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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Housing crisis

229 replies

lollipoprainbow · 19/03/2022 18:58

Aibu to feel really angry about the housing situation in this country ?? I think it's terrible that tenants that privately rent only get 2 months to find somewhere else to live once issued with a section 21 surely in the current climate of a rental shortage it should be six months ?? I think it's awful that people can't get mortgages despite paying the same or less in rent each month. I think it's disgusting that 'affordable housing' is anything but for the normal low wage earning person. There is zero help for people working on a low wage. Sorry but I just need to vent, I want to complain but don't know who to !!

OP posts:
GiraffesInScarfs · 20/03/2022 23:59

The point of a deposit is to mitigate the bank's risk - who are lending the mortgage - in case the property needs to be repossessed and sold and there are market fluctuations in prices. So if they ask you for 20% deposit, they are effectively ensuring themselves that they can recoup their lending if you fail to pay, even if house prices drop 20%.

This was in response to the financial crisis mainly, that 100%+ mortgages virtually disappeared. Because those mortgages implicitly presumed that house prices would always rise.

The other option would be to do away with desposits but have much more stringent lending criteria, so people needed to earn greater multiples of the amount borrowed and show much more security of income (massively disadvantaging lower earners compared to current setup and also those who are self-employed).

The only other option I could think of would be banks requiring people to take our very comprehensive insurance for job loss/ business failure/ critical illness as well as life insurance when they take out a mortgage. But this would be £££ per month so again put ownership out of reach for many who might otherwise manage it. And even with that there'd still need to be either a deposit or a larger salary multiple to be able to cover the risk of price decreases or interest rate rises that might impact future affordability.

In some countries you can take out a 20 or 30 year fixed rate mortgage. That I think helps people to be able to plan. Often people say "well once you own what does it matter what the house is worth?". Obviously it does, because if you have a 5 year fixed rate and when you come to refinance and the price has dropped, you may well find you cannot refinance affordably at all. Or people get trapped by negative equity, which also harms social mobility in terms of moving for careers etc. Or even to be able to care for family.

These oversimplifications are silly. It is not a simple problem to fix and the UK is not alone in experiencing this.

Snoozer11 · 21/03/2022 00:20

I have been searching for a new rental property for over six months now and so far there's been nothing.

I have savings but will never be able to borrow enough to afford a house.

I think I might leave the UK.

GiraffesInScarfs · 21/03/2022 00:56

Eh? The 'status quo' would have been to remain. People voted for change.

They voted for changes which every credible expert told them would make them poorer. But they'd "had enough of experts" so gleefully ignored them. I guess they are now enjoying the outcomes that they expected given all the adamant "we knew what we voted for!!" stuff.

Also, the one of the main arguments of the remain campaign was that house prices would plummet if we voted for Brexit.

Lol!!!!! But people knew what they voted for, right? So obviously nobody believed this kind of obvious nonsense??

MidnightMeltdown · 21/03/2022 15:43

@GiraffesInScarfs

Eh? The 'status quo' would have been to remain. People voted for change.

They voted for changes which every credible expert told them would make them poorer. But they'd "had enough of experts" so gleefully ignored them. I guess they are now enjoying the outcomes that they expected given all the adamant "we knew what we voted for!!" stuff.

Also, the one of the main arguments of the remain campaign was that house prices would plummet if we voted for Brexit.

Lol!!!!! But people knew what they voted for, right? So obviously nobody believed this kind of obvious nonsense??

Erm... I very much doubt that anyone voted leave for financial reasons. It was mostly the older generation, most of whom own outright, so why would they vote for a housing crash?

It was just scaremongering nonsense from the fear campaign.

MidnightMeltdown · 21/03/2022 15:51

[quote lollipoprainbow]@spaceman1 this js the problem, with fewer and fewer rentals it's going to get a lot lot worse. I'm incredibly worried. [/quote]

There isn't just a shortage of rental properties though, there's also a shortage of houses to buy. There are a lot of people in rentals who are waiting to buy, but haven't been able to find anywhere because there are multiple buyers chasing each house, which is pushing prices higher.

Landlords don't 'create' housing, they just take away from FTBs.

Blossomtoes · 21/03/2022 16:17

It was mostly the older generation, most of whom own outright, so why would they vote for a housing crash?

Because if you own outright it barely affects you if there’s a housing crash. If you bought 25+ years ago virtually all the value of your house is as a result of rises in the property market. If your house falls in value so do all the others so you’ve got nothing to lose. Unlike people with massive mortgages.

