BTL as a pension fund - why not?

[JagLover]

fblm said:

Quality.

You think you are entitled to a '3/4 bed house' in exchange for 'an honest days work'? I'm afraid it never worked like that. I'm in my 30's, just; my parents bought their first house in their late 40's. So that would be a 3/4 bed house for 3 decades of honest work. Your sense of entitlement is comical.

I would suggest your experience is not typical. My parents bought their first house at mid to late twenties, as did most of the boomers.

Dad working fulltime, Mum part time, ordinary and not particularly well paid jobs. Our street was full of ordinary working people growing up. Now you would need 1/2 million to buy a house there.

Successive governments have betrayed the generations to come and we need to start setting things right.

[Eleven]

JagLover said:

fblm said:

Quality.

You think you are entitled to a '3/4 bed house' in exchange for 'an honest days work'? I'm afraid it never worked like that. I'm in my 30's, just; my parents bought their first house in their late 40's. So that would be a 3/4 bed house for 3 decades of honest work. Your sense of entitlement is comical.

I would suggest your experience is not typical. My parents bought their first house at mid to late twenties, as did most of the boomers.

Dad working fulltime, Mum part time, ordinary and not particularly well paid jobs. Our street was full of ordinary working people growing up. Now you would need 1/2 million to buy a house there.

Successive governments have betrayed the generations to come and we need to start setting things right.

I disagree with this. I bought my first house 30 years ago; I had to move out my home town to get it and it took two of us working full time to buy it. That was pretty much the norm in those days.

Those who feel hard done by housing wise always look at the average house price and think that because trey are an average person that is what they are "entitled to" whereas in truth most people buy a cheap house as their first and maybe second properties, only moving on to an average one later in life.

[LucreLout]

JagLover said:

Successive governments have betrayed the generations to come and we need to start setting things right.

Wait until you learn how much your share of the national debt is going to be, and the last thing on your mind will be house prices.

You've got to fund what is likely to be 4 trillion quids worth of liabilities, once you toss public sector pensions into the mix.

Governments have no money of their own, they take every penny they spend from someone. Having just had my tax statement for the past year, I'm paying a lot more than my fair share of that. Trying to then seize the value of my main asset by stealth because some kid thinks he deserves a three bed house for a first buy rather than a one bed flat... Well, my generation really aren't going to fund that.

For as long as one bed flats are affordable, those in their 20s can't complain. By the time you're settling down to have kids you'll have two one bed flats each with a slab of equity. You'll have higher earnings and a better ability to fund the sort of home you feel entitled to.

Property prices may look like a burning issue for the young, but when looked at objectively, it's their expectations that are in the biggest bubble. No government is going to act based on that. BTL may get some political expediency tax next parliament, but nothing earth shattering and not enough to do more than slow price gains slightly.

As for the national debt, forget working out how much it is per person and work out how much it is per working person under 40. They're unlikely to even dent the debt in the next decade, so the reality is that almost all of that debt will land squarely on your generation. Unfair? Absolutely. Unavoidable also though. I'm furious on my children's behalf, but with only 17 years to retirement, and half the country lining up another debt expanding labour government, there's not much I can do about it.

[LucreLout]

Eleven said:

I disagree with this. I bought my first house 30 years ago; I had to move out my home town to get it and it took two of us working full time to buy it. That was pretty much the norm in those days.

Those who feel hard done by housing wise always look at the average house price and think that because trey are an average person that is what they are "entitled to" whereas in truth most people buy a cheap house as their first and maybe second properties, only moving on to an average one later in life.

Yarp, average houses are bought by average couples with average equity from previous properties. They've not usually been bought by single people as a first move.

[jdw1234]

Since when was Reigate one of the most expensive parts of the country? ;-)

The grim reaper will sort it out eventually. I.e. all the houses held by boomers will have to be sold to fuiture generations at some point. You can only do so much to avoid inheritance tax.

[vescaegg]

jdw1234 said:

Since when was Reigate one of the most expensive parts of the country? ;-)

Reigate itself may not be but it is very popular and has gone crazy in recent years. Surrey in general is though.

[jdw1234]

vescaegg said:

jdw1234 said:

Since when was Reigate one of the most expensive parts of the country? ;-)

Reigate itself may not be but it is very popular and has gone crazy in recent years. Surrey in general is though.

I was being silly. No disrespect intended.

My friend lives just off Reigate Hill. Its extremely nice, but loads cheaper than the posh bits of Surrey and Central London.

[s1962a]

tannhauser said:

vescaegg said:

tannhauser said:

The smugness is palpable. But then this is PH.

Vescaegg - you own your own house at 28? Well done. Or do you mean the bank owns it?

