I’ve know that 20 – 30 years ago, people were encouraged to see housing as an asset that they could profit from. Why was this seen as an asset but things like cars were not? (Or at least weren’t seen as assets in the same way?)
And is there anyway back from this as we now have private landlords that own 10+ properties? Can we change this view on the housing market and will it make a difference?
Edit: as quite a few people have pointed out, my wording isn’t great on this question. What I mean to ask is how we can actively fix the housing market after the fact that it has been sold off with such things as buy to let schemes that allow people tobit a property, rent it out for a few yeats then use the profit to buy and rent another property, rinse and repeat?
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Housing is an asset? You can’t just change the land of economics. It forms part of your net worth.
Cars are an asset too btw. They just depreciate over time and lose value. Although they’re unique circumstances where classics do the opposite.
Anyways houses will always demand an asset for as long as they’re demand for it. Its a fixed asset. It doesn’t depreicate really. Unless you do severe damage to it. Cost of living increases and house price increase. Therefore increasing your net worth. This isn’t some mindset thing. Its basic capitalism and economics. It can’t be changed unless you change the entire law of the land
>Why was this seen as an asset but things like cars were not?
Generally speaking property only increases in value over time. Cars do not, if you buy a new car today, the second you drive it off the forecourt it starts depreciating in value (there are a couple if exceptions, vintage and rare models etc, but these will generally lose value initially before they start gaining it back)
Not old enough to remember, but did it coincide with Thatcher selling off housing stock? (And was that done to get money going in to government instead of paying out so much housing benefit?)
Housing has always been asset. What changed was it became/was shown to have lower risk and a higher return on investment than other things, such as investing in business stocks.
There’s an argument that the lack of productivity over the past ~3 decades is due to capital being used to buy housing and commercial building as assets, rather than investing in companies who would then use said capital to buy assets which would increase outputs and associated productivity.
As others have said, that’s not really right. A house has always been considered an asset. What did change 20-30 years ago was the banks invented a new product, the Buy to Let Mortgage. This enabled, for the first time, ‘regular people’ to ‘invest’ in property like never before.
Cars aren’t worth triple what you pay for them 15 years later.
Only way to change the buy to let market, is to make it less attractive. Either higher taxes or more tenant rights.
Examples:
Allowing Tenants to get their own handyman to fix issues with the property if the landlord doesn’t fix it in X days and deduct the cost of their rent payment
Allowing Tenants to have pets/kids etc without discrimination
A fixed tax on buy to let properties rent (so you just don’t invest profits in more property and pay no tax)
A cap on rent of x% the property value( for example 3%)
Only allowing fully paid homes to be rented (no interest only btls)
A mixture of policies like that would make properties much less attractive as investment and free up the market to the people who actually want to buy a house.
As is at the moment , some people are stuck paying 1200 rent unable to save while that place would of cost 600/month under a mortgage (and before everyone jumps at me with bla bla repair costs and stamp duty, a house doesn’t cost 600/month on average to maintain )
Idk why I’m reading this thread – I’m in my 20s and will never be able to buy a house unless something really drastic in the housing market or laws around buying to let change (which won’t happen)