Starmergeddon: They Came And Ate Us

[epwc]

The biggest problem with private landlords is that they don't understand their responsibilities, it's a complex thing but I'm not sure that many understand much at all, in my experience managing agents aren't much better

[Biffer]

I stand corrected, nothing to do with Labour then or ministers - tbf though that guardian news headline does say shadow minister so it’s an easy mistake to make.

The point you're deli erately missing is the tories tried to protect their guy. Labour got shot of theirs.

How is that the same in your mind?

Whilst it goes on in both main parties the difference in the way they handle these cases is quite stark.

No, no, no.

Yeeb says they're all the same. And he said it with such confidence.

[epwc]

Yeeb says they're all the same. And he said it with such confidence.

As we all know it's not whether something's true or not, it's how confidently you express it.

[Yeeb]

It was not a shadow minister
It was Geraint Davies MP for Swansea. He was accused of sexual harrassment by several women over a period of several years. He had the whip withdrawn and was then suspended from the Labour party as soon as a formaal complaint about him had been made. He subsequently stood as an Independent and stood down at the last election

I stand corrected, nothing to do with Labour then or ministers - tbf though that guardian news headline does say shadow minister so it’s an easy mistake to make.

The point you're deli erately missing is the tories tried to protect their guy. Labour got shot of theirs.

How is that the same in your mind?

The offence bit is pretty similar , Labour probably saw the trouble Tories got in by trying to hide another rapey mp so chose a different route.

[Yeeb]

And that tax should be increased, like tax on labour (actually doing something) is.

And unless you built the house, you don't provide anything. You take rent on an existing asset. It was there before you and will be there after you. Happy to help you with that.

You don’t seem to understand what home provision is , or more importantly what happens to existing tenants and those who wish to rent if landlords leave the market at an increasing rate like they have been doing. (And ultimately, government tax revenue from landlords too).
Happy to help you with that.

Oh no, I hope tax changes don't forget landlords to sell up en masses driving down house prices considerably. The horror of it all.

Landlords (not through malign intentions) in combination with poor planning laws have distorted British society in a profoundly negative way.

Yes because then all the people who rent will be able to buy overnight !

Oh, wait…

[Yeeb]

The point you're deli erately missing is the tories tried to protect their guy. Labour got shot of theirs.

How is that the same in your mind?

Whilst it goes on in both main parties the difference in the way they handle these cases is quite stark.

No, no, no.

Yeeb says they're all the same. And he said it with such confidence.

You guys should be ashamed of yourself , quibbling over the political outcome and ‘how it was handled’ rather than the pretty serious and horrible and identical sort of crime .
Doubt whether it matters that much to the victims whether they had the whip withdrawn or not , but hey ho you’ve just further proved that some people are myopic in the defence of their own team. Let’s hope no more scandals happen for Labour or equivalence drawn to other political parties else your sort with have to crunch gears and claim it’s not at all the same…

[_Os_]

You don’t seem to understand what home provision is , or more importantly what happens to existing tenants and those who wish to rent if landlords leave the market at an increasing rate like they have been doing. (And ultimately, government tax revenue from landlords too).
Happy to help you with that.

Oh no, I hope tax changes don't forget landlords to sell up en masses driving down house prices considerably. The horror of it all.

Landlords (not through malign intentions) in combination with poor planning laws have distorted British society in a profoundly negative way.

The flip side to which is you don't want them to have to sell, you want a lot more landlords and more flexibility in the labour market. That said allowing them to profit from capital gains for doing sod all is an oddity

Yeeb is correct when he says the taxes/costs on landlords are increasing. The UK's PRS was/is produced by low interest rates and poor returns from index linked stock investments (and for most people, if you're stock picking then you're losing). Property was just a superior place to park money compared to stocks or bonds. The minimum yield landlords aim for is 5%, taxes/costs that didn't exist when they bought eat into their expected yield, which then forces some to convert their properties to HMOs as they chase yield. I've seen portfolios with yields around 5% mostly backed by millions in mortgage debt, US bonds are currently paying 4%+ and that's as low risk as any investment comes (don't have the asset inflation, but it's still 4%+ with as close to zero risk as possible).

There's also the issue of hidden costs in the market landlords are competing in. The usual pattern of UK capitalism is being followed, the small players are being eaten by massive corporates using economies of scale (the "build to rent" sector). Like the corner shop owner there's no regulations to protect them against massive competitors. It's most visible in the student sector and huge purpose built new tower blocks. Less visible is when landlords have had enough, if their portfolio has any size the easiest way to sell is to sell to a single buyer (a larger landlord) or send it all to auction (also likely to be landlords). If the general pattern of UK capitalism is followed, all the small fish are eaten (no regulations protecting them, rising costs, hated), most of the medium sized fish are eaten, finally the corporates controlling nearly the entire sector are themselves eaten by foreigners who sweat the asset into the ground and invest profits wherever the best returns are (probably not the UK).

You would have to be quite mad to enter this sector. There's not going to be a lot more landlords.

[Biffer]

I stand corrected, nothing to do with Labour then or ministers - tbf though that guardian news headline does say shadow minister so it’s an easy mistake to make.

The point you're deli erately missing is the tories tried to protect their guy. Labour got shot of theirs.

How is that the same in your mind?

The offence bit is pretty similar , Labour probably saw the trouble Tories got in by trying to hide another rapey mp so chose a different route.

So guys in charge find out about a sexual offender and cover it up is the same as guys in charge find out about a sexual offender and kick him out is the same behaviour for you? Sounds like you have a side you like and are just desperately trying to excuse it to yourself.

Fuck this prick , no longer engaging. Cunt off yeeb.

[Yeeb]

The point you're deli erately missing is the tories tried to protect their guy. Labour got shot of theirs.

How is that the same in your mind?

The offence bit is pretty similar , Labour probably saw the trouble Tories got in by trying to hide another rapey mp so chose a different route.

So guys in charge find out about a sexual offender and cover it up is the same as guys in charge find out about a sexual offender and kick him out is the same behaviour for you? Sounds like you have a side you like and are just desperately trying to excuse it to yourself.

Fuck this prick , no longer engaging. Cunt off yeeb.

Lolz , all that swearing and you have lost the plot and thrown your toys yet again.
How do you plan to excuse former Labour MP and rapey type Mick hill that was only about year before that ? Labour actually reinstated that chap - do you have the brass neck to try claim that’s really any different behaviour ?

Seriously though, you are being an illogical dick, I’m mocking you and others who disagree with me saying Labour are also sleazy and inept, and doing a really bad job of it tbh. I don’t have a side as such and mocked Tory sleaze to exact same extent , but you moral high ground Labour types just cannot bear any equivalent behaviour from your own sweet rapey MP’s

[I like neeps]

You don’t seem to understand what home provision is , or more importantly what happens to existing tenants and those who wish to rent if landlords leave the market at an increasing rate like they have been doing. (And ultimately, government tax revenue from landlords too).
Happy to help you with that.

Oh no, I hope tax changes don't forget landlords to sell up en masses driving down house prices considerably. The horror of it all.

Landlords (not through malign intentions) in combination with poor planning laws have distorted British society in a profoundly negative way.

The flip side to which is you don't want them to have to sell, you want a lot more landlords and more flexibility in the labour market. That said allowing them to profit from capital gains for doing sod all is an oddity

If said landlords go through planning, financing, and building new stock then yes we do.

If they buy existing houses as a money making exercise, no we do not.

[robmatic]

Oh no, I hope tax changes don't forget landlords to sell up en masses driving down house prices considerably. The horror of it all.

Landlords (not through malign intentions) in combination with poor planning laws have distorted British society in a profoundly negative way.

The flip side to which is you don't want them to have to sell, you want a lot more landlords and more flexibility in the labour market. That said allowing them to profit from capital gains for doing sod all is an oddity

If said landlords go through planning, financing, and building new stock then yes we do.

If they buy existing houses as a money making exercise, no we do not.

The BTL model that we perfected in the UK of amateur landlords committing minimal amounts of their own capital to acquire scarce residential property and paying minimal interest rates is an absolute wheeze.

