first-time buyers to get 20%

[BoRED S2upid]

Yet another half baked scheme to win votes. It's not going to resolve the housing problem nothing will.

Why do these politicians think the only option is to release land to developers to build cut price minature boxes they then flog as studio apartments and the like? Why not release land to the public so we can decide what we want to build. That would be a winner there are plenty of TV shows showing us how to do it if you could get land from developers!

[Hackney]

Sir Humphrey said:

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?

I read a really good article a few weeks ago on buy to let and rental in general.
Basically you're damned if you rent, damned if you buy and the BTL landlord wins whatever. Specifically interest rates rise so this is immediately passed on to the renter making sure the BTL landlord is no worse off, yet the renter is ever further away from saving for their own place. It all helps to maintain the status quo.... or actually widen the gap between the property haves and have nots.

[anonymous-user]

s1962a said:

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.

Exactly, I know someone who (in conjunction with his friend), own between 20 and 30 properties, rented back to the local council. That is 20-30 properties now not available to first time buyers.

It would be very interesting to see how many people now have buy-to-let second properties or portfolios compared to 20 years ago and how many properties in the UK are Buy to Let compared with the shortage of housing stock.

No Government (particularly Tory) is going to want to upset the investor, Buy-to-Let Landlords, as they are their key voters. It is much easier to wipe a generation off the ladder or prop up the market with various schemes to keep prices high.

Couple this with large amounts of immigration (all wanting some form of housing)and poor returns from other investments, pensions, and many seeing housing as the answer to funding their retirement, and you get the complete mess we are in now.

[anonymous-user]

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.

You're right but only short term, tax rises on landlords would lower house prices due to a temporary excess supply. But try this. Ask yourself what difference does it make to the value of a house if it is owned by the occupier, the bank or an evil landlord? Once you've answered that, ask yourself; does the value of that house change if the ownership changes? For example if you pay off your mortgage and the ownership changes from the bank to the occupier (obviously not right?), what about if you change the ownership from a landlord to an owner occupier? The number of houses and number of people hasn't changed. You just temporarily increased supply.

Oh yeah the other route to lower prices is just let Balls back into number 11 again.

[s1962a]

fblm said:

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.

You're right but only short term, tax rises on landlords would lower house prices due to a temporary excess supply. But try this. Ask yourself what difference does it make to the value of a house if it is owned by the occupier, the bank or an evil landlord? Once you've answered that, ask yourself; does the value of that house change if the ownership changes? For example if you pay off your mortgage and the ownership changes from the bank to the occupier (obviously not right?), what about if you change the ownership from a landlord to an owner occupier? The number of houses and number of people hasn't changed. You just temporarily increased supply.

Oh yeah the other route to lower prices is just let Balls back into number 11 again.

In answer to your question, house prices would be affected if suddenly it became uneconomical to be a BTL landlord, unless you had a lot of equity in the property and rent covered the extra taxes applied. This would bring more supply to the market in the short term. Once this extra supply has been bought up by people waiting to buy as their main home, prices would remain at that lower state, as they only people that really benefit from owning a house are people that want to live in it. If you want a UK property as a trophy (if you are a foreign invester), or you want to use a house as a BTL business, then pay the state for the privilege of taking that house from being owner occupied.

Bottom line - UK housing stock should not be a viable investment tool if there is a strong demand for owner occupiers.

[anonymous-user]

s1962a said:

fblm said:

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.

You're right but only short term, tax rises on landlords would lower house prices due to a temporary excess supply. But try this. Ask yourself what difference does it make to the value of a house if it is owned by the occupier, the bank or an evil landlord? Once you've answered that, ask yourself; does the value of that house change if the ownership changes? For example if you pay off your mortgage and the ownership changes from the bank to the occupier (obviously not right?), what about if you change the ownership from a landlord to an owner occupier? The number of houses and number of people hasn't changed. You just temporarily increased supply.

Oh yeah the other route to lower prices is just let Balls back into number 11 again.

In answer to your question, house prices would be affected if suddenly it became uneconomical to be a BTL landlord, unless you had a lot of equity in the property and rent covered the extra taxes applied. This would bring more supply to the market in the short term. Once this extra supply has been bought up by people waiting to buy as their main home, prices would remain at that lower state, as they only people that really benefit from owning a house are people that want to live in it. If you want a UK property as a trophy (if you are a foreign invester), or you want to use a house as a BTL business, then pay the state for the privilege of taking that house from being owner occupied.

