Rent control is a popular policy. Landlords as a whole are unpopular. Rents are high, and paying the rent is often resented. Like controlling rail fares, there is no evidence it works as hoped. Indeed, there is plenty of evidence from around the world that well intended rent control policies cut the supply of housing and end up making the problem worse.
The market for rented residential property is tied up with the market for owner occupied policy in the UK. Owner occupation remains the dominant form of tenure, even after the decline in home ownership in recent years. Landlords have to buy homes to let out in the same market as home owners. Sometimes a home owner becomes a landlord, choosing to rent out their home and move elsewhere rather than selling up. Some landlords are simply temporarily letting out their own home whilst they are away.
It is therefore difficult to blame buy to let landlords solely for the high price of UK housing. House prices have been chased up by four main factors. The first is rapid inward migration swelling demand for homes. The second is social change, allowing lenders to take more account of the woman as well as the man’s earnings in the typical couple buying a home together. The third is the acceptance of higher overall multiples of income for a mortgage, made just tolerable by a long period of low interest rates. The fourth is the decision of the Bank of England and commercial banks to allow massive bank balance sheet expansion and mortgage book expansion prior to 2007.
The main reason rents are high is that the capital value of homes is high for all those reasons. The way to get rents down is to work on both supply and demand. If there were more new homes to buy, that could curb rents. If fewer people came into the country or if fewer people wanted to form an additional household adding to demand, that could cut rents.
Current high home prices prevent many young people buying their own home. They end up either staying longer with their parents in the parental home, or rent something small that is just affordable, or share with others. The government is seeking to tackle the problem in three main ways. It wants to limit migration. It is making financial help available for home purchase. It is encouraging more building. This works better than rent control.
Rent control would mean fewer landlords and fewer homes to rent.
September 23, 2015
The landlord (usually referred to as “unscrupulous landlords”) is always the enemy to politicians, local authorities, housing charities and the especially the dreadful BBC as there are simply more tenants than landlords. Just as there are more bank users than banks.
You are quite right in what you say but Osborne is making it worse. He has absurdly high stamp duly, very restrictive planning, OTT greencrap building regulations, like open door EU immigration, has OTT employment laws and now his bonkers double taxation of landlord interest. These all push up the cost of renting for tenants. Stamp duty is a tax on buying relative to renting and means that buying for a short period usually makes no sense. Furthermore moving house is prohibitively expensive. The idiotic deposit protection scheme and other regulations also pushed up cost for tenants and inconvenience for landlords. It also creates lots of entirely pointless artificial jobs in deposit protection schemes.
September 23, 2015
Social housing is of course totally unfair competition for the private sector. Why should some get a cheap home for life and others not while having to pay taxes to subsidise these social tenants? The private sector is far more efficient than social house providers and LEAs, but it is not on a level playing field with them. One is over taxed the other get subsidy. The landlord is even taxed on gains that are not even real.
The unfair competition argument also applies to the NHS and schools. Why does the Office of Fair Trading/Competition Commission/Competition and Markets Authority (or whatever it is now called) ignore these hugely unfair competitive practices and part monopolies by the largely incompetent state sector? I suppose they are too busy thinking of a new name for next year.
The court system too is very weak in dealing with tenants who do not pay, wreck the house or do not leave when given notice. Many tenants know this and so often abuse the system. A stronger court system would help reduce rents for the good tenants.
On top of this we have largely dysfunctional banks, absurd banking regulations and poor mortgage slotting rules with restrictive lending regulations, a lack of competition in banking and very high margins and fees.
The governments deserves about 1 out of 10 so far. They have very slightly relaxed the planning I suppose. But it is certainly no where near enough, They have done little else in the right direction. Cheaper energy and fewer daft building regulations would make building houses far cheaper too. The houses would also be better with some decent sized windows.
September 24, 2015
Social housing isn’t really competition for the BTL sector, since it isn’t a free market choice. Such properties are allocated to tenants, not offered in a general market. Because it is all subsidised (Housing Association properties notionally charge 80% of market rent, or an average of £93 per week, so the subsidy of below market rent works out at around £3.4bn p.a.: figures for Council Housing would show a larger subsidy), there is a large waiting list for allocations, which would evaporate were there to be a proper fully fungible market.
Landlords mostly do not pay CGT – they simply hang on to their properties and don’t crystallise it, paying IHT on death instead, or avoiding it by temporarily re-occupying a property to be sold. It would make a lot more sense were we to have indexation relief and a much lower rate of CGT for sales by landlords to owner occupiers.
Landlords have benefited from a very large hidden subsidy – ZIRP, which on £188bn of outstanding mortgages is probably worth £6bn p.a..
September 24, 2015
You cannot avoid CGT by temporarily re-occupying a property to be sold unless you have it only held it very briefly. It is done pro rata for the let period and period of owner occupation. With the last three (two now I think?) years ignored. Plus you might be caught by GAAR anyway if it is artificial.
September 25, 2015
Also, many landlords would rather pay a reasonable rate of CGT while they are alive and be able to retire without dealing with tenants wrecking their investment, rather than sell it when they are dead for the benefit of relations, who they may not even like very much.
September 23, 2015
The complexity of and delays in the planning system (plus the “need” for specialist bat, newt, slow worm and other reports and local material/style/design restrictions) further pushes us the costs of house building. Also there is over charging for water, sewage, electric and gas connections. The government as usual is the problem they are rarely the solution.
September 23, 2015
You forgot LA planning fees for consultations, huge contributions for facilities and social housing, and of course, Legionaires disease risk assessments. At least you are not in catering where, a tenant tells me, he has to have separate knives for his meat pies and his cakes, even though the knives are washed in the same bowl and the food is eaten in the same mouth.
September 23, 2015
Indeed the insanities and pointless burdens, delays and costs lumped on builders, developers and buyers by governments are endless they must be half the cost of the house.
Why should people buying a house have to pay up for others to get one cheaply? They often already pay 45% tax rates to subsidise them.
September 23, 2015
It is a problem inherent in democracy that one group can gang together to vote in a government that will legislate to thieve off another group and then give the spoils to their voters. Labour is essentially build on this very premise or envy and legalised theft. Usually cheered on by the BBC, lefty charities, government departments and lefty academics.
Rarely however do the spoils actually arrive in any meaningful form. They are usually pissed down the drain by the politicians and bureaucrats on route. The damage done to the economy by this process is huge, it make everyone poorer but the bureaucrats.