[Tichtheid]

The flip side to which is you don't want them to have to sell, you want a lot more landlords and more flexibility in the labour market. That said allowing them to profit from capital gains for doing sod all is an oddity

If said landlords go through planning, financing, and building new stock then yes we do.

If they buy existing houses as a money making exercise, no we do not.

The BTL model that we perfected in the UK of amateur landlords committing minimal amounts of their own capital to acquire scarce residential property and paying minimal interest rates is an absolute wheeze.

I know someone who bought several houses on interest-only loans so at one point was paying a few quid in repayments whilst charging market rates for rent, ie making a mint. Now he's sold a few of them because interest rates have gone up. The houses have at least doubled in value, some trebled.

My youngest has had to bid on rental properties in London in the two times she's moved. The rent is now about 40% of her income, going towards someone else's mortgage.

[dpedin]

If said landlords go through planning, financing, and building new stock then yes we do.

If they buy existing houses as a money making exercise, no we do not.

The BTL model that we perfected in the UK of amateur landlords committing minimal amounts of their own capital to acquire scarce residential property and paying minimal interest rates is an absolute wheeze.

I know someone who bought several houses on interest-only loans so at one point was paying a few quid in repayments whilst charging market rates for rent, ie making a mint. Now he's sold a few of them because interest rates have gone up. The houses have at least doubled in value, some trebled.

My youngest has had to bid on rental properties in London in the two times she's moved. The rent is now about 40% of her income, going towards someone else's mortgage.

My daughter and three mates just rented a 4 bed terraced house in Balham - £4,100 a month. Luckily they all earn a decent salary and can afford this. If you assume a 4% return on capital that values the property at c£1.25m. London property market is just mad!

[Dinsdale Piranha]

The BTL model that we perfected in the UK of amateur landlords committing minimal amounts of their own capital to acquire scarce residential property and paying minimal interest rates is an absolute wheeze.

I know someone who bought several houses on interest-only loans so at one point was paying a few quid in repayments whilst charging market rates for rent, ie making a mint. Now he's sold a few of them because interest rates have gone up. The houses have at least doubled in value, some trebled.

My youngest has had to bid on rental properties in London in the two times she's moved. The rent is now about 40% of her income, going towards someone else's mortgage.

My daughter and three mates just rented a 4 bed terraced house in Balham - £4,100 a month. Luckily they all earn a decent salary and can afford this. If you assume a 4% return on capital that values the property at c£1.25m. London property market is just mad!

I'd be aiming for more than 4%

Renting out property is a fairly shit investment if property prices aren't increasing. There's a negative amount of effort going in to addressing that problem. I hope it changes but I'm not holding my breath.

[Slick]

The BTL model that we perfected in the UK of amateur landlords committing minimal amounts of their own capital to acquire scarce residential property and paying minimal interest rates is an absolute wheeze.

I know someone who bought several houses on interest-only loans so at one point was paying a few quid in repayments whilst charging market rates for rent, ie making a mint. Now he's sold a few of them because interest rates have gone up. The houses have at least doubled in value, some trebled.

My youngest has had to bid on rental properties in London in the two times she's moved. The rent is now about 40% of her income, going towards someone else's mortgage.

My daughter and three mates just rented a 4 bed terraced house in Balham - £4,100 a month. Luckily they all earn a decent salary and can afford this. If you assume a 4% return on capital that values the property at c£1.25m. London property market is just mad!

A 4 bedroom house in Balham would be worth way more than that I would have thought

[Tichtheid]

My daughter and three mates just rented a 4 bed terraced house in Balham - £4,100 a month. Luckily they all earn a decent salary and can afford this. If you assume a 4% return on capital that values the property at c£1.25m. London property market is just mad!

Yeah mine is in the same situation with mates in the East End. Their previous four bed terraced house was bought by their landlord for around that price two years ago, I don’t remember what it was exactly.

[weegie01]

Private rental is essential to the operation of the housing market in the UK. The overall rental market has if anything declined somewhat in the last 40 years, but within that social renting has halved, and private renting has stepped in to fill the gap.

Buy to let is not a magic money tree. There was a short time where rapidly rising house prices and historically low interests made a very attractive proposition. But like every instance of 'easy money' it really was not. Those that timed it well and knew what they were doing (or got lucky) did very well, but many under capitalised fools rushed in and got burned when market conditions turned by interest rates rises etc. Somehow only the former are remembered.

Private letting has been a more or less stable part of the housing market for a decade. Another demonstration that it is not the magic money tree of myth. If it was the market would still be growing. The market has matured to the point where it offers decent long term returns to those who are well capitalised and in it for the long term. Like most mature businesses it offers consistently decent but not exceptional returns.

One of my sons is a chartered surveyor. He is looking at getting into BTL as a pension scheme. With personal pensions now being essentially pointless, he intends to use it as a good, solid long term investment that will not start giving any signifcant income for 20 years plus, but will provide a decent proportion of his retirement income in 30 years.

The market has learned from the past and has winnowed out the fly by nights. For example, lenders demand high deposits, and will only lend on low risk properties, e.g. no new builds. Someone coming in will need a 40% deposit on their first property or two, dropping to 25% ish once they have a track record. There are properties where with a high deposit you can make some revenue income but little capital growth (e.g. Sighthill in Edinburgh), or where there will be little or no revenue and the returns are capital (e.g Edinburgh West End). In neither case are the returns huge when averaged over the long term, but they are relatively safe over the long term. And of course those returns are taxed.

The pricing model for any business contains a component for capital costs, revenue costs and profit. Go to your local garden centre and part of what you spend is paying for the owner's capital cost to acquire the premises. BTL is no different other that the capital component is high compared to other businesses.

BTL could be claimed to be distorting the market if there were exceptional returns being made so commercial interests could afford to outbid domestic buyers and still make money. This was once the case, it stopped being so a long time ago. The market has stabilised and consolidated, with new money coming largely replacing money exiting.

There were excesses in the past. Those have gone they have been used to make BTL a convenient bogeyman to cover for all the other failings in the market, mainly lack of supply relative to demand, but also the completely distortive effect of private residence relief that has diverted a huge amounts of money into housing from other investments which do not have such a generous tax relief.

[Tichtheid]

The overall rental market has if anything declined somewhat in the last 40 years, but within that social renting has halved, and private renting has stepped in to fill the gap.

MORE THAN 4 IN 10 COUNCIL HOMES SOLD UNDER RIGHT TO BUY NOW OWNED BY PRIVATE LANDLORDS
Over 100,000 ex-social homes have been lost to the private sector since 2015
10 MAY 2024


41% of all council homes sold under the right to buy scheme are now being let on the private market, according to research by the New Economics Foundation (NEF) as a member of the Homes for Us alliance, published today. NEF Freedom of Information requests found that the number of homes bought under right to buy and now in the private sector has risen by 3.2 percentage points since 2014/​15, meaning around 109,000 more former council homes are now being let privately.

The report argues that the right to buy scheme has been a major contributing factor to the UK’s housing crisis. Since the scheme’s introduction in 1980 the proportion of social renters has almost halved, from 31% of English households to 16% in 2022/​23, according to the English Housing Survey. Tenants who would have previously been housed in social homes are now forced to rely on expensive, insecure and often poor-quality homes being let by private landlords.

As well as depleting the availability of genuinely affordable homes, the report highlights how the right to buy scheme is increasingly failing to achieve its stated goal of increasing owner occupation. The research found between 2014/​15 and 2022/​23, there was a broadly similar number of additional homes sold under right to buy (119,000) as there were additional former council homes now being let privately (109,000).

Hollie Wright, assistant researcher at the New Economics Foundation, said:

“While many have benefited from it, we need to be honest about the devastating impact the right to buy scheme has had on our housing system.

“There are millions of people in this country who are denied access to safe, affordable, secure social homes, partly because of right to buy.

“It’s time to give local councils the powers they need to reverse the damage right to buy has done in their communities and give them the tools to tackle the housing crisis.”

Conor O’Shea, policy and public affairs manager at Generation Rent, said:

“It is no surprise that the haemorrhaging of homes from the social sector to the hands of private landlords has been a failure for those who actually live there.

