To think it's not a housing problem, it's a landlord problem?

[Sylvvie]

Boris has promised to build more housing so young people can get on the property ladder. Fine, brilliant.

But as with all new builds, 75% will get hoovered up by second home owners and Landlords to be rented out. This doesn't fix the problem because young people then either compete for that 15% left which is always ridiculously expensive or end up renting those properties. (Not accurate figures obviously, just an example, but certainly feels that way!).

There are an insubordinate amount of second homes and Landlord houses standing empty at the moment. Young people are stuck renting because the rental prices are so high that they can't save the capitol for even a help-to-buy property unless they get really bloody lucky or inherit. Not to mention wages at the moment are abysmal and cost of living is rising due to Brexit and Covid issues.

AIBU? Am I genuinely missing something here? I don't think more homes that young people can't afford or that get snapped up by landlords is the answer but I would love to be told I am wrong (currently saving for our deposit).

What would be your solution?

The government (of whatever flavour) can't allow prices to fall in the medium to long term, obviously there will be occasional blips. This would fuck over people who already have a mortgage, it would fuck over the economy, fuck over pensions (the shit ones we're all saving for so we might be able to retire at 75). Lower prices are not the answer.

Yes absolutely- but if they build them, they can say they’ve done it to mitigate the housing crisis and make things more accessible to FTB. Who actually buys or benefits from those properties once they’re built won’t be their problem. It’s shit.

We are FTB at 35- saved for ten years, no inheritance or help, and we’ve been able to buy a flat because we are in London. I feel lucky to have even been able to do that, and we’ve had to go a lot further out to a not very desirable area.

I wouldn’t touch equity loan new build government schemes with a barge pole though.

You aren't wrong. The only real way to fix it is to ensure that a set percentage of each new build development is kept aside for help-to-buy type schemes. I'd argue it should be a minimum of 25% for first time buyers, with a further 25% for those who are moving into the house as a primary residence (ie they only own that one property).

We have a drastic need for good quality social housing.

Build houses, out of solid materials and allow them to go to local councils to rent them out.

BTL landlords should be specifically exempt from purchasing schemes and buying any new builds unless councils say otherwise.

The situation is disgusting.

Lower prices are not the answer.

Prices staying the same while wages catch up would help a lot though.

I find it rather irritating when people who already own a house and will have the mortgage paid off before retirement moan about lowered house prices affecting their pension. Maybe have a think about those who can't afford to buy a house and can't afford to pay in to a pension because they are paying eye watering private rents.

Completely agree op. I said something similar on another thread and waited for the bashing - it just got ignored

Yes your right. Building loads and selling them to a handful of people doesn’t help. Neither does it help the climate crisis and flooding.

In a small densely populated country, I don’t think the solution is house buying at all,
We need houses built as social housing.

What happens to the remaining 10% in your scenario OP?

LL’s should be required to pay massive taxes and jump through hoops , they’ll sell their houses cuz they cant afford to keep them which happened quite a bit during pandemic and people can buy. Job done.

Yabu - landlords don’t buy property so it can sit empty and cost them money. If landlords buy a load of new properties, rents go down and so will house prices. Buy to leave is perhaps different but government studies show that’s actually a very small number of properties.

So more supply will lead to lower rental and purchase prices.

Not everyone is in a position to buy, though, and private rentals are their best option - no long commitments to stay in a particular area, no ongoing maintenance costs.

Lack of social housing is one of the biggest problems - people are on those waiting lists for years with no hope of getting a home. Even if house prices dropped a lot, many could never afford to buy.

Unfortunately falling prices would pull the rug out from under a large part of a generation relying on it as a store of wealth for retirement.

The changes to taxation on buy to let have had a huge impact, but the drop in supply of rental properties that has resulted has then pushed rents up for those properties that remain. A large number of rental properties are needed for society to function which have to be provided by either individuals, the state, or private enterprise. At present the financial situation seems to favour private enterprise.

@TractorAndHeadphones

LL’s should be required to pay massive taxes and jump through hoops , they’ll sell their houses cuz they cant afford to keep them which happened quite a bit during pandemic and people can buy. Job done.

Agreed. Be a landlord if you want, but pay for the privilege of being able to afford multiple homes. Otherwise sell them. That applies to those who inherit. I'll inherit my parents house when they die. It's going straight on the market, and I'll be making sure some landlord wannabe won't be buying it.

Houses here for a new build 3 bed tiny bungalow start at £315,000. The 2 bed homes are obviously even smaller although still high prices. To afford said house, you either need one wage of £79,000 or two wages of nearly £40,000. The average wage in the area is minimum wage. Most can't afford that, and those who could don't want to buy a tiny house. It's completely stupid. So if you have kids too, you either live in a small house cramped or keep renting.

There's no answer that won't piss someone off though, and the tories aren't going to piss current home owners off, especially the older ones. It's kind of their main voting group.

