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There's reports in the media today about our esteemed government considering allowing 100 year mortgages that can be passed down to your children. How does this help the average person own their house? You'll not only be committing yourself to a lifetime of repayments (basically rent) on something you will never fully own but you will also be addling your children/beneficiaries with a debt that they have not agreed to.
The housing market is broken already with social mobility stalling, rents rising faster than people's wages, house prices ballooning and no-one willing to call a halt to it all as it may upset people who see their property as their wealth/pension fund. How the hell can this be a good idea?
Agree with all that, the only people benefiting from that is the banks.
Housing costs need to come down, not try and find new ways to pay. We need more to be built and much more stringent borrowing requirements on multiples of income. If the government really wanted to help they could fund the 5% deposits people need to get started, preferably as a grant not a loan.
I'm sorry, but you seem to be expecting a good idea from the morons in Government? People who are literally only there because they have demonstrated a complete lack of financial ability, critical thinking, judgement, personality, morals, principles, or indeed any positive attributes at all?
The banks will love this - interest rates will have to be artificially high to protect them against inflation and come renewal you'll be totally stuffed.
I'm with you, the market broke when buy to let mortgages became popular, everyone should be able to afford food and shelter.
I'm not sure how to readjust the market but 10 times average salary to buy a house is not sustainable.
There should be a min of a 25% decrease as with all investment prices go up and down,the UK has always seen house ownership as a golden tcket, if the market is not cooled I can see civil unrest driven by inequalities by the haves and have nots in the not too distant future if a sensible route for the future of home ownership is not addressed.
People will happily pay 1/3 to 1/2 their income on their home.
However you fiddle with mortgage terms and interest rates, that seems to stay constant.
I genuinely don't understand the drive to own a house. Surely good quality social housing is a more sustainable and lower stress model?
If the government really wanted to help they could fund the 5% deposits people need
But the help to buy scheme led to increased house prices. Subsidising house purchases means that house builders can charge more for 'starter' homes, so the next step in the ladder gets more expensive too.
Owning second homes needs to make much less financial sense, and we need more houses to be built to try to get prices down, or at least get price increases down.
People will happily pay 1/3 to 1/2 their income on their home.
Happily? People will pay what they need to pay to have a roof over their and their families heads, it's not like housing is a luxury good.
Longer mortgages that pass onto offspring is common in other European countries I think, and seems to be a stabilising factor as people buy a house as a long term family home rather than constantly climbing up the so called ladder. So I think it can work. Why would you be unhappy if you inherit a house with an affordable mortgage and loads of equity?
Isn't this the standard in some other countries? It certainly used to be common in Germany.
100% tax on overseas buyers .
Burst the London bubble.
British houses for British people to live in.
Prefabs
More of this...
https://www.bristolstories.org/story/155
It will never happen 🙁 Got to keep the traditional house builders and landowners happy.
100% tax on overseas buyers .
Burst the London bubble.
British houses for British people to live in.
The children will have to take out another mortgage to pay for their parents care.
I genuinely don’t understand the drive to own a house. Surely good quality social housing is a more sustainable and stress-free model?
Good point. We need to have loads more social housing. It should be a common choice rather than a last resort type of thing.
The problem is that it largely doesn't exist, so you can either try to get a foot on the ladder or you can hope for more social housing, which doesn't exist now and won't be built in the future.
In fact, with the next round of 'right to buy' it's getting even worse. On top of the restrictions on local authorities who can't afford to build new social housing and can't borrow to pay for it either. So we've got very little social housing stock, what we have got is being sold off, and nobody is allowed to build any more.
5% deposit won’t even get you a mortgage with a lot of lenders. Plenty of houses being built near me, they’re just not affordable houses.
I genuinely don’t understand the drive to own a house.
Eh? It's quite literally free money if you can get on the bottom rung at some point.
seems to be a stabilising factor as people buy a house as a long term family home rather than constantly climbing up the so called ladder
How did that work out in Japan.
As above it's not a luxury it's a necessary.
This will just drive up housing costs due to lack of supply.
