Right to buy tenant plan to cost LLs £50 Billion

Cakeguts

Green_Bear wrote: »

I agree with all this.
I too remember this situation in the 1970s.
The supply of private rental property for tenants was much less than today and it was worse quality.

BUT there were fewer prospective private tenants looking.
However, those prospective tenants did have less choice - as the total market was smaller.

It was harder for (usually young, single) people moving to a new town to find a place to rent as a tenant. However, there were more lodging houses and guest houses, where the landlady provided meals sometimes. People often stayed in these places until they got married and either bought a house or got a council tenancy.
Or (what is often forgotten these days) the family would get social housing via the husband's public sector employer (eg police housing, water board housing etc). This was often reserved for married men with families. Single men stayed in lodgings.

BUT what was less common back in the 1970s, was families forced into private renting, when they wanted to buy or have council housing.

It was a different situation back then. Family life and employment was more settled. There wasn't the same demand for council housing from single parents, as divorce was less common. Council housing was for respectable working families - not junkies and ex prisoners.

Overall, I would say things were better in the 1970s. Despite the fact that the small amount of private sector rental property for tenants (rather than lodgers) was of poor quality.

My father worked in local government and at that time if you got a promotion you generally had to move area. In the 1960s when they moved to the area where I was brought up (see I am old) there were 5 what we would now call family sized houses on the market for sale in the whole area. One of those was in a bad state with dry rot. People forget how little property there was available for sale. Even if you wanted to buy somewhere often there was nothing available. People either rented from their employers, stayed at home or got a council flat. Council flats were for retired people or families. Single people could get them if they were relocating to work in a job like teaching and they couldn't find anything to rent privately which was normal there wasn't anything to rent privately. Single mothers had to stay at home with their parents. More people rented then than they do now. It is just that now the type of property they rent has changed. Instead of renting from the council or their employers they rent from a private landlord or build to rent company. Now there is more choice of rental property.



I would say that the difference between then and now is that people who thought that they might want to buy were forced into council housing or they bought what it is now considered first time buyer's housing and stayed in it and never moved. Children shared bedrooms that was normal. Only the children of extremely wealthy families did not share a bedroom. There have been posts on here quite recently where people have thought that children should not be expected to share a bedroom.



You can't have boarding houses now because of the HMO situation. By introducing all the red tape that goes with HMOs the governments since the 1960s and 1970s have caused rents to become much higher in shared accommodation. A landlady cooking for boarders now would have lodgers and too many of those would turn her accommodation into an HMO or a B&B with the same problem.



If there was enough social housing there would be no need for anyone wanting a council house to live in private rentals unless of course they had been evicted from social housing. There seems to be quite a large number of people evicted from social housing each year now.



One of the areas we let in always has large numbers of vacant houses on the market at anyone time and there are houses that two people earning minimum wage could afford, so it isn't true that people are being forced to privately rent when they want to buy in all areas. In most of the country there isn't a shortage of affordable first time buyers property. What there is a shortage of is aspirational first time buyers property with large fitted kitchens and enough bedrooms so that the children don't have to share. But that hasn't changed just the sense of entitlement has. Many young people these days don't think that they should go without anything. That is why debt not including student loans is highest amonst the young.



There was an article on the BBC recently about fashion and the suggestion that young people should not buy clothes that they could not see lasting for 7 wears. 7 wears not 7 washings. What a waste of money and resources and where do they get their ideas that everything has to be available now and is disposable? Apparently the UK throws away more clothes than any other country in Europe. I wouldn't buy anything that I couldn't get several years worth of wears out of.

MobileSaver

Green_Bear wrote: »

I don't think HMRC would class many small time LLs as running as business. Hence s24.

On the contrary, HMRC see LLs very much as running a business and a profitable one at that which is why s24 ensures that the treasury gets what it considers its fair share of that profit in tax.

Green_Bear wrote: »

I would be very surprised if hypothetical future profits were compensated for.

I would be very surprised too which is why I think forced sales will never happen.

