Housing - the silent crisis?

[CrisisTime]

The shocking state of housing in this country for anyone who didn't get on the gravy train in earlier decades, that is.

The homelessness. The sheer costs of housing. The tiny rooms and tiny houses. Storage rooms converted to miniscule 'bedrooms'. The dirt and dilapidation of so many rentals. Increasingly greedy landlords and letting agents. A cool house-share like The Young Ones would never exist now. The gentle landlord I once had (a vicar's wife) and her relaxed tenants - is no more. Just the sheer lack of decent affordable housing for so many.

300,000 more people coming to UK every year as well, which makes bad matters even worse, if they could be worse that is.

Is any politician from any party ever going to do anything on this issue? All I ever heard is daft initiatives that are a drop in the ocean.

And woe betide you if you want/need to buy a place in a University town! They are full of new-build student accommodation (so no space to build new houses), and many of the existing houses bought by landlords to rent out to students who guarantee multiple occupancy. The rents are astronomical too!

EVERYONE DOB YOUR LANDLORD IN NOW

The problem in outer London now is that prices are quite high. My son's house cost £325k. Saving up the deposit is very hard for a lot of people even with two full time incomes.

In other areas of the country the cost to buy is less for a first one bed flat or studio in many areas. We have relatives in places like near Halifax and they can commute and work in a number of cities around there where there are jobs and the house prices are relatively low. Ditto relatives in Yorkshire, never mind places like near Sunderland where my mother was from.

(On paying tax on any income profit you make (if you make any profit at all) from rents HMRC has an on line tool and other systems which connect it to the land registry data and much else as well as trawling letting agents and the like. However a good few landlords don't make profit. The one year my daugther let out in the rent was less than her costs so she has a loss she can carry forward in case she ever makes a letting profit. Unfortunately they do not let you set the income loss against your other income.

Ditto me. I have capital losses from sale of two buy to let flats in the 1990s during that property crash which we had to sell at a third less than we bought them for in London !!! ( I am obviously the wrost property investor on the planet). I have those capital losses but have not had any capital gains to set them against. Not all landlords make any money out of it at all.

A big issue with housing is the CGt exemption on primary homes. I think you should have to live there for at least 5 years to qualify for the exemption. I'd also like to have that exemption replaced with a threshold. Here in the US you pay no gain on the first $250k if single and $500k if married (you file jointly so thresholds are doubled) if you have lived in the home for more than 2 years.

Dob away ! All paid up, insured , declared and so on. Although if you rent a place with all the safeguards in how to rent ( you have read it?) That would stop a lot of the problems.

You'll really hate that I pay no tax on the rental income, because it doesn't make enough to do so. Clearly it makes enough to be worth it, but as soon as interest rates are over inflation by enough - goodbye.

With inflation 3% and climbing it will be a while.

BTW many landlords don't tell the land registry that they dont live at the property. That is stupid as it leaves you open to property fraud, but it does reduce the risk of a violent dealer finding out where you live. I went through some scary times because of this.

Special, the Land Registry does not record whether the owner lives at the property, rents it out or leaves it empty.
It merely records ownership, title etc. and prices paid, which can be interesting anyway.
I recently had a good old nose to find that a dd's house which she'd just paid over £300k for, had last been sold by the council in C 1971, for just over £3k.

This was well before Thatchers Right to Buy, which surprised me, but I have since learned that councils could and did sell properties off well before Thatcher.

You'll really hate that I pay no tax on the rental income
I'm well aware that the profit is in the capital gains and the rental income usually just covers costs, landlording is an investment activity
I'm just surprised that any would risk doing it without being upfront with hmrc!

For those not paying tax, a bill should be the least of their worries. Jail would be my main concern!

We always did full accounts and notification to HMRC. Pity I have never been able to use the accumulated either income nor capital losses! However I am not suggesting no landlords (or owner occupiers) make capital gains on property if they hold it long enough.

The recent rules where by 40% tax payers pay tax on income they have not made from the property which is the Tory Government trying to ensure fewer people rent out properties is having an impact as it was intended.

The land registry does record if the owner of a property lives elsewhere - if the owner tells them.

Correct, they don't know or care what goes on at the place but that's not their job.

For those not paying tax, a bill should be the least of their worries. Jail would be my main concern!

You have to do something pretty outlandish to be jailed. Most of the time you just have to stump up what you owe plus interest.

By the way the Financial Times this weekend has a useful article on people highjacking properties, showing fake ID of the seller, pretending to be the seller and selling the property. The real owner tends to get it back by the buyer loses everything. If you own a property it is a good idea to sign up to the free Land Registry property alert service where by if anyone tries to change ownership of your property then you will be notified by the Land Registry making it harder for someone to sell your property.

Jail costs the taxpayer money!

I would make them pay it all back with an equivalent fine on top. And if they had to sell one or more properties to pay the bill, tough.

I'd actually like them to do community service for years and years. Give back in terms of Labour what they took away.

I may be imagining it, but Private Eye ran an article a while ago explaining how the rich stayed rich, and kept their properties off the land registry (which has to be informed by law when a property is bought/sold).

From what I understand, properties are placed in trust, and it's the trust which is passed on - the property never changes hands.