MidnightMeltdown · 21/03/2022 17:42

@Blossomtoes

It was mostly the older generation, most of whom own outright, so why would they vote for a housing crash?

Because if you own outright it barely affects you if there’s a housing crash. If you bought 25+ years ago virtually all the value of your house is as a result of rises in the property market. If your house falls in value so do all the others so you’ve got nothing to lose. Unlike people with massive mortgages.

Exactly. The older voters didn't vote for a crash. Most don't care whether the market crashes or not, because it doesn't affect them.

GiraffesInScarfs · 21/03/2022 23:53

@Blossomtoes

It was mostly the older generation, most of whom own outright, so why would they vote for a housing crash?

Because if you own outright it barely affects you if there’s a housing crash. If you bought 25+ years ago virtually all the value of your house is as a result of rises in the property market. If your house falls in value so do all the others so you’ve got nothing to lose. Unlike people with massive mortgages.

Yes. But many idiots who don't own homes voted for Brexit because they thought it would make housing more available or cheaper. 🤦🏻‍♀️🤦🏻‍♀️🙈🙈 Crazy but sooooo many of them cited this as a reason. Mind boggling.
Villagewaspbyke · 22/03/2022 02:42

@MidnightMeltdown yes but equally by your logic FTBs take property away from renters.

If there was more housing overall both rental and purchase prices would come down

lollipoprainbow · 22/03/2022 07:33

@Villagewaspbyke totally agree, there needs to be an equal amount of rentals and ftb. That's a pipe dream though.

OP posts:
lollipoprainbow · 22/03/2022 07:33

@GiraffesInScarfs idiots who don't own homes ?? Nice

OP posts:
Alexandra2001 · 22/03/2022 07:49

A line often repeated without much thought to other structural issues with the economy. The problem isn’t that there isn’t enough welfare. Why do people want others to be dependent on welfare?
The problem is that UK is a low wage economy because nu labour systematically created a culture of welfare dependency with the tax credits instead of letting employers pay the going rate. The Tories continued this strategy. This made UK the country with the lowest productivity in the G7. Well, guess what? Low productivity means is even more wage suppression. Add to the govts around the world printing money like it’s going to fashion, stupid lockdowns in the last two years, nimbyism rife in this country, and you have this problem. Quantitative easing especially caused money to make its way into assets. So this council house theory is a bit lazy and basically from the school of thought where you shouldn’t pay people enough and have them dependent on welfare and subsidized housing

There has always been some sort of income support, tax credits/UC different names for the same thing.
the GFC caused/was an excuse for 12 years of stagnation, in investment, productivity and wages, our wages aren't really that low, comparable with say France or Italy.

The solution to housing is council housing, it was in the 50s and it is now.... just as we saw over P&O, we also have almost no protection for tenants, in many european countries, if you pay your rent and look after the property, its almost impossible to be evicted, this is what we need in this country as we move to more social housing.

Using housing as an investment is morally wrong, a roof over your head is surely a human right?

sst1234 · 22/03/2022 07:49

[quote lollipoprainbow]@GiraffesInScarfs idiots who don't own homes ?? Nice [/quote]
You know what the comment meant. Don’t try and make it something it wasn’t.

Alexandra2001 · 22/03/2022 07:56

[quote Villagewaspbyke]@MidnightMeltdown yes but equally by your logic FTBs take property away from renters.

If there was more housing overall both rental and purchase prices would come down[/quote]
No matter how much housing you build, its still an investment and is treated as such.
So BTL tend to be cash buyers, they can always out bid a FTB and they can pay instantly, so the seller almost always chooses them.

This also drives up the one and two bed properties that FTB usually want, forcing more to rent, its a never ending circle.

lollipoprainbow · 22/03/2022 08:11

@sst1234 I don't own a house so I'm an idiot, how else is that supposed to be read ?????

OP posts:
Alexandra2001 · 22/03/2022 08:40

[quote lollipoprainbow]@sst1234 I don't own a house so I'm an idiot, how else is that supposed to be read ????? [/quote]
TBF (and i rarely agree with anything sst says) i read it as they are idiots because they voted for Brexit - people on low incomes more likely to vote for Brexit - my local MP did tell me that Brexit would allow a reset in the housing market, lower rents, lower prices and more new builds......

You'd have to be an idiot to believe leaving the EU would bring about any of that and it hasn't, in fact the reverse.

GiraffesInScarfs · 22/03/2022 11:33

[quote lollipoprainbow]@GiraffesInScarfs idiots who don't own homes ?? Nice [/quote]
🙄🙄🙄

Way to deliberately misinterpret a comment.

