Buy To Let. Tories Deserve Some Credit Here

[oaksoft]

Who the f**k claimed that? You said - using your figures - that 5m were in BTL and 2 m new homes are needed. You claimed to you the sums added up. Its your rank stupidity that everyone is pointing to particularly because no one else seems to believe that the tax is going to have any other effect than pushing rent up. Your grasp of reality is awful too. Many people renting are doing so because they cannot get a mortgage either because they can't save the deposit or because their credit history isn't as clean as it needs to be.

The demand for home ownership is causing the figure of 2 million new homes because there aren't 2 million homes out there affordable enough for them to buy because BTL has caused a massive spike in prices. In the meantime these people are artificially forced into renting.

THAT is why there is an oversupply of renters.

THAT is why rental prices are also going through a spike.

You have, as ever, missed the point entirely.

Congratulations.

You know I don't even get satisfaction from slam dunking you like this any more.

Edited March 1, 2016 by oaksoft

[Ayrshire Saints]

You do realise that amongst these 5 million "buy to let" houses are thousands owned by massive Britian wide construction firms who have taken properties in part exchange and then, due to market conditions, rather than sell them on have passed them to their companies letting divisions. I doubt greatly if any new legislation will have any effect on those types of opperations.

[buddiecat]

Who would buy the homes?

The people who are only renting because they cant afford to buy for a start.

The generation of young people priced out of the market right now due to the price bubble directly caused by the BTL scandal.

I would have thought that was so obvious it didnt need pointing out.

No, it is quite obvious that those who cannot afford to buy would not be able to buy. In general the homes i have bought have been at knockdown prices due to re-possession, i took mortgages out on them and therefore anyone else who qualifies for a mortgage could do the same, they sale of such homes is not limited to landlords.

The flat owned by my better half has dropped in value since it has been for let, so i don't see any evidence of a housing bubble, that flat can be bought for 25% less than it cost ten years ago, different situation in London and possibly Edinburgh, but people will always have to pay over the odds to live in those type of areas. And i would suggest that those areas are partly to blame for the current housing situation.

[TopCat]

Oaksoft clearly has no Idea what he's talking about, again.

[Stuart Dickson]

The demand for home ownership is causing the figure of 2 million new homes because there aren't 2 million homes out there affordable enough for them to buy because BTL has caused a massive spike in prices. In the meantime these people are artificially forced into renting.

THAT is why there is an oversupply of renters.

THAT is why rental prices are also going through a spike.

You have, as ever, missed the point entirely.

Congratulations.

You know I don't even get satisfaction from slam dunking you like this any more.

What point? If you've got one you're making it really poorly. First you claim you've done the maths and 5m Buy To Let property owners being forced to sell due to a small increase in tax liability is going to solve the demand for 2m houses, forgetting completely the fact that anyone currently renting those buy to let properties are going to need accommodation. Then you claim it's such a modest increase there's no point in a landlord changing status from sole trader to company because the increase tax liability - although big enough to force them out of business in your first post - is so small it won't be worth doing. And now you claim that buy to let is causing a massive spike in housing prices, despite the evidence that seems to suggest house prices have remained reasonably static outside of London for the last four years.

Do you really think that there are 5m families in rental accommodation because they can't afford current house prices? I would imagine that if you can afford to pay a private rent these days you can most likely afford the mortgage payments on a house of a similar size in the same geographical location. A bigger problem is the mortgage market and the stricter criteria on mortgage lending. The fact that youngsters these days have to save for a deposit of at least 10% of their mortgage is a massive factor, as is the fact that lending criteria is far stricter today than it was pre crash in 2008. These days a single late payment on a mobile phone bill could mean you get automatically refused for a mortgage even if you can clearly prove affordability. Relaxing some of the mortgage lending criteria may well help those youngsters on to the housing ladder, but then you're dead against that cause the easy availability of credit is what you blamed for the crash in 2008 in the first place.

I'm a Tory voter and to me this policy looks like it's just another way to raise tax indirectly. If they charge landlords then that won't be unpopular to the clueless like yourself, and the landlords might bleat about it but the reality will be that they will either find a simple way to side step the liability - by setting up as a Limited Company (which btw WOULD be cost effective if more hassle) - or by passing the cost on to their tenant.

