To think we should ban private renting?

[honeyrosesandwich]

AIBU to think this is a great idea?

Imagine if private renting was banned. All rented houses were done under social housing / housing association. There are already over 4.5 million houses rented under social housing, so it's on a huge scale already.

It would mean rent would be affordable for everyone and effectively help the cost of living prices. I live in a housing association house and my 2 bed is £520 a month. My brother, who private rents, pays £1100 for a 2 bed in the same area.

Repairs for my house are done by the HA's own company. I just put in a request online for it.

People that want to stay in their privately rented home will be free to do so but they put a ban on any new tenancies. The owners will have the opportuntiy to sell the house to social housing or keep it for themselves, but not rent it out further. If sold, the tenant will be allowed to stay.

I've been thinking about this randomly today and haven't come up with any negatives so far. Is it bad to monopolise housing? Well, there are already certain housing associations which own hundreds of thousands of houses.

Do yo urelaise you're talking about more than doubling the housing stock across the UK - currently 19.5% private rented vs 18.5% social renters. 4. 7 million vs 4 million.
Where is the money coming from to buy 4 million homes? Over what time period do yo u think this could be practically done given the legal work needed, the paperwork, the home visits, the repairs etc.

Many people live off renting out their second or subsequent homes. If you banned private rental you would have a lot of incomeless people who would need a job or benefits quickly.

I've lived under such a system. It was called communism. State provided the flats (expropriated of course) for a verrry low rent. However, it was deemed that 8 m2 per person was plenty. We were 4 people in a 32 m2 flat and were considered lucky by many in even worse circumstances. But yes, the rent was low.

In theory yes. The issue is that a lot of housing association construction is at least partly funded by government grants/subsidies. Where is the money going to come from to get more housing owned by housing associations?

If a landlord spends money on the property their accountant reclaims that against the gross profit., which reduces their tax liability Not future rent.

Wrong...

Unless the tenant is in arrears by more than eight weeks, or in the case of a vulnerable tenant. The landlord cannot begin to apply for direct payments.

The OP is probably imagining some kind of confiscation for the greater good.

Yes, definitely. Anyway he/she hasn’t been seen on this thread for several days - maybe because not all the posters agreed with her.

It is true that the housing element of UC is paid to the tenant as long as they pass the full amount to the landlord plus some if it exceeds the cap. If they don’t payments are made direct to the landlord.

It is also true that maintenance is reclaimed from gross profit and reduces tax liability. However it is common for landlords to increase rent after maintenance works have been carried out. I rented a rather run down farmhouse with rotting window frames etc. Maintenance was carried out after 8 years we had been there and decades after issues had become apparent. The landlord wanted to increase monthly rent by a third after maintenance. No BTL - this property and many others on the estate (country not housing) in bad repair were owned by the Lord of the manor - literally a Lord.

whichever way you look at it it is a bad deal for tenants whether in receipt of benefits or not and a good investment for private landlords. However benefits should not be paid to private landlords charging rent in excess of that charged by social housing that incorporates maintenance to ensure profit that goes straight to the landlords as a return. This is essentially using state money to give a better return than investing elsewhere and is pushing up the benefits bill - as is allowing employers to pay low wages that are topped up by benefit.

Sort out benefits paid to employers and private landlords before coming for the elderly, unemployed, disabled and sick to reduce the benefit bill.

However benefits should not be paid to private landlords charging rent in excess of that charged by social housing that incorporates maintenance to ensure profit that goes straight to the landlords as a return
You seem to be conveniently forgetting the income tax the landlords has to pay on the rent received, so ultimately money that goes back into the system and funds UC.

@Passaggressfedupnot forgetting it just registering that the amount of tax paid - even at the highest rate - does not exceed the amount of housing benefit received. Even with a BTL mortgage. Private landlords take out more than they pay in where tenants are eligible for housing support.

The landlord pays the same amount of tax whether rent is privately funded or state funded.

It totally depends on the total rent and whether tenants are renting more rooms than entitled to.

If the allowance is £500, rent is £700, then by the time the landlords has paid for interest only, tax, fees, repairs etc....its highly unlikely they make a profit.

