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Single woman buys narrowboat to get on property ladder


David Mack

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36 minutes ago, doratheexplorer said:

They borrow more. “Or not”

Currently, the triple lock on state pensions is under threat, the Institute of Fiscal Studies says that it is unsustainable.  Look out if you rely on it for your living.  There is a concerted effort by some to change it.  As always, the poorest will be hit the hardest. Not everyone has a company pension, or has earned enough to save for a decent private one.  Some self-employed and those in low paid work.

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3 hours ago, magnetman said:

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. 

 

The council houses were sold to tenants at a discount from market value. The longer you'd been renting one, the deeper the discount. Buying council houses at 50% off was commonplace IIRC, but I might not as it was a long time ago. 

 

It was Mrs Thatcher's idea for turning raving trots into capitalist pigs. And it worked brilliantly. 

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8 hours ago, blackrose said:

 

Yes, I think that's what irritates me slightly about all these boaty bloggers - they're all relative newbies. Good luck to them I guess, but most of them seem to know much more about making YouTube videos than they do about boats.

I gave a YouTube/Instagram boater a hand moving their boat and became good friends with them, they had 1000 plus followers with all positive comments. They were filming the journey with me out of frame, they spent hours getting the shots and longer editing the Vlog. Between filming I pointed out things and gave tips on boating/locks, chatted about canal history and the local area. The journey lasted a few days, by the last day they weren’t filming so much but were enjoying it more, they were more relaxed and actually taking in the surroundings and the canal.

  Now they don’t do YouTube anymore and very little on Instagram and admit they aren’t bothered with it, as they are just enjoying the canals and having a boat. 
 The problem with YouTube newbies as you say, is that they are more bothered about Social Media then actually enjoying the canals and the experience, which just seams to be the norm these days with every age group. 

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2 hours ago, Peanut said:

Currently, the triple lock on state pensions is under threat, the Institute of Fiscal Studies says that it is unsustainable.  Look out if you rely on it for your living.  There is a concerted effort by some to change it.  As always, the poorest will be hit the hardest. Not everyone has a company pension, or has earned enough to save for a decent private one.  Some self-employed and those in low paid work.

I will be mightily peed off if it goes, the state pension is most of my income  my savings will go down even quicker 

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1 hour ago, Loddon said:

I will be mightily peed off if it goes, the state pension is most of my income  my savings will go down even quicker 

 

You will still get a rise. It just wont be based on the highest factor whether it be inflation, wages or 2.5 percent.

 

Perhaps a compromise would be an average of all three?

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7 hours 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.

Buy to let mortgages generally come at higher interest rates than for owner occupiers. That would suggest lenders view them as higher risk.

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1 minute ago, David Mack said:

Buy to let mortgages generally come at higher interest rates than for owner occupiers. That would suggest lenders view them as higher risk.

 

Not only higher interest rates but larger deposits. I've not taken a BTL mortgage out for a decade so things may have changed, but I've never seen a BTL mortgage offered in the market with a deposit requirement of less than 25% of the purchase price, while OO loans can require deposits as low as 5%.

 

This also suggests lenders see BTL loans as far more risky than OO mortgages.

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That says it all. The BTL will be the preferred bidder. 

 

It's a silly situation.  I don't really understand why the lender would be upset that someone would be paying them higher interest. 

 

The BTL can afford to pay the extra interest and deposit. The first time buyer can't. The BTL WILL pay the interest. The first time buyer may well not. 

 

Not rocket science is it. 

 

 

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42 minutes ago, magnetman said:

  I don't really understand why the lender would be upset that someone would be paying them higher interest. 

Because lenders are in competition. They have to offer the lowest rates they can, whether to BTL landlords or OOs, because otherwise another lender will undercut them. That the market bottoms out at a higher rate for BTL strongly suggests the risk to lenders are higher and that the increased risk is priced into the interest rates.

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11 hours ago, David Mack said:

Buy to let mortgages generally come at higher interest rates than for owner occupiers. That would suggest lenders view them as higher risk.

I think lots are interest only, not repayment. So in reality the owner is renting off the lender and reletting to the tenant 

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17 hours ago, IanD said:

 

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. This is a misrepresentation of reality, just as the article was.  Building more homes is needed but please don't fall into the trap of thinking that it's the only relevant factor.  It's far more complicated than that and includes shorthold tenancies, right to buy, tax avoidance schemes, barriers to conversion of existing property, barriers to downsizing, lack of imagination regarding housing arrangements and many, many more.  The writer of the article chooses to ignore all of that because he makes more money the more houses are built.  IMO the primary reason for the state of the housing market in this country is that those who have influence over our decision makers have chosen to protect the interests of those who own property.  This has happened countless times over the last 40 years or so.  A particularly obvious example was the bailing out of the bank c.2008.

 

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... It may be obvious but the article makes no mention.  The problem is that of all the options available to help address the housing market issues, new build housing puts the greatest demand on new infrastructure.  And the real reason developers don't usually build mixed use development is because of specialism within the sector.  Typically a developer will specialise in only building homes and just wont consider anything else.  The government's narrow definition of 5 year housing supply ensures that developers are able to push through new planning applications with little consideration of associated infrastructure, leaving it to local authorities to try and provide them through planning gain contributions.

