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Buy to Rent

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  • Buy to Rent

    Will the housing bubble burst?

    http://news.bbc.co.uk/1/hi/talking_point/3807801.stm

    The governor of the Bank of England has warned people should buy with caution as there's a greater chance now than ever before of house prices falling.

    ...

    Stop buy to let, this will solve the housing problems in our area. In Tunbridge Wells 80% of new builds are brought of plan by buy to let investors. Simple and easy solution!!
    Nigel Peters, Gatwick

    --------------------------------

    Well, one could certainly tax second, third, and fourth homes as luxuries, right? And to be fair, housing is a necessity! People really are not legally free to set up camp in public parks - at least, they cannot do so very commonly in the states.

    The buy to lease scheme overwhelmingly favors those of extravagant wealth - and I know we have this problem in my own patch of northern California. Even while jobs are being lost left and right, and even while the cost of rent has gone down considerably, property values have risen or at least stayed flat - but not declined. What drives the price? One could look to a growing population as a cause (but people have supposedly been leaving California in droves), so I think it has a lot to do with investment/speculation also. So old money drives new money to the point of bankruptcy.

    I'd take it one step further, and not allow the purchase of homes in any but a person's country of primary residence. Of course, each country has to legislate that for themselves. IIRC, Mexico allows foreigners to rent but not to own.

  • #2
    A lot of people at work are part time landlords, and what's driving them really is indeed speculation - moved from stocks to property. And like any speculative bubble everyone believes there is a greater fool who they can sell onto before it collapses.

    My expectation is that a lot of people are going to get burned - there have been 3 flats for rent where I live that have been To Let for almost 6 months now, wheras a couple of years back anything for rent or sale lasted 4 weeks at the most. This is probably due to the vastly inflated rents they're asking for.

    When it gets to a point where people on good salaries cannot even enter the market it has got to collapse (my salary is a long way above average - and I'd be hard-pressed to get a mortgage on my own home as a first-time buyer). Another factor driving rents downwards might be that people who are renting are having to go for cheaper places in order to save larger amounts for deposits to buy - it's certainly a problem for friends of ours in that position.

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    • #3
      Jules wrote:
      my salary is a long way above average - and I'd be hard-pressed to get a mortgage on my own home as a first-time buyer
      Yep - average salary round here is آ£15-20k (a skilled tradesman, say a carpenter, is on less than آ£15k in my organisation). A one-bedroomed flat with no parking space sold for آ£80k last month just down the road from me. The vendor had expected آ£55k or so.

      If said carpenter wanted to buy said flat, he would have to borrow at least 5 times his salary. Imagine if he actually had the temerity to have a family? When I worked in the mortgage game ( :oops: ), the maximum responsible lenders would do was 3 times salary. Any more, and people will be over-stretched. It's not just the buy-to-lets, Jules, anyone buying a house at the minute is in danger. I have given up looking for a house - with four children and nothing to sell, I would have to pay a quarter of a million to get anything like what I am currently renting.

      If anybody has a piece of land in south-west Scotland upon which I can build, please let me know!

      Folks - Thatcher's property-owning democracy has just about run out of any steam it had left.
      \"Killing me won\'t bring back your apples!\"

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      • #4
        It's almost like Monopoly money :

        http://inventors.about.com/library/weekly/aa121997.htm


        http://www.hasbro.com/monopoly/pl/pa...dn/default.cfm

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        • #5
          Y'know Jules, I actually think that's a very astute observation. You refer, I presume, to the "Landlord's Game" part of "Monopoly" history - that the game was designed to show how land speculation can work to destroy the wealth of a community if too few people get the upper hand. The game does teach that lesson rather well.

          I don't know if that history at "about.com" is true, but it wouldn't surprise me a bit. What is disgusting is the way a clever idea immediately descended from the hands of the true inventors and into the hands of those with the forsight to try to claim legal title to the concept of the game.

          BTW, I am a huge fan of the game Monopoly and I even own the book referred to in the story: "The Monopoly Book, Strategy and Tactics" by Maxine Brady! As it turns out, I am an unusually good player and I tend to ruthlessly destroy my opponents at the game. I have the 50th anniversary edition of the game that comes in a tin box and has a golden train player token - I love that tiny little train. My second favorite token is the wheelbarrow - somewhere to carry all of that toy money...

          I can contribute this (which I think is quite funny):
          http://www.dribbleglass.com/monopoly/

          I have this add-on also:
          http://members.rogers.com/geoff.gibs...ckexchange.htm

          As an aside, and not that you would necessarily care, the Lego brand of plastic building blocks is claimed to have been invented by Ole Kirk Christiansen, the founder of Lego in 1934 ( http://inventors.about.com/library/inventors/bllego.htm ). I have heard that an English man invented the building block system instead, and that the family of the inventor was only recently paid off to remain quiet about it (for a mere pittance too).

          Story here (from crappy lego competitor via the Internet Archive Wayback Machine):
          http://web.archive.org/web/200104141.../new/page.html

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          • #6
            Originally posted by krunky

            BTW, I am a huge fan of the game Monopoly and I even own the book referred to in the story: "The Monopoly Book, Strategy and Tactics" by Maxine Brady! As it turns out, I am an unusually good player and I tend to ruthlessly destroy my opponents at the game. l
            Hopefully people see the irony in this :P

            From one capitalist critic to another :D

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            • #7
              "As a fish through water" :?:
              \"Killing me won\'t bring back your apples!\"

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