to ask how we can sort out housing?

[Hullygully]

So. First time buyers largely priced out. Rents going up. No new building. HB cap. Little security of tenure for private renters. Landlords being stuffed.

When Right-to-Buy was introduced, both as cynical gerrymandering and vote gathering, and because the govt wanted rid of the responsibility for social housing, there was an encouraged explosion in Buy-to-Let to take up the slack.

Now we have a large number of landlords with a few properties operating on narrow margins who have little protection against rogue tenants (particularly those on HB who are told by their councils to wait it out until eviction) and who are able to pocket the first 8 weeks of rent before any action can be taken, and who are therefore understandably reluctant to take on HB tenants, plus, with the introduction of the Cap, HB tenants will be able to pay less than the market rent in large areas of the country.

Then renters have little security, they can be given two months' notice after six months, a nightmare particularly for families settled at schools etc. And of course there are some nightmare landlords around who don't carry out repairs etc.

Suggestions?
Solutions?

It could be solved in a heartbeat by relaxing planning laws.Houses are realtively cheap to build, the scarcity and hence price of building plots is the problem. If supply came into line with demand house prices will fall to a realistic level.the trouble is that isn't what the establishment want- a crash in house prices.

For a start, dreaming sun, as a landlord you can claim all wear and tear on your rental house off your tax. This must be nice, as I have never quite managed to get away from a rented home without the landlord taking at least £100 off my deposit for various small incidents of wear and tear. Double bubble, as they say on Gavin and Stacey.
And being a landlord is a business. If you can't afford liability insurance, frankly, you shouldnt be in business.

I love northernwreck 's simple take on the landlord/lady's finances.

Re HB -
"It shouldn't be paid direct to the landlord as a matter of course, no.
Yes, probably landlords do get burned occasionally, but they have a lot of tax breaks and insurance."

Perhaps we also shouldn't bother about shoplifting, I mean, shops have insurance don't they !

If HB is paid to an individual for housing (i.e. rent) and this is abused by some tenants who spend it on other things and default on rent agreements then the loophole that allows them to abuse it needs closing. How does this inconvenience anyone ? Those who wouldn't dream of abusing the system would be paying it over to the landlord anyway so why not just make it simpler all round or am I missing something here.

It takes too long in this country to evict a tenant in breach of their rental agreement. This needs sorting so landlords have confidence in taking a chance on all sorts of possible tenants, safe in the knowledge that they can take swift action against a wrong'un. Surely this benefits the good tenants as landlords are encouraged to take on the risk of renting to them.

IMHO the scarce social housing funding that is available should benefit as many people in need as possible. To keep money tied up in one expensive desirable area property when that property could be sold and used to fund two council homes in an O.K. area or 10 in a run down area goes against this philosophy. Surely you can see that. I realise that this would make your friend sad but if no-one should expect the government to fund anything other than a basic fit for purpose safety net. No-one is owed anything by the state, the state provides a safety net, it is not there to maintain anyone in the style or living in an expensive area to which they have become accustomed.

The council surely provides housing, it's up to the tenant to make it a home. Many people move several times over in their life, each time settling in and making a home in their new place, why are council tenants to be exempt from this pattern ?

Thanks om, glad you love it.

Why should you not claim wear and tear? You are taxed on profits. It is how business work. I sometimes think we should have 18 year olds not in compulsory national service but compulsory involvement in a small business or a large one for that matter where they see how it works.

You spend a lot of money such as buying your stock and then you get some money in and then you work out what profits you make and pay tax on that. No one would say corner shop sold £10,000 of goods so they pay 50% tax on £10,000. They would say if the goods cost you £5000 to buy and your wages £2000 then you are taxed on the £3000 of profit. It is no different with letting a property. They aren't "tax breaks" - they are just things you allow for in working out what is a profit.

