Right to buy on privately rented homes

Green_Bear

DannyGold wrote: »

As long as the LL had at least 25% equity then it will be fine he will just lose that.

If the tenant has a legal right to buy the place at 75% market value and the LL didn’t even have 25% equity in it, then the sale would go through and the previous owner would be on the hook to the bank for the loss.

But the bank would probably never recover this money. So in likelihood the bank would take a hit.
That said, it's probably possible.
Someone's loss (the bank shareholder) is someone's gain (the new home owner).
Happens all the time. Probably small fry in the greater scheme of things.

Green_Bear

DannyGold wrote: »

Yes the effects are being seen already, and it’s only really been a few days.

Wait until all the financial newsletters start scaremongering and using the story for click bait to grab attention.

Effects of foreign property investments pulling out of the UK purely on the mere mention of this proposal haven’t even filtered down the pike yet

I'm not so sure.
Why do you think the National Grid share price is holding up so well?*
I think NG is a much easier political target. Much less potential for loads of sad compo faces in the Daily Mail.

If a Hard Left UK govt was a real threat, I'd expect to see NG on a P/E of 4 and a dividend yield of 30%+

Cakeguts

Green_Bear wrote: »

I appreciate what you're saying. But I would like to make a few points:

1. Who would the 'better houses' be sold to? Presumably those who are now renting those 'better houses'? If so, those houses are not currently empty and will not be empty. So their use to 'new tenants' is nil.

2. If no one wanted to buy a house, then the price of that house would be zero. It is not zero in any areas of the UK. Hence, there cannot be any area of the UK where 'no one wants to live'.

3. A FTB is not a fixed entity. You say a FTB can afford to buy a 'better house'. But you don't consider those who are not currently wealthy enough to be classed as a potential FTB. If houses were cheap enough, those poorer people who cannot now become FTBs would become FTBs.

4. There cannot be tenants living in an area where 'no one wants to live'. Those tenants may prefer somewhere else, but by definition, they are willing to live there (as it is not a prison) and as such the house they rent has a value. If you turned up with the deeds and offered those tenants in poor housing the deeds to the house for £1, I'd be surprised if any turned you down.

5. At such low values, mortgages would become irrelevant. You don't need a mortgage for a house that costs £100 and you wouldn't get one.

If there were no landlords (including councils etc), then the only logical outcome would be everyone living in houses they own. Those houses may be in a poor condition, but that's the only logical outcome*.

Obviously, this wouldn't happen - because in reality, the price would hit a floor.
I think if rent controls come in, then property would start becoming priced like bonds. And as we've seen, you can get negative bond yields, so these houses would also hit a price floor - if based on nothing more than speculation (rather than yield).

*see Romania as an example of something similar.

You have to put the EPC of a minimum of level E for rental property into the mix and the fact that as the BBC has reported today 22% of the UK population has less than £100 in savings. If all of these people bought property because it was cheap how on earth would they be able to maintain it? No bank is going to lend on it because of the risk so if they couldn't raise the £10,000 or £15,000 it is worth now in cash then they wouldn't be able to buy it. You would get rows and rows of houses with holes in the roof. A new boiler could cost over £1000. You are also forgetting that we now have a generation or two of entitled people in the UK who are entitled to be housed up to the standard that they want to live at, at the cost of everyone else.



Then there is this. https://www.thesun.co.uk/news/9359698/britains-cheapest-street-gangs-poo/

Green_Bear

Cakeguts wrote: »

You have to put the EPC of a minimum of level E for rental property into the mix and the fact that as the BBC has reported today 22% of the UK population has less than £100 in savings. If all of these people bought property because it was cheap how on earth would they be able to maintain it? No bank is going to lend on it because of the risk so if they couldn't raise the £10,000 or £15,000 it is worth now in cash then they wouldn't be able to buy it. You would get rows and rows of houses with holes in the roof. A new boiler could cost over £1000. You are also forgetting that we now have a generation or two of entitled people in the UK who are entitled to be housed up to the standard that they want to live at, at the cost of everyone else.

1. EPC is irrelevant to a home owner. I own my own house. I've never seen an EPC in my life. My house. My bills. My problem.

2. Many probably would have trouble maintaining their homes. But I wouldn't rule out an attitude / cultural shift. Once someone owned their own home, their priorities may well change. People have managed to shelter themselves for centuries, with much less resources and tools etc. But yes, see rural Romania as an example of poor people owning their own homes.

3. Agreed. HB / LHA is a big factor complicating things here. It effectively puts a floor under property values in cheap areas (such as you linked to). There are other bureaucratic complications in the UK, such as illegal immigration rules, health and safety, business red tape etc. If you go abroad you see people just setting up food shops in the street etc. That kind of 'grass roots' business culture is impossible in the UK.

Green_Bear

Cakeguts wrote: »

You

Then there is this.

The £1 house area problems you link to has specific complications.

The council created these problems by CPO the houses and evicting the original home owning occupants. The behavioral problems are cultural - and NO British govt will ever have the will to tackle these cultural issues. I've been to dirt poor countries where that behaviour doesn't happen.

The main problem is obvious though - why haven't more residents been allowed to buy fir £1 and move in? Hardly rocket science to predict problems for only one occupied house in a derelict street.

Thrugelmir

Green_Bear wrote: »

1. EPC is irrelevant to a home owner. I own my own house. I've never seen an EPC in my life. My house. My bills. My problem.

Now one has to provided upon sale.

Thrugelmir

Green_Bear wrote: »

But the bank would probably never recover this money. So in likelihood the bank would take a hit.
That said, it's probably possible.
Someone's loss (the bank shareholder) is someone's gain (the new home owner).
Happens all the time. Probably small fry in the greater scheme of things.

RBS is effectively owned by the taxpayer already.

Green_Bear

Thrugelmir wrote: »

Now one has to provided upon sale.

Shows how long it is since I bought my house!
Who enforces that rule then? The solicitor?

I couldn't care less about an EPC if I was buying a house. I can see for myself if it's old and drafty.
More pointless paperwork.

Green_Bear

babyblade41 wrote: »

I would say 10 million renters with very few houses to buy, most private LL's would be selling at the right price well before any labour gov't come along and make them sell for a lot less

When someone sells a house, it is not usually demolished.

So if a LL sells a house prior to any new govt, who do they sell to?

Another LL? ok - so still another house available to let. No change for the 10 million tenants.

An owner occupier, moving from their previous house? ok - so now their old house is empty. No change.

Someone previously renting? Well, now that's one less tenant. So that's 9,999,999 tenants looking for the same number of houses -1.

DannyGold

Cakeguts wrote: »

Not to mention the funds being used for build to rent projects.

Yes this is going to be huge