September 23, 2015
“A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. ”
– Various
September 23, 2015
Lifelogic – I gather that you have been a landlord a long time. In which case you bought your property way below the price that today’s rents are set at.
I also gather that your portfolio is probably paid for – if not, then much of the landlording class IS in that enviable position. Of having rental properties bought well below current market value and probably mortgage free (paid off by tenants) by now.
The current rents, therefore, are not determined by how much rent a landlord needs to charge to turn a modest profit but at a rate that maximises that profit.
I don’t blame them one bit. But please don’t tell us that landlording hasn’t skewed the market upwards. It has:
– kept property out of the sales market, inflating the prices of those few that ARE for sale
– encouraged sellers to become accidental landlords because such high rents mean that they can avoid selling their homes at their low, true market value
– it has changed the whole psyche of our country where people now see their homes as a pension and money spinner and refuse to sell up when they should
– it has added to the property bubble frenzy as the whole thing is underwritten by government policy and welfarism regardless of the employment situation
– it has softened Tory voters’ position on mass immigration as they have been rewarded with rising house values
– it has turned the younger generation towards the Left as they are no longer stake holders in this society and the government treats them equally to the hoards of young blokes charging towards our shores.
If I were you, Lifelogic, I’d be selling up and getting the hell out while you still can.
Population density is no indicator of property values. Ask the denizens of Calcutta.
September 23, 2015
Anonymouse. If Osborne reintroduced the inflation allowance or taper and reduced CGT to 18%, many landlords would be only too pleased to sell up and probably leave the country. But the Treasury does not want prices to fall, as this would make the figures look bad and they have their eyes on the silly values and want to tax them. At the moment it is young people who are paying for this through high mortgage payments and rent.
September 23, 2015
Indexation and a rollover CGT relief is needed and undo the absurd interest relief muggings.
September 23, 2015
Rents are determined by supply and demand, they can go up and they can and do go down look at the retail sector. But the returns are clearly properly due to the landlord who took the risk, did the work, suffered the idiotic ERM, the appalling banks and made the initial investment investment. Landlords are already being taxed on non profits due to Osborne’s interest restrictions and capital gains on unreal gains.
Buy to let is only about 10% of the market by value and rental house is needed as it give flexibility for short term lets. Buy to let buyers are funding much of the building that is going on.
The stock of houses is not reduced by buy to let at all it is just that some are to rent and some are to buy. It actually increases supply as many a build for such buyers or build/extended by landlords.
My main business is not being a landlord it is just where some of my earning are invested.
September 23, 2015
BTL rents are supported by Housing Benefit: landlords now are paid over £9bn p.a. directly from that source, and rents on other properties have the convenience of the rent floor provided by the Housing Benefit subsidy. It isn’t really a free market, except possibly for the more exclusive properties.
September 23, 2015
The support from housing benefit is for the tenant who gets use of the house. The landlord gets the going rate and often rather less for those on benefits.
September 23, 2015
Like childcare this market gas been inflated by government interference
September 24, 2015
Direct payments for HB to landlords were stopped and some tenants did not pass them on.Even before it was often delayed by months. As a result, many landlords refuse HB tenants and no DHSS adverts are common.
September 24, 2015
I do not think any of my tenants are on benefits anyway as far as I can tell.
September 23, 2015
Lifelogic – 10% of the market can dictate the price of the whole.
Rents are often set higher than mortgages. Saving for a deposit whilst paying rent is the issue for many.
It is clear that houses will always sell without the need for landlords to commission their construction.
I understand fully why landlords do what they do but they are not always providing a service and are often limiting the opportunities of others, nor are they responsible for supplying the country’s housing stock.
September 24, 2015
I looked at the possiblilty of buying my bird’sold house in London a years ago. After mortgage and other costs, I would have drawn even. Fortunately, I did not go ahead as the mortgage would not now have been deductable. The capital however would have made me a profit of £160k if I had left it empty and resold 18 months later,thanks to help to buy.
September 24, 2015
The landlord has to maintain and insure the property and cover vacant periods, agents fees and many other costs.
Rarely are rents higher than a mortgage on 100% of the value.
September 23, 2015
With no interest being handed out, how else can people who have no pension much invest other than by buying property?
September 23, 2015
Well they can lend directly with suitable security and cut out the middle man banks, or they could start a business perhaps with the EIS SEIS scheme, or they could buy equities perhaps. But try to avoid dubious companies like Tesco and VW though, then again maybe it is nearly time to buy them again.
Perhaps even buy the equities or commercial property through a pension scheme using the tax deferment to augment the investment. Unless Osborne has cut the cap yet again to almost nothing as looks likely!
September 23, 2015
Apart from the very limited measures being adopted by the government, what the government should do to make a significant impact on the availability and affordability of housing would be to allow and encourage house building in places where people actually want to live. This means not in “garden cities” and rural villages, but rather in or next to large towns and cities. That is where infrastructure and employment already exists, and it would mean slaughtering the sacred cow of the green belt.
September 23, 2015
The people who complain of the cost of ownership and high rents are the same ones that insist on restrictive practices that inhibit the building of new homes and/or are demanding that more immigrants should be allowed in.
If housing was an unrestricted free market then eventually the current problems would rectify themselves. A forlorn hope and of course and such a mechanism would be faced with many practical difficulties. It does not help that successive governments keep interfering with the market on the one hand encouraging demand and on the other restricting supply.
A major fault is that we are these days slaves to the progressives who more often than not insist on their progressive policies and practices that in reality are not progressive at all They are in actually conservative and regressive ways of doing things and mostly counter productive.
September 23, 2015
WHY does nobody ever talk about demand and only talk about the supply of houses.
London cannot create 300,000 homes a year for immigrants – so why does it let them in.
Unbelievable. Inept. Incompetent.
Not blaming the Conservatives. All politicians are equally as bad.
Reply My piece is about demand as well as supply.
September 23, 2015
“Not blaming the Conservatives. All politicians are equally as bad.”
Headline in the DM, “Official figures show an astonishing 558,000 migrants came to Britain last year a leap of 24% in just 12 months”
I’m not prepared to absolve politicians just because they are “all in it together” in their treacherous abdication of resposibility. Hungary seems to understand the game but then their leader is a patriot who does not care what the revolting hypocritical slime that controls the media or the EU have to say.
September 23, 2015
Hungary understands the game when the outcome to them is negative. They have played their immigration to other countries through free movement hand well up until now when it is biting them on the behind.
September 23, 2015
Correction emigration to other countries my spell check did not recognise the word as it is so rarely needed.
