h a l f b a k e r yWarm and Fussy
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The reason home prices in the uk are spiraling is the large number of properties being bought to be rented out.
The whole issue can be solved simply:
> Each person can only possess 1 residential property which can be rented out. That person must have previously lived in that property for 12 months
before being able to rent it out. (This allows people who relocate due to work but don't want to sell their house to rent it out.)
> Profit making companies can not own residential properties, except for rental to staff at 33% below market rental prices.
> Not profit making companies/co-operatives can own as many residential properties as they like.
> Knocking several proerties into one and renting it as sub-units is not permitted.
OK, lets hear the downside to this idea.... anyone?
Companies/Private landlords will have arrpoximatly 3 years to comply with the new regulations allowing them time to sell their properties.
The reduction in the value of properties as more come onto the market would encourage people to sell sooner rather than later. Banks and landlords might lose out, mainly if they only recently bought the property, but it serves them right for jumping on the bandwagon in the first place, and they knew the risks involved when they got into the rental market.
Near the end of the 3 years as prices bottom out (they would rise again at a sustainable rate after that) co-operative rental groups would be able to buy up the cheap houses and rent them at sensible rates.
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Annotation:
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This would remove a very safe investment opportunity for a fairly large number of people. And it would leave me homeless and potless. |
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Houses arn't supposed to be an investment opertunity that's the reason the markets in such a mess in the first place. Rich people "investing" is now preventing young people from buying somewhere to live. the profits on their "investments" is simlpy money taken from people who deperatly need a house. That's not "investing" that's hoarding and profitteering. |
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And why would you be homeless? |
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It's not inconceivable that a person might acquire 50 homes over a lifetime (more, if a home can be bought in the name of a child). Do you expect those 50 homes to ever go back on the market? What's changed? What happens when a home owner dies? Can his/her children inherit? What if they never lived on the property? What constitutes living on the property? Who's responsible for (dis)proving a property is inhabited as claimed? Who pays for that service? |
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Better to switch to a system as in Hong Kong where home ownership doesn't exist, per se, but property rights are purchased for a 99-year span. |
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In other words, you wish to guarantee a shortage of rental properties, or am I missing something? |
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Who's to say that houses are or aren't meant to be an investment opportunity? They're just buildings and people can attach to them whatever values they wish. Yes, house prices are very high at the moment (esp in the South East and Edinburgh) but the arse will fall out of the market eventually and then you'll be able to pick up a beautifully converted Victorian townhouse for just six pound fifty. Swings and roundabouts. |
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Anyway, what's to stop an individual setting up a company which proceeds to buy as many houses as it can muster but charge only enough to pay the mortages (and any repairs) until such a time as the mortgages are paid off? This is perfectly acceptable under your system even though it still limits the amount of housing available for purchase. |
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I'd be homeless because my exceedingly generous landlord would be forced to sell the flat where I live and I won't be able to rent a habitable property without (a) driving myself deeper into debt or (b) moving somewhere cheap, like Sunderland, f'rinstance. |
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[Pheonix] - You can't acquire 50 homes you can only own 2 at once... one to live in one to rent. And exactly how many kids do you plan to have? |
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[Supercat] you wouldn't need to rent you would be able to afford to buy!!! |
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[Calum] House prices will only go down if the economy collapses and you get mass unemployment and homelessness. Anyone could set up a company that buys houses and charges the mortgage costs, bvut once the houses are paid off they would still be "not-for-profit" organisations...! Thus rents would be VERY low!!! You wont be homeless because you would be able to rent/buy cheaper""" |
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[CasaLoco] // You wouldn't need to rent you would be able to afford to buy!!! // |
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Why? Prices of housing (like almost everything else) are based on supply and demand. Since the demand for housing in an area is determined more by the number of people wanting to live there than by whether they pay a landlord or a lendor, the only way housing costs would go down would be if your plan to restrict rentals in an area forced people to go somewhere cheaper. |
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Besides, even if housing costs did drop slightly so that some people could afford to buy, there is no way everyone can afford to buy their own home. What would you do for the many people who cannot? |
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Supercat says that house prices "like everything else" are based on supply and demand. This idea proposes a cap on demand at each price point and therefore shifts the entire demand curve down --- and therefore will definately shift the equilibrium price down. |
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One point a disagree on --- is the right to split your residence into flats and rent them out... I see no reason not to allow this. |
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I would set the limit at two residences (summer and winter, town and country, work and holiday, or whatever you prefer)... |
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Clearly this policy will encourage overseas (property)investment ... and I see no problem with this. |
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// Not profit making companies/co-operatives can own as many residential properties as they like. // |
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This feature of the proposal bothers me - not in principle, but because of the difficulty of drafting an effective definition of this kind of organization. Most existing housing associations are supposedly non-profit-making, but all that means is that they're run by people who also own other businesses that sell goods and services to the housing associations. The profits are made by these other businesses. |
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I agree --- to be honest there is already a supply of government funded housing so this part of the proposal should/could be removed. |
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It would be cleaner to simply address the over investment in the private residential housing market. This leaves the existing public housing and private commercial property markets unregulated... |
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Currently governments are trying to discourage investment in the residential housing market by raising interest rates. And currently the banks are absorbing the base lending rate increases. The problem with this approach is that it affects all borrows including private individuals... |
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A unified approach might be to further regulate the banking industry allowing only two residential mortgages per borrower... |
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