“More than a million households are waiting for a council home, while paying much higher rents to private landlords, often for homes in a much poorer condition than they’d have in social housing.

“In order to address the crisis in renting, we must keep homes in the social sector, and give councils the ability to build many more, to properly cater for the needs of the people who desperately need affordable and safe homes that are not being provided by private landlords.”

The research also reveals local authorities with a particularly high percentage of homes sold under right to buy which are now being privately let:

In Brighton 86% of homes sold are being privately rented
In Milton Keynes 73% of homes sold are now being privately rented
In Dover 59% of homes sold are being now being privately rented
By forcing councils to sell homes at cut price, the report argues the right to buy scheme has had a chilling effect on local authorities’ ability to build new council homes. To help get councils building again, NEF recommends devolving powers over right to buy from Westminster to local councils, including giving them the ability to:

Suspend right to buy where it can be demonstrated that the policy is contributing to affordable housing shortages
End right to buy for newly built or acquired homes
Prevent sold right to buy homes from being let in the private rented sector (PRS)
Reduce discounts and extend qualifying periods
In addition to these reforms, the report suggests Treasury rules should be amended to make it easier for councils to use funds from sold homes to build replacement council homes.

Contact

James Rush /​james.rush@neweconomics.org
https://neweconomics.org/2024/05/more-t ... -landlords

[Tichtheid]

As an anecdote, my grandparents lived in rented council housing their entire lives, he worked many different jobs but mainly driving, everything from lorries to and from and London to trucks at Grangemouth oil refinery. She worked in shops.

They bought their council house in the late 80s and a few years later had to sell when their meagre pensions wouldn't cover the increased mortgage rates when interest rates went up. They were too proud to admit this to their children so they said they wanted a small ground floor flat. The family only found out the real reason a few years after. Previously they were secure in the house they'd been in for three decades.

Selling council housing was an ideological move.

[inactionman]

The overall rental market has if anything declined somewhat in the last 40 years, but within that social renting has halved, and private renting has stepped in to fill the gap.

MORE THAN 4 IN 10 COUNCIL HOMES SOLD UNDER RIGHT TO BUY NOW OWNED BY PRIVATE LANDLORDS
Over 100,000 ex-social homes have been lost to the private sector since 2015
10 MAY 2024


41% of all council homes sold under the right to buy scheme are now being let on the private market, according to research by the New Economics Foundation (NEF) as a member of the Homes for Us alliance, published today. NEF Freedom of Information requests found that the number of homes bought under right to buy and now in the private sector has risen by 3.2 percentage points since 2014/​15, meaning around 109,000 more former council homes are now being let privately.

The report argues that the right to buy scheme has been a major contributing factor to the UK’s housing crisis. Since the scheme’s introduction in 1980 the proportion of social renters has almost halved, from 31% of English households to 16% in 2022/​23, according to the English Housing Survey. Tenants who would have previously been housed in social homes are now forced to rely on expensive, insecure and often poor-quality homes being let by private landlords.

As well as depleting the availability of genuinely affordable homes, the report highlights how the right to buy scheme is increasingly failing to achieve its stated goal of increasing owner occupation. The research found between 2014/​15 and 2022/​23, there was a broadly similar number of additional homes sold under right to buy (119,000) as there were additional former council homes now being let privately (109,000).

Hollie Wright, assistant researcher at the New Economics Foundation, said:

“While many have benefited from it, we need to be honest about the devastating impact the right to buy scheme has had on our housing system.

“There are millions of people in this country who are denied access to safe, affordable, secure social homes, partly because of right to buy.

“It’s time to give local councils the powers they need to reverse the damage right to buy has done in their communities and give them the tools to tackle the housing crisis.”

Conor O’Shea, policy and public affairs manager at Generation Rent, said:

“It is no surprise that the haemorrhaging of homes from the social sector to the hands of private landlords has been a failure for those who actually live there.

“More than a million households are waiting for a council home, while paying much higher rents to private landlords, often for homes in a much poorer condition than they’d have in social housing.

“In order to address the crisis in renting, we must keep homes in the social sector, and give councils the ability to build many more, to properly cater for the needs of the people who desperately need affordable and safe homes that are not being provided by private landlords.”

The research also reveals local authorities with a particularly high percentage of homes sold under right to buy which are now being privately let:

In Brighton 86% of homes sold are being privately rented
In Milton Keynes 73% of homes sold are now being privately rented
In Dover 59% of homes sold are being now being privately rented
By forcing councils to sell homes at cut price, the report argues the right to buy scheme has had a chilling effect on local authorities’ ability to build new council homes. To help get councils building again, NEF recommends devolving powers over right to buy from Westminster to local councils, including giving them the ability to:

Suspend right to buy where it can be demonstrated that the policy is contributing to affordable housing shortages
End right to buy for newly built or acquired homes
Prevent sold right to buy homes from being let in the private rented sector (PRS)
Reduce discounts and extend qualifying periods
In addition to these reforms, the report suggests Treasury rules should be amended to make it easier for councils to use funds from sold homes to build replacement council homes.

Contact

James Rush /​james.rush@neweconomics.org
https://neweconomics.org/2024/05/more-t ... -landlords

Just an observation

In my old home town, many of those who bought under right-to-buy were quite elderly, having lived in those houses for many decades - they were the ones who moved to the New Town in the 1950s and helped build it, and took advantage of right-to-buy in the 1980s. Their kids had in many cases already made lives elsewhere, and just bumped the inherited house onto the rental market once the parents passed. I mention this as the recommendations in your quotes above suggest extending the qualifying period, whereas what we surely want is a period of commitment once bought - a covenant that prevents the house being bought and flipped - maybe even a buy-back if the tenants look to move or are deceased within a certain period. Right-to-buy is a different beast to private sector purchasing, given the advantages offered, so conditions can be applied.

The big one is to allow income from right-to-buy to fund new home development under a council corporation. Again, referring to New Towns, there were constant tinkerings with the New Town acts that had the net effect of draining income from the New Town corporations and into central government funds. As a kid, this meant little money to maintain swimming pools etc, but also meant little money to refurbish, redevelop or just flat-out develop.

[dpedin]

ONS Housing Study 2023 is interesting.

https://www.ons.gov.uk/peoplepopulation ... wales/2023

My takes from it - In England the average house price is 8.3 times the average earnings. In the most expensive area, Kensington and Chelsea it is 34.3 times, in London overall it is 11.9 times. In Wandsworth/Balham the earnings to house price ratio is 16.6 where average earnings are c£40k and average house price is c£660k. Earnings have doubled since 1997 but house prices have increased by 4.5 times.

Note: the ONS give a warning on the data sets they use, for example earnings data is based on smaller data returns since Covid and earnings are for employment only taking no account of other incomes but the overall trend and affordability picture is probably reliable.

[Tichtheid]

Further to dpedin's note on stats, the article I shared has Brighton at 86% of house sales going to private rentals. I know for a fact that the HMO sector is saturated in Brighton and no more are allowed in certain areas - particularly those ares near the Universities or near to public transport links to same.

When we sold there a few months ago I noticed HMOs coming on to the market, whereas before you couldn't get hold of them for any price, most likely due to a hike in interest rates. This suggests to me that these landlords should never have been in it in the first place if they can't weather the first shock, but they have contributed to house price inflation.

[weegie01]

The overall rental market has if anything declined somewhat in the last 40 years, but within that social renting has halved, and private renting has stepped in to fill the gap.

MORE THAN 4 IN 10 COUNCIL HOMES SOLD UNDER RIGHT TO BUY NOW OWNED BY PRIVATE LANDLORDS
Over 100,000 ex-social homes have been lost to the private sector since 2015
10 MAY 2024


41% of all council homes sold under the right to buy scheme are now being let on the private market, according to research by the New Economics Foundation (NEF) as a member of the Homes for Us alliance, published today. NEF Freedom of Information requests found that the number of homes bought under right to buy and now in the private sector has risen by 3.2 percentage points since 2014/​15, meaning around 109,000 more former council homes are now being let privately.

