to think high house prices are the problem?

(230 Posts)
benefitcapclaptrap Mon 15-Apr-13 20:23:08

Just watched a news item about the benefit cap being introduced today in some areas. Not sure I totally agree with it but I understand that the reason for it is that the welfare bill is too high. What I don't understand is how reducing housing benefit payments will solve the problem in the long term.

As I see it, the reason housing benefit spending is high is because the rents charged are also high. Too high in fact for the (mostly working,but low paid) tenants to be able to afford to pay without assistance. The usual reason given for high rents is lack of available properties, but I can't see the evidence for this locally (south east) or in other towns I have visited.

Instead, I would suggest that, the reason for high rents and demand exceeding supply is actually due to the cost of buying a house being far too high. A large proportion of people who would like to buy a house (and in the past would have been able to afford to) have been priced out of the housing market. Therefore they have no choice but to rent those same houses from a landlord that could afford to buy it. This means the rent is at a rate that not only covers the mortgage the tenant couldn't afford plus extra for maintenance and I presume some amount of profit. So it would follow that the tenant quite likely will not be able to pay the whole rent their self and must apply for housing benefit.

Am I being unreasonable in thinking that if house prices were lower and affordable to most people on an average wage there would be a lower demand for rental properties. In turn this would mean lower rents for those who can't or don't want to buy and mean lower bills for housing benefit. Also if people didn't have to spend such a high proportion of their income on the basic necessity of a home to live in, there would be less need for top-up benefits (e.g. tax credits) and people would be able to spend more which would get the economy moving again.

So AIBU? <dons hard hat and flameproof suit>

HollyBerryBush Mon 15-Apr-13 20:24:27

Your logic is there grin

But! what about the house owners? Who would foot the hypothetical bill and take on the debt if house prices were slashed?

CloudsAndTrees Mon 15-Apr-13 20:29:15

You are right, but its not that simple. It's not just that house prices are too high, it's what housing costs in relation to wages that matters. You could also say wages are too low, and it would be the same.

If house prices were somehow lowered, you would have lots of individuals losing a significant asset. If wages were higher, some people would lose their jobs, taxes would have to go up, big companies would relocate and small ones would close.

Fargo86 Mon 15-Apr-13 20:30:38

You can't artificially lower house prices. The problem is too many people, too few houses. Either we need more houses, or less people.

CloudsAndTrees Mon 15-Apr-13 20:34:32

Also, and I'm just speculating here, I realise I may be wrong, but doesn't most housing benefit go to social housing tenants anyway seeing as so many private landlords don't accept HB?

manicinsomniac Mon 15-Apr-13 20:37:50

I'm not a home owner nor have I ever looked at becoming one but, as far as I know, house prices are massively lower than they used to be?!

TunipTheVegedude Mon 15-Apr-13 20:42:24

Fargo, house prices have been artificially held high for the last few years. It's what the low interest rates, stamp duty holidays and various government schemes to help buyers have been for.
If the supports were withdrawn the bubble would deflate. But obviously if it happened quickly it would be horrible for a lot of people (repossessions etc) and the banks would lose a lot of money.
Instead the plan appears to be to keep prices high so people feel like they have substantial assets and keep spending, and inflate away the bubble. Which will also hurt.

HollyBerryBush Mon 15-Apr-13 20:46:01

Even if prices stabilised and didn't increase by inflation only - it would take a generation to bring back into line with earnings.

Although, M&D bought their house for £3,600 back in 1966, I think my dad was on £29per week, so that's roughly £1500pa. So taking it back to those days a house should be double your annual income IYSWIM. I know they could have afforded £4,200 but they were horrified at the repayments.

ihategeorgeosborne Mon 15-Apr-13 20:48:55

Fargo, the problem is that house prices are being kept artificially high, through low interest rates, lax lending criteria and QE. This will be further exacerbated by George Osborne's funding for lending schemes and home buy schemes. All this does is remove the risk of lending from the bank to the government, i.e. the tax payer. We would like to buy a house but won't even consider it in this climate, as I don't think it will end well.

ihategeorgeosborne Mon 15-Apr-13 20:50:35

Also meant to add, Op YANBU smile

RenterNomad Mon 15-Apr-13 20:53:25

You're assuming that all landlords bought at the top of the market. Not all did, and those who have lower outgoings (mortgage payments) will be enjoying better yields, but will keep their rents at "market" levels - why wouldn't they?

Also, benefit cuts will be affecting "middle class" tenants (non-HB, long term private rental sector dwellers) through child benefit/WTC squeezing = a squeeze on disposable income, but I imagine that will negatibely affect ability to buy, rather than, particularly, reducing house prices. "Help to Buy" seems aimed at helping housebuilders, not changing the fortunes of all owner-occupier wannabes (it only affects newbuilds).

expatinscotland Mon 15-Apr-13 20:54:14

'Also, and I'm just speculating here, I realise I may be wrong, but doesn't most housing benefit go to social housing tenants anyway seeing as so many private landlords don't accept HB?'

No, most of it goes to private LLs.

RenterNomad Mon 15-Apr-13 20:55:48

Sorry, my point about "middle-class tenants" was in response to cloudsandtrees about HB.

VelvetSpoon Mon 15-Apr-13 20:56:16

Isn't the root cause though the complete lack of social housing in many areas? Far too much got sold off in the old right to buy days and wasn't replaced. If there was more social housing (which is generally let at below market rent) less need for private rents, prices should fall. The only reason there are so many BTL landlords is because a) it seemed at one time like a way to make money and b) to fill the gap left by lack of social housing.

MrsBucketxx Mon 15-Apr-13 20:58:18

historically people didn't own their own home, they rented, its only a recent thing post Maggie Thatcher that started the right to buy scheme that the ordinary person could afford to buy,

this pushed prices through the roof as more people got onto the housing market, and more private housing wasn't being built, no one wants to move down or step off the property ladder do they?

investment rental property where therefore more and the cost has to be passed on somewhere.

the government should be building lots if smaller housing and houses for rent. its will ease the market all round.

Rosesandlemons Mon 15-Apr-13 20:59:31

I agree the housing bubble is still very much there. I predict that we are due for another crash in the mid-term. It's the only way out economy can get back to normal, but unfortunately it isn't going to please house owners. Despite being in recession, the housing market is very much at a peak.

ihategeorgeosborne Mon 15-Apr-13 21:00:54

It doesn't just affect new builds though Renter as they're offering a mortgage guarantee scheme on ALL properties from next January. The government will guarantee any losses to the bank of up to 25%, to encourage them to lend to more people at lower interest rates. The problem is that this will be taken up by people who are predominantly already asset rich. It will also guarantee to push prices higher which will not help the first time buyer.

Confuseddd Mon 15-Apr-13 21:03:43

I think buy to let landlords should be taxed out of sight. I think they're a blight on the market. And local authorities need capital to build more social housing. Then they wouldn't be paying housing benefit over to rip off landlords.

JenaiMorris Mon 15-Apr-13 21:04:40

Abolishing rent controls was a big contributor.

MrsBucketxx Mon 15-Apr-13 21:06:53

confused why should I be taxed on an investment I barely make 20 quid a month on.

oh do shut up

CouthySaysEatChoccyEggs Mon 15-Apr-13 21:13:03

You may be only making 20 quid a month now, but if your tenants are on Housing Benefit, you will end up with an asset (the house, which you can sell to release the cash from that asset) PAID FOR BY THE GOVERNMENT.

In essence, the government is buying you an asset!

FarBetterNow Mon 15-Apr-13 21:15:00

The money lenders make bigger profits if they lend you more money.
The more you borrow, the more interest you pay over the term of the loan.
The bankers win again!

It is madness that the sign of a healthy economy is when house prices increase monthly.

ihategeorgeosborne Mon 15-Apr-13 21:20:40

Too right FarBetter. How is healthy for families to have to pay up to half their income in some cases on rent? It is ridiculous. No wonder the country is broke. The beneficiaries as ever, are the already asset rich, which is precisely why this government won't change the status quo.

Rosesandlemons Mon 15-Apr-13 21:21:02

I think land lords need more credit. They have saved up
A deposit to buy the house, they have paid solicitors etc. In reality it's only financially viable of you have lots of properties. They are lucky to break even. Yes they will end up with a property, but one they deserve after 20 years of stress. If they want to sell they will pay capital gains tax, so if they have bought at the peak they will be lucky to make any money at all

CloudsAndTrees Mon 15-Apr-13 21:21:23

Thanks. Expat, have you got a link?

The whole thing confuses me because there are so many stories of people unable to get a private rental because they claim HB/LHA, but that cant be that significant a problem if the majority of HB/LHA goes to private landlords?

specialsubject Mon 15-Apr-13 21:22:04

it was only a matter of time before a landlord-hater appeared.

in my experience of renting out my property (disgusting, I know - sorry) - the rent went up and down by about 20% between tenants. If no-one will rent it at the price you ask, you drop the price until someone does. It's called supply and demand.

BTW many private landlords cannot take HB tenants - can't get insurance.

CloudsAndTrees Mon 15-Apr-13 21:23:45

The government doesn't buy people assets, they pay for housing for the people that claim the benefit.

ihategeorgeosborne Mon 15-Apr-13 21:23:55

When other basic needs such as fuel and food go through the roof in price everyone complains loudly. Why then do people think it's so fantastic when the most important basic need of all, i.e. shelter sky rockets in price.

deleted203 Mon 15-Apr-13 21:29:32

Would agree with Holly that house prices used to be much more affordable, particularly for the young.

I know I'm old sad but I bought my first house for £18,000 at a time when I earned £6,500 p.a. It was a 3 bed 1930s semi, and banks were happy to lend 3 x your salary.

We've since moved several times. However...my first house came up for sale again a couple of years ago for £180,000. That means for it to be a comparable price I should now be earning £60,000 pa.

Well, I'm not! I'm earning around half that! Despite being 20 odd years older and having moved on considerably with my career.

I do wonder if my DCs will ever be able to afford to buy, certainly.

