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Original poster

Housing

83 replies

titbumwillypoo · 29/05/2023 20:21

If you look at most of the problems in the country at the minute the root cause is housing. Rents are too high, wages haven't kept up, not enough houses being built and mostly a finite resource being used as a basis for our economy.
I think there's a simple solution, a two pronged system. Option 1: If you rent out one house you pay 20% on income and then for every house after that an addition 1 percent up to 80%. So couples who have got together or people who've inherited etc and have a spare house (and don't want to sell yet) can make some money but they'll not get massively rich and are more likely to want long term tenants that will look after the place. What it will do is dissuade people buying up lots of houses who then get rich off the backs of other people working without having to contribute much to society.
Option 2 is if you do have lots of houses then you can become a charity. You don't pay income tax BUT you cannot earn more than 10 times minimum wage (£216,736 a year) and you cannot charge more than 10 times minimum wage per week rent. (Say for a 2 bedroom house) Obviously there would need to be some tweaks for bigger houses and HMO's but you get the principle.
Finally, housing benefit should be reduced to a flat rate across the country (over a period of say 5 years) of 10 times minimum wage per week. The money saved could be used by councils to build more social housing under the proviso that it cannot be sold off and to pay more housing officers to inspect bad landlords.
Basically my plan allows people the freedom of choice. If you believe in unfettered capitalism that allows you to set market rates that squeeze people until the pips squeak then you can have it but in doing so you will be giving back to society. Or you can make a decent living that positively helps vast swathes of society.
YABU: Market forces and the profit motive are what makes this country great.
YANBU: Secure housing should be accessible to all for a functioning society and not a way for a minority to get rich(er) off the hard work of others.

OP posts:
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OhmygodDont · 30/05/2023 20:59

My landlord has no mortgage. So their Costa are tax on what I pay, insurance, repairs. So I should pay what in rent. Nowhere near a mortgage clearly.

Whammyyammy · 30/05/2023 20:47

Simple solution for any landlord is simply increase rent by 20%.
Landlord gets sane income.
Government get more tax.
Tenant pays 20% extra rent.

Yeah, crackling idea

CherryBlossomAutumn · 30/05/2023 20:43

What's not fine is borrowing the money with the intention of getting other people and the taxpayer to repay your loan and you get a free house at the end.

I have rented before I could get a mortgage. And I was a landlord when I had a mortgage. Are you seriously suggesting that no one rents out ever? That it’s mortgages only?

Larner · 30/05/2023 19:32

Oh don't get me wrong, I'm well aware that in boogeymanning their own monster the govt are doing fuck all to address the ills of the housing market.

However I'm never going to cry for landlords. I doubt that many who've dealt with them will. That's the trouble with profiting from a bent system. When it comes back to bite you, the people whose money you took, turns out they don't like you.

TeenagersAngst · 30/05/2023 19:25

Larner · 30/05/2023 19:22

Yes for sure successive govts including labour govts over the past 40 years have created the monster that is the unregulated (latterly light touch regulated) private landlord and has now turned on it.

Well boo fucking hoo. I'll reserve my sympathy for the people who don't have secure housing rather than the ones who cashed in on the situation and now don't feel so cosy.

The two are interconnected and if you think that punishing one will benefit the other, you know nothing about the rental sector.

Larner · 30/05/2023 19:22

Yes for sure successive govts including labour govts over the past 40 years have created the monster that is the unregulated (latterly light touch regulated) private landlord and has now turned on it.

Well boo fucking hoo. I'll reserve my sympathy for the people who don't have secure housing rather than the ones who cashed in on the situation and now don't feel so cosy.

TeenagersAngst · 30/05/2023 19:09

titbumwillypoo · 30/05/2023 16:04

If I had £200,000 spare I have choices. I could put it into savings and at an average 3% get back £6000, I could dabble on the stock market and maybe get 5% - £10,000 (or end up with a lot less) or I could buy a house and rent it out UK average £9960 minus £4000 (repairs, tax etc) but with the bonus that in 5 years it will probably be worth £250,000. All these ways of making an income are fine. What's not fine is borrowing the money with the intention of getting other people and the taxpayer to repay your loan and you get a free house at the end. If HB was reduced to 10 times minimum wage it would dissuade BTL landlords, free up lots of houses for individual purchase and or housing associations.
The housing situation in the the UK is a mess, it's not sustainable and it's certainly not the free market at work.

You keep saying that 'someone is paying off your mortgage'. BTL mortgages are overwhelmingly interest only not repayment so its quite rare that someone would actually pay off your mortgage in full.

All income is taxed, plus the sale is subject to CGT. So the 50k gain in this fictitious example would be after sales costs and all taxes.

Many LLs are not getting a yield much above 5% at the moment which is comparable with other investment types.

The government has done and is doing a fantastic job of pitting the public against private LLs, all the while failing to deliver a housing strategy that works. Currently private LLs are filling a gap which no government since 1997 has bothered to fill. But yes, let's slag them off, increase taxes and legislation so they're forced to sell causing untold headaches for tenants and continue to blame them.

