25% Rent increase

[pop9770]

It's part of the death of individual capitalism

IMO Dreadful Times

Squeezing every potential safe investment opportunity and forcing regular people to gamble in the stock market or pay heavy fees to often incompetent managers.

This is a backward step.

FFS taxing TURNOVER ! Insane .

Will be interesting to see what happens after next April

[pop9770]

http://www.thetimes.co.uk/article/the-british-disease-is-now-rank-ineptitude-rr8x56f83?shareToken=d098e11384e354d9b12e85b84d0e08ed

Good article on incompetence Osborne fits in well..

[pop9770]

Stamp duty starting to have an negative impact

The start of the collapse?

http://www.thetimes.co.uk/article/stamp-duty-leaves-mark-on-berkeley-tpz355wvr?shareToken=c7d43ed1790d4fbe2484f308d9a5a763

[JohnL]

pop9770 Wrote:

-------------------------------------------------------

> http://www.thetimes.co.uk/article/the-british-dise

> ase-is-now-rank-ineptitude-rr8x56f83?shareToken=d0

> 98e11384e354d9b12e85b84d0e08ed

>

> Good article on incompetence Osborne fits in

> well..

So what do you do with the 'chimpanzees' - toss them

on the scrapheap.

Maybe we need better teachers, mentors, managers etc. ?

[pop9770]

JohnL Wrote:

----------------------------

> So what do you do with the 'chimpanzees' - toss

> them

> on the scrapheap.

>

> Maybe we need better teachers, mentors, managers

> etc. ?

If you're dealing with low IQs ,,, basically no amount of education can fix thick people.

This is a fundamental principle thick people get wrong about other thick people.

Hear no evil

See no evil

Say no evil

chimpanzees motto

Osborne was crammed at prep school didn't help his low IQ or he knew what he was doing was madness and didn't care because it was about getting votes not fixing the economic problems.

[pop9770]

British tax payers penalised first investment in btl whilst foreign investment is encouraged insanity

http://www.thetimes.co.uk/article/homes-meant-to-revive-estate-sold-overseas-0qdmf0jdf?shareToken=cfeb318482f698fd51b2bf716cc1d09c

[pop9770]

The political establishment rigging the system to the benefit of banks the landed wealthy and big business.

Attack on BTL is the thin end of a wedge of control over the people keeping us firmly in our place as slaves to them..

A disgrace.

[bawdy-nan]

Aren't you just a bit cross that your cunning plans have gone awry?

Frankly, the more small-time amateur investors who are put off from becoming amateur landlords (often ill-informed about their responsibilities under housing law, "having a go" at their own repairs etc)) the better.

From a tenant's perspective, a large organisation is infinitely more easy to deal with on a professional footing than a private individual who has read about a cunning financial wheeze in a Sunday supplement and has decided to launch themselves into property management rather than divert their cash into yet more Danbury Mint and Noro Virus cruises.

[Loz]

I think you might just be trolling a bit there, bawdy-nan, but I'll reply anyway.

Some people like going to the small-scale landlord, as the Property pages on this very site will attest. When it is your only place, you go that extra mile to make sure you have a happy renter. Keeping the good tenants is key.

But I'm sure there a good reasons to go with a big, faceless entity as well.

[bawdy-nan]

:) pah! rumbled!

For sure, that's sometimes the case, but it's a huge risk. TBH, I've had both "types"

Loz Wrote:

-------------------------------------------------------

> I think you might just be trolling a bit there,

> bawdy-nan, but I'll reply anyway.

>

> Some people like going to the small-scale

> landlord, as the Property pages on this very site

> will attest. When it is your only place, you go

> that extra mile to make sure you have a happy

> renter. Keeping the good tenants is key.

>

> But I'm sure there a good reasons to go with a

> big, faceless entity as well.

[pop9770]

Yes I'm unhappy my plans have been changed I'd saved for years and now going for a BTL is not the investment I was hoping to get into.

In my experience private landlords are little different to large landlords both can offer poor quality.

My issue is there is less and less that individuals can invest in the barriers to entry are all biased in favor of large companies.

The Labour Gov wanted large co's as they believed they were easier to collect tax from but the opposite is true.

This recent Tory Gov are socialist light and they want to micro manage the free market just as the Labour party did.