[Gruffalo]

The new BTL regulations will be challenged in court in a few weeks time. Let’s see what the courts make of the governments penalty on private BTL investors.

Oaksoft your assertion that the BTL market is driving up house prices is absurd. Houses prices are dictated by supply and demand irrespective of whether they are rented or bought houses. Your comment that there is a shortfall of 2m houses is the reason why house prices are being driven up not because someone decides to purchase a flat then rent it out to someone who is willing to pay the rent.

Also to think that the government initiative will mean that there will be an over load of houses released to the market thus reducing their value is ludicrous. Lets just picture the hypothetical scenario that a million landlords do release 2 million houses back on to the market overnight by displacing the incumbent residents and assigning them to being homeless. This creates a series of other scenarios

The 2 million shortfall of houses dramatically increases to 4 million. Overnight you have 4 million people chasing 2 million available houses that they could not purchase and had to rent from the greedy BTL landlords. What that scenario will do will create a buying frenzy of the properties being dumped on the market. Rather than devaluing the properties it is likely to have the opposite effect.

[Gruffalo]

The demand for home ownership is causing the figure of 2 million new homes because there aren't 2 million homes out there affordable enough for them to buy because BTL has caused a massive spike in prices. In the meantime these people are artificially forced into renting.

THAT is why there is an oversupply of renters.

THAT is why rental prices are also going through a spike.

You have, as ever, missed the point entirely.

Congratulations.

You know I don't even get satisfaction from slam dunking you like this any more.

Not all people who rent have the desire to own their own home.

Some people like the idea of being transient, others like the flexibility of renting rather than owning, some have poor credit ratings, some cant afford, some see renting as a short term measure, some have released the capital on their previous property and like the idea of renting.

Your statement lumps everyone in to the idea that they turned up to buy the property could not afford it then were forced in to renting it. Bizarre as most rents are currently more expensive than mortgages at the moment.

[Guest TPAFKATS]

There's a theory that lack of housing is at least partly caused the 4 or 5 biggest housing companies refusing to build on land that they currently own. Of course this in turn raises prices through over demand and under supply.

[FTOF]

. A bigger problem is the mortgage market and the stricter criteria on mortgage lending. The fact that youngsters these days have to save for a deposit of at least 10% of their mortgage is a massive factor, as is the fact that lending criteria is far stricter today than it was pre crash in 2008. These days a single late payment on a mobile phone bill could mean you get automatically refused for a mortgage even if you can clearly prove affordability. Relaxing some of the mortgage lending criteria may well help those youngsters on to the housing ladder, but then you're dead against that cause the easy availability of credit is what you blamed for the crash in 2008 in the first place.

Coincidentally we were discussing this at work a few weeks ago, as one of the staff was getting quite desperate to find a rental property as her lease had to be terminated due to personal circumstances.

One of the staff, a pompous buffoon, who has no grasp of reality of what actually happens in the real world (sound familiar?), made a crass comment along the lines of , " Why don't you just buy a flat?".

The simple answer, after a suitably disparaging comment was aimed at said buffoon, was that a deposit for a mortgage was completely out of the question due to the huge financial outlay required.

This was echoed by three other members of staff who rent.

They are all young professionals a couple of years out of university, who despite having the intent to save, have had little or no opportunity to do so.

Edited March 1, 2016 by FTOF

[faraway saint]

Coincidentally we were discussing this at work a few weeks ago, as one of the staff was getting quite desperate to find a rental property as her lease had to be terminated due to personal circumstances.

One of the staff, a pompous buffoon, who has no grasp of reality of what actually happens in the real world (sound familiar?), made a crass comment along the lines of , " Why don't you just buy a flat?".

The simple answer, after a suitably disparaging comment was aimed at said buffoon, was that a deposit for a mortgage was completely out of the question due to the huge financial outlay required.

This was echoed by three other members of staff who rent.

They are all young professionals a couple of years out of university, who despite having the intent to save, have had little or no opportunity to do so.

Aye, Div?