Gov knows that this puts the onus on us to keep working and keep paying taxes in much the same way that they did the same in the 70/80s by getting the workers into owned houses thus meaning striking became less of an option as their asset was on the line.
The way things are going with costs we are going to see more strikes.
If the government really wanted to help they could fund the 5% deposits people need
No. This would just push prices up by about 5%.
And it's not the government, its every other taxpayer. Even those who can't afford a house would be subsidising those who can.
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The problem is demand is very location-specific. Not far from here, around Hawick, you can get a 1 bed flat for less than 30k, 2 beds for 50k, etc. You cannot get a studio in London for less than £200k. There must be a lot of people who can't afford to buy in London who could come up here and buy outright for less than their inadequate-for-London deposit savings.
The problem is where would they work?
Hopefully more WFH will see prices become more equal around the country. There are loads of places even cheaper than here, but they are not places people want to live
I genuinely don’t understand the drive to own a house.
Besides this
Eh? It’s quite literally free money if you can get on the bottom rung at some point.
It's security and stability if you have a family. A roof that your in charge of and don't get evicted from every year by a property holder who wants max return on investment.
Eh? It’s quite literally free money if you can get on the bottom rung at some point.
The key word in that statement is 'if'.
Also I said 'social housing' not 'privately rented'. Don't quote my post out of context.
Will drive prices up.
Will not solve the under supply of housing.
Its a dead cat.
It would be difficult to introduce a more stupid housing policy.
How’s it free money? My house is pretty old and always needs money spending on it.
Was a thing in Japan yonks ago, ‘90s.
I genuinely don’t understand the drive to own a house. Surely good quality social housing is a more sustainable and stress-free model
Hmm rents dead money whereas buying a house gives you equity.
If the social house rent was dead cheap then the drive probably wouldn’t be so much.
Why would you be unhappy if you inherit a house with an affordable mortgage and loads of equity?
The children will have to take out another mortgage to pay for their parents care.
There's your answer. Plus what if your kid(s) have set up their life in a different part of the country with their own lifetime mortgage? They will then have to fund two mortgages while they sell whichever house they don't want. What if they cannot afford that if the house takes a while to sell? It smacks of passing the buck to the next generation.
The broken housing market will likely bring down the government so hang in there.
It would be difficult to introduce a more stupid housing policy.
Depends what you are attempting to do,which is keep house prices high, bound to be a point where they just cannot be purchased unless they just stretch the loans to multigenerational.
Also I said ‘social housing’ not ‘privately rented’. Don’t quote my post out of context.
Modern social housing development is largely privately owned under license.
Very few council owned social housing schemes (comparitive to homes in existence and private owned social housing)
Despite me living next door to 2 council owned houses (they are seeking to auction off I understand)
Hmm rent's dead money whereas buying a house gives you equity.
It's not though, is it? For that money we get to live in a warm, dry house and someone'll come out to fix the boiler if it breaks, nothing extra to pay. Our rent goes towards paying people's wages and anything left over is re-invested in the housing stock by the not-for-profit that own the houses.
I agree that renting privately is shit (I've been there and done that) but social housing (done right) is briliant.
How many of you 'renting is dead money' types also rent their car? Just asking.
‘renting is dead money’ types also rent their car?
Nope. I mean if I did I could have much nicer car for the same money but I view it the same as my house.
Hell for what my mortgage was when I bought my house initially I could have rented a much bigger nicer house......
But for what my mortgage is now - I could rent a 1bed flat...... Inflation for you.
Loads. They just call it Leasing. Why do you think car prices are so high?
Rent never builds equity.
You always pay rent.
Difficult to downsize your rent.
Your rent is not an asset.
I agree on cars, i don't rent them either.
We dont build enough houses, there is no other cause.
X% tax on BTL
X% tax on Air BnB
X% tax on non Dom / overseas buyers
Simple. Hard to say what % tax would be effective without also having unintended consequences that also negatively impact people.
My view is that I want people that live / work in an area to own the property so you can build a decent community.
Right now many cute villages globally are all owned by investors / Airbnb’rs that is kind of sad. They are like mini theme parks with a cake shop but no rides.
