buy to let

[deusexlumina]

Save more money then, don't expect to buy one with a deposit of £5k, move away from your parents nice area they have worked up to, buy somewhere that needs some work, accept you can't buy a 3 bed detached house for your first house.

You've made quite a few assumptions there!

I don't think anyone is expecting to buy with a deposit of 5k. The government Help to Buy scheme is a step in the right direction, but saddling myself with more debt after completing a 4 year degree isn't appealing to me personally.

For the past few months I've been looking for a small 2 bed terrace to buy around the MK & Bletchley area. There are some cheaper areas further away, but unfortunately i can't yet drive so i have to be within about 5 miles of my work. the base price is around 150,000 and its rising quite quickly - and these aren't "luxury abodes"

Graduate starting salaries typically range from 18,000-24,000. To get a reasonable deposit together you're talking quite a few years of serious saving if you're alone in buying and receive no financial aid. It's entirely possible you're looking at being in your mid-late twenties before you can actually buy in the current market. Personally i don't think thats acceptable, but each to their own.

 

[elmarko]

shall we ban making money/businesses at the same time also?

Not the same thing.

Housing is a finite resource in a nation with limited space, buy to let also causes huge social problems which results in reduced economic power of the citizens to spend in the local economy (due to paying inflated mortgages/rent) - driving up unemployment & reducing social cohesion.

I don't think it's worth it tbh, messing up the entire of society for the benefit of buy to let home-owners & banks. I don't believe houses should be used as investment pots or additional incomes, we don't have luxury of simply building an infinite amount of them in desirable areas.

Regarding the comments on renting, the council should own & manage a large housing stock for those unwilling or unable to purchase - with the rent going back into the system to fund more building when appropriate.

I can understand peoples desire to make money, but let's be honest & admit it has a huge negative social impact. Personally I refuse to get involved in buy to let because it's not really that ethical if you look at the bigger picture.

 

[d_brennen]

Also without buy to let who would people rent off of?

I think OPs point is that most people would be able to afford to buy and social housing wouldn't be such a problem. Trouble is so much wealth creation is down to housing debt that nothing is going to change

 

[arknor]

buy 2 let should be banned from new builds slowly get rid of it

 

[badcompany]

Nothing wrong with renting a house out if you own it. But borrowing money to buy to let is increasing prices that helps no one in the end.

 

[Wizzkidy]

Pointless discussing this, simply because you're have the people renting shouting how wonderful this situation is (and rightly so your making a killing) and the other side of the coin where people are not even able to afford a small house unless they save for 10 years.

Both sides have a valid argument there is no right answer. The guys making the money I say good on you.

For the people that are saving I say again good for you keep at it.

I ended up going down the gov scheme to help me get a house, I needed at least 30k to get a place I could call my own, I never had any help from my family as they are bums and don't work, I dont have any "rich" family members to ponce money off, It was all on my own back

I decided to take a massive hit on my wages with a terrible morgage simply to have a home to call my own, it will be worth it in the long run

 

[alx]

I think OPs point is that most people would be able to afford to buy and social housing wouldn't be such a problem. Trouble is so much wealth creation is down to housing debt that nothing is going to change

At some point they would be able to afford somewhere yes, but what about people who start work at 18 but don't live at home and recent graduates? Even if housing was much more accessible they'd still need to save up a deposit and spend probably a couple of years if not more renting. Where would they live?

I do understand and agree that excessive buy to letting can hurt the market, but I'm not really sure of a solution. Limit people to 2 houses? Or even 1 house?

Whilst I quite like the idea of councils owning significant amounts of property to let out and proceeds going back into the system, I'm not really sure I'd trust them to do a good job....

 

[elmarko]

Whilst I quite like the idea of councils owning significant amounts of property to let out and proceeds going back into the system, I'm not really sure I'd trust them to do a good job....

Let's face it, we have a dysfunctional housing market & are currently in the process of blowing up another housing bubble. Personally, having worked a fair amount of time in the private sector in a number of different companies I've yet to see an example of a big business doing anything well or efficiently. It's a bit of a myth that socially run programs are inefficient - the only way some tend to fit that bill is because they are sometimes deliberately run at a loss (but this is due to the positive externalities - something which never get's factored into publically owned systems).

http://en.wikipedia.org/wiki/Externality#Positive

This isn't going to end well without some serious changes in how we deal with property.

 

[Jokester]

When the bubble bursts, nice cheap property for first timers.

