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.

Don't worry OP.

They've shafted the homeowners too.

The spectacularly stupid idea to have a stamp duty holiday has not only made things even more difficult for FTB, it's also made it harder for upsizers - families who've outgrown their current house or couples needing the next step of the ladder, to have room to start a family.

The evictions are also going to hit taxpayers hard - homeowners included. They'll be paying the very expensive costs of temporary accommodation to house all the homeless children and vulnerable adults.

But it also demonstrates that there are many reasons why people may be second home owners. Buying up housing to fuck everyone else over, isn't always the reason.

I'm contemplating buying a BTL.

Our retirement plans were comprehensively fucked over when my partner died suddenly and prematurely last year. I will get my state pension soon, but can't afford to live on just that and my tiny occupational pension. However, thanks to absurd house price inflation, I own a (tiny) house worth £450-500k.

I could give myself a retirement income by doing equity release and leaving fuck all for DP's son and DGD, or I could move to a cheaper area and use some of my equity to buy a flat to rent out and leave them an inheritance.

But I struggle with the ethics of BTL. Part of me thinks that if I behave as a decent LL should, I'm providing a home for someone, which is better than them being homeless. I'm also prepared to take a lower income and lease it to the council to use for tenants who would otherwise be in B&Bs or hostels, so meeting a very real need. And DSS and DGD would get a good start in life.

Plus I know it's what DP would have wanted, so I feel something of an obligation and a duty to carry out what we would have done had he not died.

Both of those seem more ethical to me than letting some equity release company make a huge profit when I die because of all the interest added on the to money I've lived on, and leave DGD with little hope of owning her own home or paying her way through uni.

I'm really conflicted about it. If anyone can come up with a more eithical way of giving myself an income and leaving an inheritance for DGD, I'd be glad to hear it.

also prepared to take a lower income and lease it to the council to use for tenants who would otherwise be in B&Bs or hostels, so meeting a very real need. And DSS and DGD would get a good start in life.

You sound like just the right sort of person to be a landlord. I appreciate there are risks for you and I'm not necessarily recommending that you do it, but from the moral and ethical side you'd be doing good.

What we urgently need is more social housing - but even if there was the political will, it wouldn't happen overnight. In the meantime there's a desperate shortage of responsible landlords willing to let to low income tenants including those too ill or disabled to work.

I'm so sorry about your DP

@winched, so much contempt!
I do deduct repairs, but you can't deduct 100% and you can't deduct insurance. Of course I was referring to monthly income and annual tax, it was so obvious, I didn't think it needed to be clarified!

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

And why is this making you so resentful. It's an investment indeed, and I could instead invest in another way, I would still get something back. Is that what you have an issue with? Or the fact that a family is paying rent instead of towards a mortgage? As it is, it was their choice, they could easily afford to buy something for their income, but they liked the house and that suited them. Is this a crime in your eyes.

For your info, I was a tenant for many years. I never felt bitter and envious of my landlords. I reached the point when I decided I wanted to me a home owner so I saved, didn't do many things other my age did, including starting a family. I got promoted and then got the house, in a cheaper area, commuting for 1 1/2 hours because I wouldn't be able to afford a property when I worked, and then had the child. I didn't give up my job or go PT like so many do, I continued with my FT work and got promoted again. Separated and was able to buy my ex out, again because I was working FT. Not earning tons, but enough. I met someone, who was a home owner, moved in with him, rented my house. I didn't buy a second property with the aim to rent, I just didn't sell.

So really, I was no different to many people who rent, but made choices that allowed me to be where I am now. I don't appreciate people like you who think I should feel shame for being in the position I'm in.

If people spent less time resenting others and more focusing on what they can do to better themselves and achieve what they want, their would be much less bitterness.

@LakieLady sorry about your DP.

I'm really conflicted about it. If anyone can come up with a more eithical way of giving myself an income and leaving an inheritance for DGD, I'd be glad to hear it.

Honestly for me the main problem I see isn't the ethical side, it's the diversification (or lack of).

Handing a property over to the council / HA to use as social stock isn't a bad idea, and probably the most ethical way to do it, but I know a couple of people who tried this (1 neg equity, the other inherited) and both properties were declined. So you run the risk of buying somewhere only to find they don't want it.

Which leaves you being the landlord.

If you believe the previous poster you'll be lucky to break even. I don't personally believe this is the case in all situations, but even still...

You would have one income source, and best case scenario is that income source would fluctuate month to month (because you needed to call out an emergency plumber). Worse case is it dries up completely because people stop paying and you can't easily evict them, or they leave you with massive costs for repairs / redecorating.

You can obviously get insurance to limit your liability, but again that is taking away from the income you need to live off.

What I would do is downsize as soon as possible, preferably while you are still working, and put that money to work for you right now. Then research what else you could do right now in the most tax efficient way possible i.e if you have a workplace pension right now, are you making the most of matched contributions? ISA?

