7 ms·

Whilst this is no doubt innovative, everything that is abysmally wrong with property ownership in the UK stems from complicated ownership structures like that b

by _0o6v 6y ago

Whilst this is no doubt innovative, everything that is abysmally wrong with property ownership in the UK stems from complicated ownership structures like that being proposed here. Just look at the leasehold scandal (and upcoming reform), the push for commonhold, and the things that go wrong (such as the cladding scandal following Grenfell). Homes are not investment vehicles to make people wealthy - they are a fundamental human right that many people are priced out of, or subject to unscrupulous landlords and freeholders exploiting what is still essentially a feudal system.

onion2k 6y ago
Homes are not investment vehicles to make people wealthy.. A huge number of people use the equity from investing in a house as a retirement fund. They very literally are investment vehicles. You can argue that they shouldn't be, or that there should be a class of housing that isn't treated like an asset, but that would be very hard to achieve without some serious market manipulation.
- rozab 6y ago
  >or that there should be a class of housing that isn't treated like an asset No need to talk in hypotheticals, this was once the case. https://en.wikipedia.org/wiki/Public_housing_in_the_United_Kingdom https://en.wikipedia.org/wiki/Public_housing_in_the_United_K... https://en.wikipedia.org/wiki/Housing_Act_1980 https://en.wikipedia.org/wiki/Housing_Act_1980
- chriswarbo 6y ago
  > that would be very hard to achieve without some serious market manipulation. Note that the housing market's already heavily manipulated, in an effort to keep the Ponzi scheme going a bit longer (e.g. Help to Buy, etc.)
  - jphoward 6y ago
    Isn't Help to Buy only for first time buyers, so it biases against Buy to Lets?
    - nannal 6y ago
      Yes but I imagine the argument would be that it leads to a reduction in supply & increased demand meaning fewer houses available to compete over which results in a higher over all price which can be applied to all houses, inflating the price beyond a houses intrinsic value.
- _0o6v 6y ago
  There's a very large difference between an individual using a house as a home, then selling and realising any increase in value, vs. a commercial company owning a property as an investment vehicle (in the literal sense - people can invest in the company!) and then letting the property out (or selling a time-based lease to a leaseholder).
- odonnellryan 6y ago
  We should try and stop this thinking. This is going to hurt a lot of people (my parents included) who are in their 50s and 60s now when they soon try and sell their homes to retire.
mytailorisrich 6y ago
Any asset that can maintain or increase its value over time can be an investment vehicle and thus in practice is an investment vehicle. It is not a human right to own property. Having a roof over your head and owning that roof outright are not the same thing.
- ben_w 6y ago
  If the rent is disconnected from the property value, then there is a speculative bubble. If the rent goes up faster than wages, people become homeless.
  - mytailorisrich 6y ago
    It's hard to see how rent can be disconnected from the property value because if the achievable rent for a property skyrockets that will pull the property's value up. If rent goes up faster than wages, which cannot go on forever, it means an imbalance between supply and demand. The best way to address this is to rebalance supply with demand, not to be tempted to control prices or whatnot that do not resolve the root cause. It must also be accepted that the most sought-after areas will be the most expensive and probably out of the reach of many. Edit: So much for mature discussions, I see...
    - _0o6v 6y ago
      > It's hard to see how rent can be disconnected from the property value because if the achievable rent for a property skyrockets that will pull the property's value up. In a free market (the UK is about as free a market as you get in relation to property ownership and rental), this might be true. But it does depend on how regulated the market is, in terms of rent controls etc. I'm not sure this would hold for an older, or bigger, or more difficult to maintain property in an area with a high percentage of renter competition in some European countries, for example (e.g. Germany).
      - mytailorisrich 6y ago
        Rent controls do not solve any issues. They certainly don't make it easier to find a home. They only tend to restrict supply and to discourage people from moving.
denisec 6y ago
I'm not sure how innovative this is. https://www.propertypartner.co https://www.propertypartner.co has been going since 2015 doing essentially the same thing.
wolfretcrap 6y ago
>Homes are not investment vehicles to make people wealthy - they are a fundamental human right that many people are priced out of, or subject to unscrupulous landlords and freeholders exploiting what is still essentially a feudal system. I live in India I had the same mindset "home or land isn't investment" but then I thought about trying investment in property and it paid vastly more than what bank or other financial instrument can fetch me when adjusted for risks. In India, properties in good locality of the city is a storehouse of value. Here most deals are 80-20 or 70-30, which means 80% of the value you show in official record while rest 20% is paid in all cash to seller. This helps save bit of tax and avoid scrutiny by tax department as you aren't drastically showing a low value. When everyone does this, the property value to government/tax agencies always appear at 80% of its actual value (the money actually being paid) for the transfer of property rights. What happens to the cash portion? Usually the seller will use that cash to renovate their house or pay for other things in cash or use it for their everyday expenditure. High value property here don't fluctuate much in price and are considerably safe investment to hold and move money when you want. I am in the market and I am seeing the guys with money during lockdown are getting wayyy better deal now.

