To be angry that this government has further shafted everyone bar homeowners

[Kitchendisco73]

The eviction ban ends and the prediction is that about a million people who rent will be in trouble and at risk of losing their home.

Alongside that, the government has also shafted anyone who is a first time buyer by creating a fake housing boom using help to buy and the stamp duty holiday as prices have risen so much, those who it was allegedly meant to help are priced out.

In Cornwall, I read there were 10,000 air Bnb properties but 62 for long term rent for local families.

www.theguardian.com/business/2021/jun/01/bank-of-england-monitors-uk-housing-boom-as-it-weighs-inflation-risk-dave-ramsden-covid

It’s entirely possible that there is a big housing crash coming too thanks to inflationary pressures.

Aibu to be angry- it’s just truly appalling and impossible for anyone (millions of people) who can’t get on the property ladder. Surely this madness has to end soon? You can’t just protect homeowners at the expense of everyone else. I am tired of the rampant inequality in this country.

And in terms of second homes- massively tax them and in wales I would like see restrictions on who can buy. Places in Cornwall like St Ives already restrict who can buy there.

. If second homes didn't exist, and I'm including holiday lets and Air BnBs in that, what would happen to the areas where these properties are? Cornwall, your area, etc. Presumably these areas primary industry is tourism, if there were no places available to holiday in, wouldn't it effectively end tourism to them and as such make the towns destitute? Areas reliant on tourism tend to be fairly run down out of the most popular bits as it is with much of the work available in them being seasonal.

If there is a market for tourism then surely capitalism and the basics of supply and demand dictate that business will pop up to provide accommodation for these tourists.

Hotels, camping grounds, caravans, parks for chalets and lodges, traditional B&Bs.

What did they do before the invention of Air B&B?

I believe Air B&B might have a place in society... a couple moving in together and testing the waters for a year or two before selling, or someone who moves in with family to make room for the Edinburgh Festival, for example. Single off shore oil and gas workers who are away for 4 weeks, home for six weeks (either through renting out, or using it themselves).

But buying up residential homes with the sole intention of turning them into Air B&Bs is wrong. These are businesses and I believe they need to be regulated carefully or else you end up with entire areas where there are no local people, nobody who cares about the area, and the kind of social cleansing situations I spoke about in my previous post.

I live in southwest surrey for those wondering where my flat example was. The south east is a big bit of the country so there are cheaper counties in the southeast. What i mean was i am in the cheap bit of my town which is cheaper than the next town along. People who live in my town still use childcare workers, healthcare asssitants and many other minimum wage roles to keep the town running. We cant bus in a workers from further away really as its quite a distance befote itscmuch cheaper.

Or maybe thats it. The town should shuttle in all the workers from a much cheaper place. It just seems a shame.

my ideal solution is to remove all the props holding up the market and let it adjust
The market will just stagnate because people won’t/can’t sell for less than they paid. The only time prices will fall is if there are forced sellers who have no choice about selling for less than they paid - which requires a wider economic collapse to have happened.

Help To Buy Water Loans have decreased the supply and increased the demand
But reducing the price of water won’t help at this point. Because people didn’t buy with cash - they got into debt. If their water is suddenly worth less they’re in negative equity and that’s disastrous.

massively tax them
They are! Do you even know anything about tax on rent? I expect not, hence your response. I am taxed 40% on my second property. Due to this change, I am not making any profit at all, and as more requirements are added each year, I am about to start making a loss. That's because I'm a good landlord, haven't increased the rent in 4 years now, do all repairs, and do so to good quality. I even pay to cut shrubs even though it's really for them to do. I do all required checks, and will renovate every 6 or so year (ie. more often then I renovate my own home).

As my mortgage is BTL, I am not under pressure to pay the mortgage down monthly, but as it is, the income from the rental is not enough to pay monthly to repay it all in what was the original timescale for repayment when i was living there myself.

Is rental expensive? Yes. Is it because Landlords are pocketing in the profit? Used to be, but now it's very much the government that is the winner, I guess to help first time buyers...

But reducing the price of water won’t help at this point. Because people didn’t buy with cash - they got into debt. If their water is suddenly worth less they’re in negative equity and that’s disastrous.

I agree, but I think they need to stop the price of water going up further (i.e, stop help to buy and anything else contributing) and then build up the supply in a controlled way.

