House Prices

[LGBirmingham]

House prices still seem to be rising? Does anyone else think this?

Equally you can get caught out by your rental costs rising or by your LL giving you notice at an inconvenient time. And you never stop paying, even after 25 years or longer the amount only increases.

Cant you just accept Crashy that you pay your money and make your choice? Nothing wrong with people choosing to buy or choosing to rent. Either way you could argue that £££ are “wasted” but it is normal to pay for a roof over our heads.

Mortgages may be cheaper than rent for those starting off from scratch with nothing - but you only have to look at the threads where people disclose how much their mortgage is a month to know that’s far from the case over time. Nobody I know (early 50s) has a mortgage anywhere near what the rent would be for their property, if they have a mortgage at all - when you can easily be charged £1200 for a room in a house share in London zone 2.

The model is completely broken because a lot of people renting aren’t doing so in a “screw mortgages, we’ll invest our money elsewhere” kind of way. Instead the few families I know who for whatever reason fell out of the property market and are renting are now fretting about what to do as they get older and are relying on inheritance to help them out.

I think renting gets harder as you get older whereas owning a property gets easier as the amount you owe decreases over time.

It’s not like renters can really invest the mortgage money elsewhere anyway. As they are committed to spending large amounts of their income on rent.

A friend of mine chose to rent throughout her 20s and 30s, now she's in her 40s she feels stuck in expensive rents (£1600pcm for the Midlands) she's bitterly regretting not buying a house sooner.

She had the affordability years ago but decided renting was easier.

She's terrified she's never going to be able to retire and will be needing to pay rent for the rest of her life.

I know people have reasons they rent, valid reasons, and many can't afford a house but I can't understand the logic of wasting money and having the insecurity of renting if you can afford a house/mortgage.

Home owning has so many long term benefits.

@BadCider that is a worrying story. The reality is that pulling off a decent home in the location you want is getting harder and harder. If you don't start as early as you can to make inroads. Many people have missed the boat now but won't admit it to themselves. We are going to have unprecedented levels of elderly homelessness I think

Maybe not elderly homelessness @CountryCob as I understand that people renting can get universal credit to help towards rental payments if they can no longer afford them.

But who would want to rely on the kindness of the Benefits system? Only as a last resort surely.

Yes @Twiglets1 but they need to find somewhere suitable to rent. If someone has no property or meaningful pension, I would suggest there may be many in that boat either because funds aren't available or because of poor financial plannning, how will they pay anything towards their costs? We seem as a nation to have forgotten about long term financial disclipine.

Exactly - looking at your long term plans for housing post retirement is something to be considered.

My friend said she worked out she's paid nearly £310,000 in rental costs, over 28 years. She has also been evicted (no fault of hers, LL selling) half a dozen times over those 28 years, so she's had expensive moving costs too. She could have easily paid off a mortgage by now, or be a long way towards it even if she'd purchased a house more recently.

I didn't want to worry about having a secure roof over my head, whatever the market was doing. Investment wise then yes, it matters, but having a home makes the market ups and downs irrelevant.

I don't care how much my property is worth on paper, I do care about having somewhere secure to live.

It’s a worry @CountryCob especially as we have an aging population and younger people paying tax can’t be expected to keep paying more and more to support people who could reasonably have been expected to plan for their own long term future.

I m mid 40s and our mortgage is literally 2.5 times cheaper than renting an equivalent property in our area.
And this is on new rate that we remortgaged on in September.

I think the renting into retirement is a huge worry for many and would be to me.
The way I see it and always have is the sooner you get on the ladder and get a mortgage the closer you are to paying it off and having almost free accommodation for life
Mortgages into retirement should be banned. Max should be 25 years
Having said that, with all that's going on in the financial world and housing market at the moment I wouldn't buy now if I was a ftb. Definitely no harm waiting atleast another 12-18 months

I find it so strange that the only things that have been said in this thread are that renting isn't necessarily wasted money and there are other options than just buying a house yet there is so much push back. Unless I've missed it I don't think anyone has said "buying a house is bad/stupid". Yet people have been told their whole lives that the best (only) thing to do with their money is buy a house so they can't help pushing back on even nuanced statements that suggest there are alternatives.

