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Guest blog: Shelter's Chief Exec on the rise of unaffordable housing

(574 Posts)
JessMumsnet (MNHQ) Fri 08-Feb-13 15:21:40

This week, to highlight the fact that housing is increasingly unaffordable for many, Shelter published research which showed what our weekly shop would cost if food prices had risen to the degree that housing costs have done over the last decade.

In this guest blog, Shelter's Chief Exec Campbell Robb warns that unless something changes, the next generation will find it even tougher to get a stable and affordable home.

What do you think? Are you struggling to get on the property ladder, with rising rents making it increasingly difficult to save for a deposit - or are you worried for your children's prospects? How do you think the situation could be improved? Post your URLs here if you blog on the subject, or tell us what you think here on the thread.

wonderstuff Fri 08-Feb-13 16:31:19

It's a massive issue my husband and I both earn just above the average wage, but have no hope of getting on the housing ladder in the SE unless we inherit. We just don't have enough to save for a deposit, it feels fruitless, it would take many many years to save the required amount, equivalent to my annual gross wage, and by that time housing would have gone up again.

I wonder if drastically lowering the inheritance tax threshold would help? Inherited wealth seems to concentrate wealth in the hands of a few.

JakeBullet Fri 08-Feb-13 16:44:09

I agree this is a massive issue.

I bought a 2 bedroom flat in 1996 which cost me £39.995. I sold it 3 years later as I moved away for £60.000 and bought a cottage for £48k...sold this for £113k which my then husband went off with......angry

I am currently in a 2 bedroom HA property with my son who is disabled and it's the only reason I got this. Private renting is out of the question, and as for buying ever again I know it won't ever happen.

I find it shocking that the average worker now needs to claim housing benefit in order to have a roof over their heads. This is wrong.....housing is a necessity and should absolutely be affordable for people.

DocBrown Fri 08-Feb-13 16:55:54

We have been priced out of the village my DP grew up in and have had to move away to afford a modest three bed.

It is insane as there has been a new development in the village but the cheapest property was £485,000 - well out of our budget.

A lot of the local villagers have moved out as they are being priced out of the local housing (good links to London and SW) and the increase of second homes.

We were only able to buy in the first place because I bought a property is 1999 and sold it on and DP bought the same year (different property) and we pooled resources to fund our purchase. A friend who went to university couldn't afford to buy at the same time and was (lucky?) to get a 100% mortgage and is now a slave to it. Frightening to think how my DCs will be able to buy a house and even the price of private renting is OTT.

MmeLindor Fri 08-Feb-13 16:58:00

Excellent blog post. I agree completely.

We moved back to UK last year after years of living abroad. The only reason we were able to buy a house was the fact that we were buying in Scotland. There is simply no way we could have moved to London / SE England.

Even then it was a struggle to get a mortgage as we had no credit rating in this country. The way in which banks decide whether to lend in UK is totally flawed, imo.

After years of lending to anyone with a pulse, they are now very restrictive.

Kendodd Fri 08-Feb-13 17:04:43

I wonder if drastically lowering the inheritance tax threshold would help? Inherited wealth seems to concentrate wealth in the hands of a few.

Yes maybe. I'm always surprised that people foam at the mouth over inheritance tax, which imo is just a massive great windfall, and yet seem fine (!) about paying tax on money they've worked hard for and have to be very careful with. And for the people who say that the person who left it worked really hard for that money so that they could leave something for their children- no they didn't, most of the time they just benefited massively from house price rises.

MechanicalTheatre Fri 08-Feb-13 17:32:09

It makes no sense that the cost of rent is going up so massively, which means the government then needs to fork out vast amounts of HB for people who should be able to afford a place on their own.

It is basically becoming impossible to live in London.

MmeLindor Fri 08-Feb-13 17:34:24

Mechanical
Rents are going up cause house prices have gone up, and too many people were doing buy-to-let as an 'investment'. It totally screwed the housing market.

BadMissM Fri 08-Feb-13 17:40:24

Yes. My OH and I at 45 have no hope of ever getting on the housing ladder. It's our second relationship, and our exs kept the houses.....

With the rents we are obliged to pay to private landlords, we will never manage to raise the money for a deposit, and even if we did, it would take us so long we would be too old for a mortgage.

Even in this small northern town, rents have risen astronomically over the last couple of years. There is almost no social housing.

I'm from London, but I had to leave because I couldn't afford to live there...soon I won't be able to afford to live here...

Jux Fri 08-Feb-13 17:41:46

Trailer parks/holiday villages.

My SIL sold her London flat but was in a LOT of debt, so hadn't much left to buy with. She's getting a trailer and will be living on one of these sites, which has just got its licence for permanent occupation.

It is very cheap in comparison with house prices. Not good for young families, but maybe OK for young single people. At SIL's park, there are a lot of recently retired people, downsizing and investing the difference so they have something to live on other than the pitiful pension.

morethanpotatoprints Fri 08-Feb-13 17:44:18

Where I live its possible for young people to get on the property ladder if they stay with parents, rent free until 22 or 23.
A small 2 bed terrace, which is all they need to start off is about 60 65K. But I know its nearly impossible in the south.

MechanicalTheatre Fri 08-Feb-13 17:44:52

I know MmeLindor. Oh I know.

But the government can, if it actually wanted to, put in measurements to either stop house prices going up, or cap rents.

They won't, like.

guineapiglet Fri 08-Feb-13 17:46:45

It is a very good post and thankfully the issue has been raised for discussion - it is a very deep and difficult situation for so many families. We have just moved to SE for job reasons from the NW - to get an equivalent property to our house in the NW would cost DOUBLE the amount we got for ours finally.
We work in the public sector, and there is no way our salaries have doubled in that time, so reluctantly we have had to take out a huge mortgage with a view to returning 'home' once our kids have finished school.

The north/south divide simply has to be addressed, the country cannot sustain being so London centric, it is not desirable or economic - it is not fair on many families who are being priced out. Goodness knows how people starting out here even have a cat in hell's chance of buying property, without 'bank of Mum and Dad' - what happens if this isnt an option?

guineapiglet Fri 08-Feb-13 17:47:56

PS - in the interim we are renting. We could have rented 3 similar houses for the equiv rent here. Landlord has just put the rent up by another £100 a month with notice. How can people keep adding more and more?

mumzy Fri 08-Feb-13 17:49:09

Housing costs especially in London is now insane. Our house has quadrupled in value since 1997 however my wage increase has definitely not. I personally blame the collapse in decent pension plans and easy credit which resulted in people jumping onto the buy to let culture reducing the housing stock for first time buyers and massively increased house prices as a result

williaminajetfighter Fri 08-Feb-13 17:51:47

Agree it's a major problem. As others posting on MN had mentioned could we not:

1. Introduce rent controls; (it's done in other countries and seems more civil)

2. Put a cap on the number of buytolet properties that one person, family or company can own;

3. Or make buy-to-let only minimally profitable by taxing the hell out of it.

4. Better regulate the rental market. Renting is hell and its bonkers what rental agents expect and get away with.

HB is just a very expensive 'bandaid' that puts money into the pocket of landlords.

Really wish this issue would be higher on the political agenda!

propertyNIGHTmareBEFOREXMAS Fri 08-Feb-13 18:01:53

In the North the majority of my younger friends have managed to get onto the housing ladder at around age 27. They are earning around 25k each (in couples) and have bought starter homes around the £160k mark. No idea if they will be able to move up when the time comes (children etc) but they are working hard admin doing well. I appreciate that things are very different down sarf.

MmeLindor Fri 08-Feb-13 18:02:45

I actually think that HB is worse than a bandaid. I think it is part of the problem.

It enabled landlords to keep raising the rent, because HB filled the gap between the private market rates and what people could afford.

In many EU countries, you are not allowed to keep raising the rent every year, and renters have many more rights.

It is also not seen as a given that your house doubles in worth every ten years - it was ridiculous to think it was sustainable.

propertyNIGHTmareBEFOREXMAS Fri 08-Feb-13 18:03:18

Anecdotally, I also know several people older than me who have now cleared their mortgages and are buying to let as an investment/retirement plan.

MechanicalTheatre Fri 08-Feb-13 18:15:27

I totally agree MmeLindor.

I have no idea what's going to happen, but at the moment, the situation is completely unsustainable.

Toomuchtea Fri 08-Feb-13 18:25:24

I too think the present housing situation is unsustainable. It's been artificially inflated for years, in order to keep the economy "healthy" but the end result is a system which appears to be hell bent on directing more and more of the housing stock into fewer and fewer hands.

We need large amounts of good, mixed social housing built: small units, bungalows and family houses. It's all very well saying that older people should move out of their large LA houses, but where are they going to go? Rather than build yet more estates of executive homes, which benefit the few, we should direct building efforts at social housing and massively increase the stock.

mikey9 Fri 08-Feb-13 18:34:34

Here around Inverness - the cheapest 1 bed flats are £70-90k with 2 beds going up from here - so 3 time ave salary (which is prob lower up here) to get on the ladder - which is exactly the same multiplier as when I bought in 1992.....then it all went mad and I and my wife both benefitted massively to be able to buy big 5 bed up here.

We fully expect to have to sell current big house to:
1. assist kids if they want to go to Uni
2. assist kids with deposits
3. pay for own (much) smaller property to live/retire in.

Hope the sums add up (unlikely) as otherwise I don't see where the kids will get any chances with 1 or 2.......

And I reckognise WE are the lucky ones. A wholescale crash in prices does have some attractions - however it will clearly shaft so many others - you have to be careful wishing for it.....

mam29 Fri 08-Feb-13 18:39:58

we rent and its not great.

we in no position to buy despite hubby being on good money.

we dont have deposit or immaculate credit scoring.

We currently pay 725 3bed small new build south west.
we rent through agents
landlord wont let us have pets despite offering to pay extra deposit already got 900quid down been here 7years now.
Yet landlord only gives us 1year contracts so each year we think are we stayingsad/ Then when comes to renew agents want annual admin fee.

We dont get housing benefit. looked into ocial we lowest band so stand no chance.sad.

The agents are frankly rubbish. 3weeks without fire in winter.
inspections every 3months.
last one came back with stroppy and very odd letter.

I was in at time of inspection so knew how the house looked.

we spent couple thousand in time here replaced flooring throughout as was crap and landlord wouldent.
Have 30year old kitchen falling apart. garden gates on last legs.
few months ago we had blockage tried sink unblockers plumber came out was blocked pipe between toiliet and bath so what we tried wouldent have worked.

Anyway get letter

re last inspection

It has been noted that your property requires deep clean and that its our responsability as tennanats and when you vacate in near future you wont get deposit back if in this condition.

You mentioned problem with blockage might I suggest you try sink unblocker.

So rang property manager and kept asking her what does letter mean? To which she said deep clean after 10mins she admitted she had no idea a we argued as tennants how can we rectify?

Shock horror get phonecall back next day

Deep clean property refers

to toddler toys in floor in lounge that he was playing with at the timesad

The gardens bot messy with kids toys an grass needs cutting I mean its been wet snowy jan and we completly landscaped garden since moving in.

I feel they being unreasonable.
hen phone or dare go in they treat renters like dirt.
If its job taht costs more money landlord insists on doing it himself and bodging it.

We want to move but as private renters we need about 2grand upfront for 1months rent and deposit and agents fees in advance which we dont have so feel stucksadFeel we have very little rights we get 2months notice have family one in school so settled in local area,

They even tried to dicatte we use specific energy supplier told them where to go.

Like most private renters we stuck with crappy conditions and rising rents.

All property has done is kept it in older generations.

Im mid 30,s and only people i now who brought had substantial help from relatives.

Sadly cat see us ever buying but just wnat decent family home , secure tennacy and treated bit better.

NapaCab Fri 08-Feb-13 19:00:48

The really striking thing about the UK is how wages have stayed flat relative to house prices, rather than the way house prices have risen relative to food, petrol etc, as Shelter are emphasizing.

When we lived in the UK, house prices were about 8 times the local average income and that is pretty typical for many parts of the UK. Salaries have been more or less static since the late 1990s. 35k was a good salary then and achievable for a professional and it's still the same today, give or take. That's the real issue. By ignoring asset-price inflation during the housing boom, and only calculating CPI on food, petrol and their mythical 'basket of goods' the Bank of England let wages stagnate so house prices outpaced them massively.

We moved to the US and we are living in one of the most expensive places in the country and yet wages here have more or less kept pace with house prices. People complain about high house prices here too but at least they are more in line with wages. You can buy a 3-bed detached house with garden in an OK area here on one professional earner's (engineer, accountant, lawyer) income.

MmeLindor Fri 08-Feb-13 19:02:09

Toomuchtea
I blogged about this last year - about the fact that there are estimated 350,000 long term empty homes in UK, and the government's response was to encourage the building of what I call McMansions - identikit executive housing.

Mam
That is awful, and must be so frustrating for you

mikey9 Fri 08-Feb-13 19:04:27

I think you have hit the nail there.
I think it is criminal that CPI/RPI does not take into account the inflation of hosue prices.

When you consider the three essentials:

Shelter
Food
Water

You wouldn't consider excluding the second two from any inflation calc - but the former........excluded!
Especially as this makes up such a huge proportion fo many incomes - how have we gone along with this for so long....?

Another revolution starts on Mumsnet (Frugal February feb seems to be another one......)

sleepyhead Fri 08-Feb-13 19:11:48

I really worry about this trend (which has been going on for years now) of seeing btl properties as a viable alternative to traditional pension schemes. It will leave a great many people in a lot of trouble if there ever is a proper crash and I think is one of the reasons that the government is reluctant to introduce legislation that would lead to a correction.

Having said that, I can totally see why people have lost faith in the pension market and look around for alternatives.

We are private tenants. We cannot afford a deposit either. Rent is so much more than a mortgage, it's like throwing money away and it hurts.

NanaNina Fri 08-Feb-13 19:17:01

I place the blame for the housing crisis fairly and squarely on this coalition govt. I am almost 70 and have never ever known things to be so bad. I think people on benefits are going to have a big shock in April with the HB changes. Also the bedroom tax means that people living in council houses or HA houses who have spare bedrooms, will only get HB for the numbers of bedrooms occupied and they won't be able to manage on reduced HB in many cases so their only option is to try and find a smaller house, but it will have to be a private rent because there aren't any smaller HA houses available.

They are pulling the rug from under any organisation that helps people on benefits (CAB is threatened with closure because LAs can no longer afford to fund them) Connexions to help young people has completely closed down and Shelter is in danger too because 50% of their funding comes from the Legal Services Commission, and they are withdrawing the entire amount because of the cuts they have to make.

I'd beter stop or I'll rant for ages...........

NanaNina Fri 08-Feb-13 19:20:12

Just noticed Jess that you have asked how MNs think the situation could be improved - that's an easy one. Get rid of these awful posh Tory boys who are making a complete hash of the economy and waging war on the poor.
God help us all if they get in for another 5 years in 2015. They even make Margaret Thatcher look vaguely reasonable and I never thought I'd say that!

peacefuleasyfeeling Fri 08-Feb-13 19:22:11

Totally agree with William. Thanks for saving me the climb onto the soapbox, because I could really go on about this. The village where my mum lives grinds to a stand-still in the winter months on account of a large share of the local housing stock being taken up by second home owners and private land lords who profit from short term summer lets at inflated priced, effectively pricing local young people out of their local property market.
Somehow I feel that there are certain things which we should not be able to profit personally from, such as the housing needs of our fellow man. It's probably my social democrat Swedish roots.

mizu Fri 08-Feb-13 19:26:43

Something has to change. My DH and I both work and although we don't earn a great amount - probably about £39000 between us, we can't buy. We save every month but may be too old to buy by the time we save up the ridiculous amount that we need.

I am 40 in a week and although I would like to buy, I agree with mam29 that just having more rights as a tenant and being able to treat the house more as our own would be good. Also having a landlord who wants to look after his property instead of keeping it just above par.

We have rented in the same house for 5 years and the landlord does everything himself shoddily. We have no central heating bar 2 gas fires downstairs which I HATE as they are so old.

And we are not alone. I lecture and am head of a language department and there are other staff (educated to a high level) who are in the same position. Not poor enough to qualify for social houses but not well off enough to buy a house/flat.

I don't know what the solution is but news on the front of a newspaper yesterday announcing that yes! house prices are finally on the rise is surely not good news?

guineapiglet Fri 08-Feb-13 19:28:56

Like I posted earlier, we are currently renting at an extortionate level, we simply cannot sustain it for much longer and are grateful to be in the position that we can eventually buy on. Our landlord has two houses and the one we are living in is his' nest egg' - checked it on Zoopla - when he bought it in 2004 it cost 350,000 (it is a 3 bed town house, modern, but nowt special ), he recently had it valued at over £550000 - do the maths. A potential £200,000 profit over 9 years. After slowly getting to know the neighbours, it seems over 50% of this development are 'nest eggs'. We worked out that our landlord will be making around 25k a year in rent(IN addition to the profit on the house).

Like is posted above - we all need shelter, food and warmth as essentials, and these should be available to us all - to my mind, second homes should be taxed hard - it is simply unjust that this situation is allowed to continue unchecked.
Also tenants should have much more protection and long term rights as in other countries, the insecurity is very unsettling and scary. Thankfully our landlord is absent, it must be unbearable to be at the mercy of an abusive, greedy and uncaring one.

stubbornstains Fri 08-Feb-13 19:29:53

I'll pick up that rant and run with it NanaNina...

Although I don't wholly blame this government (and I'm a raging socialist, mind)...The housing crisis started with Thatcher deregulating the mortgage industry, and also selling off council housing and banning LAs from using the proceeds to build more. You know, I used to think that she honestly at least believed in that "bootstraps/ self reliance/ buying your own home" thing, but when you look at how the whole thing has panned out, I suspect she was just using that rhetoric to mask the grand plan- hotting up the housing market for the ultimate benefit of the bankers.

However, 13 years of Labour Government did absolutely zip-zilch-nada to address this problem. No attempts to curb the crazy mortgage lending, no mass building of social housing, no legislation to protect tenants- etc.etc. All they did was apply a band aid, by supporting the aforementioned organisations, and underwriting peoples' incomes w/ tax credits etc (and I'm a great admirer of tax credits, and will be shafted when UC comes in).

And along come the Tories and rip off that Band Aid....

somewherewest Fri 08-Feb-13 19:34:51

We're hoping to BTL at some point, because while DH's otherwise lowly paid career (clergyperson) comes with accommodation, we'll need somewhere to live when he retires. We don't expect to make money on it...we just want to have somewhere modest paid off by the time we'll need it. Which is a long roundabout way of saying that not everyone who BTLs is privileged or views it as an investment.

stubbornstains Fri 08-Feb-13 19:36:00

Somehow I feel that there are certain things which we should not be able to profit personally from, such as the housing needs of our fellow man.

Agree totally.

Also, re the earlier poster who mentioned trailer parks: if only it were that easy. Very difficult to get planning permission for temporary dwellings- if it was easy I'd already be living in a caravan, and not be worrying nightly about what happens if my income increases slightly and I have to start being liable for the rent in my private cottage....

(There are some trailer parks, this is true, but round here you're paying about £60-80k for what is effectively a big caravan...)

mizu our income is same as yours and like you say, we're not poor enough for help, but not well off enough to buy. With two small children I also worry endlessly about the landlord turning round and ending the rental agreement/wanting to sell/him dying and his kids wanting to sell. There is no security. Our boiler was only recently replaced because the plumber serviced the old one and found it unsafe to use. He said we were lucky to be alive and he said it should have been replaced years ago. Our landlord would have gone to prison if the worst had occurred, but fat good that does after the event.

OBface Fri 08-Feb-13 19:42:58

Entirely agree there is huge problem with the (future) affordability of housing but not sure you can blame BTL landlords.

Neither myself or my husband is offered a pension through our jobs so we've invested in a couple of properties to help out in retirement. We're in our early thirties so even in the event of a crash we should still be ok as we wouldn't want to release any equity for quite a while.

Our 'home' is actually a relatively modest house in a nice village and we are by no means very wealthy, just trying to be sensible and plan for our future. Would strongly disagree with Williamina's suggestion of 'taxing the hell' out of BTL properties, how would that be fair?

OBface Fri 08-Feb-13 19:47:00

It's worth pointing out that we make no where near the level of income of Guinea's landlord and are in fact probably just in negative equity on one of the properties (but get a fairly decent return on it monthly).

stubbornstains Fri 08-Feb-13 19:55:05

By the way, and veering slightly off topic, does anybody know if the Government's promise to end the 50% council tax rebate on second homes was actually upheld? Or is it yet another of their broken promises?

Solopower1 Fri 08-Feb-13 20:08:49

Part of the problem seems to be all the unoccupied properties that were bought as investments or for tax reasons and are now lying empty.

Then there are the sites with planning permission already signed and sealed, but the companies concerned are either waiting for a better time to build, in order to get more profits, or are only interested in building expensive properties for whoever can afford them.

Then there's the Housing Benefits problem mentioned above and the Buy-to-Let brigade ...

The government could, if it wanted to, solve all these problems. But in order to do so, it would have to interfere in the rights of Person A to get rich at the expense of Persons B-Z. It's not going to do that. It believes that if Person A gets rich, we all benefit. But it's not happening, is it?

Solopower1 Fri 08-Feb-13 20:11:34

And no, please no-one say we should build in our green spaces!

There are enough brown-field sites to build affordable houses on and loads of empty houses. In fact I think I remember reading about a survey carried out by Shelter into all the empty properties.

specialsubject Fri 08-Feb-13 20:13:57

if profit on housing is no longer allowed, goodbye not only to rentals but to mortgages. That means the only way to buy a house will be with a big pile of cash.

landlords are heavily regulated - for instance there is a legal requirement for a yearly gas safety check and it is crime not to have this. So there is comeback for the person in the house with a dangerous boiler. If a tenant stops paying rent, they cannot be evicted for months. There are many other rules like this - and so there should be.

no, I don't have the answer. No-one does.

stubbornstains Fri 08-Feb-13 20:15:47

Part of the problem seems to be all the unoccupied properties that were bought as investments or for tax reasons and are now lying empty.

Yup solopower

And, just to triple-protect these investments, the Government have just made squatting in empty residential properties a crime. (there was already legislation to protect temporarily empty properties etc.)

Which, of course, is going to result in more (usually single) homelessness, more expensive HB claims for hostel spaces, and so on ad infinitum...

ideasfactory Fri 08-Feb-13 20:36:54

If anyone is interested in joining a self-build co-op (not wielding a screwdriver but buying an eco-home ready made from a legit company) please PM me - we have 3 people so far, interested in the South West, and possibly Cheltenham and Cotswolds areas.

We are aiming for homes to cost up to £120 for 3 bed with some garden.You choose the house from a selection before it goes to final detailed planning. There has been a scheme for 'shared deposit pot' also mooted - some giving more (and getting bigger plot eventually) others less but altogether enough to secure the land and service pipes, planning and mortgage etc.

Post what you think of this idea if you ahve any experience etc.

Solopower1 Fri 08-Feb-13 20:37:47

I have several young (20s) relatives living in London, all with full-time jobs, all earning £26- £27K ish (a nurse, an IT consultant, a Social Worker, etc) - none of them can afford the huge rents they are being charged.

Two of them went to live in a licensed squat. The deal was that they could stay there rent free, as long as they looked after the place until the owners wanted to sell it. They could decide who lived there and decorate it themselves, etc. They worked really hard on it, doing it up, and looked after it really well. It was a fantastic idea, a win-win situation, and it lasted them for two or three years.

But then the owners wanted it back. They moved out, no problem, but now it's really hard for them. Anywhere near their jobs is incredibly expensive; anyway further out and the transport is incredibly expensive.

What are they to do?

The answer that they are going to come up with, sooner or later, is leave. Go somewhere else. Like Canada. According to that new banker person, Ontario is one of the cheapest capital cities to live in.

edam Fri 08-Feb-13 20:38:09

I feel very sorry for everyone who wasn't in a position to buy somewhere decades ago. Rents are at sky-high levels, buying is unaffordable, wtf are people supposed to do? Shelter is an essential, yet we have an entirely dysfunctional ;market' that is doing no-one any favours. Except speculators and the super-rich, I guess. Housing should be for people to live in - decent, warm, affordable. Making money out of it should be a secondary consideration.

Solopower1 Fri 08-Feb-13 20:43:11

Ideasfactory - great idea!

I think shared ownership sounds good too.

About older people, I have some friends in their 80s in the US and they all worked together at the same university. Come retirement time, they all clubbed together and live in some sort of shared housing scheme with wardens and gardens.