[oaksoft]

What point? If you've got one you're making it really poorly. First you claim you've done the maths and 5m Buy To Let property owners being forced to sell due to a small increase in tax liability is going to solve the demand for 2m houses, forgetting completely the fact that anyone currently renting those buy to let properties are going to need accommodation. Then you claim it's such a modest increase there's no point in a landlord changing status from sole trader to company because the increase tax liability - although big enough to force them out of business in your first post - is so small it won't be worth doing. And now you claim that buy to let is causing a massive spike in housing prices, despite the evidence that seems to suggest house prices have remained reasonably static outside of London for the last four years.

Do you really think that there are 5m families in rental accommodation because they can't afford current house prices? I would imagine that if you can afford to pay a private rent these days you can most likely afford the mortgage payments on a house of a similar size in the same geographical location. A bigger problem is the mortgage market and the stricter criteria on mortgage lending. The fact that youngsters these days have to save for a deposit of at least 10% of their mortgage is a massive factor, as is the fact that lending criteria is far stricter today than it was pre crash in 2008. These days a single late payment on a mobile phone bill could mean you get automatically refused for a mortgage even if you can clearly prove affordability. Relaxing some of the mortgage lending criteria may well help those youngsters on to the housing ladder, but then you're dead against that cause the easy availability of credit is what you blamed for the crash in 2008 in the first place.

I'm a Tory voter and to me this policy looks like it's just another way to raise tax indirectly. If they charge landlords then that won't be unpopular to the clueless like yourself, and the landlords might bleat about it but the reality will be that they will either find a simple way to side step the liability - by setting up as a Limited Company (which btw WOULD be cost effective if more hassle) - or by passing the cost on to their tenant.

You are not listening and you are making stuff up.

So I am out.

Good luck chatting to yourself.

[oaksoft]

Oaksoft clearly has no Idea what he's talking about, again.

Cracking contribution TC.

[Stuart Dickson]

You are not listening and you are making stuff up.

So I am out.

Good luck chatting to yourself.

Oh dear. The words you were actually looking for is "You're right Stuart"

[Stuart Dickson]

Coincidentally we were discussing this at work a few weeks ago, as one of the staff was getting quite desperate to find a rental property as her lease had to be terminated due to personal circumstances.

One of the staff, a pompous buffoon, who has no grasp of reality of what actually happens in the real world (sound familiar?), made a crass comment along the lines of , " Why don't you just buy a flat?".

The simple answer, after a suitably disparaging comment was aimed at said buffoon, was that a deposit for a mortgage was completely out of the question due to the huge financial outlay required.

This was echoed by three other members of staff who rent.

They are all young professionals a couple of years out of university, who despite having the intent to save, have had little or no opportunity to do so.

When I bought my first house in 1990 at the age of 20 I had saved £5,000 up and was buying my house - a two bedroom semi - for £35,000. My lawyer persuaded me that I should get a 100% mortgage rather that pay a deposit because I'd need my savings for furniture as well as paying his fee and paying stamp duty. Looking back now I'd definitely question whether that was best advice or not. The base rate on mortgages back then went up to 15% before very slowly coming back down. The idea that I should borrow more than I needed seems ridiculous now.

When I moved to my second house we actually took out one of those 120% mortgages with Northern Rock that was roundly condemned after the banking crisis. We didn't need a loan structured like that but I had investments I didn't want to cash in at that point and I was also at a bit of a crossroads with my career and I wasn't sure what way I was going to go. Ultimately we repaid the full amount within 5 years which kind of proves that they weren't always given out to those who were a bad risk.

The thing is many of my generation took full advantage of a much more lax attitude towards mortgages and there's no doubt it's the banks unwillingness - perhaps rightly - to go back to those days that is hindering the younger generation who want to from getting onto the property ladder. Its something that has been recognised within government with a load of help to buy initiatives being funded by the taxpayer and with the new savings plan that's been set up by the Conservative Government.

[Guest TPAFKATS]

There's an awfy lot of attention seeking on this thread

[oaksoft]

There's an awfy lot of attention seeking on this thread

Just so long as you fully understood the point he was making that he bought a house at the age of 20.

