to think we need new taxes on Buy-to-Let

[AgaPanthers]

Over the last 15 years the number of new homes built in Britain is equal to the number of new homes under private rental. In other words, buy-to-let is in effect taking all new homes (though obviously some existing homes are going into btl and some new ones into owner occupiership so it's not a 100% match).

But there have been vast rises in the number of private tenancies, sharp falls in the number of owners with mortgages, and the consequences are many, from tattier streets (landlords don't spruce up homes with sitting tenants, the tenants don't want to plant the gardens because they might be kicked out next year) to families having to move house mid-school year because the landlord is kicking them out.

Today it's announced that the number of people made homeless from private tenancies has trebled in five years, and that private landlords are now the leading cause of homelessness. www.bbc.co.uk/news/uk-27940701

AIBU to think that this has resulted because of all the people piling into buy-to-let because it is deemed as more attractive than the alternatives (bank accounts, shares, small business, etc.), and that therefore we need new taxes to make buy-to-let far less attractive, given the social problems it causes?

expat. I so agree with that about letting agents. More regulations and checks needed there.

A couple of years ago there was a thread on here where a landlord was outraged that her tenant wanted her to do some quite extensive maintenance work while she (the tenant) was away for a few days, as it would be more convenient for her. The landlord posting was outraged by this, and thought it was obivous that we would all see that it was a massive cheek that the tenant wasn't offering to be around to answer doors etc, and the idea that anything should be done for her convenience was risibly misguided.

I see the tenant's POV much more immediatley in this. If you hired a car, you would not be expected to hang around while its oil is changed etc, as part of your hire period. Where does this weird idea come from with rented houses? IS it some kind of feudal hangover?

"we have several million more people living in private rented than we did 15 years ago"

Yes, and we have hugely less people privately renting than we did in 1950 (and 100 years ago the vast majority privately rented) The contraction has not been in renting, it's in the reduction in the post second world war boom in social housing which peaked in 1980 that changed things. It's not simple enough to look at just the change from 15 years ago - why was that the right ratio of own / social rent / private rent?

Personally I think home ownership percentage is too high in this country (even with the recent reduction) since it does so much to limit mobility for work etc. But still, the fundamental thing we need is more homes built, which is mostly a planning issue it seems.

Allhailqueen;
That's a double edged sword though because tenants keep saying that they want to be treated as though it is their home rather than just the landlords investment. When a home owner has repairs gone they generally need to be around to open doors to the builders. Would the tenant rather the ll not bother maintaining the property if if can't be done at their c

It is bizarre isn't it, landlords seem to think it's a sort of hobby, to be engaged in as convenient to the landlord, except an odd sort of hobby where the tenant hands over tens of thousands to the landlord each year.

No other business would be put in the hands of amateurs (landlords) and shysters (landlords).

I know there are some good LL's out there, my old LL was great (I had to move as property was too small)

Ever since leaving that property, I've gone from one shoddy LL to the next. My current one has stopped doing inspections because the house is immaculate (clean, tidy and better than when we moved in) the problem now is she won't maintain it. We've had numerous problems with drains and electrics but she just sends a 'handy man' round to patch it up rather than sort it out. She even told us to 'fuck off out of her house' after we told her her handy man left a while in the circuit board and told us to keep our daughter away from it in case she put her fingers in the hole

Yes, we could move. But we can't afford to at the moment (bond, amin fees etc) TBH, its worrying we could end up with some one worse than her. Sometimes you're better of with the devil you know (she's not a devil, she's a twat)

Everyone I know who has rented has had a bad experience.

It's not right that she can carry on renting this house out after we leave to another unsuspecting tenant and do the same.

There should be a referencing system and sanctions put in place for dodgy LL's. I don't know how that wouldwork but something needs to change.
We constantly have the threat of eviction over our head if we complain about lack of repairs/maintenance.

It's not right.

Most landlords in the UK have one property they live in and one they rent out. Those with mortgages (most) often make no profit and just hope property prices will rise. they then pay capital gains tax on any gain they make when they sell the property (at 28% I think).

We are about to see many more people unable to buy a home due to the mortgage tightening. There is no more social housing being built so thank goodness for private landlords. Abroad you do get pension funds and others investing in housing but the returns have not been high enough in the UK as taxes are so high. So if you want long term pension funds owning long leases on property the solution is lowering the tax on landlords not increasing it.