I think the stats show that there are more single people than ever before, but it's hard to see how they will be able to live alone when they are old, unless it's in tiny boxes.

Oh and <bee in bonnet time> someone tell the builders that we need light and air and space in our houses. Two square metres for a family of four with tiny windows that are so high up you can't see out of them won't do!

MmeLindor Fri 08-Feb-13 20:47:42

I agree with Stubborn - the foundations for the housing crisis were laid by Thatcher, but blame should not only be put on the Tories. We have been badly let down by all political parties.

I don't think that taxing BTL owners is the answer - and such a law would never get passed. There are many reasons that people let houses - some had to move for work and let a house they haven't been able to sell.

I'd like to see tax incentives for landlords who offer long term leases - of 5 years and over.

And tax breaks for landlord who invest in their property.

Like with children - don't just penalise bad behaviour , but reward good behaviour.

The landlords must be held accountable for substandard housing and the best way to do that is very simple.

Allow tenants to deduct a fixed % for faults that are not fixed. They do this in Germany. A month without heating? You are within your rights to deduct up to 100% rental payments. It's up to the landlord. Either he fixes the heating or HE has to take the tenant to court. It is very clever as it turns the responsibility into the LL.

Reward good landlords. Penalise bad landlords.

MmeLindor Fri 08-Feb-13 20:49:47

Solo
I have the details on my blog about the empty properties - I mentioned the numbers earlier

MmeLindor Fri 08-Feb-13 20:51:59

Someone mentioned the 'holds' that a lot of developers have on land - if they could be released, the price of land would fall and people might be able to build their own houses.

It doesn't make sense to buy a new standard 3 bed house from developer when you could build one much cheaper.

Solopower1 Fri 08-Feb-13 20:53:52

So you did, MmeLindor. I've just been back to have a look. Very interesting!

sundaesundae Fri 08-Feb-13 20:57:01

Solopower the vast majority of people I know in that situation live in shared houses, paying around £500pcm with all bills included, spend as little as possible on transport (have bikes) and save like demons taking on extra work where they can.

To get on the property ladder we lived in a shared house, did similar and moved in with little furniture and no social life for a long time. Some people seem to want to move into a three bed semi, in a good area, with all new furniture and have no change in lifestyle. It just isn't realistic to want that, if buying is so very important then you do what you need to do for a while. Take on extra shifts, put off marriage and babies, sell anything you don't need. My parents generation did similar, they didn't exactly walk out of school and into a house with a mortgage.

I do have sympathy with people that feel trapped in their situation, who don't want to move, who are forced to rent. I have rented through agencies, privately and been a lodger. I would never go through an agency, they are just there to make money, extortionate fees for checking references, months of rent in advance needed and I am sure they encourage landlords to increase rents.

Building affordable housing never helps those who need it, as it is usually people who don't qualify that are struggling the most. Attitudes to long-term rental and creative housing need to change, councils need to make land more accessible to self-builders for example.

cakebar Fri 08-Feb-13 20:57:53

I don't understand why there can't be secure, long term (years) tenancies protected from rent increases. It just seems a humane thing to do. If there were more landlord obligations then perhaps those who see it as an investment would be dissuaded.

And yes, generally I do think it is morally repugnant to buy to let, or have a second home, both should be heavily taxed. It is not right to have more than one home when others have none.

FairPhyllis Fri 08-Feb-13 21:03:29

I agree that housing benefit is a major part of the problem - it is artificially inflating private rents. I dread a Labour government getting in again soon because there is even less prospect of them doing anything about housing benefit than the Tories.

Land is massively overvalued in this country and sooner or later the market is going to correct itself. I think that many people who have overstretched themselves or taken out poorly thought-through BTL mortgages are not going to be able to cope with interest rate rises - which will be very sad, but will help out with the misery caused by the instability/grottiness of renting in many areas.

I also think our economy needs to be less London-centric.

Solopower1 Fri 08-Feb-13 21:06:34

Agreed, Sundae. They are healthy young people with good jobs - a lot more fortunate than many.

But it's the idea of a licensed squat that I like. A very tidy solution to a particular situation imo.

ArielThePiraticalMermaid Fri 08-Feb-13 21:06:40

We could easily afford mortgage repayments if we had the kind of deposit you used to be able to have (10%). Easily. They would be far less than our rent. And neither will they look at us because we work for ourselves - we have done for 8 years and are weathering the recession when so many businesses are going to the wall.

williaminajetfighter Fri 08-Feb-13 21:07:07

Hi Just to clarify my previous post I'd like to see people who have second homes and their 2nd or above buy to let homes heavily taxed. Of course that's not 'fair' but it means that investors would invest in other things - eg pensions, stocks, shares - rather than housing which would ideally reduce prices in the long term.

What I really find repugnant are the slumlords and the a**hole next food to me who has a 'property portfolio' of 20+ properties in good locations that he rarely maintains and sits on waiting to sell. These guys ate everywhere and do very little for the economy or for improving communities.

williaminajetfighter Fri 08-Feb-13 21:07:51

I meant 'next door to me ...' Not 'next food...'!

Solopower1 Fri 08-Feb-13 21:11:07

William - I know. And they will keep eating everywhere, [smiile]

stubbornstains Fri 08-Feb-13 21:15:26

FairPhyllis Housing Benefit is not artificially inflating private rents.

Housing Benefit is capped at (I think, someone correct me if I'm wrong) 30% of the median rent in any area. That means that it's a real struggle to find a private property to rent where HB will actually cover the whole of your rent.

If Housing Benefit was determining the cost of private rentals, rent would actually be going down.

That's to say nothing of the wholesale benefits cap at £26,000, which will generally now be affecting larger families in London, and the so-called "bedroom tax".

I think you'll find that the private rental market is being inflated by good old-fashioned competition, largely from renters who previously would have been able to buy.

Kernowgal Fri 08-Feb-13 21:21:13

Somehow I feel that there are certain things which we should not be able to profit personally from, such as the housing needs of our fellow man.

Agree wholeheartedly. I've got to the point that I'm thinking of emigrating as I don't think I can afford to live in the UK any more. I work in an industry with low salaries - even managers rarely make more than £25k - and currently earn approx £17k. I'm single, no kids. I earn too much to get any help towards my rent, yet too little to be able to afford to live in a decent home. I'm 35 now and I don't want to have to live in lodgings or shared housing any longer. I looked into shared ownership, but I don't even earn enough to buy through that sort of scheme.

I lived in London for many years and moved frequently - landlords sold up, put the rent up, housemates moved on etc etc. Renting under the AST system never felt secure. We dealt with some utter shysters under the guise of letting agents. I now refuse to rent through agencies - one down here in the south west tried to charge me £175 + VAT for a contract and a credit/reference check.

It makes me feel quite depressed and worried for the future, as I really don't know where I'll end up.

Apologies for anyone hearing the sound of tiny violins as they read my post... wink

alemci Fri 08-Feb-13 21:27:57

A while back in the early 2000's the Labour Government proclaimed it was building affordable housing for key workers i.e. nurses, teachers etc.

Just wondered if anyone with these occupations actually got the housing reading the post about the lady who is a lecturer and Head of Department.

Where did this affordable housing go?

stubbornstains Fri 08-Feb-13 21:30:02

It was a total fudge IIRC alemci. I believe it was shared ownership-largely on the outskirts of London, which has the biggest problem- and shared ownership was proven to be really crap value for money.

Kernowgal Fri 08-Feb-13 21:35:59

In London it was terrible value for money - when I looked into it I would have ended up paying more than a straight-up mortgage when you take into account the 'market rent' and the 'service charges'. I couldn't see any benefit to it whatsoever.

Would it help if banks lent based on affordability rather than salary multiples?

Onetwothreeoops Fri 08-Feb-13 21:40:23

We are also stuck privately renting with the addition of being self-employed. Home ownership is not an option for us in the foreseeable future.

I suspect that there are a lot of politicians who own more than one property and are profitting from high house prices. Unless conflicts of interest are removed when policies are being planned then things are very unlikely to change.

Also I'm not sure if taxing BtL properties would work as I'm sure the landlords would find a way of passing additional costs onto tenants.

alemci Fri 08-Feb-13 21:41:18

that's a real shame. I remember those schemes in the 80's as well when people couldn't get on the housing ladder.

It is just stupid that a basic necessity has become so expensive. I remember my mum sharing a flat in London (I mean her telling me about it, I wasn't born) in the early 60's. She wasn't well off but people seemed to rent and it was affordable and they could still buy a house eventually.

Not anymore.

mangomay Fri 08-Feb-13 22:13:17

Am I the only person who thinks that the main reason for the lack of social housing is the 'Right to Buy' scheme which, I believe, Margaret Thatcher introduced? It enabled people to buy their council houses at a fraction of the market rate, which was seen as a fantastic thing to do at the time. Fast forward a few decades and those families have sold the houses, made a profit and gone on to buy another property. All the while the government has done nothing to replace the housing stock which was bought and therefore is now massively depleted, causing a substantial housing shortage.

Viviennemary Fri 08-Feb-13 22:21:04

I think these huge subsidies to private landlords given by housing benefit has driven house prices up further. I certainly don't agree with increasing inheritance tax. So people in other parts of the country must have estates left to them subject to greater inheritance tax in order to prop up prices in the south. I think that is totally ridiculous.

Why are house prices so high in some parts of the country. Because they are kep artificially high. That's my opinion. They have not been allowed to find a level.

MmeLindor Fri 08-Feb-13 22:33:15

Kernow
We could have had a mortgage much larger than we got - but we couldn't afford the deposit. I agree that it is often more the deposit than the monthly payments - which would sometimes be less than rent on the same property.

The system is flawed. It is apparent in the way in which we talk about housing.

There is no translation for 'housing ladder' in German, because they don't have this idea that you buy a starter home and then move up. They also don't believe that you can get rich with property.

They buy a house in which they live, and they don't expect their house to increase in worth.

This idea that our houses are worth more now than they were 10 years ago - it is a fallacy. My parent's house is 'worth' 10x what they paid, but they couldn't sell it and get a better house.

sleepyhead Fri 08-Feb-13 22:39:41

Exactly Mme. House price increases only really benefit those who are selling without going on to buy again - eg BTL cashing in, those inheriting from a deceased homeowner, elderly selling to pay care home fees. Maybe people from the South East relocating to a much cheaper area.

The rest of us would benefit from lower prices and greater stability. We're about to try to move from 1 bed to 2. We have a huge deposit (I've lived here and paid off a mortgage for 20 years..) but will still struggle to afford it as the increase from 1 bed to 2 is very large. We'll likely end up with the same square footage and just a couple of extra walls hmm

I sometimes wonder what we're doing clinging on to the ladder. We might be better off just giving up and renting. And then I read about people having to move every year, problems with repairs etc. Seems like the average person in the UK has the worst of both worlds.

FuntimeFuschia Fri 08-Feb-13 22:44:10

There is going to be an entire generation who have never, ever manged to get onto the housing ladder. We're all going to be screwed in years to come when we retire when we are about 80 years old. Only one couple in my social circle and age group have bought a house, and that was only because his parents gave them a massive sum for the deposit. We won't be able to save enough for a deposit for at least a decade, the private sector is extortionate and utterly lacking in security and stability, and local waiting lists for a 2 bed HA house (for example) is 8 years. I think there is a huge housing crisis due to hit (probably when UC lands on us like an atom bomb) and I am not looking forward to the fall out.

mam29 Fri 08-Feb-13 22:44:55

Thanks mme lindor I try stay positive its hard at times.

You right developers do sit on land.

Mizu can empathise we just lttle bit above your income not by much.

When i worked our combined salaries were £52k barclays offered us 125k at time which wouldent even buy us 2bed flat.Even the ex councils were selling higher than that in really dodgy areas of the city.

We cant seem to save hubbys paying off car loan, e have 3kids.

Im early 30,s but hes 40 not sure latest is yo can take out mortgage?

My landlord is tight, hates kids, animals, has no taste and crap at diy.I have had worse landlords and agents im so fed up of theit attitue every time we resign they want to put blooming big sign outside in front garden saying let by, one year nearly fell and landed on my small child.

The boilier gets checked by plumber every year so least thats safe but lat flat had very dangerous boilier.

Started looking round at other properties to guage prices and for 800-900 could get much bigger house and better finish than here and our 1980s decor hell.Alot ads say no dss so not sure all landlors accept housing benefit,

Private rentals go very fast.When we fisrt moved here 1t house fell though so husband came to see this house and accepted without me,

I want to contest any rise this year but is risk as i could easily not get tennancy renewed and we not in any position to move right now moving expensive business and only stayed so long as knew this be long term as landlords paid off mortgage and this is one of 3rentals plus his country mansion and he drives a huge top of range jag.

We all would really love a small dog.

I think all very well saying people need to think less big.
But if average 1st time buyer 39 by then they usually have a family so need bigger 3bed house. something they can love and grow into for a long time.

There is no ladder anymore bottom rung ie

ex council/ doer upper all snapped up by buy to lets as pension pots.

Used to get so irate watching property ladder as some would just borrow on value of other property to buy more and build up small empires some would do hardly anything mostly cosmetic and expect it to be easy profit.

Like the series after property snakes and ladders where some failed and at end chose to live in property themselves until market picked up they were just greedy.

Grand designs is generally for the very wealthy occasionally has some interesting ones like flat pack home and council co-op.

George clarke and phil spencer on channel 4 did show on empty homes theres loads,

The truth is everyt hings protecting the developers,
All the shared ownership schemes are new build shoe boxes only and new builds depreciate faster ok if there long term but if short trem easier to get into negative equity.

There are loads people on interest only mortgages with no plan how to pay if off at the end.

No interest rates so low cant get trackers,
Not that lot of mortgages follow low base rate either.

I do think holiday homes should be taxed.
Not sure about buy to lets as we dont have enough social housing.
Its lack of housing and high demand which is stopping house prices dropping like they did in previous recessions.
It benefits home owner maybe but no one else.

My mam lives small rural market town lots people on benefits high house prices, few jobs yet another executive housing estate sprung up we do wonder where these people coming from?

Like idea of co-op. I would love to be loaned land by government then could save for big log house as dont mind wooden house its just lands so pricey and planing permission so complex.

Im baffled at cost of wooden houses/flat pack why in this country. we not considering it as fast track social housing for now as take less than week to build kind of like modern day prefabs.

If some brave multimillionaire brought land in every major town/city and build swedish type estate at reasonable prices would be a winner its not like we have hurricanes over here to deal with.
Its good enough for usa.

I dont really feel any party wants to help the poor renter.

younger generation saddled with student debts, low paid jobs and will find it harder again.

To go uni, get married, buy house, run car and have a family gets more and more impossible.

A lot of houses in our street buy to let 2 sold and lovley people moved on as landlord couldnt afford mortgage payment.Another got into financial trouble and rented there home out. People come and go no sense of community here very sad.

As for keyworker my mate looked into it as worked for nhs . it was werd it had to be in area where she worked and there ere no schemes here but there were no hospitals in area they built the estate which was on rural village somewhere on outskirts and she dident drive.

Cassarick Fri 08-Feb-13 22:47:27

So somewherewest - you intend to BTL. You will let someone pay your mortgage for you then, when you want to retire, you will kick that someone out and take over the house for yourselves? Nice !

RCheshire Fri 08-Feb-13 22:49:39

The fundamental problem here is the perception that rising house prices are 'a good thing'. See Daily Mail and Daily Express headlines for some of the worst examples...

Rising houses...

"house prices rise by 10%" - means a bigger jump to your next house

Higher house prices - mean more stamp duty to the IR, more interest payments to banks, less money left for people to invest in the productive ecomony - goods and services.

Higher house prices - increase inter-generational resentment

Higher house prices - reduce workforce mobility as stamp duty increases the cost of flexibility to move for new employment opportunities.

There are two groups who profit from rising house prices:
- downsizers - given most of these are now 'baby boomers' who will have been one of the wealthiest generations for a long time past and future I feel little sympathy
- BTL investors; house building is minimal. BTL removes houses from the market putting upwards pressure on prices of the remaining stock for people not looking to invest, but just looking for a stable home. It should not attract current tax breaks. I think it will very very gradually become a tax cow for the govt.

Current prices are not sustainable in relation to wages against a backdrop of other rising costs (e.g. travel fuel, heating fuel). I do fear that some people who stretched themselves to buy within the last 6 years are going to be badly burned.

sleepyhead Fri 08-Feb-13 22:50:58

Well, to be fair, when someherewest's dh retires that's exactly what the church will do to them.

I agree that people with tied accommodation should be trying to pay a mortgage for somewhere to live when they lose their home. In the meantime of course, they should be being exemplary landlords wink

RCheshire Fri 08-Feb-13 22:56:06

I remember once seeing a list someone had pulled together detailing the property portfolios of MPs (of all parties). It was quite clear from that picture that no party is going to support the young by allowing house prices to fall - too much vested interest.

edam Fri 08-Feb-13 22:57:59

I wish house prices would tumble, tbh, so everyone stood a chance of affording somewhere to live - given that rents would presumably come down in line with the cost of buying. Only you'd have a load of people who have somehow managed to struggle onto the bottom rung within the last few years who would be buggered.

MmeLindor Fri 08-Feb-13 23:16:14

Cassarick
that is not fair to Cassarick - they are not hoping to get quick, they only want the security of their own house when her DH retires.

I have nothing against BTL homeowners - I would do it too if necessary. We have bought a house now, but if DH gets moved elsewhere we'd probably keep this one and rent. At least to begin with.

We've moved cities 4x in 10 years. You have to go where the job takes you.

MmeLindor Fri 08-Feb-13 23:17:02

not fair to Somewhere, I meant

redbobblehat Fri 08-Feb-13 23:22:41

i honestly think the high cost of housing is this countrys biggest problem, its what is really fucking us up

the council house should never have been sold off, we must build more social/council housing

all this country is doing now is funding millions of buy to let investment oppurtunities!

sundae - that speech about how you and your parents got on the property ladder is clearly well-meant. But I don't think it's that simple.

DH and I lived in a shared room in a shared house when we first moved in together, and it was 510 pcm. And there were mice, and disgusting toilets (two between the lot of us, and I forget how many of us there were but 12 or so IIRC). We put up with it until the building was condemned (which wasn't very long) because we thought things would get better. Now we have a one-bed flat that is badly damp, so it's mouldy, and which has no heating except a very old gas fire which we've been told ought to be removed as a CO risk but can't be as it's not legal to leave a property completely unheated. Last winter thick sheets of ice froze onto the inside windows of the bathroom and our bedroom because they were away from the gas fire.

I've been looking for somewhere else to rent and you can get gorgeous places near me (so I am very lucky), but you can also get shitholes. And the difference in price is not noticable. We just looked at a beautiful two-bed house for 875pcm; we've also seen absolutely disgustingly damp and mouldy bedsits for the same money or more. You can ring the changes by spending money on the commute instead of the rent, but the end result is that property here is quite expensive.

Please tell me what the point would be of us deliberately choosing to live in a filthy, tiny single room, just so we could feel virtuous about spending precisely the same money as we could spend on a nicer place? confused

Btw, as I understand from people in London (which I'm not), it is precisely the same there: you shop around for a place that is in decent nick (holy grail: not mouldy!), and you don't expect the prices to vary hugely.

I think possibly at some point in the mythic distant past, it was possible for most people to save up by renting somewhere small and cheap and a bit squalid for a short time, but I really don't believe that is an option for most people now.

merrymouse Sat 09-Feb-13 06:11:30

I think a big problem is the concentration of employment in the South East. There is a huge variation in house prices from area to area.

Also, interest rates. Low interest rates enable people who can afford the deposit to get on the ladder. I think most people know that they are taking a huge risk, but don't feel they have any choice. When interest rates start to rise, there could be carnage, particularly if the economy hasn't improved much at that point. Although house prices have risen, it would be interesting to compare monthly mortgage payments to times when interest rates hit 17%.

EvenIfYouSeeAPoppy Sat 09-Feb-13 07:00:31

What redbobblehat said.

I live in Germany. We rent, along with (I think) between half and two-thirds of the rest of the population, depending on region.

We can terminate our lease on our flat with three months' notice without giving reasons. Fixed-term tenancies are extremely rare - most are indefinite. If our landlord wants to get rid of us (again three months' notice), they have to have an extremely good reason which will stand up in court. In effect we can only be evicted if we persistently don't pay our rent, make ourselves a complete nuisance over a sustained period of time, or the landlord or a close relative want to move in (and that has to be a reasonable and realistic request too).

Landlords are only allowed to raise the rent by a maximum of 20% over three years, and even then the rise is capped at the average rent for the area for the condition/standard of the property (I think there are three classes, basic, standard and luxurious).
If a landlord doesn't honour their obligation to keep the house/flat in a decent condition or refuses to carry out repairs, we can legally reduce our rent until it's done, with a huge body of case law from which to derive specific percentages for specific situations. We once had no heating for 10 days in a cold snap in October, and because it was down to the landlord's contributory negligence we paid no rent at all for those days, which the landlord accepted.

In our situation, as we may yet move again for work, and with so much protection in place, there is no point buying. People do buy, but they tend to stay put for life - there's no 'property ladder' here -, and it's a lot more of a genuine choice than in the UK, where it seems to me that people are practically forced into buying because the alternative is either terrible or unobtainable. And landlords seem to manage OK with all these laws, as does the economy.

All this notwithstanding, UK friends and relatives tend to react with concern, pity, scorn and/or horror when they find out we rent. The stigma of renting and the lack of basic protections for tenants seem to be a bit of a chicken-and-egg thing in the UK.

mam29 Sat 09-Feb-13 07:25:57

Oh yes meet someone new

what do you do for living

do you rent or own?

Had odd conversation with mum I hardly knew at school whos saving to buy and told me most important thing I can do and shes indian.

When eldest was small used to meet up with some mums from antenatal who liked to discuss equity and what house they buying next and looked upon me with pity.

As soon as say i rent when you going to buy? how come you havent brought.

Relatives have no idea how hard it is and harp back to when they brought.

Inlaws brought for3grand.

My nans house sold 42k in 92 now on market for 250ksad

My parents made couple of crap financial decisions.
As did my aunt who feel off ladder with repossesion in 90s and got back on less that 2years later.

Lendings too overly cautious.

Im sure i read about goverenment deposit schemes but not sure if they just new builds. what we pay in rent we could pay in mortgage in 7years we never been late with the rent but banks dont take that into account.

Even my agents have attitude to renting as sales is at front.
Go into office and they pounce with w sike how can we help you and i say i rent and they like go to back then. I few times rang wrong number as they have 2lines and instead of tranferering me which sure can be done i get back I need to ring right number back.

I would love to contest 3monthly inspections as feel its excessive and intrusive and unsure if should be paying them admin fee each year as landlorsd choice keep us on one year and they charge him.

Germany sound fab.I keep saying to dh where can we move bt hes retail manager so doubt we have points to go far as I fancy canada and foreign languages are awful.

mumzy Sat 09-Feb-13 08:09:47

I really feel for people in their 20s and 30s even those with decent salaries as buying a house/flat nowadays especially in the SE must seem so far out of reach unless you have help from family. On top of that a lot of them will have graduate loans to pay for as well. The rise in property prices only benefits a few but creates huge social problems. Where I live approximately 70% of properties are BTL which means we have a very transient population and very little community spirit or neighbourliness. Lots of my colleagues cannot afford to live in London and spend 2-3 hours a day commuting, to the detriment of family life. We also have a very stark social divide, the ones that can afford to live here are either very rich behind their luxury gated developments or poor in run down council estates. Neither group mix socially and attend different toddler groups, schools etc.

Muminwestlondon Sat 09-Feb-13 08:25:10

What no one has mentioned so far is that even social housing rents are now moving towards "market" rate, which in central London is extortionate. There is such a shortage that it is impossible to get social housing unless you are destititute. At the same time every piece of land that is spare is built upon. All new developments should be forced to include say 40% social housing.

The only young people I know who have bought in London have bought shared ownership with a hefty deposit from Mum and Dad. Yes the mortgage rates might be low, but it makes no difference to the majority with less than perfect credit or not enough savings for a large deposit. I think shared ownership is massive risk as well. People can get stuck in unsuitable accomodation and completely unable to sell.

I agree that buy to let should be taxed punitively. Alternatively the rental sector needs to have very strict laws governing it, such as a previous poster pointed out is the case in Germany.

Inhertitance tax is the easiest tax to avoid with good planning and is effectively "voluntary".

gazzalw Sat 09-Feb-13 08:42:47

I don't have anything particularly helpful to say about the current 20/30somethings but I can see why staying put with one's parents after Uni is becoming more and more appealing. If M&D are in agreement about a peppercorn rent, it might just be the only reasonable way to afford to live in the South East, have any type of social life, pay back student loans and put some money aside for a deposit somewhere down the line.