The report argues that the right to buy scheme has been a major contributing factor to the UK’s housing crisis. Since the scheme’s introduction in 1980 the proportion of social renters has almost halved, from 31% of English households to 16% in 2022/​23, according to the English Housing Survey. Tenants who would have previously been housed in social homes are now forced to rely on expensive, insecure and often poor-quality homes being let by private landlords.

As well as depleting the availability of genuinely affordable homes, the report highlights how the right to buy scheme is increasingly failing to achieve its stated goal of increasing owner occupation. The research found between 2014/​15 and 2022/​23, there was a broadly similar number of additional homes sold under right to buy (119,000) as there were additional former council homes now being let privately (109,000).

Hollie Wright, assistant researcher at the New Economics Foundation, said:

“While many have benefited from it, we need to be honest about the devastating impact the right to buy scheme has had on our housing system.

“There are millions of people in this country who are denied access to safe, affordable, secure social homes, partly because of right to buy.

“It’s time to give local councils the powers they need to reverse the damage right to buy has done in their communities and give them the tools to tackle the housing crisis.”

Conor O’Shea, policy and public affairs manager at Generation Rent, said:

“It is no surprise that the haemorrhaging of homes from the social sector to the hands of private landlords has been a failure for those who actually live there.

“More than a million households are waiting for a council home, while paying much higher rents to private landlords, often for homes in a much poorer condition than they’d have in social housing.

“In order to address the crisis in renting, we must keep homes in the social sector, and give councils the ability to build many more, to properly cater for the needs of the people who desperately need affordable and safe homes that are not being provided by private landlords.”

The research also reveals local authorities with a particularly high percentage of homes sold under right to buy which are now being privately let:

In Brighton 86% of homes sold are being privately rented
In Milton Keynes 73% of homes sold are now being privately rented
In Dover 59% of homes sold are being now being privately rented
By forcing councils to sell homes at cut price, the report argues the right to buy scheme has had a chilling effect on local authorities’ ability to build new council homes. To help get councils building again, NEF recommends devolving powers over right to buy from Westminster to local councils, including giving them the ability to:

Suspend right to buy where it can be demonstrated that the policy is contributing to affordable housing shortages
End right to buy for newly built or acquired homes
Prevent sold right to buy homes from being let in the private rented sector (PRS)
Reduce discounts and extend qualifying periods
In addition to these reforms, the report suggests Treasury rules should be amended to make it easier for councils to use funds from sold homes to build replacement council homes.

Contact

James Rush /​james.rush@neweconomics.org
https://neweconomics.org/2024/05/more-t ... -landlords

I must be missing a point here.

I said that private landlords have stepped in to fill the gap left by the decline in social renting. All that article says is that a fairly large number of homes taken out of the social rental market by right to buy were subsequently brought back into the rental market by private landlords and thus help fill the gap.

[weegie01]

Further to dpedin's note on stats, the article I shared has Brighton at 86% of house sales going to private rentals. I know for a fact that the HMO sector is saturated in Brighton and no more are allowed in certain areas - particularly those ares near the Universities or near to public transport links to same.

When we sold there a few months ago I noticed HMOs coming on to the market, whereas before you couldn't get hold of them for any price, most likely due to a hike in interest rates. This suggests to me that these landlords should never have been in it in the first place if they can't weather the first shock, but they have contributed to house price inflation.

It says 86% of those sold under RTB are now privately let, not 86% of all house sales.

[robmatic]

Private rental is essential to the operation of the housing market in the UK. The overall rental market has if anything declined somewhat in the last 40 years, but within that social renting has halved, and private renting has stepped in to fill the gap.

Buy to let is not a magic money tree. There was a short time where rapidly rising house prices and historically low interests made a very attractive proposition. But like every instance of 'easy money' it really was not. Those that timed it well and knew what they were doing (or got lucky) did very well, but many under capitalised fools rushed in and got burned when market conditions turned by interest rates rises etc. Somehow only the former are remembered.

Private letting has been a more or less stable part of the housing market for a decade. Another demonstration that it is not the magic money tree of myth. If it was the market would still be growing. The market has matured to the point where it offers decent long term returns to those who are well capitalised and in it for the long term. Like most mature businesses it offers consistently decent but not exceptional returns.

One of my sons is a chartered surveyor. He is looking at getting into BTL as a pension scheme. With personal pensions now being essentially pointless, he intends to use it as a good, solid long term investment that will not start giving any signifcant income for 20 years plus, but will provide a decent proportion of his retirement income in 30 years.

The market has learned from the past and has winnowed out the fly by nights. For example, lenders demand high deposits, and will only lend on low risk properties, e.g. no new builds. Someone coming in will need a 40% deposit on their first property or two, dropping to 25% ish once they have a track record. There are properties where with a high deposit you can make some revenue income but little capital growth (e.g. Sighthill in Edinburgh), or where there will be little or no revenue and the returns are capital (e.g Edinburgh West End). In neither case are the returns huge when averaged over the long term, but they are relatively safe over the long term. And of course those returns are taxed.

The pricing model for any business contains a component for capital costs, revenue costs and profit. Go to your local garden centre and part of what you spend is paying for the owner's capital cost to acquire the premises. BTL is no different other that the capital component is high compared to other businesses.

BTL could be claimed to be distorting the market if there were exceptional returns being made so commercial interests could afford to outbid domestic buyers and still make money. This was once the case, it stopped being so a long time ago. The market has stabilised and consolidated, with new money coming largely replacing money exiting.

There were excesses in the past. Those have gone they have been used to make BTL a convenient bogeyman to cover for all the other failings in the market, mainly lack of supply relative to demand, but also the completely distortive effect of private residence relief that has diverted a huge amounts of money into housing from other investments which do not have such a generous tax relief.

I think there are still some distorting effects due to BTL even without the cheap and freely given credit that was available a few years ago. I am an accidental landlord because I kept my central Edinburgh flat when I emigrated, so I try and keep on top of the market and browse the landlord forums now and again. From what I can tell, a lot of my fellow landlords are basically financially illiterate but pump fairly hefty chunks of money into the market.

[weegie01]

I think there are still some distorting effects due to BTL even without the cheap and freely given credit that was available a few years ago. I am an accidental landlord because I kept my central Edinburgh flat when I emigrated, so I try and keep on top of the market and browse the landlord forums now and again. From what I can tell, a lot of my fellow landlords are basically financially illiterate but pump fairly hefty chunks of money into the market.

No question that there are those who believe the hype that property is a one way bet and throw money in there. Some of these will be part of the exodus there has been from BTL and AirBnB in Edinburgh in the last few months as they then realise it isn't. These sales are pretty much the reason why sectors of the Edinburgh market are very soft just now.

I'd be an idiot if I claimed BTL had no effect on the market, any source of demand does. IMHO people overestimate that impact compared to other drivers largely based on a few lurid tales in the media.

[Tichtheid]

I must be missing a point here.

I said that private landlords have stepped in to fill the gap left by the decline in social renting. All that article says is that a fairly large number of homes taken out of the social rental market by right to buy were subsequently brought back into the rental market by private landlords and thus help fill the gap.

According to this source, East Lothian Council bring in some £33.72M in rent from across 9353 properties - giving an average rent of £3605 per annum https://www.housingregulator.gov.scot/l ... n-council/

Google brings up an average monthly private rental in the county of £1426 per MONTH, or £17k per year https://www.home.co.uk/for_rent/east_lo ... y=elothian


There are hundreds of new houses being built around East Lothian and very few if any now are under £300K, many of the them go on the market for £600k+

[Yeeb]

The overall rental market has if anything declined somewhat in the last 40 years, but within that social renting has halved, and private renting has stepped in to fill the gap.

MORE THAN 4 IN 10 COUNCIL HOMES SOLD UNDER RIGHT TO BUY NOW OWNED BY PRIVATE LANDLORDS
Over 100,000 ex-social homes have been lost to the private sector since 2015
10 MAY 2024


41% of all council homes sold under the right to buy scheme are now being let on the private market, according to research by the New Economics Foundation (NEF) as a member of the Homes for Us alliance, published today. NEF Freedom of Information requests found that the number of homes bought under right to buy and now in the private sector has risen by 3.2 percentage points since 2014/​15, meaning around 109,000 more former council homes are now being let privately.