I think lower house prices makes total sense, when I was younger I bought a house and it went up in value by £50,000 in one year. Prices have just got sillier and sillier. I would love to see prices come down for the sake of the young and I'd have no problem with my house being worth a lot less than it is now if it meant all other property was cheaper too. We've been here a long time but it's worth nearly double what we paid for it. I think we really need to cut back on foreign investors and second homes, and stop covering the countryside in ugly, cheap houses that are all bought up as shoddy BFL's.

@ChloeCrocodile

Lower prices are not the answer.

Prices staying the same while wages catch up would help a lot though.

I find it rather irritating when people who already own a house and will have the mortgage paid off before retirement moan about lowered house prices affecting their pension. Maybe have a think about those who can't afford to buy a house and can't afford to pay in to a pension because they are paying eye watering private rents.

I'd rather house prices were lower as it's easier to trade up for everyone etc even if you don't get as much for your house

I find it quite telling that as a country, the UK has one of the highest levels of rooms per person across Europe.

The problem isn’t the physical number of properties - it’s the cost of them which puts them out of reach. I’d like to know how exactly we’ve ended up here.

My guess is that it is the privatisation of housing. Much like other privatised industries, the priority is about making as much money as possible and that’s at the expense of those who need homes.

We need great public ownership of homes which are open to all - much like we had in the post war days. If the government rented more homes, it could do so at a decent rate (because it’s cost of borrowing is much lower). Anyone who wanted to buy outright would have to go on the open market.

I would love to see prices come down for the sake of the young and I'd have no problem with my house being worth a lot less than it is now if it meant all other property was cheaper too.

And what happens if you need to move? You've bought a house with say £400,000 mortgage. 5 years later you need to move. You still owe £380,000, but in your utopia, your house is suddenly only worth £200,000. What do you do now?

I agree with you but I think you meant to say inordinate, not insubordinate.

@Asdf12345

Unfortunately falling prices would pull the rug out from under a large part of a generation relying on it as a store of wealth for retirement.

The changes to taxation on buy to let have had a huge impact, but the drop in supply of rental properties that has resulted has then pushed rents up for those properties that remain. A large number of rental properties are needed for society to function which have to be provided by either individuals, the state, or private enterprise. At present the financial situation seems to favour private enterprise.

You could have a separate private market for people who want to own outright and a publicly owned rental market.

A home is a fundamental right, in my view, so shouldn’t be used as a profit making exercise.

I dont think being a landlord is appealing anymore and hasnt been financially worth it for years now. It was fine if you was already a landlord but it's so much harder to get a buy to let now.

I would love to sell up and would if the tennants left. It was our only house when we bought it ( long term renters in a nicer part of England for work. To expensive to buy here). It got us onto the property market so has worked out well for us over 15 years but I would never ever do it for a income now. When / if sections 21s end I go as far as saying you would be insane to set up a new btl.

As an aside my kids arent planning to move out until.at least theirs 30's. Its impossible to buy here unless a shared ownership which isnt without it's own problems

A couple of points:

LLs would rather not buy new because the cost is higher and hence the return lower

Not everyone wants to buy: be it because they need the flexibility to up sticks for work, because they want to move to their spouse's country (or their own if they are not from here), because they want to stay somewhere for a couple of years e.g. a big city, and then move out. I have tenants (couples usually, sometimes a single person, in greater London) and hardly any, in over 20 years of letting, was renting because they couldn't buy

If LLs didn't offer properties to tenants, what would those people who cannot buy for whatever reason, do? Be homeless? Because the government could not afford to buy or build enough properties to house all the tenants currently in private rental.

Unfortunately falling prices would pull the rug out from under a large part of a generation relying on it as a store of wealth for retirement.

Oh well. Should have thought of that before predicating your retirement on hoarding a vital resource ¯\(ツ)/¯

Yes I know it's more complicated than that - and in fact many of the pensions we are put on in our regular jobs include property in their funds- but I just can't get too upset about landlords losing money. They knew what they were getting into.

It'll be ok.
When interest rates get high enough btl and accidental ll will sell and someone big, Amazon say, buy up all the houses because they have such financial flex.
Then we can work at Amazon, spend at Amazon and rent from them too.
Brilliant eh?
At night we can all stand in the garden and watch Jeff's rocket spunk our money into space.

Or we could be practical, prudent and sensible and build a tonne of SH and not emergency/poor housing either, true social housing not ghettos.

@Gingernaut

We have a drastic need for good quality social housing.

Build houses, out of solid materials and allow them to go to local councils to rent them out.

BTL landlords should be specifically exempt from purchasing schemes and buying any new builds unless councils say otherwise.

The situation is disgusting.

Fully agree, @Gingernaut. There needs to be a steady stream of sustainable, high quality social housing being built around the country with NO right-to-buy schemes attached.

And BTL mortgages phased out completely. We don't need them in our economy. Maybe landlord licences? So the number of properties bought by professional landlords can be more strictly restricted and managed.

75% of new builds are not bought by second home owners or landlords - perhaps in specific areas but not nationally. In fact there is a property surplus in some places! We have a jobs distribution problem rather than housing stock, companies should be incentivised to move to areas with empty housing or brownfield sites suitable for housing development.