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BuyToLet Housing Costs Rent Prices etc.
Jo Public
Posted: 06 June 2012 11:21:25(UTC)
#1

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Anyone else get the feeling that the lid is about to blow?

Rents rise while wages fall, not that many younger people care about wages anyway since employment is a distant prospect. Those in jobs can't get mortgages, so who cares that the interest rates are practically 0%. Society can't afford Housing Benefit and is refusing to pay. Tenant arrears are growing. Police and Prison budgets are being cut. So what's to stop people just squatting - as Dylan sang: when you ain't got nothing - you got nothing to lose.

Is this just alarmist? Or are landlords really raking it in and sleeping easy?
Prof Eman
Posted: 07 June 2012 08:00:07(UTC)
#2

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We all need to worry about the spread of double dip recession.
As regards BTL the arrears are increasing and rent levels are dropping in real rather than money terms in most areas.
Lack of jobs for the young and uncertainties with benefits and cuts mean most BTL landlords avoid DSS. The biggestl losers are the young.
Does not augur well for the future.
Rose G
Posted: 07 June 2012 10:12:16(UTC)
#3

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It is not just buy to let but other factors too which have been promoted by successive governments which has led to the increasingly and fantastically higher prices for housing.

Buy to lets are only one factor. Other factors/policies which have led to nearly unaffordable housing is because since mrs t introduced the sale of council housing, very little housing stock has been replaced because the local authorities were not allowed to use money from the sale of housing to replenish housing stocks.

Add to this that many foreigners are able to make cash purchases of property, for which few will pay stamp duty or other taxes, means fewer affordable properties for residents in the UK.

Buy to let landlords have definitely benefitted from lower interest rates on their house purchases - however it is not just these that have benefitted from increasing rent prices. Private landlords in general have become more greedy - their mortgage costs have decreased because of low interest rates, but they are increasing the rents!

My experience of private landlords is that they do not get checked thoroughly by the local authorities for the quality of housing they provide. When I left our family home due to a violent partner, I was sent to various flea pits in which I was supposed to bring up two babies - the memory of one still sticks in my mind - the room was on the top floor; the contents of the fridge could have provided sufficient bacteria to built a new laboratory to cultivate penicillin; there were some dubious stains on a very threadbare carpet & worst of all there were turds littering the floor - I have wandered how on earth this kind of person providing such substandard accommodation is actually allowed to call themselves a landlord, more like a slum merchant!

Private rents should be capped, especially if this is being paid for by the taxpayer. Secondly, more housing should be made available for housing association (who provide good quality family homes at a more reasonable price than private landlords) & if need be local authorities should build more homes to replace the stock that has been sold off.

Unfortunately, Dave & his crew have no idea on how the ordinary person struggles to made ends meet as the cost of living rises because of his & his buddies at the BOE & the rest of the madhouse introduce more daft policies to make more job cuts - who knows what makes them what they are - they are not only cruel but unjust, but show me politicians these days who actually care what the electorate are going through. They are not only a dishonest bunch, but are part of a whole swathe of society who are quite happy to go on as they are because none of this affects them.
4 users thanked Rose G for this post.
Jo Public on 07/06/2012(UTC), Bryan Jefferson on 07/06/2012(UTC), pete the builder on 09/06/2012(UTC), Guest on 14/06/2012(UTC)
Martino
Posted: 07 June 2012 11:57:17(UTC)
#4

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Housing discussions are always undermined by myth. Myth 1 is that shortage of supply leads to higher prices. It doesn't, what drives house prices is lending levels, no loans and prices fall and vice versa. Myth 2 'Affordable' and 'Social' Housing - these are Blair era euphemisms for tax subsided housing, take away the subsidy and these homes behave like all other housing. Myth 3 Selling Council stock reduces availability, ownership/tenure does not affect availability at all. Demand will always exceed supply except in 'abandoned' areas.

Some answers to housing supply are a) remove the obligation on house builders to provide social housing - it makes around 40% of all sites unviable which is why building has slowed dramatically - what industry could give away 25%-40% of product at cost without collapsing? b) oblige lenders to make mortgages assignable subject to gtees from the original borrower c) stop lenders increasing their average loan by more than say 50% of inflation, this will bring prices back in line over say 20 yrs d) control the population by stopping mass immigration and discouraging large families by incremental reductions in benefits to parents of more than 2 children once those children reach 18.

