Richard Jones, policy adviser at the
Residential Landlords Association, said: “Unless they make funding available,
landlords will be forced to pass these costs on to tenants in the form of
higher rents. It could also make being a buy-to-let landlord prohibitive. They
could struggle to find such a large amount of money upfront.
“Landlords have been harshly treated. This
is an extra stealth tax on top of all the other measures that threaten the
finances of the sector.”
The
concept of the ‘market clearing price’ hasn’t penetrated to the rent seeking
sector then.
6 comments:
LOL.
These people conveniently forget that for most of the 20th century, landlords were deliberately driven out of the market (higher taxes, rent controls, no BTL lending, availability of low cost council housing etc) as a result of which, the number of households renting privately fell from 90% to 10%.
Nobody missed the landlords, and we Brits used to pride ourselves of the flip side - that we had the highest owner-occupation levels in Europe (over 70% until Home-Owner-Ism came back with a vengeance under Blair-Bornw).
If landlords could pass on their costs to tenants, it implies that tenants are paying less than their landlords could potentially ask them.
From which it follows that landlords are, out of the kindness of their hearts, generously accepting lower rents than they could obtain for their properties.
Given that in the 1970s there wasn't that much difference between Britain and West Germany, and given that both countries had conservative governments in the 1980s (under Margaret Thatcher and Helmut Kohl respectively), why did Home-Owner-Ism take off in the former but not in the latter?
@GC Good question.The ratio of house prices to earnings is, according to my notes, Germany 11.24; UK 81. A key event was, in the early 60's, that the Conservatives were on the way out because they couldn't replace Macmillan and had too many sex scandals, so abolished the Schedule A tax on Home ownership in 1963 as a straight bribe to the growing middle class while retaining the tax subsidy on mortgage interest . There was no attempt then to dress it up as being in the national interest : however Schedule A was draconian. Unbelievably now, house price increases were taxed straight out of income, even if the price rise came from extensions and improvements. The rest is history straight downhill towards the high house price/low wages/ state violence to titillate the proles, of the autistic Thatcher and her even thicker successors which we now bickeringly endure, forced to do so by the unspeakables who vote for anything right-wing even Brexit, having been given freehold of State built houses, in the first instance.Our wage-based economy has disintegrated.
I should imagine that the Germans have done better by being less degenerate politically, having learnt a lesson.
Speaking of Germany, my understanding is that German homes have very high energy efficiency as would be expected. Yet their rents are a lot lower than in the UK. Every country in the world except Monaco has lower rents actually. So how do the RLA explain that? Surely if rents are set by costs, you should be able to see a marked difference in UK construction, insurance, etc costs between us and everyone else.
I should imagine that the Germans have done better by being less degenerate politically, having learnt a lesson.
Could the traditional highly-fragmented state of land ownership in much of Germany (especially the west and south) be significant, plus the fact that many of the biggest and most influential landowners (the Junkers) were dispossessed as a result of defeat in World War II?
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