Should the London Buy to Let market be more tightly regulated?

[blacknoire]

The average prices in London are now ridiculous. The fact that a young professional couple earning very very high salaries, cannot even afford a flat anywhere nice is stupid. Lots of the properties that 10+ year ago would've been in the price range for first time buyers are/were sold as "investment opportunities". Often bought from overseas or by those who lucked out by being born 40 years earlier and getting on to the ladder first.

Cities are there for people to live in. It's no surprise that many big law firms are now looking at moving from outside of London, as rents are so high, but importantly they must have staff who can afford a decent lifestyle vs the work put in.

Should the market in central London, zones 1-2 be more tightly regulated?

This could be done by limiting the number of buy-to-let's per person to one, or one per couple. Radical, not so.
Perhaps even higher taxes can be put in place on such properties to make them not worth while.

What are your thoughts? Are your opinions influenced by personal gain of having a buy to let?

It’s so depressing. Await the inevitable posters telling how hard they worked for it, youngsters today just need to save like they did, as though their hard work alone was responsible for their house prices doubling etc.

Don’t know what the solution is. Cities should be for living and the young.

The problem is that many young people rent. They cannot rent in the public sector. So they must rent in the private sector. You could reduce the number of flats to rent by limiting ownership but that would produce a price reduction affecting the young people who have just bought somewhere. Is that fair? It’s very complex but reducing private flats to let isn’t one of them that will work fifth everyone. There’s always further out of London. Zone 1 has always been mega expensive!

My own personal opinion is that no-one should own more than one home.

Not sure why you're only highlighting it as a London problem, BTL or 'Borrow To Leech' as it can be perfectly accurately described is a problem across the whole country.

The number of people who choose to rent is minuscule compared to the number of people who have no choice but to rent due to BTL pushing up prices and hoovering up properties, removing them from the market.

The U.K. like other countries like Australia are safe stable places where people want to buy property so their money is in a safe place. So rich Chinese, Russians, Brits buy it up.

Why is it a bad thing that law firms move out of London. So many people wfh or go to the office a couple of times a week. The sooner jobs are spread out if the SE corner of the U.K. the better.

May be the ‘young professional couple earning very high salaries’ are hoping to live beyound their means. There are plenty of nice areas in London where those people should be able to buy a flat and places in London where those people earning those very high salaries are invariably nice or have become gentrified due the population.
If you mean they can’t afford a flat in Mayfair, then they have been for people with old money.
Plenty of people need to rent, or want to rent. Not all of they want to live in a council estate.

IMO there should be a major crackdown on bad landlords who don't maintain their properties adequately, etc. Successive governments, including Labour, have been extraordinarily lax and complacent.
Ditto on LLs who don't declare their rental income.

All LLs should IMO be required to register themselves and their properties. At the moment in many parts of the UK there is no legal requirement for a LL to inform any official body that they are renting out X or Y property. Even the self assessment tax form doesn't ask for addresses, just how many properties - it's all too easy to be economical with the truth.
I say all this as a LL myself.

I think a lot of major continental cities eg paris have rules around who can buy there

I really think the mass buying up f property in central london > often left empty > by squillionairres from overseas looking to make money on the increase in prices has had an appallig affect in multiple ways on London.

I thikn the reason London is usually the one in these posts is becasue it has been a massive target for this, and teh "ripple effect" has pushed prices up so so massively and for such a long way and affecting so many millions of poeple.

I would satrt with the overseas investors + important one > something to stop properties being left empty. That would be a start.

these rules could of course apply to all citiies / all propertes

i am from norht london and so what's happened in london is most familiar to me

I HATE the social cleansing that has gone on it's fuckign disgusting and destroys communitites. London should NOT be allowed to become an enclave for the wealthy (but we're getting there fast over large tracts of it)

The issue isn’t BTL. The issue is that due to wealthy investers buying houses and keeping them empty, there aren’t enough BTL properties available and therefore market rates are artificially high.

Lots of the properties that 10+ year ago would've been in the price range for first time buyers are/were sold as "investment opportunities

No they were put on the market and were bought by BTL landlords. There are still very few places sold with a tenant in situ These weren't exclusively for investment only. Anyone could have bought them.

Perhaps even higher taxes can be put in place on such properties to make them not worth while

This was done and all it did was increase the rent by the same amount.
Remember a LL needs to cover his costs.
If the costs goes up then the rent goes up

Should the London Buy to Let market be more tightly regulated?

You have answered your own question by pointing out that the market will regulate itself if or when it goes too far: It's no surprise that many big law firms are now looking at moving from outside of London, as rents are so high

And why just London?
What about similarly overheated cities like Edinburgh, Bristol, Manchester?

Where do you propose to delineate this? Because whatever boundary you put on it, will just drive up the prices in the places just the other side, like ripples in a pond.

And how are you going to regulate this bubble of socialist-style governmental control of private housing in a free capitalist market society?

You've had a kneejerk reaction based on the fact you can't afford to buy in the most expensive parts of the country, but your idea is unworkable give there will always be people richer than you or I, who can afford more than you or I.

Well my points upthread about other major continental cities regulating who can buy, to stop massive foreign investment
Combined with something about not leaving properties empty
Would be a good start

You thijnk not?

Clearly having super-rich foreign individuals and businesses buy up large amounts of residential property in central london and then leave it enpty is an issue > you think not though? You see this as natural and inevitable and the market will "correct itself",with rules around not leaving residnetial property empty for long periods as an outrageous socialist suggestion?

I'm interested to hear why you think these ideas are so bad?

