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Gideon Gono

London Landlords "making Billons"

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http://www.londonecho.com/20090612470/land...ing-crisis.html

Private landlords are taking advantage of London's housing shortage to charge taxpayers of billions of pounds for sub-standard homes, an MP has claimed.

Councils with long housing waiting lists are forced to place tenants in private accommodation - and to pay "astronomical" rents, said MP Jeremy Corbyn (Lab Islington North).

But he said he was "shocked and appalled" by the low quality of the homes offered by some landlords.

The MP called for rent controls, to set a legal maximum for the amount landlords are allowed to charge.

He was speaking in the House of Commons as MPs from all parties warned that London faced a housing crisis.

Mr Corbyn said: "In my constituency, as in most in London, the fastest growing sector is the private rented sector.

"My local authority, like many others, now routinely nominates people to the private rented sector because there are no council or housing association places for those in desperate housing need.

"The rent deposit is paid by the local authority, and housing benefit pays for the rent; and the rent levels are astronomical.

"I could give many examples of flats in the same council block where, for example, one is council-owned and is paid for by housing benefit of £100 a week and the other has been bought under the right to buy and then rented out on the private market at £300 a week, which is also paid for by housing benefit.

"The amount of public money we are pouring into the pockets of private landlords is ludicrous; the total is several billions per year in London."

The total housing benefit bill in London is £4 billion, he said.

"In the short term, there is not a lot we can do about that, as the private rented sector is providing housing for people, but rent controls in the private sector would prevent profiteering.

"Above all, we should provide far more places built to a decent standard, because I am shocked and appalled by the conditions of the private rented accommodation in which many people are placed at present."

Sarah Teather, the MP for Brent East and Liberal Democrat Local Government spokesperson, said one in ten households in London was currently on a waiting list.

She said: "Housing is a powder-keg issue. It ignites rows about race and immigration, and it provokes people to lose faith in the system.

"It is the very issue that fascist parties rely on to breed resentment and hate."

She called on the Government to invest more in building housing for rent.

Local Government Minister Ian Austin said more new homes were built in 2007-8 than at any time in the past 30 years.

The Government had spent £29 billion since 1997 to bring more than one million social rented homes up to scratch, he added.

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is your point that it's all down to "Thanks to bears on HPC renting ;o)" ?

edited to add :

making "Billions" from 5000 or so registered HPC users, in London alone? Really?

Have you thought this one through?

Or are you just up at 2 o clock in the morning and feeling so desperately sad and lonely that you though you'd try to wind up some people that you don't know on an internet forum in some sad and woefully misguided attempt at interaction with almost any other human being?

Edited by scuuzeme

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By borrowing at 4.5%, and renting at 3% yield, they are "making billions"

dumb.jpg

Only a Uk Landlord would understand that sort of math

:lol::lol::lol:

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By borrowing at 4.5%, and renting at 3% yield, they are "making billions"

dumb.jpg

Only a Uk Landlord would understand that sort of math

lol-smiley-bounce-ag1.gif

Edited by Eiji

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I think he means to suggest that it is Dumb to rent.

The figures illustrate the reverse, and that's BEFORE factoring in future capital losses.

He is just demonstrating his own shaky thinking. It's embarrassing, and he doesn't realise it

== ==

Our Gono is a very easy target.

He just doesnt get it.

Im trying to work out what his name means:

Gon - no? Gonads? No!

Someone who hasnt the balls to STR, i suppose?

Read the article - no council housing availiable. All this adds up to demand to the private sector. Demand will push rents up.

You don't know what my name means? Are you that financially illiterate? As I've said before bubby if you were so clever you -

a) Wouldn't be on here ramping your signature

B) Would of sold those 8 rentals in HK in August last year

c) Wouldn't post chart after chart or rubbish on here - I dont see any charts from bloomberg, what sort of a big shot hero investor doesnt have that?

If you are such a hero investor as you claim to be why are you wasting your time on here 30 mins before the Hang Seng opens?

Easy targets? Yeah, Im talking to one.

P.S Is that "7 figure portfolio" HK dollars or US?

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http://www.londonecho.com/20090612470/land...ing-crisis.html

MP Jeremy Corbyn (Lab Islington North) [...] said he was "shocked and appalled" by the low quality of the homes offered by some landlords.

The MP called for rent controls, to set a legal maximum for the amount landlords are allowed to charge.

The effect of rent controls is to reduce the quality of accomodation as landlords have no incentive to make improvements and reduce supply as landlords leave the market for better returns elsewhere.

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I think he means to suggest that it is Dumb to rent.

The figures illustrate the reverse, and that's BEFORE factoring in future capital losses.

He is just demonstrating his own shaky thinking. It's embarrassing, and he doesn't realise it

== ==

Our Gono is a very easy target.

He just doesnt get it.

Im trying to work out what his name means:

Gon - no? Gonads? No! Someone who hasnt the balls to STR, i suppose?

Gono-rhea??

