To think people who own more than 3 properties should have a special tax applied to them?

[Calltheguards]

I'm just thinking with the housing crisis, should people really own more than 3 properties? I would assume it's a property portfolio and used to exploit renters. AIBU to think there should be a special tax applied to property owners who own more than 3 properties? Maybe tax them at a really high rate to discourage people from hoarding property.

Can someone finally tell me how much do they think the prices would drop and how would it make a massive difference to FTBs who can't save a deposit now?

Because even in 2008 house prices fell about 16%.
For easy calculation I will use £100k house. You need £5k deposit now. If prices fell by 16% you would need £4.2k. That is NOT such a big difference.

Obviously it would make difference on really expensive properties like £500k where after 16% drop the deposit would drop from 25k to 21k.
Average house price is 231k. Deposit needed 11.5k with 16% drop in price it would be 9.7k.

Sometimes when people say "prices would drop and more people could afford to buy" I don't think they realise that it's not THAT big difference. Yes, there would be the added point of being able to get mortgage on SLIGHTLY small wages, but with market being unstable, banks would get even tougher.
IMHO a proper sustainable solution would be to provide better saving options with better interest, teach basic finances at schools and raise quality and access to education so people can progress at work better, hence getting higher and higher wages over the time.
IMHO it is better to give better chances to people who didn't get them before than take from the ones who had them.

CornishMaid- no, I don't think people should be allowed to invest exactly how they like, if that choice plainly disadvantages others. That's socially divisive.

I think one thing we overlook is that there aren't, particularly in the S/SE of Britain many people who own more than one house who didn't get some sort of leg up onto the housing ladder.

We didn't all 'work our socks off' to get there

It may have been able to buy at an opportune time (like when a mortgage could only be taken out in one name, and houses generally cost a 2.5 to 3x multiple of that person't annual salary): it might be coming from a family able to support you to get into uni, to get a degree and a ££ job; it might be being able to get a 100% mortgage; it might be a parent gifting the deposit; it might be inheriting from parents; it might be 'marrying well'.

I:
-Sold the house my parents bought in 1969 for £4,500 for £450,000 in 2016. Dad certainly didn't 'work his socks off' in his 9-5 middle management job; retiring at 57...
-Overseas, married a bloke who due to that country's mortgage arrangements (typical was 7 years, then!) who'd more or less finished buying a nice flat in a popular city.
-Went to a grammar school
-Had parents who supported me into a professional job.

Fair bit of 'luck' in among my 'good judgement' in there!

*Actually OP, you are sounding completely clueless and ignorant. Its difficult to have an intelligent debate with someone about the housing crisis when they don't even understand how a mortgage works and refers to Landlords as "parasites". Let alone lacking any factual information to back up their "blue skies" solutions.

You have are still yet to respond to the many posters who have pointed out the you that multiple property owners do already pay more tax. It seems that you only have one way of thinking and expect everyone else to feel the same.*

You sound clueless and you're doing it purposely because you like engaging in straw men fallacies. You have never heard of rent to own and want to confuse it with a bank mortgage. Rent to own exists in other countries and it's not a new concept. I won't be responding to you anymore because a debate driven by fallacy is not an honest one. Peace.

Rent to own is no different than being owner financed

What are you even talking about? If you are referring to "owner financed" as someone having a mortgage than that is very different to renting. Renting is paying the owner of the property a service fee to live in said property. Mortgage is paying off a load to the bank. It's really that simple.

Rent to own is no different than being owner financed

This isn’t true. I think you mean ‘buy to let’? If it is, interest rates on buy to let mortgages are typically higher, as the bank is making a more risky investment by offering a buy-to-let mortgage.

and the owner can set the rent rate according to that

I think this might be the crux of your confusion. Owners don’t set rental rates. As I said before, in the Uk there isn’t a landlord large enough (monopoly or oligopoly) to set market rates. Rents are set by the available supply of property and demand. Imagine if all the 1 bed flats in an area were going for 500 pcm. Then a buy to let landlord came along and decided to charge 800pcm to increase their own profit. No one would take that flat at 800. So the landlord can’t set their own rental rate

u have never heard of rent to own and want to confuse it with a bank mortgage.

I never said I hand't heard of it, you said that. You're the one that said Rent to own is the same as having a mortgage..... OK then. I dont like debating with people who can't comprehend simple facts or even do a basic Google search. Enjoy being bitter and jealous at property owners.

Juror If house prices fell, I think there'd be a bit of a chain reaction of more and more current BTLs being released into the market, further depressing prices.

The 100% mortgages only emerged because no one could afford to buy such stratospherically priced houses requiring such huge absolute sums of deposit money.

I would agree that it sounds better to give opportunity to those who haven't had them, than take from those who did; but a house is 'a thing' only someone from one of those two groups can own it. And I can't see any party, existing or emerging, that would support any improving of the the lot of 'the have nots' if it threatened their privilege in any way!

For anyone who doesn't know how to use Google!

www.investopedia.com/updates/rent-to-own-homes/

Aren't the "shared ownership" houses designed for those who can't afford to buy full ownership? That seems like a decent solution...

M3lon "Imagine all the money the government has put in the hands of landlords in the form of housing benefit - it might all have gone to properly fund the NHS instead!"

Absolutely.

Like working tax credits. Imagine the government had made employers pay actual living wages to their employees. Ironically, I suspect quite a lot of the WTC ends up back in a multiple-house owning LL's pocket who is also their employer.