What you get from renting is a place to live. Just like you get a travel experience from a holiday or food from a grocery store. That's not a waste. Some people might value the career opportunities or amenities that come from renting in an expensive city over living in a more affordable suburb. Each to their own.

It becomes an issue when there is pressure to buy at all costs or when there is a sneering attitude towards renters as if they are financially irresponsible. I've seen it several times on mumsnet where someone offers a view about the housing market and the response is "are you a homeowner?" as if that is the only way someone can understand economics. Most people who have done well out of property have been in the right place at the right time, not because they have some sort of financial savvy.

Similarly I don't think it's necessarily a good thing to encourage young people to buy as soon as possible. There was a post on here recently about someone being encouraged by family to buy and they would be left with £600 after the purchase. Unless someone is 100% sure they want to live in their hometown their whole lives, we should be encouraging people to explore career options, different places to live, etc not saddling them with a lifetime of debt and maintenance costs at the earliest opportunity.

Also, not all renters are on low incomes and spending all their money on rent with no ability to save. This attitude contributes to some of the poor treatment renters receive. When you assume someone must be irresponsible to be x age and still renting it justifies providing poor housing standards and the attitude that "if someone what's a home of a nice standard they should work harder and buy it".

The evening standard had an article on outright ownership which said "all but six (London) boroughs had more owner occupiers with no debt than those with mortgages to pay off in 2021, according to the latest available figures.

Wow, I never realised it was that high. So higher mortgage rates don't affect a massive number of London households, therefore less likelihood of a crash.

@BraveToaster with over 700 posts on this thread we see a wide range of opinions on the wisdom or otherwise of taking on a mortgage including @CrashyTime who finds it "actually quite funny" that "unfortunately some people are going to be in a right pickle with their debt."

It's fair enough that people also have views on long term renters, though I don't believe anyone has implied that "all renters are on low incomes and spending all their money on rent with no ability to save".

Obviously it is hard to save if you are paying rent - this is a problem affecting many renters. It's also hard to save if you are paying a mortgage. But no assumption has been made that all renters are on low income or that they spend all their money on rent.

"It’s not like renters can really invest the mortgage money elsewhere anyway. As they are committed to spending large amounts of their income on rent."

You have no idea what the average renter is doing or not doing, but you are really trying hard to convince people into mortgage debt, are you involved in the mortgage industry or something, Im starting to think you might be? A renter in a cheap rental wont be spending large amounts of their income on rent, neither will someone living at home, and neither will a renter with a large income.........you really have to accept that there are different shades of reality, different contexts and different types of personal circumstances, but we do know for sure that the price of mortgage debt has gone up a lot, that is a matter of public record because everyone knows where interest rates are are where they were? Some people can afford the increased price of their mortgage debt, some cant, again many different situations just like renters. One thing I am sure of though is that the average basic property in the UK isnt worth the amount of debt secured on it or the amount of debt someone would need to borrow to buy it, it was a con the public were taken for a ride so bankers could make out like bandits, it is time to accept that and for people to wake up so that it never happens again.

@BraveToaster I have to agree with you regarding renting. There seems to be an old-school attitude that if you don't own your own home, you are some sort of lower class citizen to those who do. Half my family seem to have this attitude; they were all raised on a council estate, and, for the most part, barely have a pot to piss in and will retire on state pensions. Yet, this snobbery persists.

What renting has taken from me, it's also given back. Frankly we've had a dreadful last 3+ years renting. However. We've now had the opportunity to live in three different counties that we absolutely, categorically would NOT want to be our permanent home. Had we pushed ourselves to buy in any of them, I think we'd be really unhappy now. None of them were the right place to settle.

The other thing that renting has taught us is an awful lot - tonnes and tonnes of information - about what we do and do not want in a house. It does make it more difficult to find the right house to buy, but we're far more experienced at seeing 'no way' flags than your average person who doesn't have dozens of rentals behind them. Which means we're far less likely to make a colossal, expensive mistake.

And, from our perspective, our rent is £1600 pm and we're still putting away £1400-2100 per month towards a deposit on a house.