The OP here is missing the point that this article relates only to social housing, not the entire private rented sector. These are by and large that section of the community who would never ever buy because they are used to the idea that the state should cater for their every need without them ever having to work or pay their own way.

It's a catch 22 to complain about the standard of housing being let to this tenant group as most landlords with decent properties at the present time have the luxury of choosing not to accept DSS precisely because of the perception of increased likelihood that the property would not be kept in a good condition for very long and the inherent risks of either receiving Housing Benefit directly or trusting that the claimant would hand it over if they decided to receive it themselves.

Those landlords who are reliant on milking the status quo in respect of social housing for the longer term are naive and gullible to believe that the government cannot at the stroke of a pen pull the rug on them by capping rents, compulsory purchasing unsold newbuilds for social housing or building more housing in anger in large numbers. Any of these things can (and in my opinion will) happen at any time in the near future.

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Read the article - no council housing availiable. All this adds up to demand to the private sector. Demand will push rents up.

Read the article - this has happened already, it's not new demand. All that has happened is someone has noticed it and has decided to make an issue of it as an area for cutting expenditure. Cutting the expenditure would mean paying less housing benefit, the demand in terms of people may be the same, but they would have less money, so the demand in pounds would go down. I don't expect that this guy has any particular sway over public policy, but I can imagine that it's an area that government will be looking at making savings right now.

I don't think you'll find many people who would disagree that there are plenty of landlords making some very good cash at the moment, especially off the back of housing benefit. There is one major factor though that links all these landlords, none of them paid anywhere near the current open market prices for the majority of their houses.

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There is one major factor though that links all these landlords, none of them paid anywhere near the current open market prices for the majority of their houses.

Exactly, many of them will have bought after the last crash, or even before the 80s boom. But DrBubb's point still stands, if the current market value for the property means the yield is only 3% they would be stupid not to sell but I'm guessing in many cases they would rather stick to the comfortable easy option of continuing to lease out their properties as they may not feel they need the money anyway.

Just because someone is a landlord it doesn't mean they are clever or making good money, if making anything. It just means they wanted an investment with little risk.

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Read the article - no council housing availiable. All this adds up to demand to the private sector. Demand will push rents up.

You don't know what my name means? Are you that financially illiterate? As I've said before bubby if you were so clever you -

a) Wouldn't be on here ramping your signature

B) Would of sold those 8 rentals in HK in August last year

c) Wouldn't post chart after chart or rubbish on here - I dont see any charts from bloomberg, what sort of a big shot hero investor doesnt have that?

If you are such a hero investor as you claim to be why are you wasting your time on here 30 mins before the Hang Seng opens?

Easy targets? Yeah, Im talking to one.

P.S Is that "7 figure portfolio" HK dollars or US?

Yeah big shot hero investors know who Zimbabwean finance ministers are, watch Bloomberg all day (to think they are big shot hero investors) and post ludicrous articles suggesting that people that need to rent their property out as social housing at yields likely to be less than the mortgages they are paying and before maintenance/management costs etc are "making billions".

:lol:

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gumby3.jpg

The OP is a remnant of contrary ideals: debt is wealth, stupid is clever.

Even my landlord sees it. He is a nice chap, and cheerfully admits that I am doing very well out of him as I hand over the rent.

I can't take anybody seriously if they type "should of". You're not thinking!

Edited by chute

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Read the article - no council housing availiable. All this adds up to demand to the private sector. Demand will push rents up.

You don't know what my name means? Are you that financially illiterate? As I've said before bubby if you were so clever you -

a) Wouldn't be on here ramping your signature

B) Would of sold those 8 rentals in HK in August last year

c) Wouldn't post chart after chart or rubbish on here - I dont see any charts from bloomberg, what sort of a big shot hero investor doesnt have that?

If you are such a hero investor as you claim to be why are you wasting your time on here 30 mins before the Hang Seng opens?

Easy targets? Yeah, Im talking to one.

P.S Is that "7 figure portfolio" HK dollars or US?

Hi GG

As we've worked out here, you have a VI in keeping property prices high. From previous post you have a place in the UK with a small (I think £30k) loan but you work (finance industry)/live in US but intending to come back.

I don't know much more, but my guess is you're in your late 20's early 30's, single and no kids. (of course I am just guessing at this).

My question is this though. If you intend to come back to UK to live, do you expect you will want to stay in your current property forever? Or Is there a chance you might want to trade up at some point (family etc) to a bigger house? Or need to move to a more expensive part of the country for work? Or are you already at the top of the ladder?

Only I find a lot of younger mortgage holders with no children are quite short-sighted and get panicky about their house losing value, when the bigger picture is that in a few years time when they need to trade up to a bigger family house the disparity will have shrunk proportionately thus leaving them in a much greater position when the time comes to buy a bigger house.

I know I'm jst stating the obvious here, and I don't mean to patronise. Just interested to find out why you have such an interest in HPI's.

Sorry if you've told us on a previous post.

KG

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Private landlords are taking advantage of London's housing shortage to charge taxpayers of billions of pounds for sub-standard homes, an MP has claimed.