Viviennemary Mon 15-Apr-13 21:30:24

House prices are far too high in most areas. I'd like to move but to get anything better with as good a garden and postion would be too expensive for us to bridge the gap. So we just have to stay put. I don't agree with all those government rent subsidies going to Lanlords. Why is the taxpayer lining the pockets of landlords.

ihategeorgeosborne Mon 15-Apr-13 21:34:35

Good question Vivienne. Why don't they just use that money to build more social housing. Far more sensible. I can only assume that they profit from it themselves hmm

MrsBucketxx Mon 15-Apr-13 21:36:31

I dont accept HB even if I could so the government would not be paying.

MintyyAeroEgg Mon 15-Apr-13 21:37:34

Agree that btl is a huge blight on the housing market. That doesn't make me a landlord hater, so don't be so defensive.

I would like to see house prices drop. I am a homeowner but want my children to be able to afford their own home and as things stand now they won't be able to. We will probably end up selling this house to pay for our old-age care so no sizeable inheritance for them either. I worry for EVERYONE's children. A rental house similar to ours is nearly double what our mortgage is so there's no way that rentals are affordable. And people can't afford to buy either. Something has to give.

My friend, on the other hand, bought a flat at the peak of the climb and wants prices to stay high so she doesn't go into negative equity. But she can't sell as no-one thinks the place is worth that much, clearly. Or they cant afford the mortgage which is probably more likely. She also has trouble renting out as the rental is high for what it is, I guess. I'd say it was a poor investment and I feel sorry for her but ultimately I disagree with people trying to make huge amounts of money out of ordinary properties for the ordinary person in the street, when in doing so it prices ordinary people out of the buying market. It comes back to bite them on the bum, in the end.

maddening Mon 15-Apr-13 21:41:36

it's ok the government is approving loads of planning apps to build loads of houses in a vain attempt to build it's way out of trouble - so when all these shiny new homes come on the market then surely prices will decline.

unfortunately more people will be trapped by negative equity.

Sorry I meant that my friend bought her flat as an investment to rent out. She owns her own house.

benefitcapclaptrap Mon 15-Apr-13 21:42:59

Good point about how to lower house prices. I hadn't thought about that as I only started thinking about it in general an hour or two ago.

How about we say from tomorrow every house is now worth half what it was today. Everyone's house would still have the same value in relation to others, but actually the gap between your current home and the next step up is actually more achievable relative to your wages. Homeowners won't lose anything because at the same time all mortgage debts are also cut by 50%.

As I see it there is no actual loss in terms of assets and debts so long as it is applied to all properties simultaneously as their value is only relative to each other. But at the same time the cost of a home relative to the average income has now fallen and as I said earlier this should translate to a lower welfare bill and more disposable income all round.

The banks are probably the only ones who wouldn't be happy that they have lost 50% of the value of debts owed to them, but as another poster said it was them who gained from house prices rising the most and probably caused the problems we are now having so maybe its about time they suck it up take the hit. Halving the amount they get in bonuses should just about cover it grin. After all we are all in this together.

ihategeorgeosborne Mon 15-Apr-13 21:46:54

Well said Curly. Also what happens to people now who can't afford to buy because they're paying all their income on rent in 20 or 30 years time. What happens when they're no longer able to work? They will have to have HB. It is a mad situation when people can't afford to save to buy a house because their rent is so high and in many cases it is more than the land lord's mortgage. Why are they so hell bent on ignoring this crisis? What do they think will happen? Sadly, I believe that they just don't care. They just want to win the election in 2015 and to hell with what actually matters. Not that they've got any chance of doing that grin

Ultimately we will have to wait years, for the population of homeowners at the top of the ladder to age and need to sell to pay for their own care. Who will they sell to, when the families on the next rung of the ladder down already are paying the maximum amount they can afford on their current house? They won't be able to afford to move up so the houses on the next rung up will eventually come down in price. And so on down the ladder.

It's already happening in my road. Single Elderly people in family homes are having to reduce their house prices to enable the families that these houses were built for (3 bed semis) to afford to buy them.

Skinnywhippet Mon 15-Apr-13 21:49:52

^
Mortgage debts couldn't just be slashed by 50% If you borrowed £10000k from the bank you owe them £1000. Trying to mess with that would completely screw the value of our currency.

bonbonpixie Mon 15-Apr-13 21:50:04

It's all very worrying of course but I imagine the government doesn't wish the housing market to deflate. Think of the millions taken by the government every year via Stamp Duty. DH and I just had to pay 4% Stamp Duty on our last house. If house prices go down the government will be taking less money in overall.

CloudsAndTrees Mon 15-Apr-13 21:50:32

I'm with you Curly, a homeowner that would like prices to drop. Mainly for the sake of my children, but also because I might be able to buy a bigger house instead of the shoebox I currently have!

Claptrap, if your dreamy idea did happen, there would still be areas of high house prices simply because of location. People will always pay over the odds to live in the right area, or near the right school. So what happens when those areas where people actually want to live are full up?

I think a big part of the problem is that so many of us (myself included) have families where parents don't live together, so there are a lot of children that effectively take up two homes instead of just one.

MoodyDidIt Mon 15-Apr-13 21:53:54

YANBU op, i don't get it either :S

flaminghoopsaloohlah Mon 15-Apr-13 21:54:33

I recently read a report by Shelter: apparently if food prices had increased at the same rate as house prices have I the last 40 years the average family weekly food shop would be £450 - if that's anything to go by you are DNBU for coming to the conclusion that high house prices are the problem...thing is it seems from what I've read that we're pretty much stuck with it all...

GibberTheMonkey Mon 15-Apr-13 21:54:57

The problem with halving everything is that those who have already paid (for example) 90% of their mortgage off will feel hard done by compared to those who have paid 10%

GibberTheMonkey Mon 15-Apr-13 21:56:07

It used to be that food was a families biggest expense
Now it's normally housing with food second and council tax often close behind

Roseformeplease Mon 15-Apr-13 22:01:59

Some parts of the country are very affordable. I do not understand why more people don't look for jobs, business opportunities etc in more affordable places. Where I live you can get a 3 bed with a garden and sea views for about £120k. Rents here are low (£450 per month for the same house) and there are jobs, if you are flexible. Also, loads of people are self-employed (tourism type jobs and businesses mostly, but not exclusively). I always wonder why we are not swamped but we have very few new "young" arrivals, mostly retired folk.

If you can be flexible (and I appreciate not everyone can) why not? I moved here from SE21 and now live in a 5 bed house worth not much more than my 1 bed flat was. With good broadband and some imagination, some people could save themselves a fortune in rent and mortgages.

maddening Mon 15-Apr-13 22:03:53

but if house prices go down even more will be trapped and unable to move by negative equity - we bought in 2007 - we are stuck in a house that no longer meets our needs but can not sell (if we did we would still owe over £20k let alone solicitors fees and estate agents fees which we can't afford to pay anyway) - we would have to rent and no chance of building a deposit with 20k to pay off and we would be less likely to get a new mortgage anyway as we are 6 years older etc.

if we wanted to rent it out we could only do that by changing to a btl mortgage so would lose our v good interest rate and would have to pay £100 more in mortgage than we could let the house out for and we would have to rent elsewhere (unless we could miracle up a deposit to port our mortgage - we would still be paying the extra £100 per month for the mortgage on our property.

I think part of the problem is people like us - trapped in "1st" homes and unable to move on.

ihategeorgeosborne Mon 15-Apr-13 22:04:28

Have thought about that myself Rose, but the problem is that if you are not self employed you still have to be able to commute to your place of work.

sydlexic Mon 15-Apr-13 22:05:33

I don't think it would be a good idea to lower house prices. If we lower the value of all of the housing stock and people are in negative equity and banks have no security it will not help the economy.

The problem is people will pay what they can afford, which with interest rates so low, is a lot.

My first house cost £40k the interest rate was 15%

My current house has a 100k mortgage on it at 1% over base rate which is £292, nearly £400 per month less than my first house.

I am a landlord and have invested a lot of money in two houses which are let, one to a single lady and one to a retired couple. I have just spent £2k on a new boiler for one. I have all safety certificates and insurances.
My properties are let at market value. I don't understand the attitude of some people towards landlords.

Callycat Mon 15-Apr-13 22:17:08

^I think land lords need more credit. They have saved up
A deposit to buy the house,^

Not necessarily, Roses. Round here the majority of landlords received their property as an inheritance from their parents.

MrsBucketxx Mon 15-Apr-13 22:36:57

I'm not in the majority, I dont know anyone in this position.

same as usual, bash those who have more than you,

have you ever heard of the phrase asset rich cash poor,

Rosesandlemons Mon 15-Apr-13 22:41:56

Ok well in that situation their parents have saved up for a deposit....

CloudsAndTrees Mon 15-Apr-13 22:43:18

Even if a landlord has inherited their property or somehow acquired it without a BTL mortgage, they still have to do the job of being a landlord, or pay someone else to do it for them. They have to pay the costs associated with any property such as maintaining plumbing and heating systems, as well as safety certificates.

I have no idea why people seem to expect landlords to do this for free and charge rent that exactly matches their mortgage. They are doing a job and they have taken a financial risk, as well as providing someone with a home. There is nothing wrong with landlords charging market rate, I often find the attitudes towards them on MN completely bizarre.

MrsBucketxx Mon 15-Apr-13 22:46:53

exactly mn - landlord = evil money grabber who doesn't maintain their property and expected rent their home at a loss.

Callycat Mon 15-Apr-13 22:52:49

"Ok well in that situation their parents have saved up for a deposit..."

... and?

Angelico Mon 15-Apr-13 22:54:18

Bear in mind too that there are lots of reluctant landlords at the minute- having to move house due to changing circumstances, unable to sell previous home due to negative equity.

maxpower Mon 15-Apr-13 22:55:01

Op yanbu but I fear we're too far along to correct the problem. Even if there's a housing market crash those in power won't take the opportunity to try to do things differently to address the problem.

manticlimactic Mon 15-Apr-13 22:56:29

I had to rewind the news and check those figures. £350pw rent~?? shock A WEEK? Mine is just over that a month

But then I am North in social housing.

ihategeorgeosborne Mon 15-Apr-13 22:58:59

The 'reluctant' landlord is not helpful to the poor tenant who has to stump up huge fees to the letting agent, only to be told 6 months down the line that they have to move out again as the landlord has decided to sell after all. The kids have to be moved from school, they have to find that deposit again. There does need to landlords, but they need to be professional and operate as such. Reluctant landlords are a tenant's nightmare.

benefitcapclaptrap Mon 15-Apr-13 23:03:59

Oh I didn't expect this to turn into a landlord bashing thread sad My AIBU was that high houses were the problem, not landlords. I currently rent my home and my landlord is lovely and I'm sure the majority are also.

ihategeorgeosborne Mon 15-Apr-13 23:10:49

You're right claptrap, high house prices are the problem. My landlord is also good. I would still rather be able to buy by own house than rent though, as I worry about the security for my children and what we will do when we retire sad

YoniMaroney Mon 15-Apr-13 23:19:07

The government (the previous one, mostly) are to blame for high house prices, not the landlords, who respond to government policy on tax, interest, and so on.

