"Regeneration or social cleansing?" Discuss

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Permalink Reply by John D on June 8, 2015 at 14:45

The conventional wisdom at the time was that rent controls discouraged potential landlords and led to many houses falling into rack and ruin because of lack of maintenance.

I too could live in Central London in the 60s but in one room - this was before the family came along and I needed three bedrooms.

I don't see how Buy to Let solves anything - if the Landlord has to charge enough to cover the mortgage, why doesn't the tenant buy for himself ? It would be cheaper.

Buy to Let just exacerbates the housing price spiral. As I see it, the only solution is to increase the supply of accommodation by encouraging Build to Let.

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Permalink Reply by pamish on June 8, 2015 at 15:17

getting that 20% deposit together can be just a bit tricky.  Or even 5% when a house costs £550k ( eg in this road, this month, in scuzzy old Tottenham)

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Permalink Reply by Ian on June 8, 2015 at 13:54

I would agree that rent controls in principle would be a good thing but a new entrant into the buy to let market buying a property at market value or more will need to cover the mortgage and maybe make some profit to cover maintenance. I don't believe someone should be excluded from buying a property to rent just because the mortgage repayment is higher than the average rental at the time. When I first arrived in London I shared a house and lived in a single room but house price had not exploded like now. As long as it is not implemented with a simple 1 hat fits all then it could work but authorities like simple 1 hat solutions like bedroom tax that sounds good in principle but bad in practise.

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Permalink Reply by Michael Anderson on June 8, 2015 at 14:17

But it becomes circular Ian. As higher profits are gained from buy to let, the asking price for property increases so higher rents are demanded to meet the increased cost of buying and so and and so on. It don't think it's too much of a coincidence that the explosion in buy to rent, rocketting rental charges and booming property values have all gone hand in hand. Either. a brake is applied through rent control or the rental and house buying markets become so out of control that only the very wealthy and/or foreign investors can get in on the act. The area of affordability in London has made most places in Zones 1-3 no go areas for average incomes.. When I first arrived here I could afford Soho and later Hampstead. Imagine what my £s would get me in those areas now!

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Permalink Reply by pamish on June 8, 2015 at 14:27

Shortly the pension-pot cash-in possibility that was opened in April, could mean millions (?) of over-50s being tempted by the idea of becoming a BTL landlord as a way of paying themselves a pension.  I've no idea if this will happen but you can see the twinkle in the eye of many people who would not have considered this before. Get 100k deposit in your hand, get a supercheap mortgage, and you're off, your own housing portfolio begins. This could well have been the reason for this extraordinary policy coming in (of course the state will have to pick up those who blow it all on bad risks and/or con-men) - a back-door way of 'solving' the housing crisis by creating more + more small private landlords.

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