So there is still an awful lot of land out there that no one knows who owns - with the obvious implications for tax collection or avoidance that implies.

By the way the Financial Times this weekend has a useful article on people highjacking properties, showing fake ID of the seller, pretending to be the seller and selling the property. The real owner tends to get it back by the buyer loses everything. If you own a property it is a good idea to sign up to the free Land Registry property alert service where by if anyone tries to change ownership of your property then you will be notified by the Land Registry making it harder for someone to sell your property.

Presumably (properly) mortgaged properties would be immune, since the lender would be registered as holding a charge on the property ?

Good point. I registered for the service when I paid off my mortgage after 30 years.

Where a spouse is not on your property's title and she or he has registered at the Land Registry their right to live in the matrimonial home presumably the same applies - the fraudster could not so easily sell without consent of that spouse although I suppose they could pretend to be that spouse too.

lurking yes , theoretically....but there is still mortgage fraud.

I'm glad lurking mentioned that because I had thought you could only use the Land Registry service if you had no mortgage but the FT article and Land Registry man quoted in it was suggesting everyone should register and also that you can register for it on properties you don't own - eg of an elderly relative who may be being scammed. So I wonder if you can register for it (for up to 10 properties) without the other person knowing so you can keep tabs on your husband's portfolio of 5 homes or snoop on third parties?

I'm glad lurking mentioned that because I had thought you could only use the Land Registry service if you had no mortgage but the FT article and Land Registry man quoted in it was suggesting everyone should register

I believe (BICBW) there was a law change (2005-2010 ???) that now requires the Land Registry be informed when property changes hands. There were some squeals from the middling-rich, but the super rich knew it would still keep them off HMRCs radar because their land tends to be held by trusts.

Does anyone remember the situation until recently where you could buy a house, only to discover that you were responsible (for hundreds of thousands of pounds) for chancel repairs ?

en.wikipedia.org/wiki/Chancel_repair_liability

No amount of due diligence from the buyers solicitors could confirm or deny the liability, due to the lack of land registration. All you could do was buy insurance (google it if you don't believe me).

One positive thing about the dissemination of information the internet has bought, has been to shine a light on some of the tricks the rich have used to stay rich. And passing down trusts that are legal entities (so avoid inheritance tax) is just one ...

My dad used to work in social housing - he suggesteded:

Currently If you have a greenfield site worth perhaps £10,000 an acre as agricultural land and then you get planning permission for building homes on it. The value goes up to a conservative £1 million per acre. This is an increase of 100 times. Even after capital gains tax it is like winning the pools. The plot cost per house comes out at over a third of the market value of each dwelling and the result is that we have shitty houses at inflated prices that are still too expensive for people on average wages

Proposed Remove capital gains tax from land sold for housing and replace it with a new tax to be directly re-cycled into subsidising the building of affordable homes. I would start modelling around a figure of 75%. Then I would calculate how many homes were needed and where and restore the arrangement of instructing at the lowest level of local government that planning permissions be granted for the needed numbers and categories of homes for that location. If you want a really radical idea, don’t even buy greenfield building land; lease it. If an acre of agricultural land is worth £10,000 then most landowners would probably be very happy with a return of 8% for doing nothing. That equates to £800 per annum or £50 to £70 per house per annum. So buy the house and rent the land at £50 to £100 per year. Somewhat less than the mortgage on the £70,000 or so it would cost to buy the land at freehold building site price. You would need to provide for indexation and use housing associations to manage the leases but it’s feasible.

But this was a year or two ago - I don't know if it would still be possible

Does anyone remember the situation until recently where you could buy a house, only to discover that you were responsible (for hundreds of thousands of pounds) for chancel repairs ?

Just FYI, reading the Wiki carefully, I may have been premature ... it seems the proposed legal remedy to the situation was lost. If so, anyone who bought their property before 2003, may want to take legal advice"

(excerpt from the Wiki)

Subsequent to this case, it became best practice[2] for new purchasers to be advised to request a check as to whether the local parish (one of the 15,000 ecclesiastical parishes into which all of England and Wales is split) included an older rector's church, not evolved from a chapel but now with a vicar, and if so to take out chancel liability insurance.[2][3] Unless such a check was made, homeowners who had lived in their property since before 2003 were unlikely to be aware of their liability or to have insurance, as chancel repair liability would not have been registered on their title and may not have been researched by their conveyancers on moving in. If it was not noticed by solicitors and the church enforced the liability across the affected land, action against the solicitors may be time-barred after six years

Yes, my son's very conscientious solicitor in November had him buy insurance against the remaining risk of chancel repair obligations on his property. The seller would not pay the modest premium so my son did just to be done with it and get the property purchased.

By the way on hidden ownership of property Private Eye have a map where you can check which foreign owners own properties near your house (quite a few in my case) and secondly the Government currently is planning to require just like for UK limited companies under the Persons of Significant Control (PSC) new rules that foreigners may have to disclose ultimate ownership abroad of property in the UK and I think for Government contracts (public procurement) suppliers for those would have to disclose ultimate owners of the company eg the president of North Korea, or a Gadaffi son or whatever.

Mind you the dishonest will just lie as ever.