back to article IT mercenaries and buy-to-let landlords are my HEROES - here's why

High rates of home ownership increase the unemployment rate, says a new study. This doesn't, at first, sound very sensible; we'd probably think that anyone with a house is working so damned hard to pay the mortgage that they'd have no time to be unemployed. However, it is actually true that there is a correlation between the …

COMMENTS

This topic is closed for new posts.

Page:

    1. Tim Worstal

      Re: Loss of long term renting

      There is a problem with there not being an acceptable long term rental contract. But the problem before assured tenancies (mid 80s they came in) was that there were no valid short term contracts. As soon as someone got a tenancy they were almost impossible to shift out. Supply of private rentals did rise very strongly when the shorter, 6 month tenancies became available. It meant that if you did make a mistake with the tenant then you'd not have made a 5 year mistake but a 6 month one.

      I rented a place in Germany last year. I wanted it for 6 months. There was loads of very decent property to rent at very decent prices. But only one flat in the whole town that I could have for only 6 months.

    2. J.G.Harston Silver badge

      Re: Loss of long term renting

      Six months isn't the maximum of a tenancy, they are the minimum. There's nothing to stop you negotiating a longer tenancy.

  1. Darren Barratt
    Happy

    Make the letting agents honest

    I've thought for a while, that instead of paying a deposit into the letting agents hands, there should be a compulsory insurance scheme for tenants that the agent could approach for compensation in the event of damages or default.

    This would keep the thieving few agencies from making bogus claims against tenants deposit and would also work to punish genuine dodgy tenants (just try getting the insurance after you've had a couple of claims against you)

    1. Anonymous Coward
      Big Brother

      Re: Make the letting agents honest

      https://www.gov.uk/tenancy-deposit-protection/overview

    2. Anonymous Coward
      Anonymous Coward

      Re: Make the letting agents honest

      Very reasonable but I feel bound to say that defaulting is always a deliberate act to defraud - besides obvious circumstances such as redundancy/bankruptcy/theft I know one case where the tenant had to move in the middle of the night for the safety of them (and their children).

      It wouldn't hurt for there to be something in the other direction so that tenants could get access to emergency repairs when the agent or landlord won't pull their finger out.

  2. Anonymous Coward
    Anonymous Coward

    Or

    If you want a more mobile population we could build a lot more properties to buy. We scrap pretty much all tax for someone buying to own 1 property and ramp up the tax for every house you buy. This way the cost falls greatly for first time buyers and the majority with a single home while the difference is made up of those owning more and more homes.

    And as it would be a lot cheaper for those with a single home to move they could follow the work!

  3. Anonymous Coward
    Anonymous Coward

    French Solution:

    Tax breaks for people who buy newbuilds and commit to a minimum 9 years of rental.

    Works quite well.

    So ling as you don't get a belligerent non-payer as they are a bastard to get evicted.

    (This case is mostly covered by rental assurance.)

  4. Anonymous Coward
    Anonymous Coward

    Social and Anti-Social Housing

    The reason it takes so long to transfer across council housing is the lack thereof, which leads to long waiting lists. Since the shortage was caused by the massive selling off of council stock under Thatcher and her clones, this is not a case of social housing being even worse than private ownership but of private ownership being even worse that it appears. Indeed, the bulk of economic problems we have today are due to the home-ownership fetish of Thatcherite politicians, including Blair and Brown.

    All it's given us are over-priced crap houses provided by industrial-scale cowboy builders like Barratts and their ilk. And, of course, something like 800,000 empty homes in the middle of a "housing shortage".

  5. Anonymous Coward
    Anonymous Coward

    alternative (crazy?) solution

    Bit radical, but perhaps one way to alleviate this is for EVERYONE to rent, and no-one is allowed to privately own property? You rent your house from an approved housing association (note not the government!) whose job is to maintain properties and build/demolish them as local demand requires.

    That way freedom of labour movement is much simpler, as all kinds of properties will be available to rent, not just beige studio flats and damp terraces. There would be no restriction on rent charges - it can be a free market based on supply and demand, with the possible exception of regulation demanding housebuilding where demand becomes excessive due to insufficient numbers of properties.