We have a lovely landlady with no mortgage who is very proactive in fixing things. She even gets our weeds sprayed, lawns mowed and hedges topped! First sign of mole activity and she's here sorting it; she had the kitchen redesigned for us to fit a range cooker in (when she couldn't remove an Aga), now that size cooker doesn't work for us, she's talking about getting it done again so we can fit a bigger one in - there's no mention of us paying for it, then she's going to get the entire kitchen redecorated. When our boiler failed last month, she had her man here within 2.5 hours.

Not all rental homes are dreadful and not all tenancies are a complete waste of both time and money.

But... I don't want to live in this county. So, again, renting this house has taught me that. If we'd just driven through it a few times and looked around, we probably would have said 'lots of space, yeah this is pretty, let's buy here' - but it would have not been the right thing to do for our long term future.

I wonder how many people who have bought houses have ended up in a county/city/town/village/country that they don't really like, because they never had the opportunity to spend enough time there to see it warts and all?

Good news, but not nearly enough in the context of where interest rates are, in reality though many sellers are cutting a lot more than that, PropertyLog is your best tool for insight into local markets.

"There seems to be an old-school attitude that if you don't own your own home, you are some sort of lower class citizen to those who do. Half my family seem to have this attitude; they were all raised on a council estate, and, for the most part, barely have a pot to piss in and will retire on state pensions. Yet, this snobbery persists."

Exactly, this type of ingrained stupidity and lack of knowledge about debt and financial markets makes many of the UK population ripe pickings for the banker class, really sad to witness actually.

Calm down Crashy and think logically for a moment: what would I gain from trying to convince people into mortgage debt? Am I getting money in any way from the views I express on Mumsnet? Am I building a platform or attracting followers via an anonymous Mumsnet account? Am I an evil genius trying to get other people to bend to my will? Answer: No I'm not.

Nor am I involved in the mortgage industry. If I had a job at the moment I would not be able to post so much on Mumsnet would I? I've never worked in the mortgage industry nor am I likely to. It has been pointed out by others on this forum that I'm not exactly big on data.

We just have different opinions Crashy - you foresee a house price crash and sometimes seem to relish the prospect. I feel like I disappoint you by expressing a different opinion but I wouldn't say I'm trying to convince anyone into mortgage debt. Both owning and renting have their advantages and disadvantages and it's fine that you favour one option while I favour the other.

In 1900 in the UK 90% of people rented and they rented from private landlords. Just about all my ancestors then were renting except one or two, and they were all happy enough although some had to move a lot - I am not sure whether due to landlords, moonlight flits or they just fancied a change. People should just made up their own minds. however if only 6m of 67m people in the Uk are on universal credit that is probably not the most important factor to consider.

For me I bought in 1984 and it was about stability, our first child came soon after - we just wanted somewhere that was ours to do the stuff we did with the first place, made a storage room in the loft, put a sink in the bed room etc. I planted corn on the cob in the garden, had a green house and my husband laid a patio although some of those tenants might also be able to do.

The only thing I would say in expensive areas is that if you will be pay a lot of stamp duty having lots of moves with very high stamp duty can be a huge waste of money so our 1984 terraced, 1987 semi, 1990 detached ( we really stretched for that one not only interest only loan but deferred interest - some interest added to the capital and then rents went through the roof) and finally my current 1997 house - is that these days those intermediate moves in London would be too expensive in terms of excessive stamp duty. I have still not recovered from my very very high 1997 stamp duty (rates had doubled that year).

"I wonder how many people who have bought houses have ended up in a county/city/town/village/country that they don't really like, because they never had the opportunity to spend enough time there to see it warts and all?"

I wonder how many took large mortgage debt for a box in a New Build scheme on the edge of some uninspiring town somewhere just to "get on the ladder" (absolutely hate that phrase, purely designed to exploit the financially vulnerable)

You still dont really get what Im saying, I don`t favour "one over the other" when it comes to renting or buying, I am saying that ordinary working people should be able to do one or the other without spending half their salary every month to house themselves (it will be more now on recent mortgage debt with the higher rates) and I am saying that recent house prices are the result of a gullible public and a lot of cheap debt freely available, not "supply and demand" or "natural inflation" or any of the other nonsense that people often trot out on forums. It was essentially a Ponzi scheme and the public were the Mark

ok Crashy.

Love this and 100% agree. However Mumsnet is naturally a more conventional conservative platform so I am not surprised by the lack of evident lifestyle diversification

I agree with this…