P0stB0xT0pper · 30/05/2023 18:24

Most expensive cities to live in the world
The list will change accordingly to how the stats are calculated

Hong Kong
Geneva, Zurich, Basel, Bern (Switzerland)
Tel Aviv
New York
Tokyo
Beijing
Singapore
Copenhagen
Shanghai
etc

London is further down the list

The cost of housing is not just a UK phenomenon

P0stB0xT0pper · 30/05/2023 18:11

It's not the case in all parts of the UK though & I've lived in lots of different locations

drawersmoe · 30/05/2023 18:00

How would you like it if someone told you that you could not spend your hard earned money on X, Y or Z ?

I think the point is younger people are disproportionately affected by the housing crisis simply because of when they were born.

P0stB0xT0pper · 30/05/2023 17:52

Housing discussions are a regular occurrence on MN

Not all LL charge extortionate rents

Not all LL deduct money off deposits

Not all LL don't do repairs

Not all LL own BTL, some own out right & this includes a single LL & big companies with shareholders. Lots of company pensions invest in properties & land.

How would you like it if someone told you that you could not spend your hard earned money on X, Y or Z ?

Stomacharmeleon · 30/05/2023 16:22

I am helping a lady at the moment who is being evicted as landlord wanted to put her rent up by £300 a month and has now decided to sell.
She has teenagers at home. She is an ex addict who is not well mentally. She is terrified. Local housing allowance is £300ish short on what local properties go for now privately. Local council has a massive waiting list and she will be put in temporary accommodation out of area.
The situation is dire. I am just hoping her local liaison finds someone who takes pity on her. It's not looking likely though. Her section 21 is up next week and then it's the eviction process :(

Original poster
titbumwillypoo · 30/05/2023 16:04

If I had £200,000 spare I have choices. I could put it into savings and at an average 3% get back £6000, I could dabble on the stock market and maybe get 5% - £10,000 (or end up with a lot less) or I could buy a house and rent it out UK average £9960 minus £4000 (repairs, tax etc) but with the bonus that in 5 years it will probably be worth £250,000. All these ways of making an income are fine. What's not fine is borrowing the money with the intention of getting other people and the taxpayer to repay your loan and you get a free house at the end. If HB was reduced to 10 times minimum wage it would dissuade BTL landlords, free up lots of houses for individual purchase and or housing associations.
The housing situation in the the UK is a mess, it's not sustainable and it's certainly not the free market at work.

OP posts:
P0stB0xT0pper · 30/05/2023 15:59

https://www.theguardian.com/business/2022/jan/22/build-to-rents-glitzy-goldrush-raises-fears-for-social-housing

I don't believe that there is a single golden bullet solution to the housing situation

The reason I am saying this is because different people have different requirements. Someone aged 20 has different needs to someone in their 80s, similarly a single person or a family.

I have seen articles in the news where single people aged 20 live with someone aged 80 at a reduced rent. In a good match, both parties benefit, but this would not suit everyone.

Lots of ex town centre commercial buildings are being turned into flats

Build to rent’s glitzy goldrush raises fears for social housing

Banks, private equity and high-street names like John Lewis are piling in to the sector, but will the poor be priced out?

https://www.theguardian.com/business/2022/jan/22/build-to-rents-glitzy-goldrush-raises-fears-for-social-housing

Larner · 30/05/2023 15:29

Fraud isn't a massive issue. The main problem is that top ups are built into the system and are reactive to prices being demanded. Start from a position of rent caps. Nobody can charge more than the rent cap. That would in turn restrict borrowing on investment buys. That cools down demand. For owner occupiers, no more schemes like help to buy because they just fuel the same type of demand ie borrowing. The entire market is distorted by demand based on borrowing and investment/speculation, not on how much money people have actually got. Unless you tackle that it will stay skewed.

I do agree we need to build more publicly owned/cooperative owned housing. Especially at local level that can be responsive and meet the needs of particular areas in a way that is more difficult than broad brush national programmes. We need to do something because that £23 billion a year is only going to increase and we're not getting a return for it.

Blackbyrd · 30/05/2023 14:33

The taxpayer subsidised rental costs to the tune of 23 billion pounds last year. So it's not really the occupants paying but the state. Housing Benefit should never have been rolled into UC as it is far too complicated and easy to defraud
Building social housing does not generate profits for local authorities anymore which is why housing associations or arms length management companies do it instead
Right to Buy needs to be abolished in England, and the Housing Act completely rewritten to move away from needs based which only encourages people to work the system . We need to reward endeavour and specifically key workers
The current ruses of pretending your holiday home is not just your second home, or that you are a genuine landlord renting to a relative need to stop. No housing costs should be paid to close relatives, end of
A workaround re Local Housing Allowances is to drop down a bedroom need. So instead of an unaffordable two bed, rent a better one bed and sleep in the living space. You will still get the two bed rate even if in a one bed (for example). Far from ideal but better than paying a rent top up. Personally, I would like to see a lot more housing collectives with land gifted or sold on a non profit basis with the proviso that only local, lower income families get a plot on which to build

CherryBlossomAutumn · 30/05/2023 14:26

LouReidPark · 30/05/2023 10:44

I agree we need more social housing. It is a big problem that so much is given to private landlords via HB. With building I think it would help if we built more good flats - make them spacious, give them balconies - so much more space efficient than the typical new build estates which are full of small-proportioned nominally detached houses.

