To be a bit shocked at the landlord who is evicting 200 families because they are on housing benefit

[wetaugust]

Heard this and 'Wow' - I was shocked.

He's being interviewed on C4 News.

He'd rather rent them to Eatern Europeans who are working.

He said that if house prices go up then rents should go up.

He said he's not the only landlord doing this.

Wow!

So some local authority will have to find new housing for all these people.

Where will this end?

I am stunned.

Cerisier the point about BTL is that it is very highly leveraged. In other words, while house price growth/income might not be better than shares, you can't buy shares with a 10% deposit and 90% borrowed from the bank.

That essentially means that BTL growth is leveraged by a factor for 10.

IMO the problem is with the government. The LL is operating legally.

I find it ironic that where I live in the US rent increases are restricted to a maximum amount set by the local town. When they had a 47% increase in property taxes LL's were allowed to apply to the town for an increase in excess of the maximum amount set by the town. This is what should happen in the UK. You don't increase rent with what is happening in the housing market. You increase rent in line with your costs, at least that is what I did when I rented out my flat.

House prices are so high now it is a joke. Who, with an income of GBP80k/yr, can afford a GBP500k home?!? The arguments for supporting house prices are unfounded too. If all the house prices fall, those who already own a house can always send the keys back to the bank or continue to pay the difference if they want to continue living in the house. You don't pay income tax on the unearned income portion of a written off mortgage so I don't see what the problem is. When the government bailed out the banks they had a fanastic opportunity to repair the housing market. I think this is the biggest mistake made by the government.

Another thing the US does really well is allow for interest on a mortgage to be deductible for primary private homes. This allows first time homeowners and landlords doing a BTL to be on a more equal footing.

Rather than get angry with LL's I think the wrath should be directed at our MPs who continue to fail the lower socioeconomic groups in our society.

PrincessFiorimonde This is what I wanted to say. HB does not mean you are not working. I bamboozled a lettings agent once when I responded, "Both", to the question, "Are you working or receiving benefits?".

Like another PP said, fair enough that letting is a business but an LL is in the business of providing a home. There has to be some improvement in this area so that both LLs and tenants can benefit - greater access to housing for tenants, greater security for LLs.

It's not up to him to set benefits policy. He doesn't get a workable deal so he doesn't serve that market.

Eastern Europeans take jobs that his tenants could have applied for.

There are empty houses in less expensive areas that housing benefit claimants can move to.

His tenants might be working.

They also might not be able to take the same jobs that Eastern Europeans are doing - it depends on how they're contracted. Freedom of services means that people and companies can compete for jobs across Europe, so people or companies with higher wages (eg in England) may not be able to compete with the those who have lower wages (eg in Eastern Europe).

Plenty of HB claimants do look for housing in less expensive areas. Plenty of LLs in less expensive areas still don't want HB tenants.

Sometimes a HB claimant ends up in a 'nice' area because it's actually the only place they can find a property. Whenever I see an ad that says 'DSS Welcome' I'm interested, regardless of the postcode. They're like gold dust these days.

Also consider - people coming from Eastern Europe to work here may be coming with a skill set, experience, a trade, a profession and so on. Some people here who receive benefits may well not have any of those. They may only have very basic qualifications, if that. They may have little to no work experience. They are less attractive as prospective employees and it's not as simple as telling them to go out and study and get experience.

CallMeNancy quite. There are many reasons why people choose to rent rather than buy, not least that it can be far more financially efficient to rent depending on mortgage rates/how under/over valued house prices in an area are compared to rental yields. That's before you start thinking about stamp duty, upkeep, etc.

The 'outlaw private LL' posters seem to assume that everyone wants to move into their first home age 20 and stay there for good...

One thing that doesn't sit easy with me is that private individuals are taking money out the benefit system
Not knocking landlords or people that privately rent (I am a someone that rents privately as I don't have the deposit to buy).
There was a time when it was council houses and the council collected and kept the rent. Yes it was a bit 'plastic money', but that plastic money stayed in the system.

Can 'immigrants' live 10 to a house without breeching any letting laws?

I've wondered how they can afford to live in London but people from the UK can't, and are they really paying their full whack of Council Tax from these meagre wages?

Can't help feeling if someone went after these people for what they really owed in taxes fewer would be able to afford to move here. Don't intend to sound anti-immigrants but feel that there can't really be a level playing field for UK residents, and, come to that, the immigrants, are many of them being taken advantage of on illegally low wages?

IIRC the council used to pay the private landlords directly but now pay the benefits to the tenant who pays the landlord hence the arrears.

Not yet, the paying money to tenant is still going on. BUT, big fat BUT housing benefit is always paid in arrears.

It's not a bedroom 'tax' FFS

No it is called the spare room subsidy but as this does not apply to private tenants it is largely irrelevant in the case this thread is about.

Well he won't be taking money out of the benefits system now. How does that help? You can't have it both ways.

Ha. Good point Roshbegosh

Some people on here are so incredibly bigoted. Immigrants pay tax into the uk system and a huge number of them take nothing out of it in benefits or education or housing benefit.

roshbegosh has the post of the thread there. You can't have it both ways.

Often private landlords pay taxes ( like everyone else on theor prpofits) and those taxes can fund benefits and social housing.

I'm sure anybody who doesn't have a vested interested in desperately scratching around for a justification for their method of deriving an income can see how badly flawed this argument but is but anyway - Iain Duncan Smith pays taxes on the income he makes from his job, does that make him a force for social good? His taxes help pay people's benefits too! If a drug dealer pays tax on their earnings does that make them a force for social good? Or what about if I set up a company that buys all the bread in the supermarket every morning and sells it on a stall outside for a tenner a loaf, I'll pay tax on the profit and people need bread right? does that make my company a useful social enterprise?

I think you'll find that pharma companies would fail your test. They sell medicine at quite a cost to us.

Not sure what test I ever mentioned, and pharma companies may sell drugs at a profit, but if they didn't those drugs wouldn't exist in the first place. Neither is anyone forced to buy drugs if they prove to be useless. Churchill was bang on the money in his explanation of how landlordism is not like other useful business activities:

"Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains -- and all the while the landlord sits still. Every one of those improvements is effected by the labor and cost of other people and the taxpayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is enhanced. He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived."

So, how exactly do you plan to halt capitalism

a) We don't live in a pure capitalist system, otherwise there would not have been any bank bailouts.
b) If you think the housing market, one of the most heavily government manipulated markets around, with artificially restricted supply and artificially inflated demand is in any way representative of capitalism you don't know much about economics.

Immigrants pay tax into the uk system and a huge number of them take nothing out of it in benefits or education or housing benefit

Do we know this for sure? Maybe they are working cash in hand and living in crowded accomm, aren't declared on any system here so not paying council tax or anything else, who knows??

Round here the immigrants I see are families who pay tax but also have social housing (with several children they get to top of list quick) and naturally use the education system. They are skilled and hardworking but are taking houses and jobs but are probably better at them than UK people.

Selective quoting in that quoting the entirety of a lengthy speech would be silly on a forum like this, I 'selected' a quote that most summed out the relevant point. It may not be 100% the same thing he was talking about but the principle still applies, hoarding of a scarce resource to extract money, either from later sale or through rent, is not a socially useful activity.

I rented for the best part of a decade and can count the number of times the landlord did anything significant on one hand. To call a few hours in 10 years "bloody hard work" seems a bit of a stretch.

This has good sources. Of course, a DM link would say precisely the opposite.

I should clarify I have no problem with landlords who take in lodgers into their own residence, as they are adding to the housing supply.