Foreign Ownership of UK assets.

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Tim
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I read with horror that the UK's 'buy to let king' Fergus Wilson is selling his 1000 house portfolio in Kent to foreign buyers, particularly those based in China and India. I understand that the majority of countries in the world have mechanisms to limit or prevent foreign ownership of property, the UK is in a minority where everything's for sale!

Personally I'm not too comfortable with the idea of 'buy to let' anyway but feel that selling large chunks of the countries housing stock to foreign investors is a huge mistake. Is nothing actually owned by 'UK PLC' (ie 'us') anymore? Will our future generations be resident in the UK simply to profit absentee foreign landlords and employers? Maybe it doesn't really matter, what do others think?
 
Don't really see a problem. Lets be honest we have been buying houses across the world for centuries, so why shouldn't "foreigners" do it here. Unlike paintings, cars etc at least a house stays in the UK so you could argue so does the revenue.
 
Jonathan, somebody has to own the property. What are you suggesting the government owns all houses?
Owning a house isn't damaging. What has damaged the housing market beyond repair is the banks and building society's lending more than 3 times a persons salary. By sticking to that principle house prices would have risen but in a more "controlled" way. The fact that my house is worth 5 times more than we paid for it is irrelevant as all other house near us are the same sort of price.
 
munch said:
Don't really see a problem. Lets be honest we have been buying houses across the world for centuries, so why shouldn't "foreigners" do it here. Unlike paintings, cars etc at least a house stays in the UK so you could argue so does the revenue.
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That's part of the problem though - the revenue (in the form of rent) will leave the country and not be available to be spent in the UK. Your comment about 'buying houses across the world for centuries' really refers to colonialism which we left behind with the empire.
 
JonathanRyan said:
We need to get over this idea of people owning the house they live in. It's out of date and actually damaging.
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Munch is correct, someone does have to own the property. Would you rather pay rent to an elected, accountable local authority or a Chinese absentee landlord?
 
So all the Brits still buying houses in Spain and France etc doesn't count? If you are worried about rents leaving the country take a look at commercial; properties. Some friends of ours have moved to Australia and as you can't just buy a house out there they have rented out their house. Is that wrong as their money is leaving the country? The house is still in the UK, the money that actually brought it is in the UK, if they had stayed in the UK what extra money from that house would there be?
 
I would rather own my own property and that more people had the opportunity to do the same. I also accept that there will always be the need for social housing.
 
munch said:
I also accept that there will always be the need for social housing.
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me! I have a large family and could never have afforded to buy a house as big as I live in.. a brand new 6 person (3 double bedrooms) house been in from new for last 25 yrs.. on a small street and not on an estate...... never had to worry about a housing repair bill.. its been refurbished ie kitchen bathroom... Yes owning your own house is one of the best things you can do in life. gives you security in later life... but bringing up a large family was better in a big house for me :)

So lots of different reasons but yes renting is needed and it wouldnt have bothered me one bit where the rent went :)
 
munch said:
Jonathan, somebody has to own the property. What are you suggesting the government owns all houses?
Owning a house isn't damaging. What has damaged the housing market beyond repair is the banks and building society's lending more than 3 times a persons salary. By sticking to that principle house prices would have risen but in a more "controlled" way. The fact that my house is worth 5 times more than we paid for it is irrelevant as all other house near us are the same sort of price.
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What I mean by "damaging" is that people in some areas of the UK have to pay more to own their own home than they can possibly afford. They spend years in rented accommodation building up a huge deposit and then pay crippling mortgage costs. And that's by and large because they believe for some reason it's "right" to own their home and in some way their duty to pass it on to a future generation. Instead they could carry on renting, spend the money from the deposit and live a happier live.

I'm starting to wonder why the government don't encourage people to do this. I'm guessing something to do with macro economic levers.
 
munch said:
Jonathan, somebody has to own the property. What are you suggesting the government owns all houses?
Owning a house isn't damaging. What has damaged the housing market beyond repair is the banks and building society's lending more than 3 times a persons salary. By sticking to that principle house prices would have risen but in a more "controlled" way. The fact that my house is worth 5 times more than we paid for it is irrelevant as all other house near us are the same sort of price.
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Rather than blaming the banks, it is still us taking the loans. It is pure greed, human nature at its worst.