Alternatively do nothing and keep pretending
1 user thanked Martino for this post.
Guest on 14/06/2012(UTC)
alan franklin
Posted: 07 June 2012 12:04:57(UTC)
#5

Joined: 30/01/2008(UTC)
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As a landlord - and former tenant - I have great sympathy for anyone with housing problems.
I grew up in a slum, far worse than anything people live in today: no heating, no bathroom, no kitchen, toilet across the yard and one amenity- a cold tap over a cracked sink.

Grandma, who raised me, cooked in a foul little hole called a scullery, on a clapped out gas cooker.

We disliked the landlord who was called a "bodger." Holes in the floor were fixed by beating out biscuit tins and nailing them down over the hole.

Later on, when I started to learn economics, I realised that the cause of our misfortune was socialism. Rent controls were bad for landlords and terrible for tenants. No money came in and no money was spent. Result: all round misery. When you try and do good by controlling things it always backfires. Please re-read that, all Socialist do-gooders.

Eventually I became a journalist, then a chief reporter running a busy newsdesk, then an editor, then a publisher. I freelanced for all the dailies, radio and TV and covered thousands of stories. The number one problem in housing came from - council estates! Social housing does not work. Furthermore, it removes all initiative and incentive from people to improve their property. I could list thousands of complaints from council tenants in many areas and counties. Work was seldom done properly or on time. Complaints were endless, problems too numerous to list.

Over all hung an air of despair. This changed when Margaret Thatcher unleashed enterprise and initiative and gave those trapped in councildom the keys to the cell door. A brilliant and hugely successful idea. Go through former estates now and see all the improvements, the different colour schemes, the additions. People became kings of their castles and loved it.

Any time you have huge organisations running housing you get poor admin and worse housing- I could tell story after story of really bad overspill housing in places like Farnborough, Hampshire. This cost hundreds of millions of taxpayer money to put right and the places are still not pleasant to live in.

Giving private landlords some freedom to invest their hard-earned money in property provided a great pool of decent modern housing for those who could not immediately- or chose not to - buy a home. The idea that landlords make a fortune is another joke. If you maintain properties to a high standard, redecorate every couple of years, provide new appliances, pay fees of all kinds for everything from gas inspections to ground rents,property maintenance fees for flats, agents’ fees and so on, you will get a return of about three per cent. I speak from long experience.

Of course, those who want to own should have that chance. The reason they don’t is simple. There are- Socialist inspired - restrictions of all kinds on building anything. Planners – and I personally covered council planning committee meetings for years, before subsequently sending out reporters to do the same- spend their lives trying to stop development. Their endless restrictions (but was this a dog kennel 50 years ago? If so it is a contaminated site!) double and triple the price of housing. This, and the absurdity of not allowing building on over 90 per cent of the land surface of Britain, is by far the main reason housing is so expensive here.

There are thousands of acres of redundant land that could be used for building. Ideal for self-builders or groups getting together to build their homes. Let people’s energy and initiative be unleashed and all the whines, moans and problems will fast vanish.

First, though, you need a bonfire of regulations. Just ask any builder or developer.
18 users thanked alan franklin for this post.
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Jeremy Bosk
Posted: 07 June 2012 18:33:03(UTC)
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Alan

Much of what you say is correct. I do believe that building should be kept to areas that have already been developed. Human housing and commercial and industrial buildings are almost always a blot on the landscape.

There is no national housing shortage, just an imbalance between where the houses are and where the jobs are. It would be cheaper to move the jobs. Quite a few houses stay empty and deteriorating for years due to inertia or legal wrangles. There are also those would be tenants who do not have references, a job, any visible means of support or do have drug, alcohol or mental health problems so are turned down by landlords. Which last is why council housing does serve a purpose. Homeless people would otherwise constitute a public nuisance. This I say as a statement of fact, not to make moral aspersions.

What you say about landlords and the standard of housing they supply is true of the better landlords who provide a good service at a fair price. Unfortunately there are a great many who do not supply decent accommodation and charge extortionately. These landlords fall into two main categories:

1) Those who for reasons such as over-indebtedness cannot afford to maintain their properties and

2) Those who knowing that they are in a sellers market in particular areas, or with particular classes of vulnerable tenant, simply charge whatever the desperate tenant will pay and allow their properties to go to rack and ruin. When they are eventually shut down by environmental health departments, these landlords simply decamp, allowing the mortgage lender to repossess.