September 23, 2015
The government wants to limit immigration you say.
You know that this can’t be done all the time we are members of the dreaded EU so why do you continue to push this line?
Reply I am trying to get change in our relationship with the EU -hadn’t you noticed that?
September 23, 2015
Reply to reply
Yes of course I had noticed that you are trying to change things and I admire you for your stand and position.
Your article though said that the government was trying to limit immigration and it is patently doing no such thing nor will it all the time your party is being led by a Europhile.
September 23, 2015
Having just reread my previous post it makes me quite sad to have to refer to “your party ” when for many years I would have been able to say “our party “
September 23, 2015
You are indeed but few others in your party are.
September 23, 2015
“The main reason rents are high is that the capital value of homes is high for all those reasons.”
A lot of landlords are well established. They bought their houses long ago, when they were dirt cheap and yet charge today’s rents. They use their portfolios to raise deposits and funds to compete against first time buyers who are struggling with things like university debt.
I don’t blame landlords for doing this. But they are a big reason for high prices and would be equally participant in a race to the bottom on rents if the market turned – they’d undercut new entry landlords and price them out of business.
What I’m saying is that they have a controlling marginal effect on the property market. They do instigate high prices where – if they were in it for altruistic reasons (and I don[‘t suggest they should be) – they could, in fact, be instrumental in keeping rents at the historic low prices that they originally paid for the houses.
They are in it for maximum profit. I don’t blame them.
But that was the whole point of landlording. To speculate on ever rising property values, get someone else to pay the mortgage off and then charge rents at index linked rates. All of it to be underwritten by a glass bottom of welfarism that ensured a tax payer funded rentier class to always be ready to rent regardless of the jobs market.
Therefore ever rising prices becomes self fulfilling – and mitigates the detrimental effects of mass migration because it satisfies home owners through the values of their homes.
They are the ones who make owner occupiers loath to sell on, and old people to remain in big houses because “our greatest asset is our home” or “their not making anymore land” or “your home is your pension” as it is for many now.
September 23, 2015
Further to the comment at 7.05
People who become accidental landlords have done so because they refuse to sell their houses at the true market rate.
If they can’t sell at that value they can rent until it does reach that value. And people NOT selling in an area ensures that it DOES reach that value.
Landlording (and the ramping programmes on TV) has definitely helped create the property market frenzy and excessive prices.
Anyway.
From what we see on our TV screens hundreds of thousands (if not millions) of pushy blokes are about to arrive in Britain and it won’t stop there.
We are in uncharted territory.
September 23, 2015
Well they do not all refuse to sell they prefer to rent. Perhaps they are working away for a year or two and want to return later. It is very expensive to sell and buy again with stamp duty as such absurd rates, agents fees, legals fees, land registry fees, vat, valuations, mortgage fees, redemption fees …… why should they?
September 23, 2015
Lifelogic – What happens when the market dips and someone has to move to another location for work ? (As happens at the same time when the economy dips)
Well, in the old days, the house owner would have taken the hit and sold the house lower than expectations – thus the market readjusts.
Now, if the market dips and people change job location they don’t sell up. They let out their house until the market ‘recovers’
Infact what they are doing is perpetuating a boom rather than helping the market to adjust. I don’t blame them – but this is what the rental market does to the sales market. And it excludes more and more young people from being stakeholders and so they are more inclined to be Leftist..
September 23, 2015
They’re leftists because they’ve been carried all their lives.
When they start having to pay their way – that’s when they see the light.
September 24, 2015
Handbags – And the best way to ensure they pay their way is to shackle them to a mortgage.
Thatcherites understood this very well.
September 23, 2015
Yes, I think Cameron’s description of a ‘swarm’ is very apt. When you see the kind of young men on the tv displaying aggressive behaviour it worries me. Ukip are right when they warn of millions coming into Britain. They will get their papers in the EU countries and then just walk into the UK and start their demands. According to the news the other day, the NHS really is at breaking point and it can only get worse. I hope they have a lot of trained midwives because they are going to need them in the next few months!
September 23, 2015
They are short of midwives already needless to say.
September 23, 2015
And doctors. Recruiting from overseas for doctors or investment and training for doctors in the UK. Which option do you think the government is going to choose?
September 23, 2015
The issue seems to be the choices of the doctors. We train enough at university, but many don’t stay in the profession (at least not in the NHS – it’s notable several MPs are ex GPs) or emigrate. Some of that is because of family commitments that didn’t apply to previous generations of doctors. Some is because they don’t enjoy working in the NHS, and therefore seek out less byzantine employers elsewhere.
September 23, 2015
Lifelogic
They are short in some areas and sods law dictates that the better off areas do not suffer so much as the others.
One of my clients yesterday a retired vicar agrees that the way we are going by 2040 this country will be Muslem along with the rest of the EU if it remains together and can survive for that long.
The sad thing is that the vast majority of politicians do not know let alone understand about cause and effect analysis.
September 23, 2015
The doctors they train here often leave too as they are not paid that well in the UK, have to work in the dysfunctional NHS and have to pay huge taxes and have large debts to clear.
September 23, 2015
Rent control works in Germany. Why ? Maybe because the market there is skewed so much in favour of renting over owning property.
September 23, 2015
They have a declining population and plenty of houses.
September 23, 2015
“They have a declining population…..”
Not for much longer!
September 23, 2015
Yes, and this is why Frau Merkel is opening Germany’s doors to the flood of migrants now descending on her country.
September 23, 2015
frau Merkel is making an assumption that all those piling in across Greece are a) wanting to work . .b) willing to work. When , for a lot of them, a life of benefits, money and healthcare supplied for doing nothing except arriving, will be a rise in living standards – -why the hell should they work? Then they would be taxed and have to contribute to get the same level of what they will get handed, for doing nothing. If they won’t work, or work to a suitable standard, will they be deported? . .and where to? A guess will be here – to get a free life supplied courtesy of our own govt.
Scenes of these people showing their “gratitude” after arriving in “safe” Europe, by doing whatever they want to do, wherever they want to do it, shows they are behaving like savages. Would you honestly expect any company here to employ them?? They are in Europe, showing their true colours. Wait till the demands start to change to their ways. Those long shown scenes of screaming and yelling in the streets of their home countries will be here in our own towns – -and they are NEVER going to go back. Worse still WE will see our taxes handed over to them so they can do it. DC will be so proud of himself.
