Should minions be the instrument of rich people?

[Colonel_Klinck]

They are ghost towns in winter, St Ives is particularly bad they even voted to ban people buying second homes there..

Same thing has happened in some of the most scenic villages where I'm from in the Cotswolds. Properties bought up by Londoners who are only there at weekends in the summer, the place is a ghost town and all community has disappeared. I'd be in favour of banning owning more than 2 properties and forcing people who do own more to sell them off, over say a 15 years period depending on how many they own. Housing associations and non profit housing groups should still be able to buy and help people who can't afford to buy outright or have to rent. I'd certainly ban all ownership by foreign entities and funds that are just buying them as an investment.

 

[dowie]

100% CGT on residential property that isn't your principal private residence.

Local authorities don't have control over CGT, also I doubt that that is a feasible change at all - surely big landlords would avoid it/have their properties wrapped up in a company etc.. some second homeowners aren't buying them for an investment etc.. you'd just hit some of the smaller local landlords.

Puls suppose it did hit property prices a bit, doesn't stop the rental yields via holiday lettings or airbnb from being attractive... 100% CGT is rather moot if your investment doesn't appreciate much in value but instead gives you a nice fat yield from rental income.

 

[Mysterae_]

Increasing the council tax for additional homes properties is an approach.

If the second home was just for holidaying then say an increase of 400% because if you are well-off enough for a second home then you can obviously afford it. If your 2nd, 3rd etc house is for rental then the council tax could be 200%, of which the tenants pay 100% as usual and the owner pays the other 100%.

It would help fund the local council to provide other services, however I imagine the landlords would just pass the costs on and increase rent.

 

[dowie]

If the second home was just for holidaying then say an increase of 400% because if you are well-off enough for a second home then you can obviously afford it. If your 2nd, 3rd etc house is for rental then the council tax could be 200%, of which the tenants pay 100% as usual and the owner pays the other 100%.

It would help fund the local council to provide other services, however I imagine the landlords would just pass the costs on and increase rent.

Can't see why they wouldn't try to. I mean it doesn't make sense to hit rentals that are used by the local working population. Take away even more money from them in rent and you'll make it even less likely that some of them will be able to afford to buy in the near future.

 

[cheesyboy]

Local authorities don't have control over CGT, also I doubt that that is a feasible change at all - surely big landlords would avoid it/have their properties wrapped up in a company etc.. some second homeowners aren't buying them for an investment etc.. you'd just hit some of the smaller local landlords.

Puls suppose it did hit property prices a bit, doesn't stop the rental yields via holiday lettings or airbnb from being attractive... 100% CGT is rather moot if your investment doesn't appreciate much in value but instead gives you a nice fat yield from rental income.

I meant from government.

There are 2.65m landlords in the UK. Hitting the small ones makes a big difference.

Give local authorities the full ability to issue and limit short-term letting licences to control the number of such.

 

[dowie]

I meant from government.

There are 2.65m landlords in the UK. Hitting the small ones makes a big difference.

Give local authorities the full ability to issue and limit short-term letting licences to control the number of such.

The OP is about second homes and mentioned Cornwall etc.. not Landlords in general.

That said, I suspect the biggest difference would be a transfer of rental accommodation from small landlords to big ones - there is still plenty of demand for rentals regardless.

Artificially limiting the supply of rental accommodation seems rather likely to push up rental prices too and increase profits for landlords who have the licenses!

 

[Mysterae_]

Can't see why they wouldn't try to. I mean it doesn't make sense to hit rentals that are used by the local working population. Take away even more money from them in rent and you'll make it even less likely that some of them will be able to afford to buy in the near future.

Totally agree. Isn't it about time the council/government stepped in to enforce an upper limit on rent? The government would love another taxation bracket too.

 

[cheesyboy]

That said, I suspect the biggest difference would be a transfer of rental accommodation from small landlords to big ones - there is still plenty of demand for rentals regardless.

Removing demand reduces price. It's very simple economics. If big landlord companies were wanting more properties, that demand would already exist. It's not additional demand.