Diverse portfolio should be your number one priority, imo, incorporating both safer, lower yield investments and some riskier, higher yield investments. But speak to a IFA, or if that's not possible try making a post on somewhere like MSE or reddit's UKPersonalFinance with your figures and the shortfall you need to bridge to retire.

Also look at what you actually need as a monthly income when you retire, and if you downsize. And if there is any possibility of reducing those costs i.e renting out a room, perhaps to someone in the same position as you. Or increasing your income for the first 5/10 years... can you proofread, do transcription, for example? Retirement from the stresses of the day job rather than full retirement.

Does DGD have a junior ISA? This is another thing often underestimated, the effects of compounding interest and not having to pay tax on capital or dividends.

Basically what I'm saying is, just throwing it into property can often seem like the best / easiest choice but you have to look at the risks involved and compare it with what else you could be doing. What yield would the property give you after expenses and tax? What yield would just throwing it into stock market give you?

Only guys just to give a different context. We are currently living in Copenhagen- their are still lots of families here because there is a ton of great quality socially owned housing- 3 and 4 bedders too, flats and townhouses with balconies or gardens and shops and cafes and the metro. They also allocate a flat to most young Danes and subletting is allowed if your circumstances change— but it does help give security to people.

It’s all because of government policy.

No it isn’t. People buying second homes has been a thing long before this government was in place.

Far too many empty homes standing vacant that could and should be repurposed.

@vivainsomnia no contempt! And if you read my post, I actually referenced a situation such as yours as an example where letting out a property is completely necessary.

I confirmed your figures because: I said you are taxed at 40%, you replied saying my assumption "proved how little people understand" and then went on to provide figures that are basically showing you are taxed at 40%! So I still have no idea what point you were trying to prove with all of that.

I'm not in any way resentful. Why would I be resentful when as you said, you make 0 profit? My investments have made more than 0 thankfully, so I'm really not bitter or jealous. The thing I took issue with was you making out like nobody else could possibly understand, when it's actually pretty simple to understand.

Then I took issue with you moaning about a situation you put yourself in. It's an investment indeed, and I could instead invest in another way. Well, firstly, it's not an investment, you are (or rather, were) just using it as an investment. It's a home. People could have bought up toilet roll in March 2020, sold it to other people and called that "an investment" but at the end of the day, it's still toilet roll, and they have little right to moan when it stops being profitable in August 2020. Secondly, then do it! Invest in another way. Nobody is stopping you.

And the last part of your post sounds like you are the bitter one. I "made the right choices" too, for your info. I own my home, and have always worked full time, full time + a business at night for years. But I'm not naive enough to think it was entirely down to me either, when literally everything from the fact I wasn't born disabled, my parent didn't abuse me, I didn't grow up in care, did well in school with bare minimum effort, and happened to have a decent teacher who pointed me in the direction of my career had a lot more to do with me eventually owning a home than any choice I ever made.

Take a wee second to remember not everyone is born in the same circumstances and with the same "choices" you had.

Lakie, capitalism is the best most ethical system on the planet and socialism damages people and has always failed. Don't worry about your ethics. If you pick the route that makes more money you will do more people more good, not least the state by paying it a lot of tax to spend on the less well off.

LL are unlikely to evict tenants who pay their rent. Councils and Housing associations also evict tenants who don't pay their rent.

@Xenia

Lakie, capitalism is the best most ethical system on the planet and socialism damages people and has always failed. Don't worry about your ethics. If you pick the route that makes more money you will do more people more good, not least the state by paying it a lot of tax to spend on the less well off.

Is it? If you really believe that, than disband the nhs, universal education and campaign to bring back the work and poor house.

We need both, social capitalism if you like.

Sweden, Norway etc don't look like they have failed, extremes rarely work.

We moved in order to buy our home. My son is in process of doing the same. He is now buying a 2 bedroom terraced house in hull for £84k with 20 percent deposit. Others could do the same. People like Teachers and NHS workers could easily move to cheaper areas as plenty of jobs in these areas there, but they make a choice not to.

People with btl do pay tax, often 40 percent on gross. If a property is empty the LL has to pay council tax and standing rates on utilities too. I have a second home in France I have not been able to use for almost 2 years due to the pandemic but it still costs me almost £2k euros a year for 2 sorts of tax in France and utilities.

@Crikeyalmighty

Only guys just to give a different context. We are currently living in Copenhagen- their are still lots of families here because there is a ton of great quality socially owned housing- 3 and 4 bedders too, flats and townhouses with balconies or gardens and shops and cafes and the metro. They also allocate a flat to most young Danes and subletting is allowed if your circumstances change— but it does help give security to people.

Denmark has the right idea.