X% tax on BTL
X% tax on Air BnB
X% tax on non Dom / overseas buyers
This times 100
Help those that need it penalise those that are breaking the system
But proper sustainable social housing needs to be implemented to make it work.
Why do you think car prices are so high?
Loads of reasons. Laziness, aspiration/status and entitlement are a few of them.
How many of you ‘renting is dead money’ types also rent their car? Just asking.
There a massive difference. A car is almost always a depreciating asset, a house almost always goes up in value. Buying a house is basically free (in fact better than free), which is pretty messed up.
X% tax on BTL
X% tax on Air BnB
X% tax on non Dom / overseas buyers
Totally agree.
I guess another way to look at it. Is 100 year loan is just renting a house with none of the downsides of renting but equally none of the upsides.....
Loads of reasons. Laziness, aspiration/status and entitlement are a few of them.
But also affordability, made possible by leasing.
100% inheritance tax. You want your parents house? buy it on the open market.
It would solve the housing crisis in about well, instantly. But no one would vote for it.
Short term affordability.
Kicking the can down the road if you will.
There a massive difference. A car is almost always a depreciating asset, a house almost always goes up in value. Buying a house is basically free (in fact better than free), which is pretty messed up.
Hmm. See, I look at renting a (social, I'm on about social housing not privately rented) house much like car leases, all you have to do is stick fuel (water, gas & electricity) in it and if it breaks for whatever reason (don't dredge up small print of specific leases to Make A Point please, you all know what I mean) someone'll come out to fix it.
I get that people have differing priorities, like we don't have kids so there's no need to leave anything behind us, but house ownership is not the ultimate goal for everyone and definitely not the answer for a more equitable society.
Massive investment on good quality affordable social housing is the only long term viable solution, take the pressure off the market from the bottom up.
Which would also help deal with a variety of other social issues. If we had a government and electorate who cared about such things.
Train a load more builders
Give councils money/allow them to borrow money to build a load more houses.
Build a load more houses.
Build them well!
I was thinking about the last point this morning after reading this story. https://www.bbc.co.uk/news/uk-scotland-glasgow-west-62013797
The photo below shows the space previously occupied by two family houses: 
The footprint of them is tiny, plus there's a total of about 3 postage stamps of grass front and back.
There's plenty of need for flats rather than everyone living in suburbia, but houses like those seem like the worst of both worlds. None of the space or greenery of suburbia, but often none of the convenience (shops, public transport, etc) of city centre living.
but house ownership is not the ultimate goal for everyone and definitely not the answer for a more equitable society.
Indeed how ever it's one of only a few things you can do to protect/hedge your absolute certainty costs over your life time. I'd recommend it to anyone fortunate enough to have the choice availible to them.
Much like the 7 or so years of fairly trouble free motoring I get after the average lease has expired(natch free motoring) .....eventually (in the current system) your mortgage payment and rent diverge fairly quickly
Why would you be unhappy if you inherit a house with an affordable mortgage and loads of equity?
What about those who don't inherit a house? Rising house prices are a result of cheap credit. The easier you make it for people to borrow, the higher prices become. Which leaves new buyers with the prospect of taking on a huge amount of debt, potentially extending beyond their own lifetime. It leaves no option whatsoever for people to save a good proportion of the required funds and take a more sensible approach.
I'm not familiar with how the policy works elsewhere, so I'm not dismissing it entirely. But we all know house prices can't continue to rise forever, and anything that makes borrowing easier raises questions of kicking cans down the road. It's potentially an economic nuclear bomb.
100% inheritance tax. You want your parents house? buy it on the open market.
It would solve the housing crisis in about well, instantly. But no one would vote for it.
It wouldn't solve the housing crisis, but it would help. As would taxing/limiting holiday homes, whether airbnb or sole use and mostly empty (the latter is the worst).
The concentration of housing stock in a few hands is part of the problem, the lack of building is the other part.
It's so dysfunctional that we (for some definition of we) collectively consider increased house pricing as a good thing. Everything else, we want it to get cheaper, at least relative to salaries.
I genuinely don’t understand the drive to own a house.