If the government allowed more houses to e built for the millions of new immigrants, there wouldn't be such a problem.

But as they generally own at least two houses each MP, they don't give a fuck about normal people without second home allowances, because insane house prices make them as MPs rich.

ihategeorgeosborne Mon 15-Apr-13 23:22:40

I totally agree with you about the last government Yoni, but this government haven't exactly done much to change the status quo and they've been in power for 3 years.

Angelico Mon 15-Apr-13 23:24:36

I think you can safely assume reluctant landlords are too busy trying to save themselves to worry about being professional. By definition if they're reluctant they're amateurs, not professionals. Not a good situation for lots of people.

allagory Mon 15-Apr-13 23:32:22

Sorry YABU: It is just replacing your misery at not being able to afford a house with someone else's misery of negative equity. Imagine being forced into selling your house at a loss (after illness, divorce or bereavement quite likely) and then still paying off the remaining mortgage for years and years. For nothing.

No one will sell off at a loss unless they have to, so you also might not find much to buy.

My feeling it would probably be better if they increased wages and reduced taxes.

YoniMaroney Mon 15-Apr-13 23:43:51

It is harder to reverse high house prices than to stop them inflating in the first place though, ihatego. The former can have knock on effects.

RenterNomad Tue 16-Apr-13 00:48:25

No-one's mentioned distrust of pensions yet (Equitable Life? Nah, bricks and mortar, thought many). Nor the slower-growing, even deflationary years which left people looking for yield (and lack of yield screwed Equitable Life, didn't it, with its idiotic guarantees, chasing market share?) both for pensions and shorter-term investments. Yield-chasing in conditions of balooning credit equsls asset price bubbles. Bubbles in assets like gold and equities can be tolerated (relatively) painlessly. Financially-driven inflation in assets necessary for life, like agricultural commodities (esp. grain) and shelter, is considerably less tolerable politically, and it's quite right that there have been food riots. Investors need to price in political risk, and that includes the risk of fluctuating yields (c.f. fluctuating rent mentioned by specialsubject) due to people balking at certain rent levels, wage freezes or unemployment levels, defaults.

wonderingagain Tue 16-Apr-13 01:03:42

Councils are supporting families to negotiate with their landlords as we speak. Now that there is a cap on housing benefit, many buy-to-let investors will simply have to drop their prices. Those that don't will lose tenants and have to find others who are prepared to pay. People will only pay what they can afford and so unless the nation is swarming with wealthy professional couples eager to part with their money, the likelihood is that rents will simply come down. Along with that, there may also be a drop in sales prices as BTL investors cut their losses resulting in more housing supply.

It is right that the taxpayer shouldn't pick up the bill for an inflated housing market.

MrsBucketxx Tue 16-Apr-13 08:14:43

how can you drop prices when the rent barley covers the mortgage as it is, thats not including fees gas certificates etc.

negotiate with me all you like there us only so much I can give.

ShadowStorm Tue 16-Apr-13 10:47:46

Agree that house prices are a problem. I'd like to see them drop too (and yes, I am a house owner)

I think that there's a number of things that government could do to help - including encouraging more house building in areas where there's high housing demand, including social housing; reduce VAT on house refurbishments so that it's easier for owners to bring empty houses back into use; putting curbs on buy-to-let.

Viviennemary Tue 16-Apr-13 11:08:06

How can you drop prices when the rent barely covers the mortgage.

A good question. It all goes back to the banks. And the government does not want a mortgage crisis with lots of people in negative equity. And of course it would hurt their banker friends. And might even shock horror affect their bonuses. The tax payer has propped up rents for far too long.

quoteunquote Tue 16-Apr-13 11:20:56

When my parents bought their first house in 1967, a small terraced three story mill workers cottage, it cost two and a half times my father's yearly wage as a university lecturer, he mentioned it when we discussing relative house prices.

The same house when sold last year(according to a search) would be about equal over 15 years salary of a lecturer in the same job.

Binkybix Tue 16-Apr-13 11:27:29

How can you drop prices when the rent barely covers the mortgage

This goes back to the supply and demand point. If there is no one willing to pay the price then you need to either drop the rent and take a hit on the mortgage, or if you cant affird that in the medium term, sell up, possibly at a loss. There are risks with most investments, which is why you get a return.

I don't hate landlords - not all of them ;) -but you can't have it both ways. The majority charge the most they can get now due to market rates, so you also need to accept the other side of the coin.

HesterShaw Tue 16-Apr-13 11:30:30

YANBU.

I have long thought that the outrageous cost of accomodation in the UK is the source of many of society's ills.

Toasttoppers Tue 16-Apr-13 12:04:12

Link below on house prices vs average wages since 1980

blogs.thisismoney.co.uk/2010/04/house-prices-vs-average-earnings.html

I bought at a good time so my house value has more than doubled. Still much cheaper than SE, I have no idea how people cope down South. It's a home first before its an asset.

YoniMaroney Tue 16-Apr-13 12:06:23

"negotiate with me all you like there us only so much I can give."

Well tbh I think you set your rent at market levels. If you cannot achieve a rent at a level that will cover your mortgage, then that's something you have to deal with - either by selling your property, or by making a loss.

It's not really true that rents are set by mortgage costs, since one person might have a very expensive mortgage, and they can't expect people to pay over the going rate just because.

At the moment rents/mortgage rates are obviously in a fine enough balance that you can break-even, but this isn't really your choice.

My landlord rents me at below market rate, but above his mortgage, which is 10+ years old (on a lower capital value).

Absy Tue 16-Apr-13 12:13:46

YANBU

One of the things that I think should be done is regulation of the rental market. There is a degree, but not nearly enough. For e.g., in the area I live in in London the rents have gone up around 25% over the last few years. Yes, there is a lot of demand BUT, a lot of the time rents are set by rental agencies/landlords, and I doubt that their costs have risen by 25% in the last few years. The rise is driven by greed, pure and simple. And not just in our area - a friend lives in a less fancy area of London - her LL has demanded a 5% increase in rent every year since they've moved in. The mortgage is unlikely to have become more expensive, there hasn't been any development of the flat that would necessitate a rise in prices (e.g. redoing the kitchen). So why charge more?

When we moved into our flat, the landlord has outsourced some of their role to a rental agency, including deciding how much the rent should be - the LL bought the flat in the early noughties, and the flat has more than doubled in value, though I doubt their mortgage has. It is in the interest of rental agencies to raise rents, as they then get more income. The people who lose out are renters.

MintyyAeroEgg Tue 16-Apr-13 12:18:59

Couldn't agree more with Absy's post.

YoniMaroney Tue 16-Apr-13 12:22:50

Rent rises reflect excess demand, excess immigration and insufficient house building.

daisydoodoo Tue 16-Apr-13 12:23:41

Yes housing costs are a major issue. We brought first home in 1996 for £38k, earning around £15k, our mortgage was low around £300 a month (think it was signiificantly less), byt the time we sold our tiny 2 bed house just 4 years later it sold for £145k.
This allowed us to go on and buy a bigger house and have a bigger family. Our income hadn't increased that much, it was around £25k by then but we had £100k equity.

Now 13 years later, a divorce that left me with no equity (he managed to keep it, still to this day not sure how that happened), I earn a good wage but can not get back onto the property owning ladder as even with my wage the mortgage wouldnt be big enough for a house the size we need in the area where we live and work. If i was to move to cheaper area where i could afford the mortgage I wouldnt have a job earning as much as i do now, so maybe not able to afford my mortgage on a lower income?

So currently i rent, i rent a 3 bed semi detatched house for £1000 per month, this is at least half of my basic salary (i do get comission as well) without any bills paid. I know of a fair few other families that work and rent privatley but becasue housing costs are so high and the wages would only just about cover the rent, receive help in the form of housing benefit. That to me is what is wrong a family with two working parents, at least one is working full time, perhaps even both and yet they still dont earn enough to pay the rent!

loveisagirlnameddaisy Tue 16-Apr-13 12:45:29

Can I just point out that it was the last government who introduced Local Housing Allowance which caused some massively inflated rents due to the way houses were banded. Yes, a Labour government lining the pockets of private landlords. Who would have thought it?

This government then cut these market rates in 2011 to avoid landlords upping rents and taking advantage of the system.

YoniMaroney Tue 16-Apr-13 12:46:15

How did it allow you to buy a bigger house. Surely the bigger house would have gone up in value by even more?

If you bought a house for £38k and sold it for £145k, and then bought a new house for £200k then it would have cost £52.5k previously, if it rose at the same rate, so previously you were paying £15k to move up, and after the rise it was £55k, which means that the house price increases actually made you poorer.

YoniMaroney Tue 16-Apr-13 12:47:37

"Yes, a Labour government lining the pockets of private landlords. Who would have thought it?"

Er, how many houses does the Blair clan own?

loveisagirlnameddaisy Tue 16-Apr-13 12:49:28

I was being sarcastic...

lydiajones Tue 16-Apr-13 12:59:41

YANBU. But there is no real solution as people who have struggled in recent years to get on the property ladder would be left in negative equity if the prices went down. I do think the landlords (who bought property 10+ years ago) have it made.

Absy Tue 16-Apr-13 13:08:37

Some of the most expensive properties in London are unoccupied .

I do keep on waiting for the price bubble in London to pop, but I doubt it's happening any time soon, but it will. You can't have a capital city where normal people can't afford to live.
I think part of the reason that prices have been able to go up so much is because people just resign themselves to paying a larger proportion of their salary as rent than is normal outside of London, by saving less (or not at all) and/or doing without other things.

