Why should the poor have to make this choice?

It not just the poor, unless you are given a very large amount of money for a deposit, a couple can have above average incomes and still have next to no chance of owning a house.

More and more people will find themselves in this situation, especially as everyone taking out 30-40 year mortgages in their 30s will not have the equity to pass down to their children.

Now I am part of the home owner club I was able to remortgage for less money, despite my girlfriend losing her job, and myself having no provable income as I went self employed this year. Made me feel sick to be honest.

Averages are certainly skewed but give a general idea of historic shifts.
It’s far from black and white with inflation and interest rates also having a considerable effect
Between 1997 and 2007 average house prices tripled, the big boom that never went bust.

especially as everyone taking out 30-40 year mortgages in their 30s will not have the equity to pass down to their children.

Well they will have equity – the mortgage will be paid off in their 60s or 70s and then they eventually die and (assuming they don’t leave it all to a Cat Charity) the children get an inheritance.

sorry, yes but they won’t have that crucial gap where they are still earning, but not paying the mortgage.

People want at least some things, like a decent trip away – look at how many people on here are always on about T5s and trips to Morzine and £3k bikes. And is it fair that people have to sacrifice SO much just to get what others take for granted?

That sounds like social Network influence, no one ever posts up the bad/**** days.

When we bought our first house we slept on camping matts for months and did not have a fridge for about 4 months (luckily it was winter). Holidays were a few nights away in a tent and we had two BSO’s to commute to work and do the shopping with as fuel was a luxury item according to our budgeting.

Even now, 25 years later, “T5s and trips to Morzine and £3k bikes” is still way off the mark for us and I feel I earn a good salary, but have never had enough to move far up the property ladder.

sorry, yes but they won’t have that crucial gap where they are still earning, but not paying the mortgage.

Possibly, possibly not. My mortgage is due to be paid by the time I reach retirement age but I fully expect to be able to overpay in the final few years when our girls have grown up and left home and we have much more disposable income – I estimate that feeding, clothing and supporting their interests (music, dancing, horse riding etc) right now costs us >£1,000 a month.

Why should the poor have to make this choice?

So where do you draw the line? What house price makes it fair to the poor? Make all first time buyers houses £50k? Even at that level there would be hundreds of thousands who still couldn’t afford a house.

Unfortunately the South East (and other hot-spots) are always going to be expensive.

Possibly, possibly not. My mortgage is due to be paid by the time I reach retirement age but I fully expect to be able to overpay in the final few years when our girls have grown up and left home and we have much more disposable income

Not going to help them onto the housing ladder then?

So where do you draw the line? What house price makes it fair to the poor?

The truly poor should be housed by the council, house prices should be roughly 3 x income – if you did this I would expect a huge surge in productivity and economic growth.

“Housing is one of the most egregious examples (in this country) of the boot of the rich on the neck of the poor. And it would be pretty easy to work towards fixing it – it’s a well known problem with lots of solutions.”

This.

Only the most self-centered of people, the most vested or the most ignorant can look at this country and say there is not a problem with housing.

Anyway this thread is missing this!…

🙂

Is it right that people like gr5604 have to sacrifice their 20s when others are enjoying life?

When I was in my 20s I was shit poor. Everyone I knew was shit poor. Because we were trying to buy houses. I thought thats what being in your 20s was supposed to be like. At least its character building.

It IS much harder now. But complaining that it isn’t fair that you can’t have your nice house AND you foreign holiday AND your stable of 3k bikes AND your T5 just comes across as millennial whinging and doesn’t really help matters.

house prices should be roughly 3 x income – if you did this I would expect a huge surge in productivity and economic growth.

Which they roughly were (+10%), before the 80s. How do we get back there?

No one is complaining about any of those things.

We want good quality rentals and a realistic route to owning a house.

It might be mainly a South east problem now, but it is coming your way soon.

We needed to restrict house value booms , its too late now , should have had taxes on property profit
sliding scale depending on how long the property was lived in , speculators could still work with houses that needed renovation as those costs could be factored into the tax, leaving it all to the market and
heating it up along with restricting social housing has made a mess.

The solution is to make BTL less appealing and ultimately introduce a universal basic income.

Is it right that people like gr5604 have to sacrifice their 20s when others are enjoying life?

We can’t go back as a society I know – but the other thing back in the late 80s and early 90s when I first bought is people were doing things much sooner. Couples got married in their early 20s and a house was really the dream for which everything else was sacrificed.

House, kids, one car and a week in SkegVegas! 🙂

But going back further – my grandfather who was an Overman down t’pit was considered a fool for taking a mortgage and buying his own house in the 1950s.

