Saturday, April 4, 2015

From Britain’s lunatic property market emerges another astonishing anomaly

Buy-to-let investors get mortgages till they're aged 105, while ordinary homebuyers are 'too old' in their 50s

From Monday April 6, savers over 55 will have access to all their pension cash. Many are expected to withdraw money and pour it into buy-to-let

Posted by cornishman @ 02:06 PM (4870 views)
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19 thoughts on “From Britain’s lunatic property market emerges another astonishing anomaly

  • Again, BTL investors are being treated with kid gloves, whilst home owners are being pillaged. This is awful, and takes cash from the stock market, depleting industry of capital.

    BUT, the major block for home owners is the FRAUD that allows estate agents to sell homes to investors who rent out homes via their lettings wing. Agents manipulate sales towards BTL investors who are often on the Agency’s staff-roll or family / friend connection. Those sales will be manipulated lower as Agents take a hit with lower sales commission so they can benefit from rental commissions ad-infinitum.

    Vendors get DEFRAUDED, manipulated towards selling at a lower price to BTL investors who would pay less than what home owners would pay, because owner / occupiers are in for the long haul and do not care about yield. They are willing to bid up the place that will be their home.

    I know this because out of three places we put offers on, we lost two, to BTL investors offering LESS than us!! One Agency even phoned up Nationwide to delay our valuation survey so that their preferred BTL investor got in first!!!!

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  • Agents should be BANNED from letting out ANY property they have sold within two years of selling it. Buyers should be forced to notify any conflict of interest, i.e. employment or family relation with an Agent.

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  • @1 +2
    I think that’s the most sensible thing I’ve ever heard you post on this site.

    I’m not quite sure how this can be squared with the general libertarian view of giving absolute precedence to negative rights, but I’ll pass on that for now, since I’ll always take common sense over dogma any day of the week.

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  • If pension money is going to be diverted into buy-to-let from Monday, I would have thought that house prices would already have been affected in the last few weeks by people front-running this. It takes a few weeks to sort the conveyance before any buyer needs the capital. So any pension holder over 55 doing this would already have made an offer and have the legal work well under way.

    I don’t see any great surge in asking prices. In fact I see a lot of ‘reduced’ prices on Rightmove every day.

    But if it does happen, and lots of cash is taken out of pensions to put into buy-to-let, what is going to happen to the Footsie? If the stock market crashes, will some sort of ‘rescue’ be attempted by the BoE?

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  • what is there to stop someone buying a house as a buy to let and then moving into it themselves?

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  • Mr Ed, Libertarians believe in free markets. Free markets rely on accurate information. The defrauding of sellers, i.e. Agent’s manipulating sales towards their benefit and not the vendors, marginalises the property rights of the vendor. It is done without the consent of the seller and is 180 degrees from Libertarianism.

    Libertarians believe in law and order, and the protection of property rights.

    An alternative to banning, is to force Agents to disclose any conflict of interest, i.e. the vendor must be made aware if the Agent aims to let out the property with a CONTRACT stating that if the Agent rents out the property and makes commission, that they get clawback. Say, for example, refund of the sales commission.

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  • @6
    Ah yes, that’s what you believe libertarianism is. But when a libertarian happens to be an estate agent, things can be different.

    “When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean—neither more nor less.”

    You think you’ll get Galt. Instead you get Jeffrey Skilling. 🙂

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  • To me liberty means lack of force, and that means getting rid of monopoly(which also means land monopoly) and the the the theft of our environment. This is best achieved by monopoly economic rent being shared by all and people who destroy the environment being charged for it so it is minimised.

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  • Isn’t it a bit weird to cash in your pension and go into business? I thought the idea of retiring was to stop working.

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  • Isn’t it a bit weird to cash in your pension and go into business? I thought the idea of retiring was to stop working.

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  • There should be a new designation for Residential housing, similar to Agricultural Occupancy.
    A house labelled as Residential can only be purchased by the occupier or his family.
    A separate category can be created for ‘commercial housing’ for those with enough money wishing to build rental blocks of flats, etc.
    All these streets of 2-bed terraced squashed houses should certainly be categorised as Residential.
    There are some things a society needs which should never be commercialised, simple as that.

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  • @9, Best laid plans and all that, things change rather rapidly once you hit the age of 75, so entering BTL very late in life is about as dumb a thing as anyone can do once they are much over 65. Personally having seen quite an alarming percentage of over 70s I know rapidly succoming to the various forms of dementia BTL would be the last thing crossing my mind for a stress free retirement (how much is the extra hassle really worth).