I am a LL. I rent the house through the American Military - just one of many types of people who don't want to buy a house yet still need somewhere to live and therefore for whom BTLetters are essential. The rent doesn't cover the mortgage and by the time other costs are factored in (insurance, service cover for the boiler, water rates etc) as well as the tax on the profit (quite rightly only the interest on the mortgage is counted as as expense and therefore I am still taxed on profit despite the rent not covering the mortgage) it costs me a couple of hundred pounds a month to run. That's fine - its the equivalent of a pension and I'm taking the risk that in 25 years it will be worth more than a pension pot that I could have contributed a couple of hundred pounds a month to. It is a risk because there is no guarantee that this will happen, and any difference will likely to be eroded once the costs of buying the place, any periods where there are no tenants, any damage etc. are taken into account. But that's fine. It's my risk and I appreciate I am in an incredibly fortunate position. But we are not all repulsive leeches trying to make life difficult for others. I am a good landlord. My tenant is properly vetted and I check with neighbours that there are no issues. Any maintenance issues have been dealt with promptly. My tenant is happy and wants to extend their contract. I will not be putting their rent up although could quite easily do so given the market at the moment.

My daughter's tenants are mobile young doctors in London like loads of people in London. They are not ready to buy, still doing exams etc and presumably without a deposit yet. It is not true that most landlords have lots of properties, make a fortune and abuse their tenants.

It doesn't say why the tenants are being evicted though does it. I wager its the changes to housing benefits resulting in arrears. Landlords by and large don't evict good tenants.

Well my town is slightly different to many because it's got a high proportion of armed forces who do to stay for long and don't want to buy even if they could.

My tenants are all longer term lets, the shortest time being 3 years in August, and I've told them all these are my pension. I let them prove themselves then they are free to decorate as they want under the proviso they return it to boring when they go. I've never put the rent up for any of them and rents are way above what they were.

I've just broken even in my 4th year, these don't provide monthly income and as it does I reinvest.

There are very few local authority homes as Maggie Thatcher's right to buy scheme was very popular here and the money made not reinvested. I'd like to see a lot more social housing being built.

We funded our houses by not trading up when we got better jobs, not having expensive holidays, I've got a 14 year old car etc and investing in our future. Many have commented on how 'lucky' we are when they had the same opportunities to rein in the spending and invest. We've remained modest in our spending and will reap the rewards. There are those on low incomes etc that I feel sorry for, my DH started off on a £55pw apprenticeship and I worked in a factory for 60 hrs a week when we started out. We bought in what hit the national newspapers as the worst estate in the country back then. Others turned their noses up and rented in nicer areas. We made the right call.

I am a good landlord too. I'd love longer tenancies though. It is expensive every time a tenant leaves.

I think a licence that is renewed if you are a good landlord, is a great idea.

We don't make a very big profit, We are really relying on capital gains for the long term - risky. By all means tax those with multiple btls but most of us are trying to provide our pensions and are very small fry.

Maybe I have been lucky then. I live alone and would never be able to afford a mortgage. I wouldn't qualify for social housing, so if private rentals were reduced/taxed I would be totally screwed potentially.

Restricting btl landlords to one property is naïve at best. Why wouldn't they then just set up a company if they wanted to own more properties for let (and pay corporation tax instead?).

And why restrict people from buy-to-lets, but not for example, those who inherited properties that they rent out or large country estates who rent out their estate cottages but never sell them?

Seems a very divisive attitude on class grounds.

I think anyone who lets property to be used as residences should have to pass certain tests in order to have a licence to do so.

• The “buy” part in “buy to let” is neither here nor there, to me, except that many who buy are in practice borrowing to buy, and they should not be allowed to place themselves in too precarious a position to do so IF they are going to be letting the property as someone else’s primary residence.

• The tenant should not be at risk of homelessness because the landlord over stretched and went bust.

• The tenant should not be at risk of poor maintenance because the landlord cannot afford (or does not choose) to invest properly in this. Not all maintenance costs are, of course, predictable. And most are not anyone’s fault. I find it infuriating when a landlord drags his heels over replacing or repairings things because they “should” not have gone wrong, perhaps being only a year old or something, and is somehow trying to pin the blame on the tenant.

If you inherit a place you don't intend to live in, and you can't afford to be a landlord, then you would just have to sell it. Just as if you inherited a car and didn't have anywhere to keep it, or a licence, or couldn't afford to tax and insure it. And for the same reasons - in recognition of the impact on society and requiring a certain level of responsibility.