SteveT350C - I blame the short sightedness and greed of successive generations and governments, as well as bad luck/timing on my part. FYI I've worked hard, studied hard, and saved hard and have several years' salary in cash savings. Am I about to spunk it on overpriced pwopetee? Like ste I am! I'm prepared to either sit it out, or fk of abroad with my savings and skills.

The bank owns some of it sure but I'm chipping away by overpaying each month. Do you want people to be able to buy a house outright? That may be a little ambitious....

Of course I don't. But people lose sight of the fact that it's not really owned until paid for.

You're being prudent paying back the capital - but many are not, and are way over-extended and in it over their heads on massive IO mortgages. They have no means or plan in place to pay it back - indeed a major ststorm is brewing when these mortgages come to an end. Same applies to monthly payments when rates inevitably rise.

Isn't this the exact same thing people were saying in the 2008 onwards crash? From what I recall house prices went down about 25% on average (rough figures from my memory) and then shot up again when the people who were waiting to buy ploughed in after the economy recovered a little.

Like it or not, the UK seems to be a desirable place to be with limited housing stock. You will need to change the demand or the rules of purchasing property for supply to become more plentiful and affordable.

I have a solution, but no govt would entertain it i'm sure. My view is the housing should not be used as an investment vehicle as it is in such short supply. Sure, you can have a BTL property, but at the same time you are taking away a property that could be bought by someone as an owner occupier. Put a land tax on each and every property, payable yearly. If you are an owner occupier then you get 100% rebate.

[NomduJour]

s1962a said:

Sure, you can have a BTL property, but at the same time you are taking away a property that could be bought by someone as an owner occupier

Err ... right

[s1962a]

NomduJour said:

s1962a said:

Sure, you can have a BTL property, but at the same time you are taking away a property that could be bought by someone as an owner occupier

Err ... right

I'll give you an example. A landlord I came across has a portfolio of 20 properties plus in London. He started buying them in the 1970's and most of what he has is mortgage free and out on rent. I am sure he is a good and honest person and pays tax on the rental income as per the rules, but those are 20 properties that are not owner occupiers and being used as an investment vehicle.

[NomduJour]

BTL landlord - needs to make a profit.

Owner-occupier - doesn't.

Who is likely to pay more?

At the lower end of the BTL market, there are properties with virtually zero chance of selling to owner-occupiers. Renting doesn't exist because of evil landlords.

[s1962a]

NomduJour said:

BTL landlord - needs to make a profit.

Owner-occupier - doesn't.

Who is likely to pay more?

At the lower end of the BTL market, there are properties with virtually zero chance of selling to owner-occupiers. Renting doesn't exist because of evil landlords.

You're making this an issue about landlords, whereas I am talking about supply and demand of housing.

I can't comment on the lower end of the BTL market, but think about a 3 bed terraced house in Zone 3 of London. That is a desirable property that a lot of first time buyers might be waiting for to come up. If BTL becomes attractive - such as it is now with high rents, then that pushes up house prices, so the owner occupier has to compete with the landlord to purchase the property. If there was a land tax for non owner occupiers, it would either makes rents more expensive (as the landlord pushes this cost to tenants), or they would sell and thus it could get bought by owner occupiers.

Why should this 3 bed house be used as an investment vehicle with virtually no penalty for taking it out of the owner occupier market?

[GT03ROB]

s1962a said:

NomduJour said:

s1962a said:

Sure, you can have a BTL property, but at the same time you are taking away a property that could be bought by someone as an owner occupier

Err ... right

I'll give you an example. A landlord I came across has a portfolio of 20 properties plus in London. He started buying them in the 1970's and most of what he has is mortgage free and out on rent. I am sure he is a good and honest person and pays tax on the rental income as per the rules, but those are 20 properties that are not owner occupiers and being used as an investment vehicle.

...but why does everybody need to be an owner occupier? They need somewhere to live, that is the key point. The landlord doesn't prevent that

[s1962a]

GT03ROB said:

s1962a said:

NomduJour said:

s1962a said:

Sure, you can have a BTL property, but at the same time you are taking away a property that could be bought by someone as an owner occupier

Err ... right

I'll give you an example. A landlord I came across has a portfolio of 20 properties plus in London. He started buying them in the 1970's and most of what he has is mortgage free and out on rent. I am sure he is a good and honest person and pays tax on the rental income as per the rules, but those are 20 properties that are not owner occupiers and being used as an investment vehicle.

...but why does everybody need to be an owner occupier? They need somewhere to live, that is the key point. The landlord doesn't prevent that

A better question would be, why is the UK limited housing stock allowed to be used as an investment vehicle, with virtually no penalty for doing so.

