Single woman buys narrowboat to get on property ladder

[IanD]

8 minutes ago, Tam & Di said:

 You are talking of a couple who were both at work - not such a common thing back then, certainly not among 'working class' people. My father did manage to buy a 99 year lease on a newbuild house immediately before WW2, but that was because he had a £500 football pool win.

 

As a park keeper with a wife and 5 children he'd never have been able to do that otherwise

 

Tam

 

 

 

The houses either side were bought by working class couples where the man worked and the woman stayed at home, which was indeed common in those days.

 

The simple fact is that relative to wages houses were *far* cheaper then; yes not *everyone* could afford to buy them, but a lot of people could -- certainly a lot more than today with the current ludicrous UK house prices.

 

This was long before "right-to-buy" which was good for the tenants in the short term who got to own their own house, but not so good for people in the long term as prices went up and the houses were snapped up by BTL investors. In some council areas the majority of the houses purchased under the RTB scheme are now BTL rentals, often owned by landlords with multiple properties -- I'm sure some people on the forum think this is a good idea, but I don't... 😞

Edited February 2, 2023 by IanD

[magnetman]

Another problem with the right to buy nonsense was people ended up buying houses they could not afford to maintain. So you get low quality housing thirty years later. Obviously this doesn't apply to flats as there is an obligation on the leaseholders to upgrade their flats at the same time as council owned units. 

 

And how come people who were allocated council homes suddenly found they could afford to buy ? Surely this would immediately make you ineligible for council owned housing provision. 

 

Something wrong here. 

[Tam & Di]

None of the young people I knew and mixed with at that time ever spoke of buying a house or moving onto the 'property ladder' - they mostly lived with their parents or in flats at least well into their mid-20s, even when married.

 

Tam

[ditchcrawler]

16 minutes ago, Tam & Di said:

 You are talking of a couple who were both at work - not such a common thing back then, certainly not among 'working class' people. My father did manage to buy a 99 year lease on a newbuild house immediately before WW2, but that was because he had a massive (at the time) £500 football pool win.

 

As a park keeper with a wife and 5 children he'd never have been able to do that otherwise

 

Tam

 

 

My first terraced house was £3000 in 1970, some £300 less than the people I bought it for paid for it. The mortgage was beer money. I moved from there to a modern bungalow, as much as I could afford and interest rates went up almost monthly in 1972-3

[IanD]

8 minutes ago, Tam & Di said:

None of the young people I knew and mixed with at that time ever spoke of buying a house or moving onto the 'property ladder' - they mostly lived with their parents or in flats at least well into their mid-20s, even when married.

 

Tam

 

My parents lived with my gran until I was about 5, then they bought the house when in their mid-20s, and stayed there until they died.

[doratheexplorer]

24 minutes ago, Athy said:

I still don't see it. A  young professional couple with steady jobs, as Mrs. Athy and I were when we bought our first house, will be viewed as a good risk by mortgage lenders. A landlord who may already be paying multiple mortgages may appear less secure.

   W e're in the BTL game in a small way,, with just two rental properties, and when we bought them we found the estate agent most accommodating, but I have always thought that this was because we didn't need mortgages to buy them, not because we wanted to rent them out rather than live in them.

Ahh, the good old days when there were steady jobs!

[Peanut]

One of the problems in the housing market is that it is easier to get a buy-to-let mortgage than it is for a home buyer.  This also distorts the market.

[Tonka]

34 minutes ago, doratheexplorer said:

Ahh, the good old days when there were steady jobs!

Is forum moderator classed as s steady job

[Athy]

14 minutes ago, Peanut said:

One of the problems in the housing market is that it is easier to get a buy-to-let mortgage than it is for a home buyer.  This also distorts the market.

This was alluded to earlier, and I enquired why it should be so. Do you have an answer?

2 minutes ago, Tonka said:

Is forum moderator classed as s steady job

Probably, but as it's unpaid it wouldn't impress a mortgage lender much.