Though, in our area the house prices themselves are even more ridiculous. A flat went for sale in our building, and DH and I worked out that we could move up two floors, to a flat that is the same size but officially a two bed (we're still trying to figure out how), and pay twice what we pay in rent for a mortgage. We decided against it ...

wonderingagain Tue 16-Apr-13 13:22:03

Absy in the bad old days those huge multimillion pound London properties were rented out to several families and lived in. Before that they were lived in by the wealthy with their servants living upstairs or in the basement. Now they are simply investments.

Central London has lost its heart and the only thing that will change that is a massive tax on space (m2). Any space above a certain average quota should be taxed to Kingdom Come.

If BTL Landlords have over-stretched themselves on their mortgage and bought over-priced property that's their problem. The taxpayer shouldn't have to fix that by subsidising them.

HesterShaw Tue 16-Apr-13 13:28:48

Well the deregging or whatever it technically was called of the banks did it. So then people needed more money to pay the mortgage, so then families who h traditionally had a SAHP had to both get jobs if they weren't both working before.

When my parents bought their first house near Cardiff, they paid £9,000 for a three bedroomed, detatched house on a corner plot and a big garden. My dad was on a solid wage but nothing spectacular, and my mum was a SAHP. This was in 1975.

Things have changed so unimaginably much. Accomodation now costs the earth. DP and run our own business and take home about £45,000 which is more than enough for monthly payments, but again it's the deposit. It's so wrong.

Wannabestepfordwife Tue 16-Apr-13 13:31:33

LAs really should have been encouraged to invest in social housing rather than been encouraged to invest abroad it would have been lower risk.

I agree withabsy I do think letting agents have increased the cost of rent and speaking from personal experience I don't understand what they do to justify their letting fees.

flaminghoopsaloohlah Tue 16-Apr-13 13:33:09

If BTL Landlords have over-stretched themselves on their mortgage and bought over-priced property that's their problem. The taxpayer shouldn't have to fix that by subsidising them.

This.

Just like any investment/business venture - BTL landlording is a risk and it's unreasonable for any business landlord to expect the taxpayer to stump up the money to reduce that risk.

There are loads of great landlords out there...but there are many unscrupulous ones too: a friend of mine found herself homeless and jobless, but there wasn't any social housing to help her. Her local council had to put her into a really awful flat at £156 p/w (in an area where such a flat would go for around £100 p/w) The landlord had at least 10 other properties that were poorly maintained with an average of 3 flats in each property and because it was emergency housing the local council paid 100% of whatever he demanded. Since the council had a duty to house these families they had no choice but to accept his over-inflated prices. His excuse? As far as he was concerned these families were a risk because they had fallen on hard times.

wonderingagain Tue 16-Apr-13 13:44:26

Hester Well the deregging or whatever it technically was called of the banks did it. So then people needed more money to pay the mortgage, so then families who h traditionally had a SAHP had to both get jobs if they weren't both working before.

I would go so far as to say it was the introduction of several million women into the workplace enabled people to get larger mortgages and so prices went up accordingly in the family home market. The deregging came later, along with low interest rates, interest only, self-assessment mortgages. They added the extra sparkle to the goldrush.

And now the privileged can build a new home (usually by Polish builders on a minimum wage) in their back garden to further bolster their empires.

HesterShaw Tue 16-Apr-13 13:46:08

Chicken or egg?

amicissimma Tue 16-Apr-13 13:46:42

I suspect that if house prices dropped significantly, a lot more people from Mediterranean eurozone countries would buy here, specially around
London, to put their money in a safer place than their home. This certainly seems to be happening in London, but is restricted to those who are rich enough to be able to afford the high prices. This in turn is pushing prices up and less-wealthy buyers outwards and so it goes on.

I remember the days of rent controls -was it the 60s? The amount of property available to let contracted as, added to the risks of renting, it was worthwhile for fewer and fewer property owners. It's no good if people prefer to leave property empty (and, if necessary find ways to conceal the fact), rather than let it out.

I have heard private renters complain that they just can't compete with the rents that HB claimants can pay. Maybe HB is pushing up rents?

Unfortunately I can see plenty of problems but I'm rather short of solutions!

MrsBucketxx Tue 16-Apr-13 13:52:54

binky, why on earth would any landlord willingly rent at a loss.

are you sayimg this should be the case, I ( landlords etc) are in business to make money, we arent charities. your an idiot for even thinking this.

if you invest in stocks ths can go down but you dont do this by choice.

how is it that people dont get how an investment works?

wonderingagain Tue 16-Apr-13 13:54:45

Rent controls worked but Landlords failed to maintain properties because there was nothing in it for them. They did the job of the council really and could probably have done with some support. The properties became derelict and did not have much capital value. Those are the houses that people bought in the 1960s for £5000 that are worth £5M now.

In those days the wealthy lived outside London and the poor lived in the centre.

It's tragic that the London property pull has reached the mediterranean countries and they are now forced to move.

wonderingagain Tue 16-Apr-13 13:55:53

your an idiot for even thinking this well that's a nice thing to say of a Tuesday lunchtime! Is that how you treat your tenants?

amicissimma Tue 16-Apr-13 13:59:05

wondering, I don't think anyone is forced to move to London, just that they feel it's a good option at present. Did you think it was tragic when hundreds of thousands of British people felt that buying property in the south of Spain was a good option?

MoodyDidIt Tue 16-Apr-13 13:59:47

There are loads of great landlords out there...but there are many unscrupulous ones too: a friend of mine found herself homeless and jobless, but there wasn't any social housing to help her. Her local council had to put her into a really awful flat at £156 p/w (in an area where such a flat would go for around £100 p/w) The landlord had at least 10 other properties that were poorly maintained with an average of 3 flats in each property and because it was emergency housing the local council paid 100% of whatever he demanded. Since the council had a duty to house these families they had no choice but to accept his over-inflated prices. His excuse? As far as he was concerned these families were a risk because they had fallen on hard times.

shock that is disgusting. there is no word bad enough for that ^^ robbing cunt landlord

i am actualy forever grateful to my last landlord for being a greedy little chancer. i was a single mum on HB and he decided to put the rent up by 120 a month. Council refused to pay the extra HB, i refused to pay the extra. so he gave me my notice. Council rehoused me in a nice housing association house and the rent was much less what my ex landlord wanted every month. i also left it in a state and owed rent, bad moody and now i have managed to exchange my HA house to a lovely council house in a better area which i am hoping to either buy one day or be able to save a deposit to buy a place thanks to the cheap (ish) rent.

i for one really hope prices crash. sorry if this offends anyone but i couldn't give a shite about your "investment" - a house should be a home, not a way to make money at the expense of people less fortunate. and i want my kids to be able to buy even if i can't.

Illgetmycoat Tue 16-Apr-13 14:01:33

House prices could easily be reduced if banks were restricted in the proportion of annual income they could lend to borrowers, or if they went back to basing the amount they lend on one, rather than two people's income in a marriage.

They won't do that, though, because then we wouldn't all owe them so much money and be paying them lots of lovely interest.

HesterShaw Tue 16-Apr-13 14:02:07

Moody, I completely agree. Good luck to you smile

benefitcapclaptrap Tue 16-Apr-13 14:05:11

Some very interesting points being raised here. I am now wondering what effect the introduction of tax credits (the part that pays towards childcare) and the free nursery places for 3 year olds, had on the increase in housing prices. Did it allow both parents to go to work, where one had previously been a SAHP, and push prices higher due to increased income? Or was needed in response to prices already getting too high, and both parents needing to work just to keep a roof over their family's heads?

Alibabaandthe40nappies Tue 16-Apr-13 14:05:46

I really don't see the London bubble bursting, not until the Russians go elsewhere. That investment from the top is what is holding prices high.

Loads of people of my generation (30-45) are going to get a decent lump from parents eventually because of the housing bubble, which most people I know are already working out how to pass it on to the next generation (my DCs) without having to pay inheritance tax twice.
There are a lot of pensioners with enough income thanks to final salary pensions, that they are income AND asset rich. That money filters down, and is what has enabled thousands to get on the property ladder and that will continue for the next ten to fifteen years. The readjustment in prices will come after that.

morethanpotatoprints Tue 16-Apr-13 14:08:27

House prices aren't too high.
if you take the average earnings of 26k and times by 3 for a couple or 3.5 for a single person then this is enough for a starter home.
It isn't the house price its the high deposits people are expected to find.
Ok, there are areas of the country where it is more expensive to live and people struggle here. This has always been the case though, its nothing new. My ds1 is 21 and will have enough for his first home soon, he only earns min wage but is going for small terrace that needs work doing on it and is prepared to start off at the bottom. It will cost him between 35 and 40K we live in NW.

Alibabaandthe40nappies Tue 16-Apr-13 14:09:47

benefit - it has undoubtedly become a vicious circle, the two income issue. But there was definitely a time when the sudden injection of cash that tax credits and subsidised childcare provided pushed up prices. Gordon Brown has a lot to answer for.

ihategeorgeosborne Tue 16-Apr-13 14:10:35

i for one really hope prices crash. sorry if this offends anyone but i couldn't give a shite about your "investment" - a house should be a home, not a way to make money at the expense of people less fortunate. and i want my kids to be able to buy even if i can't.

Agree 100% Moody. Investments can go down as well as up, but for some reason the vested interests don't think that is an acceptable option.

wonderingagain Tue 16-Apr-13 14:14:20

Hester this has been my theory for a long time and I have been wary of expressing it loudly, but increased earnings per household (not per person) will have made a huge difference in the 1980s. Suddenly mortgages became very profitable for the Building Societies because their risks became reduced. With two people working in the household it was very unlikely that the owners would default.

So of course then the banks got wind of this golden egg and decided they wanted a piece of the action too. Our Lady Thatcher supported them by letting the banks sell mortgages too and the hen kept on laying.

If you went so far as to say that womens equality caused the housing boom you could also say that women have contributed to the fact that there is now no longer a choice between working or parenting. We have to work. And average income working women can only do that if we can get childcare subsidised by the state.

Once again the only people that lose are the taxpayers (twice - by subsidising childcare and overpriced housing) and children (arguably).

