to think that banning 'buy-to-let' would go a long way to solving the housing crisis?

[carlajean]

It seems so obvious to me that there's sure to be some flaw in the argument, but it would be easy to enforce (i.e. one family, one house) and there would be a large number of houses/flats released onto the market, forcing the price down (to a rational level) so that people could afford the newly-available housing.
Because interest rates are so low, housing is a good investment, particularly with older people who might have pulled down their pension early, resulting in private landlords buying up cheap housing a letting it out.
I await flaming, but am interested to hear what people think.

When I escaped by horrific marriage, I was able to do so fairly quickly and easily because there was a good stock of rental flats in all areas. If I had to wait months for something to come up, I wouldn't have been able to leave.

Also, you say 'one family, one house'... What about companies? Are they allowed to own lots of homes to rent out?
What about if I buy a shop and it has 3 flats above it? Can I keep those?

What about us? On family, bought a family home at the peak of the market in 2007. Lived in it til earlier this year, when work took us abroad. Currently rented, while we aren't in the country. We'd like to keep it as a) its worth less than we paid and b) when we come back to the UK, we'd like to live there again.
Would we need to sell? It's been converted to a btl mortgage.

Not everyone has money for a deposit, not everyone can get a Mortgage.

There would be a massive shortfall in property available to rent with BTL, so my question remains; Where would people live?

There were no BTL mortgages before 1998, I believe.

There was still rental property then.

I don't think it would work for many reasons stated - but there is a middle way, which is greater regulation and fewer tax breaks for landlords, to provide for longer, more stable rents and rent costs.

I'd also be interested in incentives for sellers to sell to owner occupiers. BTL landlords usually have more capital for deposits (according to the ONS) and can therefore outbid owner occupiers with less wriggle room, so bunging owner occupiers extra cash or a stamp duty cut is just likely to push up prices further. Giving the seller a financial incentive to sell to an owner occupier is not likely to have the same perverse effect - but it might rebalance a little.

Rickroll there were plenty of private landlords prior to 1998, who had Mortgages, mostly interest only.

jassy
One proposal is to allow BTL landlords a reduction in their CGT bill if they sell a BTL property to a first time buyer.

It sounds like it could be open to abuse, but if it could be properly monitored, it sounds like a good idea.

notquite
I'd rather have rent caps or guaranteed long term tenancies to ensure my family's stability.
I agree. There's nothing wrong per se in landlords owning and renting out houses. You could even argue that it's better that their capital is tied up rather than local councils, housing associations etc., it's only wrong because they then put families in precarious positions, drive up prices, etc.
So I would have
*residency requirement
*massive non occupancy penalty
*much much longer tenancies
*rate caps

YANBU but it would have to go hand-in-hand with local authorities seizing empty properties and converting them to social housing (believe some LAs already do this), building more social housing, and regulating rents for the 'accidental' landlords left behind.

I think banning would be tricky for the reasons outlined above. My feeling is that better tenants' rights and strict (but not unreasonably low) rent controls could allow a functional rental sector while capping the current out of control growth in house prices.

It's kind of swung back and forth - strict controls were introduced post war to deal with Rachmanite landlords, those choked off the private rental sector so then they were got rid of under Thatcher, but then it went too far in favour of landlords esp with the selling off of council houses. Now I think we need to push it back a bit in the favour of tenants.

Not every landlord needs a BTL mortgage so there would still be lots of rental property. The point is that they would not be using tax breaks and special allowances to buy property but rather they would have to put down their own capital. BTL mortgages can be interest only which owner occupier mortgages can't. By all means let people buy properties but with their own cash, no tax breaks or special mortgages.

I rented for years - it was great. I went to different towns and indeed countries for years. The time and costs associated with buying and selling even if you could afford a mortgage would mean people could rarely move anywhere.

It is also really difficult to co-ordinate buying one property at the same time as selling another. In the end it would just be the banks who own the properties as most are mortgaged.

Ridiculous idea

Actually, I've been in the position twice when I was renting when the landlord offered me the flat for sale. In both cases, while it suited me to rent it, I didn't want to buy it as I didn't think it was a suitable property for me/us long term.

I wouldn't want to be in the position when private rentals were effectively banned and have a choice, get a mortgage and buy this flat or another now or be evicted with nowhere to go to (no private landlords = only the council properties for rental and suddenly a huge number applying).

where do you see people living who can't get a mortgage? People like those who've defaulted on debts and now have a poor credit rating. People with no savings for a deposit. Unemployed people who need housing benefit to pay their rent (which they can't use to pay a mortgage). People who have just graduated and are moving to a new town to start a first job, need to live somewhere for their first day, but cant get a mortgage until they've got an employment history and some savings? People who've just been offered a 6 month contract in an amazing sounding job at the other end of the country, but don't want to sell up the family home and shift the kids out of school for such a short period... You know, the people who rent privately now and it suits them.

There's a lot to be said for putting greater tax and restrictions on BTL to stop it being quite such an attractive financial option, but don't assume everyone who is renting wants to buy that property in that town, or could buy it even if the price fell.