Bottom line - UK housing stock should not be a viable investment tool if there is a strong demand for owner occupiers.

I give up. You're absolutely right. Vive la revolution!

[Sir Humphrey]

s1962a said:

In answer to your question, house prices would be affected if suddenly it became uneconomical to be a BTL landlord, unless you had a lot of equity in the property and rent covered the extra taxes applied. This would bring more supply to the market in the short term. Once this extra supply has been bought up by people waiting to buy as their main home, prices would remain at that lower state, as they only people that really benefit from owning a house are people that want to live in it. If you want a UK property as a trophy (if you are a foreign invester), or you want to use a house as a BTL business, then pay the state for the privilege of taking that house from being owner occupied.

Bottom line - UK housing stock should not be a viable investment tool if there is a strong demand for owner occupiers.

So once you have increased the supply of houses for purchase, who will provide the credit to buy these houses with?
Let's say just 20% of rented homes come on the market at an average price of £177k you need £300bn of credit to buy those houses with (HSBC's total value is £125bn).

Once you have solved the problem the first time by taxing away the rental market, how do you make sure that enough houses are built each year to cope with the increase in demand?

[s1962a]

Sir Humphrey said:

s1962a said:

In answer to your question, house prices would be affected if suddenly it became uneconomical to be a BTL landlord, unless you had a lot of equity in the property and rent covered the extra taxes applied. This would bring more supply to the market in the short term. Once this extra supply has been bought up by people waiting to buy as their main home, prices would remain at that lower state, as they only people that really benefit from owning a house are people that want to live in it. If you want a UK property as a trophy (if you are a foreign invester), or you want to use a house as a BTL business, then pay the state for the privilege of taking that house from being owner occupied.

Bottom line - UK housing stock should not be a viable investment tool if there is a strong demand for owner occupiers.

So once you have increased the supply of houses for purchase, who will provide the credit to buy these houses with?
Let's say just 20% of rented homes come on the market at an average price of £177k you need £300bn of credit to buy those houses with (HSBC's total value is £125bn).

Once you have solved the problem the first time by taxing away the rental market, how do you make sure that enough houses are built each year to cope with the increase in demand?

You seem to understand supply and demand which is good. If average house prices are 177k for the 20% of houses on the market, and people cannot get finance for that amount, what will happen to the house prices if the BTL landlords want to sell? They will either have to reduce them or keep them and pay the land tax.

As to your point about meeting the demand - what is the government currently doing about building new houses?

One point that is being missed here is the UK allowing it's limited housing stock to be used as an investment tool. Why do you think this is a good idea?

[blueg33]

Even affordable housing is an investment tool with yields or circa 4-5% plus equity growth

The development process needs cash input, that cash has to show a return, hence it is an investment tool however you look at it.

The fact is that land supply is a key issue, that is constrained by the planning system. To make houses cheaper for first time buyers on a long term sustainable basis, more land must be released into the system.

A short term fix using public asset is not the way to do it except over 4 years to win an election.......

There is no doubt in my mind that the avilability of buy to let at high gearing led to above average price inflation in first time buyer homes. This cannot be undone.

[crankedup]

s1962a said:

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.

Its a vicious circle the Country finds itself in regards housing. We cannot turn back the clock on past policies, nor do future Governments seem to learn from past mistakes.
Thatcher wanted a 'Nation of home owners' this is what we have ended up with.

[crankedup]

blueg33 said:

Even affordable housing is an investment tool with yields or circa 4-5% plus equity growth

The development process needs cash input, that cash has to show a return, hence it is an investment tool however you look at it.

The fact is that land supply is a key issue, that is constrained by the planning system. To make houses cheaper for first time buyers on a long term sustainable basis, more land must be released into the system.

A short term fix using public asset is not the way to do it except over 4 years to win an election.......

There is no doubt in my mind that the avilability of buy to let at high gearing led to above average price inflation in first time buyer homes. This cannot be undone.