[vescaegg]

s1962a said:

GT03ROB said:

s1962a said:

NomduJour said:

s1962a said:

Sure, you can have a BTL property, but at the same time you are taking away a property that could be bought by someone as an owner occupier

Err ... right

I'll give you an example. A landlord I came across has a portfolio of 20 properties plus in London. He started buying them in the 1970's and most of what he has is mortgage free and out on rent. I am sure he is a good and honest person and pays tax on the rental income as per the rules, but those are 20 properties that are not owner occupiers and being used as an investment vehicle.

...but why does everybody need to be an owner occupier? They need somewhere to live, that is the key point. The landlord doesn't prevent that

A better question would be, why is the UK limited housing stock allowed to be used as an investment vehicle, with virtually no penalty for doing so.

No it isnt. We live in a capitalist society and those are the rules.

A limited quantity of something makes it valuable; the reasons why something is limited can be looked at of course but its ridiculous to say anyone should be able to own.

A right to live somewhere sure, but owning is not a necessity.

[GT03ROB]

s1962a said:

GT03ROB said:

s1962a said:

NomduJour said:

s1962a said:

Sure, you can have a BTL property, but at the same time you are taking away a property that could be bought by someone as an owner occupier

Err ... right

I'll give you an example. A landlord I came across has a portfolio of 20 properties plus in London. He started buying them in the 1970's and most of what he has is mortgage free and out on rent. I am sure he is a good and honest person and pays tax on the rental income as per the rules, but those are 20 properties that are not owner occupiers and being used as an investment vehicle.

...but why does everybody need to be an owner occupier? They need somewhere to live, that is the key point. The landlord doesn't prevent that

A better question would be, why is the UK limited housing stock allowed to be used as an investment vehicle, with virtually no penalty for doing so.

Are you serious??

[Sheepshanks]

Eleven said:

I disagree with this. I bought my first house 30 years ago; I had to move out my home town to get it and it took two of us working full time to buy it. That was pretty much the norm in those days.

Not sure it was - we bought in that time-frame and the mortgage was very much based on my pay. We had kids pretty quickly and wife stayed at home for several years. No way could a couple in the same position buy that house today.

Don't know if it's already been mentioned but around here (outskirts of Chester) BTL's are definitely holding up prices. Anything where the price looks a bit soft they're snapping up - some areas have more "to let" signs than "for sale".

[s1962a]

GT03ROB said:

s1962a said:

GT03ROB said:

s1962a said:

NomduJour said:

s1962a said:

Sure, you can have a BTL property, but at the same time you are taking away a property that could be bought by someone as an owner occupier

Err ... right

I'll give you an example. A landlord I came across has a portfolio of 20 properties plus in London. He started buying them in the 1970's and most of what he has is mortgage free and out on rent. I am sure he is a good and honest person and pays tax on the rental income as per the rules, but those are 20 properties that are not owner occupiers and being used as an investment vehicle.

...but why does everybody need to be an owner occupier? They need somewhere to live, that is the key point. The landlord doesn't prevent that

A better question would be, why is the UK limited housing stock allowed to be used as an investment vehicle, with virtually no penalty for doing so.

Are you serious??

Yes, I am. Rather that getting so defensive, can you explain why you think something like housing should be allowed to be used in this way with no penalty?

Take another example, Malaysian or Chinese individuals (picking them at random) buy up lots of property and either rent it out or leave it empty with a view of capital appreciation. You have no issue with this either?

[DMN]

Sheepshanks said:

Eleven said:

I disagree with this. I bought my first house 30 years ago; I had to move out my home town to get it and it took two of us working full time to buy it. That was pretty much the norm in those days.

Not sure it was - we bought in that time-frame and the mortgage was very much based on my pay. We had kids pretty quickly and wife stayed at home for several years. No way could a couple in the same position buy that house today.

Don't know if it's already been mentioned but around here (outskirts of Chester) BTL's are definitely holding up prices. Anything where the price looks a bit soft they're snapping up - some areas have more "to let" signs than "for sale".

Likewsie, my parents bought their first house 35 years ago. They paid £7,000 cash. A house on the same street today costs 17 times that.

Wages haven't gone up 17 times over to match that. What has happened is that people today, who want to work hard and give themselves a future, have very little chance of being able to do so.

With the increase of people falling into the rental trap, when (if) they're ready to buy, a small one bedroom flat isn't going to be the answer.

There's a ticking time bomb that a Government of what ever colour is going to have to deal with some day.

[jdw1234]

Won't the generation that can't afford housing be in charge roughly when everyone who is planning to use BTL for a pension retires?

Is 32 generation X or Y?