But no issues with foreign ownership, heck if I did I shouldn't own my property :)
 
Why is it somehow "greedy" to make money out of property but not out of, say, running a taxi business?
 
JonathanRyan said:
What I mean by "damaging" is that people in some areas of the UK have to pay more to own their own home than they can possibly afford. They spend years in rented accommodation building up a huge deposit and then pay crippling mortgage costs. And that's by and large because they believe for some reason it's "right" to own their home and in some way their duty to pass it on to a future generation. Instead they could carry on renting, spend the money from the deposit and live a happier live.

I'm starting to wonder why the government don't encourage people to do this. I'm guessing something to do with macro economic levers.
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Why should I pay someone elses mortgage by renting when I can pay my own mortgage then pass the house on to my family one day to make things a little easier for them? These days the government help first time buyers out so much, the deposits are lower and the rates are MUCH lower so Im not sure how long the 'joy' of having a few grand in your back pocket will bring compared to owning your own home for a lifetime will bring.

Youre paying for something you will NEVER own when you rent. Thats throwing money away, unlike saving for a deposit.
 
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Mr Bump said:
What a load of absolute twaddle
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Um, OK.

twist said:
Youre paying for something you will NEVER own when you rent. Thats throwing money away, unlike saving for a deposit.
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In the long term, you never actually own anything (because death). You need somewhere to live while you're, you know alive, but don't actually need to own it. The government is,a s you say, helping out first time buyers a lot. But only in a way that's distorting the market massively. It actually makes more sense to use money to pay for stuff you need (somewhere to live right now) than to buy something you don't (a pile of bricks that will last longer than you and be there until it is taxed into nothingness).

As for passing your house on "to the next generation".... I haven't inherited my house from a "previous generation" - I bought it with money I’d earned. My parents are pretty happy living in their house in their late 80s.
 
JonathanRyan said:
What I mean by "damaging" is that people in some areas of the UK have to pay more to own their own home than they can possibly afford. They spend years in rented accommodation building up a huge deposit and then pay crippling mortgage costs. And that's by and large because they believe for some reason it's "right" to own their home and in some way their duty to pass it on to a future generation. Instead they could carry on renting, spend the money from the deposit and live a happier live.

I'm starting to wonder why the government don't encourage people to do this. I'm guessing something to do with macro economic levers.
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What happens when you retire and your rent out weighs or takes up a large portion of your pension. My mortgage is almost paid off, 3yrs to go, I can retire early in 7yrs time if I wish, I'll have no such worries. As for renting whilst trying to save a deposit, why not try saving the deposit before hand.
 
JonathanRyan said:
As for passing your house on "to the next generation".... I haven't inherited my house from a "previous generation" - I bought it with money I’d earned. My parents are pretty happy living in their house in their late 80s.
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So why did you buy instead of rent, if renting is so much better?
 
nilagin said:
What happens when you retire and your rent out weighs or takes up a large portion of your pension.
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Take the money you would have spent on a deposit (i.e. the surplus from your living costs) and invest it in something that isn't property. Use the income from that for your pension fund. And use the pension fund to pay for your accommodation.

nilagin said:
As for renting whilst trying to save a deposit, why not try saving the deposit before hand.
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I don't understand. Where do you live "beforehand"?
 
Cartus said:
I read with horror that the UK's 'buy to let king' Fergus Wilson is selling his 1000 house portfolio in Kent to foreign buyers, particularly those based in China and India. I understand that the majority of countries in the world have mechanisms to limit or prevent foreign ownership of property, the UK is in a minority where everything's for sale!
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It's completely contrary to the Great British ethic.. historically we've been all for foreign ownership of assets as long as we did the owning and the assets were foreign but we were never very keen on the concept of paying for them.. ..
 
JonathanRyan said:
Because I started buying property in the 90s when it was a really good idea.
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But for some people it's a good idea now.
Why was it OK for you, but is not OK for others?
 
JonathanRyan said:
Take the money you would have spent on a deposit (i.e. the surplus from your living costs) and invest it in something that isn't property. Use the income from that for your pension fund. And use the pension fund to pay for your accommodation.
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My mortgage repayment currently stands at £329/month. Rent for a similar sized property would be over £1k/month. The only time I paid more in mortgage payments than rent would have cost was when interest rates rose to 15%. My property is now worth approximately 4 times what it was when I bought it and when I retire, I can sell up move out a bit further from London than I am now, buy a bigger property for less, if I wish and still have money left over.
 