Take out the demand from small landlords, and you see prices fall. When prices fall, more people buy their own homes (particularly when private landlords are a huge drain on lower price housing stock), which then reduces demand for properties to rent, which then reduces incentive for big property rental companies to hoover up stock.

 

[dowie]

Totally agree. Isn't it about time the council/government stepped in to enforce an upper limit on rent? The government would love another taxation bracket too.

How would a government set an upper limit on rent even work? Different locations (and indeed different durations) have very different rental rates.

Suppose I'm a US banker who is going to be in London for 3 months and I'd like a decent apartment in Canary wharf so I'm within walking distance of the office as I'm going to be working ridiculous hours when there... How's it going to look when they're not available anymore, instead the only apartments below the rent limit are a bit further out in Poplar and are generally a bit ****.

Removing demand reduces price. It's very simple economics. If big landlord companies were wanting more properties, that demand would already exist. It's not additional demand.

How are you removing demand? Increasing CGT for (some) landlords doesn't remove the demand for those properties from tennats.

Take out the demand from small landlords, and you see prices fall. When prices fall, more people buy their own homes (particularly when private landlords are a huge drain on lower price housing stock), which then reduces demand for properties to rent, which then reduces incentive for big property rental companies to hoover up stock.

If you're expecting a drop in prices then your 100% CGT doesn't really get to apply, you're giving away a freebie that can be offset against other gains over the next 4 years.

You might lose a few potential tenants who are now able to purchase property but there would still be plenty of need/demand for rental accommodation - it just means that new rental accommodation will be more likely to be owned by larger landlords.

Some of this stuff I just can't take too seriously - it's not really serious proposals, it's more like revenge fantasies from bitter people - no one is going to stick a 100% CGT on second homes anyway so it is rather moot to even pretend it is viable.

 

[chrcoluk]

I'm 50 / 50 in this thread.

There should be a need for a rental market, but only to a certain age. 1st year students will get a place in the uni halls of residence, normally run by the uni itself or a private firm. 2nd/3rd/4th year students normally stay in some other student digs such as a house-share found on the university register. After graduating, you might find yourself back in a house-share again for a few more years to keep costs low. By the time you hit 30, you should be thinking about getting your own 1 or 2-bed abode. This is on principle only. The sad reality is that a large chunk of the population are still renting into their 30s, 40s and 50s. This is due to the shortage of buy-able property because they have been taken up by 2nd-home buyers or by landlords who have a portfolio of 3 or 4 rented properties, plus the property that they themselves live in.

I think that landlords should be allowed to rent 1 house out for the purpose of a 2nd income, but no more than 1 house per landlord.

2nd homes shouldn't be allowed because they're empty for half of the year.

If you're rich enough to afford a 2nd home, then stick with 1 home but upgrade to a bigger home. I'm fine with that because it will be lived in year-round!

If you want to holiday somewhere, then stay in a hotel (however many stars you want), a health spa, holiday park chalet, outdoor centre, campsite or stay at family or friends, but not in a 2nd home!

Hell, I'm even fine with people going on cruise ships, even though Greta will disagree with me. The main thing is that the ships are occupied for most of the year as operators run winter cruises as well.

What happens to the 30+ year olds in your plan who arent able to buy a home for one of many reasons?

For renting, we need a large shift of principles. Including multi year tenancies been the standard, occupier having vastly increased rights, including authority over wayleave forms, authority over repair work (able to get it done and take out of rent if LL doesnt do within reasonable amount of time). I do accept there could be a private rental market for the luxury end and for those who like to move around a lot, but I feel the supply of housing to ensure everyone has a home should come first. A roof over your head, security and adequate space shouldnt be a luxury. This will never be supplied in the UK rental market its just too broken, hence my idea about making home a home not a financial asset, leave the renting to the social landlords, and free up the private stock for the buyers looking for a place to live.

I would support an idea of a 2nd home tax if the proceeds were only used for building houses, it would be dynamic based on the supply and demand balance, if demand outstrips supply, the tax would be crazy high as a deterrent, there would be still people who pay it, and proceeds would go towards increasing government housing stock in the country. If we ever got to the point of having a good housing supply again the tax would be very low to reflect that.

