Savings & Investments Attitude

[ADK]

I agree with that. Although the only way to solve the problem is legislation changes.

[Rob1742]

If individuals were not allowed to buy property to let, there would be a property market collapse.

The knock on effects would be massive, especially with the banks. Another collapse would kick in straight away.

Not sure how you would feel if the property you purchased for £200k suddenly dropped by half?

Do you then stop people buy commercial property to rent out?

Now that would be interesting.

Or maybe we could then say it is unethical for people to sell their house at a profit?

Then maybe we could tell shopkeepers not to make a profit as it's unfair on those buying their goods.

[Sir Fynwy]

Labours idea to build a billion pounds worth of houses and sell them at cost would also see a reduction in house values, the UK really needs a total revaluation of the housing stock but the pain and disruption to the markets would be massive and no government is going to force it, the current government actually props up home overvaluation with the stupid "Help to Buy" policies.

[leicsmac]

If individuals were not allowed to buy property to let, there would be a property market collapse.

The knock on effects would be massive, especially with the banks. Another collapse would kick in straight away.

Not sure how you would feel if the property you purchased for £200k suddenly dropped by half?

Do you then stop people buy commercial property to rent out?

Now that would be interesting.

Or maybe we could then say it is unethical for people to sell their house at a profit?

Then maybe we could tell shopkeepers not to make a profit as it's unfair on those buying their goods.

 

I'll be honest, I wouldn't dance a jig if the bottom fell out of the housing market, but only because of the knock-on effects, not out of any sympathy for those who make a killing in such markets.

 

I really do think there should be restrictions on buying to let. Perhaps that will actually let more people own their homes if they wish, rather than the market being controlled by those who own them already.

 

As an aside, I think any market involving an essential human right that is artificially inflated (be it housing, food, education or health) is objectionable. Thankfully in our country it's only one out of those four - well, possibly one and a half.

 

Labours idea to build a billion pounds worth of houses and sell them at cost would also see a reduction in house values, the UK really needs a total revaluation of the housing stock but the pain and disruption to the markets would be massive and no government is going to force it, the current government actually props up home overvaluation with the stupid "Help to Buy" policies.

 

Agreed.

[Sir Fynwy]

I'll be honest, I wouldn't dance a jig if the bottom fell out of the housing market, but only because of the knock-on effects, not out of any sympathy for those who make a killing in such markets.

I really do think there should be restrictions on buying to let. Perhaps that will actually let more people own their homes if they wish, rather than the market being controlled by those who own them already.

As an aside, I think any market involving an essential human right that is artificially inflated (be it housing, food, education or health) is objectionable. Thankfully in our country it's only one out of those four - well, possibly one and a half.

Agreed.

The best restriction on buy to let would be to add a right to buy provision for tenants, see how quickly the market realigns if long term tenants can buy a house from the landlord at a reasonable market price underpinned by legislation.

[MooseBreath]

Labours idea to build a billion pounds worth of houses and sell them at cost would also see a reduction in house values, the UK really needs a total revaluation of the housing stock but the pain and disruption to the markets would be massive and no government is going to force it, the current government actually props up home overvaluation with the stupid "Help to Buy" policies.

That last point in help to buy has been proven incorrect. House prices are only really increasing in London, and basically nobody has ever used help to buy in London. In the places where help to buy has been used most, prices have still actually been falling. The take up of the policy just hasn't been anywhere near strong enough to have any significant impact on prices, but it had helped a few people get on the property ladder. Seems like a successful policy to me.

[MooseBreath]

If individuals were not allowed to buy property to let, there would be a property market collapse.

The knock on effects would be massive, especially with the banks. Another collapse would kick in straight away.

Not sure how you would feel if the property you purchased for £200k suddenly dropped by half?

.

If the value of people's homes fell it would only be a paper loss. They'd still be paying the same mortgage as they were before. Unless I'm missing something I can't see how it would cause any kind of collapse. Buy to letters would get their fingers burned but that's the risk they take. The government should be about steering the market towards providing affordable homes, not steering it towards buy to letters protecting their profits.

[leicsmac]

If the value of people's homes fell it would only be a paper loss. They'd still be paying the same mortgage as they were before. Unless I'm missing something I can't see how it would cause any kind of collapse. Buy to letters would get their fingers burned but that's the risk they take. The government should be about steering the market towards providing affordable homes, not steering it towards buy to letters protecting their profits.

 

This is bang on, Moose.

[Guest MattP]

Labours idea to build a billion pounds worth of houses and sell them at cost would also see a reduction in house values, the UK really needs a total revaluation of the housing stock but the pain and disruption to the markets would be massive and no government is going to force it, the current government actually props up home overvaluation with the stupid "Help to Buy" policies.