Don't assume that everyone can afford to manage a property either, paying for maintenance as well as a mortgage - it suits a lot of lower paid or unemployed people that if the boiler breaks, someone has to fix it.

basically, don't assume that a change that would benefit you a bit wouldn't fuck over a lot of other people.

All renting should be through social housing. No individual should be in control of whether another family/person has a home or not. Ban BTL, house prices drop, councils buy them all up dirt cheap and let them affordably through housing association.

Holiday lets are not just bad either. Assuming they are busy, they bring a steady supply of tourists to an area supporting local shops and businesses. In most of these areas tourism is the mainstay of the local economy. Second homes which are empty most of the year of more of a problem.

This has been done to death.

Where would all the people who WANT to rent live? People new to an area, people at university, people wanting to live with their friends rather than on their own in a sad little studio flat.

i don't think you understand how the Conservative party thinks and which type of people they want to help.

thanks all - I've found the responses very interesting.

I'm sorry if it's been 'done to death' whois. I come on alot and can't remember seeing any threads on it, perhaps it would be better if you hid the thread, or provided a list of non-discussable subjects?

Rick, we obtained a "business development loan" from Nat West to buy a property to let out before "buy to let" loans came out. Also plenty of people buy for cash so don't need a buy to let loan.

It would certainly be complex. Eg my daughter bought to let out (now not allowed) and lived at home as the only way she could afford it. She now lives in the flat due to pay rises she got. Would people not be allowed to move into their boyfriend's flat if they had their own? or be forced to sell it? Lots of people move for work but will only be in France or Devon for 1 year so they let out their property whilst they are away.

As someone else said what about companies? Would you ban limited companies owning properties?

Certainly the state can do as it chooses although we did just get a Tory government so forcing landlords who perhaps only own one property to sell at a loss is not likely to be on the top of the Government's agenda for the moment although remember it is the Tories not Labour who have changed interest relief on lettings and introduced the Annual Tax on Enveloped Dwellings (properties held by companies which is something like £3000 a year for properties over £500k) and who has just forced a 1% rent reduction on social landlords against their will.

Surly,

Obviously your idea is ridiculous for a multitude of reasons, but I love the idea of Hollywood stars and Brazilian footballers and Asian businessmen having to relocate to the UK for work for a short period, and their first port of call being the housing office, where they queue up to bid on a 6 bed mansion in prime London

SurlyCue why on earth would house prices drop if BTL was banned? The vast majority of house sales are to owner occupiers?

I entirely agree social housing needs to be far far far bigger than it actually is, but as the supply of private rentals doesn't meet demand, I can;t quite see how even buying every single landlord owned home in the country is going to solve the lack of housing. Not to mention the fact that houses can't be physically moved to where demand is greatest.

The UK needs proper laws covering rental property - we rent in Germany (from a private landlord) having owned in the UK. We've lived in our rented house for 8 and a bit years which is twice as long as either of the properties I/ we owned, its bigger and nicer than the house we had in the UK and somebody else has to mend the roof/ boiler :o We have no wish at all to buy.

That said there is no justification for tax breaks on btl mortgages - they should be available on the same terms as all mortgages, not interest only either, to contain the rampant property speculation in some areas.

PIL own theirs and its falling apart around them - was all very nice 40 years ago when they bought it but now they've paid off the mortgage but are being hit with major essential maintenance bills (roof, bathroom floor sinking, kitchen in need of replacing) which are more atm than our rent.

Our landlord would have to give us 6 months notice to leave because of the length of time we've been here (mind you it goes both ways and we'd have to give him 6 months too). We always pay the rent on time, he always sends his plumber mate round to fix any problems with water or heating - otherwise we leave each other alone and have no contact except to say hello when he visits his grown up son who lives down the road. He has two rental properties, not a big empire.

There are too many buy to lets and the reduction in tax relief will discourage new buy to lets. A big issue is that a landlord can get an interest only mortgage, but a first time buyer has to have a repayment mortgage. If landlords were forced to have a repayment mortgage then it would make it harder to increase a property portfolio.

I'm a long-term renter and I have to say without a glut of rentals I would have been stuck for housing plenty of times as I've moved a lot for jobs. HOWEVER, I don't agree that buy-to-letters should be given concessions that regular mortgage holders don't have. So for example, the landlords that can take mortgage holidays when their property stands empty - sometimes for considerable amounts of time - is clearly not fair and could be contributing to unfair growth in this area. By all means, buy-to-let, but take the same risks and responsibilities as resident mortgage holders. The other problem is - if buy-to-let becomes too much the norm, then where are all the renters going to come from? There has to be balance, and at the moment, the unfair advantage given to buy-to-lett mortgagees is a problem imo.

I broadly agree but think it would be better to repeal the Right To Buy Act and keep social housing the social sector.
I think a well regulated rental market is necessary and believe in rent caps linked to local wages rather than an artificial market rate driven by landlords and greedy agents and propped up by housing benefit.