 

[chrcoluk]

How would a government set an upper limit on rent even work? Different locations (and indeed different durations) have very different rental rates.

Not sure if Jack can step in here, but I think the way rent regulation works in Germany is its linked to inflation. So its more about regulating the rent increases rather than the original rent someone pays when they move in. Kind of like soft regulation. Some parts of the country have seen insane rent increases in the past year alone.

Personally I think it wouldnt work here, our rental market is just way too broken and the only fix is social renting. If a proper fix was attempted we would have landlords protesting.

 

[FoxEye]

Local authorities don't have control over CGT, also I doubt that that is a feasible change at all - surely big landlords would avoid it/have their properties wrapped up in a company etc.. some second homeowners aren't buying them for an investment etc.. you'd just hit some of the smaller local landlords.

Puls suppose it did hit property prices a bit, doesn't stop the rental yields via holiday lettings or airbnb from being attractive... 100% CGT is rather moot if your investment doesn't appreciate much in value but instead gives you a nice fat yield from rental income.

Corporate ownership of residential property - excluding housing associations - would be something I would ban.

As well as overseas ownership of residential property.

These aren't radical ideas - they are actually a thing in other countries.

 

[Hades]

Take out the demand from small landlords, and you see prices fall. When prices fall, more people buy their own homes (particularly when private landlords are a huge drain on lower price housing stock), which then reduces demand for properties to rent, which then reduces incentive for big property rental companies to hoover up stock.

The demand isn't coming from landlords. It's coming from tenants. Landlords are just reacting to market demand. If you remove small landlords the proerty will just go to larger landlords instead, and the net result will be less competition and higher rent.

 

[FoxEye]

The demand isn't coming from landlords. It's coming from tenants. Landlords are just reacting to market demand. If you remove small landlords the proerty will just go to larger landlords instead, and the net result will be less competition and higher rent.

Not everybody who rents want to be a renter.

The demand comes from people who don't want to be homeless

Landlords buy all the property knowing that everybody needs a house to live in. Also, you think renters would prefer to pay more in rent money to their landlord than they could get a mortgage on the same property for? That's a service they really want? To pay more and own nothing? Sure, sure.

 

[dowie]

Corporate ownership of residential property - excluding housing associations - would be something I would ban.

As well as overseas ownership of residential property.

These aren't radical ideas - they are actually a thing in other countries.

Can you give an example of banning corporate ownership of residential properties excluding housing associations?

How would you go about banning it?

Landlords buy all the property knowing that everybody needs a house to live in. Also, you think renters would prefer to pay more in rent money to their landlord than they could get a mortgage on the same property for? That's a service they really want? To pay more and own nothing? Sure, sure.

Well yes - why would you want a mortgage + legal fees + stamp duty for the house you live in for say 2nd year at uni? Then do you sell it and buy another paying mortgage + stamp duty + legal fees for third-year because one of your housemates has taken a year abroad and another wants to live with his gf + some other mate wants to live with you and the rest instead etc.. What happens if you can't sell in time?

Then when you move for a job do you repeat the process - mortgage application, stamp duty + legal fees?

It's nonsense, why would students or recent grads want to be tied into owning a house unless they themselves fancied being a landlord and renting rooms to their mates.

How do you handle the US banker visiting London for 3 months, long enough that he doesn't want to be stuck in a hotel - is the housing association going to find him a Canary Wharf apartment?

These just don't seem like serious proposals or solutions, it seems like more landlord revenge fantasy which would cause plenty of problems for people who want/need rental accommodation.

 

[FoxEye]

Can you give an example of banning corporate ownership of residential properties excluding housing associations?

How would you go about banning it?

Well yes - why would you want a mortgage + legal fees + stamp duty for the house you live in for say 2nd year at uni? Then do you sell it and buy another paying mortgage + stamp duty + legal fees for third-year because one of your housemates has taken a year abroad and another wants to live with his gf + some other mate wants to live with you and the rest instead etc.. What happens if you can't sell in time?

