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There was very little in the way of capital appreciation to be had in the residential property business until the early 60s when prices started to take off as a result of ordinary people being able to get a mortgage much more easily than before.So on this basis I reject your suggestion that the landlord was expected to run a breakeven ship and reap the rewards at the end.It is true that the removal of the 3 x salary gap on borrowing has fuelled the massive rise in prices in recent years.Yes, there are plenty of people still in poor housing (the attitude of some landlords in this respect is unconscionable in my opinion) but actually I think there is a great deal less substandard accommodation around these days than there used to be.In particular, over the next few years we are going to see that part of the private rental sector that remains below par being dragged up with initiatives from the government regarding the minimum score required on the property's EPC in order to be allowed to let it for example.My remedy is more houses because we have a substantially larger population than we used to have.  As well as that we have many more households as a result of divorce etc. as well as young people wanting their own place whereas before they may have stayed with mum & dad until marriage.This is obvious surely?The selling off of social housing and the cessation of the council house building program (which should be restarted - in new towns as you say) has accumulated a massive deficit which is going to take some time to clear, but this is hardly the fault of private landlords.If I manage to bequeath anything to my children, which is far from clear at the moment, then it will have been as a result of a lifetime of very hard work.  The jury remains out on this but I continue to struggle onward if not upward...So no, I am not rich.  Did I mention that my car is 15 years old?  :-)In the mean time, my own children face the same challenges as everybody else's as they transition into adulthood and try to make their way in the world.  I have a daughter with a 2.1 degree from Oxford for instance that is petrified about how she is going to find work once her 12 month stint as a sabbatical officer for the OUSU ends in June.

Tony Colliver ● 4906d

Jaz - this is just not true.It is a nightmare to get a council to pay LHA direct to a landlord.  It can be done, but typically it is not done because it is just too difficult.Rents in an area are determined by the local market.If you think that the council pays premium rates you are living in cloud cuckoo land.  In fact, they generally pay considerably less citing the "security" that they offer as they usually look to take a multi-year let.I have looked into this many times and rejected it because what the councils offer is insufficient to cover my costs never mind provide a profit.Of course landlords are in business to make a profit.  I see nothing wrong with this. Do you?  it takes a long time to build a profitable property business.  And yes, it is true that properties that were purchased a long time ago are the most profitable but this is offset by newly purchased properties which generally require an enormous upfront commitment on the part of the landlord to put them into service.  This is true of any business as it reaches the point where it's capital costs become fully amortised.LHA is not why rents went up so much.  They went up so much because the market will sustain that level.  This is simple basic economics.Except for some anomalous financial circumstances in the late 90's to mid 2000's (remember, investing in housing is for the *very* long term) it is currently and has always been the case that the rent charged barely covers the costs in the early years.  In fact, what often happens is that a property does not start to turn a profit for 3 to 5 years.  during this time the shortfall has to be provided by somebody.  Guess who does that?it is not for nothing that a very substantial amount of the bank financing for BtL is on an interest only basis.  The simple economic facts of the matter are that the capital and interest repayment model in this context is not sustainable as the payments demanded by the banks, when taken with all of the other expenses of running a property buisness (yes, there are many) means that it is not possible to break even.Yep - LHA will mostly be claimed by those in the private rented sector but the reason for this is massively subsidised rents being levied by the councils.  it has always been this way - that is the point of councils providing social housing - they do it at a lower rent.In the late 80's we used to live on a council estate in Cambridge.  We bought the house off the original council tenant who had bought it off the council.  During our years there I came to realise that it was the council tenants who had the new roofs and bathrooms (courtesy of the council's massively expensive but arguably unnecessary refurb program - they were making a political point as they were opposed to the right to buy program) and, and this is particularly striking, the expensive new cars on the drives.  It was the council tenants that had massive disposal income - not the other way around.  It seems to me that the council rents were just a little too subsidised in Cambridge as these people were able to afford fancy new motors courtesy of the massive rebate that they were being handed by the council tax payers.If LHA is stopped some rents will come down it is true. (Though probably not in London.) However many landlords would be forced to sell up as the business model would no longer be sustainable.  Unless the councils bought these properties as they came available then this will lead to more people living in B&Bs and end up costing the council tax payer even more.Actually, committed free-market sympathiser though I am, I have to admit to a certain queasiness about the whole right to buy thing.  It seems to me that the council tax payers got a very raw deal out of the whole thing - as did the truly needy as well.  I favour abolishing the right to a tenancy for life in favour of some form of income related entitlement / assessment - i.e. once your income exceeds a certain level the rent charged for social housing should start to go up leading, eventually, to the tenant taking the view that they would be better of either in the private rented sector or, preferably, buying their own house.  This would have the highly beneficial effect of recycling the available social housing so that the most needy in society would always be the ones in occupation.