September 23, 2015
On the One Show Tonight they showed Nick Knowles and his team renovating rows of homes for ex service men who would otherwise find themselves homeless. How come we can find homes for immigrants but not for our servicemen? Also, why do British families have to stay long term in B&B when so many of the Syrian immigrants interviewed recently have been given housing? British people should be given the homes and the immigrants should take their place in the B&B’s. It is a disgrace.
September 23, 2015
” Landlords have to buy homes to let out in the same market as home owners ” Some do. But “Serial Landlords ” or Big Landlords as we might call them have ongoing access to cheap loans. They haunt a market where money-up-front, and in cash, no questions asked, with commensurate price reduction allows them to make financial killings which are in a different world from Joe Bloggs.
They also regularly access House Auctions where houses are sold in panic or have been repossessed. Knock-down prices. They can afford to take the risk of some of those houses needing extensive renovation. They sometimes have their very own team of renovators. Legend has it that some members of those teams are also claiming unemployment benefits, are paid in cash for this and that “little job” as-and-when-required. Local and national money laundering via such enterprise is well-known in the criminal fraternity. Has been for years. And the criminality goes deep with its tentacles everywhere. No surprise Parliament has not effectively dealt with the whole field of Buy to Rent.
The famous rent controls instigated by the Labour Party and championed by the present Father of the House Sir Gerald Kaufman which he is on record as saying “I’m very proud of the legislation” led to thousands being forced out of their rental accommodations at very short notice by a variety of underhand means such as theft of their belongings, money, and threats, so that a fresh and higher rental charge could be inflicted on the new tenant where rental housing was always in short supply particularly for single people and even more for single… young… people.
Successive Parliaments have done nothing to rid the housing market of historic gangsterism. Have assisted criminals in keeping cheap rented accommodation in extremely short supply and made poor housing a real earner for many of these Landlords through the “captive audiences ” of students and nurses and even giving tax incentives to landlords to capture this highly profitable market.
It is estimated that 50% of MPs, quite legally and above board, personally profit by the ability to buy to let.
As with all other matters of grave national importance we will no doubt see MPs efforts to remedy the terrible problems in the housing market… referred to as: “Bending over backwards.” Of which they can, as always, be justly proud.
September 23, 2015
There is a huge benefit to the economy from the wide and flexible provision of private rental housing in that it makes it easy for renters to move at short notice to where the work is.
As you say, the way to control rents is to increase the supply of housing and moderate the demand.
September 23, 2015
You are partly correct John. State control of prices does not work correct. But the state already controls prices of housing. It imposes way over market rates for social housing in areas with no jobs market, areas left to their own devices where rent prices would collapse (and then make it cheaper to live there and cheaper for new employers to come to the area for workers who didn’t need so much for rent). It sets the rates for rent for folk living off benefits, often higher than would otherwise be the case. The state also manipulates house prices with interest rates, help to buy, planning permission restrictions, out of control immigration, and all of the rest of it. The state and its manipulations have put house prices and rental costs up to silly levels. So it is not more state manipulation of prices we need but less, as market forces left to their own devices would do a much better job than the current nonsense we see all around.
On the other hand the service and standard provided by private landlords and their estate agents in this country is appalling. Everything from demanding renewal signatures mid-way through the current tenancy, while they will not sign till the last day, a very one sided long commitment. To poor property repairs, where properties are often run down by lack of maintenance to force tenants to move on. To keeping deposits. To turning up and disturbing tenants endlessly. We really do need some properly enforced standards to sort out the mess. And we need longer term tenancies to become the norm for decent tenants, and we need to encourage more decent big businesses to enter the property rental market instead of the mass of out of control small landlords.
The reasons the big boys don’t want to play in private rentals are obvious, far too many out of control risks which the state can randomly impose. The houses can be moved into the catchment area of the worst schools with no notice or appeal. The houses can be moved into the catchment area of the worst GP’s with no notice or appeal. Planning can be granted for a traveller site next door. The state can manipulate prices up or down. Unfair competition from “social housing” granted free houses, planning concessions, and so on, all the tricks of state monopoly provision crowding out private enterprise. We need to fix these risks so that big players can enter the market.
And yes private rents are far too high at the moment, especially in the South East.
September 23, 2015
Good analysis.
September 24, 2015
Ditto, Mark
(Please paragraph in future, Iain. Otherwise it’s difficult to read.)
September 24, 2015
thanks
September 23, 2015
Government interference with market forces is wrong . Houses to buy or to rent is a speculative business heavily reliant on the property investors ; without them there is no choice . It is true that over many years (since the 60’s in particular) property has outweighed other investment sectors ; some areas (such as London) have seen incredibly high returns , however , during this period when the cost of borrowing was unusually high , many smaller speculators went broke .
If the country is stupid enough to allow a constant inflow of population , there are bound to be distortions in the availability of housing ( not to mention the additional strain on other public resources ! ) ; obviously this increase impacts on the market . Imposing rent controls will do nothing but cut down the housing supply and make the overall position much worse off .
September 23, 2015
Rent controls won’t cut house supply.
What happens ? The houses disappear in a puff of smoke ???
No. It puts the houses back in the hands of those who are meant to have them. Those living in them !
I am not being socialist here.
Landlords are few – they alone will not keep the Tory party in office.
There is something that feels inherently wrong about a long established landlord, who bought when houses were dirt cheap and has no mortgage but who now charges today’s inflated rents, having voted in the mass immigration Tory party, and claims “It’s not my fault, it’s what the market determines and I’m providing a service that wouldn’t be there otherwise.”
No
They’re greedy bastards and no wonder our aspirational, educated young are quitting the country and that those remaining are left leaning.
September 23, 2015
Houses will disappear in to the black market
Rentals will become gentlemen’s agreements between friends and families.
I rent all mine that way already.
You might be able to outbid my godson, if rent control take that off the table….?
September 23, 2015
As long as someone is housed in your house, trt.
Your godson (a young person) is getting an affordable home and is not competing with another young person to buy a house.
Prices come down !
September 23, 2015
Rent control will mean fewer homes are build and many will not let and will keep them empty.
September 23, 2015
I am unconvinced by the idea that just because landlords buy over half of all newbuild properties immediately (and probably a large chunk of the rest when they are subsequently resold, as most newbuilds are unattractive to potential owners, being small and built to high density), that that should mean that if they didn’t buy there wouldn’t be a market for new homes.
The problem is that only landlords can really make sense of newbuild prices since they can benefit from a Housing Benefit subsidy to their rent, and don’t have to worry about how liveable the property is: builders therefore build to meet BTL requirements (and building regulation has favoured such construction – Sec 106 demands for “affordable” shoeboxes are anathema to a properly functioning newbuild market).