You only have to walk the streets in the poorer parts of any major town to see this process in action creating slums. Talk to the housing officer of any university, students' union or housing charity.
2 users thanked Jeremy Bosk for this post.
Jo Public on 07/06/2012(UTC), normski 2nd on 08/06/2012(UTC)
Rose G
Posted: 08 June 2012 08:15:40(UTC)
#7

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Alan

While I see your point of view, if you do want to go back to dem bad ole days - how about employers and their social responsibility to their workers? Cadburys comes to mind - the houses that they built for their workers are now on the open market and fetching a fortune. Today's employers are reluctant to do what employers in the past did as part of the benefits of working for a certain company.

For example, (this is in South Africa) my father, god bless him, never paid a penny for his family accommodation provided for him as part of his job. We lived on the estate/farm, & till he died, this accommodation was free to us. The company he eventually last worked for also provided him with family accommodation. They also paid workers to maintain the outside space - mowing the lawn, planting new shrubs et. They also eventually, I think in the 60's, provided us with indoor hot & cold water, toilets & electricity - how is it possible that employers who used to provide a decent standard of accommodation have now left this responsibility mainly to the market, & occasionnally to social enterprise.

For example, apart from taking all the time, why should the City of London not make extra contributions to some of the running of the tube network in London - why should ordinary taxpayers shoulder the bulk of the burden?

The utilities were originally started off by subsription & eventually were sold off at huge profts & where did it get us ordinary folk who do not have disposable income to play games with our money? We now pay some of the highest prices for our fuel.

As for the other utilities, I eventually gave up on BT because their customer service is non existent in the UK, all calls are in some distant land where their understanding of my language is somewhat dubious. Ditto many of the other companies who chose to base their call centres & other buildings outside the UK because it is cheaper - they are not interested in creating jobs locally, but making a profit by using slave labour frequently!

British Gas, would have been a fantastic company to invest in at one time I am sure, but they treated their workforce detestably and only now sub contract to other companies, some of whom are in my opinion, worse than rogue traders. People, especially the older folk trust the names they know off & many of them have been bullied into taking out contracts for boilers they never needed or wanted in the first instance.

I agree that some of our lack of housing does have to come from the private sector, however, let me tell you that todays houses, if you could call them that, are not fit for families - the outside space is minimal, the room sizes are smaller than my local authority flat, but as for the price, it is eye watering, all because Canary Wharf is in the vicinity. Ordinary families (my friends are both trained doctors) cannot afford these prices. Developers are only looking at the profit margin, so they build rats nests & expect to get a fortune from crowding more people into smaller spaces.

There was once some regulation about room sizes, number/size of windows, but all these regulations are now not in force, & we are getting accommodation to rival that in China probably, what a negative thing to do. People living in these boxes are expected to also pay a fortune in maintenance, at the private landlords whim.

Seriously, post war there was a huge effort to create decent standard of accommodation for the returning soldiers & their families, & since then, successive governments just have not been bothered. If today's politicians were in power post war, I doubt we would have had the NHS or the other public services like the police or firefighters - we could only afford these if we could pay for it, privately.

However much we can mock socialist ideas for wanting to be more fair, if left to tories or the libdems, even nulabour, I would hate to grow old in this country because they simply do not care about how we grow old, & what our quality of life is.

I have the fortunate option of decanting, what about those who have to face the future in a country where care homes are not regulated, & even when regulated, are continuing to provide dismal standards of care?
2 users thanked Rose G for this post.
J Thomas on 08/06/2012(UTC), Jo Public on 14/06/2012(UTC)
Jeremy Bosk
Posted: 08 June 2012 12:05:51(UTC)
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Rose

I have to agree about BT and their Indian call centres. Their staff can usually write English intelligibly but the accent and rapid gabbling make speech impossible. Unfortunately my last service problem was with the broadband connection: so the phone was it. It took a month to fix even though I told them where the problem was on the first day. When they finally sent an English engineer to my house he confirmed my diagnostic of a crossed line in the exchange and swapped to a new pair in the street cabinet. Which took two hours including a visit to the local exchange and his lunch. The last time it happened about four years ago was just the same. Then the engineer was an English born Asian, so it is just a language problem.