Personally I don’t think social housing is ‘the’ answer. It’s part of it, but I don’t think it’s the main solution.

A really good mix of affordable rented and mortgaged properties, mostly private but some social housing is I think much more achievable than mass social housing.

We should look at great models like in Germany, the continent, other areas. It seems that careful and well managed regulation of rented housing, which benefits both landlords and tenants is really key. Lots of flats as we simply don’t have enough land for housing. However there is also responsibilities for the renter, as well as more regulation and capped rents to average earnings.

This works in other countries but has taken several years to build up.

I think our ‘solution’ are not that good. You can’t just ‘tell’ landlords to have less security but take on more responsibility. They will leave. I have and won’t be a landlord again. It’s simply not worth it.

kerryno · 30/05/2023 14:22

Not enough social housing
Wage stagnation
ageing population

it's a mess

kerryno · 30/05/2023 14:21

The housing market has fucked the economy because it was the economy.

CherryBlossomAutumn · 30/05/2023 14:19

titbumwillypoo · 29/05/2023 22:48

bijouxtt · Today 21:57
I rent out my house for £50 more a month than it costs for the mortgage. I put the £50 towards insurance and repairs. If I was taxed 20% then I would have to put the rent up 🤷🏻‍♀️ it's my only property and I rent another property due to relocating for work

Bijouxtt, This is the problem in a nutshell. You chose to borrow money but you're getting someone else to pay it back and in the end you'll have an asset paid for by someone else. No other investment would work like this. A bank wouldn't lend an individual £200000 to buy shares and then expect the taxpayer to make up the monthly repayments so why is it ok with housing? It's a broken system that impacts society as a whole.

CoreyTaylorsSoggyTshirt Option 1 means they pay 29% on 9 house or 30% on ten and they can charge what they like. Option 2 means they can buy as many houses as they like, but they can only charge a capped rate like a housing association and will still get a VERY good income for their work.

MayBeeJuneSoon The housing crash that is likely will just mean those sold houses being snapped up by people who already have the money which will make the situation worse. The minimum wage is £10.42, so how many hours a week do you think should some people have to work to keep a roof over their heads?

£50 more than a mortgage a month isn’t nearly enough to cover costs of renting out. This is lost in tax anyway which is 20% of the profit of everything including mortgage. Repairs can be thousands - I know I am a landlord! I spent £15,000 in the last 2 years on one house - roof and boiler needed updating. And this is a house which I also spent similar a few years ago. I will need to completely renew kitchen and bathroom soon - if it wasn’t rented it probably wouldn’t ‘need it it’s just the wear and tear is much more significant.

Rented houses need redecorating every 4-5 years. That’s another £3000. Garden repairs. Bathroom updates. Kitchen updates. Insurance.

I’ve had non payment of rent for 4 months in the past.

I think your heart is in the right place but I think your post shows that ‘off the top of my head’ solutions do not work. You need proper understanding of all the issues on all sides.

P0stB0xT0pper · 30/05/2023 14:11

Secondly, there must be a percentage of people that are landlords that do not declare their income to HMRC that manage their own rental properties. (Do not use an agency)

There have been discussions about some councils making it compulsory for landlords to be registered.

There are so many loop holes

LakieLady · 30/05/2023 12:38

LouReidPark · 30/05/2023 10:44

I agree we need more social housing. It is a big problem that so much is given to private landlords via HB. With building I think it would help if we built more good flats - make them spacious, give them balconies - so much more space efficient than the typical new build estates which are full of small-proportioned nominally detached houses.

I'm not sure how it works now, but council housing used to be self-funding in the medium-long term.

Councils borrowed the money, built the houses and rented them out. The rental income covered the running costs and repaids the loan. Once the loan was repaid, the income in excess of running costs could be used to build more council homes.

RTB and changes to local government finance rules brought about an end to this excellent system. And in doing so, it's increased the DWP spend on housing, as more and more people need help to meet the high cost of renting in the private sector, and the taxpayer pays off the mortgages of BTL landlords.

LakieLady · 30/05/2023 12:20

At the minute the Government are distorting the market by paying market rate in housing benefit

They don't pay market rent. The maximum amount you can claim, whether it's housing benefit or UC, is an average of the bottom 30% of rents in the area. And that was frozen for a few consecutive years, so was below the average of that 30%.

In London and the SE, it's getting damn near impossible to find a property to rent that is at, or below, the maximum that will be paid in benefits for rent. It may well be the same in other areas.