UK house price to crash as global asset prices unravel

[sgtkate]

BTL isn't a bad thing per se at all. Many countries in Europe have large large numbers of people living in rented accommodation. The differences are the law. In Poland (partner is Polish so I know a lot about this) you can take effectively a lifetime let and unless you break the terms of the lease you cannot be kicked out of your house/flat EVEN if the owner loses their other homes. This gives total security to the renter and means there is no reason to look to buy anywhere. As a result the housing market does not boom like ours does.

 

I think the problem in the UK is that we do neither nor. We have neither a long term secure renting culture or laws, but at the same time we allow people to buy up multiple properties and rent them in an insecure manner which reduces houses available for people who do want to buy, pushing prices up. It's the combination that's the issue and not the buy to let market as such.

 

I think it would be a bad thing for large companies to have almost exclusivity over the rental market. Most smaller landlord sacrifice some profit for ease of renting, meaning they often keep the same tenants for many, many years and rarely increase the rent as that might make the good tenants leave. Larger, corporate companies don't care about ease and they would increase the rent at every opportunity, kicking out tenants to do so if that was the most profitable option. Ultimately our rental laws need changing to allow a tenant a 'life' lease. I don't think we should go as far as Poland either, and we also need to make it far easier for a landlord to physically evict a tenant if they are in breach of the lease. If you are going to give a lifelong lease to someone, you MUST be able to kick them out if they fail to keep up their end of the bargain.

[Cyclone]

I offered long term leases to my tenants, and none of them wanted anything longer than the initial 6 months and then rolling monthly.

[Orzel]

BTL isn't a bad thing per se at all. Many countries in Europe have large large numbers of people living in rented accommodation. The differences are the law. In Poland (partner is Polish so I know a lot about this) you can take effectively a lifetime let and unless you break the terms of the lease you cannot be kicked out of your house/flat EVEN if the owner loses their other homes. This gives total security to the renter and means there is no reason to look to buy anywhere. As a result the housing market does not boom like ours does.

 

Close but not close enough.

British system is similar.

There is freehold here and 'wlasnosc' there - directly translated as ownership.

Leasehold has two main analogues there:

- Right to use(lease) for limited time

Similar to our lease but freeholder is always treasury or some local authority of different level. This type of ownership can be transfered as any other. It can be terminated only if you go against what is written in contract - e.g. using residential plot for commercial purposes. It applies to land. Same as leasehold here.

- And right to use(lease) for unlimited time

This one applies almost exclusively to flats. Freeholder is a local housing association. This comes from communist times. It is no longer possible to incorporate those. Now you have go for shared ownership(management company can be appointed or incorporated) or rental. Old ones are allowed to operate as before and they are still in numbers. I don't know exact figures but huge percentage of populations lives in those types of flats.

This type of ownership can be bought, sold, inherited and such.

It has a downside of having housing association that is wasteful and inefficient as any local council or body. They have the right versus they have to earn their right like private management companies.

So the model is not that far from English.

Rental, leasehold and freehold.

Vulnerable tenant protection is better here.

You can lose your leasehold or freehold to debts same here and there.

 

I think the problem in the UK is that we do neither nor. We have neither a long term secure renting culture or laws, but at the same time we allow people to buy up multiple properties and rent them in an insecure manner which reduces houses available for people who do want to buy, pushing prices up. It's the combination that's the issue and not the buy to let market as such.

 

The issue as I see it is lack of flats owned by some sort of housing association, local council or some other body.

Space and energy efficient and affordable.

They may not have drives and gardens but its a trade-of.

Compared to similar size cities in Poland Sheffield is just a big village with only a few blocks of flats. It may be nicer but is more expensive. Hence less affordable.

 

I think it would be a bad thing for large companies to have almost exclusivity over the rental market. Most smaller landlord sacrifice some profit for ease of renting, meaning they often keep the same tenants for many, many years and rarely increase the rent as that might make the good tenants leave. Larger, corporate companies don't care about ease and they would increase the rent at every opportunity, kicking out tenants to do so if that was the most profitable option.

Tenants can not be kicked out. Eviction takes ages. Over a year for 'vulnerable'. Even squatters can not be thrown out of a house. Rental tenants are really well protected and some exploit that. It is not worth raising rent to lose a years income. Prices are self regulating by supply and demand so lack of affordable housing is only issue.

 

Ultimately our rental laws need changing to allow a tenant a 'life' lease.

That is called a leasehold and is already there. Only not popular and expensive. Supply and demand again. Lease is expensive to buy but cheap to maintain.

Polish model is buy cheap, pay more later - more affordable for skint.

 

So to sum it all up - we don't need to build houses, we need to build cheap rental flats. People who would live there would not maintain their own garden anyway.

 

I offered long term leases to my tenants, and none of them wanted anything longer than the initial 6 months and then rolling monthly.

 

That is because it's fixed term so they can not give you notice if their circumstances change unless you had that clause in contract.

And if you did it's not different to rolling contract unless it's one sided.