It's about equal opportunity and reasonable rents with this new BTL turnover tax rents are likely to rise and BTL investment is likely to fall so where is the benefit to society other than increased tax revenue which could have been aimed at all rather than the likes of you and me?

[LondonMix]

I don't agree at all. I've owned for a long time, but small scale BTL landlords usually have full time jobs and are very unresponsive to sorting issues in a timely manner because the landlord duties come on top of everything else a normal person has to deal with.

Also, because they are small scale they often don't have cost effective maintenance and repair contracts in place, which means when something goes wrong the spend ages get quotes and arranging a call in. My friend had her flat broken into and the door broken and the landlord took almost a week to fix a door that provided no security for the flat because she wanted to get quotes which is not only outrageous but immoral.

I think professionalising the rental sector can only be a good thing and will increase the overall supply of housing. I could get into why but that is the main goal of the governments policy which is why its not ill thought out at all.

Loz Wrote:

-------------------------------------------------------

> I think you might just be trolling a bit there,

> bawdy-nan, but I'll reply anyway.

>

> Some people like going to the small-scale

> landlord, as the Property pages on this very site

> will attest. When it is your only place, you go

> that extra mile to make sure you have a happy

> renter. Keeping the good tenants is key.

>

> But I'm sure there a good reasons to go with a

> big, faceless entity as well.

[Loz]

LondonMix Wrote:

-------------------------------------------------------

> I think professionalising the rental sector can only be a good thing and will increase the overall

> supply of housing.

Not sure how you conclude it will increase the overall supply of housing.

But on your other point, at the moment we have a decent amount of competition and those that want to go with a big corps can and those that want to go with the small private player can. Surely concentrating rental property into the hands of a few big corporations can only be a bad thing.

[LondonMix]

It will increase the overall supply of housing because up until very recently house builders pretty much exclusively developed housing units to sell to individuals. Some of those individuals are owner occupiers but many are small scale investors in London (both national and international) who ultimately put the units into the rental market. House Builders also need to sell between 30 and 50% of their schemes off plan to secure development finance.

How many homes a traditional house builder can develop in a given year in the traditional Build to Sell model is restrained in part by the financial capacity of small scale high net worth investors.

The new government backed PRS (Private Rental Sector) scheme brings larger institutional money into the market which can deliver much larger schemes because they are designed for long-term rental investment rather than sale. A PRS development doesn't require any off plan sales and a large schemes can be more easily developed because leasing velocities are high. The British Property foundation estimates that a large land plot can deliver twice the PRS units per annum (over a phased development) relative to the more traditional Build to Sell model while achieving a PRS investors target returns.

Key to solving the housing crisis is speeding up housing delivery per annum which is why PRS is getting loads of state financial support as well as exemptions from certain requirements so investors in the sector can compete with the offers for land traditional house builders make.

The investors looking to invest in and operate PRS are almost exclusively pension funds-- their cost of capital which is lower than housebuilders is what makes the financial model work.

In the UK, hardly any housing is run by large institutional landlords / investors. Its got one of the lowest rates in the Western world, so I wouldn't actually say there is much choice at all. Some of the government's new rules don't apply to BTL investors with at least 15 properties. The goal is to kick out the really small scale punters who still have full time jobs and aren't doing this professionally while simultaneously bringing in large scale investors to speed up housing delivery.

Anyhow, that's the policy / aim. We'll see if its successful as really the constraints on housing delivery include issues with skill shortages in the construction sector than need to be addressed. Nevertheless, in the last year 2.5 billion of new institutional money has been invested in large scale rental schemes alone across the UK so its having some of its intended impact.

[Earl Aelfheah]

Good summary LondonMix

[LondonMix]

Its long, which is why I didn't include it in my original post!

Like I said up thread, government get policies wrong but rarely are major policy initiatives totally without thought (except grammar schools).

I think supply won't actually increase without significant investment in the construction sector as that's the most intractable issue constraining supply (though there are many). The new mayor is looking to get a special budget regarding skill devolved from central government to tackle the skills shortage issue in London. Others are investing heavily in modular housing solutions. We'll see. This policy has cross party support-- the mayor is very supportive and its one of the key housing focuses of May.

