first-time buyers to get 20%

[JagLover]

Hackney said:

Don't buy a car on finance/lease - I have to, I need it for my job. Putting 20,000 on an old banger is a recipe for losing my job frankly.
Don't get the latest smart phone - new iPhone, £185. Selling old iPhone £145. Yep, that's made all the difference. My London flat edges ever closer....
Cut the gym and run in a park instead - I'm not a member of a gym
Don't go up the pub and restaurants etc - we don't, nowhere near as much as we did. We're having a baby in Feb so saving money for that.

I'm 42 so above the "young" threshold for CMD's frankly idiotic plans to help first time buyers. I'm not one to use the term discrimination lightly but why give all this so-called help to 40 year olds and not first time buyers above that age?

Yep

Many people need to commute serious distances for their jobs these days. A reasonable new, reliable, car is often a necessity rather than a luxury.

[Sir Humphrey]

s1962a said:

Why not try and fix the actual issue, which is the use of houses as an investment tool rather than for people to live in?

I propose a land tax on each and every property in the UK per year. Something equivalent to the council tax on a property, with no exceptions on who the owner of the property is (private or company). If the property is your main home you get 100% rebate. The money resulting in this to be used to build new homes and for social housing.

If you want to be in the buy to let business, then be prepared to pay a land tax that compensates the state for taking away property that could have been bought be someone as a private home to live in.

How are houses used as an investment tool if it doesn't involve people living in them?

[crankedup]

s1962a said:

Why not try and fix the actual issue, which is the use of houses as an investment tool rather than for people to live in?

I propose a land tax on each and every property in the UK per year. Something equivalent to the council tax on a property, with no exceptions on who the owner of the property is (private or company). If the property is your main home you get 100% rebate. The money resulting in this to be used to build new homes and for social housing.

If you want to be in the buy to let business, then be prepared to pay a land tax that compensates the state for taking away property that could have been bought be someone as a private home to live in.

This will lead to yet more red tape and bureaucratic costs together with an increase in rents that would nullify, for the landlord the tax suggested.

[crankedup]

Sir Humphrey said:

s1962a said:

Why not try and fix the actual issue, which is the use of houses as an investment tool rather than for people to live in?

I propose a land tax on each and every property in the UK per year. Something equivalent to the council tax on a property, with no exceptions on who the owner of the property is (private or company). If the property is your main home you get 100% rebate. The money resulting in this to be used to build new homes and for social housing.

If you want to be in the buy to let business, then be prepared to pay a land tax that compensates the state for taking away property that could have been bought be someone as a private home to live in.

How are houses used as an investment tool if it doesn't involve people living in them?

Capitol appreciation together with the use of a ghost occupant.

[vonuber]

I wonder if a redistribution of the economic weight of the country more equally around the country would help? Maybe shift parliament to Birmingham..

[s1962a]

crankedup said:

Sir Humphrey said:

s1962a said:

Why not try and fix the actual issue, which is the use of houses as an investment tool rather than for people to live in?

I propose a land tax on each and every property in the UK per year. Something equivalent to the council tax on a property, with no exceptions on who the owner of the property is (private or company). If the property is your main home you get 100% rebate. The money resulting in this to be used to build new homes and for social housing.

If you want to be in the buy to let business, then be prepared to pay a land tax that compensates the state for taking away property that could have been bought be someone as a private home to live in.

How are houses used as an investment tool if it doesn't involve people living in them?

Capitol appreciation together with the use of a ghost occupant.

Example:-

Person buys house in London in early 2000's for 100k. Now house is worth around £400k and nets £2k a month as a rental. Mortgage (assuming I/O only from the start) is £75k so the difference between £2k and monthly mortgage is profit (subject to income tax). Now assume this property is owned by a company, so instead of income tax it gets treated as an asset and company tax comes into force.

Nothing wrong with that you might say? That house is now not available for anyone else to buy, so due to the owner taking it out of private-main-home ownership, there should be an annual land tax applicable.

[s1962a]

crankedup said:

s1962a said:

Why not try and fix the actual issue, which is the use of houses as an investment tool rather than for people to live in?

I propose a land tax on each and every property in the UK per year. Something equivalent to the council tax on a property, with no exceptions on who the owner of the property is (private or company). If the property is your main home you get 100% rebate. The money resulting in this to be used to build new homes and for social housing.

If you want to be in the buy to let business, then be prepared to pay a land tax that compensates the state for taking away property that could have been bought be someone as a private home to live in.

This will lead to yet more red tape and bureaucratic costs together with an increase in rents that would nullify, for the landlord the tax suggested.

Increase in red tape and costs? how exactly? The land registry knows exactly who owns what so knows who is liable, and a charge can be put on the property if the owner fails to pay the annual tax.