We needed to restrict house value booms , its too late now , should have had taxes on property profit
sliding scale depending on how long the property was lived in

that already exists. You pay CGT on any property you own that is not your primary property, and if you live in a property then rent it, you pay CGT on a sliding scale based on how long you lived there.

FWIW, I was a BTL landlord for most of my 30s (38 now, sold last year) – nothing alturistic about it, it just seemed like the most efficient investment, which it was, partly due to the rental income (£250 mortgage, £1250 rent), but mostly due to the rise in prices over the period I rented it out (could have sold for £260k when we moved out, sold for £338k 5 years later). Together these turned £60k (deposit) into ~£180k. If you remove the growth from house prices, I think most BTLers would simply not be interested in buying them up

Those numbers are obscene for the amount of work you put in.

When I bought my first house I rented out three rooms and slept in a room too small even qualify as a box room.

It’s the “hidden” costs of living that are doing for peoples savings/outgoings.
Granted it was the early 90s but my bills were low. Council tax was probably less than some folks sky bills now. The rush for cool new stuff is understandable but expensive and it’s costing.
I should be mortgage free the year I retire. Yes a t6 yes expensive bikes yes a decent wage but no kids (we’d swap it all for kids but alas biology had other ideas).

The solution is to make BTL less appealing and ultimately introduce a universal basic income

BTL *is* significantly less appealing. I want out. Thousands of other landlords too. The returns are not what they were a few years ago.

I also agree with a universal basic income.

Not going to help them onto the housing ladder then?

If we are in a position to help and we feel they need/deserve it then why not? With lower outgoings each month when they leave home (of around £1k in today’s money) as well as our mortgage being lower as a percentage of earnings (we don’t intend on remortgaging but I do expect to earn more in 10+ years time) means I believe we would be in a position to help if we believed it was needed.

And we may also decide to downsize (this has been discussed already in our household) which would mean they would have access to further financial support.

We want good quality rentals

The solution is to make BTL less appealing

Would you care to elaborate on how you get “good” rentals whilst simultaneously discouraging people from becoming landlords? I’m obviously missing something but that doesn’t make a lot of sense to me.

Would you care to elaborate on how you get “good” rentals whilst simultaneously discouraging people from becoming landlords? I’m obviously missing something but that doesn’t make a lot of sense to me.

Cut the private landlords out and let Councils take control of social housing again. Social housing should not be about returns.

Or how about the landlord takes a little less profit – outrageous I know. Look at @5lab numbers if you are unsure if this is possible.

you must be aware a 3 bed house at 130k is highly unusual. I could got not get studio flat within 50 miles of where I live. Sure I could pack up and move – but there are no jobs or family (childcare).

A three bed house for £130k where you live might well be highly unusual. I’ve just bought a 5-bed property for £162.

As our biscuity friend says, this is all about choice. You are choosing to live in one of the most affluent and expensive parts of the country. Having children is (generally supposed to be) a choice. Your career path is a choice. And it is of course well documented that everyone North of Dudley is unemployed.

Cut the private landlords out and let Councils take control of social housing again.

Why are these mutually exclusive?

Are you arguing that the only reason councils cannot “take control of social housing” is because of all those pesky landlords? Only I’m fairly certain that’s not their main barrier to entry here.

A while back I asked “why is BIL so vilified?” and I’ve had a big long list of problems which, whilst most are genuine problems which need addressing, none of them seem to me to actually be the fault of private landlords. The only valid gripe seems to be an objection to capitalism.

Brilliant, move away so we can carry on profiteering from people trying to access the most basic amenitie.

Or how about the landlord takes a little less profit – outrageous I know. Look at @5lab numbers if you are unsure if this is possible.

this is happening. In the last 5 years the following tax rules have come in :

20% tax on mortgage payments for (most) BTL
3% additional stamp duty for BTL
increase in tax you pay if you owned a house, lived in it, then flogged it

there have also been changes to make it harder to evict tenants, and other costs lumped onto the landlord (right to live in the UK, no fees chargable, etc etc)

there has been almost zero complaints about this – I think the taxes will continue rising until the total number of privately rented properties stops rising, or starts falling – its an easy way to pull more money into the treasury and help lives of FTBers. I don’t disagree with this, it is a good thing to balance the market

Or how about the landlord takes a little less profit – outrageous I know. Look at @5lab numbers if you are unsure if this is possible.

check mattoab’s tale from a few pages back. Struggling to evict people, who pay no rent for months. Landlord needs to make some money to account for scum like this. And people who have done nothing wrong (future renters) are paying for it.