    You would require the housing associations to be run as social, non-profit enterprises, or, if you're feeling really radical, as consumer co-ops so the tenants would have a share in the profits.

    Having said all this, excessive mobility in the population reduces social capital and community cohesion, which tends to lead to an increase in crime, anti-social behaviour, mental illness, neglect of public spaces, vandalism etc etc. So maybe we should all own our houses, like the government wants (but will never achieve)?

    Tricky one.

  6. FFS
    Thumb Up

    Landlord Flavours

    There are different types of landlord - many, maybe not most, are buy-to-let, running 1-4 properties, using an agent, looking for a return on investment, chasing a narrow margin above the mortgage. They are seeking longer term tenants, and a stable and consistent income. They may or may not be evil.

    Accordingly (punitive) contractual fees and terms ape the mortgage sector - they don't want people moving around - they are not going to help this situation, in fact I would posit they are a contributory factor.

    There are other landlords who offer short term lets (under 6 months), typically for cash, deposit optional, often for migratory workers (EU rather UK would be typical). This is a high risk type of letting for both parties, quality varies, for both parties.

    Unfortunately the law is currently geared against this - you could let a room for 3 months, and then if that person doesn't leave and doesn't pay rent, it could then take a further 6 months to legally evict them. (Hence, in part, the drive towards high non-refundable fees, high deposits, and the dearth of short term lets - and it is only short term lets that would facilitate the worker mobility that is being described in the article).

    What would help would be a new type of property tenancy under law with balanced protection for landlord and for tenant, but would also fast track eviction based on say 50% of the tenancy term (rather than 200%). Where the landlord could be assured of repossession within 6-8 weeks after the end of a 3 month tenancy where the tenant then doesn't leave.

    In reality this type of tenancy does exist now, but it's fairly brutal and unregulated and at the lowest end does involve garden sheds, bunk beds and baseball bats.

    In fairness I would say that the ability to evict people faster is not the solution being proposed; evictions are rare; it's about creating landlord (and tenant) confidence in the market for super short term lets (SSTLs)

    SSTLs being the point between B&Bs and assured shorthold tenancies. Again, being aware for these do exist for B2B letting but pricing can be £200 per day - not relevant here.

    Toodles.

  7. small and stupid

    So basically, theres this bunch of workers out there, who would uproot their familes and move for a job if they

    were renting, but because theyve got a mortgage, theyll instead stay where they are and be unemployed.

  8. Robert Carnegie Silver badge

    The problem with council housing,

    is, obviously, that right-wing national governments have spent decades eliminating council housing. This makes it hard to get into one of the remaining houses.

    Also, it's been commonly understood for a while that urban mass home ownership doesn't really work, and isn't practised in other countries.

    This does unfortunately leave most people paying rent to the lucky sperm club who own the property, but with sufficient competition - or with subsidised social housing - gouging doesn't particularly happen.

    Having said all that... even with flexible provision, moving house is a colossal hassle. People do it if they have to, but it's best avoided otherwise.

    1. RonWheeler
      WTF?

      Re: The problem with council housing,

      You not actually read the papers at all and see the massive splurges of reserved-for-social-housing bits in the new estates popping up all over the country?

      Not that they're any good for contractors anyway. They go almost invariably to tenancy-for-life people who get onto the system during their apprenticeship then still reaping the benefit 20 years later.

  9. RonWheeler
    Facepalm

    Agents suck - rent it out yourself

    I'm a private landlord so have a bit of experience. The whole buy tho let thing caused a lot of bad lazy (cough, yuppie) landlords who get fleeced by estate agencies who get high percentages for providing a rubbish service. Neighbour landlords who use agents have been a pain - the agents phone us direct and try to force commission works in communal areas and so on. Their markup of 'respectable' high street agents is utterly cowboy ridiculous. These charges of course go on the rent, which I where I going direct avoid viewing fees and have lower rents, plus get to vet the tenants myself on my gut feeling about them rather than references. Of course it can be hard work - being called up at 3 am because a stereotypically ditzy female tenant doesn't know how to change a flourescent tube can be ... irksome.

