This is a good idea but I have no idea how they would implement that in law
Comment on England worst place in developed world to find housing, says report
_TheNardDog_@lemmy.world 8 months ago
Okay, hear me out here. Maybe we should stop treating housing as a commodity and allowing companies and individuals to accumulate large property “portfolios”?
Because this is the fucking problem; homes are not commodities to hold in a portfolio, they’re homes for people to live in.
The UK seems to have this as a recurring problem, we are the only modern economy that has a fully privatised water supply, something which is essential for human existence. Housing is a basic right, yet we allow massive profit to take priority over that.
peter@feddit.uk 8 months ago
buzziebee@lemmy.world 8 months ago
Could be done fairly easily via the tax system. Each additional property you own increases the income tax on any rent and the capital gains tax when selling it. Bump up council tax for empty properties massively too and the market should correct itself with minimal direct intervention.
Set it up so having a second home means paying more for it, having 3 or 4 or 10 means it’s not profitable to keep it at all.
BraveSirZaphod@kbin.social 8 months ago
The core question here, which I genuinely don't know the answer to, is how much of the supply crunch is being caused by the additional properties of individual parties? Are there really that many second, third, etc. homes in the UK?
Just from some quick looking, it seems like London's residential vacancy rate is something to the effect of 3%, so I'm inclined to think that the core problem is more lack of total supply rather than poor allocation of existing supply. We've seen cities boom all over the world in the past 20 years, but new construction hasn't remotely kept up with the pace of population growth. This is the pretty inevitable result.
buzziebee@lemmy.world 8 months ago
You’re correct that it’s not solely an issue of landlords buying up property that’s causing the shortage. I was just providing a possible legislative method to cut down on the number of properties being owned by speculators and corporate landlords.
There simply isn’t enough housing being built for the population growth we’ve been seeing. That’s 100% going to lead to an increase in prices.
In cities outside of London though there isn’t always that same pressure (i.e. Liverpool still has a housing surplus), so why are housing costs rising past the point where people can afford to buy them? Supply and demand should mean that prices remain affordable for most people but they aren’t.
A large number of rental properties are rented by investors of one form or another, if we can cut down on homes as speculative assets we should see more homes being sold to homeowners and prices fall back to more manageable levels for everyday people.
There are loads of other problems such as the UK building houses instead of things like apartments, planning permission bs, NIMBYism, economic activity being focused in the south, homeowners not wanting their valuations to go down, etc etc which are all part of the puzzle. Ensuring that more homes are owned by residents rather than investors can only be a good thing though imo.
smeg@feddit.uk 8 months ago
I read an article a few years ago about how some luxury London flats were sold indirectly - you purchased a company (which did nothing) and gained all their assets (which consisted of only one flat). You didn’t own the flat, you owned a shell company which owned it; it’s the same problem as having the wealthy create companies to avoid income tax. I think massive taxation for extra property ownership is a great idea, but I have no idea how you make it work.
peter@feddit.uk 8 months ago
Okay, but how does it work when a company owns a house? If a property developer builds a load of houses, wouldn’t they be incentivised to sell the house for more to recoup the penalty to them?
buzziebee@lemmy.world 8 months ago
I think if it’s a first time build you could work something out to not punish developers for building houses which take a little time to sell, but you’d also want to avoid developers building and sitting on properties. That will probably already happen though as they’ll want to recoup construction costs asap I imagine. For portfolio property buyers they’ll be incentivised to sell which is only a good thing.
irmoz@reddthat.com 8 months ago
That is far too lenient on the landleeches
Just seize them and kick them out on their arse
frazorth@feddit.uk 8 months ago
It wouldn’t be because people owning multiple houses is not the issue. Going to have to paste my usual response from Reddit to people thinking that landlords and second houses are the problem.
commonslibrary.parliament.uk/…/cdp-2022-0001/
In total, the EHS estimates that English households owned 873,000 second homes, of which 495,000 were second homes located in the UK.
citymonitor.ai/…/england-short-4-million-homes-he…
And there are 27.8 million homes in the UK, and we are apparently short 4 million.
So we ban second homes and that releases almost 450,000 houses which is less than 2% of the housing stock and we are still short 3.5 million houses, now what do we do?
buzziebee@lemmy.world 8 months ago
Well there are 4 million rental properties in the UK so your numbers don’t quite add up. A very significant number of properties are purchased and rented as investment assets. No one is saying that ending landlord property portfolios will magically fix the issue overnight, but it certainly adds inflationary pressure on house prices and prices normal people out from being able to purchase homes. Houses should be homes first, not speculative assets.
Through taxation policy it should be possible for a family to move home and rent their old one, or rent an inherited one whilst waiting to sell, etc without much additional burden. But we shouldn’t encourage private entities pricing out normal people from homes and forcing entire generations to only be renters.
The economic damage from high house prices and lack of generational wealth is way too expensive to allow this portion of the market to continue. Simultaneously we need to be building a fuckload more homes, yes, but there being other things to change shouldn’t dismiss other helpful ideas.
Liquid_Fire@lemmy.world 8 months ago
The EHS defines these as “homes that are primarily used as holiday homes (by family, friends or let to others as a holiday let) or are occupied while working away from home.”
This clearly doesn’t include regular rental properties, so I don’t see how it shows landlords are not a problem.
irmoz@reddthat.com 8 months ago
Abolish landlording completely
peter@feddit.uk 8 months ago
I don’t think landlords as a concept are a completely bad idea
irmoz@reddthat.com 8 months ago
There is no good reason to own a home you don’t live in.
BraveSirZaphod@kbin.social 8 months ago
You're assuming that this would magically drop all property prices to be affordable by all people, which is not at all self-evident.
irmoz@reddthat.com 8 months ago
You’re assuming there would still be a “market” in this scenario ;)
florge@feddit.uk 8 months ago
Put a cap on the maximum value a house can be based on bedrooms / floorspace? It’ll never happen since those in power won’t want their million pound houses suddenly being worthless.
BraveSirZaphod@kbin.social 8 months ago
That's categorically impossible, because value in an economic sense is not determined by any one person.
You can put limits on price, but that's a very different thing, and has several downstream effects that are often negative. If you mandate that the price be below an asset's actual value, the owner is highly incentivized to either sell it in less legal ways, or simply not sell it at all and wait until regulations change or they find some other way of getting its true value. In the basic context of real estate, for instance, you might just meet with people, reject all offers, and then sell the house to a friend who agrees to "gift" you some extra money for it.
If, in a rental context, you mandate that rents remain below the cost of ownership from mortgage and maintenance, you incentivize the owner to do things like never do any maintenance (because what's the tenant going to do? Lose a rent controlled apartment?). You incentivize builders to never build anything, because rents won't be high enough to recoup costs. Some particularly bold landlords may even try to deliberately destroy their units as a way to get rid of an expensive asset (see upper Manhattan in the 70s, where many buildings "mysteriously" burned down).
Price != Cost != Value. Failing to understand this causes a lot of broken analysis.
florge@feddit.uk 8 months ago
Oh for sure, it’s far too simple to just impose a limit. And if any limits imposed are too punitive, as you say, they’ll likely do more harm than good.
Aux@lemmy.world 8 months ago
That’s not the issue though.
wildeaboutoskar@feddit.uk 8 months ago
Arguably it is. The root cause is the same - treating basic necessities as investment vehicles