Completely unworkable, pie in the sky suggestion:

Each month, (and by agreement of both parties) some of your rent goes into a pot which is returned to you when you move out, as long as you dont fail to pay the rent and dont trash the place.
This could then serve as the deposit to buy, you and a mortgage lender would know what is in your pot.

Would need an independent party to hold the money, much like the damage deposit scheme. Hopefully it could pay a paltry bit of interest too.

that already exists. You pay CGT on any property you own that is not your primary property, and if you live in a property then rent it, you pay CGT on a sliding scale based on how long you lived there.

Think he means you’d pay CGT on your primary residence as well. Seems fair to me and would definitely slow down the market. Maybe you could ring fence that money and put it back into social housing. So as BTL pull out as it becomes an illogical investment, these properties could come back into public ownership.

And the stamp duty bung, maybe stop doing stuff like that?

Also, think its fair to criticise the shit landlords, but ultimately govt policy is to blame for btl

Brilliant, move away so we can carry on profiteering from people trying to access the most basic amenitie.

Or choose to stay and suck up the fact that you’re living in the most expensive part of the country.

I’d love to live 200 miles South of where I am currently. Know why I don’t? I can’t afford it.

Ooh, I know, you could move to Burnley and become a landlord. (-:

I’m in my thirties now and during my twenties 70% of my pay went on rent and associated bills before I even ate. Thankfully in my late twenties I changed careers and got a promotion to a wage above the previously discussed average and could really start saving enabling me to buy a few years ago.

It’s only been mentioned briefly, but the availability of 100% or more than 100% mortgages pre 2008 allowed a few of my older friends to get mortgages in those days, I would have done it but couldn’t get the couple of grand it required for the associated fees together in a short enough space of time. Even a 100% mortgage back then would have been cheaper then my rent! Even though mortgage rates are lower now but property prices are much higher, my first few years of mortgage payments were more than what pre 2008 100% would have been due to the increase in property prices.

So where do you draw the line? What house price makes it fair to the poor? Make all first time buyers houses £50k? Even at that level there would be hundreds of thousands who still couldn’t afford a house.

£50K would be a mortgage of what £250 a month, i.e. a quarter of one persons minimum wage. Are you sure there wouldn’t be loads of people who could not afford to buy that £50k house.

The only valid gripe seems to be an objection to capitalism.

Nonsense, it’s an objection to a warped version of predatory capitalism applied to a basic human right.

Ooh, I know, you could move to Burnley and become a landlord. (-:

This problem is heading your way, then will you be suggesting moving out the country ?

check mattoab’s tale from a few pages back. Struggling to evict people, who pay no rent for months. Landlord needs to make some money to account for scum like this. And people who have done nothing wrong (future renters) are paying for it.

I’ve been working in the refurbishment of social housing for the majority of the last 20 years and i’d confidently wager that there are way more bad tenants in the world than there are evil landlords.

I wouldn’t risk being a landlord after i’ve seen some of the devastation caused by some people to rented properties.

I’d estimate that most large social housing providers, at any given time, have at least 5% to 10% of their properties void awaiting repairs to make them habitable.

Are you sure there wouldn’t be loads of people who could not afford to buy that £50k house.

They might be able to afford it but they wouldn’t be able to buy one on the south coast. If a decent house did cost anything like that then nobody would build new ones, nobody would sell the one they own and if one did somehow come on the market there would be thousands of people trying to buy it.

The whole system needs a massive shake up, starting with a load more social housing but that won’t happen anytime soon.

this is happening. In the last 5 years the following tax rules have come in :

20% tax on mortgage payments for (most) BTL
3% additional stamp duty for BTL
increase in tax you pay if you owned a house, lived in it, then flogged it

there have also been changes to make it harder to evict tenants, and other costs lumped onto the landlord (right to live in the UK, no fees chargable, etc etc)

Agreed, these are good steps, but I suspect that rents have also risen to balance some of it out.

Or choose to stay and suck up the fact that you’re living in the most expensive part of the country.

I’d love to live 200 miles South of where I am currently. Know why I don’t? I can’t afford it.

Not quite as simple as that though is it? Where you live isn’t an easy choice for lots of people, heavily influenced by family, friends and work. Seem legitimate to seek correction for some of these things. In the same way it’s legitimate for some areas to seek correction in underinvestment in their economies.

ah yes, renters are scum was waiting for this. – is it possible you are only seeing the worse cases as this is your job?

The new changes outlined by 5lab are very welcome, but rents still raise year on year.

Why would you give stamp duty tax breaks at a time like this, while ignoring 3 million people that were not covered by any furlough scheme. We are getting towards the tipping point where the majority of people will be renting – things will change then

This problem is heading your way, then will you be suggesting moving out the country ?

…have you every been to Burnley! 🙂