    1. Anonymous Coward
      Anonymous Coward

      Re: Agents suck - rent it out yourself

      Fine in theory, but I'm in whole different country from my flat and remote direct management isn't practical. Yes the 15% for the agent is irksome, but there's not a lot of choice in my situation. If I lived within an hour's drive of the place, then yes, I'd dispense with an agent in a heartbeat.

  10. Anonymous Coward
    Facepalm

    bunch of 'tards

    Blanchflower and his imbecile friends of the MPC still haven't figured out that the simple relationship between supply and demand applies not only to the houses, but to the money that is exchanged for them.

    House prices have not doubled or tripled because there are twice as many people in the country or because there is a 'shortage' of property. They have doubled or trebled because low interest rates enable people to borrow 2 or 3 times as much money.

    Much more money chasing same number of houses = massive price rises

    As for the moribund economy, and lack of investment in companies that generate jobs - Blanchflower and his chums still haven't figured out why low interested rates and QE to prop up a housing bubble is not stimulating the economy, it is killing it. Because not only is it keeping Britain uncompetitive in terms of living costs, it is underwriting property as an investment class that cannot lose (because the government will intervene with more QE if it looks like it will). Why risk money to invest in a company that might expand and create jobs when you risk losing all your cash for a meagre return, when you can get 5% from a BTL and know that the government will print as much money as necessary to ensure the price of your asset continues to rise.

    The MPC are idiots, and the politicians are fools for letting them look after their banker chums to everyone else's detriment. So please stick the MPC up in front of the BTLers against the wall when the revolution comes.

  11. Andyb@B5

    IT workers + relocations issues == Tele-working? (at least in roles where it is appropriate)

    Perhaps its time for the government to actively promote teleworking offering tax breaks to corporations who do more than pay lip service to the idea.

    1. TopOnePercent
      Thumb Down

      The unfortunate and unintended side effect of course being that the telecommuter doing 'your' job won't actual be you. It'll be someone in India working for half as much.

  12. Anonymous Coward
    Anonymous Coward

    Way to build a stable society!

    Lets follow that advice, we will all become travellers, and the rich will be the only home/land owners (gouging our eyes out in exorbitant rents).

    W O W!

  13. Daz555

    I fell into being a buy-to-let landlord a few years ago because I needed to move house (baby on the way) but could not sell the one I lived in - no-one would buy it.

    So it seems I'm now to be the wall against which all others are shot, come the revolution. Now, does this mean I end up being shot or not? Answers on a post card.

    Since being a landlord however I'm astonished at the demand for houses - you stick it on Gumtree for 5 mins and 10 people want to come round and look straight away. Not quite right that.

    1. J.G.Harston Silver badge

      "I fell into being a buy-to-let landlord a few years ago because I needed to move house (baby on the way) but could not sell the one I lived in - no-one would buy it."

      So, you weren't/aren't a buy-*to-let* landlord. You bought to occupy. You let because you can't sell.

  14. Matt Bryant Silver badge
    Stop

    Parlez vous fumier de bovin mâle?

    Slight problem with the farcial idea that house ownership causes high unemployment - the Fwench economy is worse off than ours and they have a tiny minority of home owners, renting being more common in Fwench cities than here in the UK. And, whilst the idea could be argued as a problem for contractors that shift job regularly, big news - the majority of workers (even inside the IT industry ) do not contract.

    I poured money down the rain as rent for years and all it did as mean that when I took out a mortgage the house prices had gone up compared to when I started renting. My advice is get on the housing ladder as early as you can afford it (even before you can afford it) becasue it is a lot cheaper in the long run.

  15. Kevin Johnston

    Alternatives

    I offer the two following points for consideration (or shooting down, what the hell..):-

    The house price bubbles began not long after the limits on salary multiples for lending were relaxed. Strangely enough when you could only borrow 2x combined income the house prices were fairly stable but once they went to 4x or even 5x then all that happened was you bought the same property you would have just at a much higher price. Who benefited...oh yeah, the banks. So ownership is bad as it encourages house price inflation-.

    With home ownership comes materialism, all the time rental is more common that ownership, people do not accumulate much clutter as it is a pig to keep moving it. Once they own a house though the rules change and more money get spent on 'stuff' to fill the house with so ownership is a good thing. isn't itI

    1. Ken Hagan Gold badge

      Re: Alternatives

      I'll accept your first point but leave your second on the table.

