> And this is a part of why it should be administered by governments and not just let loose to market forces... There's no real financial incentive to build 100,000 houses in the middle of nowhere
That's exactly what the Chinese government did, only at a larger scale. It hasn't worked out well.
> They actually suggested recently to offer multi-generational mortgages... That's how crazy the market is getting.
I saw that, it's absolutely wild.
> Those are risks your landlord should have insurance for. In a world where property isn't such a commodity, those risks don't really have the same meaning or value.
There are risks that can't be insured against. Suppose my employer relocates to another region, and I have the choice of following or finding a new job. If I own a house, I now have to sell it (incurring a 3-6% transaction cost and lots of headache). I can only sell it if there's a willing buyer, and there's no guarantee there will be any.
My rent is covering the building's mortgage, taxes, and maintenance, which I would be paying if I owned the property. It may be marginally higher than the cost of ownership, but I have a strong preference for flexibility. That flexibility is worth the liquidity premium to me.
> What happens to people that are 'undesirable' to landlords
In the US, there’s legislation that prohibits discrimination across a variety of protected classes (race, religion, sex, etc.) Does the UK have similar legislation? Putting aside ethics for a moment — discrimination is inefficient. It’s in everyone’s best interest to eliminate such behavior, whether through market forces or legislation.
That's exactly what the Chinese government did, only at a larger scale. It hasn't worked out well.
> They actually suggested recently to offer multi-generational mortgages... That's how crazy the market is getting.
I saw that, it's absolutely wild.
> Those are risks your landlord should have insurance for. In a world where property isn't such a commodity, those risks don't really have the same meaning or value.
There are risks that can't be insured against. Suppose my employer relocates to another region, and I have the choice of following or finding a new job. If I own a house, I now have to sell it (incurring a 3-6% transaction cost and lots of headache). I can only sell it if there's a willing buyer, and there's no guarantee there will be any.
My rent is covering the building's mortgage, taxes, and maintenance, which I would be paying if I owned the property. It may be marginally higher than the cost of ownership, but I have a strong preference for flexibility. That flexibility is worth the liquidity premium to me.
> What happens to people that are 'undesirable' to landlords
In the US, there’s legislation that prohibits discrimination across a variety of protected classes (race, religion, sex, etc.) Does the UK have similar legislation? Putting aside ethics for a moment — discrimination is inefficient. It’s in everyone’s best interest to eliminate such behavior, whether through market forces or legislation.