Owllady Tue 16-Apr-13 14:14:30

I agree with the OP and I think house prices are artificially high
you cannot even get a mobile home here for less than 90k

ShadowStorm Tue 16-Apr-13 14:16:13

MrsBucketxx, I think very few people would expect LL's to willingly rent at a loss.

As far as I can see, the point that's being made is that if you can't find a tenant willing or able to pay the rent advertised, is that LL's may be forced to choose between (a) having a tenant who's not paying enough rent to cover all the LL's costs, and (b) having no tenant at all, which would mean the LL losing even more money, and (c) selling the property, possibly at a loss.

I haven't seen any posters suggesting that LLs should voluntarily rent at a loss out of the goodness of their hearts.

JenaiMorris Tue 16-Apr-13 14:17:58

why on earth would any landlord willingly rent at a loss.

MrsB, I assume you're referring to BTL landlords. A BTL landlord is doing well if they cover their mortgage repayments. It is not, nor has it ever been, a given that the mortgage will be paid fully through rental income alone. This is particularly the case earlier on in the mortgage's life when payments in relation to income are usually high (as with any property purchase).

The investment is in the bricks and mortar which the rent you charge helps to pay for, with a view to it having been paid for in full years (25 maybe) down the line. The return on your investment isn't realised until the property is bought and you then either live in it or sell it on.

I'm afraid it might be you who is failing to understand the meaning here.

YoniMaroney Tue 16-Apr-13 14:20:16
MrsBucketxx Tue 16-Apr-13 14:24:34

when buying a blt mortgage your bank will check you can rent above a certain rate, called the rateable value,

I haven't ever had to rent at a loss but have come close to it. but this doesn't take into account for all the other fees involved ( and damage caused by tenants I spent thousands to correct)

ihategeorgeosborne Tue 16-Apr-13 14:27:03

But surely MrsBucket that is the risk YOU'VE taken. No one forced you to invest in property.

FasterStronger Tue 16-Apr-13 14:28:28

annualised over their years in power, house prices went up less than 2% under Thatcher per year and around 9% per year under Blair

Binkybix Tue 16-Apr-13 14:29:22

Well, yes, but market conditions can change presumably.

Effectively then, you have rented at a loss in the medium term if you take into account other costs. However, you will have the asset at the end, and as many have said, BTL has risks as well as upside.

JenaiMorris Tue 16-Apr-13 14:29:26

But rents are subject to market fluctuations!

Surely when you enter into a BTL mortgage and buy a property you take this into account, as well maintenance costs and void periods confused

This has been going on for years though. I remember reading various threads on property forums years ago from people who'd been sold the lie that BTL was easy money. Maybe it was once, but over a BTL mortgage's lifespan there will be highs and lows.

flaminghoopsaloohlah Tue 16-Apr-13 14:30:56

Moody - it happens in every LHA- landlords/B&B's renting out at ridiculous prices because of people losing their homes....and the councils pay it...

ShadowStorm Tue 16-Apr-13 14:35:31

It makes sense that banks check that you can rent above the rateable value when you take the BTL mortgage out.

But this can't possibly give a guarantee to anyone that the property can be rented out at the rateable value for the full life of the mortgage.

Property markets, just like any others, are subject to fluctuations. The warning about how the "value of your investment can go down as well as up" applies to all investments, including BTL properties.

flaminghoopsaloohlah Tue 16-Apr-13 14:35:35

Mrs Bucket - you made an investment...these can go up and down...because that's what investments do...including BTL ventures.

MrsBucketxx Tue 16-Apr-13 14:38:06

I for one would never rent at a loss.

can't see that ever happening with the rental market being like it is atm.

ihategeorgeosborne Tue 16-Apr-13 14:42:52

MrsBucket, people are losing their jobs, people are having pay freezes and pay cuts, people are having their benefits cuts, the government has put a cap on housing benefits. Just who exactly do you think in your wildest dreams can afford to continue to pay these rents?

wonderingagain Tue 16-Apr-13 14:43:12

Yonimoroney negative gearing links are interesting but make my brain ache. Is it a bit like instead of bailing out the banks, they bail out the holder of the mortgage?

Absy Tue 16-Apr-13 14:45:23

I agree - if you're a BTL Landlord, it's an investment. You could have invested that money into stocks, and suffered losses when the markets fall. Likewise, if the value of the property falls, or rents fall, that is a loss you need to take. It's immoral to artificially keep the value high to make sure you don't lose out. And, the e.g.s I gave above are all landlords who bought the properties 10+ years ago, so I doubt their mortgage payments have doubled (like the value of the properties have).

No investment is 100% safe, none. Even gold (which has been seen as a safe haven for decades) fell 8.7% yesterday.

YoniMaroney Tue 16-Apr-13 14:46:05

FasterStrong yes, in real terms:

House prices were 3.113x their 1997 level in 2007. In real terms, the rise over the Blair term was 136.5%, which is 9.0% real per year.

Over the Thatcher term, house prices were only 2.87x their 1979 level in 1990. Overall inflation, however, was 2.37x, so the real price increase was only 1.8%. If you look at wage increases (ahead of price inflation), prices did not get higher under Thatcher, I would imagine.

By the end of Thatcher's term, prices had fallen around 13% from their 1989 peak (the peak was 3.29x the 1979 rate), but even so, she did not cause disastrous HPI, as Blair did.

Prices by 1997 had still not exceeded their 1989 nominal peaks, so were by then even cheaper in real terms, and the real annual change over 18 years was just 0.4%, so homes by 1997 were more affordable than in 1979, which is what most people would call progress.

Considering the Labour government as a whole, prices doubled in real terms, a 6% annual real change, which in a low-inflation, low wage-increase, environment, one in which global stockmarkets flatlined, was terrible.

ShadowStorm Tue 16-Apr-13 14:47:35

MrsBucketxx, I can understand you not wanting to rent at a loss. But if things got to the point where you couldn't find tenants willing or able to pay a rent high enough, what would you do?

(a) rent at a loss
(b) have no tenant at all, and an empty rental property for possibly months on end
or (c) sell the property, even if it meant selling at a loss

MrsBucketxx Tue 16-Apr-13 14:47:35

I hate.

I dont accept hb at all, and I have never had an issue. my rental is relatively small 600 a month for a three bed detached is not that much.

lljkk Tue 16-Apr-13 14:53:00

Has anyone mentioned big factor is under-crowding? Families of 6+ used to live in small 3 bed terraces; now it's common for singles and childless couples to insist they can't reside in anything smaller than a 3 bed semi. Lower density is a huge factor in housing demand. Grannies don't live with family any more, divorced people don't share flats with their mates, lodgers are increasingly unusual.

There are lots of empty properties, too, but usually in the places with too few jobs so not enough demand.

JenaiMorris Tue 16-Apr-13 14:55:22

Unless shortfalls in rent combined with other costs (interest, repairs and so on) over the lifetime of your mortgage are more than the value of the property at the end of it, then you're not making a loss.

Mondrian Tue 16-Apr-13 14:55:50

What started the whole saga in 2008, the sub prime mortgages, is IMO just the tip of the iceberg. House prices are in for a big readjustment once the interest rates start to hike up - many will find themselves in the same situation as the post thatcher negative (or zero balance) equity era.

As for rental prices being too high, i dont think so as historically residential rents have been fixed at 6% but now are closer to 4% due to market saturation of rentals as well as lower interest rates so not really out of line if price of property is taken into account.

ShadowStorm Tue 16-Apr-13 14:56:47

That's a good point, lijkk.

I know plenty of people who live in homes with one or more spare bedroom for a variety of reasons.

LimitedEditionLady Tue 16-Apr-13 14:57:08

yeah i can see your point but id be quite mad to see my house value drop when i already felt a drop as we bought just before the recession when the prices were higher.

YoniMaroney Tue 16-Apr-13 15:03:44

wonderingagain with negative gearing, you basically do this:

John Q Bloke works as a trader in Ozzie bank. He pays 46.5% income tax on everything over $180k.

John Q Bloke buys an apartment in Melbourne for $300,000. On this he pays $17,500 in mortgage interest and other costs, and receives $11,000 in rent, so apparently renting it out at a loss of $6,500 per year.

In addition, he is allowed to write off 2.5% of the cost of his apartment as a capital allowance, this is $7,500 per year.

His deemed net loss is therefore $14,000 per year. The actual cash flow loss is $6,500, but he's also writing down $7,500 (2.5%) of the capital cost of the building.

This $14,000 loss, even though arising on a property, is then deductible against his personal income tax liabilities for working in the bank.

So he ends up deducting 46.5% of $14,000 off his tax bill tax = $6,510 per year.

As he is only losing $6,500 on renting the apartment out, he ends up making $10/year profit. Not much for sure, but it's a lot better than that $6,500 loss, and he reckons this time next year the apartment will be worth $325k, so it's fair dinkum after all.

Obviously the higher your income, the bigger benefit you get from doing this, and because in fact there isn't really a capital loss at all (since the capital values of the land are rising), a big portion of the tax loss is not a real loss.

Without the capital allowance, you could still use negative gearing to reduce the loss on the rent, but it's the capital allowances that make it really profitable.

wonderingagain Tue 16-Apr-13 15:12:11

I think this negative gearing works on the basis of being accounts literate. The only people that would understand this are bankers and accountants (and obviously you Yoni).

But the gist of it I guess is that it began as a way to keep the housing market reasonably stable but has changed as it now covers people's tax income from other earnings meaning that people are doing this as a sideline tax dodge rather than a way to keep their property business afloat.