The only way to solve it now (I think) is by building homes to meet the demand, and waiting for wages to catch up.

If they actually did want to put something in place similar to help to buy... it should look more like a social rent scheme where you lived in the house at affordable rent (similar to the mid-market property which is in the middle of social rent and private sector prices).

The money made from that rent is used only to build more houses by the HA, available at 0% deposit only to the people who proved themselves with X years of rent.

Those tenants move on to home ownership and new people move into the social rented homes.

Almost like a "Right To Buy" but done the correct way where people are not removing social housing stock, people are not being wildly advantaged, and HAs are made to reinvest the money in new housing.

But honestly I don't think they actually wanted to help anything with help to buy other than use it as a sort of sticking plaster, which they knew would put prices up (benefitting their portfolios), and they knew would win votes because on the surface, it is helping FTB onto the property ladder. And that is popular amongst young voters who need a home, and people who want their children to buy a home.

Following

Still not sure why you are against help you buy scheme? It’s a loan from the government which is paid back is extra from interest and equity.

The whole building houses is of course the only solution but it will not happen as it will change the property market. The government don’t want this nor do the people who voted for this government.

They are! Do you even know anything about tax on rent? I expect not, hence your response. I am taxed 40% on my second property. Due to this change, I am not making any profit at all, and as more requirements are added each year, I am about to start making a loss.

Aren't you taxed 40% on the profits of your second property, and presumably at 40% because your income is high enough to pass the threshold?

So if you are not making any profit then how are you being taxed 40%?

I'm not an expert but didn't the change just stop LLs being able to write off mortgage interest payments as an expense? So now instead of being able to write it off an expense they get a 20% decrease on the tax due. Something like that anyway, and it didn't happen overnight.

And I also thought you get around this by having a company and thus coming under the same tax rules as anyone else who has a company?

I do all required checks, and will renovate every 6 or so year (ie. more often then I renovate my own home).

Okay so you are contributing financially to maintain "an asset" you own, which you can then sell at a later date? I do not see what your point is here. You expect cash basis style tax breaks for spending money to increase the value of an asset you own?

As my mortgage is BTL, I am not under pressure to pay the mortgage down monthly, but as it is, the income from the rental is not enough to pay monthly to repay it all in what was the original timescale for repayment when i was living there myself.

Is that not the way it should be? If you lived there yourself you would have been paying partly towards the home you own (or will own fully) and partly towards interest on the loan you took out to buy the home. At the end of it, you have a home.

You are surprised that moving out and having someone else pay you to live there isn't enabling you to pay off the loan faster / at the same rate you were paying yourself?

You were paying and had a roof over your head + the privilege of borrowing tens / hundreds of thousands + the actual ownership.

The tenant is paying to have a roof over their head.

Why would you expect the latter should pay off the loan faster than the former?

@Kitchendisco73

The cheaper houses that first time buyers should be buying are being bought by second home owners or people who own houses to rent out. It’s not right and it has to end.

who is selling these houses to them? Surely if a person owns a home and they are concerned about locals being priced out, they can choose who to sell it to no?

Ultra low interest rates and a tax payer funded stamp duty holiday means people who have money can put it into property and get a really good return renting to the younger generation who haven't had chance and never will to build up savings because of ridiculous house prices and rent. All the governments fault for introducing prop after prop for the over inflating house price bubble, help to buy, shared ownership there's too many props all designed to make house prices rise

@Littlemoons

People in second home places make an active choice to sell 'Outside the community'. They are getting away with no approbation - why? They are the ones making a choice in shafting their fellow villagers/neighbours. The OP could have a dialogue with any of the people with homes for sale - in any format. There are a significant amount of abandoned homes on Wales also - see my earlier post for stats - why no anger directed towards that? It's just too easy and simplistic to day it's the out of towers rah rah rah.

I see where you are coming from, and to an extent, I agree - but most of the people in these "second home places" have been on comparatively low wages all of their lives. Like anyone, they find their small pensions shrinking in real terms and have to think of themselves. A lot will actually have had their properties sold under them to fund care homes.