JonathanRyan said:
In the long term, you never actually own anything (because death). You need somewhere to live while you're, you know alive, but don't actually need to own it. The government is,a s you say, helping out first time buyers a lot. But only in a way that's distorting the market massively. It actually makes more sense to use money to pay for stuff you need (somewhere to live right now) than to buy something you don't (a pile of bricks that will last longer than you and be there until it is taxed into nothingness).

As for passing your house on "to the next generation".... I haven't inherited my house from a "previous generation" - I bought it with money I’d earned. My parents are pretty happy living in their house in their late 80s.
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If you do look at it like that then even after Ive passed my home will still help my children and their children etc etc. wether they keep it for their families or sell it to pay for education/their own home. My home is also an investment, lets say I decide to sell it when I retire and go on a mad pensioner party for a few years, I couldnt have done that with the measly 5% deposit I 'saved'. I dont need to own my home but why should I give someone else my money and have nothing to show for it at the end of it, my home also brings me a lot of joy. How is it better to pay monthly rental rates that are as high as a mortgage?! One is an investment and a place to live and the other is just a place to live that you never own.

Nowadays you need a 5% deposit, the average first time buyer is not going to buy a £500k house, how far are you going to get on a 5% deposit in life? On your average home, thats only around £10-15k for my so called pension fund. Hardly something to retire with no matter how well you invest it.

I havent inherited/been given a penny, Ive worked for everything I own including my house.
 
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Maybe it's time to stop subsidising low pay and making the cost of living a more important factor in the cost of business decision making. At the moment an employer can pay below a living wage and rely upon the state to subsidise employee living costs through tax credits and benefits. As a country we demonise the low paid employee whilst accepting the concept of paying someone less than it costs them to live as somehow normal. If employers had to increase wages to the point employees could afford to live in the areas around their businesses could we encourage development in the regions away from the South-East and London? Most of Europe manages to maintain economies not completely focussed on one small part of their countries.

And like turkeys voting for Christmas, we keep voting in parties dedicated to dismantling social housing - but "I'm alright Jack"
 
Rather than a general discussion regarding mortgage vs renting, isn't it the point that if unbridled foreign ownership is allowed to continue then few of us will be able to consider buying a house and will barely be able to afford to even rent them in the more desirable areas.

Look at what's happening in London and roll it out nationwide.
 
Foreign ownership of domestic rental properties is bound to lead to trouble.
There are many and complex laws that landlords must comply with.
How would that work with foreign absentee landlords.
 
Cartus said:
Rather than a general discussion regarding mortgage vs renting, isn't it the point that if unbridled foreign ownership is allowed to continue then few of us will be able to consider buying a house and will barely be able to afford to even rent them in the more desirable areas.

Look at what's happening in London and roll it out nationwide.
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Terrywoodenpic said:
Foreign ownership of domestic rental properties is bound to lead to trouble.
There are many and complex laws that landlords must comply with.
How would that work with foreign absentee landlords.
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I don't really see any difference as to who owns the property that is being rented. If the property is in this country it will still have to fall under the same regulations. Don't see it having any bearing on rental costs or the availability of houses to buy neither. Costs of rental or buying are only high in London because of the money that can be earned there and people wanting to live there.
 
I would have thought that one of societies (and subsequently government's) priorities would be investment in it's population via its stock of housing. Instead we see 'right to buy' being extended and everything of value being sold off. We all used to own an excellent postal service until it was sold off at a bargain basement rate and the service has worsened.
 
When I bought my first house in Kent in 1962 it cost £3000. It came with a fixed interest 30 year, 100% mortgage.
That property last sold in May 2012 for £230,000. It has a projected value of some £270,000 today.(zoopla)

When I bought it I was paying some 15% more per month than similar properties built for rent on the same estate.
People said I was a fool and could never afford to keep up with the payments. Within 18 months the renters were paying 10% more than I was.
Inflation could then be relied on to to reduce the relative cost of mortgage payments.