The report argues that the right to buy scheme has been a major contributing factor to the UK’s housing crisis. Since the scheme’s introduction in 1980 the proportion of social renters has almost halved, from 31% of English households to 16% in 2022/​23, according to the English Housing Survey. Tenants who would have previously been housed in social homes are now forced to rely on expensive, insecure and often poor-quality homes being let by private landlords.

As well as depleting the availability of genuinely affordable homes, the report highlights how the right to buy scheme is increasingly failing to achieve its stated goal of increasing owner occupation. The research found between 2014/​15 and 2022/​23, there was a broadly similar number of additional homes sold under right to buy (119,000) as there were additional former council homes now being let privately (109,000).

Hollie Wright, assistant researcher at the New Economics Foundation, said:

“While many have benefited from it, we need to be honest about the devastating impact the right to buy scheme has had on our housing system.

“There are millions of people in this country who are denied access to safe, affordable, secure social homes, partly because of right to buy.

“It’s time to give local councils the powers they need to reverse the damage right to buy has done in their communities and give them the tools to tackle the housing crisis.”

Conor O’Shea, policy and public affairs manager at Generation Rent, said:

“It is no surprise that the haemorrhaging of homes from the social sector to the hands of private landlords has been a failure for those who actually live there.

“More than a million households are waiting for a council home, while paying much higher rents to private landlords, often for homes in a much poorer condition than they’d have in social housing.

“In order to address the crisis in renting, we must keep homes in the social sector, and give councils the ability to build many more, to properly cater for the needs of the people who desperately need affordable and safe homes that are not being provided by private landlords.”

The research also reveals local authorities with a particularly high percentage of homes sold under right to buy which are now being privately let:

In Brighton 86% of homes sold are being privately rented
In Milton Keynes 73% of homes sold are now being privately rented
In Dover 59% of homes sold are being now being privately rented
By forcing councils to sell homes at cut price, the report argues the right to buy scheme has had a chilling effect on local authorities’ ability to build new council homes. To help get councils building again, NEF recommends devolving powers over right to buy from Westminster to local councils, including giving them the ability to:

Suspend right to buy where it can be demonstrated that the policy is contributing to affordable housing shortages
End right to buy for newly built or acquired homes
Prevent sold right to buy homes from being let in the private rented sector (PRS)
Reduce discounts and extend qualifying periods
In addition to these reforms, the report suggests Treasury rules should be amended to make it easier for councils to use funds from sold homes to build replacement council homes.

Contact

James Rush /​james.rush@neweconomics.org
https://neweconomics.org/2024/05/more-t ... -landlords

As you would expect, a very one sided argument. Mentions the ‘ideological reasons’ and rants at how they are now in the hands of evil landlords who do nothing apparently , but completely and utterly misses the financial reasons for why RTB started.
Uk was broke
Local councils were broke
A large % of the post war social housing stock was in poor condition , there was no money to fix
Selling it off greatly cut the urgent financial burden.
New owners , and then later evil landlords , pumped money in and brought them up to spec, amazing how people care for stuff better when it’s their own & not given to them for free.

Selling off the council houses wasn’t the problem, not replacing them was the problem. Amazes me how the proceeds were not earmarked for new social housing, simple supply and demand would have indicated the need and future consequences.

For an organisation with economics in the title, they don’t seem to be interested or understand the economics involved.

[Sandstorm]

Selling off the council houses wasn’t the problem, not replacing them was the problem. Amazes me how the proceeds were not earmarked for new social housing, simple supply and demand would have indicated the need and future consequences.

Yup. Succussive Governments for a generation have been allergic to investing in the UK infrastructure.

[weegie01]

I must be missing a point here.

I said that private landlords have stepped in to fill the gap left by the decline in social renting. All that article says is that a fairly large number of homes taken out of the social rental market by right to buy were subsequently brought back into the rental market by private landlords and thus help fill the gap.

According to this source, East Lothian Council bring in some £33.72M in rent from across 9353 properties - giving an average rent of £3605 per annum https://www.housingregulator.gov.scot/l ... n-council/

Google brings up an average monthly private rental in the county of £1426 per MONTH, or £17k per year https://www.home.co.uk/for_rent/east_lo ... y=elothian

There are hundreds of new houses being built around East Lothian and very few if any now are under £300K, many of the them go on the market for £600k+

Which has what to do with the statement that private landlords filled the gap left by the reduction in social housing?

Comparing average rents for council houses to average rents in the private sector for East Lothian is invalid. East Lothian is prime commuter land for Edinburgh and there are very expensive private rental properties of a type that just do not exist in the council estate. Like for like, a privately rented propert will usually cost more than a socially rented one, but you are not comparing like for like.

[Tichtheid]

I must be missing a point here.

I said that private landlords have stepped in to fill the gap left by the decline in social renting. All that article says is that a fairly large number of homes taken out of the social rental market by right to buy were subsequently brought back into the rental market by private landlords and thus help fill the gap.

According to this source, East Lothian Council bring in some £33.72M in rent from across 9353 properties - giving an average rent of £3605 per annum https://www.housingregulator.gov.scot/l ... n-council/

Google brings up an average monthly private rental in the county of £1426 per MONTH, or £17k per year https://www.home.co.uk/for_rent/east_lo ... y=elothian

There are hundreds of new houses being built around East Lothian and very few if any now are under £300K, many of the them go on the market for £600k+

Which has what to do with the statement that private landlords filled the gap left by the reduction in social housing?

I was making the point that affordable housing is nigh on impossible to be had and the private sector taking over a large chuck of municipal housing has played its part in that problem.

Comparing average rents for council houses to average rents in the private sector for East Lothian is invalid. East Lothian is prime commuter land for Edinburgh and there are very expensive private rental properties of a type that just do not exist in the council estate. Like for like, a privately rented propert will usually cost more than a socially rented one, but you are not comparing like for like.

I used East Lothian because I live here, you're welcome to do the same comparison between private sector and council rents in any other council area in Scotland

I just did a very quick search in Fife - council houses look to be a bit more than in EL, Gumtree has private rents of between £700 and £3000 per month

Highland was similar for council rents, from ONS "Highland is in the broad rental market area of Highland and Islands. Private rents in Highland and Islands averaged at £681 a month in October 2024. This was an increase from £656 in October 2023, a 3.9% rise."

These figures are not all from the same source, I wish they were, I don't really have the time to spend any more than a quick search during a mug of tea

[Yeeb]

Selling off the council houses wasn’t the problem, not replacing them was the problem. Amazes me how the proceeds were not earmarked for new social housing, simple supply and demand would have indicated the need and future consequences.

Yup. Succussive Governments for a generation have been allergic to investing in the UK infrastructure.

If you are talking about successive governments , then you should really annoy that bobble hats and point out it was the Labour amninstrations before Thatcher got in that started the study and encouraging home ownership as a goal , as well as building fewer social houses than Tories has done until that point.
Before that, it was a Labour idea too of giving council tenants right of purchase….. like closing mines and privatising NHS, Labour has successfully managing to dodge all the blame for that.

But but but Thatcher evil landlords wah wah wah etc

[I like neeps]

Private rental is essential to the operation of the housing market in the UK. The overall rental market has if anything declined somewhat in the last 40 years, but within that social renting has halved, and private renting has stepped in to fill the gap.

Buy to let is not a magic money tree. There was a short time where rapidly rising house prices and historically low interests made a very attractive proposition. But like every instance of 'easy money' it really was not. Those that timed it well and knew what they were doing (or got lucky) did very well, but many under capitalised fools rushed in and got burned when market conditions turned by interest rates rises etc. Somehow only the former are remembered.

Private letting has been a more or less stable part of the housing market for a decade. Another demonstration that it is not the magic money tree of myth. If it was the market would still be growing. The market has matured to the point where it offers decent long term returns to those who are well capitalised and in it for the long term. Like most mature businesses it offers consistently decent but not exceptional returns.