 

The 'help to buy' scheme hasn't had too much effect on the price of housing surely? It's barely even been taken up by people from the figures I'm reading.

 

I don't think ever getting young ambitious people a house they can afford to pay for should ever be a bad thing, if they need a helping hand at the start as they can't afford a deposit so be it.

[Sir Fynwy]

The 'help to buy' scheme hasn't had too much effect on the price of housing surely? It's barely even been taken up by people from the figures I'm reading.

I don't think ever getting young ambitious people a house they can afford to pay for should ever be a bad thing, if they need a helping hand at the start as they can't afford a deposit so be it.

It's not the net effect it's the tone of the policy that is damaging, subsidising affordability of housing rather than tackling the issue of overpricing but as I said no government is going to put forward a policy that puts a large amount of core voters into negative equity. I still think a right to buy on private rented property is the best overall way to improve the market.

[Rob1742]

If the value of people's homes fell it would only be a paper loss. They'd still be paying the same mortgage as they were before. Unless I'm missing something I can't see how it would cause any kind of collapse. Buy to letters would get their fingers burned but that's the risk they take. The government should be about steering the market towards providing affordable homes, not steering it towards buy to letters protecting their profits.

It would not just be a paper loss for home owners. Banks and building societies would have to write down their assets and there could be a another banking collapse.

Keeping house prices stable is vital at this point and we are keeping interest rates very low to ensure this happens.

[Rob1742]

It's not the net effect it's the tone of the policy that is damaging, subsidising affordability of housing rather than tackling the issue of overpricing but as I said no government is going to put forward a policy that puts a large amount of core voters into negative equity. I still think a right to buy on private rented property is the best overall way to improve the market.

A right to buy option isn't possible. How would you do it? Let the tennant buy the property, say after 5 years if they wanted too, using what they have paid as a deposit?? This would mean the landlord would have had £000's invested for years and made a loss. The idea is simply unworkable on every front.

[leicsmac]

A right to buy option isn't possible. How would you do it? Let the tennant buy the property, say after 5 years if they wanted too, using what they have paid as a deposit?? This would mean the landlord would have had £000's invested for years and made a loss. The idea is simply unworkable on every front.

 

Then perhaps it will dissuade them from using something (that I have said before) that is a fundamental human right as a means of making easy cash, and actually invest in something else.

[ozleicester]

Step one - End Negative gearing! (tax breaks)

[Sir Fynwy]

A right to buy option isn't possible. How would you do it? Let the tennant buy the property, say after 5 years if they wanted too, using what they have paid as a deposit?? This would mean the landlord would have had £000's invested for years and made a loss. The idea is simply unworkable on every front.

You've not understood the idea, tenants would get the right to buy the property at a reasonable market rate, the landlords would get their money but not a massive profit and not the current guarantee of a lifetime of earning from the property. It stops private landlords from seeing renting as a long term business model and makes the housing market more fluid without putting vast amounts of people in negative equity.

[Rob1742]

You've not understood the idea, tenants would get the right to buy the property at a reasonable market rate, the landlords would get their money but not a massive profit and not the current guarantee of a lifetime of earning from the property. It stops private landlords from seeing renting as a long term business model and makes the housing market more fluid without putting vast amounts of people in negative equity.

I do get the idea, but it just is not possible. You are making out that landlords are making fortunes from renting, but they are not in the majority of cases.

4 to 6% yield gross is common, then there are all the repair costs and management frees etc. if you have to get a mortgage on top of that it is just not an option these days.

The people so have a mortgage on them are purely hoping for market growth as rent received might just about cover it.

So as an investment, well in Leicester anyway it is not a great thing to do. So to say someone could buy the property at s special rate is just not possible as the profits in a lot of cases is borderline.

Investing in property is just okay, but ahead of putting money in a bank or building society. Stock market comes comes with risks too.

Most landlords are not making a killing on it that is for sure, and if there were better ways than earning 4% gross, costs under that and having to deal with a tennant every 6 months who tell you they can't pay the rent, then I would take it.

So no,,selling at a special rate to a tennant is not an option as the profits just are not there. There are risks to buying property so never would your idea be workable.

[Guest ttfn]

You've not understood the idea, tenants would get the right to buy the property at a reasonable market rate, the landlords would get their money but not a massive profit and not the current guarantee of a lifetime of earning from the property. It stops private landlords from seeing renting as a long term business model and makes the housing market more fluid without putting vast amounts of people in negative equity.

What about larger organisations where the landlord has (in some cases) hundreds or even thousands of people in its employment?

What about the value that these people are adding not only to their properties but to the country's economy generally by understanding the market and creating genuinely attractive areas for people to live and work?