As for increased rents - it will also make Buy to lets a bit less attractive as an investment vehicle, so might have an effect of increasing supply of homes for sale, thus possibly making them more affordable for people who want to live in them as a main home.

[anonymous-user]

s1962a said:

Why not try and fix the actual issue, which is the use of houses as an investment tool rather than for people to live in?

Because that is not the issue. The vast majority of people still buy a house to live in it.

The whole situation is really very simple, it's called supply and demand. If you want lower house prices either decrease demand, which is not going to happen, or increase supply. All these stupid schemes to 'make houses more affordable' will only ever increase demand.

[Sir Humphrey]

s1962a said:

Example:-

Person buys house in London in early 2000's for 100k. Now house is worth around £400k and nets £2k a month as a rental. Mortgage (assuming I/O only from the start) is £75k so the difference between £2k and monthly mortgage is profit (subject to income tax). Now assume this property is owned by a company, so instead of income tax it gets treated as an asset and company tax comes into force.

Nothing wrong with that you might say? That house is now not available for anyone else to buy, so due to the owner taking it out of private-main-home ownership, there should be an annual land tax applicable.

So somebody does live in it?

[s1962a]

fblm said:

s1962a said:

Why not try and fix the actual issue, which is the use of houses as an investment tool rather than for people to live in?

Because that is not the issue. The vast majority of people still buy a house to live in it.

The whole situation is really very simple, it's called supply and demand. If you want lower house prices either decrease demand, which is not going to happen, or increase supply. All these stupid schemes to 'make houses more affordable' will only ever increase demand.

If a landlord owns 10 houses in a street, and then rents them out, wouldn't you agree then there are 10 houses that are not available for people to buy?

[s1962a]

Sir Humphrey said:

s1962a said:

Example:-

Person buys house in London in early 2000's for 100k. Now house is worth around £400k and nets £2k a month as a rental. Mortgage (assuming I/O only from the start) is £75k so the difference between £2k and monthly mortgage is profit (subject to income tax). Now assume this property is owned by a company, so instead of income tax it gets treated as an asset and company tax comes into force.

Nothing wrong with that you might say? That house is now not available for anyone else to buy, so due to the owner taking it out of private-main-home ownership, there should be an annual land tax applicable.

So somebody does live in it?

Yes, they rent it from the landlord. If the landlord sold that house then someone could buy it as their main home, and hence get their foot on the property ladder - and most likely pay less in monthly mortgage repayments than they would in rent (assuming they already have the initial deposit).

[crankedup]

s1962a said:

crankedup said:

s1962a said:

Why not try and fix the actual issue, which is the use of houses as an investment tool rather than for people to live in?

I propose a land tax on each and every property in the UK per year. Something equivalent to the council tax on a property, with no exceptions on who the owner of the property is (private or company). If the property is your main home you get 100% rebate. The money resulting in this to be used to build new homes and for social housing.

If you want to be in the buy to let business, then be prepared to pay a land tax that compensates the state for taking away property that could have been bought be someone as a private home to live in.

This will lead to yet more red tape and bureaucratic costs together with an increase in rents that would nullify, for the landlord the tax suggested.

Increase in red tape and costs? how exactly? The land registry knows exactly who owns what so knows who is liable, and a charge can be put on the property if the owner fails to pay the annual tax.

As for increased rents - it will also make Buy to lets a bit less attractive as an investment vehicle, so might have an effect of increasing supply of homes for sale, thus possibly making them more affordable for people who want to live in them as a main home.

Whichever way you cut it any new taxation brings with it new bureaucracy and associated costs in administration of the tax. The land registry is continually changing with house sales ongoing therefore not a reliable source for BTL ownership information. If we make BTL more expensive those additional land tax costs rolled across from the landlord to tenant would need to be unrealistically high for tenants to suddenly be able to purchase their home on the back of the tax/increased rent.

Personally I see the downfall in housing shortage and high prices of existing stock down to the past Government policies over the last 3 or 4 decades. The only democratic way to satisfy housing demand is to up the annual new build rates and for Government to provide for much more new build in social housing. Neither will happen of course.

[anonymous-user]

s1962a said:

fblm said:

s1962a said:

Why not try and fix the actual issue, which is the use of houses as an investment tool rather than for people to live in?

Because that is not the issue. The vast majority of people still buy a house to live in it.

The whole situation is really very simple, it's called supply and demand. If you want lower house prices either decrease demand, which is not going to happen, or increase supply. All these stupid schemes to 'make houses more affordable' will only ever increase demand.

If a landlord owns 10 houses in a street, and then rents them out, wouldn't you agree then there are 10 houses that are not available for people to buy?

Agreed. How is that different to 10 houses in a street owner occupied, wouldn't you agree then there are 10 houses that are not available for people to buy? What difference does it make to the value of a house if the person living in a house owns it, the bank owns it or a landlord owns it?

Supply and demand. Reduce demand or build more, prices will come down, job done.