YoniMaroney Tue 16-Apr-13 15:23:37

Well:

UK - interest payments only deductible from rental income only
Aus: interest payments and capital costs deductible from total personal income

MoodyDidIt Tue 16-Apr-13 16:18:16

Moody - it happens in every LHA- landlords/B&B's renting out at ridiculous prices because of people losing their homes....and the councils pay it...

i hope that with all the benefits caps that will help put a stop to that. while i don't agree with a lot of the recent benefit cuts, thats one cut i absolutely do agree with cos it will stop profiteering landlords ripping off the state. GOOD!! they'll have no choice but to accept less rent, either that or get fuck all.

and actually mrs btl Bucket IMO do think 600 a month is a lot for a 3 bed (detached or not) my rent is £78 a week (about 340 a month?) for a large 3 bed semi. (and before anyone starts on about LA rents being too low, its not that they are too low its that private rents are too HIGH)

oh i could talk about this till the cows come home. but something i heard some say recently which made me think. the way home ownership at all costs is pushed on to people as the be all and end all. might it have anything to do with the fact if we are a nation of mostly home owners, when we are old, the govt won't have to stump up for care will they? cos they will just make people sell their houses.

expatinscotland Tue 16-Apr-13 16:22:47

'GOOD!! they'll have no choice but to accept less rent, either that or get fuck all.'

No, they won't. They just won't take people on HB even if they could. It's a LL's market as fewer and fewer people can afford to buy their own home.

MoodyDidIt Tue 16-Apr-13 16:28:59

well where are these people going to go then? are they all going to be on the streets? i don't think so.

MrsBucketxx Tue 16-Apr-13 16:36:47

the councils WILL have to build homes for those who can't afford private rents.

council tax will go up but all will benefit from jobs homes etc.

expatinscotland Tue 16-Apr-13 16:38:05

Temporary housing is where they will go. The LLs can easily get people who don't need HB in this climate. This cap won't do FA and may well come back to bite plenty of people who think it's a good thing right in the arse.

YoniMaroney Tue 16-Apr-13 16:41:31

'The LLs' are not a homogenous group.

MoodyDidIt Tue 16-Apr-13 16:41:35

The LLs can easily get people who don't need HB in this climate.

i take your point expat but as rents are so high, even working people are increasingly needing HB "top ups" so surely the pool of people who can afford extortionate rents without HB is getting smaller. and those people can probably afford to buy anyway?

MrsBucketxx Tue 16-Apr-13 16:46:31

many can afford the rent like my neighbours who pay 950 a month but can't afford to save for a deposit,

lots dont need hb, intact I say most private rentals arent.

expatinscotland Tue 16-Apr-13 16:48:33

Plenty are, Yoni, if their BTL lender or insurance will not allow them to take HB/LHA tenants.

'and those people can probably afford to buy anyway?'

How? Without a 20% deposit and under far stricter lending rules. Most people don't rent out of choice. There is thread after thread on here from posters with decent wages who don't even need HB struggling to rent because they have children or one is a SAHP.

MoodyDidIt Tue 16-Apr-13 16:52:35

many can afford the rent like my neighbours who pay 950 a month but can't afford to save for a deposit

yeah thats exactly why they cant afford a deposit. because they are lining some fucker elses pockets sad poor sods.

fair enough expat, point taken. its rubbish though isn't it? really rubbish. sad

YoniMaroney Tue 16-Apr-13 17:01:42

"Plenty are, Yoni, if their BTL lender or insurance will not allow them to take HB/LHA tenants."

Hmm, I'm not sure if that's enforceable actually, now that HB is being paid to the individual.

And anyway, my point was that it's presumptuous to assume that all LL enjoy a buoyant rental market, when conditions vary hugely across the country, or even across a city.

Certainly in London demand looks good, but how about in Liverpool or somewhere like that where you can buy a house for under £50k?

wonderingagain Tue 16-Apr-13 17:06:16

Thanks for that Yoni, actually I didn't know income from rent was deductable against mortgage interest. The ultimate aim of these rules is to stabilise the rental market so we don't have landlords set up and then move tenants out at a whim when they see a better property or indeed when their BTL starts to fail financially. In Europe they control all this with long term contracts and huge legal obligations on landlords. It's not something you enter into unless you are prepared to commit. I think slowly they are working towards that here and the recent crackdown on landlords is a sign of this.

I do think prices will eventually reach 3.5 x household income eventually however because professionals now get paid more and workers get paid less, the division between the haves and have nots will get much wider and soon the only people renting will be the have nots, who will not be able to cover the rent of over-stretched BTL landlords.

MrsBucket 600 a month is low but still demands an income of at least 1200 after tax which is a sizeable sum depending on the area you live in, the wages available. London is a different ballgame entirely.

YoniMaroney Tue 16-Apr-13 17:20:39

I'm not sure income multiples are necessarily that important, if interest rates remain low in the long term then affordability is what counts.

However, the issue is that affordability, while present in the North, is absent in the South East and London especially.

£1200/month income is not actually that much, when you consider that minimum wage is now (at 37.5 hrs/week), £1025/month, but on top of that, with 2 children, you would receive around £800/month in tax credits. By the time your children had grown up, you'd be all but mortgage-free.

The issue comes in London where tax credit rate are the same as in the north, but house prices up to 10 times more expensive - in the north on minimum wage, tax credits will pay your mortgage (if you have kids), in London you can't even get a mortgage, and your tax credits will line the pockets of a landlord (or more realistically a bank, since the landlord probably himself bought at some ridiculous price, and the original owner who made £££ on the sale is probably dead by now), and you've got no chance of ever affording a house. By the time your kids reach 18, since you never bought a house, your income will fall massively, but your costs will have increased with inflation (rents keep on rising, but when you buy the real cost of repayments is dramatically reduced by inflation over 25 years with a final nominal/real cost of zero (excluding maintenance) when the mortgage is paid off) over time, so you'll be old, poor, and completely fucked. Perhaps by that time parents will be borrowing from their children.

Who knows.

Anyway, thanks Tony! No more Boom and Bust indeed.

Absy Tue 16-Apr-13 17:30:33

"How? Without a 20% deposit and under far stricter lending rules."

Yip - I know plenty of people with good jobs, but who can't get on the property ladder in London. I'm in my early 30s, and IME, people in their late 30s and older could afford to buy somewhere, using their own savings/funds etc. The only people I know in their ealy 30s and younger who have bought have done so with parental input, even people with good jobs/substantial savings. I don't have wealthy parents, so I'm screwed (as are many other people my age).

Absy Tue 16-Apr-13 17:32:03

"yeah thats exactly why they cant afford a deposit. because they are lining some fucker elses pockets poor sods"

yes - is it fair/right that people can't afford to save for their own deposit, but are instead paying high rents to someone who either has a relatively low mortgage (having bought 15 years ago) or are mortgage free?

I wish people would stop pointing to the affordability of the north when it comes to housing. Yes, Yoni, there are certain parts of Liverpool where you can buy a 3 bed terrace for under 50k but it will be in one of the most deprived, crime-ridden areas of the country. Surely we are talking about the average British family home, in the average ok area. Not the bloody depths of drugdealer-dom.

loveisagirlnameddaisy Tue 16-Apr-13 17:45:40

'Some fucker else's pocket'

Charmingly phrased.

So are we suggesting that all private LLs are all 'fuckers'? That would include me, my partner, three of my friends and probably quite a few Mners. We can't all be fuckers, surely??

wonderingagain Tue 16-Apr-13 17:51:49

Good point Yoni about value of benefit/tax credit should be variable per region.

The only thing that will alleviate the North South divide is more jobs in the regions and fewer in London. This will reduce demand. Building a gazillion new homes isn't necessary.

It wasn't Tony, Gordon tried to regulate the banks when he was treasurer but the House voted against it. They did what they could but Margaret had done the damage years ago by setting things to sell the country to the highest bidder.

loveisagirlnameddaisy Tue 16-Apr-13 18:00:32

Yes, let's blame Margaret Thatcher. It's all her fault. FGS, she's not been PM for 20 years, plenty of time to start the reversal of her appalling policies (like building more social housing). So why hasn't it happened?

YoniMaroney Tue 16-Apr-13 18:08:17

Actually I think the issue with London is not enough supply of housing in London and surrounding areas.

Here's 3 of the top 5 headlines from a typical local newspaper:

"THE Open Spaces Society has branded a decision to build 1,500 homes near one of the largest nature reserves in the south east as "outrageous".

Runnymede Borough Council has agreed to remove green belt status from the former DERA site at Longcross, on the boundary of Chobham Common."

Next:

"RESIDENTS are continuing to fight plans for 371 homes at Westfield Common in Woking, ahead of a crucial council meeting this week."

"A full planning application was submitted in February by Evolution, a partnership between developers Kier Property and Thames Valley Housing, to demolish buildings on Westfield Common and replace them with 371 homes.

A total of 651 parking spaces, plus outdoor play areas, landscaping and new access are also part of the application.

Opposition against the proposals has a long history, including victory in a public inquiry when the council was refused a common land swap in June."

Further:

"A PETITION to stop developments in the green belt around Byfleet has attracted nearly 900 signatures in one evening.

The Byfleet Petition, set up by the Byfleet Residents Action Group, was signed by 888 people in the village hall, High Road, on Tuesday"

Basically the South East has absorbed millions of new immigrants but essentially no new housing has been built.

In other countries you can just build. The green belt is essentially a means of enriching existing land owners by denying people the housing that they need.

The planning process, and the endless demands by councils for trinkets from developers (new roads, new schools, etc.) means that the rate of housing growth is far less than required.

If it was easier and cheaper to build houses, then prices would not have grown at the rate they have.

London is expensive, but so are commuter towns outside it -essentially demand far exceeds supply.

As for Tony + Gordon, they had massive majorities and could do what they liked. They chose to task the BofE with keeping retail inflation low, but not controlling house price inflation (or indeed immigration).

wonderingagain Tue 16-Apr-13 18:18:39

Everything still has to be passed by the House and in this instance the House voted against the motion (not sure of details but could find out if wasn't busy working hard to pay mortgage).

When I meant more jobs in the regions I don't mean in the commuter towns around London, I'm talking the North, the South West, Midlands, Wales etc. Many government departments have already moved out and now the BBC is in Manchester so hopefully that will reduce demand a little. It's going to be a lot easier to build around regional cities than it will be around London. London is already sprawling enough.

The green belt was designed to limit the growth of London and rightly so. And I'm Londoner born and bred!

FasterStronger Tue 16-Apr-13 18:19:30

however if we keep building houses we will have even greater food insecurity than we do already.

if we did not import food, we would have less than 70% of the food we need in the UK.

so if at some point in the future, we cannot import food, because other nations need it to feed their own population, or war, we wont have enough food.

suddenly high house prices don't seem like the right thing to be worrying about.

wonderingagain Tue 16-Apr-13 18:25:19

If people lived in regional areas the food miles would be less and distribution would be more manageable. Planning housing properly will have an impact on waste. It will also make communities more sustainable as people will settle longer rather than simply 'exist' in an uncomfortable environment with long hours and little to show for it.