Also important for you to have spotted was that he paid a 120% mortgage off in 5 years just in case you or anyone else was in any doubt about his financial prowess.

You can ignore the rest of his post because that was the only important thing he wanted you to know.

What he failed to mention in his haste to boast was that in 1990 the average UK house cost around £50-60k with average salaries at £14k or thereabouts - roughly 3 to 4 times the average salary.

In 2015 the average UK house price was an eye watering £165k with average earnings just £26k - more than 6 times the average wage.

So even if the banks agreed with his position and starting lending ridiculous amounts again this current crop of new house owners would be getting considerably more shafted than his generation. It would also fuel a massive house price surge because, as I've said, with 5 million houses inn the hands of pretend entrepreneurs, the housing stock available for buying is well below the level of demand to buy with those potential buyers forced to rent instead causing huge rental spikes.

Personally I don't know how anyone could condone this sort of behaviour.

If anyone can come up with another reasonable explanation for simultaneous rental price spikes, house price spikes and BTL ownership number spikes that didn't have BTL as the cause of it then I am all ears because nobody has managed that yet.

Edited March 2, 2016 by oaksoft

[oaksoft]

Was it 1989 he claimed to have £60,000 on his P60 (I'll need to check, but can't be bothered just now)? Yet, by 1990 he had saved only £5,000.

If I'm wrong, just put it down to laziness - a.k.a. doing a dicko. Normally I would check before posting.

Round about that time yes.

Begs the question of why he didn't simply buy the £35k house outright.

[Tommy]

When I bought my first house in 1990 at the age of 20 I had saved £5,000 up and was buying my house - a two bedroom semi - for £35,000. My lawyer persuaded me that I should get a 100% mortgage rather that pay a deposit because I'd need my savings for furniture as well as paying his fee and paying stamp duty. Looking back now I'd definitely question whether that was best advice or not. The base rate on mortgages back then went up to 15% before very slowly coming back down. The idea that I should borrow more than I needed seems ridiculous now.

When I moved to my second house we actually took out one of those 120% mortgages with Northern Rock that was roundly condemned after the banking crisis. We didn't need a loan structured like that but I had investments I didn't want to cash in at that point and I was also at a bit of a crossroads with my career and I wasn't sure what way I was going to go. Ultimately we repaid the full amount within 5 years which kind of proves that they weren't always given out to those who were a bad risk.

The thing is many of my generation took full advantage of a much more lax attitude towards mortgages and there's no doubt it's the banks unwillingness - perhaps rightly - to go back to those days that is hindering the younger generation who want to from getting onto the property ladder. Its something that has been recognised within government with a load of help to buy initiatives being funded by the taxpayer and with the new savings plan that's been set up by the Conservative Government.

So you are saying you were born in 1970

[Stuart Dickson]

Just so long as you fully understood the point he was making that he bought a house at the age of 20.

Also important for you to have spotted was that he paid a 120% mortgage off in 5 years just in case you or anyone else was in any doubt about his financial prowess.

You can ignore the rest of his post because that was the only important thing he wanted you to know.

What he failed to mention in his haste to boast was that in 1990 the average UK house cost around £50-60k with average salaries at £14k or thereabouts - roughly 3 to 4 times the average salary.

In 2015 the average UK house price was an eye watering £165k with average earnings just £26k - more than 6 times the average wage.

So even if the banks agreed with his position and starting lending ridiculous amounts again this current crop of new house owners would be getting considerably more shafted than his generation. It would also fuel a massive house price surge because, as I've said, with 5 million houses inn the hands of pretend entrepreneurs, the housing stock available for buying is well below the level of demand to buy with those potential buyers forced to rent instead causing huge rental spikes.

Personally I don't know how anyone could condone this sort of behaviour.

If anyone can come up with another reasonable explanation for simultaneous rental price spikes, house price spikes and BTL ownership number spikes that didn't have BTL as the cause of it then I am all ears because nobody has managed that yet.

