You and your mates are entitled to special state assistance to expropriate people you dislike to your personal advantage.

Poor people, on the other hand, should just accept that the likes of themselves have no right or expectation ever to buy, and can just go hang, lump it, whatever, and die poor.

As somebody who clearly takes an extremely non-interventionist approach, you would presumably be the first to agree that we cannot make houses in London and the home counties cheap enough for people who work as cleaners and shop assistants to be able to buy. As I clearly said, I think there should be more government support for people on low incomes to enable them to have a stable home. But I also think that people who get on in life, get good jobs and pay high taxes should be able to buy. Otherwise there is no incentive to better your financial situation.

CLAPTON

I see that the guardian reports that Haringey Council has launched an online letting agency for private sector letting.

http://www.theguardian.com/money/2016/mar/10/london-council-launches-letting-agency-for-private-renters

Seems that one time fees will be 180 plus 72 (credit checks) with no renewal fees.

early day yet but it will be interesting if it takes off

cells

Jason74 wrote: »

Thanks for the considered reply. We come at this from very different starting points, so I doubt we'll find much common ground. But the reasonable response (something all to often lacking on here) deserves the courtesy of an honest reply so here goes.

I'm not confusing the right to shelter with the right to buy a home. However, I do believe in the idea of a (for want of a better term) social contract, whereby those who go out and attempt to do the right thing gain certain reward for doing so. And part of that reward is a secure home. That doesn't have to mean home ownership (although the more people who own their home the better imho, for a whole host of reasons). But it does mean a far better deal than that offered by the private rented sector.

Broadly speaking, I believe that everyone who works full time should be able to access either home ownership, or a rented home that meets their needs (and here the emphasis is on needs rather than wants) on a model broadly based on traditional council tenancies (ie, with truly affordable rent full security of tenure). For me, this is as much an obligation of government as providing a police force and making sure that every child has a place at a decent school.

What is clear, is that we're both a long way from that situation, and moving further from it. Where we part company of course, is that I see that as a problem and you don't. But for me, Government action is absolutely required to reverse that trend. Top of my list of actions to rectify the issue would be large scale public sector housebuilding both for ownership and secure rent. But it's also very clear to me that BTL is part of the problem, so actions to limit this through the tax system are imho a clearly and unambiguously good thing.

Half the country is affordable for a couple on minimum wage

About half that remains is affordable for a couple on median full time wage.

That leaves about 25% of the stock which goes to those in higher than average wages and of course the top 5-10% of homes go to those that are in the high wealth group irrespective of their income.

So problems are not national but confined to certain local area. Those that think its a national problem think that they should be able to buy the better than average home on less than the average income by just themselves rather than as a couple.


Also regarding renting. In about half the country rents are close to social rents. Eg in the midlands a 3 bed terrace can be rented for £600 per month. That night be marginally higher than a council tenancy but then again your not in the middle of a bug council estate and the landlord pays invoem and capital taxes while the social sector does not