Market forces do not consider stability or community.

MrsBucketxx Tue 16-Apr-13 18:27:20

there are thousands of brownfield sites crying out for conversion, but its considered to be too costly.

this is where it should be built, not destroying miles of country side.

YoniMaroney Tue 16-Apr-13 18:30:11

If it's too costly, then it's not going to do much for house price affordability, is it?

Agricultural land costs something like £10k/hectare, the same land with planning permission is £1m/hectare.

wonderingagain Tue 16-Apr-13 18:36:26

There are brownfield sites in the regions too. The regions can do with a little less countryside, London can't cope with any more people.

ShadowStorm Tue 16-Apr-13 18:53:10

The land on brownfield sites can be contaminated and need environmental remediation before any building work can start. That can push the cost up quite a bit.

But I agree that developing brownfield sites should be encouraged where it's possible and practical for the land to be reused.

Pigsmummy Wed 17-Apr-13 10:59:59

My husband and I saved for years for a deposit and bought a house, the bank were willing to lend us about 4/5 times our salary (we haven't borrowed that much) We had a deposit of 15%. I think that we paid a fair price for a nice house (very small) house. I think that this is a typical story where two people are working full time and save hard (making sacrifices to be able to save).

If house prices of existing properties are reduced then the banking system will fail.

YoniMaroney Wed 17-Apr-13 11:00:52

"If house prices of existing properties are reduced then the banking system will fail."

House prices fallen over 50% in Ireland, large falls in US also, no failure.

JenaiMorris Wed 17-Apr-13 12:28:19

Google Japan, too.

MrsBethel Wed 17-Apr-13 12:34:26

Yes, housing is far too expensive in this country.
This:
* reduces standards of living,
* widens the wealth gap,
* makes our economy desperately vulnerable.

The govt needs to reduce planning restrictions and build a lot more houses. Millions more. Given that they can borrow at <1% interest rates, and make worthless land priceless at the stroke of a pen, a massive govt scheme couldn't fail to make money, would reduce house prices, increase standards of living, and would boost the economy.

MoodyDidIt Wed 17-Apr-13 12:58:39

great post mrsbethel

Mondrian Wed 17-Apr-13 15:55:46

I see far more apartments in the continent than I do here in England even though England has a higher population density. I hardly ever see a purpose built small block apartment (2-4 storey) development outside big cities but that's mostly what I see in places like Germany where population density is actually lower than UK. Consumer habits will need to change too only then will we see terraced houses replaced by terraced apartment blocks.

LimitedEditionLady Wed 17-Apr-13 18:16:48

I agree landlords do have a lot of stress aswell with owning a rental property.they need maintaining and if they dont get a tenant theyre footing bills until they do and also thry might get bad tenants!

CloudsAndTrees Wed 17-Apr-13 18:21:53

I think that's a good point Mondrian.

People don't want to live in apartments or flats any more if they have a family, they think they should all have a house with a garden. But the government won't build apartment blocks because they will be unpopular and they will be accused of ghettoising.

expatinscotland Wed 17-Apr-13 18:41:43

'People don't want to live in apartments or flats any more if they have a family, they think they should all have a house with a garden.'

Can you blame them? If they can afford it, why not?

expatinscotland Wed 17-Apr-13 18:43:03

The rest of the Continent complies with minimum sizing standards. The UK does not. They don't build apartments/flats, they build glorified shoeboxes. It's understandable they're not popular.

Owllady Wed 17-Apr-13 18:48:17

dont a lot of people in the uk have pets (ie a cat or a dog)

CloudsAndTrees Wed 17-Apr-13 18:53:47

Absolutely, I wouldn't want to live in a flat if I could afford a house, but if i couldn't afford my own housing I'd just be glad of somewhere safe and clean in a half decent area if it was provided for me at less than market rate.

Government provided housing does not need to be the same as private housing. It doesn't have to appeal to buyers, it just has to do the job. The government could do more to encourage private building, although they have made a start, but even those things would be criticised.

Owllady Wed 17-Apr-13 18:56:17

this is very rose spectacles, how many of you have lived in council flats lately? my MIl has some at the end of her road, used to own single elderly people, now they are full of drug addicts and a few elderly people, I wouldn't want my MIL in one that's for sure and I am not a snob by any stretch of the imagination

Owllady Wed 17-Apr-13 18:56:44

these flats have gardens btw
overgrown or neatly tended to and stolen out of regular

mateinthree Wed 17-Apr-13 19:04:12

Urgh, some seriously misinformed people on this thread, but then again talk about houses always seems to bring out the ignorant..

as far as I know, house prices are massively lower than they used to be?!

House prices adjusted for inflation:

1982: £74,000
1992: £91,000
2002: £130,000
2012: £165,000

Admittedly 'real' house prices peaked at £215k in 2007, but in nominal terms have only fallen very slightly. Since wages have barely gone up since then the affordability hasn't improved an awful lot. And before anyone bleats on about 12% interest rates, I suggest you go and look up what MIRAS was, and also consider the relative effects of deposits in a low price/high interest rate vs high price/low interest rate environment.

*I think land lords need more credit. They have saved up
A deposit to buy the house*

Bollocks. The vast majority of the BTL brigade simply MEWed their deposits from houses they already owned that had rocketed in value, using the advantage of having been born at the right time to snatch first time buyer properties and force those coming after them to rent those same properties and line the landlords pockets instead of buying them for themselves.

TunipTheVegedude Wed 17-Apr-13 19:31:19

Ah, a HPCer.

MoodyDidIt Wed 17-Apr-13 19:34:00

applauds mateinthree

particularly the last paragraph.

mateinthree Wed 17-Apr-13 19:35:41

Actually Tunip, I've never posted on that site, I find the general attitude on there quite depressing (especially the muted glee at job losses). Regardless, the material facts of my post are accurate.

mateinthree

I don't doubt your figures, but I am assuming they are averages. The problem with quoting average figures is they are skewed by sales / prices at the top end of the market especially in places like London. In fact, I wonder if that isn't at least part of the reason why the average house price adjusted for inflation has gone up. A better comparison is median income versus median house price.

mateinthree Wed 17-Apr-13 19:52:26

Toad, yes perhaps that be something to take into account, but certainly isn't the whole story. The house I live in (3 bed semi) in a small northern town was bought for £50k ish in the mid 90s, and cost me £150k a couple of years ago. My OHs parents bought a (2 bed terrace) house near central Manchester for £30k at the turn of the millenium, and sold it for £130k a few years back.

The south is definitely worse, but the North is a lot worse than it used to be.

YoniMaroney

I'm not sure what the rules are in Australia, but when one disposes of property it is normal to write the depreciation back in for tax purposes, except to the extent that the property is sold at a loss. So, while tax is not delayed, it is not permanently reduced.

mateinthree

Assuming there weren't renovations or other factors etc I will concede you have a point.

However, I doubt houses will ever go back to what they were in the 1960s without rent controls and stricter lending criteria. It would be interesting to know price-to-earnings ratios from the inter-war or pre-war periods but I suppose the statistics aren't out there. I do know that owner-occupancy was only about 20% I suspect, however, that the low prices of the 1960s were an anomaly.

YoniMaroney Wed 17-Apr-13 23:45:35

Toadinthehole some countries have affordable housing.

There's an interesting report here:

www.demographia.com/dhi.pdf

It notes that the majority of major US markets (pop > 1m) enjoy p/e ratio of under 4x. That is 40 out of 51. The median is 3.2x earnings. In the UK no markets have sub 4.0 p/e ratios, and the median is 5.1x earnings.

Whereas basically the whole UK is rated 'severely unaffordable', the only areas in this category in the US are Boulder, Hawaii, the New York area, Boston, and California.

Mondrian Thu 18-Apr-13 06:32:00

I don't think the two are comparable as UK has a much higher population density - 650/sq mile vs 84/sq mile, which means much cheaper land. Furthermore majority of houses are of wooden construction rather than brick making construction much cheaper (& less durable).

skippedtheripeoldmango Thu 18-Apr-13 09:55:04

Bollocks. The vast majority of the BTL brigade simply MEWed their deposits from houses they already owned that had rocketed in value, using the advantage of having been born at the right time to snatch first time buyer properties and force those coming after them to rent those same properties and line the landlords pockets instead of buying them for themselves

A lot of that happened in my home town, a place that is one of the most financially deprived areas in the UK. Your normal hard working 40 hour per week person cannot afford to buy because between that, and people retiring there (buying a house to let out and another for themselves) has shoved house prices up so high that the only way to live is to rent of the multiple property owning landlords or to get a house on the council estate (hardly likely, 4 year waiting list). The people who keep the town ticking over and who keep Asda full and running are never going to be able to afford to ever buy their own house.

On top of that, the local council were bloody stupid enough to allow a lot of the properties to be converted into bedsits...and you can all I'm sure imagine what happened...

The majority of people who have to rent also rely at least partly on HB...who is getting the benefit of the HB? The landlords.

YoniMaroney Thu 18-Apr-13 10:03:43

"I don't think the two are comparable as UK has a much higher population density - 650/sq mile vs 84/sq mile, which means much cheaper land. "

Well land in Alaska is not much use if you want to live in central Portland (which you can do, for a reasonable sum).

Mondrian Thu 18-Apr-13 12:29:22

The difference is so huge that it doesn't make much of a difference but for your benefit lets compare actual land in Contiguous United States (less hawaii & alaska) vs England. 7.6 million sqm vs 0.13 million sqm that's almost 60 times the area vs nearly 6 times the population (300 million vs 53 million).

Owllady Thu 18-Apr-13 12:32:12

I have l;ived somewhere like that skipped, I don't think people realise what a negative effect second hjome owners have on local economies (and now I will get loads of replies saying it helps it, okkkk)

HesterShaw Thu 18-Apr-13 12:36:27

It doesn't help at all. Where I live, some villages are almost half second home ownership. People who come down with bootloads of food from their local Waitrose and contribute bugger all to local life. And yet they are so self righteous and defensive when questioned. If you want a holiday in a pretty area, rent a cottage for a week or two like everyone else.