My Mortgage: £600
income if i rent flat out: £1100
That will be taxed and not the reason i bought it but it made good financial sense to buy it as really wouldn’t want to be paying to rent a place just like it.
the answer is more good quality social housing.
X% tax on BTL
X% tax on Air BnB
X% tax on non Dom / overseas buyers
Also, x% tax on 2nd home owners and cancel right to buy policy. Councils that do build rental properties are constantly fighting an uphill battle as the properties they do build get sold off under right to buy & they have to then go through all the work of getting a new development built, which after a few years then gets bought through right to buy...
I genuinely don’t understand the drive to own a house. Surely good quality social housing is a more sustainable and lower stress model
Either you're confusing *what you'd like to happen* with the reality, (that we don't have enough social housing), or you're being disingenuous.
Here in Bristol, tens of thousands of people are on the waiting list, and wait times for all but the most direly urgent cases are many years. Private rentals are ludicrously expensive.
Yes we need to improve our social housing but to say you don't understand why people in the UK want to own a house is just silly.
Here in Bristol, tens of thousands of people are on the waiting list, and wait times for all but the most direly urgent cases are many years. Private rentals are ludicrously expensive.
Yes we need to improve our social housing but to say you don’t understand why people in the UK want to own a house is just silly.
Yeah, lived around Bristol for a while, rented for a while as we moved from another area and it was creeping up way too much, probably a good 30% over the last 3 years, which is just unsustainable.
As for the original question, i've seen them talk about 50 year mortgages, not really 100 years, this sounds more reasonable (for an unreasonable market!), as for why buy, because i can't see myself in retirement being able to pay the level of rent we're seeing these days, around here a similar house to rent is £1250, and this isn't an expensive area or big house, that's £15000 a year after tax just on rent!
My Mortgage: £600
income if i rent flat out: £1100
I just looked and got something very similar, certainly couldn't afford my current home.
just like to add thats rent not income once mortgage paid.
though looking at sold prices from 15-20 years ago round here you really would be rolling in it if you were a professional landlord who started buying back then, but thats due to ‘up and coming’ price rises that have levelled off now and i see them being single digit/flat for a while.
i probably couldn’t afford to buy this flat now on my own though it would still be affordable for a working couple to buy or rent (in London).
According to an article in the Big Issue from Governt Council tax statistics there are 288,000 houses in the UK which have been empty for six months or more (Oct 2021)
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But as I said above the cheap houses are not where people want to live (or feel they have to live to be able to work) the problem is spreading jobs around the country better.
Another factor at play here is pension freedoms and the derisory returns you get from traditional ‘safe’ savings like NS&I or annuities and if you’re not prepared to take the risk on other investments - BTL is as solid as it gets. The flip side is that commercial property is likely to face an ‘adjustment’ at some stage with lower demand for city centre office and retail spaces but the Government doesn’t want to face the consequence of a big write-down on an economy dependant on property price stability or growth. The irony is that as we are likely heading for a recession, then a huge stimulus in social housing building could help employ many people, but the Tories passion for “small government” means it’s unlikely to happen. We have a chronic shortage of housing on the Islands - but the increase of material prices post covid and skilled labour shortages means there’s virtually no building as the cost to build exceeds market value.
Build more homes. We need a decade or 3 of building many more homes to fix the lack of supply
From the previous page:
"I’m not sure how to readjust the market but 10 times average salary to buy a house is not sustainable."
Back in 1987 I bought my first flat - a nice little 2 bedroom 1st floor place above a shop - for 27K. I sold it 18 months later for 45K. Its supposed value had grown by a grand a month. I bought as a first time buyer on 3x my salary and 1x partners salary. The lady that bought from us was downsizing so she could just about afford the 45K while we moved into a house that cost us 56K.
I said at the time that house prices couldn't possibly continue to rise like this simply because if first time buyers on average national wage at 3x1 plus 1x1 couldn't obtain mortgages to buy at the bottom of the ladder then the whole ladder was compromised.
Look where we are now . . .
