what if, everyone is only allowed to buy their own home, no more buy to let, what happen then?

[happyfishcoco]

just a hypothetical question.

I am very curious.
as some people cannot afford a house and blame the landlords.
And they are very happy that nowadays landlords are selling up their houses because of the interest rate going up. They think this will make house prices go down and become affordable.

SO, is that true?
from an economic perspective how would it be, if the UK government do not allow people buy to let?
(also not allow the company to do so.)

where do people live?
Why gov cannot have more affordable houses for people?

This is just absolute nonsense. A tenant who needs to spend 80/90 percent of their salary as rent wouldn't pass the finance test to rent that EA put them through.

Although I'm a landlord (and we only bought it to rent out to a family member for low rate) I think there should be more social housing. It was a terrible decision to sell it off back in the 90s.

Sorry but… if the owner doesn’t get to use the property because a tenant is living in it and doesn’t make any money why would they bother?

Frankly, I am convinced that the problem is not the landlords, I put the blame FULLY on Airbnb.

@Whattodowithit88

so can you explain how the owner should contribute to the mortgage? Most will have mortgages of their own to pay as well. Not to mention how they would cover insurance costs, maintenance work required, upgrades when legislation requires it, etc etc

lots of landlords are incidental ones, not big businesses.

you sound very bitter

This has got nothing to do with tenants. You choosing to live in a fixer-upper and not fix it up is your decision. It's a choice you're making to save money. You're not engaged in a business contract with anyone, nobody is reneging on a deal. You pay your mortgage so you can own the house. You have no rights other than that if you keep paying the mortgage you own the house and can't be evicted. Nobody else is responsible for your repairs and maintenance.

The tenant on the other hand is engaged in a business contract with the landlord. They're not paying to own the house. They're paying for a service. That service includes the house being in a good state of repair for them to live in for the duration of the tenancy. Why should they pay for this service and then not receive it? The state of a homeowner's house is totally irrelevant to a tenant.

They should pay the renters to live there, they are doing them a favour😂

When I was a FTB I was frequently outbid by BTL investors, often on the online auctions. BTL investors have the funds readily available and ability to pay over the asking price because they only see the amount they can overcharge in rent.

If the rental market was better regulated and rent prices weren’t extortionate (so landlords are no longer making obscene profits) then renters would be less angry and exploited.

Properties are a home not an investment, people need to stop using BTL as a pension scheme.

It’s an exploitation on private renters and makes it impossible to save for a deposit. Anyone who doesn’t see this or tries to justify being a landlord is ignorant.

Properties are a home not an investment, people need to stop using BTL as a pension scheme

First thing to do to achieve this is to change the SIPP rules which allow BTL properties to be included in a SIPP portfolio. This would remove the associated tax breaks for BTLs. Buying commercial property using a SIPP is an unjustifiable combination. I'm actually surprised tenants are not more angry about this.

BTL LLs should be required to register as a business, with the associated compliance requirements part of a license to operate (Gas safety being a current one, but add in sufficient fund levels for maintenance, H&S checks (mould and structural issues) and of course the minimum EPC rating). The business would be taxed at corporate tax rates.

This level of regulation would inevitably drive small LLs out of the market and lead to properties coming onto the market. The tenant in situ could either apply for a 100% mortgage if the have been struggling to save a deposit, or they could apply to convert the property into a shared ownership scheme property (which could be opened up to a lot more candidates). This would be significantly cheaper and quicker than building more social housing and would give them a stake in the property.

I’d like to see legislation that allows private renters the option to buy into the property they are renting and the right to purchase it.

There is a huge number of people who WANT to rent and don't want to buy. Students don't want to buy a house, they want properties for 9-10 months to be able to attend a university away from home. There is not enough private or uni student accommodation for everyone. This is currently a massive issue in Glasgow. Recent graduates who are likely to be moving on to a different city in a year don't want to buy a house, people who are on temporary secondment from work, or like a NHS doctor who does two years somewhere then is moved somewhere else at the end of their foundation training.

I get the frustration of people who want to buy and can't, but you don't solve that issue by banning renting altogether.

I get the frustration of people who want to buy and can't, but you don't solve that issue by banning renting altogether.

