BTL as a pension fund - why not?

[anonymous-user]

JagLover said:

tannhauser said:

fblm said:

Have you listened to yourself? Jesus. The world does not owe you a standard of living. The reason Joe can't afford a house like his parents did is that they had the gall to live far longer than the actuarial tables said they would when they were promised their pensions and healthcare for life. If only they would have the common decency to just stop being ill and die huh?

Shove it up your arse. In a developed, and supposedly civilised country such as the UK; expectation of a decent standard of living/housing in return for an honest day's work is NOT an unreasonable expectation.

The reasons the younger generation are priced out are many; and it's not only because baby boomers have "had it good", and are living longer. How the masses at large cannot see this is absolutely astounding.

Agreed

Why it should be apparently normal for children to have a lower standard than their parents in a supposedly growing economy is beyond me.
...

I didn't say it was normal (in a historical context) and I'm certainly not saying it's desirable simply that it is not to be expected any more. One look at your debt figures and unfunded liabilities should dissuade you of the fact that it is to be expected. Some people clearly don't like to be told how it is. Tannhouser believes his expectations are 'not unreasonable', thats fine, but he's going to be very disappointed. Instead of facing facts he chooses to tell the messanger to shove it up his arse. Thats fine too but its not going to change anything.

(ps as for a 'growing economy' you might want to take a look at your GDP per capita)

[economicpygmy]

LucreLout said:

They stimulate demand which encourages building.

Not really, demand in all its forms does that. The whole of point of BTL is to maximise profit, nothing else matters.

Edited by economicpygmy on Friday 28th November 14:02

[s1962a]

http://www.telegraph.co.uk/finance/personalfinance...


I wonder if we'll start seeing stories like this in the future how people made millions from the privitisation of the NHS.

[gibbon]

s1962a said:

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?

What?

I pay 45% tax on any profit made on my rental property. Virtually no penalty? You should see my tax bill.

[LucreLout]

s1962a said:

Whats with your assumptions? Are you a BTL Landlord? I am, and I can see the inherent flaws in the system. Just because the system allows you and me to make profits out of housing stock, doesn't mean that there can't be better ways of ensuring owner occupiers get priority over purchasing housing over BTL investors. Also introducing barriers against housing being used as a tool for foreign investors to gamble on capital appreciation.

Nope, not a landlord. Given the attitudes on display from gen y, I'm starting to think I should be.

There's enough housing that everyone is housed, so why build more? Why try to penalise BTL, when the only difference between OO and BTL is to whom the HPI accrues?

FTBs can't have priority over BTL in the real world. Even if new build could only be offered to OO off plan, it'd either not get built or BTL would just buy the previous lot off the FTBs rather than current builds from developers. Nothing changes.

I know emotive people like to interchange the words gambling and investment, but there's no gambling on a long term buy of UK property. It's a reasonable investment with a high degree of stability.

As a nation we need to get a collective grip on the rampant and unrealistic expectations of the younger generations or we and they are heading for trouble. There's no problem for them buying property, its just that these geniuses are sitting on several years worth of pay whining about property prices when they could have bought years earlier at vastly lower prices (see earlier poster). That kind of stupidity can't be helped.

[aizvara]

LucreLout said:

Gen Y want to own houses rather than rent them so they can benefit from HPI. Whatever else they say is much noise and fury signifying nothing. They want to seize others capital gains so that they can take them for themselves - its just envy, spite, and jealousy. And its as pathetic as it is transparent. They'll just have to curb their expectations and dig deep and work harder for longer.

Put another way, when did anyone last step over a series of homeless gen y'ers freezing in the street? Yeah, me either.

I don't want to benefit from HPI or seize other's gains - I want to live somewhere permanently, not subject to the standard AST agreement. I'm not interested in them as an investment.

I want to buy in order to:
- redecorate as I like without permission
- even just put up a picture or shelving without worrying about the deposit/inspection.
- not be subject to quarterly house inspections to see if I've wrecked the place.
- have a cat or dog without asking permission first (and then being denied).
- have repairs be my responsibility so that I can get someone to actually replace the boiler, fix a draft etc... And also so I can get someone who knows what they are doing when they do these things.

With all the above, I don't want there to be both a disinterested agent relaying to an apparently equally disinterested landlord in order to get these things done, if they ever get done.


I'd really not be interested in buying if we had a rental market and protections as per Sweden or Germany, for instance.

[LucreLout]

economicpygmy said:

Unlike other buyers in the market...

BTL isn't stopping OO buying, they're both buying. Remove BTL and you remove their investment without any replacement.

[economicpygmy]

gibbon said:

What?