Sadiq khan made lots of ( non specific) promises about tackling the unaffordability of housing in London for the majority of Londoners. As far as I can see he’s not done anything concrete about it. I was lucky to buy in the early 00s. I feel so sorry for colleagues who are coming into my profession (Allied health professional) with degrees even masters and can’t afford t o rent a place with their partners, let alone buy. They are stuck in flat shares, often with people who get on their nerves.

Same old. There'll be a price crash soon and it will solve the problem.

I can imagine these ‘foreign ‘ investors ( would be ok if they were UK investors? ) are buying much outside in prime central London and under the million mark. And those struggling to afford rent aren’t suddenly going to find glut of cheap prime London property if they can’t keep them empty/ as second homes.
The population of London has shot up at a far greater rate than the UK in general population but construction of new homes are limited by lack of unbuild space and the green belt.

The market always finds its natural level ( law firms moving out etc..), people will have to realise that there is life outside London. No point looking back to the 70s ( when the higher rate of income tax was 83 % and the lower rate 33% btw) and feeling you have been hard done those born in an earlier generation were lucky. The world, the country, the capital will continue to evolve and those around today have to change too.

"I can imagine these ‘foreign ‘ investors ( would be ok if they were UK investors? ) are buying much outside in prime central London and under the million mark. And those struggling to afford rent aren’t suddenly going to find glut of cheap prime London property if they can’t keep them empty/ as second homes."

Ripple effect. The central stuff is snapped up and left empty by people speculating > and yes it is different to Bitish investors who pay tax here and are part of society etc. Anyway they buy the stuff in the middle and the rich people who would have bougth the stuff in the middle move out to the next bit, pushing prices up and so on. The prices end up inrcreasing all the way down the chain. This has happened in London.

I'm surprised you've not heard of this effect given the interest you have in it.

Do you thikn that the laws other major european cities have to restrict untrammelled foreign property speculation (and property left empty) is a pointless and stupid idea then?

As for a life outside London >> some people seem to forget that London is made of communities, people who have generations of roots, know about teh history of the area etc which is more important than maybe realised.This is understood for other parts of the country but not in London for some reason.

"I can imagine these ‘foreign ‘ investors ( would be ok if they were UK investors? ) are buying much outside in prime central London and under the million mark."

Ah misread this.

Oligarchs, Saudi oil types etc have bought up a lot in the most expensive parts and left empty. the super-rish british went to the next layer out as the properties they would have had are off the market, they're still super rich though and so this pushed prices up in the areas they look. The people who would have bought there (few quid less than super rich) are in turn pushed out to the next bit pushing up prices and so on.

I can't understand why anyone supports the snapping up of London property to be left empty TBH.

"In collating new research on new-build luxury apartments and houses, I have found that many of the homes in these developments lie underused or vacant. Around one in 20 homes in Central and West London lies empty, according to the UK government’s statistics agency. A full 89 per cent of all new builds in London are apartments, and between 2014 and 2016 around one in six of these was sold to overseas buyers – that’s 13 per cent.

This figure rises to more than one-third of buyers, or 36 per cent, if we look at the “prime” market areas of central London over the same period. Here, vacancy was measured by looking at homes with little or no “transactional data”, relating to finance, retail or other forms of administration, such as tax records and bills.

On this measure, we find that half of residences in new builds in general are empty, as are 19 per cent of dwellings across London’s inner boroughs. The likelihood that a home is empty rises alongside its market value: 39 per cent of homes worth £1m to £5m are underused, and 64 per cent of homes worth more than £5m. Of the homes owned by foreign investors, 42 per cent are empty."

from here www.independent.co.uk/voices/housing-crisis-london-high-rise-luxury-developments-property-local-councils-austerity-a8618171.html

PLenty more on google

I find it odd that there are people who think this is AOK but well here we are so I suppose there must be some, and here they are on the trhead [grin[

commonslibrary.parliament.uk/social-policy/housing/empty-homes-and-overseas-buyers-what-do-we-know/

house of commons thing saying weeelllll who can say butinteresting none the less

No I don’t think buying property property to keep empty is a good idea. And I also don’t think governments meddling in the market is a good idea either.

Yes those communities , generations and roots have to change with the world. Too many people, and no extra space on this planet. Everyone has to move forward. It’s tough but communities you speak of are going to have to change.

In my local area they moved the poor people out.
They moved children out of schools that they were settled in, moved families away from their support networks, from grandparents etc
Moved poeple away from their jobs leaving them with £££ and massive (liek really stupid 5 trains and buses 4 hour) commutes or to leave them and then find what? - nothing else as the areas they were moved to were more deprived

This is social cleansing
It does not save money as moving poeple away from support networks etc has unintended (or at least foreseen but not cared about) consequences

I think saying OH these people need ot get with the times is incredibly harsh

Granny lefy behind with her daughter and grandkids moved out > who will care for her now? Who will do the free childcare that she was doing to facilitate her DD in working?

etc etc etc

Shortsighted and cruel. In my opinion.

And because the area is "nicer" and these people were not welcome any more.
Like the council attitude to Grenfell. They wanted rid of them, although probably not in the way it happened. Certainly the run-down of the housing was for a purpose though.

But yes it's all progress isn't it and people need to "change" or >>> or what exactly. Well, fail, fall is what.

I find that idea of a future for teh UK > more of this > bleak, not progressive.

breaking up families. running down accomodation. forcing people out
If you don't care about people then what about history, the oral history the people with roots they track the change in an area they care about it in a way that transient people with no connection just don't so much.

There is that side too. A bit more nebulous I agree but important nonetheless.

Roots we talk about roots.

If no-one has any sense of connection to the places we are or the people around us, then the aim of destroying community will have been achieved.