I think living in Greater London gives one a distorted view of reality. There are a lot of youngish and older people living in enviously smart dwellings who have had major help by rich parents or grandparents. It is sadly not the reality for the majority of young or even middle-aged ones.

We have a three-bedroom house but in a not very nice area, but only really could afford that because DW was a real saver and lived in places with peppercorn rents (essentially) until 30s. I had had a share in property, but sadly not in areas that had up-and-come so never made any money on mine. We have had no help whatsoever from relatives despite PILs living in a property worth £1M.

I slightly disagree, Mumzy - I think there is more social mixing than you might think in London not out of choice but out of necessity. I think it is only those working in high-paid City jobs who can afford the gated developments or to live in middle-class enclaves like Crouch End/Clapham etc... You might just find that in the run down council estates are many privately owned properties, homes to the less-well off graduates of this world.

What I think is crazy though is house-price inflation in some parts of London. One of those properties in Chelsea that was recently on the market for £8,500,000 was bought in the 1980s for £140,000 - yes a lot for that era but not the equivalent of its value in current terms.

A lot of people's escalation up the property ladder has historically been down to inheritance and luck. I am not sure with elderly care provision eating into inheritance pots that this is going to happen to the same extent in the future...

I think it is increasingly going to be the case that families will follow other cultures' models of living several generations to a property.

Our parents' generation lived through what was effectively a halcyon age with affordable housing even in the South East/London, moves funded by generous relocation/promotion packages from their employers (even in the Public Sector) and decent pension pots. I do not think that any of us or our children will be in the same fortunate position unless we come from very monied backgrounds.

There needs to be some sort of major overhaul of the whole housing system. The start would be to impose rent ceilings even in London. I don't really know why if Councils can charge a fair rent, the landlords can't be forced to charge a maximum of 20% over the official fair rent value. We have crazy situations where council-owned properties charge £90 a week rent, but others living in equivalent properties in the same locale, paying to private landlords, are forking out three times that p/w.

MoreBeta Sat 09-Feb-13 08:45:25

The problem is that Govt is hamstrung here between saving the banking system (which it partly nationalised) and making housing affordable.

The real solution to this problem is let house prices fall back to the long run average of 3.25 x average male full time wages. It reached 6 x male full time wages in the peak of the boom (even higher in London).

Unfortunately Govt and Bank of England are terrified to let house prices fall. It would destroy the banks if people in negative equity started walking away from their mortgages as they did in the early 1990s house price slump.

We have got ourselves into a situation where the boom in house prices engulfed our economy in debt during the 2000s and getting out of that debt trap wil involve mass mortgage defaults and repossessions. That would also be very unpopular with the older generation of 'boomers' who have almost all of their wealth tied up in housing - totally tax free.

Govt really does not want to address this problem and quite frankly organisations like Shelter are not going to advocate repossession and fire sales of those repossesed houses either. Either that or impose capital gains tax on homeowners who have seen large unearned and untaxed increases in wealth at the expense of younger generations.

To put it bluntly we need to stop propping up the housing market, tax it like any othe rasset or business and let prices fall back to a level that younger generations can afford.

wonderstuff Sat 09-Feb-13 09:03:12

The rules in Germany sound much better. It's the insecurity of renting that upsets me the most. Should our landlord want to sell its unlikely we would find a house in this area, children would have to change school, would be awful. I also hate that the agency get so much money from us for doing so little, that we don't really feel at home here, the landlord is storing his broken furniture in our 'unfurnished' house and has left rubbish in our garden that he won't move, and he can because its his house.

Someone asked about key worker housing. I am a teacher. Basically there were two schemes, new build, where you look out a loan repayable over 10 years, for your 30% deposit. Developers put list prices up by 30% to cover this, the houses were not good value. There was also a really good open market scheme we went for where you were given £20k from a HA for a deposit, repayable when you sold, amount repayable was the % of house value. You could even take money with you to next house. We bought a flat, but we made no money on it, our dd was born, got to two and we had to move, but our wages hadn't risen and we couldn't afford to buy a bigger house, so we sold up, made just enough for fees and deposit and now we rent.

ideasfactory. What a fab idea!

The bedroom tax in social housing means many may want to downsize but the smaller properties are not there to downsize into

Si then forced to go private into smaller properties if can find them where the Rent is actually more than there original property was but it's ok HB covers but it's not really as it ends up higher costs

If they expect people downsize then thru need build smaller properties to . Also this rule not apply to anyone over 62 which are infact the biggest section of single /couples in larger properties

10 years time when in theory I only have one dc left at home I be one bedroom over yet for me to downsize will cost social housing thousands as I need a minimum amount floor space ( wheelchair user and adaptions right throughout the property ) and fully adapted properties are very very rare

Though living in SE chances are I'll still have at least one other dc at home other than ds3 or tbh probably all 4 ( have 4dc and 3 bedrooms so not exactly living it up more sardines but it's adapted for me so we mange)

Solopower1 Sat 09-Feb-13 09:27:18

I really feel for some posters: Kernowgal, Mam29, LRD ... .

Here's a little story about what good social housing can be like.

I have never owned a house. Decided not to buy our council house in the mid 1990s because I was so furious at M Thatcher and co selling off the Council's stock, and have rented ever since.

But renting from the Council in Manchester (1980s - 2000) was a dream. We had a lovely big house in good condition with a large garden, front and back, on a generally peaceful estate. We were treated with respect by any officials we came into contact with, repairs were done promptly, we were allowed to decorate as we wished, we had great neighbours who were incredibly supportive and tolerant - we felt like it was home, and ours. I was a newly single mum with two small children at that time, and it was a refuge for me. It was secure - no-one was going to kick us out - and the absence of housing worries meant that I could concentrate on rebuilding my life and that of my children. I went to uni, got a good job, my kids went to uni, got good jobs, and now we all pay our taxes.

I would love it if I knew my taxes were going towards funding housing like that for today's young families! If only, if only ...

However, if I still lived there now, with my last child about to fly, I would probably have to move or sublet two bedrooms. And, possibly partly because I didn't buy the house when I could afford to (but also because I got a job in an expensive city), I am now stuck in the private rented sector - which I hate, mainly because it is so insecure.

There are advantages in renting. You are mobile, and that is very important for some lifestyles. But the private sector is horrible. At least the council is regulated. Although there are lots of landlords who are very conscientious about obeying the law, there are others who take advantage of our desperation and just openly flout the rules, or take so long to do repairs etc that it can have serious implications for our health, both mental and physical.

solo - sorry, I wasn't trying to do a 'poor me'. I really am lucky, because we're going to move soon and it will be fine. I just wanted to illustrate what the realities are, because I think if you don't know, it's natural to think 'why don't they all just rent small rooms in a house share, I bet I would'. But people need to know that a room in a house share that is not damp and horrible is often very difficult to find! There is a reason why some people in my generation rent what may seem to older people to be extravagantly nice places - it's not because we're turning our noses up at something slightly shabby and small, it's because it may be that or the place where we'll get ill from the damp.

Solopower1 Sat 09-Feb-13 09:38:40

When I left, another young single-parent family moved into the house. Those children are now grown up, but I wonder if their mother will have to move out of their family home if she can't afford the bedroom tax.

I hate to think of young families growing up in hideous conditions.

Good housing is so important, for the health of the nation!

Solopower1 Sat 09-Feb-13 09:41:19

LRD - I think we should tell it as it is, and we can only talk about our own experiences. People need to know what it's like - governments need to know.

Yes, that's true.

I would like it if we could get back to a situation where it was more normal for people who were reasonably well-off to rent, and for it not to have that stigma. I think the quality of housing would go up.

MoreBeta Sat 09-Feb-13 09:50:35

Rent controls (rent caps) are not the answer.

It leads to slum landlords. We had that in the UK in the 1960s. If rents are capped then landlords stop looking after property as they cannot afford to have it repaired.

Getting the price of property down is the answer by allowing the market to work.

Solopower1 Sat 09-Feb-13 09:56:52

Another thing about the bedroom tax - just because your kids leave home that doesn't mean you don't still need the space, especially if you have grandchildren.

Lots of grandparents do a fair amount of child-minding for their offspring, which they can only do if they have the space. And for some young families faced with high child-care costs, this can be the difference between getting and keeping a job and being unemployed.

Solopower1 Sat 09-Feb-13 10:25:38

MoreBeta, I agree we need to get the price of property down, but how can that be done? What do you mean by 'allowing the market to work'?

Want2bSupermum Sat 09-Feb-13 10:27:47

Where to start with housing in the UK....

1. Foreigners have inflated London to the point of insanity. My flat in London is now 'worth' more than GBP500K apparently. We put it on the market and Europeans are the ones making offers. It doesn't take much to put the pieces together. I think there is a lot of dirty money from Europe in London real estate.

In addition, the new wealth from Russia and the Far East has moved in. It is shocking that you can live in the UK and not pay taxes on your worldwide income. That needs to change and we will see house prices in central London fall which will have a knock on effect for everywhere else in the country.

2. Rental Market: Here in the US, land of rampant capitalism, when we rented the increases in rent were set by the town we lived in. They calculated the increase based on the increase in property taxes and mortgage rate changes. The biggest increase we had was 4%. People were up in arms about it too. The increases are announced in June and landlords had to inform you 3 months prior to the annual lease coming up if they were increasing the rent.

Oh and lord help you here if you don't offer safe housing as a landlord. The town will do the work to bring the home up to code and place a lien against the house. Good luck getting your permit to rent through if you have one of those liens.

The crap that goes on in the UK wouldn't last five minutes here.

WhatKindofFool Sat 09-Feb-13 10:43:18

Bring back mortgage interest tax relief.

MoreBeta Sat 09-Feb-13 11:28:12

MIRAS was another distortion in the housing market designed to encourage people to buy rather than rent.

At least in the 1950s homeowners had to pay income tax on the implied rental value of their home to recognise that fact that they were in effect enjoying rent free housing whilest being allowed to claim MIRAS.

Then they removed the income tax element and kept MIRAS right at the time there was high wage inflation in the 1960s and 1970s and the whole myth and love affair of the 'boomer' generation began. Of course they took away MIRAS once the boomers had reached middle age.

The boomer generation have paid no tax on their unearned housing wealth apart form stamp duty but tenants have to pay rent out of taxed income. No wonder so many people are trapped in rented accomodation paying.

MoreBeta Sat 09-Feb-13 11:32:51

solopower - the Bank of England is distorting interest rates by forcing them down to almost zero and well below what the capital market would charge.

In addition banks are being allowed to 'extend and pretend' lonas on property where the person is not paying the mortgage in order to avoid repossessions and hence have to take losses on the mortgages they extended in the boom years.

Govt and Bank of England are terrified of creating a triggeringa wave of repossesions which is why we keep seeing rates being kept low and all sorts of schemes to pump up the housing market.

Miggsie Sat 09-Feb-13 12:04:43

When DH and I bought our house we were both junior civil servants and we could just afford this house and took in a lodger for 2 years which helped with renovations.

Our house is now worth 7 times what we paid for it - we could not afford to buy it now with our present salaries despite me recently getting a senior management job.

If DD wanted to buy a house at age 23 like DH and I did round here she would need to come out of University and earn £250k! With a £50k deposit!
No way could that happen - and I'm boggled at how the houses which do go on sale round here are snapped up - £1m for a family home - someone has money, but I don't see how anyone on a fairly normal wage can afford to buy here.

I haven't asked people but I can only assume there is a lot of inherited wealth or a massive amount of debt.

I know my friend has extended her mortgage and will be paying it off when she is 67!!!! I don't see how this can continue, and I foresee a lot of people living with their parents for quite a long time.

hi haven't read all the posts sorry.

just wanted to comment on how it's not just the private market. i live in a HA property. when i moved in 4 years ago the rent was £65pw. it is now £89pw and will go up again by the maximum legal amount come april 1st probably to somewhere between £100 and £110pw. when it went up to £89 last april i was shocked that it could have risen by nearly 50% in 3 years. the private rentals market around here has done nothing like that and at this rate within another year or so it will be just as cheap for me to rent privately.

the HA was given my LA's entire housing stock for £1 since which time the rents have rocketed across the board to being very close to the private rent rates. cheaper housing is ceasing to exist here even for those lucky enough to get social housing.

if i had rented privately i would not have had to shell out to install electricity into the back passageway (it was that or make a choice between having a fridge or a washing machine as there wasn't space for both), pay to have washing machine plumbing put in, pay to decorate the whole house which was a mess of holey, flaking bare plaster or to pay put flooring throughout the whole thing. i made those investments thinking well at least the rent is cheaper. now either this april or next april it won't be cheaper the same price could see me in a fully maintained, all mod cons house.

not sure if this has already been mentioned but i think if you were to break down the stats of rising rent prices a large proportion of it would be made up by housing associations rocketing up rents of social housing at record levels.

for those thinking that rent is really cheap i am obviously not in london. i live in a 2 bed semi and within 2 miles of here you can 3 bed houses for £495pcm. if my rent goes to £110 in april as i expect that means i'll be the same or more for my 2bed.

Piggychunk Sat 09-Feb-13 13:00:54

Where do you live Swallowed? Would love to know where you can get 3 bed for £495 always on the look out for a cheap place to move to the South is killing us sad

Corygal Sat 09-Feb-13 13:07:07

Housing market in the UK stinks. What worries me most is that, having been kicked out of life's reward systems, eg a home or a work pension, the younger generation are going to either stop work or leave the country.

The younger generation with any sense, that is. On the subject of housing, your rent is paid whether or not you work, so what's the point.

don't want to say where i live on here piggy. the 3bed £495 wouldn't be in the nicest part of town i admit - for another £100 it turns out you can get leafy terraced street in nice part of town with original floorboards and features.

though of course i'd have to find the money and energy to actually move.

TunipTheVegedude Sat 09-Feb-13 14:02:24

It is ridiculous and we are storing up big problems for the future stability of this country if we allow the housing/rentals market to continue to be a means by which the older generation are shafting the young.

We urgently need reform of renting law to bring it into line with other European countries where it works better, and the government needs to stop throwing everything it's got at keeping the housing bubble inflated. A minority here is being pandered to and it does not benefit the nation as a whole.

And I say that as a home-owner (able to buy thanks to inheritance and parental help) with plenty of housing wealth in my extended family.

sleepyhead Sat 09-Feb-13 14:23:08

It'll be "interesting" to see what happens when the 60/70/80 year old homeowners get too infirm to live in big houses and start to sell them to pay for nursing care. That money won't go to inheritance, but into the care home industry and to local councils.

Maybe it'll happen over too long a period of time to make much of a difference.

It'll also be "interesting" to see what happens when you get a generation of infirm elderly who have nothing to sell to pay for care. In Europe I believe a lot of that cost passes down to next of kin. In Germany there's a scandal going on at the moment about elderly infirm being shipped off to care homes in Eastern Europe because it's cheaper.

(obv when I say "interesting" I mean in the sense of interesting times - may we not have to live in them..)

mondaytuesday Sat 09-Feb-13 14:52:34

A cheer went up at the far end of the village green. It woke me from the daydream I was enjoying whilst gazing into the fire. The pot of soup hanging from the tripod would soon be ready, and myself and my family were hungry. That seemed less important now.

I stood up, and noticed the others around the campsite doing the same. We all looked toward where the cheer had come from. We knew what it meant. It was happening more frequently now, that last one was only 3 weeks ago.

I saw the family quite quickly this time, the wife was leading them through the campsite, weaving between the tents. Without exception the people on their route stood and applauded. The husband was red faced, and looked shocked. He kept turning his head, making sure his daughter was keeping up with them.

No more living outside for them. No more living in a tent. I was pleased for them, but still couldn't help but wonder when it would be our turn. The winter was just beginning, they were lucky with the timing.

The thought crossed my mind again, how crazy it was that it had come to this. It wasn't that long ago that the death of a parent was a sad event, not a cause for celebration. But now it was that family that were the lucky ones, finally moving into a REAL HOUSE of their own. Finally inheriting a home. Incredible.

The family had gone from the village green, and were racing down a side street towards their property. I watched the others sit back down again, many were attending their own soup pots hanging over their fires like I was. It was getting dark now and we all wanted some warmth inside us.

Not for the first time, I hoped for the day when all boomers would be gone, and we could start again, living indoors.

Just Imagine That.

dreamingofsun Sat 09-Feb-13 15:21:28

two ways of decreasing demand would be:

taketheribbon Sat 09-Feb-13 15:24:00

mondaytuesday that was brilliant!!

dreamingofsun Sat 09-Feb-13 15:24:11

1. reduce immigration. we can't house our current population so why increase it?
2. If you want to get rid of private landlords find other ways that they can save for their pensions. the current pension industry has had so much bad press and the costs are so high people don't see it as a good investment

Building over large swathes of greenbelt is a horrible thought. Developers should be made to build on brown field sites. Those large houses that people are talking about OAP's living in normally have large gardens as well - so lets build estates on them.

FairPhyllis Sat 09-Feb-13 15:30:49

monday grin

Something feeding the problem is that for some reason people seem to very firmly believe that they are entitled to have their property go endlessly up in value. We don't seem to have learned anything at all from the crashes.

I mean, a house is an investment like any other. Its value can go up OR down, and you just have to suck it up if you need to sell at a time when its value is down - don't pin all your financial planning on the assumption that it will go up in leaps and bounds.

You shouldn't really expect to get anything out of your house other than the historic long-term average value rise, which is about 2.4% a year in real terms.

Good blog post smile

I was a single parent when my DD was small, and by the time she was 5 we had lived in 4 different private rented houses (one of which was found unfit for habitation by the local council, though they did nothing to help us get out of there). It was awful, moving so often.

DP and I have given up on the idea of 'getting on the property ladder' as a bad job. We've chosen instead to live in a housing co-op which, though it has its own set of difficulties, gives us a secure tenancy for as long as we pay the rent.

We paid £1 to buy a share in our co-op and become shareholders of the company that owns our home. We then rent our accommodation at a fair rent (set at just below current LHA levels at the moment) and when the mortgage on the property is paid off, the rents will go down to cover just what is needed for repairs/insurance/council tax etc.

I totally agree with whoever it was upthread that said housing should not be something individuals see as a way of making a profit. Its a basic need! Secure and safe housing is everyone's right, its at the bottom of that Maslow's (?) pyramid.

I like the way trailer park/caravan living is being mooted as a possible solution. I have a lot of Traveller friends for whom that way of life is being made almost impossible, so maybe the economic situation will make it a more accepted lifestyle smile

Even the Daily Fail are coming round to the idea that converted vehicles make very good affordable homes grin

TunipTheVegedude Sat 09-Feb-13 15:58:17

FairPhyllis, I agree. One reason why the expectation of rises is a problem is that it encourages people to continue living in large houses long after they need the space because even with the higher running costs, it makes financial sense for them to do so. Hence the normal process whereby older people move out and people with young families move in just hasn't been happening as it should.
The problem is only partly one of shortage of housing. It is also that the normal mechanisms that ensure the houses broadly end up with the people who need them are broken by the housing bubble. It is utterly insane. Families with children crammed into little flats, elderly people rattling around in big houses, and as long as prices are expected to go up the people with all the wasted space have no rational reason to move out so can't be blamed for not doing so.

Crabbypink Sat 09-Feb-13 16:14:28

Every time there's a new building of flats going up in Bromley, why are they "luxury"? I suppose, if they put "good-value, reasonably-priced housing for people who just want to buy something", it wouldn't sell. At least not here. Or would it?

sleepyhead Sat 09-Feb-13 16:15:41

Good-value, reasonably priced housing would go like hot cakes... to buy to letters.

wonderstuff Sat 09-Feb-13 17:00:35

queen where do you find out about such co-ops? Sounds fab.

Solopower1 Sat 09-Feb-13 17:45:09

MoreBeta, thanks for the explanation. I am still puzzled, though, because some of what you said seems to be a good thing to me. No-one wants more repossessions, surely.

And low interest rates are good for people with mortgages.

I suppose there are always winners and losers, whatever the government does. But I wish we were more interested in social justice in this country, and less inclined to demonise other sectors of society - who are often even worse off than ourselves.

And this baby boomer thing. Some of them worked the system and got rich - but we would all have done exactly the same things as they did, given half a chance. They (we) were a lucky generation - free education and healthcare, less crowded roads, fewer cars, more green spaces, more jobs - and more decent, family-sized council accommodation. So many of the important things in life. We can have that again, if we vote for people who think those things are important. On the other hand, if we vote for people who believe that rich people share what they've got and it will trickle down to the poorest of us in the end, we will wait for ever.

Btw, the vast majority of 55 - 75 -year-olds are not rich, and some are very scared indeed about their futures.

mizu Sat 09-Feb-13 17:46:04

ideasfactory - wow what a great plan! We live in the south west. Don't know how to pm you or even what that means.

alemci, I am the language lecturer and yes I think it was 2007 tat we joined one of the key worker schemes. We looked at a few houses but by the time I rang up to ask for more information and what to do next, the money had run out and they were not being funded anymore.

And just for information our shoddy landlord owns another 9 houses in the area!!

MoreBeta Sat 09-Feb-13 18:05:26

solopower - it is true that no one wants repossessions but the problem is that the seeds of this problem were laid in the last 10 years with so much debt being secured against property to creat an enormous bubble rise in prices it has to burst properly before the property market can heal itself.

The bigger the boom the bigger the bust.

Solopower1 Sat 09-Feb-13 18:12:48

MoreBeta - Don't you think the problem started when people were allowed to buy their council houses?

I know it sent some people shooting up the housing ladder, but it also helped cause the housing crisis, because as you say, the boom was followed by a bust, and then people needed the council houses that had been sold off and not replaced.

MoreBeta Sat 09-Feb-13 18:31:07

I think the issue of council housing is to be honest a red herring. I know it is a very emotive issue but in reality council houses are just another property market distortion.

There are huge queues for council houses precisely because they are rented at far below market rate. What we need is all house prices and rents to reflect the true market value.

If rents and house prices fell 25% from here this problem would largely disappear.

Incidentally, I do think our housing shortage is excarbated by old people 'hoarding' houses that are far too big for their actual needs. I have just seen on Sky a discussion about a cap on care fees at £75k for the elderly so thay 'dont have to sell their house'. Why not? Surely that is what savings should be used for? If we make it so old people never sell or downsize we create an automatic shortage.

TunipTheVegedude Sat 09-Feb-13 18:38:02

I don't like the word 'hoarding' - it seems designed to stigmatise people for doing something that is entirely sensible and not in any way malicious. If their house is rising in value OF COURSE they're going to hold onto it as long as they can. But it is part of the problem, yes.
How many of these families squeezed into small flats have grandparents in much bigger houses? Quite a lot that I know of.

higgle Sat 09-Feb-13 18:40:51

South WEst here - plenty of nice houses for sale for less than 180K - some with 4 bedrooms. A young couple on 25K each could save hard for a year and easily afford one of these.

MoreBeta Sat 09-Feb-13 18:42:36

Problem is that housing for the boomer generation became a favoured tax free saving vehicle and not just a place to live. Fine. They did well but now they should use that money they 'saved' by investing in a house to pay for their retirement and care. Otherwise the younger generation will be paying for it through taxes while still living in cramped houses.

This is an intergenerational crisis.

confused

How?

Let's assume they only needed one minimum wage income to live off (unlikely, isn't it?). Where would the rest of their deposit come from?

higgle Sat 09-Feb-13 18:56:00

Was that a reply to me? Well, my son earns a little over 35k, takes home about £1500. If he and his GF wanted to buy a house they could move in with us or her parents and with a joint income of £3k could save at least 18k in a year betwenen them, possibly more as we would only want food money + small contribution. They would have their deposit and could save a few months more for the fees - so 18 months and they would be in. they both have some savigs anyway.

MechanicalTheatre Sat 09-Feb-13 18:59:26

That's not an option for a lot of people though, higgle . My parents and my partner's mum would baulk at the idea of us moving back with them for a year. Besides which, we live in London and have jobs here and none of our parents live in London.

Oh, sorry, I thought you were talking about two people on 25k, saving for a deposit, not one person saving half of a deposit.

18k would not get me a deposit for a 180k property, sadly, since I do not earn 35k and have student loans, like many people my age.

35k is a very high income for a young person, higgle. I think we all know rich people can buy houses!

It must be very pleasant for your son that he can move in with you, too. You're very good to him, and I don't mean to knock your generosity - only to explain why many people can't afford it.