Councils with long housing waiting lists are forced to place tenants in private accommodation - and to pay "astronomical" rents, said MP Jeremy Corbyn (Lab Islington North).

I think we should resurrect this quote the next time you go on about "wealth creation for the nation".

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http://www.londonecho.com/20090612470/land...ing-crisis.html

Private landlords are taking advantage of London's housing shortage to charge taxpayers of billions of pounds for sub-standard homes, an MP has claimed.

Councils with long housing waiting lists are forced to place tenants in private accommodation - and to pay "astronomical" rents, said MP Jeremy Corbyn (Lab Islington North).

But he said he was "shocked and appalled" by the low quality of the homes offered by some landlords.

The MP called for rent controls, to set a legal maximum for the amount landlords are allowed to charge.

So what's new?

You've just described the situation as it was in 1983-85, when as a young graduate I lived and worked in London. And that's after Mrs Thatcher had reduced the amount of money poured into slum landlords' pockets.

To put some figures on it, the amount of rent ordinarily payable as housing benefit for a single person had just been capped at £130/week: any claim above that level would have to be justified. At the same time, my gross salary as a graduate working in IT and with a Maths degree from Cambridge was £130/week. Except ... £50 of that £130 went on income tax, to support (among other things) people far richer than myself, while my remaining salary after rent was within a few pence of what I'd been paid whilst on the dole between graduating and starting work.

It wasn't until I got out of London in 1985 I was able to afford a room in a house with little luxuries like regular hot water.

If Jeremy Corbyn has only just noticed, it implies he's led a privileged life.

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Have you thought this one through?

Or are you just up at 2 o clock in the morning and feeling so desperately sad and lonely that you though you'd try to wind up some people that you don't know on an internet forum in some sad and woefully misguided attempt at interaction with almost any other human being?

Didn't we have someone before who was always posting (from New York) in the middle of the night?

[Also, the one who calls himself "Flash Gordon," if you look at his real name in his information, I'm sure he posted here before under that name, only the search function on this site is so awful I cannot confirm that]

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By borrowing at 4.5%, and renting at 3% yield, they are "making billions"

dumb.jpg

Only a Uk Landlord would understand that sort of math

Actually this is not right, even in london ex-council flats can be bought for about half their cost if it had been the same size , in the same area but in a standard victorian block.. so for instance if you take a 3 bed flat costing say £900k in a victorian block in kensington... this will rent for something like £3,000 p/month..... take roughly the same size flat in a concrete ex-council block and the cost might well be £450/£500k but rental while less would be around £2500...... so yiedls on ex-council property are much higher.

Many ex-council properties have been seeing yields of north of 7% for ages up and down the country.

I wouldn't agree that landlords are making billions becasuse things are still tight and prices still falling but the maths of buying and renting out ex-council property is very different from standard property.

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I cant see it makes much difference, the cash will end up back at the bank. I'd guess most rentals have a mortgage outstanding.

Making Billions eh, does that include loss of capital on the house price??

Come on you Bulls get buying, we need your losses to make our house purchases cheaper next year!!!

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http://www.londonecho.com/20090612470/land...ing-crisis.html

Private landlords are taking advantage of London's housing shortage to charge taxpayers of billions of pounds for sub-standard homes, an MP has claimed.

Councils with long housing waiting lists are forced to place tenants in private accommodation - and to pay "astronomical" rents, said MP Jeremy Corbyn (Lab Islington North).

Okay... and?

Tell us something we don't know.

Timewaster.

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Harrowdene Gardens Teddington, used to be that you had to be quick to get anywhere here. Now landlords accepting DSS and rents for those with jobs in freefall, yeah making billions springs to mind.

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Yeah big shot hero investors know who Zimbabwean finance ministers are, watch Bloomberg all day (to think they are big shot hero investors) and post ludicrous articles suggesting that people that need to rent their property out as social housing at yields likely to be less than the mortgages they are paying and before maintenance/management costs etc are "making billions".

:lol:

nice come back man, like it. bravo mate

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These rents are being paid due to local housing allowance (housing benefit) which is a system wholly unsuited to London - we have had a quite a few threads on this. The allowances are set extremely high and don't differentiate between a Georgian Terrace and a council block, they go on the number of bedrooms/ no of people.

Sadly, certain Landlords are making incredibly high amounts of money from this, especially those that bought up council stock in the 80's and 90's - and it's funded by council tax as local councils pay this benefit. This horrendous lining of certain pockets should and could be stopped. They wouldn't be able to get such rents from non-benefits tenants so it's not as if social tenants would suddenly be homeless if rents were reduced.

There is doubtless much inertia to change the system due to certain people becoming extremely rich from it and exercising the influence that money brings.

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I think this is a good article - and a bearish one.

We on the site have written about the scandal of excessive housing benefit before.

Now it seems that someone in government is beginning to take it seriously.

Now if the dire public finances cause housing benefit to be reduced - as I suspect may happen - that would be a bear feast.

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