Plus, there is no guarantee that if Couple A sell their home at a discounted price to Young Couple B, to let them live in the area, that Young Couple B won't sell at Big Price to 2nd Home C, if they get the opportunity to get a better paid job somewhere else - they'll have to, because they won't be able buy a home in their New Town otherwise - in fact, they'll still probably have to go for somewhere much less roomy or pleasant even with the inflated price they got for their first home.

It's not evil elderly people trying to cash in - it's most often comparatively poor ones being forced to.

@jimmyjammy001

Ultra low interest rates and a tax payer funded stamp duty holiday means people who have money can put it into property and get a really good return renting to the younger generation who haven't had chance and never will to build up savings because of ridiculous house prices and rent. All the governments fault for introducing prop after prop for the over inflating house price bubble, help to buy, shared ownership there's too many props all designed to make house prices rise

^ Totally agree.

[quote Kitchendisco73]@Littlemoons to answer your post, it is happening in welsh communities that houses are being sold ‘internally’ in the village via closed Facebook groups but it’s not happening enough get. People are only just waking up to what is going on[/quote]
Why do people need to sell via closed facebook groups though - they just need to tell a regular estate agent that they want to sell to a local family and that what would happen. No need for any cloak and dagger stuff. It's completely up to sellers who they sell to.

Aren't you taxed 40% on the profits of your second property, and presumably at 40% because your income is high enough to pass the threshold?
This really show how people don't know much about the implication of being a landlord. No, I am not being taxed on profits. i get 1200 pounds in rent and have to pay almost 6000 pounds in tax. Yes, it is because my income is high, but it doesn't change the fact that once I've paid the interest on the mortgage, the tax, repairs, fees, insurance, checks, and put aside for refurbishment and redecoration, I have nothing left to pay towards the repayment of the mortgage.

I am not complaining at all, I am not in a bad position, I am tired of reading about greedy landlord who make a fortune off the poor helpless tenants. As said, like many in my situation, I am looking to sell now. Good for those who are looking for a nice 3 bed property is a very nice area, not great for those who need the same size property, living in a nice area, in the best catchment area for schools, but don't want to buy or not yet.

@WhenSheWasBad

Something definitely needs to be done about second home ownership. Not sure what but I’d start with taxing the hell out of them.

You know why that is though, right? In my home country, there was no such thing as renting for a year and then you'd have to fear you'd be cast out. Renting was often for life. You did not have to ask for permission for every single nail in your wall; you decoreated as you saw fit. You signed a contract saying this was your home, do what you like to it, but put it back to what it was like when you moved in. Walls were firm and soundproof, issues were dealt with immediately and professionally (not by some dodgy DIY on the cheap attempt). Contracts were rolling, so suited the tenant as much as the LL, but the assumption was always a lease for life, unless you failed to pay. Homes were spacious. We could have whatever pets we pleased, be away for as long as we liked, work or not, use our home as just that - a home. Looking at my current rental contract, none of that is the case here. I would have to beg to update the look of the kitchen, which has probably looked the same since 1960. I can't remove the hedge , which is shortening my garden by 0.5m on each side. I can't hamg pictures, fix futniture to walls (which would make life safer for my children) and if I want to move out I have to give 6 months notice. Renting abroad is much more tenant-centred, which is why people don't mind. In return, people don't leave their homes like shitholes. Which I've also had to deal with.

Wrong quote, sorry. This was at the suggestion that renting in Europe is much more popular and that people in the UK are entitled to want their own space.

NEWSFLASH:

This just in. Tories have absolute contempt for the working classes.

But if there was a slump in property value the young would suffer most. Those who had bought in the last roughly 10 years.
The oldies who are sitting on a large increase in value will most likely have paid off their mortgage and don't need to move.

*46vivainsomnia

There aren’t loads of abandoned houses in the welsh town I am from- there are lots of holiday homes though if that’s what you mean?
But this is not just about your village. There are many abandoned properties in the UK*

Exactly! OP - wants national sympathy for a problem affecting their area, not bothered by the issue elsewhere for people. Lots of houses that could be repurposed - not all listed buildings further, a significant amount intestate. Notice the OP not addressing the issue of local people adding to the burden of their peers by selling to 'outsiders. Its ok for locals to profit by selling to whoever they like but it's not ok for people to buy it?. Second homers wouldn't be an issue if OPs neighbours didn't sell to them. Maybe have a direct conversation at local level OP where you could actually make a difference rather than tilting at windmills.