Xenia "if I let out a flat and I have expenses they are set against the income to work out my true and real profit and I am taxed on that. It is perfectly appropriate that interest on a loan is set against those profits before people are taxed. It is no different from a corner shop paying interest on its bank loan to tide it over to buy stock"

On the other hand, if I buy a house as an investment, hoping to make a modest income out of the rent, but to sell it for ten times what I paid in X years time (which AFAIK is the usual hope of private landords) or leave it to my family, then I can borrow the money to buy it, instead of paying out of my savings, and get tax relief on the interest.

However, if I buy shares as an investment, hoping to make a modest income out of the dividends, but to be able sell them for ten times what I paid in X years time (which IFAIK is the usual hope of private investors) or leave them to my family, then I can borrow the money to buy them, instead of paying out of my savings, and NOT get tax relief on the interest.

So we have a preferential tax treatment on private investors who buy homes, compared to private investors who buy anything else.

That is probably not "fair," but of course tax doesn't have to be.

All the tax relief does is to push up the prices of houses. Many years ago, homeowners used to get tax relief on mortagage interest, and that did the same. S&D means it did not make houses any more affordable.

That is probably not "in the interests of the citizens" but of course tax doesn't have to be.

Doesn't make it right though.

Of course a business such as a landlord should be able to claim wear and tear on expenses Xenia. They just shouldnt expect me to pay it also.

As a landlord, I pay tax on profits as any other business: not sure where these fab tax breaks comes from. Evicting (bad) tenants can be really expensive, and the protection for landlords in those situations is rubbish.

So I do everything I can to keep good tenants, including providing top notch service (repairs within 48 hours even for minor things, like a broken towel rail), I do not hike up rents every year, that type of thing. I also offer long term leases, but so far no one has taken up the offer. I am bored to death of hearing landlord bashing.

And even if I think that the current level of social housing is not sufficient, I would not support any further social housing building until some rules are not changed - I never heard of "inheriting" council housing before I came to the UK, for instance. You could have a situation where the children have become well-off, and still have right to a council house: in other words, as a (potentially poorer) taxpayer I would be paying rent to well off people? It's a waste of money.
And, having lived in a council house (former police flats) for a while... Well, let's say I do not trust the government to put up quality housing...

Actually I have recently started a small (tiny!) business, so I am familiar with the concept of only paying tax on profit, but agree with piglet john that it has been weighted in favour of making money from property.

Also, as far as my friend who is being evicted goes-she has not "become accustomed" to a life of luxury! She simply lives in the area her family always has, which btw used to be considered pretty rough.
Just because the area around her has been gentrified, she should uproot her whole life and move to the sticks? Really?
I wish there were still a safety net omgomgombut unfortunately, when it comes to housing,for most people, there isn't one.

there are two issues

HMRC are utterly useless at enforcing taxation of profits from small scale letting

landlords can get tax relief on their mortgage interest at up to 40%
when homeowners have to pay their mortgage interest out of after tax earnings

solutions:
Land registry records are being computerised as we speak. There will be some people with some rather nasty tax demands over the next 5 years (as HMRC can go back 20 years for deliberate evasion)

limit tax relief on debt for unincorporated businesses to the basic rate
ie if you want to make a big living out of being a landlord you have to be a Ltd co and file your accounts publicly at Companies House

No landlord with half a brain pays any tax.You up the rental property mortgage and reduce your own house mortgage, or invest it in another property.

investing in another property does not make tax liabilities go away

of course one easy way of getting rid of landlords would be for the government to sort out some better way of people saving for their pensions. Being a landlord is one of the most unpleasant and stressful things i've ever done and i imagine most landlords feel the same

I enjoyed being a landlord
and as a tenant I've had good and bad landlords

private renting is an ESSENTIAL part of a flexible economy
it would be INSANE for the government to spend taxes on holding enough empty stock of houses to meet the need in all areas

many landlords hold empty properties and then make profits when they rent out
risk and reward
I have no problem with that
BUT there should be NO commercial benefits to keeping properties empty
and it is ESSENTIAL that those landlords and tenants who wish can sign binding tenancy agreements for periods longer than 6 months.
Variable terms work in commercial lets, they have to be made to work in private lets

you could put your money in a pension, using a SIPP if you want to run it yourself. The allowances are very generous for earning non-millionaires and you get tax relief on contributions.