Obviously I'm not saying people who don't own homes are idiots.

I'm saying that many idiots voted for Brexit, including some who were so deluded that they believed it would make it more affordable for them to buy a home. It is believing that Brexit would be beneficial that makes such people idiots, not the fact that they don't own a house.

GiraffesInScarfs · 22/03/2022 11:34

TBF (and i rarely agree with anything sst says) i read it as they are idiots because they voted for Brexit - people on low incomes more likely to vote for Brexit - my local MP did tell me that Brexit would allow a reset in the housing market, lower rents, lower prices and more new builds......

You'd have to be an idiot to believe leaving the EU would bring about any of that and it hasn't, in fact the reverse.

Exactly.

MidnightMeltdown · 23/03/2022 11:05

Yes. But many idiots who don't own homes voted for Brexit because they thought it would make housing more available or cheaper. 🤦🏻‍♀️🤦🏻‍♀️🙈🙈 Crazy but sooooo many of them cited this as a reason. Mind boggling.

@GiraffesInScarfs I don't understand the logic of making this about Brexit voters. The argument about house prices came from the remain camp. You could equally say that many idiots who own homes voted remain because they thought that their house price would plummet if they didn't.

MidnightMeltdown · 23/03/2022 11:15

[quote Villagewaspbyke]@MidnightMeltdown yes but equally by your logic FTBs take property away from renters.

If there was more housing overall both rental and purchase prices would come down[/quote]

Not really. Most FTBs will be moving out of the rental market, hence freeing up their previous rented home for another renter.

It's simply changing the proportion of homeowners vs renters

Blossomtoes · 23/03/2022 11:48

TBF (and i rarely agree with anything sst says) i read it as they are idiots because they voted for Brexit

Same. You’re taking offence where none was intended @lollipoprainbow.

Villagewaspbyke · 24/03/2022 11:49

@MidnightMeltdown - emm yeah but where does the house the FTB move into come from? If it’s a former rental property then even if they are moving out of rented there is no net gain of housing!

We don’t have enough housing and we need to build more. Chasing landlords out of the market with no more housing will only make things even worse for renters.

@Alexandra2001 - landlords don’t tend to be cash buyers at all. Vast majority use mortgages.

Villagewaspbyke · 24/03/2022 11:55

Also @Alexandra2001 the reason rents are so high is that there is not enough rental properties. Landlords buy property because they can get a return on it. If the return is lower, they will stop buying and may sell what they have. No landlord is going to junior keep buying properties no one wants to rent or won’t pay much to rent. It doesn’t work like that.

We need more housing! Probably of all types really and some people (me included) may prefer to rent at certain points in their life (or even their whole lives).

MidnightMeltdown · 24/03/2022 12:30

[quote Villagewaspbyke]@MidnightMeltdown - emm yeah but where does the house the FTB move into come from? If it’s a former rental property then even if they are moving out of rented there is no net gain of housing!

We don’t have enough housing and we need to build more. Chasing landlords out of the market with no more housing will only make things even worse for renters.

@Alexandra2001 - landlords don’t tend to be cash buyers at all. Vast majority use mortgages.[/quote]

I agree that we need more houses, but the point is that there isn't specifically a shortage or rental properties, there is a shortage of properties in general.

People need to live somewhere, regardless of whether the property is rented or owned. If someone buys, that doesn't make the situation worse for renters, because the person who bought would still need to live somewhere if they hadn't bought (i.e. in a rental). In other words, when someone buys, it takes that person out of the rental market. All it does is change the ownership of the home that they occupy.

Changing the proportion of home owners to renters doesn't make things better or worse for renters. However we commonly hear this nonsense trotted out by landlords, as if they are somehow doing people a favour by increasing the number of houses available. They aren't - landlords don't build houses.

Alexandra2001 · 24/03/2022 13:32

@Villagewaspbyke Nope figures from Countrywide show that over 65% of BTL landlords are Cash buyers.

I know 3 young couples who have struggled to buy a first property because landlords out bid them all, in the case of my DD, put offers in on 23 properties and 22 were sold to BTL...

Only purchased when a seller (who had lived their all her life and raised a family) asked all offers to explain in writing what they were going to do with the house, 90% dropped out....

So if BTL start selling, good!

As you said, its an investment, profiteering on other peoples financial misery.

Social Housing should be provided by the Govt, this would be at affordable rents, the Govt get a profitable & appreciating asset, people have more money to spend in the economy... win win!

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