Solopower1 Sat 09-Feb-13 19:07:42

Looking after old people in their own homes is cheaper for us (tax payers) than paying for their care homes.

Pitting one generation against another doesn't achieve anything, does it? How does it help? Rich people do not share. That is how they became rich and how they will stay rich. Old people are no different to anyone else in that respect.

If you are going to turn the oldies out of their homes, then do the same to the bankers and chief executives and anyone else who owns a house that is bigger than they need. David Beckham springs to mind, but I'm sure there are other footballers or filmstars that we could turn out of their mansions. Think how many homeless families they could accommodate.

Let's storm their gates.

<Hang on a minute - I'll just get my knitting.>

Solopower1 Sat 09-Feb-13 19:08:56

Sorry - that was to MoreBeta.

higgle Sat 09-Feb-13 19:10:12

Typo - he earns £25k to take home £1500. He lives in London at the moment and pays £630 for just one room in a shared house, he is in the civil service and hopefuly will get a "posting" somewhere cheaper to live.

BadMissM Sat 09-Feb-13 19:12:11

I'm 45, and I've still never earned more than 20k, despite having a master's degree.... My parents, despite having the room, when I & my daughter did move back in with them, charged me so much rent I had no money left to live, let alone save....

Paying £550 rent a month leaves me and my partner with no money left for bills, let alone saving....

higgle - sorry to be picky, but you mentioned a couple earning 25k each. So, a rich couple. Even assuming they were allowed to share that room for 630 (and many LL charge per person not per room), could they save a deposit for a house cost 180k? In a year? With transport costs?

I'm not denying it can be done, it just sounds rather unlikely to me, and that is depressing given that a couple earning 25k each in their 20s are already doing very well financially, aren't they?

Solopower1 Sat 09-Feb-13 19:13:04

Weird, isn't it? Children not leaving home or coming back to stay with their parents. Before long we'll have extended families all living under the same roof again, as they do in other parts of the world ...

BadMissM Sat 09-Feb-13 19:13:42

There's another possibility...the older generation in the emormous houses could possibly downsize and help their kids with deposits? They are the ones who profited from the property boom, after all?

Solopower1 Sat 09-Feb-13 19:16:17

BadMiss - yes, I can't think why a parent living in a mansion would not want to do that, tbh. I'm sure a lot do.

sleepyhead Sat 09-Feb-13 19:21:45

Only if we have big enough houses in the first place Solo. I'll have 2 with a 6 yr age gap in a 2 bed flat (if we're lucky - it's going to be 4 of us in a 1 bed while ds2-to-be is tiny). Dh and I are 40, so realistically another 27 years until we retire - pushing it to do too many other moves that require mortgage increases.

Not much room for adult children and partners to move back in to save for deposits.

noisytoys Sat 09-Feb-13 19:26:08

Where I live in the South East, the council are counting all living spaces as bedrooms for the purpose of 'bedroom tax' so everyone has to downsize. Living rooms, dining rooms, box rooms are all bedrooms. It is common here for a family of 4 to live in a small 1 bed flat, often with the adults sleeping in the small open plan living room / kitchen and the children having the bedroom. Because of this the smaller flats and houses that were originally starter homes have shot up in price and are being bought as BTL and no one can afford to buy one and the demand to rent one is very high.

Solopower1 Sat 09-Feb-13 19:40:30

Noooo! Bangs head on table. It's so unfair, Sleepyhead and Noisytoys.

We really have got our priorities all wrong, wrong, wrong in this country.

MoreBeta Sat 09-Feb-13 19:46:59

solopower - I'm not suggesting forcing people out of their homes. Just telling them they have to use the money stored in them to pay for their care if that becomes necessary.

Why is money stored in the form of a house so sacrosanct? No one would say the same about £500k of money an old person had in a deposit account or shares.

alemci Sat 09-Feb-13 20:00:26

I think the older generation had their own share of hardships. Some of them were born before the war and went out to work at 14 as did my father-in-law. He had to do National Service which my dad didn't being a little bit younger. They did struggle to buy property and have never had much money to play with.

Sure they have a nice house now but they live on a small pension.

roneik Sat 09-Feb-13 20:00:51

It’s a shame that one generation is being set against another, I am a pensioner and getting a home paid for took a lifetime. Even then I had to trade down to the north in order to be able to have something 2 bed. If you walked in the majority of boomers shoes you would realize it’s never been easy buying your own home.
People should also remember that the benefit system was not always so accommodating as is now.
There was a time when you needed 28 weeks national insurance stamps to be eligible to six months dole money . After that you were on your own.

sleepyhead Sat 09-Feb-13 20:06:00

roneik - that's still the case with contributions based jobseekers. Which was the only one that dh qualified for when he was made redundant, (quite rightly) as I was working.

sleepyhead Sat 09-Feb-13 20:08:41

And it's not a case of pitting one generation against another really. You can see up thread examples of people from my generation who will be disadvantaged if house prices fall, or policies are put into place to discourage using homes as an investment.

It's about balancing the needs of the majority with the wants of the minority. Which is the majority, which is the majority? What is a need and what is a want? That's the tricky bit (well, one of them anyway). Does a family of four need more than one bedroom? Does a single pensioner need three?

Solopower1 Sat 09-Feb-13 20:10:27

I see, MoreBeta.

I would agree with you, but I think in a civilised society we should all help pay for the old, the young and the infirm.

But then I really don't think vast amounts of inherited wealth is fair either. So on balance, yes, let those who have houses sell them to pay for their care. I think.

But then no-one inherits anything, the house is probably sold to someone rich who doesn't need it or is going to let it out at an exorbitant price and not look after it or knock it down and build a supermarket in its place. Nothing is done to help the housing crisis and young families still can't afford a house to live in.

I know - compulsory purchase orders. The council buys the house that the old person sells to pay for her care. Then the family of the old person move in and pay rent to the council - which also helps pay for Grannie's care, build more houses, fund hospitals, etc.

Would that work, do you think?

I think I would agree with you, MoreBeta, if the council bought the house and used it for someone to live in.

sleepyhead Sat 09-Feb-13 20:14:10

The family of the old person (ime) almost never moves in to the inherited property. Families just don't generally live that close to each other any more.

An exception obv is where a child has been living with the parent, and possibly providing a lot of care, in which case I think exceptions should be allowed (I'm not sure if that's the case or not at the moment - don't think so).

Varya Sat 09-Feb-13 20:16:09

Moved 70 miles away from our families and have never inherited. Never will. Now just a very modest semi 45 miles out of London. Son and daughter have only just clung to housing ladder with our help, but too many people are IMO chasing too few houses and this puts the prices up. No handouts, all our housing costs have always been met by us, with a struggle at times. Never easy.

sleepyhead Sat 09-Feb-13 20:18:17

Interestingly, my parents' street - which was all families when we moved there in the late 70s - has gone through a cycle of getting greyer and greyer and now going back to elderly people dying and properties going back on the market.

They're (mostly 3 beds) being bought by professional couples without children in their 40s and 50s though. Not by the young families that they were originally built for, despite local amenities and schools being good. Presumably they're still priced out. I actually can't remember when I last saw a child in that street that wasn't someone's grandchild.

alemci Sat 09-Feb-13 20:20:16

well said roneik. Also I don't think people had the expectations that our own kids have. Society has become so materialistic (myself included).

sleepyhead Sat 09-Feb-13 20:20:24

Oh, and my dad was earning probably the equivalent of about £25k in today's terms when they moved in. My mum was a SAHM.

pmsl hmm

mam29 Sat 09-Feb-13 20:29:39

A cheer went up at the far end of the village green. It woke me from the daydream I was enjoying whilst gazing into the fire. The pot of soup hanging from the tripod would soon be ready, and myself and my family were hungry. That seemed less important now.

I stood up, and noticed the others around the campsite doing the same. We all looked toward where the cheer had come from. We knew what it meant. It was happening more frequently now, that last one was only 3 weeks ago.

I saw the family quite quickly this time, the wife was leading them through the campsite, weaving between the tents. Without exception the people on their route stood and applauded. The husband was red faced, and looked shocked. He kept turning his head, making sure his daughter was keeping up with them.

No more living outside for them. No more living in a tent. I was pleased for them, but still couldn't help but wonder when it would be our turn. The winter was just beginning, they were lucky with the timing.

The thought crossed my mind again, how crazy it was that it had come to this. It wasn't that long ago that the death of a parent was a sad event, not a cause for celebration. But now it was that family that were the lucky ones, finally moving into a REAL HOUSE of their own. Finally inheriting a home. Incredible.

The family had gone from the village green, and were racing down a side street towards their property. I watched the others sit back down again, many were attending their own soup pots hanging over their fires like I was. It was getting dark now and we all wanted some warmth inside us.

Not for the first time, I hoped for the day when all boomers would be gone, and we could start again, living indoors.

Just Imagine That.

Monday tuesday-do you and other families live in a tent in uk?

Heard and seen tented cities in usa.

Neither my mil or my parents would want us living with them.

I couldent wait to move out, we didet get on there ere no jobs in mams rural town.

This recession despite being triple dip so different to last theres been a lending crunch but no crash houses here holding their own.

Cany see anything being done as not in the propery owners interests.

I detest council tax as based on value of home but if rent what does value mean to me?maybe lanords should pay tennants council tax that seems fair ad council tax 2nd homes should be drasticlly high.

roneik Sat 09-Feb-13 20:30:48

I see lots of upmarket cars and jeeps driven by people that rent around my way, and that makes me think back to when I was saving to buy when young.
We had an old banger for years. I was made redundant before I got to retirement age so had to trade down to what my pay could reach to without constant worry.Up here in the north east you can buy a 3 bed house for 70k and a poor condition one for less. So here’s one southern boomer that hat to uproot to the north many miles from relatives in order to have a roof that wasn’t rented. My point being the economy should not be concentrated in the south and people have to make sacrifices if they want to buy a home.
Also previous governments should have seen technology was to take away so many jobs and prepared the economy to cope with less jobs for more people. My answer would be build houses on masse, and that would create some jobs and liberate the economy.
Rents would fall if there were not a shortage of accommodation. How can the economy recover when rents are taking such a big proportion of incomes?

the thing is though it won't effect those who get 'vast inherited wealths' - they can pay for the care without touching the bulk of their estate.

it will effect those who would have managed to leave 50k to each of their 2 children helping them get a foot on the property ladder and a few grand to each of their grandchildren to help pay towards uni fees.

if you want to hit truly vast inheritances you need serious inheritance tax.

my aunt inherited loads of stocks and shares and money from her husband. her second husband did well for himself too. her children with fully paid for educations and very encouraging parents also did fantastically well for themselves and already owned their homes outright and were earning 6 figure sums by the time their mother died. the money she left meant each of them went out and bought another property outright to rent out as an investment. but my god you should have heard the moaning and bewailing of having to pay a bit of inheritance tax.

my parents may leave 150k i'd guess - they have 2 dds both single parents and 4 grandchildren. my guess is they'd leave a third to me, a third to my sister and a third between the gc. making them spend their house on care if they needed it would mean me in all likelihood never being able to buy again or have any capital investment for my retirement (after losing a home in the last recession due to combo of housing price crash, my son's birth and ill health meaning not being able to work for a while) therefore being a bigger 'drain' on society when i'm older and being able to invest less in my son's education and chances of being genuinely financially independent.

meanwhile those leaving fortunes of ten million untouched.

also in my experience mortgages are cheaper than rent anyway - so this struggle to buy a home business is nonsense. if you can get a mortgage you will have cheaper housing.

my mortgage was way less than my rent is in a HA property and had the flexibility that when times were good i could pay in more and when not pay less. rent is just rent and it goes up over and over with no option for shopping around for a better fixed rate or such.

edam Sat 09-Feb-13 20:35:37

Morebeta - council houses are not rented at 'below market rates'. Council house rents were set at a fair cost reflecting the cost of land and building. Private rents and house prices have gone crazy for a variety of reasons, but that's not the fault of council tenants. You can't turn round and punish them because the housing market is entirely dysfunctional.

edam Sat 09-Feb-13 20:37:31

swallowed, that's nonsense. People can't buy because they can't save for a deposit, what with sky-high rents eating up their incomes plus 0.5% or less interest on savings - below inflation. So anything you save is actually losing value.

err i did say 'if you can get a mortgage'. my point was that the running cost of a mortgage was considerably lower for me than my rent is and that was before ridiculously low interest rates

Viviennemary Sat 09-Feb-13 20:44:27

I agree with roneik. Most of the people I know with mortgages struggled to pay them and had a constant worry of not affording them. And when the interest rates hit 16% people had to downsize or lost their home altogether. It just simply isn't true that people had it easy. Also tax credits are a relatively new thing. In the early 1980's huge numbers of people lost their jobs as a lot of heavy industry closed.

higgle Sat 09-Feb-13 20:50:13

£25 is about average starting salary for graduates in London, I think. DS1's friends studied a variety of subjects and only the lawyers go tmuch more than that. He pays £630 for his room now and lives there alone, saves a bit. If he seriously wanted to buy somewhere he would have to either save for ages or move in with us for a bit. Most of the younger people who work with me either stay at home or move back in for a while to save for a house.

Varya Sat 09-Feb-13 20:52:30

It seems to me that Thatcher was the architect of unaffordable housing, water, fuel etc with her privatisation, selling council houses etc. A thoroughly toxic set of policies.

I think you might be a bit off on that, higgle. Maybe it is, and maybe the grads I know are very unlucky, of course.

I don't know so many people whose parents can afford to have them back home, but I agree it is really nice when parents who're well off help their children up. My parents are good to us (though thank god they never assumed we'd 25k starting salaries!).

I googled hoping to find a site I would know was reputable - I didn't, but this was the first result, which may be pessimistic, but was interesting:

graduatefog.co.uk/2012/2187/average-graduate-salary-10000/

roneik Sat 09-Feb-13 20:58:36

In the last bad recession interest rate went to 17% people lost jobs , and now as then some will prosper on the back of misery. interest rates and Q/ easing have saved buy to let and made saving unattractive and in some cases impossible.In 2007 I thought that the same thing would happen with rates and as I was on a low wage got out of mortgage paying by trade down.
Not easy when you are getting old starting all over in an area where you know nobody
The north grows on you after a while

MechanicalTheatre Sat 09-Feb-13 21:03:04

I don't know anyone who started on 25K (except maybe a doctor or two). It might be the average starting salary for a graduate job, but those are few and far between these days. The vast majority of my friends scrabbled around in bar jobs, internships, temping and other low paid stuff for a good 5 years after graduation.

But if you've been a doctor, you've clocked up more debt, is that right?

A friend of mine has just got her first permenent job for something in the mid-20s, but she has spend 8 years training for it, so she has that much more debt. So she still can't get a mortgage.

i certainly didn't earn anywhere near 25k as a graduate. after post graduate studies i earned 19k - 25k sounds good as a first graduate job. sadly most people i know were forced into low paid work to start trying paying back debts and to keep a roof over there head when the loans stopped.

i'm sure it helps if mummy and daddy can afford to put you up and hold your hand but most people i knew didn't have that option.

also moving north isn't really an option as generally lower house prices come with lower salaries. it is gobsmacking to see the levels of qualifications, experience, car ownership and responsibility demanded for pitiful wages (way under that mythical 25k believe me) in the job adverts here and i'm central rather than north.

Solopower1 Sat 09-Feb-13 21:26:43

I was earning £25 as a teacher with 20 years' experience. But the young people I mentioned above who earn that live in London.

i think you'll find teachers don't start on 25k even when they live in london solo.

roneik Sat 09-Feb-13 21:31:44

sleepyhead, first they came for the disabled , then they came for the unemployed, soon after they came for the elderly.(sound familiar?)
I do believe there has been a campaign by this government to divide and rule in order to take the focus off of the fact that they and the last government have been a qualified disaster and both chancellors have been useless at doing anything other than borrow to create what might look like a growing economy.
The reality is the economy was propped up by north sea oil debt and dodgy banking practices. On some forums people are being really nasty about the old and disabled and jobless

Solopower1 Sat 09-Feb-13 21:48:22

Swallowed, I expect you're right. The IT consultant earns that - more, in fact. He's 24. I didn't ask the teacher or the nurse or social worker.

roneik Sat 09-Feb-13 21:52:02

Sorry to double post , but I think we need a government consisting of business people and a smattering of ordinary folk not millionaires, who are completely out of touch with the reality of life for ordinary people.

I honestly believe that if there is not change there will eventually be crime and social disorder never seen before .
Something has to give and something will IMO

alemci Sat 09-Feb-13 22:19:39

I think most people don't have much wealth apart from what is tied up in their properties. I agree with the divide and rule posting.

Mortgages are cheaper than renting if you can get there to start with but at least with renting you can walk away. You could get repossessed and then chased for a debt for years and your house is sold at a very low price.

mondaytuesday Sat 09-Feb-13 22:40:23

You always get the same old views whenever this topic is discussed! You always get the 'it wasn't easy in my day either's, and the 'they spend all their money on gadgets' crowd, the 'make sacrifices like I did's etc etc. It just gets funny after a while. Addressing some points here -

Buy somewhere cheaper!
Prices vary across the country, and that's for a reason. Up until the inevitable crunch in 2008 prices were flying up as people borrowed as much as the banks would lend them. They went up higher in places where higher loans were available, and that was governed by local salaries. You can buy somewhere cheaper yes, but in order to live there you will have to work somewhere that pays you less. That will not make them more affordable. If you buy further out of london for example the commute will take care of any saving you could make. If you are not yet retired prices are just as unaffordable all over the country.

Other people are buying whats the problem?
The number of properties changing hands has halved since the 'crunch'. Those that are buying for the first time, and this is what we are talking about here, usually do so with money given to them by family. That obviously disadvantages those without that option, and can cause family strife for those that take that option. People that buy without help are stretching themselves, and in most cases I would say they are being irresponsible with their and their families financial future. Interest rates are low, they can only go up from here. The base rate may well stay at historical lows for the foreseeable future but the cost of a mortgage is going up regardless. When people stretch to just about afford a low fixed rate they are storing up real problems for themselves when the rate on offer is higher later on. Who can claim to be responsible when taking such a gamble with their families home. In my view right now most people buying for the first time are those that cannot afford it.

It's always been hard, I did it, just work harder!
This view is usually based on ignorance of the current situation. Thats ok, you don't have to follow the market and keep up to date but if you're judging other people you would look less foolish were you to first at least gain some idea of the current situation. And to those who say it was hard before so what's changed? I would simply point out this.. if you struggled before this bubble, understand that it is now much harder. A greater struggle than yours. Also consider the point that it is actually possible for something to be unaffordable. If houses were a billion pounds each the advice to save up like you did is plainly not going to help. They aren't a billion pounds each, but there is a level at which they cannot be purchased. What would the market look like if that level had been reached? Look around you, what does the market look like today?

Times are tough, it's hard for everyone and people are just getting on with it!
It is not hard for everyone. If you have already bought your costs are a lot lower than someone renting. That is not because you are clever and deserve it, it is because of the luck of when you were able to buy. You can't help your birthdate and those born later have much reduced social mobility now.

The priced out have every right to be angry at the way this market has been allowed to get out of control. The banks lent too much from 2001 to 2008 and house buyers borrowed too much. It was never sustainable, prices cannot just gallop up and up relative to earnings and their not be consequences. A renting life is of a much reduced quality compared to that enjoyed by a mortgage holder. I for example know that I will never have children due to this crisis. I have to move whenever a landlord decides to sell my home. I have been evicted several times, and yet I have always been a good tenant and paid all of my bills on time.

The answer? Higher interest rates leading to lower prices and an incentive to work and save. Savers will be more active in the economy using their income from their savings and workers will see there is a point to working when they start to make progress towards owning a home instead of it being so out of reach to be a fantasy. Right now low rates simply move money from the workers and prudent savers into the pockets of the spendthrift and indebted. It is also why we have such high inflation. We need to encourage the right behaviour or it will just get worse.

Unfortunately we need brave politicians who are interested in what is good for the population as a whole rather than what will get them elected in the short term and keep the value of their properties high.

Im not holding my breath.

MmeLindor Sat 09-Feb-13 23:25:36

I don't think there is one answer to this issue.

There are lots of bits and pieces that would help.

Build more affordable housing

Make it easier to get mortgages

Make renting more attractive

Tax incentives for landlords who offer long term lets and / or renovate properties

etc

I also wonder about what will happen in the coming years. Many of my generation (40somethings) bought their own house, as did most of their parents. I know lots of couples who stand to inherit 2 houses (assuming the houses aren't used for care homes).

When the baby boomers die, we will have sinking populations, and presumably more housing stock. What happens to all those houses?

And what effect will this have on the housing market?

BrandNewRetro Sat 09-Feb-13 23:26:46

My children will be the same as me: they will get on the property ladder on the death of their parents.

Unless they get a job in the City, or some other lucrative profession. No one in our families has ever earned that kind of money, so I don't know how to encourage them into that type of career, we don't have any role models.

God knows how the situation could be improved. Maybe some kind of revolution in the funding of buying a house. Some kind of special savings scheme that starts at birth. If we saved about £2,500 per year for each child from the day they were born, they might have a deposit by the time they are 25.

Not that we could realistically do that!

mikey9 Sat 09-Feb-13 23:59:22

I suspect a big part of many misunderstandings is the secrecy with which many people hold their earnings - Have never understood this idea. If we actually knew what those struggling were actually earning - and what their likely prospective earnings were - then the picture would reveal itself a little clearer.

See the quite different perspectives from LDR.." and "Higgle above ranging from minimum wage salary to new gradualte salaries.
Statistics give us mean figures but what really matters is how many people earn in certain ranges of salary (the huge (10s, 100s of millions earners massively influence the mean) - making the median figure much more representative but.......I really think this falls into the hands of the employers who benefit from our reluctance to discuss salaries and incomes.

If we are to better understand what is a reasonable multiplier for the value fo an "average house" (whatever that is) - then this bit of info is pretty vital.

Higgle describes a young civil servant in London earning £25k hoping for a posting to "somewhere cheaper" - we should bear in mind this will lose London Weighting (approx £3k.....IIRC) if he moves away.

In these days of open information - having some payscales "out there" to allow us to understand better why people are struggling so would allow us all to apply some real perspective on the discussion (and inform both young and old...)

I'm happy to start - is anyone else in......?

£30k Local Govt (low mgt/professional) salary after 27 years working in Civil Service and now LGt = £1850 take home pay supporting SAHM and two little uns - in the Highlands.

Solopower1 Sun 10-Feb-13 00:10:53

I agree, Mikey, about more openness, but don't think that three or four people declaring their salaries on here is going to give us a big enough sample to answer your questions.

But yes, I would love more transparency in teaching salaries, especially higher up on the scale. It would also be good if people who get paid huge amounts could explain why their 24 hours each day is worth so much more than anyone else's.

MmeLindor Sun 10-Feb-13 00:13:12

Is there a pay scale for civil servants in UK, that is published?

I know from Germany there is one -
You can look up and find out how much eg a teacher in certain State, with X years experience would earn.

workingmumsy Sun 10-Feb-13 00:36:55

I bought my first maisonette in late 1990's with interest rates rising to 14% and a salary around £8k. I could never afford a carpet, but the fuzzy brown underlay was ok. I lived with the advocado bathroom suite; had a black and white TV as I couldn't afford a colour licence and slept on a futon as I couldn't afford a bed frame and mattress.
Next came a 2 up 2 down terrace house. I went to a secondhand junk shop in intercity Birmingham, put on my best Brummy accent so I wouldn't be overcharged, and bought furniture.
I've gone on from there. I've been self employed for years, so have had to come up with at least 25% deposit long before everyone else.
My point is, I know it's hard, but you can't have all of life's luxuries up front, new furniture etc, etc and a house. People are too wired in to the essentials of having the best phone etc. rather than what will do for the time being. You need to have priorities.

sleepyhead Sun 10-Feb-13 00:50:38

Doh! Secondhand furniture - I knew there'd be a simple solution <slaps forehead>.

Workingmumsy, please read mondaytuesday's post. This is not about iPhones.

Solopower1 Sun 10-Feb-13 00:55:03

What Monday said: 'if you struggled before this bubble, understand that it is now much harder. A greater struggle than yours.'

It is even harder now. People aren't going on about luxuries. It's about having a decent house to bring your kids up in. Because that is better for all of us in the end.

