To think rent is so bloody unfair

[Tar19891]

My rent is 800 per month. A mortgage on the same value flat would be 450 per month. Not in London obviously. It’s not fair is it?

@Jobseeker19

I have yet to meet a landlord who pays insurance.

Total nonsense most landlords have landlords insurance ! Ie Building insurance

That said, my brain isn’t struggling whatsoever so there little point in discussing it if you can’t produce your own estimates.

I'm happy enough with yours @SwanBuster, which demonstrate that landlords pay a very large chunk of tax as a proportion of turnover!

As I've said, I think you left out cost of capital and I shan't embarrass you further

We rent in suburban London. Husband's secure job is here, as is his close family. He grew up in London.
Between us both working and earning around £50,000 between us we are struggling, always in overdrafts, credit cards. Too old, unable to save and will never own our own place. Rent is £1600 pcm. It's shit.

[quote JudgeRindersMinder]@SwanBuster there was idiocy from lenders in the south east way before new Labour. In the 80s banks were lending massive multiples 5,6,7 times) people’s PROJECTED salaries I. In 10 years time they reckoned a person would earn eg £50k, so they were lending on multiples of that rather than their ACTUAL salary which was maybe only £25k. This is when property prices got really stupid, way before new Labour was a twinkle in anyone’s eye, Although I don’t disagree they compounded the previous financial idiocy[/quote]
Thats coming back.

BOE is now looking to increase the salary cap from 4.5x to 7x fot mortgages.

They will keep pumping up the housing market until its spectacular failure. Hard to say when that will be, but with these sorts of tail risks it is usually sharp and very painful.

@LardyDee

That said, my brain isn’t struggling whatsoever so there little point in discussing it if you can’t produce your own estimates.

I'm happy enough with yours @SwanBuster, which demonstrate that landlords pay a very large chunk of tax as a proportion of turnover!

As I've said, I think you left out cost of capital and I shan't embarrass you further

You are only embarrassed yourself, don’t worry.

Cost of capital is negligible when you’ve got the magic printer doing the work for asset holders.

someone renting isn’t “buying someone else a home” though. They are paying rent for their own home (which can be funded from the housing element of Uc unlike a mortgage). Who actually owns the house is irrelevant to the tenant provided they keep up with their obligations (actually social housing bodies are often terrible at maintenance compared with private landlords and rent is not necessarily less either).

UK has a very poorly educated 40+ population

Nonsense.

Its the younger cohorts that see the scam for what it is

Like all generalisations, this is also nonsense. I’m nearing the end of my seventh decade and of course it’s a scam. Just another way of transferring more wealth from poor to the rich. It’s shameful.

@Blossomtoes

UK has a very poorly educated 40+ population

Nonsense.

Its the younger cohorts that see the scam for what it is

Like all generalisations, this is also nonsense. I’m nearing the end of my seventh decade and of course it’s a scam. Just another way of transferring more wealth from poor to the rich. It’s shameful.

We have been over this in other threads.

Very few people in the UK went to University pre-1990

This is not news.

Who actually owns the house is irrelevant to the tenant
Nope it’s really really fucking relevant! Because eventually you can pay a mortgage off and stop paying, you just own the thing: bosh, no more money going out. But renting is forever.

@Villagewaspbyke

someone renting isn’t “buying someone else a home” though. They are paying rent for their own home (which can be funded from the housing element of Uc unlike a mortgage). Who actually owns the house is irrelevant to the tenant provided they keep up with their obligations (actually social housing bodies are often terrible at maintenance compared with private landlords and rent is not necessarily less either).

I’m going to shock you and agree - but only in pure practical terms.

the part about UC’s housing element funding it is absolutely something young people should take advantage of in my opinion. If I was in that position I’d be reducing my P60 figure by any means possible - for instance salary sacrifice and taking advantage of this corrupt mess.

We have been over this in other threads

We have. And we’ll never agree because our definitions of educated differ. Maybe not bother rehashing it because I’d quite like to go to bed at some point tonight!