Green_Bear

Cakeguts wrote: »

My father worked in local government and at that time if you got a promotion you generally had to move area. In the 1960s when they moved to the area where I was brought up (see I am old) there were 5 what we would now call family sized houses on the market for sale in the whole area. One of those was in a bad state with dry rot. People forget how little property there was available for sale. Even if you wanted to buy somewhere often there was nothing available. People either rented from their employers, stayed at home or got a council flat. Council flats were for retired people or families. Single people could get them if they were relocating to work in a job like teaching and they couldn't find anything to rent privately which was normal there wasn't anything to rent privately. Single mothers had to stay at home with their parents. More people rented then than they do now. It is just that now the type of property they rent has changed. Instead of renting from the council or their employers they rent from a private landlord or build to rent company. Now there is more choice of rental property.



I would say that the difference between then and now is that people who thought that they might want to buy were forced into council housing or they bought what it is now considered first time buyer's housing and stayed in it and never moved. Children shared bedrooms that was normal. Only the children of extremely wealthy families did not share a bedroom. There have been posts on here quite recently where people have thought that children should not be expected to share a bedroom.



You can't have boarding houses now because of the HMO situation. By introducing all the red tape that goes with HMOs the governments since the 1960s and 1970s have caused rents to become much higher in shared accommodation. A landlady cooking for boarders now would have lodgers and too many of those would turn her accommodation into an HMO or a B&B with the same problem.



If there was enough social housing there would be no need for anyone wanting a council house to live in private rentals unless of course they had been evicted from social housing. There seems to be quite a large number of people evicted from social housing each year now.



One of the areas we let in always has large numbers of vacant houses on the market at anyone time and there are houses that two people earning minimum wage could afford, so it isn't true that people are being forced to privately rent when they want to buy in all areas. In most of the country there isn't a shortage of affordable first time buyers property. What there is a shortage of is aspirational first time buyers property with large fitted kitchens and enough bedrooms so that the children don't have to share. But that hasn't changed just the sense of entitlement has. Many young people these days don't think that they should go without anything. That is why debt not including student loans is highest amonst the young.



There was an article on the BBC recently about fashion and the suggestion that young people should not buy clothes that they could not see lasting for 7 wears. 7 wears not 7 washings. What a waste of money and resources and where do they get their ideas that everything has to be available now and is disposable? Apparently the UK throws away more clothes than any other country in Europe. I wouldn't buy anything that I couldn't get several years worth of wears out of.

A lot of my clothes are more than 7 YEARS old.

I agree with all your post.
I don't know what the regulations were for B&B back in the 1960s and 70s.
I would certainly say the lodging / guest houses were more like what we would today call B&B.
I knew people who lived in them and were quite happy. Probably because they got evening meal and cleaning etc included. I don't remember the rent being that expensive. Certainly the guys who lived there had enough left over for beer.

I also seem to remember that most guest houses were either for male or female guests. I don't know if that was some kind of law, or just a social thing.

I think the main difference compared to today, is that back then a married couple would generally own one guesthouse, live in it and treat it as their own home and business. Running a guesthouse was generally a full time job - at least for the wife. If this is the case, the owner can probably cope with the red tape and costs involved.

It wasn't like today, where you get people trying to buy lots of HMOs (with debt), but not live in any of them and try and get rich from rent alone. Often these HMO rooms get filled with junkies etc and it doesn't go quite how the landlord intended.

Cakeguts

In one of the areas where we have rental property there is at least one gas engineer who makes his entire living from doing gas certificates for rental properties. There are also people who maintain rented houses and gardeners all earning a living from rented property. These people can't make a living from owner occupiers because in terms of gas certificates owner occupiers often do not have their gas appliances serviced every year. They don't employ as many gardeners and they don't employ as many property maintenance people. Not to mention the cleaning companies that clean between lets. There are a lot of people working in the private rental industry who are going to lose their jobs. A lot will go when the section 21 situation is brought in. That will cause the first wave of landlords to sell up. What is in danger of being lost are all the decent properties as well as the job losses. All because of meddling by governments in something that is not broken.



People who are using rental property as a pension cannot risk the loss of section 21 and the back door introduction of security of tenure and rent controls so they will have to sell up. HMOs don't have a problem because who wants security of tenure of one room in a shared house? Rent controls would be more of a problem because they good landlords of HMOs will get out.