YoniMaroney Thu 18-Apr-13 12:54:20

Actually there's lots of empty land in the UK too, it's just that it's expensive or impossible to build on it, because of planning regulations.

Only 2% of England is built-up. www.bbc.co.uk/news/uk-18623096

Despite this we build smaller homes (800 sq ft average) than say Germany (average new dwelling size 1200 sq ft), which has a similar population density, or even Japan (1400 sq ft), which has a higher population density than ours.

Quality of life is a complex issue, but small houses and lots of unused land are not my idea of good sense.

Unfortunately we have suffered historically unprecedented levels of immigration, loose monetary controls, and no solution for this is in sight.

FasterStronger Thu 18-Apr-13 13:13:47

I think people will adapt and live in smaller houses and flats, share more, with friends, siblings, parents.

Owllady Thu 18-Apr-13 13:17:50

*HesterShaw Thu 18-Apr-13 12:36:27
It doesn't help at all. Where I live, some villages are almost half second home ownership. People who come down with bootloads of food from their local Waitrose and contribute bugger all to local life. And yet they are so self righteous and defensive when questioned. If you want a holiday in a pretty area, rent a cottage for a week or two like everyone else.*

exactly and that would help the local economy

HesterShaw Thu 18-Apr-13 13:23:26

Of course! No brainer!

But these people are too speshul to share.

Owllady Thu 18-Apr-13 13:27:49

grin

I once had to listen to one braying about why didn't council close off a one way street of a weekend as it made walking down the pavements too difficult for them, them being second homers. Not sure how he thought people would access their houses or how they coped in the week wink

HesterShaw Thu 18-Apr-13 13:56:48

And there was that incident in Cornwall where the fishermen wanted a permanent jetty installed to make landing their catches 100 times quicker and easier and the second homers formed an alliance and blocked it, using legal challenges they could afford, the crux if their protest being it would change their view. They were so utterly convinced of the fact that their wishes trumped the local people's. They seemed perplexed that anyone should think differently.

YoniMaroney Thu 18-Apr-13 14:10:13

Indeed: www.bbc.co.uk/learningzone/clips/conflict-between-local-people-and-second-home-owners-in-cornwall/7239.html

Of course such objections are hardly limited to second home owners. Those who own home at all fight tooth and nail to prevent new construction that would allow people to buy their own home.

We received a letter from the a neighbouring road saying that a planning application had been put in for two houses on an empty plot, and that we must object otherwise the place would change in character completely, as if entire roads of 1930s detached houses would be changed in flats as a result. Bollocks, no objection here, build away.

badgeroncaffeine Thu 18-Apr-13 14:12:27

I hope they don't build any more. Keep the supply down, keeps the prices and the rents up. This makes investing in property worthwhile.

HesterShaw Thu 18-Apr-13 14:14:35

Fuck the people though, eh?

badgeroncaffeine Thu 18-Apr-13 14:24:36

Why not devalue all investments then, see how the people who remain in the UK get on then...

HesterShaw Thu 18-Apr-13 14:26:23

We're talking about homes for people here. Places to live. Security. Comfort.

What are you talking about?

badgeroncaffeine Thu 18-Apr-13 14:28:40

Why not just buy a mud hut in Africa then and live there? Should cost you an amount you can afford.

YoniMaroney Thu 18-Apr-13 14:29:53

Lots of investments get devalued. Stockmarket fell by a half, twice. Still below 1999 levels now.

Gold price reached a two-year-low a couple of days ago.

The money in people's bank accounts is being eaten by inflation and 0.5% interest rates.

We are still here I think?

badgeroncaffeine Thu 18-Apr-13 14:32:24

You're talking about GLOBAL prices YoniMaroney

Property is a LOCAL commodity.

Owllady Thu 18-Apr-13 14:36:42

We received a letter from the a neighbouring road saying that a planning application had been put in for two houses on an empty plot, and that we must object otherwise the place would change in character completely, as if entire roads of 1930s detached houses would be changed in flats as a result. Bollocks, no objection here, build away.

have you ever lived anywhere where they have proposed a 5 pitch traveler site shock the disgust and outward prejudice was amazing when they proposed one here. I had to buy a paper just to make sure it really was still 2013

YoniMaroney Thu 18-Apr-13 14:43:02

? The London Stock Exchange is our LOCAL stock exchange. It's where our LOCAL pensioners have most of their pension funds invested.

HesterShaw Thu 18-Apr-13 15:17:22

Badger, elaborate? I'd fascinated to find out how you know what a stranger on the internet can afford.

HesterShaw Thu 18-Apr-13 15:17:40

BE fascinated even.

Mondrian Thu 18-Apr-13 15:32:31

Yoni, I agree that more land should be marked for residential development. Also government should make self-built much easier, it's pretty much the norm in the continent but uk is way behind - it also makes housing much cheaper by some 20 - 30% but of course it doesn't serve the big developers or the big landlords.

I don't think the 2nd homers or the small landlords make that much of a difference it's the big players that set the rates - the owners of the company that owns our apartment block in london (the lease & 30% of the 200 flats) are the largest landlord in Europe (as a family) and 2nd in the world as they own loads of properties ... Yet you never hear or see their names as its a series of companies spread throughout the family. Incidentally they moved to uk after the war penny-less!

Owllady Thu 18-Apr-13 15:51:45

I think all taxpayers should be given the option of buying a plot of land and then we could all put up our flatpack homes

FasterStronger Thu 18-Apr-13 15:56:39

I think all taxpayers should be given the option of buying a plot of land from who?

FasterStronger Thu 18-Apr-13 15:56:50

from whom?

Owllady Thu 18-Apr-13 15:58:59

the council, they own loads of land

wink

YoniMaroney Thu 18-Apr-13 16:12:28

Lots of land available, you can buy a family home sized plot for £1k. The ONLY problem is that it's illegal to build on it without planning permission, which the government wouldn't give.

FasterStronger Thu 18-Apr-13 16:17:59

owl - if they own lots of land, why don't they sell it rather than cut services?

Owllady Thu 18-Apr-13 16:22:23

they are selling it! obviously you don't live in the country wink

they are also selling a lot of leasehold farms

FasterStronger Thu 18-Apr-13 16:25:46

err no.

that's terrible selling farms. they make farming accessible.

what is the other land currently used for?

HesterShaw Thu 18-Apr-13 16:30:43

I don't understand the current policy. On the one hand, the government are saying they will relax planning laws to make development easier fuck the environment. And on the other hand the Localism Bill will give more power to communities over what is built and isn't built. You will get some communities which will say no to everything because they don't want any ghastly poor people near them. The town I live in (population about 18,000) hasn't had ANY affordable housing built in over four years. And yet we have some of the longest housing waiting lists in the country.

I also take issue with the phrase "affordable" housing - now that to me simply should me "houses normal people can afford" not ones which are priced stupidly. It shouldn't mean HA homes, or only houses for rent, or part ownership schemes. People want homes of their own! It's the enormous deposits the banks are charging that is one of the main problems.

YoniMaroney Thu 18-Apr-13 16:33:00

Affordable housing is ridiculous. They do a token half-dozen houses often with some stupid part-buy, part-rent scam scheme, and the rest are even more expensive than what's otherwise available.

Owllady Thu 18-Apr-13 16:42:40

I think it's terrible selling leasehold farms as well to be fair, i was just saying what is happening

That said, they sold disused farmland to developers a few miles up t'road from here to build an urban village type thing so they are obviously flexible when they want to be. But yes, their affordable housing is laughable aswell for a 3 bed terraced it's £182,000. We have a household income above the national average and we cannot get a mortgage for that amount

Owllady Thu 18-Apr-13 16:43:27

sorry the £182,000 is for a shared ownership 3 bed terraced. i don't think i was very clear. In my mind that is not at all affordable to alot of people

Owllady Thu 18-Apr-13 16:45:33

I will tell you what's on the shared opwnership scheme up for sale in my toen
2 bed apartment 200k
2 bed apartment 180k
1 bed apartment 135k
1 bed flat 130
2 bed apartment 50k

Owllady Thu 18-Apr-13 16:45:56

god sorry i seem to have lost the ability to type! blush

HesterShaw Thu 18-Apr-13 16:51:05

But why should people who were able to afford housing before this RIDICULOUS housing boom, who are earning an averagely decent salary have to SHARE ownership? It's insane!

It wouldn't matter so much if we were like France where there are many more tenants for life, but in this country, property ownership has developed into the standard "security", and something which everyone aspires to. With it becoming so out of reach for so many average, normal people, they are constantly on the edge of risk, at the mercy of remote and profit-driven LLs who could evict them any time they like. In France laws protecting tenants are more thorough.

Owllady Thu 18-Apr-13 16:54:00

I know I agree. When we were children my dad worked a manual job and my mum was a cook and they bought a 3 bed detached house!

Owllady Thu 18-Apr-13 16:56:14

whereas my husband is an extremely skilled engineer and I worked in retail management until recently, haven't got a hope in hell of buying a house, not one we can fit the children into anyway

We did own before, but the prices dropped, dh lost his job and we relocated for work, out of necessity and we broke even. thankfully we sold though as we would be in negative equity now confused so maybe it was for the best

HesterShaw Thu 18-Apr-13 16:58:12

Your parents sound like mine in terms of income. Dad earned a decent-ish salary and my mum was a SAHM earning nothing and they bought an 3 bed house, and later a FIVE bed house on a naice estate after she got a job as well.

Madness.

YoniMaroney Thu 18-Apr-13 17:00:40

The country is fecked.

I want somewhere nice to move to.

Maybe I'll enter the Green Card Lottery.

HesterShaw Thu 18-Apr-13 17:05:06

I like this country. I like Britain. But I am fucking exasperated by it.

MoodyDidIt Thu 18-Apr-13 18:13:43

me too hester

i posted a despairing post the other week about never being able to afford to buy, as i said earlier i am "lucky" as have a council house but its in a dreadful area and who knows what the hell the govt are going to do to council houses? prob sell em all off to private landlords who will put the rent up and give us shit tenancys. actually thats my one of my biggest fears tbh sad

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