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.

So given that I am not suggesting that everyone gets a 100% mortgage just those with a faultless record of payment it shouldn't be a problem.

I guess I wasn't clear in my post. The bank isn't terribly worried about whether you default or not because they can take title to the house if you do, but if the house has lost a substantial portion of it's value they still take a loss.

The lenders who were foolish enough to lend 100% or more took their lumps when the market fell and many of them are no longer around. Most lenders back then still required a down payment/deposit.

OP your original question was should people own 3 or more properties? Well - the answer is yes, if they wish to do so and are able to financially. Let’s not get personal. If you want to address the housing crisis, you need to direct your thinking to how to improve social mobility and education which would improve the quality of life for all - and that’s a different debate.

Handsoffmysweets

In answer to your questions (i don't think that they are goady at all)

as you don’t fit local authority criteria, without renting privately where would you live?

I couldn't, I have no option but to rent privately, hence not having a choice.

What solution do you have for this so called private LL problem in this country?

As far as I can see the problem isn't LLs that have several properties or its those that have huge portfolios and treat their tenants like shit. And even then there are LL with huge portfolios that are fantastic.

Are you in an expensive part of the UK?

I am, but why should I move? I can easily afford a mortgage (its half my rent) its the deposit that is the problem.

MissConductUS

You were quite clear. I just don't agree with you.

On a profit and loss scale based on the fact that those that pay mortgages don't shift anything but the interest for the first several years banks could quite easily absorb the cost.

The money funded by a new tax on property magnates could fund acquiring more social housing. Rent controls such as in Germany could be applied to keep costs low to the renter. Landlords would still exist but have to pay a tax proportionate to the number of properties they own over 3. I used the number 3 because I consider there to be exceptions (for example some previous posters indicated the need to put up elderly family in a home they owned) but I find it hard to believe that the majority of owners of 4+ properties own for the sake of service and not profiteering. They have received good fortune due to circumstance of being born at the right time or help from others (inheritance, gift, etc). Landlords running property empires like a business and not producing any product or jobs, yet absorbing a substantial purchasing power of the public are harming the economy and the environment (through forcing essential workers priced out of local job areas to commute). If it wasn't exploitative in nature, there wouldn't be offshore companies created just to do it.

There would still be private property to rent out by individuals who own a reasonable amount of property and could afford the tax.

Handsoffmysweets

Help to buy is a con (in my view) as it requires an immediate full payment once the term is up.

95% is starting to be an option but frankly the quality of the builds suck.

You can get 95% mortgage as a first time buyer for any property, not just new built

And it has been available for YEARS

On a profit and loss scale based on the fact that those that pay mortgages don't shift anything but the interest for the first several years banks could quite easily absorb the cost.

It depends on how far the market has fallen when they have to repossess and sell, if they can sell at all. What sank a lot of mortgage lenders during the financial crisis was the fact that there were no buyers as so many people had gotten laid off and people weren't taking risks by buying houses in a falling market.

If banks could really do this profitably given the level of risk, some would.

Two ways around this that I've seen in the US are real estate developers offering more favorable terms/bigger loans when you buy something they've built and private mortgage insurance (PMI). PMI protects the lender in case you default and you can drop it once you reach 80% loan to value ratio. It's not easy getting on the property ladder here either, so I am not unsympathetic to your situation.

Build new houses - Not in my back yard

Build - don't want to live next to social housing

The property needs to be built first

Op, I really think you are living in a dream world. It might work for a couple of years but it’s not sustainable. Just because some people have benefited from circumstances doesn’t mean they should be penalised for it. You sound very bitter op. We need people from all backgrounds and walks of life to function as a society. So what is businesses and landlords are profiteering, that’s their business, literally. It’s a good job we do have entrepreneurial people in the UK or where would we be?? Life isn’t fair. Some people may have had a helping hand but so what? If everyone was financially the same the system just wouldn’t work.

The money funded by a new tax on property magnates could fund acquiring more social housing

The fly in this particular ointment is that "property magnates", using the best financial advice, would certainly use every available strategy to avoid the tax (and that's avoid, not evade). The offshore schemes you mentioned are just one method, and doubtless there are many more I'm not clued up enough to know about

So between legal challenges and the usual LA incompetence, how long do you anticipate it would take for a decent pool of housing to build up? And again, where are the magnate's ex-tenants who don't meet LA/HA criteria to live?

If the public's purchasing power went towards a variety of services over rent, it would boost the economy substantially. The current majority of profit from the funds sits in bank accounts, or to purchase more property, and does not encourage job growth.

@MissconductUK the IEA are a fairly controversial crowd. Its no surprise they publish this. They are essentially a libertarian lobby group, with far too much influence. One of their fav topics is to argue for a hard brexit, but that's a topic for another day. They are far from unbiased.

I quite like the fts analysis here:
www.google.com/amp/s/amp.ft.com/content/fe805c60-a6ac-3aab-8582-41b7fcacbfc0

And here:
www.google.com/amp/s/amp.ft.com/content/efe1f74c-3c1d-11e9-9988-28303f70fcff

As i said, i like their analysis. Especially the idea that it is not a simple matter of supply meeting demand. But i would add the focus needs to be on housing as a basic need, and less on housing as a way of a few making money.

Its a very complex thing. And it isnt clear one way or the other how intervention would work. But the idea that some own multiples of properties, seeing them as investment vehicles, while increasing numbers are excluded from owning, is evidence that the market is not working. Thats a different question to the question how to intervene.

Give it a rest OP and have a while you’re at it.

Landlords running property empires like a business and not producing any product or jobs

They are providing a product - housing, which requires debt services, taxes, repairs, insurance, etc. to remain viable. You can certainly kill the rental market with regulation, as NYC did in the 1970's, but people were not better off because of it.

But if you want to believe that most LL's are rapacious and evil, or that there's something inherently wrong with doing it at scale, have at it.

If the money is not spent the economy suffers, that's just how it works.

Ever visited Cuba, the economy & society functions differently there
It's not a capitalist country

Socialism is not a dirty word and it's probably the only way future generations will survive when robots and automation disrupt the current system permanently.