by _0o6v 6y ago

onion2k 6y ago

Homes are not investment vehicles to make people wealthy.. A huge number of people use the equity from investing in a house as a retirement fund. They very literally are investment vehicles. You can argue that they shouldn't be, or that there should be a class of housing that isn't treated like an asset, but that would be very hard to achieve without some serious market manipulation.

rozab 6y ago
>or that there should be a class of housing that isn't treated like an asset No need to talk in hypotheticals, this was once the case. https://en.wikipedia.org/wiki/Public_housing_in_the_United_Kingdom https://en.wikipedia.org/wiki/Public_housing_in_the_United_K... https://en.wikipedia.org/wiki/Housing_Act_1980 https://en.wikipedia.org/wiki/Housing_Act_1980
chriswarbo 6y ago
> that would be very hard to achieve without some serious market manipulation. Note that the housing market's already heavily manipulated, in an effort to keep the Ponzi scheme going a bit longer (e.g. Help to Buy, etc.)
- jphoward 6y ago
  Isn't Help to Buy only for first time buyers, so it biases against Buy to Lets?
  - nannal 6y ago
    Yes but I imagine the argument would be that it leads to a reduction in supply & increased demand meaning fewer houses available to compete over which results in a higher over all price which can be applied to all houses, inflating the price beyond a houses intrinsic value.
_0o6v 6y ago
There's a very large difference between an individual using a house as a home, then selling and realising any increase in value, vs. a commercial company owning a property as an investment vehicle (in the literal sense - people can invest in the company!) and then letting the property out (or selling a time-based lease to a leaseholder).
odonnellryan 6y ago
We should try and stop this thinking. This is going to hurt a lot of people (my parents included) who are in their 50s and 60s now when they soon try and sell their homes to retire.

mytailorisrich 6y ago

Any asset that can maintain or increase its value over time can be an investment vehicle and thus in practice is an investment vehicle. It is not a human right to own property. Having a roof over your head and owning that roof outright are not the same thing.

ben_w 6y ago
If the rent is disconnected from the property value, then there is a speculative bubble. If the rent goes up faster than wages, people become homeless.
- mytailorisrich 6y ago
  It's hard to see how rent can be disconnected from the property value because if the achievable rent for a property skyrockets that will pull the property's value up. If rent goes up faster than wages, which cannot go on forever, it means an imbalance between supply and demand. The best way to address this is to rebalance supply with demand, not to be tempted to control prices or whatnot that do not resolve the root cause. It must also be accepted that the most sought-after areas will be the most expensive and probably out of the reach of many. Edit: So much for mature discussions, I see...
  - _0o6v 6y ago
    > It's hard to see how rent can be disconnected from the property value because if the achievable rent for a property skyrockets that will pull the property's value up. In a free market (the UK is about as free a market as you get in relation to property ownership and rental), this might be true. But it does depend on how regulated the market is, in terms of rent controls etc. I'm not sure this would hold for an older, or bigger, or more difficult to maintain property in an area with a high percentage of renter competition in some European countries, for example (e.g. Germany).
    - mytailorisrich 6y ago
      Rent controls do not solve any issues. They certainly don't make it easier to find a home. They only tend to restrict supply and to discourage people from moving.

denisec 6y ago

I'm not sure how innovative this is. https://www.propertypartner.co https://www.propertypartner.co has been going since 2015 doing essentially the same thing.

wolfretcrap 6y ago

>Homes are not investment vehicles to make people wealthy - they are a fundamental human right that many people are priced out of, or subject to unscrupulous landlords and freeholders exploiting what is still essentially a feudal system. I live in India I had the same mindset "home or land isn't investment" but then I thought about trying investment in property and it paid vastly more than what bank or other financial instrument can fetch me when adjusted for risks. In India, properties in good locality of the city is a storehouse of value. Here most deals are 80-20 or 70-30, which means 80% of the value you show in official record while rest 20% is paid in all cash to seller. This helps save bit of tax and avoid scrutiny by tax department as you aren't drastically showing a low value. When everyone does this, the property value to government/tax agencies always appear at 80% of its actual value (the money actually being paid) for the transfer of property rights. What happens to the cash portion? Usually the seller will use that cash to renovate their house or pay for other things in cash or use it for their everyday expenditure. High value property here don't fluctuate much in price and are considerably safe investment to hold and move money when you want. I am in the market and I am seeing the guys with money during lockdown are getting wayyy better deal now.