Since BTL makes about 40% of all purchases by those who are not simultaneously buying and selling a home they add very substantially to housing demand: in fact, they buy more homes than are built (200,000 last year with a mortgage, and more for cash), which is why BTL continues to increase its share of our homes. Were landlords to cease adding to their portfolios the supply picture for first time buyers (who bought over 300,000 homes last year with a mortgage) would improve if no houses were built at all. Present levels of building of around 140,000 homes is only perhaps less than 25% of the net supply, most of which comes from executor sales directly or indirectly, with small additions for things like RTB.
If builders had to tailor their offerings to a different market, I don’t think this would stop them from building – apart from perhaps a hiatus as they decide how to cope with land banks they’ve paid too much for.
September 23, 2015
It is the tenant who gets use of the house and the benefit paid. The landlord just get the going rent!
If the government bought them some food would you say the supermarket received the benefit, that is an absurd way of thinking?
September 24, 2015
The landlord gets a subsidised rent. And yes, the supermarket also gets a subsidised sale when someone shops with benefit money. Consider what happens in countries where such benefits are not provided. The supermarkets do not sell to the poor who cannot afford their prices.
September 23, 2015
Lifelogic
‘Fewer homes will be built’
There is a shortage. They will be built.
‘Many will not let and will keep them empty’
So I was right. It’s not about duty to service.
September 23, 2015
“They’re greedy bastards…”
You probably are too, aren’t you?
Do you sell your labour, skills and talent to the employer for the best salary you can get? Greedy!
Do you invest your savings to maximise your rate of return? Greedy!
Do you shop around to get the best prices? Greedy!
And you’re climbing the walls with jealousy, thinking someone else has had a stroke of good fortune: “… who bought when houses were dirt cheap and has no mortgage but who now charges today’s inflated rents…”. I’m not going to say I pity you, I don’t.
September 23, 2015
Most people sell what they have at the going rate. Why give it away to one tenant rather than another tenant. Would you sell you car for half price when someone else is happy to pay the full price?
September 24, 2015
Monty – “Greed.W
Throughout this topic I have said repeatedly that I don’t blame landlords for what they do. But I do object when they make out that they’re doing people favours.
BTL landlords have a tendency to go around telling everyone they’re providing a service – as though they’re philanthropic. And then demand that government policy is formed on this premise.
They are, in fact, causing young people to have to pay higher rents than they would mortgages.
As for my own greed ? I’ve always sold my houses on and I work for less than I could earn if I optimised my position. That would mean living in a less beautiful area than I do – and probably mean losing my stunningly beautiful wife too.
There really is more to life than making money.
September 25, 2015
Anonymouse. Usually, in order to find a beautiful wife and live in a beautiful place, it is better to optimise one’e position and make more money.
September 23, 2015
Rent controls, as you say, will mean fewer landlords and fewer homes to rent. In essence it is just a form of legalised theft of landlord’s assets. In the long run it does not benefit even tenants as it kill the supply and destroys investment and any investor confidence.
The problem is scarcity of houses, we need more supply of homes to rent or buy, or we need fewer people that way prices will fall. Thieving of landlords will reduce supply and harm everyone in the end, it is moronic lefty economics.
We saw with Ed Milliband that it is not even good politics. Miliband could not even beat the second rate Cameron, with his thieving off landlords electoral proposal, to try to buy tenants votes.
September 23, 2015
There is no theft of assets via rent control. It simply makes renting out eventually unprofitable, and probably leads to redevelopment of the site if the previous experience is anything to go by. The theft of assets comes via CGT charged on portfolio liquidation.
September 23, 2015
Of course there is, you might well halve the price of the asset if it has a tenant paying minimal rent.
September 24, 2015
The alternative is to sell to an owner occupier. Would they value the property at such a low level? Do you think that capital values of rental properties will fall because larger landlord incomes are going to be taxed more highly in future?
September 23, 2015
“well intended” rent control policies! What are you on about? It is just theft and an attempt to buy votes – how on earth can it be well intended?
September 23, 2015
Rent controls are also a breach of faith with investors, a sort of Mugabe tax system where the money they grab of you is decided after the event by the state. This is hugely damaging to investment, it thus pushes up the cost of finance for new developments. If you are likely to be robbed later why take the risk of investing.
Of course Osborne already has brought in double taxation of landlords interest and the hugely damaging General Anti Avoidance Regulations which already creates very damaging uncertainly for investors thus damaging growth and job creation.
But then he clearly is not a real Tory or even a Tory of any description.
September 23, 2015
In a recent TV showing of a UK Parliamentary Committee chaired by Mr Vaz, the Mayor of Calais Natacha Bouchart was asked why migrants preferred the UK to France. She cited several things but pointed to the perception by migrants of better welfare benefits in UK and a larger black market in jobs. She was told by the UK side that the OECD has stated that France has better sums of welfare payouts and the “black market” is much greater in France. Ms Bouchart needed to re-emphasise that she was stating “migrants’ perceptions.” When asked where they got their incorrect ideas she stated that their relatives in the UK had told them.
It would greatly benefit Parliament in regard to housing, the black market, and a whole range of issues if it could be possible for the research and advice of OECD, OBR, BoE could be taken with a pinch of salt. Statements of real people like Ms Bouchert and real people like the migrants living here should on the whole be believed.
Without getting into the migrant issue as a whole : if more listening was done and migrant opinion acted upon then MPs would get a very much clearer idea of just exactly what is going on in the UK behind the lace-curtains.
This is a very corrupt country indeed. Etc ed
September 23, 2015
We also seem to have moved inexorably as a society to assuming that it is entirely right and justified for young people to leave home and live independently, whether they can aford to or not. Gone are the days when people “settled down” aged 20-22, teamed up with their partner and shared the costs of renting or buying their own property. Now they may expect 10 years or more of living away from the family home before they consider sharing the cost of their accommodation with a partner. As a result there is unprecedented demand for hundreds of thousands of one-bed apartments, flats and small houses, the like of which would have been inconceivable 30 years ago.
The problem for us all comes when those who are more affluent make this entirely understandable and affordable move soon after starting their careers, say in their early to mid-20s, creating an expectation amongst the less affluent that they should also be able to leave the family home and be housed at the taxpayer’s expense. Rightly or wrongly I sometimes cite Bracknell as an example of this trend. That creates huge demand for new / small social housing in the rented sector when years ago they would have continued to live at home and not felt bad about that, now they do.
