UK house prices fall – but rents go up

Nobody should be surprised that rents are being driven up at the moment; they are a direct result of government policy. And that's not just Westminster policy but labour policy in Wales, and SNP policy in Holyrood.
The policy of all the governments was to borrow and spend to fight Covid. That left us with an enormous debt. Pressures like that don't affect totalitarian nations like China and Russia; they can just lock their citizens up, pretend their vaccines work when they don't and suppress media coverage.
Vladimir Putin took advantage of that weakness and invaded Ukraine, knowing that EU countries were dependent upon Russian oil and gas, that the european economies were in debt, couldn't defend themselves and had neither fuel security nor food security. But it was our own governments that made us vulnerable to that invasion and the SNP and Labour were just as culpable as any of the other parties at Westminster. All of the parties had a colllective brain***t which exposed the deficiencies in all of their planning.
Whether it's Kyoto or Glasgow present policy on tackling climate change and present tax policy is fuelling rent inflation. Landlords have been targeted with a succession of punitive measures over the last decade, all of which are inflationary. A buy-to-let property with a 60-80% BTL mortgage isn't owned by a landlord; it is 60-80% owned by a bank with a landlord only owning 40-20% of it and taking almost all of the risk of investment; the banks take next to no risk. So inevitably hitting landlords via all the financial costs net of tax drives up rents for tenants.
Landlords need to be able to plan and know what tax policy is likely to be if they are to plan for such things as EPC improvements. The potential cost of these improvements is not thousands, but tens of thousands of pounds, all of which must be financed. But right now landlords do not have that information; uncertainty and risk are amongst the factors that fuel rent rises.
The next general election could happen in 2025; earlier if there's a crisis that brings the present government down. So policies being dreamed up by the parties now could well end up being paid for by tenants if they don't get to grip with tax, just as the rent increases we are seeing now are the result of decisions made years ago.
I wonder, as we approach the next general election, which parties have the wit to see this?

Reply to the comment left by Beaver at 08/12/2022 - 11:50I’m not sure about a general election in 2025 as would be unusual for a new Government to go to the polls so early after being elected. (Our Parliaments are for max 5 years so there will definitely be an election in December 2024 at the latest).
And talking of totalitarian regimes locking citizens down you missed, mandating vaccines and media dishonesty you can also include Australia, Austria, Canada, France, Germany, Greece, USA etc. And the U.K. of course.

Reply to the comment left by Dylan Morris at 09/12/2022 - 08:55You are correct: In the UK people were locked down. All the parties were complicit; in fact labour and the SNP wanted more locking down, not less. But there was never any possibility of any of them eradicating the virus and that was obvious from the beginning once we knew that it was a coronavirus and how widespread it was.
The vaccine programme was actually the only successful part of the UK management of the outbreak because the Pfizer Biontech and Oxford vaccines did actually reduce the risk of serious illness and death. But the collateral damage from locking the country down to people's lives, jobs and mental health was enormous; for some people their trip to the coffee shop is what saves them from loneliness.
Whilst all that was going on the government told people that they didn't have to pay their rent. And that of course is another reason why rents are going up now. A landlord with an 80% LTV buy-to-let mortgage owns 20% of the house. The bank owns the rest of it but the bank takes no risk. They always work out by how much house prices might crash and ensure that they can get their money back in a fire sale. All the risk is the landlord's.
And that's the point. Rent rises now are a direct consequence of government policy (Westminster, labour and SNP). When governments say "...you don't have to pay your rent yet.." or "...we are having a rent freeze.." what they do is kick the can down the road, just as they did with Covid. The effect of that is the rents go up higher later. The banks take no risk. Landlords on the other hand risk losing all their equity and in some cases their only source of income.

“because the Pfizer Biontech and Oxford vaccines did actually reduce the risk of serious illness and death” ……..these experimental vaccines (gene therapies) were untested so there was no evidence whatsoever that they did this.

Reply to the comment left by Dylan Morris at 09/12/2022 - 09:57
So the Pfizer Biontech vaccine isn't a gene therapy.

The Pfizer Biontech vaccine is a dose of pure RNA. Our genetic code (our genes) is made up of DNA. DNA is very stable, it has to be to pass our genetic code down the generations. RNA is the substance that cells use to read DNA; like taking an impression of it. And once the RNA has taken that impression the RNA makes a protein from the code it has read off the DNA.

The way that the Pfizer Biontech vaccine works is that it gives your body the code to make one of the spike proteins on the virus. And then the body reacts to the protein which it has just made; so it doesn't affect your genes at all. Although it does give you a sore arm.

The Oxford/Astra Xeneca vaccine is a modified chimp adenovirus. So it's a live virus and it can give you symptoms something like the common cold; but I know from experience that those symptoms are nothing like as bad as getting Covid. The way the virus is modified is to make the body make the same spike protein that we know will provide some protection if the body reacts to it.

So both the Pfizer and Astra-Xeneca vaccines worked to reduce the symptoms of disease and risk of death, and we know that they do. The Chinese vaccine never worked. But none of the vaccines will stop the spread of Covid. That's because the Covid virus, like the influenza virus, is made of RNA and it continuously mutates. And that's why it was obvious that they could never stop the spread of Covid right from the beginning of the outbreak. the best that they could do was to slow it down whilst they developed a vaccine to stop people dying.

So have you been injected with it ?

Reply to the comment left by Dylan Morris at 09/12/2022 - 11:05
Yes. I had the Astra xeneca vaccine. That did me no harm. Made me slightly sleepy for an evening. Other friends had symptoms like the common cold. That's no big surprise because that's what adenoviruses do.

I have also had the Pfizer Biontech vaccine. That made my arm sore for about 14 hours. Again, no big surprise.

And both vaccines were way better than having Covid (which I've also had).

Reply to the comment left by Beaver at 09/12/2022 - 14:32
Best wishes for the future, good luck.

According to Zoopla:

https://www.zoopla.co.uk/discover/property-news/rental-market-report-december-2022-whats-going-to-happen-to-the-rental-market-in-2023/?utm_source=zoopla&utm_medium=email&utm_campaign=engagement-rmr-landlord-investors-20221210

“Increasing investment in new rental supply from multiple sources is the main route to reducing rental growth and making for a more sustainable private rented sector.”

"It is important that policymakers encourage good landlords of all types and sizes to stay in the market and deliver much-needed supply."

"Only by increasing investment in the private rented sector can we ease the affordability pressures on renters in the medium term and make for a more sustainable rental market."

Reply to the comment left by Beaver at 12/12/2022 - 10:29
Build-to-rent = hugely expensive boxes in the sky, concentrated in major cities. 5% coverage so far, 8% by 2030 so they've got a long way to go to make a significant impact.
For the rest of us, we have a huge roadblock in the form of Section 24, that completely misunderstood (by politicians that is) tax that deters the private landlord from investing in their own name.
Recent changes have made it more difficult to make the numbers add up within a corporate wrapper and with interest rates as they are, I can't see much movement there either.
Ireland is rapidly backpedaling on its "war on landlords" but too little, too late. I believe we'll be following in their footsteps.