Thursday 7 September 2017

Fantastic* article

Spotted by Peter Smith (via FB) in What Mortgage:

Even tenants think the buy-to-let crackdown will reduce housing supply

Do they? All of them..?

One in five renters believes that the removal of mortgage interest tax relief on buy-to-let homes will reduce the supply of rented properties in their area...

Ah right, a small minority of them. Given the amount of propaganda hurled at them, that's a reassuringly low figure.

The research, commissioned by GoCompare Mortgages, also revealed that some tenants were concerned that they will face rent hikes as buy-to-let landlords pass on the higher costs, with 6% saying they had already seen a rise...

Ministers have argued that the move will level the playing field between landlords and homeowners. However, experts believe landlords will need to increase rents between 20% and 30% to cope with the extra cost of the tax hikes.


So far the experts have been proved resoundingly wrong. 6% saw a rise, but we do not know how many would have seen a rise anyway (most of them). What about the 92% who saw no rise or a fall..?

Most of the rest of the article is the Missing Homes Conundrum, a Homey belief that if a landlord sells up, the house disappears from the face of the earth and former tenants become homeless.

Affordability and access to mortgage loans were key reasons why many Brits rent. Half of the tenants surveyed live in rented accommodation because they can’t afford to buy their own home, while 11% were renting because they were currently unable to obtain a mortgage. Just 14% of those renting were doing so out of preference.

Banks love creating loans! From a risk point of view, a landlord is a better bet than an owner-occupier; if there are fewer landlords buying homes then banks will grit their teeth and lend to owner-occupiers i.e. better-earning former tenants instead.

* Using the word's original meaning of "delusional".

3 comments:

Bayard said...

"The research, commissioned by GoCompare Mortgages, also revealed that some tenants were concerned that they will face rent hikes as buy-to-let landlords pass on the higher costs,"

"Some", eh? Presumably such a trifling small percentage that they don't dare mention it.

So how do they think the landlord sets the rent? Takes his mortgage payments and other outgoings and then adds a bit on? If that is the case, why is it not markedly cheaper to rent from someone who owns their property outright and has no mortgage payments to pay?

Mark Wadsworth said...

B, that is a question which Homeys studiously ignore.

Lola said...

FWIW I made a comment which also linked to this post. They haven't posted it - of course.