According to an article in the Big Issue from Governt Council tax statistics there are 288,000 houses in the UK which have been empty for six months or more (Oct 2021)
that’s a small number and a lot of those will be empty and waiting to be sold, just like the flat my partner is buying for us to both live in, owners have relocated to Scotland and the buying/selling process is now over six months.
the bigger issue is probably ‘executive developments’ owned by overseas investors or those wealthy foreign nationals with family at universities
Btl and Airbnb is mostly noise around the edges of house prices, and for btl the taxes and laws are being cranked up year on year.
Imo the best way to subdue the market would be capital gains tax on your primary residence. Say 40%. Reducing the amount that housing equity inflation affects the market will subdue things nicely
Inheritance tax - loads of ways round it if you have the money to pay an ifa.
Rents have gone up c20% this year, in sw London, partly due to increased costs, elec safety, higher borrowing costs, energy performance certs, more regs on the way too.
No idea what the solution is, I would sell mine to my long term tenants if I was offered a cgt amnesty. The liability dies with me so i may as well just let the investments run.
See, I look at renting a (social, I’m on about social housing not privately rented) house much like car leases
Similar in some ways. You pay lots of money and end up with nothing at the end of the term.
I genuinely don’t understand the drive to own a house
How can you not? When you rent, your money goes into someone else's pocket. When you buy, it ends up in yours. How can this not be desirable?
Lunacy pure and simple !!
Hmm rents dead money whereas buying a house gives you equity.
I moved to my current house owing £5k on the previous one due to the current party of government's mishandling of the economy in the 80's (others owed even more). At least a social housing rent won't see the renter personally lose money.
Just a thought.
Isn't the problem not too few houses but too many people? Too many people also creates most of our problems. Might I suggest pollution, shortages etc.
You might realise that socialism isn't my thing but even I would completely remove any right to buy etc. If it is owned by the government/nation/callit what you will it should stay owned by the government.
However any attempt to remove peoples rights to do what they like with their money is doomed to failiure and so it should be. It isn't natural.
However in an attempt to take a more socialist view maybe:
Much of the problem is what is built and where. The should be no excuse ever to build on any agricutural or green site. Ever. That would, as well as proecting our rural and agricultural areas keep the prices down. Force developers to use brown field sites or not at all. Stop planning permission for executive properties. A family of two adults needs at the most 3 bedrooms (for kids getting into their teens) and a single bathroom. Force the end of extensions to create oversize homes. Many a perfectly acceptable rural family dwelling has had a whopping extension added to create a second bathroom, a spare bedroom and a huge kitchen. Stop that, force development to keep things sensible and the situtaion could improve.
My only experience of European housing is when I lived in Switzerland. In the 5 years I was there my rent didn't increase but my salary did. Basically if you were able to stay in the same place for say 20 years you'd pay the same rent. You'd offset it on the piller scheme. There is a lot of housing in Switzerland so you can choose. And the quality is exceptional.
Back now in the UK and bought a house at maybe the top of the of the market. So I'm lucky that I can overpay.
This country needs to build a lot more houses
Unless you are suggesting some form of "ethnic cleansing" whoch i doubt, we just need to build more houses..
I think he's just pointing out the obvious, that the world in general and the UK in particular, are grossly overpopulated.
The UK housing crisis is just one symptom of this (and a very minor one compared to, say, climate change)
Genocide would be one answer and would undoubtedly get quick results but is unlikely to be very popular, a much reduced birth rate would take longer but is likely have more support. We are starting to see it in some of the developed world, Japan and Italy on particular, but it needs to be more drastic to have a significant impact.
100% inheritance tax. You want your parents house? buy it on the open market.
You want anything of sentimental value? Buy it on the open market.
Unintended consequences.
Hmm rents dead money whereas buying a house gives you equity.
Equity for what though? Depending on your house you might not have any scope to downsize later and then what? You still need somewhere to live.
I'm talking, like Kayla1 about a world where social housing is better provisioned than it is now btw.