[crankedup]

fblm said:

s1962a said:

Why not try and fix the actual issue, which is the use of houses as an investment tool rather than for people to live in?

Because that is not the issue. The vast majority of people still buy a house to live in it.

The whole situation is really very simple, it's called supply and demand. If you want lower house prices either decrease demand, which is not going to happen, or increase supply. All these stupid schemes to 'make houses more affordable' will only ever increase demand.

Completely agree, but Governments are getting themselves into an increasingly larger hole during every Parliament. They simply have to be seen to respond to the cry's of those who are 'unable to buy a home'. Only way they can be seen to do this is what we witness, provide subsidies courtesy of the tax payer or order builders to build more, which of course they cannot do so. Its a lose lose for Government for those few lucky enough to be able to take advantage of any such subsidy scheme there will be many more who do not qualify for same.

[ATG]

economicpygmy said:

Whats the overall cost to soceity of so much wealth being tied up servicing debt?

This point seems to get so little attention, yet seems to me to be so utterly fundamental.

[turbobloke]

fblm said:

Supply and demand. Reduce demand or build more, prices will come down, job done.

Exactly.

Except in parts of London where building more isn't an option and different demand sources apply.

[Sir Humphrey]

s1962a said:

Yes, they rent it from the landlord. If the landlord sold that house then someone could buy it as their main home, and hence get their foot on the property ladder - and most likely pay less in monthly mortgage repayments than they would in rent (assuming they already have the initial deposit).

The point I was replying to was that there is a "ghost occupant" - i.e. nobody lives there.

Why are people so obsessed with everybody owning houses, why can't it be up to the person concerned to decide whether renting or buying is better for them?

If mortgage payments go down there will be an increase in demand of houses to buy and a decrease in demand of houses to rent, meaning a lower cost of renting as well. So the cost of housing has gone down.

Of course if the occupant wanted to buy the house they lived in then the landlord would sell it to them if they offered the higher price when it goes up for sale.

[s1962a]

crankedup said:

fblm said:

s1962a said:

Why not try and fix the actual issue, which is the use of houses as an investment tool rather than for people to live in?

Because that is not the issue. The vast majority of people still buy a house to live in it.

The whole situation is really very simple, it's called supply and demand. If you want lower house prices either decrease demand, which is not going to happen, or increase supply. All these stupid schemes to 'make houses more affordable' will only ever increase demand.

Completely agree, but Governments are getting themselves into an increasingly larger hole during every Parliament. They simply have to be seen to respond to the cry's of those who are 'unable to buy a home'. Only way they can be seen to do this is what we witness, provide subsidies courtesy of the tax payer or order builders to build more, which of course they cannot do so. Its a lose lose for Government for those few lucky enough to be able to take advantage of any such subsidy scheme there will be many more who do not qualify for same.

We keep talking about demand and supply here of homes that can be purchased. If there weren't so many homes being tied up in buy to lets (often owned by companies) then there would by more supply in the market for home owners who want to live in their as their main property.

[s1962a]

Sir Humphrey said:

s1962a said:

Yes, they rent it from the landlord. If the landlord sold that house then someone could buy it as their main home, and hence get their foot on the property ladder - and most likely pay less in monthly mortgage repayments than they would in rent (assuming they already have the initial deposit).

The point I was replying to was that there is a "ghost occupant" - i.e. nobody lives there.

Why are people so obsessed with everybody owning houses, why can't it be up to the person concerned to decide whether renting or buying is better for them?

If mortgage payments go down there will be an increase in demand of houses to buy and a decrease in demand of houses to rent, meaning a lower cost of renting as well. So the cost of housing has gone down.

Of course if the occupant wanted to buy the house they lived in then the landlord would sell it to them if they offered the higher price when it goes up for sale.

I thought the whole point of this thread was about about first time buyers - not renters.

Would you agree that if landlords who own multiple properties under buy to let decided to sell those houses because taxes made buy to let that bit more uneconomical, then there would be more houses on the market? It's simple supply and demand.

[Sir Humphrey]

s1962a said:

I thought the whole point of this thread was about about first time buyers - not renters.

Would you agree that if landlords who own multiple properties under buy to let decided to sell those houses because taxes made buy to let that bit more uneconomical, then there would be more houses on the market? It's simple supply and demand.

More houses to buy, fewer houses to rent, the same number of places for people to live.

Renting is very good for a lot of people, you don't need upfront capital, you can move fairly easily if your circumstances change, you don't have a large amount of debt etc.

Why are you (and most of the country) so obsessed with having people own their own property? We should leave it up to the person who wants somewhere to live to decide how he/she finds somewhere to live.

If you tax buy to let out of the market who is going to provide the capital to the buyers to buy the house? What happens to the people who are renting the house when it is sold to someone wanting to live there? Where will the houses to rent come from for anybody else wanting to rent?