RCheshire Sun 10-Feb-13 01:21:32

workingmumsy,take the cost of that maisonette in the 90s and work out the multiple of the then average salary. Then look at what it would be priced at today as a multiple of today's average salary. I'll be amazed if you then can't see that second hand furniture would not address the problem.

mummydoesntsharefood Sun 10-Feb-13 02:50:10

williaminajetfighter, I couldn't agree more. There definitely needs to be restrictions on these unscrupulous people who have portfolios of properties and coin it in off of struggling tenants.
When there is a shortage of any resource why should anyone be allowed to hoard it?

Like many of the other posters here, I'll never be in a position to own my own home but I am fortunate (I reluctantly concede in this respect) to live in social housing where the rents are about half of what you'd pay privately and also fairly stable. I do feel a great sadness that I will never be able to choose where I live, or what type of accommodation I live in because of the competition for the more decent dwellings - for garden properties in particular - but there are families in bedsits at the end of the day.

A lot of land in London (and I dare say elsewhere in the country) is being snapped up and turned into huge blocks of luxury appartments - with only a tiny percentage allocated 'affordable'. Many of these flats then sit empty for the majority of the year because they are bought by people who only use it as a base when they are in the country. This type of thing really irks me, an empty property is a sin in my opinion.

i agree that it is time for interest rates to start going back up. yes short term it has kept the mortgage payers happy and living at much cheaper rates than renters but it also cripples any of us who don't own houses and would like to try and save for our own and our children's futures.

it also impacts on pensioners who did the right thing, saved, invested etc and expected part of their early retirement to be covered by interest before having to spend all of their capital. there is no interest.

i don't see how we can all afford to subsidise people's mortgages and debts.

i wish my social housing rent was half that of private rents. after 3 years of maximum rent increases and another one coming up we're virtually on a par with private rent levels now only with the additional costs of having to invest huge amounts to make them habitable.

mumzy Sun 10-Feb-13 08:46:43

The unoccupation issue is interesting. When we were looking to move to the suburbs a couple of years ago we viewed large 4-5 bed detached houses with huge gardens about 50% of them were lived in by 1-2 elderly people and often the houses were poorly maintained or they'd be living in only 2 of the rooms because it was probably expensive to heat the whole place. They'd also comment on how they were looking forward to not having to look after the garden. However the amounts they wanted for them was totally unrealistic and inevitably very few of the places we viewed actually sold also there is a lack of good properties for the elderly to downsize to. One of my relatives sold her large family home and downsized to a 2 bed house in staffed retirement village it has cost her the entire profit she made from her house sale to live there so no inheritance for her dc. However she and her dc have got the security of mind that if anything happened to her there will always be trained staff to look after her. As a rapidly ageing population we need to think ahead about our housing needs at every life stage. I fully intend to consider living a retirement village when the time is right and then my family home will be freed up for others.

ILikeBirds Sun 10-Feb-13 09:10:06

Lets not forget that the 'historically low interest rates' aren't helping the first time buyers. They're helping those who overstretched in the last decade who can now frantically overpay whilst rates are low, which is preventing the correction we need.

Look at interest rates on products aimed at first time buyers with a 10/15% deposit. They're low but nothing like the 0.5% above base deals that many who had the fortune to buy earlier are on.

MoreBeta Sun 10-Feb-13 09:31:32

mondaytuesday - absolutely spot on post. The distortion of low interest rates to 'save the banks' and avoid a fall in property prices has robbed savers and the younger generation while rewarding those irresponsible bankers and those who over borrowed in the boom years.

mikey9 - somewhere in my computer I have house price and wage data since 1930. The average ratio since 1930 of wages to house prices in 3.25.

This 3.25 x ratio corresponds exactly to the old criteria banks and building societies used to have of only lending 3 x main earner salary plus requiring a minimum deposit of 10%. We need to get back to that sensible ratio BUT the problem is that would require house prices to fall dramatically to match wages. In fact, Govt and Bank of England are doing everything possible to prevent that happening and get mortgage lending at high multiples started up again.

the historically low interest rates didn't prevent me having to let my last property be repossessed in the end because what i needed was a buyer - not a cheap mortgage. if your circumstances change and you have to move during a housing market crash you are screwed. my property needed a first time buyer and the few of those that were still in the market for buying couldn't buy the property from private sellers because the private builders who'd been over building flats, flats and more flats could afford to throw money at them and say look we'll pay your deposit and give you cashback and other crazy deals because it was cheaper for them to sell than to hang onto locked capital even if they made a short term loss.

this is why i also don't really agree with all this 'build affordable housing' a) it is rarely any cheaper than comparable properties on the market from private sellers (my dad is a counsellor and the affordable housing proposals builders bring are always such a piss take it's untrue - the projected prices are higher than that of comparable houses in same area in the property pages) and they expect to be given precious land at giveaway prices in order to build them. b) there are houses people are trying to sell desperately that should be bought before new ones are built.

we seemed to encourage property developers in our towns to such a degree that they saturated the market with flats, apartments, factory conversions etc that were at crazy high prices for the first wave of buyers who were then stuck with them because they were overpriced and unsustainable and then when the crash came they could afford to sell them off at stupidly low prices with deals like we'll pay your stamp duty, surveyors bills etc therefore undercutting the rest of the market who were desperate to sell and going down to really reasonable prices but could not compete with companies giving such deals.

i obviously can't speak for national trends but here i really think the overdevelopment of flats by private companies contributed to totally fucking up the housing market contributing to an initial rocket of prices then the complete devaluing of property.

sorry bit of a ramble

and the thing with these private builders and developers is that the money they make selling doesn't go back into the market. if a private seller sells their first time property they then buy the next step up the ladder and that property owner buys again - up or downsizing. the market flows.

when you buy from a private building company it just stops. they make a bit more profit and block the natural movement of the market whereby that purchase could have a knock on effect of several more sales and purchases.

really, really think we need to be buying from and selling to each other not just pouring money into millionaires pockets.

MoreBeta Sun 10-Feb-13 09:51:21

I knew it would all go badly wrong when in the mid 200s there were property programmes all over TV and people were making more money every day by just owning and living in their house as it went up in price than actually going out to work. It was like the entire country came to believe we could make a living just buying and selling houses to each other at ever higher prices and banks were ever eager to lend the money to sustain that fantasy.

That was always unsustainable because logically house prices cannot go up faster than wages for very long before they become unaffordable.

It was the very definition of a bubble.

MoreBeta Sun 10-Feb-13 09:51:47

'mid 2000s'

Southwest Sun 10-Feb-13 09:55:14

IMHO the first thing we need to accept is that there is absolutely no political will whatsoever to make housing really affordable!

Xenia Sun 10-Feb-13 09:58:52

Also remember food prices have come down and down and bear no relationship to where they ought to be so it is not the best of comparisons but no doubt the one that most suits Shelter's agenda.

The state has interfered like the worst forms of socialists in keeping interest rates low - base rate at 0.5%! We need the free market rather than interference of that kind.

By the way comparing the first house we bought in 84 and our then salaries both about £7500, small 3 bed terraced £40k with the equivalent salary in those jobs now £40k each and the houses on that street now - zone 5 house £275k, (outer London zone 5) the comparison shows the financial positions of an equivalent couple today would not be too different, considering I was paying 33% tax then and interest rates rose to 12 - 18%, not the 3 - 5% people pay today. As for saving for deposits it was always hard. I think in 1900 only 15% of people ever owned a home. I am not sure things are too bad at all compared to how they were.

Finally the house my other moved to in 1938 today costs £50k. There are some parts of the country which are still cheap.

Southwest Sun 10-Feb-13 10:15:34

Sorry visiting family will post in bits

Can only talk about London and south east with any experience

What is more affordable? Truly affordable?
buying a house/flat for 350k or for 700k?

Clearly 350k

Once you accept that you realize house prices have to fall
But I'm sure home owners are more likely to vote

So if you want to drop house prices and not 'hurt' home owners how do you do it?

Simple tax btl like earned paye income

Prices drop no one really suffers .......

Sorry about typos on phone

Southwest Sun 10-Feb-13 10:17:15

I keep meaning to post an AIBU about this but have shitty Internet access so can't

Some of the things I have been told recently about money have truly amazed me

dreamingofsun Sun 10-Feb-13 10:30:47

southwest - btl income is already taxed in the same was as other earned income.

Solopower1 Sun 10-Feb-13 10:44:42

Very interesting post, Swallowed. Agree!

And (don't get me started) they build horrible little boxes that they wouldn't dream of living in themselves, employ labour from elsewhere, pay taxes, if at all, in other countries ...

Why oh why oh why ...

prices in rent and housing don't drop by taxing btl income - not in a market where landlords always have the upper hand and can just command more rent because there'll be a high enough earning couple unable to get a mortgage but having the money to pay higher rent.

honestly i think we just have to improve the rights and stability of tenants including not allowing big rent hikes. the owners then have to either be decent affordable landlords or sell up to someone wanting to buy a home.

whilst landlords can buy cheap, rent high and boot out tenants at the drop of a hat when the market changes and they decide they can charge even more rent to a different class of tenant then no their won't be houses to buy, no their won't be affordable rent and no we won't shift the culture of property as investment.

mondaytuesday Sun 10-Feb-13 11:08:34

The state has interfered like the worst forms of socialists in keeping interest rates low - base rate at 0.5%! We need the free market rather than interference of that kind.

Agree!

comparison shows the financial positions of an equivalent couple today would not be too different, considering I was paying 33% tax then and interest rates rose to 12 - 18%, not the 3 - 5% people pay today.

Buying when rates are high is good. The fact you could do so shows it was affordable for you, the price would have been higher had rates been lower.

So whats wrong with buying today at low rates? You can't afford to! Low rates will go up, your high rate environment was a privilege, you knew your repayments could only go down as rates would go down if they went anywhere.

Today when rates are low they only have one direction to go, buying today is an extreme gamble, when they are this low a small quarter point rise can wipe you out. Very very foolish to buy in a low rate environment, you were very fortunate indeed to have the luxury of buying in a high rate environment.

As for saving for deposits it was always hard. I think in 1900 only 15% of people ever owned a home. I am not sure things are too bad at all compared to how they were.

Another one! It was hard before so therefore, even though it is ten times harder today, it must be the same. Ok!

You're blinkered by your ego. You weren't harder working, smarter, or more prudent. You were lucky.

dreamingofsun Sun 10-Feb-13 11:48:22

swallow - please can you tell me where landlords can buy cheap, rent high and boot tenants out at the drop of a hat? This certainly isn't the case where we live in the south west.

i guess you haven't read another thread on here recently where the tenant was several months behind with their rent; had trashed the flat causing loads of damage and disappeared and the landlord was unlikely to get them evicted for several months (whilst they still had to pay the mortgage etc).

ArielThePiraticalMermaid Sun 10-Feb-13 11:52:26

Tenants eh? Total bastards, all of them.

i bought for the first time with a boyfriend in the early/mid 90's. interest rates were high but property was cheap and it was a buyer's market as equity/mortgages had finally broken even and people were desperate to move. we were only allowed to borrow 3.5x our joint salaries max and whilst we chose interest only we had to show evidence that we were investing in a financial product (a pep at that time) at a realistic level to cover the sum of the mortgage within 25yrs or less. that property rocketed in value over the next ten years or so (i left and signed it over to boyfriend).

i bought again in 2002 - prices were not yet peaking but were high and banks were lending huge mortgages without deposits. i got a 100% mortgage (re: no deposit) of 4.5x my salary as a single person based on the fact i was a professional and professional mortgages as they were called took into account that the salaries would be going up year on year with experience and jobs were secure. they even allowed me an interest only mortgage without requiring any evidence of me paying into any financial products for repayment.

roneik Sun 10-Feb-13 11:54:47

Turn on the tv watch homes under the hammer and other property porn shows, you will see that anyone of all ages are speculating in property.
It’s not a boomer problem , it’s a banking and government policy problem.

Anyone with a pulse was lent ever increasing amounts of money to speculate

I doubt if anyone posting on here would have not been part of the problem given the chance.
Put up interest rates and the market will find a level nearer to affordability.
Without building a lot of social housing this will create massive homeless problems as the properties get repossessed by those that borrowed more than they could afford (greed)
Buy to let has been a big player in the prices of property. Forcing up prices at the lower end .

Solopower1 Sun 10-Feb-13 11:57:33

No! Not the free market! That's what got us into this mess. Survival of the fittest? Not on your nelly.

Would the free market have created the welfare state, free education? Would it have built decent-sized houses with big gardens for families to live in? Don't think so - not if you could maximise your profits by squeezing another boxlike dwelling into the back garden, calling it a bijoux apartment and letting it at inflated rents to young professionals ...

We need more of the enlightened kind of thinking we had in the 1940s after the war, when peope were so glad to be alive they loved one another and couldn't bear to think of anyone living in squalor.

United we stand! We are all interdependent in this circle of life. We can achieve a win-win situation with a little intelligent planning. We need to stand up to the bullies!

<falls off soap box and goes to make a cup of tea>

Solopower1 Sun 10-Feb-13 12:00:47

I think we can safely say that whatever the governments have been doing over the last 20 years hasn't worked - it's brought us to where we are now.

Why would we want more of the same?

roneik Sun 10-Feb-13 12:08:19

Morebeta, nail on head,

i don't think borrowing more than you can afford was always about greed - for some literally the price of a basic house was the price and the bank were telling them they could borrow it and society was telling them you must buy a house, get on the ladder etc etc so they did.

now the ones who did that plus reeled up debt on credit cards, hire purchases etc etc that are being bailed out by low interest rates that mean the rest of us can't save do annoy me.

Viviennemary Sun 10-Feb-13 12:25:48

I thought buy to let was charged like any other income. It will be taxed as income surely.

mondaytuesday Sun 10-Feb-13 12:43:54

i don't think borrowing more than you can afford was always about greed - for some literally the price of a basic house was the price and the bank were telling them they could borrow it and society was telling them you must buy a house, get on the ladder etc etc so they did.

Greed or stupidity/irresponsibility, not things we as a society should encourage or can afford.

now the ones who did that plus reeled up debt on credit cards, hire purchases etc etc that are being bailed out by low interest rates that mean the rest of us can't save do annoy me.

They are in the minority and the entire economy is being trashed just so they don't have to face the consequences of their actions. They should be out of properties they cannot afford.

mondaytuesday Sun 10-Feb-13 12:54:53

i guess you haven't read another thread on here recently where the tenant was several months behind with their rent; had trashed the flat causing loads of damage and disappeared and the landlord was unlikely to get them evicted for several months

aww didums. If you make your money by taking advantage of the poor you should expect some consequences somewhere down the road. Do something useful with your life instead, create something, do some work for once. Picking the pockets of the poor and keeping them down is sick, Im glad there were some consequences. For many of these buy to let 'people' they get away with the damage they cause society scot free, that's the real tragedy.

alemci Sun 10-Feb-13 13:24:27

does that entitle the 'poor' to disrespect other people's property though and trash places.

However, there has been some greedy people buying to let but then some decent people too.

roneik Sun 10-Feb-13 13:32:07

unless you lived through several bad recessions plus a devaluation IMF taking control under Labour back in 1970 aprox, you cannot assume that people from previous generations had it on a platter.The only advantage we had was most of the time there were jobs, People were members of trade unions and collectively they helped create reasonable wage levels and conditions.
I would like to make a point here, in Labours 13 years of rule they created 2.3 million jobs , of those our population only took up about 250.000
This helped drive down wages along with a selfish new generation that came in about the time of Thatcher who didn’t want collective bargaining and let a lot of their rights be eroded.

Any surplus in Labour will drive down wages , where were you all while governments and corporations were doing this to you ?
We live in an age where people have got an entitled attitude
One thing for sure is we all get old and may some of the people on the internet reap what they are currently sowing when it’s their turn to be a victim

roneik Sun 10-Feb-13 13:34:58

I forgot to mention 2 million of those jobs were taken by Immigrants , putting pressure on housing as well as driving down wage levels

roneik Sun 10-Feb-13 13:48:47

Monday tuesday how true
"They are in the minority and the entire economy is being trashed just so they don't have to face the consequences of their actions. They should be out of properties they cannot afford"

i have to say (and as someone who eventually allowed my property to be repossessed) why we must avoid repossessions at all costs? repossession is the natural consequence of a market that lent out vast quantities of money to people who couldn't realistically afford it. the people make losses (i did, i know it's tough but hey) and the banks make losses - not real losses because they've made a fortune on the interest over the years upto repossession and that probably covers the shortfall when they sell at stupidly low prices and they then have the benefit of a situation where unlike any other debt it does not expire but can follow a person for life so the minute they get an inheritance they can pounce in.

why avoid it?

i think we do need to change the laws regarding mortgage shortfall though - i think if a mortgage company can be shown to have lended irresponsibly then they should at least share the financial consequences of the shortfall with the person they irresponsibly loaned to if not write off the debt. being made to write off shortfalls when they are the consequence of irresponsible lending may lead to more care in lending.

and more care in lending leads to lower prices because mortgages HAVE to reflect earnings.

incidentally my mortgage lender has never chased me for my mortgage shortfall. i think they know full well that i don't have the money now and if they push things to a head they'll get nothing because they'll just force me to go bankrupt and get it written off. i'm confident that they know damn well that my parents own property and have responsible investments and that i will inherit enough to cover the shortfall at some point and they'll be watching ready to swoop. apologies if that sounds paranoid but the collection of financial data (especially given i had student loans and you had to put your parents names, addresses etc down) is very comprehensive and accessible to lenders.

i have to weigh up whether to voluntarily go bankrupt sometime soon or wait and see what happens. last time i contacted them they wouldn't even tell me what i 'owed' weirdly enough.

i honestly thought getting repossessed would make the sky fall in. i felt like it was some immoral deed or sign of terribleness - thus we are conditioned. the reality when i broke it down was that they had made a fortune out of me over the 6 years i paid that mortgage (and i had whenever possible thrown in cash lump sums to the balance) and that there was no way on earth they were going to make a net loss from me not continuing with the mortgage. i also had to realise that these people were bookies essentially - they make their money from gambling on people's lives going well. when they get it right they make vast profits. a part of that way of making a living is accepting you get it wrong sometimes and make a loss but realistically the odds are massively stacked in their favour as with any casino or bookie in the land.

mondaytuesday Sun 10-Feb-13 14:17:48

does that entitle the 'poor' to disrespect other people's property though and trash places.

No it doesn't, but I understand where the anger comes from, buy to let people are ruining peoples lives they can't expect there to be no reaction to that on occasion.

It is an immoral activity, they all know it deep down. If this continues as it has done they should all expect to get some reaction eventually, they bring it on themselves.

btl landlords are also bookies. they gamble that someone else will pay their mortgage for them so they can buy a house for free and make an income from it along the way. sometimes that gamble doesn't pay off and you end up with a few months where shock horror you have to pay your own mortgage!

diddums! their gambling should be risk free and 100% profitable every single month right?

dreamingofsun Sun 10-Feb-13 14:25:17

monday - grow up. not everyone wants to buy a house - some people prefer to rent. the housing situation has not been cause by BTL. prices are actually stagnating or dropping in large areas of the country at the moment. the area where they are rising most rapidly is london and thats put down to people from abroad buying places. Do you never read or watch the news on TV?

where i live someone on a minimum wage supporting children could never have afforded to buy a property - even 30 years ago they would have been too expensive. sometimes you just have to cut your cloth and stop winging.

MoreBeta Sun 10-Feb-13 14:26:49

SaF - creditors cannot generally pursue you after 6 years.

See this link on statute barred debts.

Do not acknowledge a debt if a debt agency contacts you after 6 years because the clock starts again. Take legal advice and do NOT reply.

"If the debtor acknowledges the debt in writing or makes a part payment within the original limitation period, then the time limits start to run again from the date of acknowledgement or the date of payment.

Even though the lender may be barred from pursuing recovery, a debtor may decide to pay the debt after the expiry of the time limits. Because of this you should allow a debt which is otherwise statute-barred if the personal representatives pay the debt and you receive evidence that the payment has been made.

These instructions do not apply to debts in Scotland.

I have a friend who defaulted on her mortgage in the 1990s and was repossessed and a debt agency contacted her many years later. Luckily her husband knew the law and she did not acknowledge the debt.

mortgage shortfall is an exception morebeta - they have something like 20yrs (a convenient generational gap to have the chance to grab inheritances). i haven't spoken to them since summer 2010 but from what i've researched the normal rules do not apply and they can swoop in in 2030 and claim their money if they so desire.

it is confusing to know what to do.

i've never replied to a letter at this house (and they literally send one every 2 years) and it's never been sent recorded delivery so other than that short phonecall nothing. but seriously check out mortgage shortfalls and you'll find that they are exempted from the normal credit consumer act regulations sadly.

alemci Sun 10-Feb-13 14:32:48

but isn't trashing a house immoral too - 2 wrongs don't make a right. don't know the story but could it just be that they were not nice people who had no respect for anyone regardless of what they were given.

musicalfamily Sun 10-Feb-13 14:54:35

I

musicalfamily Sun 10-Feb-13 14:56:00

OOOps, what I was going to see is that I worry about our children's futures with regards to housing and student loans and can't see a way forward. I worry about government trying to sort this out by allowing rampant building projects, which only serve to line builders' pockets even further. I have seen our village triple in size on greenbelt and prices keep going up - so not an alternative really.

ManTim Sun 10-Feb-13 14:57:17

It's essential that councils take firm control of the rental sector. Beyond mandatory licensing they should be checking and policing upkeep and they must set district rent levels and defining security of tenure. In countries with a stable rental sector, Germany, for example: In Berlin the tenant may remain in a property as long as they need it making it suitable for families with schooling and local work commitments. Secure tenure is vital in any housing. Their rents are set by the town halls and cannot be raised at-will by landlords.

Landlords unable to offer suitable property on stipulated terms are thus dissuaded from operating in the sector. In the UK removal of such inadequate landlords would release much needed property for sale. Those remaining would provide fairly priced, maintained properties with secure tenure and be welcome in the market.

musicalfamily Sun 10-Feb-13 14:57:38

In our village there are retired couples living in huge 5 bedroom houses and professional couples with 2 or 3 children living in cramped townhouses and struggling. It just doesn't feel fair at all. We are lucky because we bought young and had children older but it still really upsets me.

Xenia Sun 10-Feb-13 15:19:50

roneik is right. It has never been really easy. My grandfather had it hard and could not marry until about 40 as so expensive to buy etc. Then they had the 1929 crash to cope with which was much much worse than this recession. Then in my lifetime I remember the dire position of people in the 70s, savings wiped out, massive inflation and no advantage that your house price might go up and huge huge property crash in the 70s too.

Then move into my era and we did not have it good in 84. Prices in London were double where we came from, I won't lay it on thick but things most of you have today people would not dream of having, even stuff like hair conditioner and orange juice. You cut right back, every item of babywear was second hand etc. Not east at all and then the day interest rates rose to 18% I think it was or 12% - gosh that was hard, mortgage 5x your income. Very very hard.

Then the 90s crash - we had two flat we sold at £40k we bought for £60k. No there was no golden era and those who bought then had golden easy lovely times with property. The only certainty is that if you buy as young as you can even if it means no holidays or meals out and work hard for 30 years to pay off the debt you may well have more security than those who rent. That is all there is to it and it remains as risky as ever. however if you intend to stay in it for the long haul over 40 years of owning you will probablyi do okay as things tend to iron out.

So what we think is the right % of people to own? Back in 1900 it was about 10% I think. It had a peak at some stage. Is there a most desirable %? Communists would say no one should own property ever of course. Not my view.

As for landlords most make very little. I think my daughter who bought to let as cannot live in it will make no money so of course there she is taking a massive gamble that over the next 40 y ears it will pay off to have bought. Some won't take the gamble and will drink their money and buy shoes so let us hope those spending on their holidays instead are not jealous in 20 years' time.

mondaytuesday Sun 10-Feb-13 15:36:48

sometimes you just have to cut your cloth and stop winging

Another one! You sound ridiculous. I'd like to see someone cut their cloth to negative proportions, would that create a worm hole?

whatyouwaitingfor Sun 10-Feb-13 15:41:19

The housing market is crazy in London right now. We have just bought our first home, and despite being on a very high (six figure) joint income with a large deposit of 40%, we can only afford a two-bed flat with no outdoor space. We were looking last year and could probably have stretched to a 3-bed then, but prices have been rocketing. We were looking in city centre locations and need to be close to a tube, so I think that what we have is better than most FTBs in London/SE can afford, but it really is staggering that we can't afford a house when we are very high-earning professionals.

In other parts of the country we could buy a large detached house. We both know colleagues who do a long commute into London after buying a house in one of the commuter towns, but that wouldn't suit our lifestyle as we spend a lot of time socialising in central London in the evenings, and wouldn't want to be restricted by the timings of the last trains.