The bottom would completely fall out of the market with your proposal and it would have disastrous consequences for London in particular.

[Sir Fynwy]

What about larger organisations where the landlord has (in some cases) hundreds or even thousands of people in its employment?

What about the value that these people are adding not only to their properties but to the country's economy generally by understanding the market and creating genuinely attractive areas for people to live and work?

The bottom would completely fall out of the market with your proposal and it would have disastrous consequences for London in particular.

Selling at a MARKET RATE to long term tenants is what I outlined, if a landlord adds value he gets it back. Not everyone wants to buy so the would still be a rental sector and requirement but you take the major part of investment out home purchasing. Is the bottom falling out of the London property market really such a bad thing in long term economics?

[Rob1742]

Selling at a MARKET RATE to long term tenants is what I outlined, if a landlord adds value he gets it back. Not everyone wants to buy so the would still be a rental sector and requirement but you take the major part of investment out home purchasing. Is the bottom falling out of the London property market really such a bad thing in long term economics?

MARKET RATE - anyone can buy any property at a market rate. There is no need to force a landlord to sell at a market rate when the tennant can go and buy any house at a market rate.

The bottom falling out of the property market is a huge issue yes. It would mean that negative equity kicked in and there is a very high possibility that people would lose their houses. Both landlords and just the normal folk who have a mortgage. So it would be a huge issue for thousands and thousands. You are basically wanting to put people on the streets.

[Guest ttfn]

Selling at a MARKET RATE to long term tenants is what I outlined, if a landlord adds value he gets it back. Not everyone wants to buy so the would still be a rental sector and requirement but you take the major part of investment out home purchasing. Is the bottom falling out of the London property market really such a bad thing in long term economics?

The bottom falling out of the London property market would be a disaster.

Part of the reason people put their money here is because of the perceived exclusivity. The London property market makes a huge difference to its economy and vice versa.

[MooseBreath]

The bottom falling out of the property market is a huge issue yes. It would mean that negative equity kicked in and there is a very high possibility that people would lose their houses. Both landlords and just the normal folk who have a mortgage. So it would be a huge issue for thousands and thousands. You are basically wanting to put people on the streets.

How does being in negative equity mean someone is going to lose their home? As long as they can afford the mortgage repayments then why would they lose it?

[Vicki Vixen]

The bottom falling out of the London property market would be a disaster.

Part of the reason people put their money here is because of the perceived exclusivity. The London property market makes a huge difference to its economy and vice versa.

 

No it would not.  A large fall in London property prices would enable normal working people to purchase houses who are not currently able to do so.  Right now, you have to be earning at least £100K in London to even contemplate buying a home.

London's economy thrives on diversity, not exclusivity.  

[MooseBreath]

I do get the idea, but it just is not possible. You are making out that landlords are making fortunes from renting, but they are not in the majority of cases.

4 to 6% yield gross is common, then there are all the repair costs and management frees etc. if you have to get a mortgage on top of that it is just not an option these days.

The people so have a mortgage on them are purely hoping for market growth as rent received might just about cover it.

So as an investment, well in Leicester anyway it is not a great thing to do. So to say someone could buy the property at s special rate is just not possible as the profits in a lot of cases is borderline.

Investing in property is just okay, but ahead of putting money in a bank or building society. Stock market comes comes with risks too.

Most landlords are not making a killing on it that is for sure, and if there were better ways than earning 4% gross, costs under that and having to deal with a tennant every 6 months who tell you they can't pay the rent, then I would take it.

So no,,selling at a special rate to a tennant is not an option as the profits just are not there. There are risks to buying property so never would your idea be workable.

Yet earlier you were advising people to invest "any spare money" in buy to let.

I think you should declare your interests because you're all over the place in this thread.

[Guest ttfn]

No it would not. A large fall in London property prices would enable normal working people to purchase houses who are not currently able to do so. Right now, you have to be earning at least £100K in London to even contemplate buying a home.

London's economy thrives on diversity, not exclusivity.

Plenty of people in London are perfectly happy commuting in an hour or so to work every day. It's not ideal but the high property prices are part of a dynamic that keeps people in well paid jobs in an internationally renowned city.

Also, London's economy does not thrive on diversity. It thrives on the finance industry, and the glamour and security of the city itself (and its property market) plays a huge part in that.

It's like reading an extract from Russell Brand's book this; lots of great, noble ideas with absolutely no consideration for the knock-on effects on the economy.

[James.]

You also don't need to be earning more than 100k to contemplate buying a home. I know a few couples with combined salaries less than that who bought. You need to save carefully, you may need to wait awhile and you'll need to focus on the right areas but it's not the exclusive playground of the wealthy middle class / super rich that many think.