This really show how people don't know much about the implication of being a landlord. No, I am not being taxed on profits. i get 1200 pounds in rent and have to pay almost 6000 pounds in tax. Yes, it is because my income is high, but it doesn't change the fact that once I've paid the interest on the mortgage, the tax, repairs, fees, insurance, checks, and put aside for refurbishment and redecoration, I have nothing left to pay towards the repayment of the mortgage.

I think you are either confused, have an absolutely shocking accountant, or you are being deliberately disingenuous with the figures here.

How exactly are you not being taxed on profits? How can you get 1200 in rent and pay 6000 in tax? That makes no sense and if it was the case you would be bankrupt quickly.

Unless you are using monthly income and comparing it with yearly tax bill which I'm not sure why you would do that ? But if you are:

So £14,400 in yearly rent.
£6,000 in yearly tax?

40% tax rate? Why aren't you deducting your insurance? Why aren't you deducting repair costs?

Why are you not understanding that the "asset" is yours, the debt is yours and expecting to make enough profit so that someone else can have the privilege of paying for it?

You say this proves that some people (i.e, me) don't know much about the implications of being a landlord but I feel like your post is only showing you do not understand the implications of being a landlord.

You are either in this situation of making £0 because you bought at a time when it was a profitable business venture (in which case no sympathy, sell it and invest in an actual business venture), or you've had a second home for some reason (moved in with partner, inherited etc) and you are now breaking even after paying the things you are responsible for and the interest on the loan. In which case, the system works perfectly. That's exactly how it should be.

I am not complaining at all, I am not in a bad position

Nope, just having a right old moan that you can no longer use a second home as an investment opportunity.

But you're not seeing that even with the 40% tax rate, even with only breaking even, you are still coming out on top.

Someone else (your tenant) is covering the interest on the mortgage, the maintenance, the repairs, the redecoration and refurbishment. So you have an asset that is appreciating in value, that someone else is paying to keep it appreciating in value, all for the cost you paid 5/ 10/ 20 years ago.

If someone today was offered an interest free 25 year mortgage, do you think they would complain? And yet that is essentially what you are doing and what's worse is you are making it out like other people just do not understand

If I offered you an interest free 25 year mortgage and offered to pay upkeep and refurbishment costs, would you be on Mumsnet complaining about the fact you're no longer being paid to accept that offer? That you are no longer making a profit out of that situation?

No, you would probably realise how ridiculous you sound.

I agree it is about homeowners. And the Government is selfish, corrupt and incompetent. It is really only about 'homeowners' in the sense that they are trying to help 'families' (homeowners) over 'pensioners' (savers). It is shit. If you are a family that rents the Government doesn't care. If you are a pensioner, you have had your double jab and can afford you home.

Notice the OP not addressing the issue of local people adding to the burden of their peers by selling to 'outsiders. Its ok for locals to profit by selling to whoever they like but it's not ok for people to buy it?

That would only work if the people selling were strolling off into the sunset.

The people selling their 2 bed and looking for a 3 bed in that area are still competing with 2nd homers offering on the 3 beds.

They're also competing for 3 beds with locals selling their 2 beds to FTB with HtB etc, being 'helped to buy' and thus enabled to offer more. They're going to be offering on exactly the same properties as the original couple who you think 'had a choice' about who to sell to.

You can't treat a single buyer and a single seller as "THE PROBLEM" and wonder why they don't just fix it themselves when everything is interlinked and the playing field is being manipulated by outside forces.

It's also a case of... how would that even work? Other than (as OP said, moving to FB groups) if a property is valued at £200k it's put on Rightmove at 200k, why would locals bother to go and see it? Even if seller was willing to accept lower from a local?

You could argue that if the local knows it should only be worth about £10k more than they paid (let's say £150k).... they market it at £150k, then people still enquire about it (would the estate agent even let you?) or people see other houses on the street at £200k and wonder what's wrong with yours.

But even if all of this was worked out, there's still a case of someone selling a £200k property for £150k, and trying to find a 3 bed for £170k when other people are willing to pay £220k. Not even the dreaded second homers, just a normal couple moving to the area for work who can get a DIP for the £220k price the house was valued at.