Summer Budget 2015 – Landlords Reactions

There is some thorough and well researched analysis made and presented by some of the posters on hpc

However, the reality of the housing market has gone against the main conclusions reached by that analysis ever since the site's domain name was first registered back in Oct 2003, apart from the 20% nominal price falls around the banking crisis (I don't think many hpcers bought at that point).

Believing the analysis to be correct for all that time, but watching the market do pretty much the opposite, has been frustrating for some.

Indeed, for a few that have had a large part of their life on hold waiting for a house price crash for many years, it has been detrimentally life changing.

Anyway, the 13 year old theory that house prices will crash might come true. The more recent theory that individual, highly leveraged BTL is coming to an end is more likely to come true.

All things considered, as things stand right now, I will be keeping my small portfolio and will look to add to it if the right property appears at the right price.

Reply to the comment left by "Jon Pipllman" at "08/03/2016 - 08:45":

I've just returned from Australia, expecting (If you listen to the hype) a mass sale of BTL's, house prices crashing down all around us and the world coming to an end.

Oh well, glad I bet the other way.

If anything, prices are still going up, not just for rentals but also owner occupied properties, landlords are still increasing their portfolios, although I guess as a company rather than as an individual. No difference in reality.

Whilst in Australia I took a look at the market, there is a rental market there which is actively supported by the government. The only change they are looking to make is the removal of negative gearing, which seemed like a dumb thing anyhow. Why would you go into business to make a loss. The market isn't as buoyant as the UK however there are still long term capital gains to be made and if developing or refurbishing a profit to be made on the rent when buying below market value. So even in a country with a lower population therefore less pressure on housing BTL works.

Tom Entwistle: both landlords and tenants would lose out under Osborne’s buy-to-let tax changes

https://www.simplelandlordsinsurance.com/landlord-news/landlords-and-tenants-buy-let-tax-changes

Part of the anti-landlord rhetoric in recent months has been to blame private landlords for homelessness. Shelter et al will quote statistics saying most homeless people are homeless because landlords evicted them (no mention of why a landlord would evict and no mention of the £9 billion lost last year to landlords in arrears and damages).

This narrative makes out that the homeless person is the victim and the landlord is the perpetrator, causing homelessness (rather than alleviating it through being a housing provider).

Of course, at the point when the authorities and/or charities want to persuade landlords to take on homeless tenants - at considerable risk to the landlord - this narrative is hidden in the background - just like the 'caring' Siobhain McDonagh, who worked 'on the coalfiace' persuading the (big, bad) landlords to house these tenants and later advised the latter to stick it out as long as possible, not paying the rent, until they stayed for the maximum possible time, up to when the bailiffs arrived, as who gives a sh*t about the landlord losing 6 months of rent and repairing the damages?

Well, in fact there is a far more valid view of the causes of homelessness in the appendix to the following report, written by the experts on this - the homeless themselves. The so-called charities and ill-informed politicians should take a look at this and stop their pathetic and constant landlord-bashing.

http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/communities-and-local-government-committee/homelessness/written/28524.html

Extracts:
'I was just drinking too much, partying with my friends, just not taking life too seriously really. Never really had a goal … I’ve worked in my past and stuff, but it come to a point where I weren’t working.'

'
… Some people it’s their family, some people they just keep on making the same mistakes … Some people have had horrible lives with their parents, some people ain’t got no parents...Some people know the wrong type of people, so they get into things that they shouldn’t be into. There are all sorts of reasons.'

This guy had a drink problem: ' And into my second marriage then, it just got to the point where – I had another child, my second wife and she just threw me out. And that’s how I became really homeless.'

There are a couple of references to landlords asking them to leave, but mostly it's about their drink and drug problems, mental health problems and 'the wife' kicking them out because of their awful behaviour.

They can see clearly that they have a lot of responsibility for what has happened to them and good on them for that. They're not saying it's all private landlords' fault. So how come the likes of Shelter keep doing that? Why aren't they saying it is substance abuse and bad behaviour which is mostly behind it?