Tony Colliver ● 4906d

That's utter nonsense.Point 1.  After paying stamp duty, paying for renovations ( most of the UK housing stock is well over 70 years old, and paying interest on a loan the profit margin on a house is not so great. It is only the serial buyers and sellers who speculate and make a profit.Most of us buy a home to live in. Not to profit from. It is those who are taking incentives to buy and then profiting using taxpayers money that are shorting the system.  It's not small, it's a huge business. Go to GWQ and see for yourself.2. Capital Gains Tax was intended for the super rich. It now affects even former council house owners.It is pointless comparing with other countries as they have totally different housing policies. The vast majority of housing stock in the US is designed to last less than 60 years largely due to the volatility of the climate. You own land there, not the property.It is easier to fleece an individual who has paid all their taxes than a business which uses every means to avoid liabilities. That's why is is still in place.In most other european countries, homes can be passed on through the family and consequently many generations live in the same home.Here it is very difficult to pass on a home even when it has been bought and paid for, tax and all and often with huge sacrifice.My Grandparents came to Ealing in the 1950s to escape the weekly spectre of the Rackman landlord and his rent collectors. In an era where 2 complete families would be living in a 2 bed terraced house ( in Fulham)They went with out food every other day for some years to be able to pay the mortgage.My parents were not so fortunate, being self employed my father was denied a mortgage even though he was never out of work for his entire working life.So we all lived happily in my grandparents house which eventually passed to my parents but now because of it's ridiculous value will inccur a tax beyond the value of my own modest home.  Yet if I was very wealthy I could avoid this.We already pay higher taxes than most industrial countries. We have the highest owner occupier ratio in industrial Europe.We have the second largest population in all of Europe yet our tax revenues are lower.It indicates that some are not paying their fair share of tax.If just one large company paid it's fair share of corporation tax, millions would be raised. If the estimated 8,500 other companies also evading corporation tax also paid up properly, then there would be enough revenue to build several new towns or the deficit would be significantly reduced to allow more projects. Yet nothing is done. The sums do not add up and thus there is a shortfall.  In other words we have reached the point of unsustainable population.It returns to this being a very small country where the prosperity is too poorly spread and basic transport is too expensive to be a viable option. It creates a massive under economy in both the prosperous parts and the struggling parts and a dilemma. Wipe it out and we really would have starving people and millions more on benefits. We would be bankrupt in no time at all.So even if we had funding to build proper housing of a decent quality, where?Yet all around us are part time properties, empty 'investment' properties, shag pads and thousands of square metres of empty office blocks.Put a stop to that and the availability of homes would be instant.