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  • Son Of Taeper says:

    Lively up guys, pensioners have spent most of the life inputting while the kids have been pressing keys on the latest computer game.
    Oap need fun also.

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  • Pete, you are a moron. If all land is to be shared, who does the distribution? This is either anarchy of a type that would lead to authoritarianism of the strongest or, centralised communism, which is always corrupt, with some people more equal than others.

    Mr Ed. Duping vendors into accepting lower bidders manipulating sales away from owner occupiers against the awareness of the vendor, is not Libertarianism, it is false advertising. It is Estate / Letting Agents abusing their position. They have a clear conflict of interest if they have an interest in lettings.

    Keep it simple, ban Estate Agents from letting out ANY property they sold within the two years prior. Require Agents to disclose any family, business or friendship association with anybody who bids on a property they are selling. Have breaches of those rules be deemed as fraud, since they clearly defraud the vendor.

    Do this, and see home ownership soar, particularly in BTL hot-spots around London near tube stops.

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  • @12
    Why should an estate agent have his business impinged upon by laws?

    You don’t have the right to force the estate agent to tell you who he has an arrangement with.

    If you don’t like the way estate agents operate, don’t do business with them.

    Find a house yourself.

    And if a vendor doesn’t like the way an estate agent operates, he can sell the house through a private arrangement and cut out the agents completely.

    Keep your socialist market-tinkering ideas to yourself.

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  • I know this because out of three places we put offers on, we lost two, to BTL investors offering LESS than us!! One Agency even phoned up Nationwide to delay our valuation survey so that their preferred BTL investor got in first!!!!

    I agree with all of that. Of course, when I do my viewings I say I am open to BTL and express interest in it.

    I don’t see any great surge in asking prices. In fact I see a lot of ‘reduced’ prices on Rightmove every day.

    I’m seeing lots of reductions in my area. One house I actually viewed – on a Saturday – was on for 395,000…on the Monday the price was reduced by 20,000.

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  • Libertas are you determineed to miconstrue what I said. Sharing land rent is not sharing land it’s just using land rent and other monopoly rents as the basis of taxation. The property and title of land remains in private hands. This will help land fall into the hands of the most productive. Why to you continue to not engage on this issue but invent nonsense straw man augments which you then attack.

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  • Estate agents and rental agents should be heavily governed , it is the most expensive purchase in your life and the least regulated

    estate agents are full of fraud and a local one near me setup another agency under a different name, moved “sold” properties to it and started marketing them again at higher prices, this would never be allowed for the sale of a bar of chocolate.

    the same agency put a house on the market then marked it on “reduced price sale” this again is illegal in a shop the item must have been at full price for at least 28 days,

    there are more regulations for food you buy

    its not about voting with your wallet and moving to another agent as agents are paid by the seller not buyer and the seller is sucked into the corruption for the promise of a quick ££££

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  • @15 He didn’t misconstrue anything. Libertarians think all taxation is theft. To be fair to him, I think he’s said as much several times.

    @1 That’s not the major block for homeowners. That’s just the one you fell afoul of. The major issues with BTL from a regulation POV are:

    i) Tax deduction on interest payments
    ii) Preferential mortgage treatment of which the example in the article is just a small part. I would argue the most egregious of these is that they can count the rental yield on a property they don’t own yet as income, whereas owner-occupiers are not allowed to account for the opportunity cost of NOT buying the house (ie having to carry on renting).

    That said, I agree that there should be a regulator for EAs. The EAs asked for one during the recession but the Tories ruled it out as soon as the current govt. was formed, presumably because there wasn’t enough money and there was a lot of anti-quango rhetoric about.

    But BTL is wrong in and of itself. It’s not about regulation. Put simply, BTL landlords create demand for rented housing purely by buying up a great deal of housing, leaving would-be FTBs to rent the houses they snapped up. They have a captive market. That’s why it’s immoral. Their very engagement in the market creates the appreciation and rent increases they seek to profit from. This is especially true at a time when we aren’t building enough houses.

    We don’t welcome speculators in the markets for other essentials, so it’s especially strange that they’re not reprimanded in the market for something so necessary as a roof over one’s head, when its price is more markedly associated with longterm real rises than say, wheat or oil, (ie more of a sure thing for speculative investors).

    The unacknowledged issue with BTL is that they don’t sell the properties on. They actually reduce liquidity in the housing market and dampen the transaction levels 5 years’ hence. If EAs weren’t so stupid they’d never collude with them as they’re killing the golden goose really.

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