One of my sons is a chartered surveyor. He is looking at getting into BTL as a pension scheme. With personal pensions now being essentially pointless, he intends to use it as a good, solid long term investment that will not start giving any signifcant income for 20 years plus, but will provide a decent proportion of his retirement income in 30 years.

The market has learned from the past and has winnowed out the fly by nights. For example, lenders demand high deposits, and will only lend on low risk properties, e.g. no new builds. Someone coming in will need a 40% deposit on their first property or two, dropping to 25% ish once they have a track record. There are properties where with a high deposit you can make some revenue income but little capital growth (e.g. Sighthill in Edinburgh), or where there will be little or no revenue and the returns are capital (e.g Edinburgh West End). In neither case are the returns huge when averaged over the long term, but they are relatively safe over the long term. And of course those returns are taxed.

The pricing model for any business contains a component for capital costs, revenue costs and profit. Go to your local garden centre and part of what you spend is paying for the owner's capital cost to acquire the premises. BTL is no different other that the capital component is high compared to other businesses.

BTL could be claimed to be distorting the market if there were exceptional returns being made so commercial interests could afford to outbid domestic buyers and still make money. This was once the case, it stopped being so a long time ago. The market has stabilised and consolidated, with new money coming largely replacing money exiting.

There were excesses in the past. Those have gone they have been used to make BTL a convenient bogeyman to cover for all the other failings in the market, mainly lack of supply relative to demand, but also the completely distortive effect of private residence relief that has diverted a huge amounts of money into housing from other investments which do not have such a generous tax relief.

The first paragraph is self defeating. Social renting has collapsed because council house building has collapsed and the stock was sold off. So filling the gap in this case equals buying a former social home and renting it as a private investor. Which defeats the point of social houses. And is bad.

BTL distorts the market, not because Blackrock are buying up multifamily residences like in the US. But because buyers are going up against commercial investors who have more money and more leverage.

There have been many failures in housebuilding policy, economic policy, immigration policy that gets us to thos point. Undeniably of which the proliferation of BTLs is one of those problems. Nobody is saying its an individual moral failing. BTLs are in for your sons reasons, a nice pension,a nice earner. They wouldn't do it if it didn't make money, so the woe is us it's awful to a be landlord was a bit silly. If it was so difficult and didnt make good money, they wouldn't do it.Lots of ways of making money are damaging to others and society. Doesn't make them a moral failing - it's the world we live in - doesn't make it a moral good or not damaging either.

[_Os_]

Private rental is essential to the operation of the housing market in the UK. The overall rental market has if anything declined somewhat in the last 40 years, but within that social renting has halved, and private renting has stepped in to fill the gap.

Buy to let is not a magic money tree. There was a short time where rapidly rising house prices and historically low interests made a very attractive proposition. But like every instance of 'easy money' it really was not. Those that timed it well and knew what they were doing (or got lucky) did very well, but many under capitalised fools rushed in and got burned when market conditions turned by interest rates rises etc. Somehow only the former are remembered.

Private letting has been a more or less stable part of the housing market for a decade. Another demonstration that it is not the magic money tree of myth. If it was the market would still be growing. The market has matured to the point where it offers decent long term returns to those who are well capitalised and in it for the long term. Like most mature businesses it offers consistently decent but not exceptional returns.

One of my sons is a chartered surveyor. He is looking at getting into BTL as a pension scheme. With personal pensions now being essentially pointless, he intends to use it as a good, solid long term investment that will not start giving any signifcant income for 20 years plus, but will provide a decent proportion of his retirement income in 30 years.

The market has learned from the past and has winnowed out the fly by nights. For example, lenders demand high deposits, and will only lend on low risk properties, e.g. no new builds. Someone coming in will need a 40% deposit on their first property or two, dropping to 25% ish once they have a track record. There are properties where with a high deposit you can make some revenue income but little capital growth (e.g. Sighthill in Edinburgh), or where there will be little or no revenue and the returns are capital (e.g Edinburgh West End). In neither case are the returns huge when averaged over the long term, but they are relatively safe over the long term. And of course those returns are taxed.

The pricing model for any business contains a component for capital costs, revenue costs and profit. Go to your local garden centre and part of what you spend is paying for the owner's capital cost to acquire the premises. BTL is no different other that the capital component is high compared to other businesses.

BTL could be claimed to be distorting the market if there were exceptional returns being made so commercial interests could afford to outbid domestic buyers and still make money. This was once the case, it stopped being so a long time ago. The market has stabilised and consolidated, with new money coming largely replacing money exiting.

There were excesses in the past. Those have gone they have been used to make BTL a convenient bogeyman to cover for all the other failings in the market, mainly lack of supply relative to demand, but also the completely distortive effect of private residence relief that has diverted a huge amounts of money into housing from other investments which do not have such a generous tax relief.

Better post than most on the subject.

Not entirely true that there was never a magic money tree and no easy money. In the 00s it was possible to max out a some credit cards, use that as a deposit, re-mortgage at 100% to repay the credit cards, credit rating goes up as cards are paid off and credit limit goes up, value of the property goes up. Always worth remembering some of the people with well capitalised portfolios now giving advice to others, acquired that portfolio for £0. There is of course no difference between luck and talent (no one can choose to be talented at anything), there was a lot of luck and fearless risk taking, then survivor bias after the fact. Not convinced that basic formula doesn't still apply, even if all the rules are different.

My advice for your son would be:

1. Set up a ltd. Hard/expensive to move the property into a ltd after the fact. If he doesn't do this from the start and really will be doing it for 30 years, he'll end up setting up a ltd anyway and have part of the portfolio held personally and part in the ltd. There's inheritance benefits, but tax is also calculated differently for a business including pension contributions:
https://www.gov.uk/hmrc-internal-manual ... /ptm043100

2. Asset values can go up as well as down. People in the UK have become accustomed to house prices always going up. There's growing political will to build more supply. As boomers die or move into care homes, more supply is going to appear from the existing stock at a higher rate than before (they were a large generation and are home owners). Additional demand is only coming from migration (internal and external). I would be weary of investing in property on the basis the real terms asset value will go up, rather than on the yield from the rent/the property being in a strong location.

3. People become attached to their properties. It's definitely not passive income, it is a business as you say. If he's going to buy and hold for 30 years, he needs to think about if he's the type of person that really will sell, or if he's going to keep working on it into his 70s and 80s. If he's not going to sell, he has a business and not a pension, which means the opposite of retirement. People can become obsessed. Seen a few cases of "it's my pension" which morphs into "I'm never selling" which then becomes "I must turn this into unearned intergenerational inequality, fucking IHT!".

[weegie01]

According to this source, East Lothian Council bring in some £33.72M in rent from across 9353 properties - giving an average rent of £3605 per annum https://www.housingregulator.gov.scot/l ... n-council/

Google brings up an average monthly private rental in the county of £1426 per MONTH, or £17k per year https://www.home.co.uk/for_rent/east_lo ... y=elothian

There are hundreds of new houses being built around East Lothian and very few if any now are under £300K, many of the them go on the market for £600k+

Which has what to do with the statement that private landlords filled the gap left by the reduction in social housing?

I was making the point that affordable housing is nigh on impossible to be had and the private sector taking over a large chuck of municipal housing has played its part in that problem.

Comparing average rents for council houses to average rents in the private sector for East Lothian is invalid. East Lothian is prime commuter land for Edinburgh and there are very expensive private rental properties of a type that just do not exist in the council estate. Like for like, a privately rented propert will usually cost more than a socially rented one, but you are not comparing like for like.

I used East Lothian because I live here, you're welcome to do the same comparison between private sector and council rents in any other council area in Scotland

I just did a very quick search in Fife - council houses look to be a bit more than in EL, Gumtree has private rents of between £700 and £3000 per month

Highland was similar for council rents, from ONS "Highland is in the broad rental market area of Highland and Islands. Private rents in Highland and Islands averaged at £681 a month in October 2024. This was an increase from £656 in October 2023, a 3.9% rise."

These figures are not all from the same source, I wish they were, I don't really have the time to spend any more than a quick search during a mug of tea

This all lovely, but I never made any comment on affordability.