[Loz]

But surely that could happen anyway - if this is all extra development and given demand is so high, there is no need to push out the smaller players. And I still think severely lowering competition will be bad. It usually is. It looks like the old supermarket story - big player comes in with money, put the small players out and then jacks up the prices. Heygate estate, anyone?

Plus there will almost certainly going to be a gap between private landlords getting out if the market and the institutions ramping up all this hoped-for projected investment. What is the turnaround time for a large development? 5 to 10 years?

So, I still think rents are going to go upwards as a result of this.

[????]

There are also some rose tinted views about LA renting back in the day too - there may have been more housing at cheaper rents but anyone who actually lived in inner London council housing in the 80s and 70s will remember how long you had to wait to get anything fixed, the horrendous bureaucracy around anything and the general state of the infrastructure....... but some how statism and big business are GOOD landlords but small private landlords EVIL - crappy lefty politics of envy as per.

[Jeremy]

Loz Wrote:

-------------------------------------------------------

> So, I still think rents are going to go upwards as

> a result of this.

Yep - I don't see how they possibly can't.

[LondonMix]

This doesn't have anything to do with social housing and shouldn't have any long term impact for higher rents unless you think small BLT landlords charge tenants below market rents for some reason. Rents are a function of supply and demand so increasing supply overtime should actually keep rental increases down. Rents are likely to go up in London anyway simply because enough housing isn't being built at the moment and PRS schemes take time to deliver so in the short term (next few years) rents my spike higher than they otherwise would have but this will correct over time. Once planning permission is in place a large scheme can be delivered in two years since you asked. I still personally think there will be a gap when the value of flats is falling and rents are increasing due to the dislocations in the BLT market. Values won't fall enough to get people who are permanently renting into ownership (it will just be cheaper for people who were always going to own to buy) so the reduction in properties available to rent will push rents up and all the BTL investors exiting the market will suppress price increases.

To your point though, yes you could encourage PRS without trying to get rid of small scale BTL investors. Getting rid of small scale BTL investors is part of the goal to professionalise the rental sector more broadly. PRS schemes for instance will be required to have longer term secure tenancies (up to 3 years) with limits on rent increases during those fixed terms. The entire set of policies tie into a broader set of goals.

Loz Wrote:

-------------------------------------------------------

> But surely that could happen anyway - if this is

> all extra development and given demand is so high,

> there is no need to push out the smaller players.

> And I still think severely lowering competition

> will be bad. It usually is. It looks like the

> old supermarket story - big player comes in with

> money, put the small players out and then jacks up

> the prices. Heygate estate, anyone?

>

> Plus there will almost certainly going to be a gap

> between private landlords getting out if the

> market and the institutions ramping up all this

> hoped-for projected investment. What is the

> turnaround time for a large development? 5 to 10

> years?

>

> So, I still think rents are going to go upwards as

> a result of this.

[LondonMix]

PRS is operated by the private sector not government so I'm not sure what your point is

???? Wrote:

-------------------------------------------------------

> There are also some rose tinted views about LA

> renting back in the day too - there may have been

> more housing at cheaper rents but anyone who

> actually lived in inner London council housing in

> the 80s and 70s will remember how long you had to

> wait to get anything fixed, the horrendous

> bureaucracy around anything and the general state

> of the infrastructure....... but some how statism

> and big business are GOOD landlords but small

> private landlords EVIL - crappy lefty politics of

> envy as per.

[DovertheRoad]

If I was a small time landlord...with a flat on the side that was even remotely leveraged....I would be selling come spring and before it get wobbly. Prices have already dropped 10% on flats locally since the Brexit referendum. Time to cash out now and collect the sizeable capital gains from the past decade, avoid marginal BTL income after the new regs and the glut of flats that will hit the market when interest rates pick up....

[????]

DovertheRoad Wrote:

-------------------------------------------------------

> If I was a small time landlord...with a flat on

> the side that was even remotely leveraged....I

> would be selling come spring and before it get

> wobbly. Prices have already dropped 10% on flats

> locally since the Brexit referendum. Time to cash

> out now and collect the sizeable capital gains

> from the past decade, avoid marginal BTL income

> after the new regs and the glut of flats that will

> hit the market when interest rates pick up....

Me too - if i had any

[LondonMix]

The local market is flooded with BTL investor flats that are struggling to sell already

[Henry_17]

London Mix,

Where do we see evidence of this? I.e. Increased stock vs recent history?