What this holds for us all in years to come is anyone’s guess – the breakdown or shortening of family influence over adolecents, a nation of young singletons, alone in their little boxes, the seemingly less confident “like, kind of like, like” upwards inflecting (asking rather than telling) generation.
September 23, 2015
You missed out the fifth reason for housing shortage the benefits system. There are lots of people who don’t work in London whose housing is paid for by the taxpayer (who often can’t afford to live in these houses). If the taxpayer could pay for their own home and not others then it would be different.
For example I know a bogus refugee who has lived in London without working for 19 years as she prefers having babies to working!
I earn more than the average salary but couldn’t afford to live in a flat like hers.
September 23, 2015
She is perhaps behaving entirely logically give the absurd system that pertains. It is the system that is wrong, but politicians seem not to want to change it.
They are quite happy for some people to choose not to have children because they cannot afford to. Perhaps because they are paying for other people’s large families in their taxes.
September 24, 2015
Surely logically but immorally?
Would you own slaves if it were legal?
September 23, 2015
“The government is seeking to tackle the problem in three main ways. It wants to limit migration.”
Who in the Government want’s to limit migration ?
It’s no secret that George Osborne is strongly in favour of increased immigration .
People used to think the Conservative Party was Eurosceptic but eventually they stopped believing that myth .
How can people be expected to believe the Govt wants to reduce immigration when all the evidence is that they want to increase it ?
Reply They are pledged to cut it substantially, they announce policies to curb it, and are seeking ways to limit migration from the EU as well.
September 23, 2015
But surely you trust Cameron’s “no if no buts, 10s of thousands” pledge!
September 23, 2015
Just when can we expect some results John. There is no meaningful effort to curb immigration.
September 23, 2015
If politicians want rents to fall or stop rising the supply needs to increase or else (demand has to reduce ed).
We get back to the “planning system” as usual. Over the years this has evolved to be a nimbys’ paradise. If say assorted plans to build say 2000 new homes for rent in Wokingham were lodged with the council the nimbys would be out in force. The nimbys would be screaming to the press alleging all sorts of things. The planning files of most council are full of tales of bitter battles. Oddly enough when houses do get built the fuss dies down, there are no demonstrations outside the town hall and the black death has not returned.
Incidentally has the government not thought about revisiting the tower block? With the right tenants and a concierge these might be a solution in the cities.
September 23, 2015
The great immorality is scapegoating everyone but the people responsible for our problems:
Companies blamed for paying low taxes.
Benefit claimants blamed for working the system
Bankers blamed for also working the system
Immigrants blamed for high levels of immigration
Landlords blamed for high rents
No. The people above are only doing what most of us would have done in their circumstances.
We are the ones to blame for electing governments that have interfered in the free market where the rich are the best at working the system and the poor just get poorer.
September 23, 2015
As you say, house prices are the main determinant of rent levels. London is often said to be the worst area in relation to very high rents, but rental returns there are lower than in the North. In the end rents can only be charged if the tenant is able to pay and so London rents cannot be forced up to match ridiculous property values, made higher by help to buy applying to high value property and available to foreign buyers.
While travelling on the tube yesterday, I noticed a quango is offering training to London landlords in order for them to understand their responsibilities. Having two of my three properties empty at the moment because of damage by tenants, who illegally sublet in one case, it struck me as a better idea for courses to be offered to tenants to learn their own responsibilities. The private rental system in Germany and Scandinavian countries works well because tenants are held strictly to their contract and the property has to be handed back in exactly the same state as when it is at the start. Here,the law protects unscrupulous tenants, who can get away with non payment and serious damage. This adds cost and good tenants suffer the higher rents as a result. Many landlords give up if this happens and others hold onto property only because of high capital gains tax on unreal gains.
Mr Osborne’s department has been very unhelpful to landlords, who are often in the game only because of inadequate pensions. He has raised CGT, taken away relief on interest, and perhaps his most ridiculous idea was to make subletting a right. A better way for landlords to lose money could not have been imagined. Licensing is on the way and HMO registration and regulations have added hugely to costs. But then he has not even had the opportunity to run a wallpaper business and lives in a world of civil servants and mad economists.
September 23, 2015
“Mr Osborne’s department has been very unhelpful to landlords, who are often in the game only because of inadequate pensions. ”
The Govt’s answer to pensions provision for those in the private sector appears to be the Liverpool Care Pathway .
HM Govt could close down the current public sector schemes and roll everyone into a new SERPS . At least we would all be in the same boat .
I’m not saying that is the answer , just that what we have at the moment is a scandal .
I bet Mr Corbyn doesn’t even ask about pensions for those in the private sector .
September 23, 2015
Rental returns in London are excellent – driven by the rapid pace of property inflation. Landlords always look at the total return – capital, plus income.
September 24, 2015
Capital appreciation is one thing and rental returns another. The first can go up and has usually gone down too in the past. Rental returns for BTL have to be based on returns after interest charges on current values. Banks will not consider possible capital appreciation when deciding mortgages and cash has to be considered alongside other options.
September 23, 2015
As someone who has been a landlord of two properties in years past there is another matter rarely mentioned but has to be included in the rent the landlord charges and that is damage to fittings. A sum to cover this is is usually agreed/paid by the tenant prior to occupancy to be returned when he/she departs. Normally this works well but from time to time the damage is greater, in some cases considerably greater, than the amount involved.
My properties were inherited from two aunts and by renting them out for several years I did get a reasonable return, probably similar to investing in stocks and shares, but it was when I sold both at the height of the property boom I got a nice rosy glow.
Mr. Redwood is correct in that rental controls would almost certainly reduce the number of
properties for rent so vast are the recent regulations the landlord must now meet, but if you do go down this road here is a tip from the TV programme “Properties under the Hammer” – follow Conrad Hilton’s maxim – location, location, location.
charges and that is damage to the property.
rental charges and that is damage by the tenant.
September 23, 2015
The Government ‘wants’ to limit immigration – but it can’t, can it !
Millions of pushy young blokes want to come here – forget what the BBC says, that it’s all families and, curiously, none of them admitting to Britain being their destination ( though they all answer in English.)
All we see in the background is an overwhelming mass of pushy blokes.
Rent controls ? Rent controls ????
The country is on the brink of being overrun and totally transformed and we are talking about rent controls ?
Are you shitting yourself like I am, John ? And if not then why not ?
Reply As I have explained before, this is not a immigration only website. We have discussed migration recently and will do so again when there is news/changes.
September 23, 2015
Reply to your reply.