Not whining at all Allhail. Just stating facts which should be researched by all entering any type of business deal and saying that it isn't simply a matter waiting for lots of income to come rolling in. I don't see why you have an issue with that.

"Gifted" is a perfectly good financial term. I work in financial services and it is used a lot. You are legally allowed to "gift" a certain amount of money each year which will be tax free if you survive another 7 years after that. It is perfectly correct language and legal terminology thank you very much. Again, I don't see why you have an issue with it.

I don't think taxes would solve the problem but then I do seem to approach this from a different place from the anti-LL brigade since: I've had 4 different LLs over the years and they have all been great.

There are complex reasons why buy-to-let has increased but it has definitely been impacted by people being unable to sell their homes and deciding to rent them until their properties move out of negative equity AND other people opting to view property as an investment in light of the banking/pensions collapse.

It has also been impacted by the right-to-buy scheme introduced by Thatcher which decimated the social housing portfolio, and the inability of successive governments to fund a renewed social housing programme.

If you read the BBC article then one of the people mentioned moved into a camper van because they didn't want to accept a council house because they were frightened of crime.

For another, their LL brought their tenancy to an end because they were worried about arrears with housing benefit tenants. The latter is another direct result of government policy changing. Housing benefit used to be paid direct to LLs. It removed the fear of defaulting. Now it's paid direct to the tenant and obviously for the LL mentioned that increased the risk factor of renting to those on housing benefit. It would be interesting to see who was actually helped by the change in payment procedure. It has definitely adversely affected lots of housing benefit tenants.

The perceived problem with buy-to-lets could be solved by building more social housing. Then the tenants who wanted to rent but preferred a social landlord could do so. Those who wanted to rent privately could still do so. Inevitably the demand for private lets would fall and that could return properties to the market. But, please let's not forget that actually some people want to rent from private LL's. They don't want to buy and they don't want to be in social housing. Private LL will always be needed to fill that gap.

APlace, you have hit the nail on the head regarding HB now being paid to tenants. When it could automatically be paid directly to landlords then a significant element of risk was removed.

Another problem creeping in now is "bedroom" tax. I have one HB tenant who lives in my small 3 bed house with her disabled son. She cannot claim the whole of her rent in HB because she has 3 bedrooms instead of just 2, even though the third is just a box room really.

It is hitting tenants. I think in some cases it is possible to still get the rent paid directly to the landlord, but it is much less common now.

If i were the Queen, i'd ban buy-to-let. A household needs only one home. And in places like Britain you have a limited space to build homes. Its not Canada or Russia

Topseyt in theory you can get rent paid direct to the LL if there are arrears of over 2 months. However I guess for some LLs that just adds another layer of administration and depending on the number of housing benefit tenants they have, then that 2 months could drastically impact on cashflow.

I was a LP parent a few years back. I worked but was unable to get social housing so had my rent topped up with housing benefit for a private rental.

I could have paid the rent out of my wages for social housing without any HB, but because I had to rent privately I had my rent topped up by £280 pcm.

So not only was I funding someone else's mortgage, so was the tax payer.

It's absolute madness.

We have two btls. They are our pension as neither of us has had a job with a decent pension. DH slogged as a waiter for 20 yrs putting away every penny to get the deposit for those mortgages, and we will sell the properties at retirement time to live off the money rather than being destitute. Why the hell shouldn't we use property as a pension? It's better than being a burden to the state. Not all lls are out to exploit tenants. We keep rents low to keep permanent tenants. Would never make fair tenants homeless.

Madmomma: the chances are that you will have to sell your houses to fund your care in old age whereas those who have never bought a property will have their care funded by the state (unless they have significant savings). So those complaining about the state paying for people's houses through HB need to remember that those LL will fund their care from their asset in old age. The HB tenants have their rent funded now and their care fees funded later. Who is actually taking more from the states finances?

Inthedark - those who will fund their own care will most likely have a choice where they go. Those who are funded by the state will be shoved where there a bed.

I think most people will be funded by the state in years to come anyway, because no one will be able to afford to buy a house to sell later on.

Just because someone relies on the state to fund residential/nursing home placements doesn't mean they've been reckless with their money when they were younger.

I think you are also forgetting that those LL's with property to sell to pay for care have had that property paid for by private tenants/tax payers.