It has an impact on our family plans, as we won't have more than one child, if any at all. Almost everyone we know has moved out to the suburbs (or at least zone 4/5, which feels very suburban to me) when they have started their families, but it's more of a priority for us that we can stay living in town.

Solopower1 Sun 10-Feb-13 15:48:51

Ah. Penny finally drops. It's all a fiendish plan to stop people having babies.

Elephant in room moment (for me). If there weren't so many people ...

<Off to lecture my kids on contraception>

MoreBeta Sun 10-Feb-13 16:02:39

SaF - I would check that out with a lawyer if I were you. My friend's husband works in commercial property and the people chasing his wife never came after her again.

Even a 'short phone call' is enough to start the clock again. These people will note and record every communication with you and they will keep contacting you.

mondaytuesday Sun 10-Feb-13 16:08:06

As for landlords most make very little.

Now the period of rising prices is well and truly over all most of them do is provide a housing service for tenants whilst 'waiting for prices to recover', and for things to 'get back to normal' grin

So not only have they priced out the young by paying more than was reasonable, they themselves aren't even making any money with it either.

What a collection of utter muppets.

The banks giving them all that credit was like giving a gun to a 5 year old. Not only do they shoot their neighbours they shoot themselves as well.

Well done amateur buy to letters! The banks are laughing their socks off at you.

You keep on waiting, im sure it will come good eventually. wink

Dededum Sun 10-Feb-13 16:18:27

In 2005 we sold our 2 bed flat in Earls Court / S Ken borders for £425K (joint income of roughly 110K), now it is worth £700k at least. So in 8 years it has increased in price by £275k, however our income would not have increased by the same proportion.

Sorry Xenia it might have been tough in the past but at least one would have known that the price of what you are trying to save for would not accelerate in value out of all recognition. Glad we are out of London now and yes we were very lucky, with family support and good incomes. At least I can say we were lucky and not put forward this idea that its no tougher now than it used to be. Don't buy that, as an ex lawyer I can track the salaries that I had and what a trainee, qualified solicitor at the same firm would get now and the properties that I bought.

i.e.: 1997 NQ £35,000 2011 £59,000
Flat £95,000 Now £275,000
Ratio 2.7 Ratio 4.6

Hmmm - slight problem

dreamingofsun Sun 10-Feb-13 16:22:16

dedum - thats just over 30k a year it increased by. when i first started looking at buying property in 1985 it was doing much the same - going up in price about the equivalent of someone's salary each year. it was so manic that there was no point waiting for property details to be sent out as anything decent would have gone by the time you read them and arranged a visit.

fridgepants Sun 10-Feb-13 17:35:25

Is it possible to rent in London safely without going through an agent? We've heard too many horror stories about Gumtree etc, but also the spurious fees worry me.DP was aghast when I to
LD him its common practice in England to have to pay an admin fee for renewing a contract...

we are renting in London, as that's where our fairly specialist jobs are, and we both moved hundreds of miles from where we grew up mostly because we each grew up in areas of very high unemployment. I earn 10k more than my dad did at the end of his career, but we will never be able to buy as the average deposit here is well over my annual wage. London weighting does not exist in either of our industries - I could only afford to move here in the first place as the weighting that job offered bumped my salary up to 18k. Now we are in our 30s and I am earning decent money, it's really depressing to realise we are at the mercy of estate agent fees, inspections, lack of autonomy over our home and shitty furniture. Those who were lucky enough to buy due to being around at the right time or being able to get help (my friends who have bought all had to do this) I think don't realise how
frustrating this is.

we did consider living in a cheaper, commutable town until we realised that would be £7k in travel costs between us.

dreamingofsun Sun 10-Feb-13 17:55:05

of course that is one solution that no-ones mentioned on here. encourage people to move to cheaper areas. you may be struggling to buy in the south, but some areas you can get a 3 bed house for 70k or less. regionalise some of the benefits/pay levels and think of some other imaginative ways to move the population out of the south.

BadMissM Sun 10-Feb-13 18:08:51

dreamingofsun Super. I'm from London, I now live in a small, cheap northern town like you suggest. There's no work now, not for 100 miles or so. I have a daughter at secondary school who is settled now... All employers have laid off massively. I can't afford to move. I still can't afford to buy.

So, anywhere you can afford to live, there's no work.

lifeafterdebt Sun 10-Feb-13 18:14:04

I have been blogging about how the irresponsible actions of the banks and how they have impacted on the UK's most vulnerable. Our government constantly talks about kick starting the economy but while people are struggling to keep a roof over their heads there is little chance of economic growth if so many can not even manage to afford the basics. lifeafterdebts.blogspot.co.uk/2013/01/philosopher-lawyer-and-political.html

Xenia Sun 10-Feb-13 18:19:33

I know a lot about the London renting market. I am not sure London is ever muchlike the rest of the country and there are a lot of people who want to rent not buy. I also (just) remember the 1970s rent act, when tenants could stay for life on sums like £10 a year and the result? There were virtually no properties to rent in the private sector anywhere. It really really hard to find anywhere. It was a really thing to remove rent control and let the market decide.

Yes, people can move to cheaper areas. As I said my grandmother's house (not sure if she owned or rented it) costs £50k today.

On the comparisons now and then... Mine above and this

.e.: 1997 NQ £35,000 2011 £59,000
Flat £95,000 Now £275,000
Ratio 2.7 Ratio 4.6

Depends where you live. In Zone 5 (outer London)
1984 7500 head of dept teacher and my salary the same. House £40k
2013 those houses cost £275,000 so about 7x increase in the house price. BUT remember interest rates are about half what they were so people can borrow twice as much for the same cost and basic rate taxes are lower. The salary we are looking at is £40k now which has gone up at exactly the same rate. I was asked to write an article comparing then and now and it was fascinating. All this whinging about how hard it is now. It is always hard for everyone everywhere.

In those days very hard to get any kind of loan even if you'd saved with the same lender for 15 years. These days harder to get a 90% loan but not impossible, they were available to my daughters when we checked and there were no interest only deals at all around in the past and now there are.
Also the lenders are more careful at looking at your expenses now - childcare costs (buy before you breed). They did not used to be. They are being cautious to reflect the difficult market.

The biggest issue has always been raising a deposit. Many people have never been able to afford in British history. It is much easier now than it was in say 1920 to buy your own home in the UK. There are also properties to rent available in a free market. I am seeing it on both sides as one child is letting out and had also been a tenant.

I don't know what fridge's and partner's joint income is but I would be surprised if there were nowhere in London at all they could buy - there are flats near me from £165,000. 90% loan = £148,500 divided by the traditional 3.5 joint incomes perhaps means you'd need £20k income each to buy in outer London and be able to raise £8k each for the deposit. Of couse you h ave to start small and outer London and move up over time. Many people are too snobby to slum it like those of us who have managed to get ont he ladder over the years have been able to tolerate. Is it about people being spoiled and expecting that wonderful perfect new home rather than the rotting old tiny thing in the grotty area that you do up?

MoodyDidIt Sun 10-Feb-13 18:26:02

agree the situation is crazy and (surely?) unsustainable.

the cost of housing is completely disproportionate to the average income. for example, in 2001, i was 21 and was earning 15k. i was renting a nice (although small) new build city centre apartment for £330 a month, leaving me around £700 for bills, food and general living. i was quite well off really. yet i have friends in their 20's who are still earning 15k and yet they are lucky to find even a scummy house-share for that money. what chance have they got in life? and what chance will our DCs have?

something needs to be done, no idea what to be honest sad

Dededum Sun 10-Feb-13 18:27:25

My £95k bought me a small 2 bed flat five minutes from Liverpool Street !! Now, where in London would I get a 2 bed flat (900 sq ft) for £95k. Interested, have been out of London for 8 years, so no real idea.

Doobydoo Sun 10-Feb-13 18:37:16

We had a mortgage many moons ago.When dp made redundant we moved to Ireland.Have been back in UK 3 years now and thank God we rent through an estate.We had considered renting in a village where ds2 goes to school and I work and where ds1 can get bus to school to save £300+ a month in petrol but we cannot give up the security we have where we are now.We cannot risk a house being for sale and the insecurity.

dreamingofsun Sun 10-Feb-13 18:38:23

badmiss - so why not encourage jobs in your area. Ok so they might be slightly lower pay rates than london, but your living costs are lower. surely that helps everyone - you to live where you do and the people in the south who are grossly overcrowded?

BadMissM Sun 10-Feb-13 18:52:02

dreamingofsun Back in the real world, how? I can't afford to buy a house, let alone start a business or an employment scheme. In an ideal world, that would be a fantastic solution, but in the real world, not going to happen. I have been turned down for every business idea I've had, if I can't get the credit for a mortgage, they won't give me credit for a business idea either... because I have nothing (a house) to stand as security. It's a vicious circle.

If you have no money, there is no way of generating it without capital.

fridgepants Sun 10-Feb-13 18:58:20

Trust me, we will be slumming it. it is disingenuous to suggest people renting and hoping to buy are not.

DP is on £17k. His company is moving to London with no corresponding increase in wages. With living too far away to cycle, travel costs will go from 0 per month to £135 (I think its near £200 if you go out to Zone 5 - I get a season ticket loan from work, he doesn't.). We aren't currently sure if there will be enough left over each month to save, its going to be something we will look at very carefully once we move in together, and

fridgepants Sun 10-Feb-13 19:01:02

sorry, hit enter too fast...

he may be able to move on from where he is, but jobs are scarce as we all know. I am on twice his wage and still paying off student loan, debts pre getting health issues sorted, etc - there's factors like that as well.

We are seriously considering whether we can afford a TV license, never mind a fancy Sky package etc.

mondaytuesday Sun 10-Feb-13 19:40:23

Is it about people being spoiled and expecting that wonderful perfect new home rather than the rotting old tiny thing in the grotty area that you do up?

No it's about unaffordable housing as part of an asset bubble formed in part by the deregulation of the banks which led to irresponsible lending and borrowing causing housing to approximately triple over a period of just ten years during which there was negligible wage inflation. This bubble caused the inevitable crunch in 2008 causing insolvency of the banks leading to tax payer funded bailouts and artificially low interest rates down to a level not seen for 300 years causing a depression from which the uk has yet to recover. Its been covered in a few of the papers.

Oh no wait, its that an entire generation all have flat screen tvs, silly me.

dreamingofsun Sun 10-Feb-13 20:06:03

badmiss - i'm not talking about you generating employment. If the minimum wage was varied - depending on the local cost of living then it might encourage companies to establish away from the south. i'm sure there's probably other ideas like this for people in the know. there are too many people in the south....lets think about moving them and the jobs north - especially lower paid ones since the cost of living in the north is so much lower.

roneik Sun 10-Feb-13 20:23:48

Our economy and unemployment will not go back to as was before 2007 until house prices unfortunately crash. We are not as a country able to grow wages until we meet the levels of eastern countries wages. Everyone wants cheap goods and manufacturers send their production to China and other lower wage economies. This in turn costs jobs. Banks may well go to the wall when interest rates do rise a few percentage points . Only then will there be a chance of property being at an affordable level for many. Why cant the government see we are walking on a knife edge, if they started a massive home building project now it might save the day. The countries debt levels are horrendous and it only needs a shock to our credibility and high inflation and it may be upon us. They did not see the 2007 banking crisis , yet many ordinary folk were posting on forums and telling people to get into gold as they expected the economy to implode. We came to within an hour of the |ATMs being shut down . Here we are 5 years later and things are still deteriorating.
I can’t believe how ineffective and arrogant the last two governments have been, in the private sector they would have been sacked as incompetent

roneik Sun 10-Feb-13 20:44:58

Then they came for the low paid in the south and sent them north lol
They would have to pay about £450 for anything reasonable to rent.
On minimum wage both would need full time employment , and they may stand a chance of buying after saving a bit of a deposit. You can buy a three bed up here for 50k and a better area would be just over 100k
I know someone who is buying a nice house near Cleethorpes for 78k
Prices have gone down maybe 12% over the last year. At auction they go for small change sometimes

mikey9 Sun 10-Feb-13 22:15:18

I bought in Carlisle in 1991 for £32k (on n £11k salary) - just under 3X but was nervous even then of losing my job - and having a mortgage so made sure I bought a Victorian terrace with a seperate front room. That meant I could rent out both one of the two bedrooms and the front lounge and continue to pay the mortgage if the worst happened.

Although I have moved on jobswise I know the payscales and reckon staying put I would now be on £25k - and the same house would be £83k ish (STILL just under 3X) assuming they are actually selling at the moment.

Thought that might be an interesting comparison......however I don't know the jobs market in Carlisel - I suspect it isn't strong.

dreaming people have mentioned that repeatedly and had the obvious fact that the cheaper houses areas are cheaper because the wages are lower and that's if you can even find a job.

i call the job pages the 14k pages here because that seems to be the standard wage employers are offering whilst also wanting qualifications, experience and quite often your own car.

and of course there were luckier times ffs. property is all about luck - if you are in the position to buy during a slump period you get a cheap house and if you are able to stay in it and not have a disaster like me of needing to sell in a recession then all you do is sit it out and pay your mortgage and the prices will go up again and in any case you bought in a slump so the prices don't fall to below what you paid anyway.

if say my boyfriend and i had stayed together and in the house we bought in i think 95 for £37k - that wouldn't have been worth less than £120k even in the worst of this last slump. it's now back at around £130-£135k. we could not have lost! we could at the time have borrowed up to 70k and still been within 3.5x his salary (i was studying and working part time) but we didn't need or have to - we got a lovely townhouse for 37k and didn't stretch ourselves. our mortgage was low enough that we could save plentifully and/or have a nice lifestyle. if we'd still been in there when this recession hit we'd have had the luxury of 0.5% interest rates and paying off huge chunks of the capital for years.

it's not about some golden long era it's about luck of timing. for some these slumps are a godsend they are in a position to buy and can snap up cheap housing.
i would say that when we bought that house a lot of houses of the first time buyer kind got snapped up by btl landlords at that time who've made an absolute fortune. anyone with a bit of capital and credit rating could make their future fortune.

the btl'ers who tried it later when prices were high will have made nowhere near as much but the reality is they don't have to - as long as someone else is paying the mortgage they have a golden goose for the future should they really be expecting to make a fortune in the here and now too out of it? it is greed. i don't feel sorry for people who are not making a fortune out of renting out a second house - even if they only break even over the first 10 years they're sitting on a future fortune of an owned home they never paid for.

alemci Mon 11-Feb-13 09:10:35

also it is if you are prepared to take risks on the property market. A couple of people I know have moved up the ladder to really nice large properties in affluent areas. Their old house is let as they couldn't get the asking price so they must have huge loans and take a gamble. It might have tennants but then again it isn't guaranteed.

Myself and DH are Mr and Mrs cautious (as are my DP's and my In laws). People borrow against their own home and take out another mortgage whilst already having one in the equity of their own home. They are taking a risk and could end up with nothing.

Sometimes it is luck and judgement and being prepared to take a risk. People don't necessarily have any capital or maybe a small amount. They just borrow against their original house.

Also it is much easier to trade up in a slack market. we lost on our first house but got the house we are in now for less than if it had been a seller's market. would have loved to move again but couldn't and watched others leave the area. have extended instead but will move eventually.

diamondsinthesand Mon 11-Feb-13 09:38:50

I agree with the 'luck theory' or timing, anyway.

I have a friend who owns in excess of 20 houses - ftb properties - which are let out for a healthy income, she bought in early 2000's. Another who sold in London after the prices went up - she is now mortgage free in massive house in another county, like many others who have done the same thing.

Xenia - Many renters are already 'slumming it', not because they did not get on 'the ladder' - maybe lost their jobs or had a marriage breakdown (which can be caused by 'slumming it'). Your children only grow up once and in sub-standard housing their chances of an accident in the home are higher. This is not a time to 'slum it' and its right to fight for better housing.

When we were renting (with children) we were forced to move by landlord selling up 3 times. Its just not secure and you look at all the DIY programmes/adverts (on your massive flat screen!) and know they're for the 'owners' not you and you can't do your place up how you want it - not even to be safer for your children.

Squatting is/was more secure than renting sometimes! It was your own 'space'!

Landlords used to let you do what you wanted, even the private - it was the households home, not the landlords.
Now they don't. They're over possessive and its created a homeslessness bug thats affecting more and more people. Yes OK when young and single, not OK when you have responsibilities and family.

If landlords want to make money on property they need to stop wanting it all their own way and be properly regulated over rents, longer lets for families and reasonable freedom for families to improve their property as a homeowner would do.

This is an area where Shelter could get involved and make a real difference.

So frustrating, and looks like Government plans are to increase inheritance tax thresholds to help boost social care provision in old age.

Really interesting post. Scary what the situation would be if food had risen as sharply as house prices.

I can see it from both sides. We are renting at the moment (having sold our house and our purchase falling through). We are lucky in that we will be able to buy another house when the right one comes along. I also have two investment properties, which I rent out, so it is interesting to see things from a tenant's point of view (hopefully I will be a better landlord because of it).

Landlords will only invest if they can get a "return" on their capital and know they will be able to get their property back in a decent state. As landlord I have had tenant trash house and go AWOL, so it's a real concern (I like to invest in my properties, making them energy efficient etc and it's a bit of a bumer when someone runs off with your radiators). As tenant, I know how frustrating it is to be on a short tenancy with no security and not able to make improvements (I'm experiencing the joys of single glazed windows and damp at the moment).

TBH I don't know what the answer is and feel desperately for anyone trapped in poor housing. I suspect, at the same time, that lack of council housing and funding going into social sector has something to do with it. I know on the continent things are very different, with the rented sector enjoying good returns, in some countries, and tenants longer and more secure leases. I will defintely be checking out the stuff on Shelters site and some of your blogs.

diamondsinthesand Mon 11-Feb-13 18:03:03

sarah - thats an encouraging post. I would say its obvious that longer more stable tenancies mean families taking more card of their home (your house). Six months is a joke if you've no where else to go.

Oops - chipatti's burning - such an interesting talk thread!

diamondsinthesand Mon 11-Feb-13 18:04:50

I meant 'care of their home'.
Why do things 'for tenants'? They are not house guests, you're not a hostess - if that makes sense.

mondaytuesday Mon 11-Feb-13 18:39:22

Why do things 'for tenants'? They are not house guests, you're not a hostess

This is why there is such friction between tenants and 'owners'. Its unlike any other business, and yet any old fool could get a mortgage for a buy to let. Most of these clowns are not even remotely business people, and yet they were given the power in the form of credit to own other peoples homes. They are very very average people, they should not be in business at all, especially not a business where their low intelligence and selfishness has such a profound affect on others every day lives.

A terrible situation.

dreamingofsun Mon 11-Feb-13 19:59:08

monday - perhaps we should just restrict BTL to landlords with degrees then - would that make you happy?

diamond - not sure i understand why a longer tenancy woujld mean they take more care of a home. It would still mean our ex tennant who paid no rent wouldn't pay any, just for a longer period of time. Or the one that releaved his anger by putting his fist through things - there would just be fewer undamaged doors.

roneik Mon 11-Feb-13 22:18:07

Parliament A clearing house for the rich
Trickle down didn’t work

He who dies with the most toy’s wins

Democracy ain’t working

no not degrees but i do think inspections, licenses, legislation, rent control etc would narrow them down a bit. those who couldn't live up to those would need to sell up to private buyers or btl landlords capable of operating at those standards and margins.

roneik try this: recession - a clearing house for the rich.

they love these times - they get to buy up more and more cheaper than ever.

dreamingofsun Tue 12-Feb-13 09:18:32

swallowed - that all sounds very expensive. we already pay ground rent, a maintenance charge, mortgage, an annual charge to the leaseholder to have our tennant 'vetted' and not sure if it still exists but an efficiency review. then there's periods between tennants and not insignificant damage and non payment caused by bad tennants.

if you get a tennant trashing the place or refusing to pay rent it can take months to remove them already.

yes i know you don't care - but our current tennant has been with us for about 5 years or so. the end result of what you suggest is that she would be homeless because we would sell up

Xenia Tue 12-Feb-13 09:22:45

If tehre were rent control landlords woul not let. They only get about 6% as it is and as soon as they have a month or two vacancy or repairs they often end up with no profit at all. They take a massive risk to provide homes for people and obviously as is clear on mumsnet not get one iota of thanks. If they simply could make no return from it they would not let. If that meant the populace revolted because there was no state housing and their alternatives were sleeping on your mother's sofa for 15 years or in a tent then I suppose change would have been effected through some other means. I don't however believe any political party in the UK wants to move lettings back solely into the public sector therefore rent control is not not at all likely.

Recession if not a clearing house for the rich. Th rich bear more and more of the burden of tax - 1% of us pay 30% of tax as it is. My not rich daughter buying fist flat BTL had to pay about £10k stamp duty much more than was ever the case - we are taxed at every turn until the pips squeak. We lose our child benefit. We lose our single personal allowance.Few have sacrificed so much for the poor of this nation in this recession as the rich but as ever those who work and do well are kicked in the teeth by an ungrateful poor many of whom do not even work and live and are fed solely because the rich are prepared to work hard for their benefit. More than half of every penny I earn in 50 weeks of full time work a year is handed back to the state. Every day it will not be until about 6 or 7 hours into a long working day that a single penny is to feed me or my children.

alemci Tue 12-Feb-13 10:27:36

Dreaming do you also have to pay council tax on the buy to let or is that incorporated into the rent.

I think buy to let is quite a risk for the owner and you have to be quite firm and business like otherwise people will take you for a ride. sounds like a lot of hassle particularly if someone trashes the place and doesn't play fair.

JamesB1957 Tue 12-Feb-13 10:40:16

What I dont actually understand is what the objective is regarding housing - if pprices drop a lot of people will be unhappy because of negative equity - if they dont drop a lot of people will not be able to afford homes. surely the first thing is to work out what it is we want to achieve!

Xenia Tue 12-Feb-13 10:49:30

I would suggest the solution is the opposite. Don't interfere in the market. Don't seek to control it. Leave it to market forces and leave prices and rents and interest rates to market forces. We never do however.

Buy to let is risky and tenants are very very lucky people are prepared to take the risk to make huge losses to keep them housed.

MoreBeta Tue 12-Feb-13 10:53:36

James - that is exactly the problem. The older generation (who tend to vote more than young people) and wealthy (which includes politicians with property portfolios) and bankers (who need people to pay their mortgages back) tend to lobby most aggressivley for higher house prices as they depend for most of their income and wealth on property prices.

Meanwhile young people and those with with relatively little wealth on low incomes who tend to rent want a price drop so they can raise their standard of living.

This issue divides the country on wealth and generational lines and NOT so much on political lines. The political and voter majority consensus is for higher house prices - even though IT WAS borrowing against property THAT led directly to the financial crisis.

alemci Tue 12-Feb-13 11:07:19

i wouldn't care if my house price dropped as I wouldn't have to pay as much for another house or downsize. I don't think most ordinary homeowners do. It is only if you had the misfortune of having to pay too much for a house then the value drops.

If the prices drop then at least my DC have a hope in hell of buying a property.

dreamingofsun Tue 12-Feb-13 11:08:00

alemci - tennants pay council tax - thats the market norm. BTL is cetainly not the easy option suggested by some people on here (notably none of them seem to have done it) - its only because interest rates are so low that a profit can be made - when we started we had a net loss each month

mrebeta - though of course the young only want prices to drop till they've bought then they want them to rise or at least stop dropping.

prices are stagnating here - and in many ways that seems to be a good thing as it will allow people's salaries to catch up and give them time to save deposits

MoreBeta Tue 12-Feb-13 11:25:16

House prices in my city are the same as they were seven years ago but local wages are still falling and unemployment rising so they still do not reflect the reality of our local economy.

Old people selling large houses still typically bring them on to the market at 30% more than the actual sold prices achieved 7 years ago though. They still dont get it - they have come to expect their hosue to be a piggy bank.

It will take a generation for that mindset to change.

KateMumsnet (MNHQ) Tue 12-Feb-13 12:54:45

Hello all

Shelter have been in touch to thank you all for your insightful posts - they're reading them all and taking them on board.

If you want to get involved in Shelter's campaign for more affordable homes you can do so here. Alternatively, share your own housing situation, or your hopes and fears for you children's future here.

diamondsinthesand Tue 12-Feb-13 13:47:03

dreaming - a longer tenancy can mean a better sense of security.

Every time you move, your routine is broken up, and has to be re-established which can take months - simple stuff like doing the washing up, trying to get your kids to settle at night in a room which smells alien and may be painted lurid colours.

