From today's FT:
Sir, Yugo Kovach (Letters, December 5) rightly points out that state subsidies for mortgage interest amount to preferential treatment for homeowners at the expense of equally cash-strapped tenant neighbours.
This government preference is nothing new: it goes back at least as far as the "right to buy" council housing and has been maintained throughout the New Labour period so that today we are witnessing the unsurprising consequences of a housing policy (not to speak of an economy) fixated on home "ownership" and mortgage debt at any cost.
One little-discussed aspect of all this means the misfortunes of Mr and Mrs Prudence may not end where Mr Kovach left them. When Mr Prudence lost his job and the couple moved to a lower-rent property, their new buy-to-let landlord, Mr Hazard, engaged in extensive vetting of his prospective tenants and their ability to pay. However, the Prudences have no corresponding right* to check on the landlord's credit situation, and should Mr Hazard's bank foreclose, they will have no defence when the bailiffs turn up at their door...
Mr Matthew Hyland, London.
* That's not strictly true, but such a request is not going to endear you to a prospective landlord.
Tuesday, 9 December 2008
Reader's letter of the day
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4 comments:
The other difference is that should you become unemployed, the state will pick up rent but not mortgage payments; even if your mortgage is much smaller than rent would be. In Gordo's new scheme, interest gets added to capital.
Possibly so. But as a Land Value Taxer, I don't think there should be any subsidies for land or property ownership - neither MIRAS, nor housing benefit nor interest-free holidays, nor undue protection from repossession, nor agricultural subsidies (continued page 94).
I'm not a lawyer - but don't tenants have the same degree of security of possession irrespective of whether the property changes hands? Hence why sitting tenants make houses sell for less...?
JB, in general a tenant's title can be no better than his landlord's.
If bank reposseses house from landlord, he has no title whatsoever, ergo neither does the tenant. If landlord sells to another landlord he is selling his own title, which is still subject to the tenancy.
It also makes a difference whether the tenancy is registered at HMLR (which only applies to leasehold flats in practice), most shorthold tenants don't have this protection.
(This is all vastly simplified of course, maybe The Fat Bigot can opine on it.)
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