Michael Brandt ● 4906d

Tony, the philosophy, long since forgotten and then smothered completely by Mrs T’s Tories, was that a landlord should receive enough rent to pay for his outgoings and make very little profit. His profit was to come from the long term capital investment. I am not blaming you because I suspect you in particular and almost all landlords in general have not got a clue about that reasoning behind rent control. You cannot know what you don’t know. But you can see, Chiswick in particular over the last 40 years and more recently Kew, whoops sorry I mean good old Brentford, have changed as regards capital values beyond the wildest dreams of man. As soon as Mrs T told the City that the lending rules had changed we saw a gradual change from long term investment thinking to how could we make a quick buck. It’s human nature that if greed is not controlled things will get out of control. My knowledge of ancient history is now too dim, but the tulip crash (in the 1400s) comes up in these kinds of conversation illustrating the effects of greed. I don’t want to know if you self certified your ability to repay your borrowing (egged on by some slimy agent), but I certainly thought that it was the most outrageous practice because it was making more people homeless, and ruining the chances of the next generation to buy their first house. Before Mrs T you could borrow 3 to 3.5 times your salary. If we had stayed within that market imposed rule I am convinced that there would have been less homelessness and smaller waiting lists. Her opening of the doors led to increasing but sometimes imperceptible greed resulting in the crash in 2008. Seeds take a long time to grow to maturity.I agree that the workless should take full responsibility for themselves and I sure many do. But the so called level playing field is/has slipped from their reach. And Councils are now trying to think up desperate remedies helped along by pressures from Capitalists who have persuaded the Coalition to relax planning laws. I get pretty cross if a key worker sublets their affordable home. I had it explained once by a teacher. If they didn’t get the income they wanted (subletting plus their so called low income), then they would leave London and go back home. The attitude was that teachers rule. I thought to myself that it was part of the must have it now attitude - as I ran my eye over her designer clothes, pricey bag and latest phone.Your opinion is that the rents should be controlled by market forces.  We have at least 2M people on our waiting lists – and say about 0.5M in all London. So I say your view does/has not worked at all. It’s a major social injustice that so many are in poor housing, and you may have seen elements of poverty when you lived in Social Housing. The evidence is right in front of your eyes. And has been for a long time. Until the 1930s the London poor (relatively) lived in tenements or cheap hotels or digs or with relatives. The 1930s ribbon development was the greatest boon to the less well off classes. They had a freehold home with some modcons for the first time for ever. Cheap affordable with a garden privacy, space, public transport, and 20 years later starting to buy their very own sit up and beg Ford Popular The poorer classes had their very own  mini Englishman’s castle, churches libraries schools bowls tennis football fields etc, etc. These people must have thought they were in seventh heaven compared with their parents. They had a new base from which to prosper and that is just what happened. But Rent controls were there and so property continued to be affordable. Until then the 10% to 15% wealthy owned the freeholds, but no way could they starve people en mass onto the streets. But now some 65% of people own their own property; of course that is much more difficult to control, unless the government takes a firm line.Quite a bit of posh snooty tight fisted, tight streeted Chiswick in the 60’s and 70’s was a dump housing a lot of poor people. As for Hammersmith – you got through that as quickly as you might whistle through Harlesden. Fulham was very mixed and Ealing was a subletters paradise with houses altered into HMOs. Streatham Clapham Islington and Hoxton and Hackney (with a few exceptions) were beyond the pale.So now we have housing shortages and your remedy is more housing. Because there is no more space the young have to live downmarket in rotten little smelly high rise new boxes which cost much more than owning a little house. Our Planners have such low class standards. But I and so many lived in those little Englishmens’ baby castles, and we don’t want to be surrounded by high rise which we associate with isolation, slums and little control;  and we want our children to have decent housing as we had, and we want the return of social cohesion instead of the non integration which goes with multiculturism.. So we shall oppose monstrosities and rapid overcrowding and clogging up our services because we have first hand knowledge of better standards. Consequently building accommodation on a grand scale in Outer London is just not going to happen fast enough. So your rents will stay high enough to deny many a home to the less fortunate but responsible minded hard working people. And the rents will be pushed even higher by the new foreign millionaires buying in Mayfair etc.The answer is the New Homes approach (Milton Keynes etc). Interesting proposal the other day. Let some of the money in the pension funds pay for a building programme. That has to be really strictly controlled otherwise tulip mania greed will destroy the funds. Such a proposal does not have to cost the Government very much money, I suggest. Such a proposal would kickstart the economy. In the meantime social justice (you have direct experience of this) means to me that you should again be controlled. It’s part of the taking responsibility thing. But you still are better off and you will probably bequeath much to your children if you have (or will have) any. Sorry.

George Knox ● 4906d

I have to disagree, I have been a reluctant landlord for 27 years.  I was lucky to have a family member manage the property in my absence and we had a few really good responsible tenants. Their responsibility merited minimal if any rent increases.More recently I have used a few agents.  I was horrified to find that one tenant was told that "the Landlord" - me, wanted to impose a 55% rent increase and that 'they' had successfully negotiated on 'her' behalf a 22% increase.Needless to say they also increased their management fees and also claimed sole rights to the tenants.I then spent several months trying to sack the agents - a 'reputable' award winning local agency, I might add.  I sacked them finally after they failed to apologise and refund the increase to the tenant for months.They could not understand why I did not want to hike up the rent each year as "all our other landlords do it"Being a landlord carries social responsibilities. It is not all about business or a fast buck.It is out of control and control is what is needed.Estate agents have been propagating house prices for decades, playing off buyer and seller and buyer v buyer. They do likewise with 'managing' rental properties.Their greed based culture is the root of a lot of housing problems and that too needs to be brought under tighter controlThere are good landlords and bad but greed is sucking all in.Years were spent ridding the oppressive age of the Rackman style landlords but I see a great many behaving the same way - which has led to the beds in sheds scandalThere needs to be rent controls.  And landlords need to be vetted as fit and proper people. Far too many are in for a quick pound and I am incredulous at the amount of 'high priority occupation people who get a priorty with preferential assistance, then rent their new home out and go and live back at home or flatshare. Hardly what was intended with taxpayers footing the bill.