I'm a home owner and FWIW I agree with you. Maybe in some circumstances buy to let is an ethical way to make a living, but in many circumstances it isn't. Plenty of tenants would love to be paying their own mortgage rather than someone else's, but don't have a choice.

*I've really got my fingers crossed for a massive house price crash. People who have a house and live in it can continue to do so (even if in negative equity) and all buy to let landlords out of business. Young people able to afford a mortgage when now they can't.

Yup - roll on with it, I say.*

No idea how mortgage works, do you? If you are in negative equity it's impossible to remortgage to good rate so you end up on variable. It can easily be from 2% to 4.5% and that can bring repayments few hundred quid up and lots of families can't afford £200 or £300 extra. How do you think people lost houses in the last crash?

Op, the ‘rent to own’ schemes you’ve referenced are also just a financial instrument.

The first part is an ‘option’, so you get the option to buy the home during the lease. Usually, whenever you buy an option, you pay a fee for the opportunity, as you’re reducing your own risk exposure and transferring it to the option provider.

Secondly, your rental payments don’t pay off the purchase price, although a portion of them might. You still have to separately save money to buy the property before your lease expires.

The benefit of schemes like this is usually to help people who find it difficult to save up for a large deposit, but have steady and relatively high income. The downside is that they cost more then a straightforward mortgage.

They have nothing to do with private landlords

I only own one property and have no intention of buying any more (so I'm personally disinterested). I have no issue with someone acting asa professional landlord. I have rented before and if I moved temporarily would rent again. The rental market serves a useful purpose. I would prefer the government to provide more social housing and to legislate the private rental market more carefully (similar to the system many EU countries have) so that long term renters had more security. I think in many ways casual landlords who only own one or two rental properties are sometimes worse as they often don't really know what they're doing, don't benefit from a network of contacts and economies of scale so find it more difficult to make a profit and end up cutting corners.

By the way, my monthly mortgage bill is half the cost of my previous rental property. I couldn't afford to rent my flat at market rates, but I'm overpaying my mortgage every year!

Sorry to have called you goady, I meant that when posters try and explain the property market to you, you don’t respond or seem interested, so maybe you’re not that keen on actually discussing the property market?

I've really got my fingers crossed for a massive house price crash. People who have a house and live in it can continue to do so (even if in negative equity) and all buy to let landlords out of business. Young people able to afford a mortgage when now they can't.

So people can continue to live in their houses in negative equity, therefore unable to sell. Buy to let landlords will continue to rent out their properties as they won’t sell at a huge loss. So these young people who can now afford a mortgage. What will they buy if there are no houses coming on to the market because nobody can afford to sell? I think your wishful thinking is a bit devoid of logic tbh.

@Calltheguards I’m genuinely baffled by you.

I’m thinking now maybe you’re a “journalist” on a fishing expedition.

Did you even read what you linked??

OP, could you please clarify exactly how i'm not discussing this "honestly"? Its a bit ridiculous for you to assume I don't know about rent to own when you yourself said it's the same as a mortgage. I'm trying to discuss the subject with you and then you decide because I don't agree to shut me down? Seems a bit silly really.

Grey- no, that just keeps house prices artificially high. So Tory voters can smile contentedly as their house gains in value.

The government should not be meddling in house prices. Despite some falls, but mainly nothing worse than stagnation, house prices are still abnormally high.

Personally, and I make no apology for bringing this up, I consider Leave to be a symptom of the growing house ownership inequality in the UK, among other factors.

The government have directly contributed to this via tax breaks for BTL LLs; shared ownership schemes; Housing Benefit (rather than force LLs to lower rent); scurrying away from 'The Dementia Tax' when it was suggested those who were beginning to need elderly care (and who hadn't been made to pay enough to provide for it during their working lives) might have to sell their 5 bedroom family home (back into the housing market) to pay for it, said 'No'; and there being no additional burdens placed upon 'ave a go LLs, people with one house who use their equity to buy another, that being some else's potential FTB home.

It's coming home to roost.

I have to say i do agree with the OP. I live on a council estate in an ex council house (bought with discount by family the sold to my landlord) were being crippled by the private rent with no chance of saving for a deposit while the houses either side pay a third of what we do and because of the lack of council properties we havent got a hope in hell of getting a council property with affordable rent

If you actually think that, then you either don't know anything about the shared ownership schemes or are a bit thick.

No need for insults. I have never been involved in shared ownership so asked the question, did it really require you to call me thick?

A) they’re already paying tax, income and increased stamp duty.

B) why does having multiple properties mean they’re exploiting renters? Why do you think people with only 2 properties wouldn’t exploit their tenants?

C) if they’re rented out, exactly how is the property being “hoarded”?

D) how is owning more than one property harmful to the environment?

E) I can’t be bothered to read more than your first page of posts, you’re obviously very bitter.

I've really got my fingers crossed for a massive house price crash. People who have a house and live in it can continue to do so (even if in negative equity) and all buy to let landlords out of business. Young people able to afford a mortgage when now they can't.

Oh yeah sure, because a massive house price crash will happen totally in isolation and not be surrounded with an overall economic disaster downturn. So all those young people on low wages will be perfectly placed to buy these cheap houses with no trouble; and no risk of interest rates going through the roof or their employers or banks failing.

Yep, a massive house price crash is all it'll take. And only young people will be able to cash in on it, not those with money in the bank already.