Reply to the comment left by "Ros ." at "08/03/2016 - 17:34":

Also, does anyone know about the 'dialogue' which has been taking place between ARLA and Crisis, mentioned here?

http://www.theyworkforyou.com/lords/?id=2016-03-07a.1059.0&s=landlords#g1060.4

COMMONS TREASURY SELECT COMMITTEE SLAMS OSBORNE'S BUY-TO-LET TAX CHANGES

"During his Autumn Statement speech Osborne said the move was intended to prevent increasing numbers of properties being snapped up by buy-to-let investors, who were fuelling rocketing house prices and ‘squeezing out families who can’t afford to buy."

LACK OF SUPPLY TO BLAME FOR HOUSE PRICES, NOT LANDLORDS:

"But the gathering of economic experts at Westminster was unanimously agreed that lack of supply, not landlords, was to blame for sky-high house prices.

And when asked about what impact the stamp duty surcharge would have on the housing market, damning responses flew in from all directions.

Paul Johnson, Director of the Institute for Fiscal Studies, said, ‘for those who end up in the rental sector, it can only push the rent one way, and that is up’, while the committee also heard excerpts from the Council of Mortgage Lenders’ response to the Government’s consultation on the design of the surcharge.

Their statement read that ‘turnover of the UK housing stock is already only half the level of a generation ago’, going on to argue that in London and the south-east extra costs incurred by the stamp duty surcharge would be passed on by landlords to tenants through higher rental charges."

THE GOVERNMENT IS PLAIN WRONG ON BUY-TO-LET TAX RELIEF:

Mr Johnson said: “At present if you own a property which you let out to tenants you can set any mortgage interest costs against tax due on rent received.

“The budget red book states that this means, ‘the current tax system supports landlords over and above ordinary homeowners’, and that it ‘puts investing in a rental property at an advantage’.

“This line of argument is plain wrong. Rental property is taxed more heavily than owner occupied property.

“There is a big problem in the property market making it difficult for young people to buy and pushing up rents. The problem is a lack of supply. This change will not solve that problem.”

https://www.simplelandlordsinsurance.com/landlord-news/commons-treasury-select-committee-slams-osborne

Reply to the comment left by "Ros ." at "08/03/2016 - 17:38":

Ros, you are a marvel, a whirlwind! How do you manage so much in a day?

"Lord Watts Labour
My Lords, this increase in homelessness is a national scandal. Will the Minister set out the target figure for reducing that over the next 12 months?"

One thing that concerns me, about the reckless POLITICING instead of practical moves, is Gideot has pissed of landlords. Made them intent on raising rents to break even in 5 years, to prepare for potential rent controls, where existing tenants at least MAY be 'protected' by them, at our expense, for his 'glorification'.

Even with his monstrous ego he must be beginning to realise the enormity of his folly. EVEN if he totally rescinded his maverick actions, he will NEVER get our trust, our vote, or the rents go down to where they were last summer.

And if he did make that embarrassing U-turn, or 'policy realignment as conditions evolved' he would get the ire of tenants, press and HIS reputational damage.

It really is a lose-lose situation for him. For tenants. For us. And we thought he was smart, at least after Brown.

Geograhy George is History.

Not sure if this is of any use to our campagining but interesting that there seems to be a backlash over student accomodation regarding increasing costs / inappropriate accomodation wherethe universities have handed it over to corporate bodies.....

https://www.timeshighereducation.com/news/student-accommodation-what-driving-spiralling-costs

Reply to the comment left by "Ros ." at "08/03/2016 - 17:34":

Where did the £9bn figure come from?

I see BBC don't quote that, nor the paragraphs about the trashing.

http://money.aol.co.uk/2016/03/08/fifth-of-tenants-expect-never-to-get-rental-deposit-back/

Slater Gordon trying to improve thier share price.

The full report on student housing by GVA is here

http://www.gva.co.uk/research/student-housing-research-report-autumn-2015/

Page 9 is of particular note, a graphic showing the average rent and the average rental growth by City and overall.

The national average is £144 per week / 5.5% annual increase

It really can come as no surprise that corporate landlords are increasing rents. The whole investment case / share price of such companies is built on the fact that they expect to be able to increase rents (faster than inflation).

Some of the accommodation on offer is pretty good - it is certainly better than the housing I lived in when I was at University. To have high standard accommodation, with ultrafast broadband, security, concierge, cleaners, gardeners and full time dedicated maintenance, all in a prime spot very close to a University in a city centre.... well that stuff costs money.

Surely the whole report is just a statement of the wholly obvious?