Simple. ...cheap interest rates. As I said in my post in 1991-2 the Bank of England interest rate hit 15%. Today it's at an all time record low of 0.5%. To put this into context a £35,000 mortgage was costing me £400 per month on an interest only basis. Today a £35,000 mortgage on similar terms would cost £42 per month. Indeed you could borrow £250,000 today and still not pay as much in interest alone as I was back then.

It's quite clearly a bigger factor than any nonsense about buy to let and the major factor pushing house buying out of our kids reach is simply the stricter lending criteria, which you yourself have supported all along.

You've made a rip roaring c**t of yourself with your buy to let rant and your spelling mistake about you doing meths. Don't try too hard to dig yourself out.

Edited March 2, 2016 by Stuart Dickson

[Stuart Dickson]

Was it 1989 he claimed to have £60,000 on his P60 (I'll need to check, but can't be bothered just now)? Yet, by 1990 he had saved only £5,000.

If I'm wrong, just put it down to laziness - a.k.a. doing a dicko. Normally I would check before posting.

Nope it's was 1990. In 1989 I was earning £90 per week as an apprentice. I bought my first house within 2 months of becoming time served. Edited March 2, 2016 by Stuart Dickson

[oaksoft]

Simple. ...cheap interest rates. As I said in my post in 1991-2 the Bank of England interest rate hit 15%. Today it's at an all time record low of 0.5%.

Simple is a great word to describe you because you clearly can't understand how to spot consequences.

I'll make this easy.

Your big idea is to further boost an already ludicrous housing price spike by f**king over savers?

Brilliant. It's almost as if in your world, everything exists in splendid isolation.

Low interest rates are a disaster for the economy because the millions of savers who were putting money away for their pensions as they were correctly advised to do have now had to spend years living off the capital rather than the interest.

That's millions of people now struggling to make ends meet and buying less than they normally would because they are terrified of their savings running out.

That has a massive direct consequence on the economy and jobs.

Then we have the attraction of those low interest rates to further BTL scammers who will be best placed to buy even more of the dwindling housing stock resulting in further expansion of the housing price bubble.

In addition, you have now allowed people to borrow way more than is sensible as a result of your idea forcing prices up yet again.

When the fixed rate ends we'll see massive rise in repossessions. Those who do manage to stay in their houses will have almost no money left to buy stuff.

Once again the economy suffers. Taxes go down and pensions become ever more unaffordable.

All because you prioritise housing price rises over anything and everything else.

Do you have any sensible suggestions or is everything in your head going to look like this?

[Stuart Dickson]

Simple is a great word to describe you because you clearly can't understand how to spot consequences.

I'll make this easy.

Your big idea is to further boost an already ludicrous housing price spike by f**king over savers?

Brilliant. It's almost as if in your world, everything exists in splendid isolation.

Low interest rates are a disaster for the economy because the millions of savers who were putting money away for their pensions as they were correctly advised to do have now had to spend years living off the capital rather than the interest.

That's millions of people now struggling to make ends meet and buying less than they normally would because they are terrified of their savings running out.

That has a massive direct consequence on the economy and jobs.

Then we have the attraction of those low interest rates to further BTL scammers who will be best placed to buy even more of the dwindling housing stock resulting in further expansion of the housing price bubble.

In addition, you have now allowed people to borrow way more than is sensible as a result of your idea forcing prices up yet again.

When the fixed rate ends we'll see massive rise in repossessions. Those who do manage to stay in their houses will have almost no money left to buy stuff.

Once again the economy suffers. Taxes go down and pensions become ever more unaffordable.

All because you prioritise housing price rises over anything and everything else.

Do you have any sensible suggestions or is everything in your head going to look like this?

Oh FFS you really are taking stupid to a new level aren't you.

I haven't been trying to come up with a solution at any point. All I have been doing is showing you up for the idiot you are. It's obvious that the major factor in house price inflation is not buy to let. It's obvious that if 5m buy to let properties are sold off then you put 5m families out of their homes which would put more pressure on house price inflation. It's blindingly obvious that the Conservatives are not trying to force landlords out of business. It's blindingly obvious that if the new tax was going to force landlords out of business they'd very quickly find a way to avoid paying the tax - especially since the answer is already being stated by Conservative MP's who have said that to avoid the tax liability all landlords need to do is convert to limited company status. It's just as obvious that in the current market climate what will actually happen is the landlords will simply pass on the increase cost to their tenants. You've been praising the policy, which is great, but your reasons for doing so are so deeply flawed and yet despite being shown up you still refuse to accept it.