About firms paying for housing, medical treatment etcetera. That makes sense if the company is operating in a developing country environment (such as Victorian Britain) when looking after workers makes economic sense in terms of improved productivity. It also served to attract and retain the best workers. The Cadbury and Fry families were religiously motivated philanthropists. Lord Lever (Unilever) who built Port Sunlight was more of an enlightened self interest capitalist. In modern Britain the state provides some degree of basic amenities so duplicating the state's efforts is a waste of shareholder funds. Which is not to say that private donations are not needed to compensate for incompetent and malign government. Especially in our new age of austerity.

Developers are actively encouraged to build and sell rabbit hutches for human accommodation. The cheaper modern houses are badly built and are expected to need demolition within a human lifetime.

Re: the tube trains. A tax on land value would have the same effect in urban areas because ease of access is one of the prime drivers of urban land prices. In agricultural areas, such a tax would just put up the cost of food. The good thing about land value tax is that land is immovable so threats from the bosses to relocate to Monaco to avoid higher taxes would be mere hot air. It would not help poor people unless it was made progressive by beginning only when land reached a minimum price per hectare or whatever.
2 users thanked Jeremy Bosk for this post.
Rose G on 08/06/2012(UTC), Jo Public on 14/06/2012(UTC)
Andrew Butler
Posted: 14 June 2012 05:17:14(UTC)
#9

Joined: 12/06/2012(UTC)
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I have a property for sale in Mougins out of the 4 that I own. There are about 5 people who are waiting to get their hands on the keys. So how ever low the wages get, we will have buyers. It is essential to at least have a house, if not to be owning one. And NO, the owners don't exploit or take buyers for granted, not all of them do things like that.
Jo Public
Posted: 14 June 2012 08:09:06(UTC)
#10

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Interesting, and it's reassuring that the multi-million-Euro properties in the South of France are still attracting plenty of demand. Maybe it's like London with wealthy Greeks, Italians etc looking to offshore their capital.

But what I was thinking about was more the servants quarters in towns and villages (and I guess whole boroughs in places like London), where the squeeze is getting squeezier.
Simon Oliver
Posted: 13 August 2012 16:08:22(UTC)
#11

Joined: 13/08/2012(UTC)
Posts: 1

Buying to rent is still viable ... but in another context and in another country.

France is the world's n°1 tourist destination and many UK and EU citizens buy holiday homes, gite complexes and B&Bs to cash in on the summer letting market.

There is usually a 8-10% return on investment and you get a nice place to live in for 9 months of the year as well. Prices are still falling in France (the Economist reckons they have another 30% or so to fall) so now is the time to start looking.

There's a number of specialist agencies like gitesavendre.eu and gitesforsalefrance.com which deal exclusively in these sort of properties - most of which are going concerns.

Or you can do what the Brits did in the 90's and buy up old ruins and barns, ferry down a gang of lads in a white van and do it all yourself. Either way, for less than €800k you could have 40 odd acres of land, 3 or 4 holiday houses producing a sure income stream and your own house to while away those pre-retirement years!
Amelia Brown
Posted: 14 December 2012 12:51:21(UTC)
#12

Joined: 14/12/2012(UTC)
Posts: 14

In today’s day and age finding a vacation home on rent and to know about it cost, is not an difficult task.As far as the property prices are concerned, they will always keep rising; therefore it is the right time to buy a new home. There are many websites to help you along.

I have stayed at vacation rentals in Mexico, London and Alaska. Several reputed real estate firms in London such as plazaestates.co.uk, charlesestate.com, frequently give special offers on short term rentals.



Amelia Brown
Posted: 14 December 2012 12:52:25(UTC)
#13

Joined: 14/12/2012(UTC)
Posts: 14

In today’s day and age finding a vacation home on rent and to know about it cost, is not an difficult task.As far as the property prices are concerned, they will always keep rising; therefore it is the right time to buy a new home. There are many websites to help you along.

I have stayed at vacation rentals in Mexico, London and Alaska. Several reputed real estate firms in London such as plazaestates.co.uk, charlesestate.com, frequently give special offers on short term rentals.



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