I pay 45% tax on any profit made on my rental property. Virtually no penalty? You should see my tax bill.

Thats just part of your personal tax contributions is it not? If you were to stop all other income, how much would you pay?

May I also suggest you get an accountant.

[LucreLout]

s1962a said:

Can you provide an example of how this might work?

House goes on market. Nobody buys. No investment. No capital freed for spending at the top of the chain.

House goes on market and FTB buy. Investment made, capital freed up.

House goes on market and BTL buy. Investment made in addition to FTBs who chose to buy a different property. Capital freed up plus taxes now paid on rental profits and HPI gains.

Economically, the last item works best for the country, but in any instance, BTL don't stop FTB buying but they do provide them somewhere to live until they eventually want to own a home enough to buy one at market price rather than fantasyland price.

[s1962a]

LucreLout said:

economicpygmy said:

Unlike other buyers in the market...

BTL isn't stopping OO buying, they're both buying. Remove BTL and you remove their investment without any replacement.

I noted you mentioned in a previous comment that you work in the city. Something banking related? Me too.

Therefore, what you have suggest is that at the moment prices are going up due to demand exceeding supply (looking at sold prices only to take out the outliers of unrealistic asking prices by vendors). If you reduce the demand, what do you thin kwill happen to house prices? If BTL landlords find it unappealing to invest due to barriers of entry or doing business, then existing housing stock may come down to levels that meets the demand at the time.

[GT03ROB]

s1962a said:

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?

BTL already carries a penalty for capital appreciation, CGT which is not levied on owner occupiers.

As for foreign investors, I have no problem where they rent out as it does not restrict the overall housing stock. I have more sympathy with your viewpoint where properties are just left empty. I see no problem at all with housing being used as an investment vehicle & a source of profit. It is a basic tenant of our developed society. Is it any different to selling food or water for a profit?

[economicpygmy]

LucreLout said:

BTL isn't stopping OO buying, they're both buying. Remove BTL and you remove their investment without any replacement.

Which is why I edited to say "Not really, demand in all its forms does that."

But regardless, you wouldnt! All that would happen is people would leverage the properties themselfves. as demand is a significant factor. BTL adds nothing in this respect, infact its removes the tax revenue from 'OO'.

[pork911]

s1962a said:

I don't agree with housing being used an investment vehicle

that's not restricted to BTL landlords

[IroningMan]

s1962a said:

LucreLout said:

pork911 said:

you haven't answered the 'why?'

Gen Y want to own houses rather than rent them so they can benefit from HPI. Whatever else they say is much noise and fury signifying nothing. They want to seize others capital gains so that they can take them for themselves - its just envy, spite, and jealousy. And its as pathetic as it is transparent. They'll just have to curb their expectations and dig deep and work harder for longer.

Put another way, when did anyone last step over a series of homeless gen y'ers freezing in the street? Yeah, me either.

Whats with your assumptions? Are you a BTL Landlord? I am, and I can see the inherent flaws in the system. Just because the system allows you and me to make profits out of housing stock, doesn't mean that there can't be better ways of ensuring owner occupiers get priority over purchasing housing over BTL investors. Also introducing barriers against housing being used as a tool for foreign investors to gamble on capital appreciation.

Why should owner occupiers have priority? They're not all first time buyers with a baby on the way...and no-one buys property without at least half an eye on how much it will appreciate while they own it; indeed I suspect that for many people the fact that it also provides somewhere to live is a bonus - all they're really interested in is jumping onto the next rung of the ladder at the first opportunity.

[LucreLout]

aizvara said:

I don't want to benefit from HPI or seize other's gains - I want to live somewhere permanently, not subject to the standard AST agreement. I'm not interested in them as an investment.

I want to buy in order to:
- redecorate as I like without permission
- even just put up a picture or shelving without worrying about the deposit/inspection.
- not be subject to quarterly house inspections to see if I've wrecked the place.
- have a cat or dog without asking permission first (and then being denied).
- have repairs be my responsibility so that I can get someone to actually replace the boiler, fix a draft etc... And also so I can get someone who knows what they are doing when they do these things.

With all the above, I don't want there to be both a disinterested agent relaying to an apparently equally disinterested landlord in order to get these things done, if they ever get done.


I'd really not be interested in buying if we had a rental market and protections as per Sweden or Germany, for instance.

Were I a landlord I'd happily sign a contract granting all of that, with two provisos.

First, that repairs can be inspected and must be of equal quality or better than I'd buy - stops the house getting slowly wrecked by cheap tenants who have a mate in the trade.

Second that rent reviews were covered within the contract - happy to let you stay very long term but at market price plus or minus a bit depending on who is funding the trades in point number one.

