AIBU to think if you’re STUCK in the RENTAL TRAP…

[Didyousaysomethingdarling]

...and been reliably paying years and years of rent, you should qualify for a mortgage, which equals your monthly repayments?

If so, it looks like the Tory ‘Lifetime Mortgage’ pledge is aimed at getting your vote.

In a bid to get more people on the housing ladder the Tories have pledged to ease affordability rules arguing that more than two million people could afford a mortgage at a rate of 2.35pc but would fail the current tests of 7pc and above (taken from The Telegraph).

I think they’ve stolen the idea from the Jamie Pogson petition. Could this make a difference to you?

I would rather be stuck renting for the rest of my life than ever vote Tory.

It could potentially help us, but I’d need to know more details.

It's a good policy, if I was one of the other parties I'd be looking at this with interest.
Still wouldn't vote Tory because of, well, everything else they stand for but that doesn't mean this isn't a good idea.

No I've seen the Tory bone they throw before.
They are selling most people a pig in a poke.
Oooh look affordable (ha) mortgages.....then you have to give it back because you need social care later in life.
I'd rather the housing market balanced out.

Nope, it wouldn’t help us. You still need a 5% deposit, which we are struggling to save because renting is so expensive.

I have said this for years. I was paying £750 per month rent. The house I wanted to buy would have been a mortgage of £450 a month. But I needed a much bigger deposit

I always believed that if you could pay rent on time, every month over years, that should help in a mortgage application. Especially where the rent is higher.

As it stands, I did buy. But only because my wages increased significantly. If not I would have been still renting.

We used to have that MsR social housing with RTB.
It's affordable, reliable housing we need not more mortgages.

I’d rather double my rent than vote Tory. I don’t especially want to buy. I don’t want to be liable for maintenance and repairs! I also won’t have a deposit so that’s out of the question. 100% mortgage would be doable and probably cheaper than my rent. But it’s not as simple as buying = better

" two million people could afford a mortgage at a rate of 2.35pc but would fail the current tests of 7pc"

No guarantee that the rate will stay so low for the next 25 years and some people don't have jobs with career progression.
Banks like to reduce the risk of default and have had their fingers burned previously

What this might do, with many of those 2 million wanting to buy, is set off another round of property price rises
Makes those already owning property feel richer, which is why it's a tempting political promise

However, the main barrier for many, especially in the SE, is still the deposit, so it won't have much effect unless 100% mortgages become more common again - and those are a definite risk for banks

I live in social housing and don't consider it a trap. I live in a 14 year old house that is one of a small number built within a private estate. If my boiler breaks, electrics are faulty or plumbing becomes an issues I can ring my landlord and don't need to worry about paying. I therefore don't consider to be in a trap. I am lucky though I appreciate that.

What they actually need to do is create more social housing, mixed within private estates and remove the stigma of renting.

If I could get the same discount as a council tenant through right to buy (48%) I would consider buying. I'm then put off by 1) unexpected costs of house maintenance and 2) having to sell the house to fund my elderly care rather than being able to pass on as an inheritance. The only real benefit to home ownership for financial reasons is if you can make money by property development.

@BigChocFrenzy
No guarantee that the rate will stay so low for the next 25 years
They're proposing to fix the interest rate for the entire mortgage term.

"They're proposing to fix the interest rate for the entire mortgage term."

Are other taxpayers footing the risk / bill for that ?

Look at what started the global financial crash in 2007 / 2008:

USA sub-prime mortgages and lower lending criteria were a major cause

Financial institutions in the USA pressured by their government to lend to people who didn't meet their usual financial criteria.
Much higher rate of mortgage defaults helped lead into a deep US recession, which spread into a global one.

We need to avoid significantly higher mortgage defaults happening in the UK and causing a recession

@BigChocFrenzy

Are other taxpayers footing the risk / bill for that?

The Tories plan to enlist institutional investors, such as pension funds, to offer these long-term loans, rather than traditional banks. It wants to see these mortgages offered to borrowers with 5pc deposits

I was fortunate and inherited an old miners cottage.
It was in bad repair and when I became ill and had to work PT it became a huge money pit.
It's easily the worst house in the street.
Ownership of a property is no way as secure as people think.

Just need the house prices to come down to average earnings, near me 2 bed starter homes have increased by 35-45% over the past 3/4 years with absolutely nothing having been done to them, but people seem to be happy to pay an extra £90k plus than what the previous people brought it for a few years before them, absolute madness, will all end in tears eventually.

Believe nothing in any manifesto, they are all full of empty promises.

@BigChocFrenzy
If you have a history of reliably paying your rent, why would there be a higher risk of defaulting on a mortgage? Your mortgage repayments would be fixed, whereas if you were still renting your rent is probably going to rise on a yearly basis.

Last time the affordability rules for mortgages were relaxed it went so well.

Perhaps we could finish paying off the last bank collapse before deregulating again?

Ask the women whose pension age changed how good they are at keeping promises like entire term fixed rates.

No I've seen the Tory bone they throw before.
They are selling most people a pig in a poke.
Oooh look affordable (ha) mortgages.....then you have to give it back because you need social care later in life.
I'd rather the housing market balanced out

Agreed. We rented for ever, mouldy damp houses with arses for landlords, when we were finally thrown a lifeline..a shared ownership 2-bed which is basically a pig in a poke but we had to get out of the situation we were in. We wanted DS to never have to go thru what we did, never being able to afford a house, but will prob end up having our share of the house taken from us when we have to go into care. They've got you every way.
What's not fair is social housing where repairs are done free of charge and the rent stays low. With shared ownership you pay rent, will prob never afford to buy the house outright, your rent increases annually and yet you have to do all repairs and maintenance. Grrr!!

If banks thought these tenants weren't a higher risk than their other mortgagees, then they would already be lending to them

After the global financial crisis, I don't want any government to encourage financial institutions to make private riskier loans

Similarly, pension funds would also be backing institutions to make fixed longterm loans, if they thought the balance of risk and return was suitable.

I will be stuck private renting forever. I still would never vote Tory.

A) they’re lying bastards and it’s just election bullshit empty promises
B) the biggest issue is being unable to save for a deposit while paying extortionate private renting costs, this does nothing to address that

I’d say if you fall for it, you deserve whatever you get... but sadly the rest of us will suffer along with you

If you have a history of reliably paying your rent, why would there be a higher risk of defaulting on a mortgage?

Mortgages go up with inflation. The point of the affordability criteria is that they show a borrower can afford the payments in any reasonable scenario.

I listened to the news about this manifesto today and wondered why they hadn't done any of these wonderful things over the past 10 years. Plenty of time, in reality, they will focus on business and limiting benefits.

Isn't it just another way of making sure houses cost as much as possible?