Michael Brandt ● 4906d

Speaking as a landlord I can tell you that I really do not like the idea of rent controls.My rents are controlled by the local market conditions and that is how it should be.  trust me, I am not "minting it".You won't find many business owners, regardless of what they produce, agreeing that it is a good idea for the government to set the price of their products.What I do not mind doing is competing in a market environment - even if some of that competition is coming from councils providing massively subsidised council housing rents in newly built council houses.Unfortunately, for that section of the population (working or otherwise) that are not in business it is often beyond their ability to imagine with any degree of accuracy what it actually takes to run one.  They tend to think that it is all sitting back and counting the money.  A misunderstanding which applies many times over when it comes to the *business* of property lettings.So, no to rent controls, but yes to building more council houses using the proceeds of the previous sales as well as new money.I speak with a modicum of authority having run several businesses in my life so far - including a property business and having been born and brought up in a council house.On the subject of the reduction in CTB & LHA - good.OTOH, I am happy to see benefits increased - almost in lock step - to cover this.  The ultimate object being to get people to make decisions and take responsibility for things themselves.(I know that they already make many difficult decisions balancing an often very tight budget anyway already, but they need to go further.)It will be hard on the rest of us - and especially landlords - because there will always be a section of the population that will prioritise their fags over the rent and the council tax payments - leading to a lot of enforcement action, but hopefully also the instilment of some responsibility for their own futures into that portion of them that dearly need the lesson.

Tony Colliver ● 4906d

The hard fact is, unless we want to be like Hong Kong or Mumbai, Ealing Hounslow and Brent are full.It won't be long before a way is found to build on parks and open spaces.Or its going to be  42 storey towers.The price is high, amenities will be lost and quality of life will become hugely altered and far from what we expect as British citizens.Part of the problem is what constitutes affordable housing. Most of Northfields, Greenford Perivale that were bult between 1919 and 1950 were exactly that. Affordable to the ordinary working man.90 years on and those houses are still what most people want to live in and why they are ridiculously overpriced. Simple supply and demand.Modern housing be it luxury or poor is frankly crap. Poorly designed, inflexible, and so undesirable and uninspiring that the only real buyers are but to let projects. Only acute supply and demand creates a high price, helped by estate agents ever keen to keep the bellows on the furnace of inflation.A classic example of this is on the edge of Ealing in Brentford. GWQ the former site of Beechams is a huge housing development on a site between a railway line, under a flight path and one of Britains busiest roads. It should really be a blue chip industrial use site like it was designed for in the first instance. Thousands of homes and additional people are no good if there is no space for businesses and thus employment to prosper.What has been built is a superficial slum. Like a bad malteser. Looks OK on the outside but is gammy on the inside. Flats that have such poor inner sound insulation you can hear conversations two rooms away, You can smell the cooking of almost everyone and you have to pay to park your car in the car parks on top of the service fee.Consequently, a significant proportion of the flats are on Buy to Let schemes.The new owners ( rather alarmingly made up of a significant number of people in affordable housing priority, nurses , police etc.)  then rent their new properties to local authorities who underwrite all the risks of renting to people of dubvious means and habits. Top rents are paid and the estate is now full of families who are 'priority'.At the same time, parking, small crime and demand on local facilities have all gone up, but not been increased to cope with the rise.In just a few years, yet another social problem has been created rather than solved.Council housing should be prioritised for only those who have lived in the borough and for generations of such. ( That by the way, includes a lot of former migrants who are long established.)You would think that the UK is made up of London and 5 counties. We are a very small country and yet the butter is not spread evenly. We are so small and yet it can cost more than an airfare to furthest europe to get to another city.What is needed is a few more towns, with proper links, industries, opportunities and most of all built to be desirable and have civic pride. A place people will be happy to exist in, rather that the continual dustbin of cast offs that get foisted on us.It would be better for local authorities to club together and foster such rather than overload and destroy what we have with no gain.

Michael Brandt ● 4907d