As for why buy, look at Europe, plenty of renters there because their governments never pursued a policy of subservience under the guise of home ownership. Imagine having proper rent controls and tenancy protections that would make renting as secure as buying with the advantage that it allows you to remain mobile should you choose to do so.
multiple home ownership needs to be stopped
Europe, plenty of renters there because their governments never pursued a policy of subservience under the guise of home ownership.
it could be different these days, but i recall that european pension and insurance companies invested in residential property, rather than the markets. this seems to make a lot of sense.
an issue with low birth rates is financing the social services for the next generation that is too old to work.
reducing the birth rate can only work if you have immigration to cover the short fall.
in vancouver there are a lot of huge apartment buildings. if you ever see them at night you’ll notice that none of them have any lights on. this is because no bugger lives in them. i expect this is happening in all the money laundering hotspots all over the world. what really irritates me about this is that it inflated the housing market outside of the cities there the money is being laundered through real estate.
having had a mild vent, i’ll now go back to the beginning and read other people’s input.
an issue with low birth rates is financing the social services for the next generation that is too old to work.
That is a challenge that appears to be coming quickly for many countries, European ones in particular, and in a multi generational timeframe one you could argue we should embrace regardless to lessen the strain our consumption rates inflict on our environment.
Assuming that was a direction of travel, takes me back to the suggestion of prefabs, and also a building philosophy of minimising the footprint and making that footprint easy to remove if housing stock eventually becomes surplus to needs. Which obviously is over a longer timeframe tham any if us will live to see. And a lot longer than a term or two of keeping some Etonian in very expensive social housing.
The problem, as far as I can see it, is that some people can afford second (or more) properties. Owning these then reduces the available properties to other people. Supply and demand pushes prices up, and then you have to rent.
It's blindingly obvious, but tax penalties for these additional properties is needed.
You can only be in one house at a time, why do you have to have another one? If you really what a cute cottage in Cornwall, then you can help fund people who actually live there to buy a property locally.
BTL? again, more taxation please.
Despite the belief that the Right Wing want people to own property to make them feel rich, this doesn't keep the landowners in rent and lease charges. If the rich and landed keep all the properties to themselves then they get constant income from it.
If you actually get to buy your property, then it's yours, and your future generations, to keep.
If you actually get to buy your property, then it’s yours, and your future generations, to keep.
/ There to fund your care during you descent into a box
How can you not? When you rent, your money goes into someone else’s pocket. When you buy, it ends up in yours. How can this not be desirable?
If rent is properly controlled its cheaper than buying per month especially if you stay a long time. You dont have to pay for insurance repairs so no worrying about bills etc. The money you save by renting you can use to build a pension.
My sister owns a building in Amsterdam. They live on the ground floor and there are teo rentals above it . Onr of the rental units is rent controlled. Its had the same tenant 20 years paying a quarter of what a mortgage would be.
paying a quarter of what a mortgage would be.
Based on its value today or the value 20 years ago.....
No govt dares to pop the property bubble, too many vested interests depend on it.
It wouldn't be technically difficult to allow more house building and to increase taxes on 2nd home ownership (and/or some rent controls). Politically impossible under the current govt, it goes against their entire ideology.
Politically impossible under the current govt(s), it goes against their entire ideology.
FTFY
It's not just a Tory / Westminster issue.
Surely renting versus buying is down to your individual circumstances and no one should be critical really.
As for rent/lease being dead money - it's not it's the cost of using the asset during that period.
And certainly with cars - new cars leasing can often be extremely good value if it beats depreciation.
Anyway, home owners are mostly too cocky as they have been so used to low interest rates and inflating prices. If that flips around the story is completely different.
Be humble and look at the macro picture. Like everything in this current shit-hole government investment is the only way to properly correct the disparity.
Not against the 100 year mortgage particularly but..
Roll on several generations you will have families with multiple inherited rental properties. I think this is what many of the European capitals are like. Nothing ever sells just gets passed on and on.
We need to build.
Where do we build though? Nobody wants the building near them!
@mattsccm As I read it, the second part of your post contradicts the first part. Have I misunderstood?
However any attempt to remove peoples rights to do what they like with their money is doomed to failiure and so it should be.
but then you seem to suggest doing exactly that
A family of two adults needs at the most 3 bedrooms (for kids getting into their teens) and a single bathroom. Force the end of extensions to create oversize homes.
Neither approach seems workable to me, but I'm just trying to understand your point.