[Peanut]

Maybe something to do with the moneylenders and the perceived risk, or the way the tax system works for landlords.

[Athy]

6 minutes ago, Peanut said:

Maybe something to do with the moneylenders and the perceived risk, or the way the tax system works for landlords.

Could be, but that still doesn't explain WHY landlords should be perceived as a lower risk than, sy, teachers or nurses.

As far as I can see, the tax system works the same for landlords as it does for other people - they pay tax at 20% on their profits.

[doratheexplorer]

11 minutes ago, Athy said:

This was alluded to earlier, and I enquired why it should be so. Do you have an answer?

 

Anyone who already has a property is considered a lower risk for two main reasons:

 

1.  The have already proven themselves at making mortgage payments.

2. The property they already own provides security against the loan.

 

First time buyers do not have that advantage.  Lenders mitigate that risk by being more reluctant to lend, by lending smaller amounts or by charging more interest.

 

It's just one of the many delightful ways our economy ensures that wealth continues to be directed upwards rather than redistrbuted.

[magnetman]

1 minute ago, Athy said:

Could be, but that still doesn't explain WHY landlords should be perceived as a lower risk than, sy, teachers or nurses.

As far as I can see, the tax system works the same for landlords as it does for other people - they pay tax at 20% on their profits.

 

Btl probably doesn't push out single professionals but once people start having children they become more risky to lend to and also slightly more awkward to eject from housing in the event of defaulting on their mortgages. 

 

The great thing with lending to BTL is these risks are alleviated. If someone stops paying rent they are out quickly and for all anyone cares they could be living under a bridge. Tough. 

 

You would probably also find productivity would be higher if people knew their monthly payments were going towards their own retirement rather than just paying someone else's mortgage. 

 

It is obvious. 

[IanD]

8 minutes ago, Athy said:

Could be, but that still doesn't explain WHY landlords should be perceived as a lower risk than, sy, teachers or nurses.

As far as I can see, the tax system works the same for landlords as it does for other people - they pay tax at 20% on their profits.

It's not just lower risk, they have far less difficulty finding the deposit (very large nowadays!) than most young people, because either they have the funds or can remortgage property they already own which has gone up in value.

[Peanut]

An article from Mortgage finance Gazette, from Feb 17, gives some reasons in the author's opinion.

 

https://www.mortgagefinancegazette.com/features/influence-buy-let-uk-housing-06-02-2017/

[magnetman]

Does anyone who advocates renting out property to others have any suggestions about how this will work out in the long term? 

 

Once people end their productive working lives they will have less income. What do they do if they have nowhere to live? 

 

You could get significant problems here which would presumably be transferred onto the state which is not in a position to deal with it. 

 

I am not an example but a lot of people have ended up owning their home in retirement. That must be nice. Why would it be acceptable to help ensure others don't ever have this security? 

 

Rental is fine while people are working. What happens when they are old and infirm? 

 

Seriously. What happens. 

[IanD]

2 minutes ago, Peanut said:

An article from Mortgage finance Gazette, from Feb 17, gives some reasons in the author's opinion.

 

https://www.mortgagefinancegazette.com/features/influence-buy-let-uk-housing-06-02-2017/

 

"However, one side effect of BTL is that, in my view, it has contributed significantly to house price increases in some areas, most predominantly in London but in other major cities too. Unfortunately, once BTL became popular it added to the fuel which powered the price rises because BTL landlords have had tax relief on their mortgage interest and this enabled them to outbid their home buying competition in any like for like situation.

 

Although new homes were, and continue to be built, once snapped up by landlords they are effectively taken out of circulation. This is because they are generally bought and held in portfolios rather than brought back to the market every few years. As a result, the availability of homes to purchase remains stubbornly low which in turn supports higher prices.