Then when you move for a job do you repeat the process - mortgage application, stamp duty + legal fees?

It's nonsense, why would students or recent grads want to be tied into owning a house unless they themselves fancied being a landlord and renting rooms to their mates.

How do you handle the US banker visiting London for 3 months, long enough that he doesn't want to be stuck in a hotel - is the housing association going to find him a Canary Wharf apartment?

These just don't seem like serious proposals or solutions, it seems like more landlord revenge fantasy which would cause plenty of problems for people who want/need rental accommodation.

I know people who bought (or had parents buy) a house to live in whilst going through uni. And those houses made ridiculous gains in the 3-5 years those people were studying.

Only the paupers rent whilst they go to uni... You don't think the middle classes would have their kids renting in halls, do you? Not when there's money to be made in house price appreciation.

Also there are good reasons not to want corporations to buy residential property. As an example of that, you only need to look to the US.

In parts of the US, entire suburbs are being bought up by corporates for the rental income. They have almost unlimited capital and will literally target an area, then buy everything in that area. Then when they control entire areas, they push rents up to the absolute maximum possible and people get forced out.

There are various articles you can read about how this has become a real problem in parts of the US. Corporates literally buying entire neighbourhoods and making it so its impossible to own a property in those places, so you have to rent from them.

I really don't see what is "revenge fantasy" about desiring residential property to be owned and lived in. On the contrary, that just sounds like using it for its intended function.

Or would you argue that the function of property is to make money, rather than provide shelter and a place to live?

Anyone who would say that the function of property is to make money is a lost cause really as far as I'm concerned.

 

[FoxEye]

How would you go about banning it?

Is this a trick question?

By preventing a corporation from becoming the registered legal owner or having right of control over any residential property.

By preventing any corporation from entering into a contract with any person, except for the purpose of a mortgage or secured loan, giving the corporation right of ownership or control of the property, or for any such contract to include terms which amount to ownership or control, by removing or reserving the rights of the owner in respect of the property.

e: Think I've posted this one before, about corporate ownership of residential property

Corporations are buying houses — robbing families of American Dream (nypost.com)

Again the US, but could this be the future here also.. no reason it couldn't.

Selling out: America's local landlords. Moving in: Big investors | Reuters

And of course, the first thing the new owners do is literally double the rent, whilst claiming to "provide a much-needed service" so that people can rent rather than own

A much-needed service, bleeding renters dry. With the money going to investment firms and pension funds, etc.

 

[cheesyboy]

The demand isn't coming from landlords. It's coming from tenants. Landlords are just reacting to market demand. If you remove small landlords the proerty will just go to larger landlords instead, and the net result will be less competition and higher rent.

Landlords, and 2nd home owners, create rent demand by out-competing potential home owners. It's a sealed market where people with cash or greater means can co-opt housing and effectively price-out buyers, leaving them with no option but to rent.

And landlords are such a huge population (2.65million of them), including a vast number of MPs, that they actually shape government policy to protect their investments instead of action being taken to restructure the system to allow young people, young families, to own a home.

 

[Hades]

Not everybody who rents want to be a renter.

The demand comes from people who don't want to be homeless

Landlords buy all the property knowing that everybody needs a house to live in. Also, you think renters would prefer to pay more in rent money to their landlord than they could get a mortgage on the same property for? That's a service they really want? To pay more and own nothing? Sure, sure.

If small landlords were removed from the market overnight then it wouldn't suddenly mean renters would suddenly be able to buy those properties. Those people wouldn't suddenly have a big deposit. All that would happen would be that the bigger landlords would snap up those properties.

 

[cheesyboy]

If small landlords were removed from the market overnight then it wouldn't suddenly mean renters would suddenly be able to buy those properties. Those people wouldn't suddenly have a big deposit. All that would happen would be that the bigger landlords would snap up those properties.

This is a big misunderstanding of supply and demand. And would not be insurmountable to control in any case.

 

[Maccy]

I'm sure @Will Gill has an opinion on this