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 think this is 100% a good idea, it infuriated me that 12 years of impeccable renting record (for more than the mortgage) meant nothing, but a large cash gift from mum and dad seemed to be seen as a mark of knowing about finances!

We only got on the property ladder when we got together (I could easily afford the mortgage but there was no way for me to save the deposit), as my DP had some inheritance.

Why shouldn't paying rent without fail count towards the affordability criteria? At the very least it should count towards credit rating

And my comment is based on the principle, not the party! (I am politically homeless currently)

Much better to give tenants more rights as in many other European countries
So their rental home is a secure home

e.g. I live in Germany and choose to rent now I am about to retire and I don*t want the responsibility of maintenance, repairs etc

In Germany, there is security of tenure so long as you pay your rent
e.g. the tenant at my previous flat lived there for 40 years

Rental properties are sold with sitting tenants as a positive asset

Tenants can redecorate, fit new carpets, flooring, build in wardrobes etc - if the LL wishes the tenants must return it to the original state,, before they leave
Tenants often choose to have their own choice of kitchens, which they take with them

We could do this in the UK too - it doesn't put off German LLs

Governments are no good at assessing the risk for financial institutions and certainly shouldn't pressure them to take more risks

And governments shouldn't be telling credit agencies to change their ratings to let in those that are currently estimated at higher risk

Surely all this would do is lead to higher house prices (supply and demand and all that) and price people renting out in the long term.

I agree with other people, I'm not sure renting really is such a terrible thing. And I say this as someone who was recently given two months notice to move out of their family home. Renting allows me to live in a beautiful new build house. I would not be able to obtain a mortgage on this house, large deposit or not. I don't have to pay for it when the boiler breaks, the roof leaks or some other disaster occurs.

My in laws live in a council house and will not have to pay a penny towards their care. When my parents need care, they will have to sell their home to fund it. I understand the security of property ownership, but it's not without its disadvantages.

Brussel ntbo but having a substantial deposit means that if you default, the bank have a better chance of getting their money back,
because their loan is for say 90% of the house price instead of 100%

That's why you became a better risk

@donquixotedelamancha

Mortgages go up with inflation

It won't go up with inflation it's FIXED for the entire length of the mortgage. That's why they're calling it a 'Lifetime Mortage'.

@BigChocFrenzy that piece is understandable.

My issue is that surely someone who has paid (more in rent than the mortgage payment) every month for many years, has proven their ability to pay and are therefore less likely to default in the first place?

It’s like all things, in some situations this will be good news, for others not so but I see it as being positive rather than negative and there is no way in hell would I vote for a Marxist like JC that wants to make every Sod poor.

I think this is 100% a good idea, it infuriated me that 12 years of impeccable renting record (for more than the mortgage) meant nothing, but a large cash gift from mum and dad seemed to be seen as a mark of knowing about finances!

Nothing to do with knowing about finances, everything to do with there being enough equity so that if you default they can get their cash back.

@Fatted
May I ask how long have you been renting and how many times have you been moved on by your landlord?

I grew up in the States, when it was the norm to have to have a 20% deposit, and the mortgage (usually 20yrs) was fixed for the entire term. This wasn’t so terribly long ago, either. Worked fine. It’s when more money becomes available that prices start rising.

Anyway, I agree with BerwickLad - this is just another way of making sure houses cost as much as possible. It’s the British way.

It won't go up with inflation it's FIXED for the entire length of the mortgage. That's why they're calling it a 'Lifetime Mortage'.

My apologies, you are correct, it does only appear to have a permanent fix option. I can't find any info on how that would be paid for.

If such a product makes sense under the current affordability criteria (which have been worked on for a decade to ensure the same financial crisis doesn't repeat) then why doesn't it already exist?

Either:

This is government underwritten, in which case it is yet another taxpayer subsidy on pushing up house prices (of which the Tories have had several). It would be very expensive.

Or, if it's solely a suggestion to the private market, then it's just smoke and mirrors.

Or, if it's a major weakening of affordability criteria but only when complying with a government model, then it's storing up trouble for the future.

I don't see the argument for this, direct investment in social housing seems far more effective and cost efficient to me.

there is no way in hell would I vote for a Marxist like JC that wants to make every Sod poor

How is this policy less Marxist than Corbyn's housing proposals?

@donquixotedelamancha

It would be funded by pension companies. The Lifetime Mortgage would provide the pension companies with a better return than investing in bonds with negative rates!

We have this. Both self employed so can mortgage significantly less (in terms of monthly payments) than we could easily afford. But even if the rules were changed we wouldn’t get a huge mortgage. We’re not idiots. For get about the rental trap, what about the mortgage trap? Hundreds of thousands if not millions in debt, capital locked in a risky asset which costs money to maintain. No thanks!

Lying fucking bastards wouldn't do anything of the sort. Besides, I'd jump off a bridge before I'd vote tory.

@donquixotedelamancha this policy seeks to eliminate blocks to lending as opposed to taking money from people who earn it and giving it to someone else for the sake of ‘equality’.

@donquixotedelamancha

How is this policy less Marxist than Corbyn's housing proposals?

I have a friend who is an NQT. She is a mature teacher who earns around £24k. She can’t afford a mortgage because of the stringent rules. She is the MOST thrifty person I have ever met. If her mortgage was stressed at the inflation rate of her actual mortgage, she could afford a modest home (South East). As it is she’s paying the same in amount in rent but is stuck sleeping on the sofa in her living room, as she has split from DP. She has a healthy deposit. This policy would help her into her own home. Please explain how this would be a Marxist Policy.

They only want you to buy your own home so you can fund your own care when you are in old age....

@Didyousaysomethingdarling we've been renting 15 years and moved on once, which was this year.

IME, private landlords who own a number of properties and actually operate like a business are the better landlords. They want long term tenants. The ones to b wary of are the ones who own two homes, but don't want to sell the property for whatever reason. So they rent it out just to get someone to cover the mortgage without being able to actually pay for any repairs, investment in the property etc. Then throw their tennants out when they decide they can't be arsed with it anymore and finally sell up.

Yes yes yes...after ten years we went north to escape the trap. Best decision ever!!!

@fatted
Thank you for replying. I think you're probably right, definitely food for thought. Do you mind if I ask which part of the country you are based?

Most people never go into a care home. Even of the over-85s, less than 20% are in a care home. It seems strangely fatalistic to me to avoid buying property just because it might (but more likely won't be needed to) enable you to have better care and more choice if you ever need residential care rather than be inherited.

@Didyousaysomethingdarling I live in NE Wales. I'm very aware that rents in this area of the country are much lower than say the SE of England, because there also isn't the demand.

@CmdrCressidaDuck

Agreed. Especially if renting with a fixed term mortgage would mean lower or the same monthly repayments.