If the rent is £1,000 that's another natter, but then the tenant is clearly looking at nicer or bigger than what they are expected to rent.

Ok, so to break down some costs.

Here is an example.

3 bed house worth £200k. LL has 30% equity (a common minimum for a BTL mortgage), so they've put £60k of their own money into the house. They get a BTL mortgage to cover the rest. 5% interest is not uncommon at the moment, so they are paying £583 per month in interest.

The charge £950 per month rent, all of which they pay tax on because mortgage interest is not a tax deductible expense. A higher rate tax payer is paying 40% on that £950 so that's £380 they are paying in tax, leaving £570. Their mortgage payment is £583 per month, so they've got a loss of £13 per month.

Does that look like such a great return on there £60k investment? That same £60k would earn them £200 per month on a basic savings account at 4% interest.

@Verysmalltimelandlordi have not checked your figures but how could a landlord I those circumstances afford maintenance on the property?

Add all the other costs! I have to factor £3000 a year at least for decorating, new bathroom and kitchen every 6 to 8 years, new boiler, roof repairs, window replacement.

Add having to put money aside for potential non payment of rent, court fees etc...

There's insurance, rental agents fees, gas, electric, EPC certificate etc...

Honestly, it's unbelievable how clueless the average public Jo is. Why do they think so many landlords are selling? It's no longer profitable at all for the professionals who happen to have one home to rent. The government has made sure of it.

@PocketSand, cross post. They can't! Hence why tenants are complaining of poor standards of maintenance.

The caveat in that calculation is that I've not allowed for the 20% tax credit on the mortgage interest. However, that would still only bring the total after tax to £104 per month and that doesn't include agents fees, safety certificates, insurance, backup to cover void periods etc etc.

Sorry, cross post. I was just covering that.

I for example last month had to pay out £500 for a new oven (to replace a 2 year old one that the tenants broke), £400 to get the hedges trimmed in the garden, £120 for a gas safety certificate and boiler service. One tenant was 5 days late paying rent, which meant I had to cover costs from my savings account.

So tell me again how much profit we are making and rents should be controlled?

Sorry but I find this suggestion not only utterly hilarious but in reality it would be totally unworkable! What is even more ridiculous for me and my political 'peers' is that the majority of people when asked if they would like to see a 'socialist' government in power always act as if that's the most horrendous suggestion they've ever heard and the answer is a resounding NO!! 🙄

Oh and coming back to those figures.

Say our hypothetical renter wanted to buy the £200k house they've been renting. In all probability they don't have 30% deposit. They probably have 10%. That means they need a mortgage of £180000 to buy the house.

Even at a lower interest rate of 4.5% (and remember, this could change significantly over 25 years - back in 2006 when I bought my first house interest rates were around 6.5%), they'd have repayments on their mortgage of £1000.50 pcm over 25 years. They'd then need to find the money themselves for all the ongoing jobs and replacement of things as they get worn out. These are all jobs that fall to the LL as renters.

Even if that had the same equity in as the LL (30%) to start with, their monthly repayment would be £778.17.

All this suddenly makes the £950 they were paying in rent look not quite so bad after all.

Yeah but if they aren’t buying the houses where will all the housing association people live? They have to buy all the houses

Yeah because you are being subsidised by other people

This whole thread is wild.

We're renters. I have never bought simply because i didn't want to give up everything i had (horses) to be able to save up up for the type of house i want to live in.

I'm 42 now, still no intention to buy, still no deposit saved anyway!

I like the freedom of renting, i can be picky about what we want and where and no less than a 3 bed (main bedroom, office, and guest room) i can imagine it would be horrific trying to get what we want from a HA, we'd have to make do with what we're given, and probably no more than a 1/2 bed which wouldn't suit us at all.

So what would happen to uni students? They need to rent privately S they would not qualify for social housing. Universities often don’t have enough dorm rooms for students past their first year unless they have special needs.
How about staycations in AirB&B type properties. With your logic we could not do that type of holiday ever again.
You are being totally unreasonable.

There's a reasonably priced family home going in cardiff. The agents are marketing it as a possible hmo. That is wrong in my eyes. It's just a four bed.

We have to stop thinking of housing as income for some and view it as a necessity for people. I blame capitalism.