When are MP’s such as yourself going to understand that the ordinary bloke in the street can see what is happening regarding immigration because they have to live with it. We do not wear rose tinted glasses. Immigration affects practically everything discussed on this blog and the situation at the moment is totally out of control. We all know that many of the immigrants coming into the rest of Europe will end up in the UK. They will not want to learn another language when they speak English now. Added to which they will get housed, fed and watered for life if required. God knows how we are going to afford this Etc ed
Reply I fully understand and support the Conservative policy of making a substantial reduction in migration into the UK. TO do this we need a fundamental change in our relationship with the EU including restoring full national control over borders.How many times do I have to write this? I am not about to change my mind on it.
September 24, 2015
Fedupsoutherner – No amount of “We will take only 20,000 refugees” will hide what we can see with our own eyes when a million are admitted with EU passports.
The lies, the denials and the absence of free and open debate is often worse than the immigration itself.
It is utterly sinister.
September 23, 2015
One of the worst scenarios that I am aware of, is that rent costs are now higher than mortgage costs in my area. This keeps the young either at home saving for a deposit, or having to pay rent and not being able to save for the deposit.
Banks also refuse to accommodate their practises. For example, my sister is paying a set amount per month for her rent. Mortgage companies argue that she cannot afford the mortgage repayment even though the payments would be less than her current rent.
If banks etc allowed prolonged fixed mortgages at say 10 years, then that would be an option if the repayment was less than the rent.
September 24, 2015
Rents have to cover other costs such as repairs, decoration, upgrading services,certification, risk assessments, letting management and rental agreement and often some fixed costs such as council tax, water, electricity and tv licence when tenants are likely to abscond without paying, as happened frequently in the case of mine.
September 25, 2015
Mercia. If not taking into account the reduction in outgoings in rent is part of the mortgage regulations, this is absurd. It is important to give notice and confirm when you move out of a rented property because the landlord is legally unable to enter or re-let if he does not have this paperwork. If the landlord then sues a tenant who has spent all his money or just disappears, he will not be able to recover the lost rent.
September 23, 2015
Radio4 program last week said we spend £25bn on housing benefit — more than police + roads + procurement combined.
This massive amount of money simply drives rents upward.
September 23, 2015
Correct. The amount has quintupled since Labour came to power in 1997, and now landlords get over £9bn of it directly from their tenants.
September 23, 2015
The tenant get the benefit not the landlord.
September 24, 2015
Without HB, the tenant would be unable to afford the rent. Since the sums and number of cases is so large, it is not possible to argue that landlords would be able to fill the property with alternative tenants. The alternative for the landlord would be to accept a lower rent. The benefit therefore accrues to the landlord. In any event some landlords do receive HB directly – search “rent direct”.
September 23, 2015
John, you are absolutely correct here, but I want to emphasise one key point – that was avoided and or denied by every party in Britain except UKIP during the pre-election debates. The Government(s) for the last 15 years has encouraged – or at the very least allowed – immigration into Britain on a massive scale. When 600,000 people are coming into the country every year, we need at least 200,000 houses each year just to keep up. We also need several new hospitals, several new schools, more railway stations, more water, more electricity, more police, etc, etc. It is notable that the people (and especially the politicians) who argue that “there is no downside to immigration, and more is always better” are exactly the same ones who will complain about the shortage of resources, and that the “the government” isn’t providing enough. They are allowed to pretend that these factors are entirely unrelated by our politicians, our supine mainstream media and particularly the BBC.
September 23, 2015
As some others have mentioned – the lack of confidence in company pensions has been the main driver in buy to let. It is the most secure way to save for the future. It is also the main reason for house price inflation.
September 23, 2015
People often rent homes as they simply prefer not to buy and not because they need a permanent roof over their head. If they are not happy with the house or area they can move on without fuss. This may suit the landlord and the occupier. The landlord may prefer something more permanent to realise a steady income as may the tenant. Either way the flexibility is to suit both parties. There is another party in this equation; the letting agent, who if reputable can make the transition between contracts painless.
It is not wise to set fees as many will set their fees lower than the average to help groups of people out . For example my son and his wife lived in a house of mine rent free for 2 years and I would have extended the same low costs to others who were suffering in some respect if they would treat the property with respect, but then my needs were greater. There are a great variety of properties to rent with different Landlord circumstances .To make blanket rules eliminates competition and the tenant from shopping around for the best deal.
September 23, 2015
Indeed, there is plenty of evidence from around the world that well intended rent control policies cut the supply of housing and end up making the problem worse.
What about Germany? The system there is not perfect but better. Even though the law is broadly in favour of the tenant there doesn’t seem to be a lack of desire for landlords to rent out their properties.
Rents are only one problem for tenants. The other is lack of security. There needs to be a presumption in law that any rental property becomes the home of the tenant after a reasonable period of time, and that it is simply not equitable to evict people from their homes at short notice with no reason given.
September 23, 2015
It is not “their” home any more than a rented car is their car! They did not buy it.
September 24, 2015
The house or the flat may be regarded as the property of the landlord, so it’s his(or her) house or his flat. But, it isn’t his home unless he lives in it.
September 23, 2015
Germany has a falling population (refugees aside – which may rather change the dynamic of the property market there).
September 23, 2015
Clearly there are distortions in the housing market created by both government and banks. Furthermore banks have a very obvious incentive to create housing bubbles since the money they lend at interest they have created out of thin air, thus anything they get back on top of administrative costs is pure profit. That being the case, the government must accept the obligation to ensure that house prices do not substantially outstrip construction costs. The banks by accepting more than one spouse’s income and higher multiples, have been allowed to inflate the market. So, firstly, the banks should be required to take only one income into account and secondly, they should be disallowed from accepting a higher multiple than e.g. three times that income. Perhaps then wifes might be able to stay at home and raise their families instead of being forced out into the job market to fund an inflated mortgage.
With regard to the rental market, there is a clear distortion which also affects the owner occupier market, namely that stamp duty banding based on only the property being purchased means that someone who already owns a property can purchase e.g. a holiday cottage at the same rate as a local purchaser. Stamp Duty should be cummulative taking into account an existing property portfolio; foreign buyers should be assumed a nominally very high existing portfolio value. If people want to let out property, they could avoid paying Duty by actually adding to the supply of new property by building it instead of whining about how they are providing a ‘service’.
Housing benefits should be set nationally and incorporated into the benefit system which should gradually be phased out except for pensions and people who suffer infirmity. There really is no fairness in forcing taxpayers to subsidise people choosing to come to our country voluntarily or subsidising larger families or the desire to live where most cannot afford or subsidising employers employment costs or people who choose not to work.