 

As more would-be buyers are priced out of the market and resort to renting, so the demand for more private rental properties increases. This pushes rents up and creates even more demand from existing landlords to increase their portfolios and encourages new landlords to jump on the bandwagon."

[magnetman]

Bad Things will happen. 

[Peanut]

Thank you, Ian, I believe it to be a balanced article, though slightly dated.  The economy has moved on and times are harder for BTL landlords, but there is still strong demand for BTL properties.  Landlords are moving into corporate structures as tax shelters. The influence on the market is still there.

[ditchcrawler]

24 minutes ago, Athy said:

- they pay tax at 20% on their profits.

I do

[LadyG]

1 hour ago, Tam & Di said:

None of the young people I knew and mixed with at that time ever spoke of buying a house or moving onto the 'property ladder' - they mostly lived with their parents or in flats at least well into their mid-20s, even when married.

 

Tam

This is true, when I moved away from home I was unable to get decent rental accommodation, and it was cheaper to pay a mortgage than rent. A few years later thing changed, prices rose, and property became an investment.

[doratheexplorer]

1 hour ago, Peanut said:

An article from Mortgage finance Gazette, from Feb 17, gives some reasons in the author's opinion.

 

https://www.mortgagefinancegazette.com/features/influence-buy-let-uk-housing-06-02-2017/

God that was a depressing read.  Not suprising though, coming from a banker.  All he wants is 'more houses, more houses, more houses' and attributes the lack of house building to red tape and nimbyism, implying that simply building more houses is the answer to everything.  Absolutely nothing mentioned about the infrastructure needed to support those new houses.  A prime example of the bloodsuckers who spend their lives ruining the world.

1 hour ago, magnetman said:

Does anyone who advocates renting out property to others have any suggestions about how this will work out in the long term? 

 

Once people end their productive working lives they will have less income. What do they do if they have nowhere to live? 

 

You could get significant problems here which would presumably be transferred onto the state which is not in a position to deal with it. 

 

I am not an example but a lot of people have ended up owning their home in retirement. That must be nice. Why would it be acceptable to help ensure others don't ever have this security? 

 

Rental is fine while people are working. What happens when they are old and infirm? 

 

Seriously. What happens. 

They live off whatever their pension provides and the state picks up the difference.

Edited February 2, 2023 by doratheexplorer

[magnetman]

What happens when the state can't afford that much money to provide people with basic needs ie shelter? 

 

Trouble here. 

[doratheexplorer]

3 minutes ago, magnetman said:

What happens when the state can't afford that much money to provide people with basic needs ie shelter? 

 

Trouble here. 

They borrow more.

[IanD]

10 minutes ago, doratheexplorer said:

God that was a depressing read.  Not suprising though, coming from a banker.  All he wants is 'more houses, more houses, more houses' and attributes the lack of house building to red tape and nimbyism, implying that simply building more houses is the answer to everything.  Absolutely nothing mentioned about the infrastructure needed to support those new houses.  A prime example of the bloodsuckers who spend their lives ruining the world.

They live off whatever their pension provides and the state picks up the difference.

 

I disagree. Every in-depth analysis shows that the underlying cause of the UK housing market fiasco is that we aren't building enough new houses, and haven't done for many years, which is exactly what he says.

 

NIMBYism is undoubtedly another of the contributors to the problem -- and this applies not just to houses but things like wind turbines and solar farms. And 5G masts, for those wearing tin hats... 😉

 

It's obvious that if you build more houses you need to services to support them -- not just infrastructure like roads and sewers but public transport and facilities and community centres and doctors and shops and pubs and... -- and not doing this is another problem with many developments. And these are skimped on or ignored because the housebuilders have no incentive to provide them, it just reduces their profits. Like them trying to wriggle out of their agreed percentage of social housing... 😞

 

But none of this pointing out the faults of housebuilders and the planning system changes the fact that we're not building enough houses, and especially not affordable or social housing because expensive executive homes make a lot more money for the housebuilders.