In a longer tenancy, its worth decorating how you want, things like putting in stairgates, making it work with your lifestyle, making it safe - all simple stuff but essential to get that 'home ownership' feel. Making friends with neighbours, finding safe babysitting etc

More security means happier families, who are more likely to stay together and more able to make contact for solutions when they can't pay the rent.
Stable familes also have fewer accidents in the home. (Be interesting to know if this statistic has gone up in recent years).

Difficult familes who've not known security and are not known within the community, are far more likely to give up in despair and feel 'owned' as people by their landlord, to suffer the stress of a master/servant relationship (even though they are paying rent initially) then trash the place and run off. As evictions add up, insecurity becomes the norm and a sense of 'ownership and pride' becomes impossible. Even with a house, they are homeless.

Landlords need to act as if they are the ones being hired by tenants, not the other way around. They are not charities, doing everyone a favour, they are not volunteers helping the homeless! They are gaining or hoping for wealth or they wouldn't bother.
Nothing wrong with that - but it comes with responsibilities in this particular investment option.

dreamingofsun Tue 12-Feb-13 13:56:07

diamond - i can understand what you are saying - i've been a tenant as well. Its a shame the bad ones spoil it for the good.

The two difficult families we had, were both local and were difficult from the start. one put his fist through things whenever he got stressed and didn't want to hit his girlfriend, and the other didn't pay rent (it was when we first started and she told my husband that her abusive partner had ripped the deposit cheque up so he let her move in on the basis that she would provide a new one from the bank the next day - he learnt his lesson from that as we didn't get any money till we went through the small claims court).

i agree being a landlord comes with responsibilities. All I am saying, is that if any more responsibilities were placed on us we wouldn't do it and then a single parent paying slightly under market rate for a new build, and a couple also in well maintained new build would both be homeless

how would you feel if someone you didn't know asked to borrow your car? its a similar situation for a landlord

diamondsinthesand Tue 12-Feb-13 13:57:11

To add - evictions cause lasting damage and are currently far too easy to do.

They should never be done just for not paying the rent, without lots of serious discussion and alternative options presented.

Criminal convictions, rent strikes, greed - yes, evict, maybe if not making children homeless.

But with real financial hardship, non-payment of rent evictions SHOULD NOT BE HAPPENING!
Every landlord should be forced by law to have a contingency fund to pay up to a years rent where there is genuine, proved hardship before being allowed to evict any family for not paying rent.

mondaytuesday Tue 12-Feb-13 13:58:26

our current tennant has been with us for about 5 years or so. the end result of what you suggest is that she would be homeless because we would sell up

The likes of you selling up is the desired effect. The tenant would not be homeless, the house would still be there but would be managed by a competent qualified professional rather than some del boy chancer.

dreamingofsun Tue 12-Feb-13 14:05:32

monday - what right have you to call me a del boy chancer? You do not know me, my tenant or my property. With one tenant who's been there for 5+ years and the other 2 years I imagine I can't be that bad.

What qualifications are you expecting?

diamond - there was lots of discussion before she was evicted. Unfortunately she just wanted to live there rent free, which was not the arrangement we entered into with her. what 'alternative options' had you in mind? Your suggestion ref a years contingency fund would be totally impractical unless rents were increase to cover this - which i imagine wouldn't be acceptable. Even housing associations and the council don't do this as i understand it - they evict people.

Some of you are really living on another planet

mondaytuesday Tue 12-Feb-13 14:06:06

They only get about 6% as it is and as soon as they have a month or two vacancy or repairs they often end up with no profit at all.

its only because interest rates are so low that a profit can be made - when we started we had a net loss each month

So stop doing it! Sell up, get out. Oh but where will the tenants live? The same bloomin houses but they will be able to afford to buy them having not been priced out by buy to letters who can't even make a profit themselves!

You've priced the young out of the market by paying too much for property. You all admit yourselves its not a money spinner for you, so you've priced out the young and even messed it up for yourselves in the process.

Sell up! Get out of the market! Go!

You'll be selling at a loss but thats your own silly fault for being so poor at business!

See what I mean about the irresponsible lending by the banks? You guys were given heaps of money you didn't earn and so you show no aptitude for investing it sensibly.

All you have done is bought up the properties your current tenants would have bought themselves had you not offered more than they were prepared to borrow and then rented to them instead.

What a mess you people have made. Shameful.

mondaytuesday Tue 12-Feb-13 14:07:15

what right have you to call me a del boy chancer?

I quote 'when we started we had a net loss each month'

Not quite the business person you claim!

diamondsinthesand Tue 12-Feb-13 14:07:35

dreaming - its not an easy life, being a landlord and maybe there should be more support for you all. I have friends that are landlords - they find it hard work.
No one wants homelessness - you are obviously not the kind of landlord that needs to hear this, I know a lot of them really care about their tenants but there are others who are really ruthless.

But its not like a car that you can live without. You are selling (on a monthly basis) a home, that is essential for life - especially where there are children.

You've had a bad and difficult experience - but don't let this make you cynical - expect a good business relationship with future tenants. Difficult families is not a new problem - sorry you had such a bad experience. Good luck with future tenants - let them decorate?

dreamingofsun Tue 12-Feb-13 14:19:35

diamond - its not put us off - we always thought there would be good and bad. some of the tenants are really good - you just cannot tell by looking at them or from their references. and yes several of them have decorated.

Monday - our business plan is for the long-term - so it makes no difference to us if we make a profit or loss in the ST. I find it odd that you are so critical of landlords, yet you make no mention of 2nd homeowners or old people living in large houses with big gardens. you seem very blinkered.

anyway i've said my bit and i've got leases and a gas safety check to sort out as well as my paid employment...so i'm off.

mondaytuesday Tue 12-Feb-13 14:28:39

our business plan is for the long-term

What's that saying? A long term investment is a short term one that didn't go to plan? Something like that. You're well passed your window for a profitable exit, we won't see a bubble like this again in our life times.

so i'm off

Im glad you heard from the other side, you've got some thinking to do about the consequences of your actions.

Xenia Tue 12-Feb-13 15:10:09

The vitriol against landlords most of whom have only one or at most two properties and tend not to be very well off who make not much more than building society interest rates on their properties and house people is amazing on this thread. Most look after tenants very well.

roneik Tue 12-Feb-13 15:48:42

In an earlier post I said “parliament a clearinghouse for the rich” It was said in the context of big corporations lobbying and getting much more of a say than we the voters end up with.

Bugger the buy to let landlords up the interest rated and let prices of houses find a truer level to reality of incomes. It’s got out of hand the new reality is many have to look for a shared flat or house or even a room. Sadly many low paid will be trapped in that situation as the cost of those are getting out of kilter for NMW

We IMO have to let some of the banks go to the wall, which they will if interest rates go up to historic levels.With the repossessions that will follow.
It’s already been stated that we won’t be able to bail them out again. The economy is like a rabbit caught in the headlights all the while we have these ridiculous accommodation costs.

I am a homeowner and I don’t care about values, it’s about society and the having a chance to have a home that even if it’s social housing that you can lay roots in.

Too many in power are part of this gravy train buy to let profit from peoples misery ponzi scheme

roneik Tue 12-Feb-13 16:14:00

Well past the window of opportunity to sell is right on the button’ another 1000 jobs gone today on sky news.
As the economy contracts the price of houses will tumble.
Just like the last recession , people have to sell under certain circumstances .
Those distressed sales become the new price and as it gathers momentum confidence goes. It’s when nobody thinks property is a good so called investment that it takes off again. The savvy move into buying . That can take years. With the possibility of economic recovery looking like the chances of a lottery win maybe decades.

Somebody somewhere in power should see we need to build maybe a million homes.

To all the buy to let landlords, have you considered that after WW2 for many years people were living in requisitioned homes where owners and landlords lost their control over the property. Families were moved into homes the government did not hand them back until the late 1950s .

mondaytuesday Tue 12-Feb-13 16:50:39

The vitriol against landlords

You are doing a terrible thing. Sell up.

Most look after tenants very well

You took their chance of owning away from them. Renting certainly has its place, buying doesn't suit everyone and a healthy rental market is fine. We are well beyond that now, people are priced out of ever owning, people with families, and it is you that are causing this.

You were prepared to borrow more than those that wanted the property for their home, so the seller took your money instead. You priced families out of a stable home. You then rent the property to them at a price that ensures they cannot ever save enough to ever buy a place of their own. You are holding them back and picking their pockets. Vitriol is well deserved.

Sell up. Get out of the market. Many many renters feel this way, they all hate their landlords. They won't say it to their face, they want to stay in the property.

You break their legs, lend them a crutch and expect gratitude.

Sell up.

Xenia Tue 12-Feb-13 17:42:13

No communist state has ever succeeded. Anyone against capital, money and power will always be on the losing side. Private sector enterprise has ensured the poor are housed so much better than the state ever managed.

this 'we only make 6% income' thing is nonsense and the whole point. your mortgage is being paid for you! in 25 years you will own outright a property that you have never paid for. it's a long term investment not a cash cow on a monthly basis.

if you had to sell up your house would be for sale - if lots had to sell up lots would be for sale - prices would drop. those who then bought them either to live in or to rent out would have lower mortgage costs, lower mortgage costs means lower rents needing to be charged and achievable rent controls.

this idea that you have an entitlement to make a monthly income AND a huge cash pay out at the end all for being able to get another mortgage is daft! it needs to go out with the trash.

seriously landlords were never meant to be people who didn't own all or a sizeable percentage of the property. it needs to be those who are financially secure enough for such an investment. those who an interest rate rise or a few months without a tenant or a months late rent when someone is made redundant doesn't wipe out. they need to be secure.

this idea of property as a fast income generator is what got us into this mess. property is a secure place to put your capital long term. always has been always will be. secure for 'capital' not a secure gamble - no such thing obviously for the most part. so if you had 70k then yes investing in a second home and renting it out would be a pretty secure way of investing for the future and hopefully also paying out monthly dividends on top. if you are gambling on a 2% deposit on a property bought in a time of high prices or whilst interest rates were at record lows then duh! no, not the wisest move and we can't have all of our lives grinding to hell just to protect your dumb arsed gamble.

(no 'you' being spoken to in particular here btw)

mondaytuesday Tue 12-Feb-13 18:41:43

No communist state has ever succeeded

Nothing I say has anything to do with communism, why not respond to my actual statements.

There are many countries that favour capitalism with affordable housing for their populace.

Your sort ironically favour socialism, theres nothing quite like preventing the next generation from owning their own homes and trapping them in high rental properties for stunting social mobility.

Your sort would be bankrupt if we actually had capitalism here, the problem is the housing market is not being allowed to operate as a functioning market. The housing bubble was allowed to pop in the states and they are all the better for it.

None of this excuses your immoral actions.

diamondsinthesand Tue 12-Feb-13 19:28:03

mondaytuesday - not sure that 'immoral' is the right word although your frustration is something I can understand. But things change all the time.

I think landlords are also victims in a way. Many were sold a 'pup' - there was little media attention on the committment and hard work involved - mostly on the gains. Sarah Beeny and her ilk were busy making it on TV - now the tide has now gone out and both landlords and tenants have been left beached, some of them anyway.

xenia - thats not true. Having had first hand experience of both private sector renting and state sector (social housing) I can say that state is better and more sought after. If you are also speaking from experience, it must have been with a very good private landlord, or an unusually difficult social one.

The state sector are much more 'hands off' - or certainly used to be a few years ago - and allow tenants to exist in peace and privacy and to feel some sense of ownership of their property.

If you are letting out one or two properties, you will be busy, but cannot be classed as 'not very well off' - a family of 4 renting a small 2 bed flat with high rents and an max income of e.g. £25,000 are 'not well off' when they lose over a third of this income in rent, and a third in tax and live off whats left - about £600 a month for family of four - only slightly topped up by tax credit too.

Mortgage on a flat of £85,000 would be about £400 a month, but the rent will be 6-700 instead of £500. Thats £200 a month going into a landlords pension fund, instead of their deposit saving - thats why people are getting angry and frustrated!
Nothing to do with 6% this or capital that - just families struggling with high rents.

roneik Tue 12-Feb-13 21:02:28

swallowedafly, you are wasted on here . It needs someone like yourself to get the statement you made at the top of this page into the media. My house is paid for, but I as a pensioner having seen several bad recessions can see what is happening to the young. As for the landlords doing a better job than social housing that is ridiculous.
I lived in a council house as a kid , we did not live under the boot of a landlord that could kick you out on a whim.
You could decorate , you could have a new carpet , a dog . You could also go to bed without worry of the landlord selling up and out you go.

Jux Tue 12-Feb-13 21:14:27

We can't sell up. The flat we rent out is attached to our house, takes its electricity, gas and water through our supply, and has internal access to our house which is not safe to block off completely in one case, and can't be blocked in another case.

We wouldn't be LL except for that. OK, we needn't have bought this house, but we'd been living in a van for months and I was desperate. The only house we could find which had a decent granny flat for my mum, at a price we could afford, was this one.

fridgepants Tue 12-Feb-13 21:28:01

Xenia, we all pay taxes. Even unemployment benefit is taxed.

I'm happy for my taxes to go towards those who are less fortunate than myself. I like to think that were I to lose my job, then the same pool of taxes would be there to help me.

Making taxpayers angry about those on benefits, as opposed to those who gamble with pension funds or fire people because profits are at X bn rather than Ybn was a very clever trick, and it;s a shame so many fall for it.

roneik Tue 12-Feb-13 21:30:53

Jux I dont think it's a landlord like yourself with one unit is the problem.
There are landlords with multiple properties ,that can outbid with the equity of other properties the young don't get a look in.
I lived in rented when young and rents were much smaller part of income compared to the present. The first three posts on this page really do state the obvious.People need to see the big picture. We are stripping the young of any future.I am amazed they are not storming parliament

fridgepants Tue 12-Feb-13 21:33:46

Also, while you might be a great landlord/lady, many of us who have rented have lived in places of astonishingly poor quality. I had a landlord who insisted on cash payments so that deposits were not protected, refused to do anything about mice or broken radiators, and let himself into tenants' rooms whenever he fancied while his token bedroom (kept so that the other tenants were technically lodgers and therefore had little rights) was the only one with a lock fitted. A couple I know had water dripping through their light fitting and a landlady who refused to do anything about it, despite them explaining that it was actively dangerous.

That is the kind of thing that pisses people off - people who have bought a house to let out to make money but do less than the bare minimum involved to make it safe and happy for those paying him or her. A well-maintained place that can become the tenants' home is exactly what we want as a couple, but they are often rare, and agencies see a generation who can't afford to buy and realise they can charge fees for anything they like and do nothing to earn them.

roneik Tue 12-Feb-13 21:41:21

Every time we have a round of quantitative easing it devalues our money.
It's done to cover bank gambles with mortgages given to those that were not in the position to ride out rate increases.
We are all paying for bad investors. WHY?
If I go out and buy a expensive car who bails me out ?

Only the vested interests want the plates to keep spinning

MoreBeta Tue 12-Feb-13 21:48:57

diamondsinthesand - you have forgotten the cost of insurance and maintaining a property, agent/legal fees. Everyone always does forget these costs.

"Mortgage on a flat of £85,000 would be about £400 a month, but the rent will be 6-700 instead of £500. Thats £200 a month going into a landlords pension fund, instead of their deposit saving - thats why people are getting angry and frustrated! "

That apparent £200 surplus is not real. It covers the landlords other costs.

Most landlords make nothing out of rent they only make money if the house goes up in value and lets be frank it is the prospect of a quick profit from a rise in house prices that BTL landlords were only ever in the game for. Most are now losing if they bought flats off plan. It really isnt a bed of roses. Many BTL landlords have lost money and had a lot of hassel and were 'sold a pup as someone else said.

I am a long term private tenant by the way. My landlord makes no money out of me and if he makes a capital gain well good luck to him in a falling market..

roneik Tue 12-Feb-13 22:01:31

Morebeta , That 700 pound rent you quote would be seven eighths of a min wage after tax. aprox

Taxpayers are topping up poor wages , why should people have to pay for someones property and give them a couple of hundred as well a month.

It's all greed and it will bring down the house of cards if not corrected.

mikey9 Tue 12-Feb-13 22:11:40

Have to comment on the following:
enia* said "Buy to let is risky and tenants are very very lucky people are prepared to take the risk to make huge losses to keep them housed."

What seems to be missed is that without such a huge number of BTL properties - and the risk preventing more piling in - then prices would tumble as more stock became available (just what many want to see happen).

So how lucky are all the tenants who are prices out of a sniff of buying because of the competition of buy to letters bidding up prices - unlucky I would say and they would benefit from a massive reduction in the BTL market (however pigs are unlilkely to fly.....to many politicians with their snouts in this one.

As for the comments about communism - that statement is just so like the American approach to shouting down opponents - if not a free market/capitalist/republican approach then condemn the only other choice available - communism. Thus totally ignoring the fact that many different systems exist out there - and appear to provide housing at much more affordable rates compared to incomes (Sweden, Netherlands, Germany....we could keep going.....) - none of which appear to be communist - so give up the right or wrong approach - and recognise that we could learn a lot from many of our near neighbours (I often despair that we are sooooooo poor at doing that in this country).

mikey9 Tue 12-Feb-13 22:12:11

^Xenia I meant

MoreBeta Tue 12-Feb-13 22:16:34

roneik - they are not giving the LL a couple of hundred. The LL uses it to cover costs of maintaing the property, insurance, agent fees, void periods.

Honestly the vast vast majority of LLs only make money if house prices go up. We have to get house prices down. That is the solution. That will allow LLs to charge lower rent, still make a little profit from rent and not depend on ever rising house prices.

alemci Tue 12-Feb-13 22:25:51

so to sum up do most posters think that if people stopped buying property as an investment and no one was allowed to do this then there would be a fall in property prices and then who would buy the properties. Could the renters manage to get a mortgage or would the young professionals buy the properties?

also what about the sub letting that goes on in council housing. That never seems to get discussed and it does go on. That is unlawful.

but those are a landlords costs morebeta. that's the cost! it's a long term investment - if you don't own a signifcant percentage of the actual house (rather than a huge mortgage) there's not much short term profit in it.

in ten years time when your mortgage payments (paid by tenants) start eating into the capital of the mortgage significantly then you have options - keep going as you are and get that capital down faster and faster, remortgage for the remaining amount and have a lower mortgage and more monthly income but longer till it's paid off or sell up and take out the capital accrued so far.

it's just unrealistic to assume that 5 or 6k investment is going to make to make you hundreds of pounds a month from day one AND pay out 150-200k in 25yrs time.

on what planet does that sound a likely return for a few grand?

seriously - if returns like that were realistic we'd all be millionaires.

mondaytuesday Wed 13-Feb-13 10:38:53

when your mortgage payments (paid by tenants) start eating into the capital of the mortgage significantly

If they bought after around 2004 the rent they get barely covers the interest on the mortgage. The vast majority of buy to let mortgages are interest only, and at best they break even on a monthly basis just paying that interest.

They hope for an increase in price, which as we can all see isn't going to happen.

It's a dumb 'investment' made by dumb people who see no problem with taking home ownership away from families and with preventing many more from even being able to start families.

Funny how the buy to letters have gone since I pointed out the undeniable facts about their immoral behaviour isn't it. One said hey what about old people with gardens, the other decided the communists did it, and then they're off.

I make that 2-0. Come on buy to let people, come out from under your rock, who is next to be batted out of the park?

Xenia Wed 13-Feb-13 11:00:50

I have not gone. Most of us work(and I am not currently a landlord). I would agree with/meet round the back at it were, monday over free markets. We don't have one which is part of teh problem here. We have massive control over interest rates which are kept much much lower than a free market would allow.
The result is that people are paying a lot more for properties than they would if interest rates were left without Bank of England interference.

I don't think buy to let is a dumb investment but it certainly involves risk and those who engage in risk take the rough with the smooth. It has done tenants a huge benefit as unlike when I was first looking to rent in London just before assured shortholds came in when landlords if they let had to let forever which of course meant no one would let at all so people could not find rented property, nowadays there are properties to rent.

There will be increases in price over a 30 - 40 year property ownership period. It si highly likely. There will continue to be periods like in the 70s property crash which I just about remember, the 90s one which I certainly remember etc but if you hold property over time it is likely to be a reasonable investment.

The anti landlords on this thread I am afraid have lost, haven't they? They have no money, no assets and live at the mercy of landlords. They may hate the landlords but the winners will also be those prepare to work hard and take risk and invest, not those who merely rent.

alemci Wed 13-Feb-13 11:21:59

good points Xenia. I don't have another property, only the home I live in but I must admit my DH and I discussed buying another property for my dd to live in whilst at uni rather than paying over 4K on a room for the next 3 years'.

We didn't as we just want to clear our own mortgage and not have the worry of it in a city 2 hours away.

I am sure alot of the posters such as dreamer are fair with their buy to lets and perhaps some people haven't got the committment to buy their own home or cannot hold down a job etc. others want an easy life at the expense of the hard working and it is always someone elses fault never theirs.

I still think buy to let is a huge risk and it takes someone who is quite sharp and savvy to do so. not for the faint hearted amongst us.

Xenia Wed 13-Feb-13 11:36:05

Certainly in London there are a lot of people there for short periods or moving in with friends and do not want to buy. if a landlord over charges a tenant will go to look at another place. I see the process from both sides - daughter this week has people looking at her buy to let and before that she and friends were looking for somewhere to let.

I am sad that so many tenants on the thread seem to hate landlords most of which are ordinary people who have worked very hard to buy only a second property. Few have loads of them. There is not a current market such as London in the 50s or 60s when there was the Rachman scandal and vicious landlords whose tenants had rights to stay for life on rents at ludicrous levels of £10 a year forced them out with violence. The free market and the abolition of rent controls has meant that those days are long gone and the market for rent can find its own levels subject to interest rate issues of course.

the landlords i'm talking about did not work very hard to buy a second property they managed to land a near full mortgage loan from unscrupulous lenders and expected to make a fortune in both income and end pay out unrealistically.

people who work very hard to actually 'buy' a second property - or at least own half of it outright have made wise investments and are in a position to charge realistic rents and not freak out when interest rates return to realistic levels.

those on 95% mortgage on say 2005 prices made a dumb gamble and shouldn't expect to be bailed out by inflating house prices and/or keeping interest rates ridiculously low.

mondaytuesday Wed 13-Feb-13 11:51:25

We agree on the market interference, interest rates should be higher and this would go a long way to ease the current inequalities which have nothing to do with people getting what they deserve and everything to do with when a person was born.

Take away social mobility and create a new 'landed gentry' lording over the young and you will have problems, it is not healthy for anyone.

The anti landlords on this thread I am afraid have lost, haven't they? They have no money, no assets and live at the mercy of landlords. They may hate the landlords but the winners will also be those prepare to work hard and take risk and invest, not those who merely rent.

Be careful about your assumptions here, many have kept out of property ownership because it is so obviously a speculative bubble. There are plenty of people who choose to rent and not to keep their wealth tied in an immobile illiquid depreciating asset.

It is more accurate to paint a picture of landlords as the lazy ones, it is not that they have seriously weighed up the pros and cons of their 'investment' and are go getting risk takers in the majority of cases, have you met many? They are charlatans by and large, anyone getting into this game after 2004 is far from a savvy investor.

They didn't need to earn any money to get into this game and that is the problem. The natural filters that prevent the clueless from entering positions of influence (in so far as you can claim being on the hook for a 2 bed new build as being that) have not been in effect, the banks were throwing money at these people which led us down the road to this current financial crisis.

Finally, the game is far from played, and we will see who is left with the freedom and the cash when this has played out. I would not want to be on the hook for 100s of thousands secured against a rapidly devaluing asset class with a grim future in this kind of environment. As for those who bought when rates were low, where do you think the cost of borrowing is headed? merely rent is certainly amusing in this context.

it takes someone who is quite sharp and savvy to do so

If you say so. We shall see. Most of you haven't a clue whats coming.

Quite apart from the moral issues already high lighted and still not denied, most have wrecked their own financial futures with this as well. Your inability to see this proves the point.

Good luck, you'll reap what you have sown.

alemci Wed 13-Feb-13 11:57:49

oh gosh you are a cheery one *Monday, Tuesday*smile

I do take your points though. I hope you understand that I have one home which is mortgaged and we don't have much spare cash. I think we are in a financial mess as a country.

would be interested to hear about your own experience.

mondaytuesday Wed 13-Feb-13 12:18:30

oh gosh you are a cheery one

YOU'RE DOOMED!!

Seriously it is a sad situation, people are taking advantage of other people, neither of these groups have 'earned' their positions as either the victim or the 'investor', and in the end everyone loses.