Because at this point who gives a fuck if tax revenues < borrowing. Governments have shown they don’t give a shit, provided that lovely credit money floods the system in the direction they choose. People in a no wonder situation might as well choose to scoop a bit up 🤷🏻‍♀️

@Blossomtoes

We have been over this in other threads

We have. And we’ll never agree because our definitions of educated differ. Maybe not bother rehashing it because I’d quite like to go to bed at some point tonight!

I agree with you. Education doesn’t come down to what % of the population in given generations went to university.

I went - to a supposed good one - and i games that like I game everything else and came out with a first. But what did I learn? Absolutely nothing of practical use that I couldn’t have digested myself, observed or worked out from fundamentals (maths degree).

@Tar19891

Plus the landlord is building equity. Come on, we’re all adults as you say. Just admit to profiting off the situation

Well yes, obviously, it's a business. But not necessarily by as much as you are thinking. As others have pointed out, you have to add in the on-costs associated with rental, and account for the periods be tenants.

My university degree could easily have been compressed into 1 year rather than 3. Yet another scam.

@stuntbubbles - I how is the identity of your landlord really relevant to the tenant? The tenant pays the rent and gets to live in the property. If the landlord is a housing association, charity, large corporate or individual if makes no difference to the tenants rights or circumstances (barring other issues eg if the tenant has a more secure tenancy).

The main issue we have had in the UK is a lack of respect and privacy from certain landlords.

When you rent your house, it stops being "your house" for the duration of the tenancy.

This is understood in Europe, and people leave you alone.

But in the UK, the cult of property is like a disease. Landlords harrass you, they don't respect your privacy, they barge in without asking for permission etc..

And we have rented expensive properties (£2,000 - £3,000 pcm range)

And tenants largely put up with this because they tend to have feweer resources and protections.

This happened to us in our first place in London and we hired a solicitor to deal directly with the landlord.

He backed off very fast.

Now that we have been in the country longer, I understand full well that its the asymmetry of power in the landlord-tenant legal relationship that creates so many problems. It also atracts terrible, unscrupulous people into the landlord business because they enjoy that dynamic.

Nothing gets a landlord more scared than a tenant with the resources to hire an entire army of solicitors if they behave badly.

Until the market is regulated properly, and tenants have real protections, the dysfunction will absolutely continue.

you have to add in the on-costs associated with rental, and account for the periods be tenants

The oncosts are tax deductible and most landlords have a couple of days or a week between tenants. It just doesn’t wash I’m afraid.

Good thread - very enjoyable. Good night all!

Who actually owns the house is irrelevant to the tenant provided they keep up with their obligations

I'd be more inclined to agree with this if we had a better system of secure tenancies in E&W. With a secure tenancy I'd much prefer to be a tenant than an owner-occupier, and indeed this is how much of the rest of the developed world works. It's s.21 evictions, and shorthold tenancies that keep me out of the rental market more than rents. (If we had a planning system that could actually produce enough houses even better!)

And were you taking not just the mortgage interest but the payments to principal inthe "costs" you took off before you calculated your profit? If so, your return also includes the direct increased equity from lowering the amount you were borrowing - not much in the first few years of a mortgage, but significant later on.

My property was in negative equity so there was no profit in selling it. I rented it until I broke even on what I had paid for it ten years prior.

@SwanBuster I really hope your university degree wasn’t in economics!

We've probably spent £15k making our house hospitable and need to do another £18k to it just sorting wear and tear and replacing broken things. So over the 10 years we've lived here let's say £3k a year total.

That would take our mortgage to about current market rent, however in the time we've lived here it's probably gone up in value by £200k.

most landlords have a couple of days or a week between tenants. It just doesn’t wash I’m afraid.

You have statistics to back that up?

@SwanBuster

My university degree could easily have been compressed into 1 year rather than 3. Yet another scam.

People don't retain information properly if they do a bachelors in 1 year.

Thats the problem.

I went to school in the US & UK, and the US is definitely better.

I was mostly talking about a 55 year old understanding economics and finance at the macro level.

The vast, vast majority have no clue.

Also, they seem to have zero capacity to learn new things. Its totally bizarre here in the UK.