[weegie01]

Private rental is essential to the operation of the housing market in the UK. The overall rental market has if anything declined somewhat in the last 40 years, but within that social renting has halved, and private renting has stepped in to fill the gap.

Buy to let is not a magic money tree. There was a short time where rapidly rising house prices and historically low interests made a very attractive proposition. But like every instance of 'easy money' it really was not. Those that timed it well and knew what they were doing (or got lucky) did very well, but many under capitalised fools rushed in and got burned when market conditions turned by interest rates rises etc. Somehow only the former are remembered.

Private letting has been a more or less stable part of the housing market for a decade. Another demonstration that it is not the magic money tree of myth. If it was the market would still be growing. The market has matured to the point where it offers decent long term returns to those who are well capitalised and in it for the long term. Like most mature businesses it offers consistently decent but not exceptional returns.

One of my sons is a chartered surveyor. He is looking at getting into BTL as a pension scheme. With personal pensions now being essentially pointless, he intends to use it as a good, solid long term investment that will not start giving any signifcant income for 20 years plus, but will provide a decent proportion of his retirement income in 30 years.

The market has learned from the past and has winnowed out the fly by nights. For example, lenders demand high deposits, and will only lend on low risk properties, e.g. no new builds. Someone coming in will need a 40% deposit on their first property or two, dropping to 25% ish once they have a track record. There are properties where with a high deposit you can make some revenue income but little capital growth (e.g. Sighthill in Edinburgh), or where there will be little or no revenue and the returns are capital (e.g Edinburgh West End). In neither case are the returns huge when averaged over the long term, but they are relatively safe over the long term. And of course those returns are taxed.

The pricing model for any business contains a component for capital costs, revenue costs and profit. Go to your local garden centre and part of what you spend is paying for the owner's capital cost to acquire the premises. BTL is no different other that the capital component is high compared to other businesses.

BTL could be claimed to be distorting the market if there were exceptional returns being made so commercial interests could afford to outbid domestic buyers and still make money. This was once the case, it stopped being so a long time ago. The market has stabilised and consolidated, with new money coming largely replacing money exiting.

There were excesses in the past. Those have gone they have been used to make BTL a convenient bogeyman to cover for all the other failings in the market, mainly lack of supply relative to demand, but also the completely distortive effect of private residence relief that has diverted a huge amounts of money into housing from other investments which do not have such a generous tax relief.

The first paragraph is self defeating. Social renting has collapsed because council house building has collapsed and the stock was sold off. So filling the gap in this case equals buying a former social home and renting it as a private investor. Which defeats the point of social houses. And is bad.

BTL distorts the market, not because Blackrock are buying up multifamily residences like in the US. But because buyers are going up against commercial investors who have more money and more leverage.

There have been many failures in housebuilding policy, economic policy, immigration policy that gets us to thos point. Undeniably of which the proliferation of BTLs is one of those problems. Nobody is saying its an individual moral failing. BTLs are in for your sons reasons, a nice pension,a nice earner. They wouldn't do it if it didn't make money, so the woe is us it's awful to a be landlord was a bit silly. If it was so difficult and didnt make good money, they wouldn't do it.Lots of ways of making money are damaging to others and society. Doesn't make them a moral failing - it's the world we live in - doesn't make it a moral good or not damaging either.

Social renting declined, private renting increased as that decline had created a market opportunity. You can have any opinions you like of whether this is a good or bad thing, but it does not alter the fact that this what happened.

No one is saying that it's awful being a landlord, and frankly your biases are showing by making that comment. I am pointing out that BTL is no different from any other business. Of course people are in it to make money, some do well, but some do not as it is not the easy route to sure fire success of myth.

[Yeeb]

Private rental is essential to the operation of the housing market in the UK. The overall rental market has if anything declined somewhat in the last 40 years, but within that social renting has halved, and private renting has stepped in to fill the gap.

Buy to let is not a magic money tree. There was a short time where rapidly rising house prices and historically low interests made a very attractive proposition. But like every instance of 'easy money' it really was not. Those that timed it well and knew what they were doing (or got lucky) did very well, but many under capitalised fools rushed in and got burned when market conditions turned by interest rates rises etc. Somehow only the former are remembered.

Private letting has been a more or less stable part of the housing market for a decade. Another demonstration that it is not the magic money tree of myth. If it was the market would still be growing. The market has matured to the point where it offers decent long term returns to those who are well capitalised and in it for the long term. Like most mature businesses it offers consistently decent but not exceptional returns.

One of my sons is a chartered surveyor. He is looking at getting into BTL as a pension scheme. With personal pensions now being essentially pointless, he intends to use it as a good, solid long term investment that will not start giving any signifcant income for 20 years plus, but will provide a decent proportion of his retirement income in 30 years.

The market has learned from the past and has winnowed out the fly by nights. For example, lenders demand high deposits, and will only lend on low risk properties, e.g. no new builds. Someone coming in will need a 40% deposit on their first property or two, dropping to 25% ish once they have a track record. There are properties where with a high deposit you can make some revenue income but little capital growth (e.g. Sighthill in Edinburgh), or where there will be little or no revenue and the returns are capital (e.g Edinburgh West End). In neither case are the returns huge when averaged over the long term, but they are relatively safe over the long term. And of course those returns are taxed.

The pricing model for any business contains a component for capital costs, revenue costs and profit. Go to your local garden centre and part of what you spend is paying for the owner's capital cost to acquire the premises. BTL is no different other that the capital component is high compared to other businesses.

BTL could be claimed to be distorting the market if there were exceptional returns being made so commercial interests could afford to outbid domestic buyers and still make money. This was once the case, it stopped being so a long time ago. The market has stabilised and consolidated, with new money coming largely replacing money exiting.

There were excesses in the past. Those have gone they have been used to make BTL a convenient bogeyman to cover for all the other failings in the market, mainly lack of supply relative to demand, but also the completely distortive effect of private residence relief that has diverted a huge amounts of money into housing from other investments which do not have such a generous tax relief.

The first paragraph is self defeating. Social renting has collapsed because council house building has collapsed and the stock was sold off. So filling the gap in this case equals buying a former social home and renting it as a private investor. Which defeats the point of social houses. And is bad.

BTL distorts the market, not because Blackrock are buying up multifamily residences like in the US. But because buyers are going up against commercial investors who have more money and more leverage.

There have been many failures in housebuilding policy, economic policy, immigration policy that gets us to thos point. Undeniably of which the proliferation of BTLs is one of those problems. Nobody is saying its an individual moral failing. BTLs are in for your sons reasons, a nice pension,a nice earner. They wouldn't do it if it didn't make money, so the woe is us it's awful to a be landlord was a bit silly. If it was so difficult and didnt make good money, they wouldn't do it.Lots of ways of making money are damaging to others and society. Doesn't make them a moral failing - it's the world we live in - doesn't make it a moral good or not damaging either.

Social renting declined, private renting increased as that decline had created a market opportunity. You can have any opinions you like of whether this is a good or bad thing, but it does not alter the fact that this what happened.

No one is saying that it's awful being a landlord, and frankly your biases are showing by making that comment. I am pointing out that BTL is no different from any other business. Of course people are in it to make money, some do well, but some do not as it is not the easy route to sure fire success of myth.

It is different now from other businesses, it’s the only business where you pay tax on turnover not profit thanks to Teresa May
:(

[Tichtheid]

Which has what to do with the statement that private landlords filled the gap left by the reduction in social housing?

I was making the point that affordable housing is nigh on impossible to be had and the private sector taking over a large chuck of municipal housing has played its part in that problem.

Comparing average rents for council houses to average rents in the private sector for East Lothian is invalid. East Lothian is prime commuter land for Edinburgh and there are very expensive private rental properties of a type that just do not exist in the council estate. Like for like, a privately rented propert will usually cost more than a socially rented one, but you are not comparing like for like.

I used East Lothian because I live here, you're welcome to do the same comparison between private sector and council rents in any other council area in Scotland

I just did a very quick search in Fife - council houses look to be a bit more than in EL, Gumtree has private rents of between £700 and £3000 per month

Highland was similar for council rents, from ONS "Highland is in the broad rental market area of Highland and Islands. Private rents in Highland and Islands averaged at £681 a month in October 2024. This was an increase from £656 in October 2023, a 3.9% rise."