  16. electricshaman

    As a roving IT contractor AND BTL Landlord, I find this interesting!

    I've always rented. Why? a) Because Housing Benefit gives accommodation security in case I'm out of work, and b) so I can follow the work if I need to and c) BTL landlords have pushed up house prices so high that I could never afford a house, at least not in this part of the UK.

    I never used to worry about a pension, I never thought I'd live that long. But now I'm 50, the retirement age is going up, and the outlook for a state pension in 30 years time looks pretty bleak, I've taken to saving my money and looking for somewhere to invest it. Stocks & Shares? In the current global economic environment, not on your nelly. Building society account? Only see capital diminishing in real value. Gold? Already at an all time high, probably a bad time to buy. Property? Well here's the joke:

    I can't get a mortgage for a house to live in myself, but I *can* get a mortgage for a house to let to other people, so I did. That way, I can remain mobile by continuing to rent, while providing accommodation to:

    2 people who were homeless immediately prior to moving in, and a series of people needing a place to stay while they sorted out other personal circumstances like marital breakdown. Not *all* BTL landlords rent to people who have such a level of need, but most of the ones I've met *do*.

    Put me up against the wall if you must, but you'd have on your conscience the fact of making my 5 tenants homeless.

    PS After 10 years of working with various 'idealists' to set up co-operative housing, I am completely disillusioned by the fact that 'idealists' who rail against landlords quickly lose their ideals when they realise the potential profit to be made from letting their units in co-operative housing.

  17. David Evans

    And the country with the lowest rates of home ownership in Europe is...

    ...Germany. Coincidence? I think not.

    Anyway, the shackles caused by "getting on the ladder" have always seemed fairly obvious to me (at a personal and a macro level), even though I ended up doing it myself, I was lucky enough to buy somewhere in London and keep that while renting myself elsewhere. Being a landlord AND a tenant certainly lets me see both sides of the coin, and while I don't think I'd stretch to the word "hero", the rental landlord does fulfil an essential service, and through a combination of renter-friendly legislation and expediency (its better to keep a regular tenant than swap and change) I think there are far fewer dodgy landlords around than there used to be.

    Of course if working from home was a genuinely viable proposition for most people rather than a minority pursuit not really trusted by managers (and in Ireland where I live currently its viewed with much more suspicion than the UK), then home ownership would cease to be an unemployment issue. It'll never happen though.

    1. Nifty Silver badge

      Re: And the country with the lowest rates of home ownership in Europe is...

      Yeah but rent is 25% lower in Germany

    2. Matt Bryant Silver badge
      FAIL

      Re: And the country with the lowest rates of home ownership in Europe is...

      "...Germany. Coincidence?....." Yes, a coincidence. Their reluctance to shaft themselves with rediculous wage demands, unlike the PIIGS (or our own incredibly stupid unions in the past in the UK), was a much bigger factor in their current level of economic strength, along with their simpy being the largest individual economy in Europe. Of course, now their socialist politicians have shafted them by tying their economy to the rest of Europe's, meaning they have to pay out for the PIIGS, they may not have such a rosy future.

  18. This post has been deleted by its author

  19. Nifty Silver badge
    FAIL

    Home ownership = immobility = unemployment, wait a moment,,,,

    No, there is a direct correlation between the cost of Stamp Duty and unemployment - with the lagging indicator of course.

    It is Stamp Duty (so £10 k for the most modest of SE England homes (seen by all as a total and unproductive waste of money) that really puts people off even thinking about moving to chase work

  20. teebie

    "Leave the detailed economics to the economists for a moment"

    Why? They haven't got a clue what they are talking about.

  21. wiggers
    Coat

    On yer bike!

    This will solve a lot of commuting problems for the unemployed...

    http://boingboing.net/2013/06/20/flying-bicycle.html

  22. dav3car

    The Swiss tax home ownership in exactly the way you describe Schedule A. Home ownership is much less there - and so is unemployment.

    Ipso Fatso

Page:

This topic is closed for new posts.