IMO all the people who chose to invest in buy-to-let (instead of anything else) and said it was their pension did it because they thought house price inflation would go on rising forever. Why else?

piglet - we haven't earnt much out of buy to let - when interest rates are normal we just about break even, as you say we are hoping house prices go up at some time. BUT our pensions have performed even worse. So if landlords are to be erradicated a better pension system needs to be provided for private sector workers

Lots of landlords pay tax on their profits. Plenty of people do not believe in being heavily loaded with debt. Interest rates are very low so even more likely that rents would exceed interest and other costs.

I don't agree with a comparison with a business (letting) and how you spend your income whether on your own home, dresses or whatever. There is no comparison. The comparison would be between running a business at weekends and paying tax only on your profit not your turnover. If you borrow for that or any other business then the cost of borrowing is a business expense as it rightly should be and set against people's income from the business before tax,. There is nothing wrong with that at all.

Your SIPP by the way can invest in property too if if wishes which for some if they want to give up that control is another possibility. There are special rules on that - must be commercial property. I looked at farms and woods but you must not yourself be involved with or use the property, at one point and they sent me a brochure but didn't go ahead.

Private landlords have revolutionised the private rented sector since the early 80s. Private rented property used to be virtually all slums at low controlled rents (except for a very few leases to big companies for staff from abroad). That has totlaly gone and now there is a market precisely because it was freed of rent controls.

The thing is, regarding renting, that we need some kind of rent control. Housing is a basic human need and private rents are insanely expensive, hence the number of renters on HB.
I would dearly love to pay all my own rent, but it is not possible, unless ds and I share a bedsit, which would be very bad for him.
This is not because I am lazy, its just because I am single, scrabbling to earn more, wages are stupidly low, especially where I live, and rent is stupidly high.
Actually, in New York, centre of a very capitalist society, most people rent, and although actual rent controlled apartments have declined but there is still some level of rent stabilisation, e.g how much per year rent is allowed to rise etc. It does give renters more stability.

northern - if property was cheaper to buy i guess rental prices would be lower. But landlords aren't going to rent at less than their mortgages...or not for long at least as they couldn't afford to.

No political party is committed to rent control so there isn't much point in talking about it. They know that if you have rent control then people stop letting out properties and sell them and then masses of private tenants have to buy or else apply for social housing which isn't available.

I just had a quick look at a housing allowance website. We would get four bedrooms! based on the number of people who live here and yet plenty of people in families this size who don't claim benefits would be managing with 2 or 3 bed rooms. So if I xdidn't work we would get Four Bedrooms Rate:
£346.15 per week or £18,000 a year!! That's amazingly generous. No wonder the workers work so hard and pay so much tax when we're providing massive subsidies like that so those who don't work can live rent free.

Rent controls cannot be brought back in.
All that would happen is that landlords would remove ALL the extras from the headline rent and then demand backhanders

the main thing is to penalise landlords and owners who keep properties empty
then the supply would ease up and prices would drop as it would become more of a buyers market.

The fact that there are HUGE houses in Mayfair that could easily convert into 'studio flats' for 30 people each, which have been empty for 30+ years is offensive

"landlords aren't going to rent at less than their mortgages...or not for long at least as they couldn't afford to."

Landlords are going to rent for whatever they can get, high or low. If that happens to be lower than their mortgage payments, they will lose money slower than if they let it stand empty.

Ok, I am saying this for the last fucking time . Listen Up.
THE MAJORITY OF RECIPIENTS OF HOUSING BENEFIT HAVE JOBS!

OK?

what has that to do with the general housing problem which is 'values' higher than income multiples

piglet - they would sell. its an investment not a hobby. people like us couldn't afford to loose money each month on an ongoing basis. perhaps you think all landlords are rolling in vast amounts of money. unfortunately that is not the case, they are just working people trying to find a way of funding their retirement