The error the UK made after the WWII was to believe that benefits were the way to Nirvana; Germany proved that hard work was the way to achieve real prosperity.
September 23, 2015
Rent Control in Stockholm
http://t.co/VKL7K3XZGz
Sweden has rent control. In Stockholm, people register with the local council for housing queues (public or private).
A map in the link below shows that waiting times for a rental apartment are years or decades. A single apartment listing can attract hundreds or even thousands of people to apply for an apartment. Indeed, 500 000 people are registered as waiting on the Stockholm housing waiting list.
Even if new apartments are exempted, mismatching and misallocation of space within the existing housing leads to shortages, and the below market rents lead to condo conversion or AirBnB usage instead.
September 23, 2015
If rent controls do not work – and they don’t – then why create ‘low cost homes’, which in practice means subsidised rents? Part of the solution is to get rid of all publicly owned housing, either by selling cheaply to the sitting tenant or by selling to the highest bidder at market prices (if the sitting tenant doesn’t want to buy).
Housing subsidy would then be paid to particular people and particular families just so long as it was needed. In particular, housing subsidy would usually stop when the children had grown up and flown the nest.
As for building more houses, the government would get more co-operation from the Home Counties outside the Green Belt if it halted immigration into Greater London. As it stands, a lot of the housing proposed for Hart District Council and other similar places is London overspill. Any politician or civil servant that denies this is lying in his teeth. So which people will leave Greater London? Will it be ‘white flight’, resulting in further polarisation of London’s population, or will the mix of those leaving London be similar to those staying?
September 23, 2015
Can I just say removing free school meals from young children will be a massive mistake, probably of poll tax proportions. Are the cabinet so out of touch they cannot see it?
Really despair at the quality of decisions coming from our leaders.
Reply Conservatives pledged to keep free meals for infants, and I expect the government to keep that pledge
September 24, 2015
Not what’s been said on other political sites. I hope you are correct.
September 24, 2015
Don’t despair, weep. HS2 and Hinkley make the school dinner saga pale into insignificance when it comes to bad decisions.
September 23, 2015
Your diagnosis that the property bubble has been fuelled mainly by ever larger sums lent against the same properties by ill-regulated banks on a variety of pretexts is broadly correct. The corollary is that to reverse it, there is a need to limit and reduce the sums lent against a given property, since buyers can only pay more if they can borrow more. I’d add in the largely London specific rocket fuel of foreign speculative money. Equally, you are correct that landlords are hardly to blame for following the incentives placed in front of their noses, whether they be to take advantage of subsidies from Housing Benefit, or through geared expansion of their portfolios, egged on by banks looking to expand their balance sheets, and are equally blameless for failing to cash in on capital gains that are taxed so harshly – thus being locked in to their portfolios.
Politicians seem to have forgotten that the homes many of us live in now were affordable purchases 20 years ago before banks pumped up the prices. There should be no need to build a special category of miserly, inadequate properties to make them “affordable”. It is precisely these properties that landlords buy, because they are likely to attract subsidised renters who have little other choice.
It is clear that many more people would prefer to purchase their own homes rather than rent, as they are now forced to do. That requires lower prices. Landlords compete with first time buyers to keep adding to their portfolios, and can afford to outbid them because of the rent subsidy. They form around 40% of net house purchase demand, and provide almost no supply because of CGT. The BTL sector has been growing, while the state provided Council homes and Housing Associations have been in modest decline taken together: BTL tends to acquire ex council homes bought under Right to Buy over time.
You are equally correct that rent controls are not the right approach to attempts to limit the growth of the BTL sector or rent rises. When we had rent controls, it gave us Rachmanism – a cocktail of shockingly bad property maintenance, and harassment of rent controlled tenants intended to encourage them to move on, allowing replacement with new tenants at a higher rent (often including (illegal) immigrants who were less likely to complain).
If the BTL sector were persuaded not to expand any further (by limiting the gearing of their purchases and portfolios, and lowering CGT charges where they sell to owner occupiers, as well as a programme of gradual reduction of Housing Benefit support for rents, and fuller competition with the rest of the rental market which currently operates by quota, allocation and subsidy) – and even to divest some of its properties, the supply available to first time buyers would increase significantly, and prices would therefore fall, making all homes more affordable. The effect would be far more pronounced than anything likely to be achieved by increasing the amount of building.
September 24, 2015
But HMG does not want house prices to fall and has it’s eyes on taxable capital.And in the end there would be the same 65m+ and growing population living in the same number of houses, but more younger owner occupiers, who would also want values to rise.
September 24, 2015
Rational young people buying their first home should not want prices to rise in real terms, and thus make upgrading to a larger family home or a more pleasant environment more expensive.
September 24, 2015
In my lifetime all economic crashes have had as their root cause the property market.
Banks, through their expansion of M3, are able to lend exponentially money they do not have and any lending in excess of savings is inflationary.
The crashes come when the banks holdings of assets are unable to generate sufficient income to service the debt.
The multiples of salary that are now needed to buy a property are now such that even the most casual observer must question whether there will be sufficient income to both survive and pay debt, particularly in the future when interest rates go up.
Every person unable now to buy a property because of the high prices is a potential addition to the growing tenancy market and a further reason for the buy to let market, now estimated to be one trillion pounds to grow further, for this is where the demand is.
Bank lending is vast in this area and is premised on the expectation that tenants will, in the main, not default. Hardly a very sound basis for lending even though it might be backed up historically.
There is absolutely no evidence that the other causes you mention are real viz. inward migration and allowing women’s income to be taken into account (this was taken into account back in the early sixties).
So, we have a bubble that is fuelled not only by the banks but also by the Bank of England with falsely low interest rates and by the government itself with their guarantees to the banks to enable further unsafe lending.
Gordon Brown and his cohorts denied a bubble as have all the Prime Ministers in office prior to a crash and still, in spite of good evidence that manifests itself like an elephant in the room, yet another bubble waiting to surprise the masses as it bursts, and it surely will
September 25, 2015
Potential BTL landlords buying at today’s prices please note this wise warning.^
September 25, 2015
Discourage bank lending on existing property (unless being substantially rebuilt brought back into use).
Only allow tax relief on new supply (new builds or rebulds) and only for a specific finite period which ends on first sale.
License all landlords and ensure all rent is paid via a central clearing house or the local council.
Should the right to buy not be extended to private rental properties?