I agree, it would be unrealistic to ban renting altogether. But it does need much greater regulation and control, even in the transient rental base as you've mentioned. A licensing scheme for LLs would help with this. A lot of students are renting sub-standard accommodation that is overpriced. Whilst HMOs are regulated to a degree, there are LLs who get away with awful practices.

we are seeing your thought experiment played out - thousands of small time landlords are selling up because it’s become too expensive. Because the demand for rental properties is still there, there’s now a massive shortage and costs for renters have shot up and they’re still very difficult to find in some areas.

similarly the suggestion that not only should people not be allowed to profit from property, but rent shouldn’t even cover the cost of the mortgage - again, nobody will do it, they’ll invest their capital elsewhere and there will be a huge shortage and price hikes.

Scotland introduced rent controls. LL sold up and left the market. Therefore fewer properties available to rent. Therefore rents went up. Result = higher percentage increase in rent in Scotland than England.

Trying to manipulate the market rarely results in the desired effect.

There’s a demand for rental properties because people need somewhere to live but are priced out of the property market. People don’t rent out of choice (normally).

Quite a few posters on this thread have said they rent, or have rented, through choice and why.

Wales brought in licensing which is very strict. It frightened a lot of owners small owners who chugged along charging low rents who just sold up. Many of these properties have been hoovered up by English and overseas landlords. So the price of property hasn't dropped but the rents have almost doubled.

Our councils are struggling no chance they can buy anything up or build anything, they're actually placing homeless families in other parts of the UK. It's an unholy mess.

If house prices went down drastically lots of people would be bankrupt or in negative equity. And if renting wasn’t allowed, lots of people would be homeless.

Buy to let is a shitty model for rental. Lots of unprofessional, overleveraged landlords. What you want is a mix of big institutional investors - typically pension funds - housing associations and councils.

Buy to let mortgages should be banned. If you can't afford to buy a(nother) house to rent out leave if for someone to get on the ladder.

Landlords will still be there (inherited, move in with partner etc) but so will many more houses for FTB

Same happened in my city, the council put more strict guidelines (basically no more than 3 people in an HMO) which meant a lot of landlords had to sell. The house prices are still high and going up, but with less houses in the rental market the rental prices have increased by at least 25% in 2 years.

But it is not only about the price, it is often the case these days that people willing to rent a flat have to compete with another 25 people to get it. Properties are often closed to further viewers within half an hour of being advertised.

There are a lot of scammers too these days who are taking advantage of all these people who cannot find where to live even if they are are willing or able to pay the already very high rents.

In the case of our city, airBnb is causing far more damage than long term landlords greed. But then rules to control AirBnB have backfired. For example, in some places in Scotland, a lot of properties that before were rented to students in the academic year and to tourists on the summer are now not available to students as the landlords are not allowed to offer September to June only contracts, therefore the student are now paying for 12 months even if they are not using the flat during the summer and there are so many struggling to find a place the rental prices have gone crazy as well.

Where would students live? Where would people on secondment or in an area temporarily live? Where would people who just don't want to buy live? Where would people on holiday stay if they don't want a hotel? There a dozen reasons why people don't want to own property. There's a huge amount of money tied up in property investment. You can't banish it overnight - there will always be a need.

People managed all this before buy to let mortgages.

I think this is where things are headed. It will be uneconomical to be a small private landlord - not banned, so accidental landlords will still exist, but not a way of making money.

I'm against BTL because eventually, the tenant and family will be evicted, if it were a tenancy for life, then that would be better.

BUT there has to be choice first, build council houses, reducing housing benefit part of UC bills, number of LLs decrease, more houses on market, less competition for FTB's and we still have a private rental market for those that need this for work etc.

Another benefit of council housing is cheaper rents, more money in the local economy, less poverty, better quality housing assuming good regulation of construction.

A lot of BTL LLs may very well go bankrupt as house prices are going down. Government will not step in and prop them up. Its not a crash this time but a slow slide, which will probably happen over many years. The bubble will deflate rather than pop.

If the government acts quickly to put measures in place to allow Shared Ownership schemes or 100% mortgages to take effect for tenants, it can counter the homeless issue. Or the banks may seize control of the property and setup defacto Corporate rental companies of properties they own. A vacuum creates opportunity.