 

[Brookert]

What I can't understand is, how are local authorities allowing housing stock in urban areas to get completely butchered. My old street used to be full of decent terraced houses perfect for a family with two children, ample parking, and a generally safe environment.

Fast forward 10-15 years, nearly every house has been split into tiny flats, parking is a nightmare, house prices have shot through the roof, and the area is rapidly declining as an environment to live and raise a family.

 

[Bear]

Something needs to be done, many people I know have sold their home to BTLers, homes that could otherwise have gone to people buying somewhere to live. It doesn't take a genius to work out that increasing demand for homes pushes prices up which in turn will push rents up.

Which then pushes up the cost to the tax payer which pays to keep people in private rented accommodation who would have normally be in a council house.

Like elmarko, I also refuse to get involved although my wife would like to, although some would say owning a share portfolio is just as bad which is my preferred choice.

 

[elmarko]

When the bubble bursts, nice cheap property for first timers.

The problem is, that bubble bursting will hit some lower income families very hard who just got onto property ladder & saddle millions of families with a mass of negative equity (making it impossible for them to move)

Which then pushes up the cost to the tax payer which pays to keep people in private rented accommodation who would have normally be in a council house.

Like elmarko, I also refuse to get involved although my wife would like to, although some would say owning a share portfolio is just as bad which is my preferred choice.

Indeed, a perfect example of a negative externality related to second home ownership & the reduced housing stock (one which I'd argue is very significant).

Personally I wish the who 'economic' argument would at least include the entire impact - not just the immediate & direct financials (any policy which ignores the wider picture is laughably simplistic). If a government has to pick up the negative externalities & benefits from the positive ones - these should both be factored into all decisions - a government =/ a business.

 

[Jokester]

The problem is, that bubble bursting will hit some lower income families very hard who just got onto property ladder & saddle millions of families with a mass of negative equity (making it impossible for them to move)

There's no real way to fix that though, forcing house prices down to make them more affordable for first time buyers will always screw over those already on the ladder.

 

[badcompany]

There's no real way to fix that though, forcing house prices down to make them more affordable for first time buyers will always screw over those already on the ladder.

Why
It only matters if you're selling up.

 

[gettothechopper]

1) build more houses
2) stop people splitting 2/3 bed family homes into multiple flats
3) better controls on renting e.g longer tenancies if people want them, less rubbish ******** fees that scummy letting agents fleece tenants for
4) allow more unused town center commercial property to become housing
5) stop nimbys blocking every single development that ever gets planned just because they dont like it
6) profit

 

[Jokester]

Why
It only matters if you're selling up.

Sometimes you don't have a choice but sell up.

 

[Maccapacca]

When the bubble bursts, nice cheap property for first timers.

I've been listening to that for the last 12 years and ignored every word.

 

[d_brennen]

When the bubble bursts, nice cheap property for first timers.

Assuming the burst doesn't take their job, life savings and ability to borrow with it... Downturns in the housing market just enable enterprising buy to leters to expand their portfolio at a higher profit margin, as they are usually in secure employment, have cash reserves and leverage with lenders. I'm not saying buy to let is all evil and btlers are money grabbing slum landlords, the game is just a bit broken for those at the lower end of the income scale. My parents were able to buy a 3 bed house on my fathers wage alone, while my mother raised me and two siblings. I'd need to a premiership footballer to do the same where I live

 

[Jokester]

I've been listening to that for the last 12 years and ignored every word.

Same here, I've mentioned this in every thread that comes up pretty much about house prices/buy to let.

It's not in the government's and subsequently the wider UK economies interest for house prices to drop so they won't take the action to deal with it in any form at all.

 

[Jokester]

My parents were able to buy a 3 bed house on my fathers wage alone, while my mother raised me and two siblings. I'd need to a premiership footballer to do the same where I live

I think this is part of the problem, early baby boomers by and large didn't buy their first house in their 20s, especially if they weren't married. My mum rented a room or flat shared for long enough, then moved in with my dad (who lived with his parents) and rented a flat, they only bought a place once they were married. I don't believe this was anything but typical in the 60s or early 70s.

Most people these days seem much more focussed on having their own place, even when they're single rather than doing that flat share thing. The only thing that has changed substantially is people living with their parents a lot longer and then jumping straight to their own place.

Expectations are a lot higher these days and what people will put up with is a lot less, not just first property but in general.