Today there is virtually no inflation factor, and mortgages are almost always variable or short term, resulting in little gain for the bottom end buyer.
The UK is no longer a good place to buy property to live in.
 
nilagin said:
I don't really see any difference as to who owns the property that is being rented. If the property is in this country it will still have to fall under the same regulations. Don't see it having any bearing on rental costs or the availability of houses to buy neither. Costs of rental or buying are only high in London because of the money that can be earned there and people wanting to live there.
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The biggest problem initially will be money leaving the country I think. The properties will be owned by landlords who won't necessarily have the best interests of their tenants. The real problem though is that as a small country we are potentially at risk of being owned totally by a country like China. The reason prices have risen so strongly in London is entirely due to foreign ownership and our governments policy of providing tax free sanctuary to the like of Russian oligarchs. That is entirely why central London prices have gone stratospheric and really is a lesson for the rest of the country.
 
Alastair said:
Maybe it's time to stop subsidising low pay and making the cost of living a more important factor in the cost of business decision making. At the moment an employer can pay below a living wage and rely upon the state to subsidise employee living costs through tax credits and benefits.
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Depends on the type of business an employer is in. At the end of the day they have to make profits, they have competitors who may well have lower operating costs due to being in another country where wages and overheads can be lower. As an example, up until 2013 I was a press toolmaker at Ford, ok my wages weren't at a level that needs subsidising, but due to UK wages and operational costs, they had to shut us down and the work will be done in other countries with lower costs. This means that Ford Europe can return to profit without having to raise car prices instead, which would mean they would no longer be so competitive against other manufacturers. I'd rather see employers in this country providing work with wages that may need to be supplemented, than not have them here at all and those workers unemployed and living completely off benefits.
 
nilagin said:
I don't really see any difference as to who owns the property that is being rented. If the property is in this country it will still have to fall under the same regulations. Don't see it having any bearing on rental costs or the availability of houses to buy neither. Costs of rental or buying are only high in London because of the money that can be earned there and people wanting to live there.
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Try getting an absentee landlord to do any repairs or maintenance. Or try taking them to court. There is no reason for them to have a presence here at all. even the rental contract could be "Foreign" and under "foreign" law.
 
Its realy no different than folk in this country buying into a foreign country to relocate or a holiday home. my missus and I will be doing that in a few years possibly Greece or turkey. £120,000 buys you a LOT.
 
Terrywoodenpic said:
Try getting an absentee landlord to do any repairs or maintenance. Or try taking them to court. There is no reason for them to have a presence here at all. even the rental contract could be "Foreign" and under "foreign" law.
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I would suspect absentee landlords would have to use an agency as a middle man that would act in legal matters like these.
 
viv1969 said:
But for some people it's a good idea now.
Why was it OK for you, but is not OK for others?
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It's not that it was OK for me but not OK for others. Very buoyant market in the 90s (like London now) but property was actually a lot cheaper. My first flat cost about 70K - that was like 2.5 times joint income or whatever. Wages have risen somewhat but property has risen somewhat more so your multiples now are much higher.

Advice is still if you can afford it buy the most expensive property you can. But if you can't, look at other ways of paying for where you live and wait for the next crash ;)
 
Terrywoodenpic said:
Try getting an absentee landlord to do any repairs or maintenance. Or try taking them to court. There is no reason for them to have a presence here at all. even the rental contract could be "Foreign" and under "foreign" law.
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Don't fall for the "all foreigners are evil" stuff that the tabloids spout. No matter where the owner lives, tenants would be protected under the same law. If you wrote a "foreign" tenancy agreement under "foreign" law you'd be screwed when the tenants decided they didn't want to pay rent or leave. Basically they could do what they wanted because your agreement wouldn't stand up. With luck, you might even go to prison for trying stuff like that.
 
JonathanRyan said:
It's not that it was OK for me but not OK for others. Very buoyant market in the 90s (like London now) but property was actually a lot cheaper. My first flat cost about 70K - that was like 2.5 times joint income or whatever. Wages have risen somewhat but property has risen somewhat more so your multiples now are much higher.

Advice is still if you can afford it buy the most expensive property you can. But if you can't, look at other ways of paying for where you live and wait for the next crash ;)
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Be interesting if there will ever be another price crash, theres a shortage of houses and an ever increasing population with people living for longer. I doubt youll ever be able to buy a house in the UK again for the prices you did 'back in the day'.
 
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