Whatever happens now there will be a mass sell off of good quality rental property because neither Labour or the Tories are interested in providing good quality rental housing they are both trying to buy votes at the expense of tenants.

Chrysalis

Green_Bear wrote: »

I think BTL probably peaked about 2 years ago. Certainly for the small time amateur landlord, holding in their own name.

John McDonall seemed quite adamant during his interview with Andrew Marr, that landlords would not lose money, under this proposed RTB.
I suspect what he meant was something along the lines of the tenant having the right to buy the house at the price the landlord originally paid. Probably minus any significant improvement costs. I wouldn't be surprised if it gets mixed in with CGT for the LL in some way too.

Interestingly, this new private RTB idea actually originated from a Conservative Party type 'think tank' / policy group.

I expect (at least early on) he is right in terms of house value.

But by lost money I mostly meant lost profits on rents. If you no longer renting your property out (or having to charge less due to a regressing market) then you losing money. If the government guaranteed sale price, that would be a "partial" form of compensation, it prevents the negative equity tho.

This market is not long term sustainable, alone the government is spending 10s of billions each year on housing benefits. Even ignoring those who use benefits to subsidise rent, its becoming increasing unaffordable for people to pay market rate rents.

So your information that it peaked a couple of years ago wouldnt surprise me either, as I dont think its sustainable. The demand is sustainable but the affordability isnt.

Cakeguts

Green_Bear wrote: »

A lot of my clothes are more than 7 YEARS old.

I agree with all your post.
I don't know what the regulations were for B&B back in the 1960s and 70s.
I would certainly say the lodging / guest houses were more like what we would today call B&B.
I knew people who lived in them and were quite happy. Probably because they got evening meal and cleaning etc included. I don't remember the rent being that expensive. Certainly the guys who lived there had enough left over for beer.

I also seem to remember that most guest houses were either for male or female guests. I don't know if that was some kind of law, or just a social thing.

I think the main difference compared to today, is that back then a married couple would generally own one guesthouse, live in it and treat it as their own home and business. Running a guesthouse was generally a full time job - at least for the wife. If this is the case, the owner can probably cope with the red tape and costs involved.

It wasn't like today, where you get people trying to buy lots of HMOs (with debt), but not live in any of them and try and get rich from rent alone. Often these HMO rooms get filled with junkies etc and it doesn't go quite how the landlord intended.

Looking into the future we are going to get a return to that rental situation minus the boarding houses and council housing. The removal of S21 and assured shorthold tenancies makes rent controls and security of tenure much easier to achieve. So the junkies etc who can't buy and the people who have been evicted from social housing are going to get security of tenure. The very people who no one wants to live next to and who have been evicted from social housing are going to get security of tenure and rent controls in private housing. Now who is going to deal with that? How is a private landlord going to get evidence to evict an anti social tenant when the rents are so low that they can only just get enough to maintain the house? This is what rent controls and security of tenure lead to. I feel very sorry for the neighbours in poor areas because they are going to get all these anti social people living near them.



If you think there aren't enough affordable first time buyers houses now think of what it would be like if all the affordable and cheap property is cheap because it is in areas where anti social people and junkies are being housed at controlled rents with security of tenure.

Chrysalis

Cakeguts wrote: »

Looking into the future we are going to get a return to that rental situation minus the boarding houses and council housing. The removal of S21 and assured shorthold tenancies makes rent controls and security of tenure much easier to achieve. So the junkies etc who can't buy and the people who have been evicted from social housing are going to get security of tenure. The very people who no one wants to live next to and who have been evicted from social housing are going to get security of tenure and rent controls in private housing. Now who is going to deal with that? How is a private landlord going to get evidence to evict an anti social tenant when the rents are so low that they can only just get enough to maintain the house? This is what rent controls and security of tenure lead to. I feel very sorry for the neighbours in poor areas because they are going to get all these anti social people living near them.



If you think there aren't enough affordable first time buyers houses now think of what it would be like if all the affordable and cheap property is cheap because it is in areas where anti social people and junkies are being housed at controlled rents with security of tenure.

Thats a lot of prejudice in one post.

It makes an assumption that everyone who cant buy is an evicted social tenant or at least an anti social behaviour type person.