Spot-on, what I would wish for, and its been mentioned by other contributors, is for manufacturing to be broadcast further afield bringing more work to those areas currently deprived of much work opportunity. Creation of a better balance rather than the all or nothing in London and S.E. Its all a bit late of course. Provision of cheaper land = cheaper housing blah blah blah!

[rover 623gsi]

when Thacher came to power, home ownership was around 57% - private rent was 11% and social housing (councils and housing associations) made up 32%.

Thatcher's dream of a property-owning democracy peaked around 10 years ago with 70% home owners, 10% private rent and 20% social housing.

And now home ownership has fallen back to around 64%, private rent property makes up around 19% and social housing about 17%.

It is interesting (imho) to note that there are now more children under the age of 16 living in the private rent sector than in the social housing sector

[s1962a]

crankedup said:

blueg33 said:

Even affordable housing is an investment tool with yields or circa 4-5% plus equity growth

The development process needs cash input, that cash has to show a return, hence it is an investment tool however you look at it.

The fact is that land supply is a key issue, that is constrained by the planning system. To make houses cheaper for first time buyers on a long term sustainable basis, more land must be released into the system.

A short term fix using public asset is not the way to do it except over 4 years to win an election.......

There is no doubt in my mind that the avilability of buy to let at high gearing led to above average price inflation in first time buyer homes. This cannot be undone.

Spot-on, what I would wish for, and its been mentioned by other contributors, is for manufacturing to be broadcast further afield bringing more work to those areas currently deprived of much work opportunity. Creation of a better balance rather than the all or nothing in London and S.E. Its all a bit late of course. Provision of cheaper land = cheaper housing blah blah blah!

Nothing wrong with what you suggest at all - my point is around housing being used as a business / investment tool, when there are families willing to buy these houses to be owner occupiers rather than renting.

This is the next stage in the BTL revolution catering mainly to tourists

http://www.theguardian.com/technology/2014/jun/20/...

[Sir Humphrey]

s1962a said:

You seem to understand supply and demand which is good. If average house prices are 177k for the 20% of houses on the market, and people cannot get finance for that amount, what will happen to the house prices if the BTL landlords want to sell? They will either have to reduce them or keep them and pay the land tax.

As to your point about meeting the demand - what is the government currently doing about building new houses?

One point that is being missed here is the UK allowing it's limited housing stock to be used as an investment tool. Why do you think this is a good idea?

Obviously the house prices would go down instantly, the point was the number of houses that have to go on sale (even if they lost half their value you would need a massive amount of credit).

The government is currently doing very little to encourage new houses, the best thing they could do would be to remove planning regulations and allow people to build houses or convert offices into flats as they see fit to increase the supply of homes rather than artificially keeping the supply low to keep the prices high.

Taxing BTL increases the cost of rented homes, so by helping people who can afford to buy you are making it harder for people to rent without doing anything to alleviate the real problem which is that there isn't enough housing for everyone in the country (as a side point people who rent are typically poorer than people who buy so you're actually hurting the people at the bottom of the ladder).

We need to build more houses in total (something your tax BTL idea will do nothing to solve), my first priority is to make sure that there are enough houses for people to live in and that they can afford to live there. Nobody will build these extra houses unless they can get something back in return, and opening it up to private competition is the most efficient way to lower prices while giving consumers what they want.

More supply => lower prices => more people owning houses + more people being able to afford to rent houses (hopefully lowering the homeless numbers as well) + all round cheaper homes leaving more money for renters and the new homeowners to spend on other things.

[JagLover]

crankedup said:

Its a vicious circle the Country finds itself in regards housing. We cannot turn back the clock on past policies, nor do future Governments seem to learn from past mistakes.
Thatcher wanted a 'Nation of home owners' this is what we have ended up with.

Nothing wrong with a 'nation of homeowners' as long as there was sufficient housing being built.

[budfox]

The scumbag Tories give people a 20% discount so that they'll purchase houses which have gone up by 20% because of their Help to Buy scheme.

Hanging is too good for these bds.

[blueg33]

budfox said:

The scumbag Tories give people a 20% discount so that they'll purchase houses which have gone up by 20% because of their Help to Buy scheme.

Hanging is too good for these bds.

Basic supply and demand.

Labour seriously stifled supply whilst in power causing much bigger price rises than any tory policy.