These figures are not all from the same source, I wish they were, I don't really have the time to spend any more than a quick search during a mug of tea

This all lovely, but I never made any comment on affordability.

Well, you kind of did when you talked about the cost of the private sector v municipal in East Lothian being an outlier, which it isn't really. Plus this

I said that private landlords have stepped in to fill the gap left by the decline in social renting.

They have not stepped in to fill the gap when the cost for the tenant is so much more - the gap is in affordable housing.

According to the Gov.UK site

In 2022-23, 24% (1.1 million households) of private renters received housing support to help with the payment of their rent

So the taxpayer is helping to pay off a quarter of private rental mortgages too

[I like neeps]

Private rental is essential to the operation of the housing market in the UK. The overall rental market has if anything declined somewhat in the last 40 years, but within that social renting has halved, and private renting has stepped in to fill the gap.

Buy to let is not a magic money tree. There was a short time where rapidly rising house prices and historically low interests made a very attractive proposition. But like every instance of 'easy money' it really was not. Those that timed it well and knew what they were doing (or got lucky) did very well, but many under capitalised fools rushed in and got burned when market conditions turned by interest rates rises etc. Somehow only the former are remembered.

Private letting has been a more or less stable part of the housing market for a decade. Another demonstration that it is not the magic money tree of myth. If it was the market would still be growing. The market has matured to the point where it offers decent long term returns to those who are well capitalised and in it for the long term. Like most mature businesses it offers consistently decent but not exceptional returns.

One of my sons is a chartered surveyor. He is looking at getting into BTL as a pension scheme. With personal pensions now being essentially pointless, he intends to use it as a good, solid long term investment that will not start giving any signifcant income for 20 years plus, but will provide a decent proportion of his retirement income in 30 years.

The market has learned from the past and has winnowed out the fly by nights. For example, lenders demand high deposits, and will only lend on low risk properties, e.g. no new builds. Someone coming in will need a 40% deposit on their first property or two, dropping to 25% ish once they have a track record. There are properties where with a high deposit you can make some revenue income but little capital growth (e.g. Sighthill in Edinburgh), or where there will be little or no revenue and the returns are capital (e.g Edinburgh West End). In neither case are the returns huge when averaged over the long term, but they are relatively safe over the long term. And of course those returns are taxed.

The pricing model for any business contains a component for capital costs, revenue costs and profit. Go to your local garden centre and part of what you spend is paying for the owner's capital cost to acquire the premises. BTL is no different other that the capital component is high compared to other businesses.

BTL could be claimed to be distorting the market if there were exceptional returns being made so commercial interests could afford to outbid domestic buyers and still make money. This was once the case, it stopped being so a long time ago. The market has stabilised and consolidated, with new money coming largely replacing money exiting.

There were excesses in the past. Those have gone they have been used to make BTL a convenient bogeyman to cover for all the other failings in the market, mainly lack of supply relative to demand, but also the completely distortive effect of private residence relief that has diverted a huge amounts of money into housing from other investments which do not have such a generous tax relief.

The first paragraph is self defeating. Social renting has collapsed because council house building has collapsed and the stock was sold off. So filling the gap in this case equals buying a former social home and renting it as a private investor. Which defeats the point of social houses. And is bad.

BTL distorts the market, not because Blackrock are buying up multifamily residences like in the US. But because buyers are going up against commercial investors who have more money and more leverage.

There have been many failures in housebuilding policy, economic policy, immigration policy that gets us to thos point. Undeniably of which the proliferation of BTLs is one of those problems. Nobody is saying its an individual moral failing. BTLs are in for your sons reasons, a nice pension,a nice earner. They wouldn't do it if it didn't make money, so the woe is us it's awful to a be landlord was a bit silly. If it was so difficult and didnt make good money, they wouldn't do it.Lots of ways of making money are damaging to others and society. Doesn't make them a moral failing - it's the world we live in - doesn't make it a moral good or not damaging either.

Social renting declined, private renting increased as that decline had created a market opportunity. You can have any opinions you like of whether this is a good or bad thing, but it does not alter the fact that this what happened.

No one is saying that it's awful being a landlord, and frankly your biases are showing by making that comment. I am pointing out that BTL is no different from any other business. Of course people are in it to make money, some do well, but some do not as it is not the easy route to sure fire success of myth.

Yes what happened is bad. That is the point. Everyone knows that the Tories sold off the council houses, didn't replace them, and that created an "opportunity" for private landlords. The reason we discuss it isn't to discuss the obvious, but to discuss the affects.

Your whole spiel talking about the difficulties of being a Landlord shows your bias as well. For the last 20 years until inflation it has been easy. Constantly low rates because of the magic money tree, dramatically restrained supply, bobs your uncle. Sure there are some exceptions e.g. buying in Aberdeen before the oil collapse but by and large over20 years interest rates have gone down, money into assets has gone up, houseprices have gone up. So to have got it wrong you're very much in the minority

It's been a great earner for most, tax more and in doing so have people able to buy, invest money into productive assets instead, avoid the population collapse high house prices will cause with the declining birth rates. Not a problem specific to the UK obviously either.

[dpedin]

The first paragraph is self defeating. Social renting has collapsed because council house building has collapsed and the stock was sold off. So filling the gap in this case equals buying a former social home and renting it as a private investor. Which defeats the point of social houses. And is bad.

BTL distorts the market, not because Blackrock are buying up multifamily residences like in the US. But because buyers are going up against commercial investors who have more money and more leverage.

There have been many failures in housebuilding policy, economic policy, immigration policy that gets us to thos point. Undeniably of which the proliferation of BTLs is one of those problems. Nobody is saying its an individual moral failing. BTLs are in for your sons reasons, a nice pension,a nice earner. They wouldn't do it if it didn't make money, so the woe is us it's awful to a be landlord was a bit silly. If it was so difficult and didnt make good money, they wouldn't do it.Lots of ways of making money are damaging to others and society. Doesn't make them a moral failing - it's the world we live in - doesn't make it a moral good or not damaging either.

Social renting declined, private renting increased as that decline had created a market opportunity. You can have any opinions you like of whether this is a good or bad thing, but it does not alter the fact that this what happened.

No one is saying that it's awful being a landlord, and frankly your biases are showing by making that comment. I am pointing out that BTL is no different from any other business. Of course people are in it to make money, some do well, but some do not as it is not the easy route to sure fire success of myth.

Yes what happened is bad. That is the point. Everyone knows that the Tories sold off the council houses, didn't replace them, and that created an "opportunity" for private landlords. The reason we discuss it isn't to discuss the obvious, but to discuss the affects.

Your whole spiel talking about the difficulties of being a Landlord shows your bias as well. For the last 20 years until inflation it has been easy. Constantly low rates because of the magic money tree, dramatically restrained supply, bobs your uncle. Sure there are some exceptions e.g. buying in Aberdeen before the oil collapse but by and large over20 years interest rates have gone down, money into assets has gone up, houseprices have gone up. So to have got it wrong you're very much in the minority

It's been a great earner for most, tax more and in doing so have people able to buy, invest money into productive assets instead, avoid the population collapse high house prices will cause with the declining birth rates. Not a problem specific to the UK obviously either.

House prices have increased by more than double the rate of earnings since 1997. Property including BTL has been a great investment vehicle for those with cash or who took a risk and borrowed to invest in property. It now looks like the balance is shifting and the tax situation and regulatory frameworks are catching up with the rental markets and as a result folk are disinvesting and looking elsewhere to invest their money. Councils were forced to sell off social housing at a huge discount and refused to reinvest in social housing as it would cost more than they would recover when it was sold off so why bother? Again it looks like the rules will be changing to encourage councils to invest in social housing again without the threat of having to sell off at a loss and that is a good thing! Inevitably with any change in a market those who are trying to get out at the wrong time will cry foul but that's the flip side to the risk they have taken and in all probability profited from already? Hopefully we will see more investment in social housing and a decline in the BTL market.