Green_Bear

Cakeguts wrote: »

In one of the areas where we have rental property there is at least one gas engineer who makes his entire living from doing gas certificates for rental properties. There are also people who maintain rented houses and gardeners all earning a living from rented property. These people can't make a living from owner occupiers because in terms of gas certificates owner occupiers often do not have their gas appliances serviced every year. They don't employ as many gardeners and they don't employ as many property maintenance people. Not to mention the cleaning companies that clean between lets. There are a lot of people working in the private rental industry who are going to lose their jobs. A lot will go when the section 21 situation is brought in. That will cause the first wave of landlords to sell up. What is in danger of being lost are all the decent properties as well as the job losses. All because of meddling by governments in something that is not broken.



People who are using rental property as a pension cannot risk the loss of section 21 and the back door introduction of security of tenure and rent controls so they will have to sell up. HMOs don't have a problem because who wants security of tenure of one room in a shared house? Rent controls would be more of a problem because they good landlords of HMOs will get out.



Whatever happens now there will be a mass sell off of good quality rental property because neither Labour or the Tories are interested in providing good quality rental housing they are both trying to buy votes at the expense of tenants.

Agreed, there are some services only required by landlords. But they are a small proportion. In general, FTB owner occupiers tend to spend more on their new homes than BTL landlords. FTBs see it less in business terms. A bit like fancy weddings or flash cars. Not a good financial case to be made for those things, but people still spend.

FTBs are also more likely to want to alter their garden to their own personal preference - so that increases work for gardeners. I've never known any BTL employ a gardener to maintain a garden. Most just put down a patio or concrete and leave it as low maintenance.

Green_Bear

Cakeguts wrote: »

Looking into the future we are going to get a return to that rental situation minus the boarding houses and council housing. The removal of S21 and assured shorthold tenancies makes rent controls and security of tenure much easier to achieve. So the junkies etc who can't buy and the people who have been evicted from social housing are going to get security of tenure. The very people who no one wants to live next to and who have been evicted from social housing are going to get security of tenure and rent controls in private housing. Now who is going to deal with that? How is a private landlord going to get evidence to evict an anti social tenant when the rents are so low that they can only just get enough to maintain the house? This is what rent controls and security of tenure lead to. I feel very sorry for the neighbours in poor areas because they are going to get all these anti social people living near them.



If you think there aren't enough affordable first time buyers houses now think of what it would be like if all the affordable and cheap property is cheap because it is in areas where anti social people and junkies are being housed at controlled rents with security of tenure.

If the junkies were bad enough for the courts to evict them from social housing, then they'll probably be willing to evict them from private rental. Unless you predict the govt will make security of tenure for private tenants greater than that for council tenants?

The reason social landlords evict so many anti-social tenants, is because the govt rules force them to prioritise them for housing in the first place.

When council housing was first built, it was allocated for all respectable workers for life (including RMT Union officials) to provide stable communities. It wasn't allocated to junkies and ex-prisoners. They went to Mr Rachman.

Green_Bear

Cakeguts wrote: »

Looking into the future we are going to get a return to that rental situation minus the boarding houses and council housing. The removal of S21 and assured shorthold tenancies makes rent controls and security of tenure much easier to achieve. So the junkies etc who can't buy and the people who have been evicted from social housing are going to get security of tenure. The very people who no one wants to live next to and who have been evicted from social housing are going to get security of tenure and rent controls in private housing. Now who is going to deal with that? How is a private landlord going to get evidence to evict an anti social tenant when the rents are so low that they can only just get enough to maintain the house? This is what rent controls and security of tenure lead to. I feel very sorry for the neighbours in poor areas because they are going to get all these anti social people living near them.



If you think there aren't enough affordable first time buyers houses now think of what it would be like if all the affordable and cheap property is cheap because it is in areas where anti social people and junkies are being housed at controlled rents with security of tenure.

Why would private landlords be giving junkies security of tenure?
Unless the landlords get caught out by a sudden law change.
I would expect the junkies to end up in hostels etc with a license to occupy, rather than a tenancy.
That's all any private LL in their right mind should be offering them now, in my opinion.