I'm not promoting a policy for the banks to become more profligate with their money or to start reckless lending once again. I was simply showing you up as you were the one insisting on tighter lending criteria, hugely critical of the banks lending money to those who you claimed could never afford it - as now the cause and effect of that very tightening has been to push house buying out of the reach of those very people you think are being excluded because of landlords.

Top Cat is right you really do know f**k all.

Edited March 2, 2016 by Stuart Dickson

[Isle Of Bute Saint]

No, it is quite obvious that those who cannot afford to buy would not be able to buy. In general the homes i have bought have been at knockdown prices due to re-possession, i took mortgages out on them and therefore anyone else who qualifies for a mortgage could do the same, they sale of such homes is not limited to landlords.

The flat owned by my better half has dropped in value since it has been for let, so i don't see any evidence of a housing bubble, that flat can be bought for 25% less than it cost ten years ago, different situation in London and possibly Edinburgh, but people will always have to pay over the odds to live in those type of areas. And i would suggest that those areas are partly to blame for the current housing situation.

Not all people who rent have the desire to own their own home.

Some people like the idea of being transient, others like the flexibility of renting rather than owning, some have poor credit ratings, some cant afford, some see renting as a short term measure, some have released the capital on their previous property and like the idea of renting.

Your statement lumps everyone in to the idea that they turned up to buy the property could not afford it then were forced in to renting it. Bizarre as most rents are currently more expensive than mortgages at the moment.

I know a few guys who sold their properties then went for rent which was a lot cheaper than their mortgage . Now they are very wealthy doing what they want to do and retiring in their late 40s.

[Isle Of Bute Saint]

Simple is a great word to describe you because you clearly can't understand how to spot consequences.

I'll make this easy.

Your big idea is to further boost an already ludicrous housing price spike by f**king over savers?

Brilliant. It's almost as if in your world, everything exists in splendid isolation.

Low interest rates are a disaster for the economy because the millions of savers who were putting money away for their pensions as they were correctly advised to do have now had to spend years living off the capital rather than the interest.

That's millions of people now struggling to make ends meet and buying less than they normally would because they are terrified of their savings running out.

That has a massive direct consequence on the economy and jobs.

Then we have the attraction of those low interest rates to further BTL scammers who will be best placed to buy even more of the dwindling housing stock resulting in further expansion of the housing price bubble.

In addition, you have now allowed people to borrow way more than is sensible as a result of your idea forcing prices up yet again.

When the fixed rate ends we'll see massive rise in repossessions. Those who do manage to stay in their houses will have almost no money left to buy stuff.

Once again the economy suffers. Taxes go down and pensions become ever more unaffordable.

All because you prioritise housing price rises over anything and everything else.

Do you have any sensible suggestions or is everything in your head going to look like this?

today you can not borrow like you did say 10 year ago. Everything to do with loans must be as water tight as possible. Capital is no longer there for risk adventures.

[Ayrshire Saints]

If interest rates rose at any speed what so ever the UK "economy" would burst overnight with disasterous consequences. We have no economy, no manufacturing output all that's left is a country running on consumer spending totally dependant on artificially maintained low interest rates. Osborne will do everything in his power to prevent interest rates rising as he knows the games up if they do. He has the BoE in his back pocket as that is all he really needs to control it. Buy to let is a consequence of the low interest rates. The govt can't curb it via mortgage interest rates so are having to legislate to try to keep it under control. Record low interest rates make it attractive to speculators with no cash and at the other end of the spectrum record low interest rates make property an attractive investment to savers earning a pittance on their savings. It's a double edged sword that will not be easy to curb while interest rates remain low and demand for housing outstrips supply. Like it or loathe it the private rental market will continue to grow. It's not all buy to let either. As I said earlier huge nationwide house building firms own tons of private rental property (it's a profitable business) and plenty of rental properties were inherited rather than bought with a sole intention of renting.