Why would a landlord not want a tenant to stay for years? Saves on voids and agency fees. Landlords, what am I missing? I'm guessing inspections could be defrayed by having a guarantor for any damage you do that exceeds the bind paid.

[s1962a]

GT03ROB said:

BTL already carries a penalty for capital appreciation, CGT which is not levied on owner occupiers.

As for foreign investors, I have no problem where they rent out as it does not restrict the overall housing stock. I have more sympathy with your viewpoint where properties are just left empty. I see no problem at all with housing being used as an investment vehicle & a source of profit. It is a basic tenant of our developed society. Is it any different to selling food or water for a profit?

CGT only applies when they sell. In the example i used earlier, the guy has bought properties since the 1970's and never sold anything.

Food or Water probably isn't a good example as it's not a finite resource and we can easily import as much as is needed. A better example would be something like the NHS - would you be in favour of it being privatised, so these companies provide a service to us in return for getting a share of the money from the govt? Housing and healthcare are both a need, so it doesn't matter who provides it as long as the end user gets an equivalent or better service (maybe at a bit of a price premium).

Edited by s1962a on Friday 28th November 14:18

[Sheepshanks]

Eleven said:

I've just looked up my first house, which sold recently. It's in the South East.

I paid £41k for it with my then girlfriend it was in the mid 1980s. We earned £12kpa jointly as a car mechanic and a secretary.

The property has just sold for £148k. A couple buying the place would very roughly need an income of £43k jointly. What would a secretary and a car mechanic earn jointly today?

That's a very low change in price - is there a reason for that?

I paid £30K for my house in 1986 - at its peak in 2007 they were knocking on £300K. With softening prices they tend to be bound now by the £250K stamp duty threshold but that's still an 8x increase, and that's low compared to increases other people of my age have seen.

[s1962a]

IroningMan said:

s1962a said:

LucreLout said:

pork911 said:

you haven't answered the 'why?'

Gen Y want to own houses rather than rent them so they can benefit from HPI. Whatever else they say is much noise and fury signifying nothing. They want to seize others capital gains so that they can take them for themselves - its just envy, spite, and jealousy. And its as pathetic as it is transparent. They'll just have to curb their expectations and dig deep and work harder for longer.

Put another way, when did anyone last step over a series of homeless gen y'ers freezing in the street? Yeah, me either.

Whats with your assumptions? Are you a BTL Landlord? I am, and I can see the inherent flaws in the system. Just because the system allows you and me to make profits out of housing stock, doesn't mean that there can't be better ways of ensuring owner occupiers get priority over purchasing housing over BTL investors. Also introducing barriers against housing being used as a tool for foreign investors to gamble on capital appreciation.

Why should owner occupiers have priority? They're not all first time buyers with a baby on the way...and no-one buys property without at least half an eye on how much it will appreciate while they own it; indeed I suspect that for many people the fact that it also provides somewhere to live is a bonus - all they're really interested in is jumping onto the next rung of the ladder at the first opportunity.

Because housing is a basic need - whether you rent or buy. If BTL investors push up prices so that owner occupiers have to pay more for the same property had the BTL investor not been in the picture, then that is unfair on them.

[anonymous-user]

s1962a said:

It's no bad thing to have BTL or be a landlord at all. But to make it an even playing field between owner occupiers and those looking to profit off housing is what I disagree with.

The % of renters is far higher in the rest of Europe and yet (current economic woes aside) they have always had relatively much lower house prices. How can this be if houses bought to let drive the price up?

[LucreLout]

s1962a said:

I noted you mentioned in a previous comment that you work in the city. Something banking related? Me too.

Therefore, what you have suggest is that at the moment prices are going up due to demand exceeding supply (looking at sold prices only to take out the outliers of unrealistic asking prices by vendors). If you reduce the demand, what do you thin kwill happen to house prices? If BTL landlords find it unappealing to invest due to barriers of entry or doing business, then existing housing stock may come down to levels that meets the demand at the time.

BTL are a small part of the market. Logically they'd be replaced by all this pent up FTB demand and prices would carry on much as before.

In reality however, people would struggle to move about to find better quality work because there would be nowhere to rent. Gen X would struggle for building a retirement.

So how would landlords maintain exposure to property without BTL? Why, through their PPR of course. Which would ensure prices maintain the current trajectory due to not one pound less being invested.

BTL isn't the problem, expectations of buying a similar house to that in which they were raised, as a first purchase, is. Due to globalisation, it may never be realistic for gen y to own their parents home unless they inherit it. We need to deflate the over entitled sense of expectation that gen y's parents have allowed to fester.