I find it sad to see such selfishness and greed combined with a willingness to inflict such harm on others.

It will all work itself out in the end but in the meantime it is sad to see how terrible people are to one other. On a site with a family focus do these landlords simply not care they are part of the problem that has priced their own children out of a life they themselves took for granted?

It is all terribly sad.

diamondsinthesand Wed 13-Feb-13 12:53:41

Off the thread but - just wanted to point out that people make money in lots of different ways.

If it was only in 'hard work' - which is a tired mantra that the better-off people eternally trot out - then all those sweat shop workers in the Far East must be raking it in!!
They can work 18 hour days so how come they are amongst the poorest people in the world?

Having money, owning a second property, being a landlord is not about hard work, its about opportunity, timing and being paid a good salary, good credit rating, getting lucky breaks, having the chance to do training, being a fortunate person - not necessarily hard work.

If a landlord is fed up, they can choose to sell to their tenants with a 'gifted deposit' (an amount included in sale but not paid for). Not many choose to do this. Unlike social landlords, they choose to terminate a contract and force people on.
Buying council houses was a good thing - and it wasn't this that caused a lack, (just huge immigration happening just after and no extra houses provided for them) but perhaps the sale should have a covenant restricting owners letting if they bought at a discount? Then selling would release it into the ftb market for others, protecting it from private landlords who support a drifting population.
BTL mortgages need categorizing and regulating. Different tenants = different needs and responsibilites

Xenia Wed 13-Feb-13 13:21:11

It's not taking advantage at all. It is no different from anyone working and being paid for the work or paying someone to sort out their plumbing. People buy and sell things, property is not different. The picture painted on the thread bears no relationship to the private rented sector in most areas. Many private landlords will not let to anyone on housing benefit for obvious reasons which I am sure most people can understand.

Most rented housing is much better quality than it ever used to be and that is almost directly a result of abolition of rent controls, a market which is much more free and the introduction of assured shortholds.

if you go back it was very hard to move out. My grandfather lived with 26 other young men in a boarding house shown in the 1901 census. Now most people in Britain are housed in much better conditions and the state even helps many people with their housing costs.

mondaytuesday Wed 13-Feb-13 14:17:00

Housing is different, it is an essential like food, water or medicine and it is no place for speculators.

It is quite obviously the case that buy to let take property values beyond the reach of those who want to buy to use as a home. These priced out families are then forced to pay large rents in exchange for an home with no security of tenure. The high rents ensure they are unable to save for a home of their own.

I share your capitalist leanings but this situation is plainly abhorrent.

roneik Wed 13-Feb-13 14:21:03

XENIA,I think you are missing what others have said, if we had real democracy a lot of buy to let landlords and those who are at the limit with their mortgage would not be supported by low interest rates. We are talking over a million interest only mortgages. We are talking several million all told. I have seen graphs that prove this to be true.As I see it we will either see a devaluation of some proportions , or in the event of a knock in confidence in our ability to tackle the deficit and the ACTUAL DEBT that is mounting by billions each month the government will be forced to raise interest rates.As things are we have quantitative easing which is causing inflation making it even harder for millions of people to get by .We the people who did not take on risky investment are paying to keep buy to let in their soon to be shattered royal like lifestyle

roneik Wed 13-Feb-13 14:24:44

We dont have real democracy because those piggies that have eaten the most slop at the trough have the most clout . They have the most clout because they lobby mps . They pay to get their way by making donations

In letting them eat so much slop at the trough they have let millions in shackles

roneik Wed 13-Feb-13 14:40:16

Like all ponzi schemes this one will fail unless there is a change of direction .

If you read history all the ponzi economies failed. Germany printed money and look where that got them .Build a million homes and you have a real chance of kick starting the economy.

It will bring down the cost of a roof over peoples head too. They might then have some spare money and be able to participate in this economy by having some spending power after basic living costs. Infrastructure roads they would make a mark too. In seventy years I have never seen our country laid so low and people so demoralised

alemci Wed 13-Feb-13 14:43:56

yes as long as the people already here waiting patiently on the housing list have access to them. I object to new houses being built if they are not being built for that purpose.

Xenia Wed 13-Feb-13 14:50:20

The lenders decide if they will allow interest only loans for buy to let lenders and for private borrowers buying their home and they have cut back in the recession and require much bigger deposits so that reflect risk, doesn't it? If they thought prices were going sky high they would be rushing out there to offer interest only 90% loans.

I agree that as Lord Young said those with mortgages have never had it so good - whether squeezed middle or buy to letters because base rate is 0.5% and in the past some of us have had to pay 12% or more on domestic mortgages. Those with savings obtain very little interest hence why some look to buy to let and those without who have big debts do not pay much to service those debts so the wise ones of those are paying back capital rather than spending on holidays and meals out.

However the most likely future trend is going to be inflation. I suspect the new Bank of England Governor will take us that way too. Obama today I think is proposing an increase ni their minimum wage. So if we go on a spend spend spend frenzy as a nation then rents will go up much more, wages will rise, benefits well hopefully they will be frozen as the state sector has got far too big.

I don't really see a ponzi scheme about to implode. Householders with negative equity and interest only mortgages tend to stay put for 10 years whilst they get promotion at work or their parents die to sort out their problems.

roneik Wed 13-Feb-13 15:13:40

XENIA, no the reason for big deposit is we are in bigger risk territory.
Again (interest rates are low because banks would fail if at historic % levels) We are paying banks to stay in the business of keeping (solvent)(quantitative easing) (BANK BAILOUTS) bad investment derivative trading (GAMBLING)

Banks lobby (EAT THE MOST SWILL AND GET BONUS FOR FAILURE)
+ more swill

roneik Wed 13-Feb-13 15:24:12

Bernie madoff used to borrow from investors but could never pay all the investors because like our government he spent it and he is now in prison.

Sound familiar (we cant pay all our debt) The difference is this is our economy and it's looking like a ponzi scheme from where \i am standing. Million would back me up because they have gone into gold.

Remember it's only a promise to pay on each bank note. When economies falter they can be devalued (ZIMBARBWE) (ARGENTINA) (UK twice ) (GERMANY)

We are just peeping into the door before we have to walk into the.....

yeah basically banks are being allowed to have our money for nothing. to give no interest. it's not just quantative easing on the mortgage payers it's also for the banks. i hadn't thought of that.

so all those millions in pensions and investments and savings that they are running on are being giving nothing in return hence keeping the banks afloat.

roneik Wed 13-Feb-13 16:27:40

We are 13% worse off than we were 4 years ago because of inflation. I would say this to buy to let landlords "since 2000 inflation has probably caused a 30% drop in the spending power of the pound" . So that house that you may sell in the mythical rise in house values market, will buy you less tins of beans to keep you alive when the lunatics get full control of the asylum.

That figure of 13 % worse of comes from today's Telegraph
Their poll of peoples expectations is depressing reading .

Xenia Wed 13-Feb-13 17:38:52

Well money does not make people happy so does it matter if they have less? In one survey the people of Keyna were the happiest people on earth.

GallopingGertie Wed 13-Feb-13 23:32:23

xenia - oh really?

cool xenia - give away all your money and property then and you'll be positively manic with joy smile i can recommend some good causes if you need help disposing of all that misery making cash.

Xenia Thu 14-Feb-13 10:30:08

I don't write about what I give away but like most people who earn reasonable sums of money and some of what little is left after 52% tax/NI and all the various sales taxes we all pay is of course given away.

I have never really understood those who are jealous of the rich. Why not change your mind set and then be happy at whatever income level you are on? Does it matter if someone has a better car or wife or better looks or more money than you do? Or why not think - wow haven't they done well, I am so proud of what they achieved so I will try to achieve it too. Instead the green scales of jealousy fall over their eyes and they lead lives in sorrow, cross at their lot but doing nothing to change it.

trust me i'm not jealous of you xenia. for me it's more the disgust at people who pretend we live in meritocracy where all it takes is hard work and everything you have is down to your personal achievement.

especially when that then turns them into socially selfish people who want to deny social inequality and create more of it to teach those lazy poor people a lesson.

i personally have not found much of a correlation between wealth and happiness and i've been pretty wealth off and way below any poverty line you name for this country. though it is true to say that fear and anxiety have a massive impact on happiness and living on the poverty line now must be terrifying with the constant treat of lost benefits, inflation, atos etc.

roneik Thu 14-Feb-13 11:14:16

Why do you assume people are jealous. You know nothing about posters finances.
Posters have not revealed any details of any wealth. This thread is about housing. I can tell you this when everybody and their wife are going into buy to let it has to end in tears.. So as well having seen similar economic problems and how they panned out. I think it gives people of my age an edge. I have just been trying to persuade a friend not to buy a second buy to let. Why cant people see that when rates go up there will be carnage. The government in certain circumstances will have no option other than let housing crash.
If the economy had been left to itself we would now be recovering from this downturn. Of course interest rates are being manipulated to avoid a crash in house prices and the people paying the price are not happy with people that are part of the problem (BUY to let landlords)

roneik Thu 14-Feb-13 11:18:03

Money makes being unhappy much more comfortable .

So my vote goes to money to buy gold

roneik Thu 14-Feb-13 11:18:48

Loads amoney lol

Xenia Thu 14-Feb-13 11:24:47

I am just trying go get to the core of why some people are unhappy some people have more of something than others, whether better housing, money, better looks or whatever.

The issue is what absolute or relative poverty standard for housing we think is acceptable. My grandfather in 1901 in the boarding house with 26 young men might have been rather cramped.

The English are very keen to own property whereas other nationalities do not have the same views. Renting flats is common on the continent, even for life and even with children. The English prefer their house with garden, home as castle etc.

If tenants would like 10 year tenancies for example where they agreed to pay rent for and stay 10 years (although I suspect many would not be so sure they would want to be there that long) and if there were a market for that they could negotiate that. I can certainly understand why people want the stability of ownership which is why how ownership rates are so much higher now than they were in 1900.

alemci Thu 14-Feb-13 11:28:15

I suppose it is just human nature Xenia.

the core for me xenia is that it is usually at the expense of others. the core is a concern about social justice and a society that works for all.

Xenia Thu 14-Feb-13 12:01:05

And I suppose my free market libertarian view would be that instead when others have that is often to the benefit of others. I work 50 weeks a year and have for about 30 years, no maternity leaves etc and at least half of every penny I receive goes back to help the poor in tax. If I let out a property if there were any surplus over expenses then again there is a heap of tax going to help the poor. If I sell it I woudl pay 28% capital gains tax on the gain - again helping the poor whilst also making a home available for someone wanting to rent. I see that as social good, capitalism at its best helping people. I don't see the fact your average buy to letter with their 1 property to rent out as some kind of rapacious nasty thing who is trying to steal money from the mouths of babies.

roneik Thu 14-Feb-13 15:40:33

Xenia , how can it be a free market it's being subsidized by Quantitative easing and interest rates being held down to prevent a crash in property values ,so that the banks don't crash?

Why is it that a crumbly old person like me can comprehend this and others either cant or wont?

The Tulip bubble was just the same it's human greed that fogs the vision and ability to have empathy for others

Put it another way and it's sod the others I am alright

TunipTheVegedude Thu 14-Feb-13 15:49:51

Your taxes aren't all spent on the poor, that's a ridiculous thing to say.
Didn't Milton Freedman show a good few decades ago now that a surprising amount of them will go straight back to the rich?

roneik Thu 14-Feb-13 20:03:22

Buy to let investors own more than one property but they only get one vote and only need one house to live in. Once enough houses are in the hands of buy to let investors, the housing market can be allowed to correct without losing the next election

roneik Thu 14-Feb-13 22:36:05

I am just going to adjust the turbo on my zimmerframe

So I will get my coathttp://cdnmn.com/emo/te/1.gif

roneik Thu 14-Feb-13 22:37:04

Typo

I will get my coat then lol

OBface Thu 14-Feb-13 23:57:02

As neither myself or husband has an pension fund to which our employers contribute, why is it seen as so wrong that we use a couple of btl properties to plan for our retirement? Others in society have generous state funded pensions but we aren't up in arms that these aren't available to us.

OBface Fri 15-Feb-13 00:01:12

And it is worth reiterating xenia's point that any income we make is taxed at the higher rate and that we will be subject to CGT upon sale. Really not sure where the issue is?

GallopingGertie Fri 15-Feb-13 01:45:52

But - its not jealousy and there is no problem with being rich, its just that rich people need to have respect for the less well-off and stop thinking wealth is some sort of divine license to be 'in the right' about everything.

If you are wealthy, don't just tick legal boxes and justify wealth as being all from hard work as oppose to the 'lazy poor' as if we were back in the Victorian age. All normal people want a purpose and a job and do their best to get one.

If you want to work hard and get wealthy, then you have to be fortunate in your health, qualifications, domestic situation etc - there is all sorts of unseen support which gets taken for granted.

Solopower1 Fri 15-Feb-13 08:58:21

Very true, GG.

Solopower1 Fri 15-Feb-13 09:00:52

OBface, have you not read the posts that explain how people who btl push the prices up so that others can't afford to buy or rent?

Xenia Fri 15-Feb-13 09:26:11

I don't think the rich do think they have a divine licence to be right about everything.Indeed I often find the left more unforgiving and more sure they are right than the right. I think for example most politicians mean well. The left seem to think only their lot mean well.

The buy to let market has ensured many renters are much better housed than in the days of rent controls and security of tenure for life. The public like a whipping boy and I can see that some frustrated with their own lives or situations might seize on landlords as some kind of devil incarnate. Most landlords are pretty good. They work hard and if property prices do not rise they will sometimes make a loss or certainly so little profit it can often not be worth their time dong all those repairs and dealing with tenants who were stupid enough to let the both overrun twice - recent cases in press over that.

A lot of taxes go on pensions and the poor. I agree some of them go on other things as well. I also think the rich spend their money better than the state and a low capped flat tax would probably mean the poor do better overall. Private philanthropy tends to achieve more than the state ever manages.

So whom do people think do more good - someone like I am in a house bigger than their basic needs with no buy to let properties or a taxi driver in a 3 bed in Essex with 2 buy to lets? I would argue the latter - he ir she is making homes available to those who need them and probably spending more on repairs, using services of tradesmen who need the money etc.

dreamingofsun Fri 15-Feb-13 09:28:49

galloping - in my family the rich work hard and the poor are lazy. health and domestic situations have been equal. qualifications have been significantly different but thats been reflected by the effort (or lack of) at school

i take it your one of the 'did well' ones of your family dreaming?

dreamingofsun Fri 15-Feb-13 09:38:23

yes because husband and i have worked hard at school/uni/work. whereas my bil never worked hard at anything and my brother got saddled with a lazy wife (now ex thankfully) who refused to take paid employment of any kind.

OBface Fri 15-Feb-13 09:43:11

But surely there is a need for landlords? Unless there is a complete overhaul of the housing system (which realistically isn't going to happen anytime soon) people will always need houses to rent.

FWIW, I bought our BTL at the peak of the market in 2007 (though I was only 27 so plenty of time before I'll need to draw any equity), the same year as I bought my own first house so prices were already inflated. We managed.

And how else are we meant to save for our retirement when we have no employee contributions towards a pension? As I said before, I'm not up in arms that others get great provision in the public sector but think it's only fair that others are allowed to ensure their future security through BTL.

in my family there has been me hit with ill health when i was doing really well and it taking a toll on that progress and there has been my sister who has always worked hard, done the right thing, been the good girl who chose only to have children when she was in a stable marriage and then her husband went and had an affair whilst she was pregnant with triplets leaving her to raise them solo. she continued working hard and is doing 'ok' but you can imagine how hard that has been compared to if she had been raising those children in the 2 parent, 2 income steady life she chose to conceive them in.

also in my family i've seen the difference in class - my mum's side (her sister and their kids predominantly) were very middle class and had money and the expectation of money and success. they valued education and were perfectly prepared to pay for it for their children (and to encourage and direct them in the direction of good paying, good progress qualifications and careers) and to subsidise their lives whilst they gained it. they helped their children buy their first homes and when they died left them a lot of money to pay off mortgages and buy second homes to let on top of their very good personal incomes. my mother's parents lived most of their lives and had their children in india and came back to england with money to buy property outright in a cheap market.

my dad's side of the family were working class poor. his father and uncles and aunts were tied into farm labour with which a house came and they couldn't seek other better paid employment because it would make them homeless. salvation came in managing to get a council house in 50's and therefore being able to seek employment that actually paid a living wage whilst being able to keep a roof over their heads. their children were expected to leave school at 15 regardless of winning places at grammar school and showing great promise for high achievement. they were expected to get a job and start paying to the household keep.

the difference of class, having capital or not, having education or not were really in my face you know? i can't pretend they don't exist. also my health situation and my sister's unexpected single parenthood have emphasised for me the realities of life not all being about 'doing the right thing' and 'being good' and 'work hard and you'll do great'.

life is more complex.

and the picture is bigger than one generation.

dreamingofsun Fri 15-Feb-13 09:53:52

yes agree life is complex. i think most people don't mind paying tax to help out people who've tried but through bad luck/ill health are having problems. Its where people have taken life choices based on the fact that they don't want to exert lots of effort and then expect others to subsidise this where it grates.

our parents are all from working class stock. my husband was brought up in mining area with very poor parents.

i'm a strong believer in giving kids a good education. that way they have opportunities available if they wish to take them.

OBface Fri 15-Feb-13 10:11:26

Swallowed of course life is complex and there is a element of luck at play for most people who have suceeded financially as well as the other factors you mentioned.

I myself had leukemia at 16 and missed both my final GCSE and first A level year at school (though still took the exams) and also missed out on the cheaper properties buying my first property at 27 in 2007 at the peak of the market.

I'm still a firm believer though that, while you can, you should work hard and take you opportunities where you find them.

it's not really even luck is it? luck sounds magical. it is complex social factors such as class, health (and yes that's a social factor as is disease very often - it interplays with class, gender and allsorts), generational wealth or lack of, access to capital, access to education, natural ability or lack of etc etc etc.

it's not 'just hard work' or 'just luck' or hard work plus luck. it is a complex social system of class and socio economic inequality that streams the majority of people into their 'place'. it's not accidental either. the powerful and wealthy preserve their power and wealth and to do so need a lot of people to be kept in place beneath them.

look at one example of what the tories did - they immediately rocketed the price of education beyond what most could afford with the result of reducing social mobility and making education a commodity that was of value again by being scarcer and who does that advantage? the wealthy who can afford education and thus pass on the inequality to the next generation reproducing the system. this isn't about party politics btw - that's not my point - my point is that those with money and power can manipulate the system to keep that money and power and look after their own. much like these interest rates.

dreamingofsun Fri 15-Feb-13 11:51:25

swallow - despite being a tory i agree with you about buying education. if you look at most of the leading people in companies and public sector orgs the vast majority have had a private education. not only are class sizes smaller but they seem to provide people with leadership skills - something which the state education system doesn't even touch on.

many of those people can't be the brighest in our country - they just happened to be lucky to have wealthy parents whilst those like us who have to use state education just have to take their chances best they can

yes and the gap will widen with university being too expensive for the working classes now. i know you can 'borrow' the money but realistically how many working class people who got degrees do you know who are earning enough to make 35k of debt before you even get to saving for a mortgage desposit or your old age look viable?

social mobility is definitely being closed down as hard as possible.

dreamingofsun Fri 15-Feb-13 12:07:24

swallow - same applies to lower middle class as well though. i always thought i'd be desperate for my kids to go to uni, but i'm having doubts due to the cost

there's no such thing as lower middle class anymore imo if there ever really was. there's those with loads and the rest of us.

Xenia Fri 15-Feb-13 12:12:24

Hang on, the new student fee system means you do not pay a penny in fees unless and until you earn over the threshold £20k or whatever it is instead of fees up front and the more poor you are the more likely you ALSO get non returnable grants, not available to those with richer parents who choose not to support them at all. The new university system is very very skewed towards the children of the poor. If they are not bright enough to go on line to see that as a doctor say they might find it possible to repay student debt and have a richer life than if they leave at 16 to work in a call centre then perhaps they are not bright enough to go to university.

Yes, luck does play a part but people move up and down in social mobility not just up and up. My grandfather was a miner. I am a single parent. I support my children alone like your sister with her triplets, except I had 5 to support not three so in a sense she had it much easier than I did, didn't she and also you say she is still working and so am I so she and I will probably do okay.

Of course some people will get ill and there will be no one rich or poor on this thread who has not had some dreadful things happen to them in the course of their life - that is how life is but some will keep on trying (many of the things I do fail and some work, but I always assume it will go well and keep on attempting things). Some will get ill because they chose to eat junk food, not to exercise and not do the things which aid physical and mental health or drink or smoke themselvesi nto ill helath and others will get il because their parents bestowed on them genes which led to that and others simply randomly but on the whole most landlords have only 1 or two properties, they work very very hard to get to that position, never make a fortune and treat their tenants well. They are just the sort of very hard working entrepreneurial people like your local shop keeper who are the back bone of this country and need its support not hatred.

'lower' middle class would imply progression - those who are socially climbing. without social mobility it doesn't exist. and that's why it's clogs to clogs in two generations as they say dreaming. you've done well worked hard etc and climbed up a bit but come the hard time it can all be lost in the passing of a generation re: can't afford education as prices have gone up or can't afford housing because of market.

those who've climbed a bit have no stability. those with generations behind them of success have capital to fall back on.

Solopower1 Fri 15-Feb-13 13:12:26

OBface, I don't think it's people like you who are the problem, tbh. You've explained why you made the decisions you took, and you're right, people will always need landlords.

The problem comes when lots of people do it on a huge scale and the govt encourages it. I suppose the solution would be a decent state pension for everyone (or is there one already?). Or maybe more regulation of the housing industry? Inheritance tax? Taxes on second homes? There's so much that could be done, it seems to me - some of which is being done, but not enough or too late or undermined by another tax that penalises the people who are supposed to benefit ...

Great posts, Swallowed - privilege and lack of go back centuries.

it is a mistake to talk about these issues in terms of individuals. where you are is part of a chain of people - from your parents, your grandparents and beyond. social class also isn't just about how much money you earn - it's how much privilege you hold and that includes inherited capital and security and security in knowing that the system will make decisions in your favour because the system is people like you.

you can bet that all the eton boys and establishment think of themselves as an 'us' and serve the interests of that 'us'. down here though we're all supposed to see ourselves as individuals with our success or failure entirely down to our own individual merits, choices etc. it's very handy for 'them' to have it that way.

we're an us from an us a generation before us and before and before. just as they are a they that has been socially reproducing itself and it's privilege for generations and generations and generations. a few exceptions of self made people who make it through and are held up as shiny examples of how we can all make it if we work hard enough do not disprove the very carefully constructed and reproduced rule. having more money than your parents, having been to uni, owning your own home or holidaying abroad do not make you part of 'them'.

this whole individualism, meritocracy bullshit is just a way of keeping us stupid and divided.

thanks solo. i really do think this whole meritocracy, divide and rule and i worked harder than you did crap among the masses is a massive derailing technique. we are part of a much bigger picture over time and power and influence. maybe that offends people's sense of agency or individuality but it is true none the less.

Solopower1 Fri 15-Feb-13 14:36:36

Plenty, plenty of people work really hard, often over 18 hours in every 24. Hardly any of us are rich.

It's not true that hard work = getting rich. It might be true that few people will become rich without working hard (unless they inherit their welath), but you can work hard all your life and still be on the breadline. More so today than at any time in our recent future in the UK.

It's simple maths. We all have 24 hours a day. If hard work led to riches, all people would have to do is work all night, and they'd be rich. Doh ...

Solopower1 Fri 15-Feb-13 14:37:04

recent past.

Solopower1 Fri 15-Feb-13 14:37:45

wealth

alemci Fri 15-Feb-13 15:07:01

When I was younger I went out with a guy who was very controlling and his family seemed to have a lot of bad luck and his dad had died young. However I also found out that his grandad had been in prison etc.

He really didn't like the fact that my dad "sat on his bum all day" but we had quite a good standard of living. I said why don't you do ex, y , z with your life then you could earn good money. Oh no, I want to drive a lorry. Don't want to work in an office etc etc. He hadn't bothered at school and in the end we broke up. He had no aspiration. he drifted from job to job and lied about being sick when he wasn't. He used to fall out with people and was quite rude.

Maybe my dd did sit on his bum but he had come from a poor background and worked hard and gone to university in the late 50's when it was more unusual.

It can be down to a bad attitude that people don't get on in life.

Solopower1 Fri 15-Feb-13 15:14:39

Agreed, Alemci. But it isn't true to say that if you have a good attitude you will get on in life.