Handing a property over to the council / HA to use as social stock isn't a bad idea, and probably the most ethical way to do it, but I know a couple of people who tried this (1 neg equity, the other inherited) and both properties were declined. So you run the risk of buying somewhere only to find they don't want it. Which leaves you being the landlord.

That doesn't stop her providing a desperately needed well maintained home to tenants on low wages or benefits (if she wants to). You don't have to go through the council to let to them.

Completely reasonable but the Tories only care about their own.

The system is terribly out of balance. We need some landlords but there are too many.

I had a look on Rightmove and a couple of other sites after a similar thread recently. Loads of flats - ideal starter homes - were being sold as 'investments'. They were being marketed for landlords. Some aimed at both FTB and investors (so FTB having to complete against already asset rich, sometimes cash buyers).

That leaves FTB trapped in expensive renting, and in turn pushing out onto the streets or homeless accommodation, the people who would have been renting instead of them - people on low incomes who could never afford to buy.

But really the biggest problem recently for ftb is the ridiculously ill advised stamp duty holiday.

@Anna727b

Completely reasonable but the Tories only care about their own.

Labour didn't do any better. In fact the situation significantly worsened under the Blair and Brown governments (but it's ok. Blair did well out of it himself. His family own a property portfolio worth several million.)

In fact the situation significantly worsened under the Blair and Brown governments

Did it? In what way? Houses were pretty affordable during the Blair years.

@Blossomtoes

In fact the situation significantly worsened under the Blair and Brown governments

Did it? In what way? Houses were pretty affordable during the Blair years.

They weren't for people at the bottom. People who would in the past have had council housing. The council housing that despite growing need (bear in mind Blair increased the population), Blair continued to sell off cheap. New immigrants, particularly asylum seekers, weren't in a position to buy. Nor were people too ill or disabled to work. And those on the lowest incomes. Blair massively pushed any old Tom, Dick, or Harry to Buy to Let. It wasn't a thing before Blair. No regulation on the landlords, and at the time they could buy with no money - on the assumption of rent to be received. Very risky policy that obviously went wrong and was eventually stopped. Buy to let meant younger ftb were outbid by buy to let investors. Add in Brown opening the door to cutting housing benefit. That was the beginning of the end for low income tenants. It started the path to the situation today. That was when it started getting really difficult for tenants to find housing on benefits.

It was the 1988 Housing Act which reduced tenants’ rights that triggered the flood of buy to lets - nine years before the Blair government won power.

I’m bemused as to why you seem determined to blame the Blair government for so many of society’s ills.

The whole building houses is of course the only solution but it will not happen as it will change the property market

There are 3 large new build estimates in a proximity of 4 miles in my area. I'm talking 1000's of houses and 2 new primary schools plus a secondary school. If you make the circle 6- 8 miles there are a further 5 new build estates....
Some of the homes are built on former flood plains. Some new estimates are next to villages that are twice the size of the actual village.

Most new homes are priced for commuters pushed out from the next big city. (Just under 90 minutes away by train)
Local people won't be able to buy these homes on "local wages" .

And yet, because developers changing premium, there is a huge increase in property prices.

I think we are looking at a property market crash when all the new builds became available. Not a great prospect for people with mortgages ... and not great for the economy either.

But I still don't think homes will be more affordable then. Unless of course, there is a huge adjustment in wages...

I wonder what would happen if all the teachers etc did leave areas for more affordable then decided they didn't fancy an hour or so commute to work? R4 had a programme talking to several people who had moved from London due to WFH in lockdown and were considering buying in the North.
With half a million abandoned homes empty, the supply is already there.
metro.co.uk/2020/12/30/500000-homes-sitting-empty-in-uk-while-100000-families-are-homeless-13812966/

The thing I took issue with was you making out like nobody else could possibly understand, when it's actually pretty simple to understand
Indeed, few people understand that most landlords are hefty taxed, not on profit but on income. My profit will be what I get when/if I sale the property, which indeed, I'll be yet again taxed on.

Then I took issue with you moaning about a situation you put yourself in
Except that I made it very clear that I wasn't moaning about my situation. I'm happy with my situation and grateful for it. What I'm moaning about, and I'm now repeating myself, is people, like you, who think that people like me have it easy and making money out of the rent tenants paid. The money that I make is out of the equity increase, not what my tenants paid. If growth stopped and house prices crashed, then there would nothing at all for me.

As things stand now, everyone gains. I though equity growth, my tenants who enjoy a nice house, and the government that gets an extra 6K out of me each year.

So can we just stop labelling landlords as greedy, that's what really gets to me. The fact that you conveniently chose to read that I was moaning about my situation when I explicitly said I wasn't.

Just going back to the SDLT holiday thing... I suppose for some families it might mean they spend more in the local economy? Like, they "saved" £12k so will spend it on a new kitchen fitted by a local joiner?