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Capitalists not greedy

Cyndy Hodgson says:
September 22 2022 at 10:15 am
Even if you are right about the distribution of mortgages, I think you are ignoring the effect of Buy To Let mortgages. The lower income households who do not have mortgages will, almost certainly, rent privately. The interest rate inceases will, without doubt, lead to rent increases, which will affect them enormously.

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Richard Murphy says:
September 22 2022 at 10:19 am
Well said

I wonder if the data was corrected for that?

The assumption there is that landlords price their rents at cost plus. Instead of being grasping bastards who charge as much as they can.

So, we can now say that Spud insists that capitalists are not greedy bastards then, can’t we?

6 thoughts on “Capitalists not greedy”

  1. BTL landlords have, if they are smart, already moved to fixed rate loans. Where it hurts is in HMOs on inclusive rents. When the landlord pays the utility bills there is no incentive to save energy. That’s where it hurts.

  2. The lower income households *should* be in social housing. If they are not, what is the point of social housing?
    Answers on a postcard, please, so as to avoid offensive comments about Bob Crow and Frank Field.

  3. Reverse this and would Spud argue that reversing the interest hikes will mean landlords get the initial benefit in lower mortgage payments but that benefit trickles through to the tenants. Could he be the world’s first trickle down economist, I wonder.

  4. “The assumption there is that landlords price their rents at cost plus. Instead of being grasping bastards who charge as much as they can.”

    It is possible that landlords, being individuals not an amorphous mass, fall into both camps. Some are rapacious bastards who charge as much as they can, and others charge what they feel is fair, given their costs, and the nature of their tenants. I have personal knowledge of at least two landlords in the second camp, for varying personal reasons. So it is entirely possible that ‘some’ landlords would be in a position to raise rents if they faced raised costs, because they are not currently taking every penny they possibly could. If this is indeed the fact then rents could rise slightly in average, and for considerable amounts for specific individual tenants.

  5. Having been a landlord, I’m with Jim on this. A good tenant on moderate rent is better than a string of bad tenants on high rents. Just the voids in between them & having to make good the damage they do to the property negates any financial advantage. You get a good tenant, pays regularly, looks after the place, you do your level best to keep them. The last thing you want to do is price them out of the door.
    That said, I reckon the whole BTL thing is headed for the rocks. It was always an unsound idea. Leveraging usually modest amounts of capital with preferential access to cheap credit was never a viable long term business plan. Too vulnerable to interest rate rises & falls in property values. Too close to free money. Generally one makes money out the creation of wealth. What wealth has been created? It’s produced hardly any new housing. It’s simply benefiting from controlling an asset. So dependent on the market value of the asset & the expense incurred in owning it. Neither of those the BTL’er has any influence over.

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