Assured shorthold is in tenant favour and it is better for them to have rolling contract.

[sgtkate]

Close but not close enough.

British system is similar.

There is freehold here and 'wlasnosc' there - directly translated as ownership.

Leasehold has two main analogues there:

- Right to use(lease) for limited time

Similar to our lease but freeholder is always treasury or some local authority of different level. This type of ownership can be transfered as any other. It can be terminated only if you go against what is written in contract - e.g. using residential plot for commercial purposes. It applies to land. Same as leasehold here.

- And right to use(lease) for unlimited time

This one applies almost exclusively to flats. Freeholder is a local housing association. This comes from communist times. It is no longer possible to incorporate those. Now you have go for shared ownership(management company can be appointed or incorporated) or rental. Old ones are allowed to operate as before and they are still in numbers. I don't know exact figures but huge percentage of populations lives in those types of flats.

This type of ownership can be bought, sold, inherited and such.

It has a downside of having housing association that is wasteful and inefficient as any local council or body. They have the right versus they have to earn their right like private management companies.

So the model is not that far from English.

Rental, leasehold and freehold.

Vulnerable tenant protection is better here.

You can lose your leasehold or freehold to debts same here and there.

 

 

 

The issue as I see it is lack of flats owned by some sort of housing association, local council or some other body.

Space and energy efficient and affordable.

They may not have drives and gardens but its a trade-of.

Compared to similar size cities in Poland Sheffield is just a big village with only a few blocks of flats. It may be nicer but is more expensive. Hence less affordable.

 

 

Tenants can not be kicked out. Eviction takes ages. Over a year for 'vulnerable'. Even squatters can not be thrown out of a house. Rental tenants are really well protected and some exploit that. It is not worth raising rent to lose a years income. Prices are self regulating by supply and demand so lack of affordable housing is only issue.

 

 

That is called a leasehold and is already there. Only not popular and expensive. Supply and demand again. Lease is expensive to buy but cheap to maintain.

Polish model is buy cheap, pay more later - more affordable for skint.

 

So to sum it all up - we don't need to build houses, we need to build cheap rental flats. People who would live there would not maintain their own garden anyway.

 

 

 

That is because it's fixed term so they can not give you notice if their circumstances change unless you had that clause in contract.

And if you did it's not different to rolling contract unless it's one sided.

Assured shorthold is in tenant favour and it is better for them to have rolling contract.

 

I think we mostly agree

[Cyclone]

I'm confused about the comment of leasehold. A leasehold in the UK is not a "rental for life". You have to raise the capital to buy the property, you own the property after that.

The only thing you don't own is the land on which the property stands.

 

This is definitely not the same as a lifetime lease on a property.

[sgtkate]

I'm confused about the comment of leasehold. A leasehold in the UK is not a "rental for life". You have to raise the capital to buy the property, you own the property after that.

The only thing you don't own is the land on which the property stands.

 

This is definitely not the same as a lifetime lease on a property.

 

No it's not and in Poland people have lifetime leases as well as other people having leasehold properties. My inlaws have both types, one is in a leasehold flat, the other in a lifetime rented flat. Neither are 'local authority' to my knowledge.

 

The 'I think we mostly agree' line was in reference to needing more cheaper apartments.

[Cyclone]

Yeah, monolithic blocks of ugly flats were built in the 60's, they quickly became sink estates in the sky.

[El Cid]

This from the Telegraph yesterday. Buy to let will lose money in 91% of regions by 2021

 

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/12087337/Mapped-how-buy-to-let-will-lose-money-in-91pc-of-regions-by-2021.html

 

 

And today. Just looked at one of my shares, its down 25% in the past six months.

 

Sell everything ahead of stock market crash, say RBS economists'

 

http://www.theguardian.com/business/2016/jan/12/sell-everything-ahead-of-stock-market-crash-say-rbs-economists?CMP=fb_gu

[geared]

BTL isn't a bad thing per se at all. Many countries in Europe have large large numbers of people living in rented accommodation. The differences are the law. In Poland (partner is Polish so I know a lot about this) you can take effectively a lifetime let and unless you break the terms of the lease you cannot be kicked out of your house/flat EVEN if the owner loses their other homes. This gives total security to the renter and means there is no reason to look to buy anywhere. As a result the housing market does not boom like ours does.

 

Yea, but England is a desirable place to live, and Poland, well it isn't.

Property/rental prices are always higher in places where people from all over the world want to come and live.

 

I'm sure you can buy 20 dirt huts in Mozambique for the change in your back pocket, it doesn't mean their property/rental laws are better than ours.

[sgtkate]

Yea, but England is a desirable place to live, and Poland, well it isn't.

Property/rental prices are always higher in places where people from all over the world want to come and live.

 

I'm sure you can buy 20 dirt huts in Mozambique for the change in your back pocket, it doesn't mean their property/rental laws are better than ours.

 

I believe Germany has a similar system, and has far lower house prices relative to wages than we do. Would you say Germany was an undesirable place to live?