 

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. That's not strictly true either.  Expensive executive homes make sense in certain areas, but not others where high density flats and small houses give a better return.  The main reasons affordable homes don't get built is because developers are able to wriggle out of affordable housing commitments.  Let me explain:  typically a local authority will have fixed policies on providing affordable housing on new developments which are larger than a certain threshold, say 10 new houses.  Above that, the developer will have to provide a percentage of affordable homes.  But there is a get out.  No affordable homes are needed if the developer can demonstrate that the development would be financially unviable with the affordable housing included.  So they appoint a company to do a viability assessment which will invariably come to the conclusion that it is unviable.  This is then looked at by an overworked district valuer who has neither the time nor the energy to argue with it.  So the development goes ahead with no affordable housing.  The ridiculousness of this situation becomes all too apparent when there are two neighbouring development sites, one developed by a housing association with 100% affordable housing and the other developed by a private house-builder with 0% affordable housing because it's 'unviable'.

 

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17 hours ago, Peanut said:

Currently, the triple lock on state pensions is under threat, the Institute of Fiscal Studies says that it is unsustainable.  Look out if you rely on it for your living.  There is a concerted effort by some to change it.  As always, the poorest will be hit the hardest. Not everyone has a company pension, or has earned enough to save for a decent private one.  Some self-employed and those in low paid work.

The triple lock hasn't been hung onto because of fairness, it's just because those who benefit from it have a high tendancy to go out and vote.  Much of the poorest in society are of working age, but don't get enough help because of the triple lock and the state funding which supports it.  In an ideal world, everyone would be provided for but right now the state biases it's help towards those most likely to vote, not those in most need.

38 minutes ago, ditchcrawler said:

I think lots are interest only, not repayment. So in reality the owner is renting off the lender and reletting to the tenant 

Bang on.  An often overlooked fact.

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15 minutes ago, doratheexplorer said:

 

I never said that the shortage of new houses being built was the *only* problem, in fact I mentioned many of the others -- but it's the underlying root cause which indirectly causes many of the others, and without fixing it the problem isn't going to go away.

 

All the other issues (housebuilders avoiding affordable homes, RTB, BTL, property as an investment not a place to live, taxation on housing, lack of infrastructure, many others....) are indeed big contributors to the problem, but not the root cause.

 

The simple fact is that what the UK really needs (a good supply of affordable new houses of decent quality, and lower house prices) is in direct opposition to the interests of the developers who build almost all UK housing and whose primary target is profit. Because as companies, that's their job, not doing what's right for the country -- that's the government's job, at least in theory if not in practice today... 😞

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14 minutes ago, IanD said:

I never said that the shortage of new houses being built was the *only* problem, in fact I mentioned many of the others -- but it's the underlying root cause which indirectly causes many of the others, and without fixing it the problem isn't going to go away.  No.  Shortage of new homes is one of many symptoms of the root cause which I identified in my previous post

 

All the other issues (housebuilders avoiding affordable homes, RTB, BTL, property as an investment not a place to live, taxation on housing, lack of infrastructure, many others....) are indeed big contributors to the problem, but not the root cause. See above.

 

The simple fact is that what the UK really needs (a good supply of affordable new houses of decent quality, and lower house prices) is in direct opposition to the interests of the developers who build almost all UK housing and whose primary target is profit. Because as companies, that's their job, not doing what's right for the country -- that's the government's job, at least in theory if not in practice today... 😞

 

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9 minutes ago, doratheexplorer said:

 

If by "root cause" you mean the prioritisation of property building/ownership/tenancies for profit/investment as opposed to providing decent places to live, then I'm in complete agreement with you 🙂

 

It's a chicken and egg problem; did the attitude cause the housing shortage and inflated prices, or did these cause the attitude?

 

Either way the UK housing market is fundamentally broken, and this government shows not the slightest inclination to fix it -- perhaps because Tory MPs and their cronies benefit greatly from it as it stands... 😞

 

Of course the number of people who have invested in property also doesn't help, the last thing they want is to see house prices fall significantly, which would be an inevitable consequence of fixing the problem...

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3 minutes ago, IanD said:

If by "root cause" you mean the prioritisation of property building/ownership/tenancies for profit as opposed to providing decent places to live, then I'm in complete agreement with you 🙂

And that root cause could be easily addressed with a direct wealth tax.  Of course, any politician advocating such a thing would be thoroughly vilified in the press and many, many people would obediently genuflect to that vilification, all the while telling themselves that they've made up their own minds.

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2 minutes ago, doratheexplorer said:

And that root cause could be easily addressed with a direct wealth tax.  Of course, any politician advocating such a thing would be thoroughly vilified in the press and many, many people would obediently genuflect to that vilification, all the while telling themselves that they've made up their own minds.

And that wealth tax would have to be also levied on properties other than your primary residence since these count as "wealth" -- they are, after all, simply an investment.

 

But BTL landlords would object vociferously to this, for obvious reasons... 😉

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On 02/02/2023 at 14:18, IanD said:

 

I think my parents bought their (new) house in 1963 on the wages of a milkman and a newly qualified teacher, so hardly a rare occurrence -- and it cost about £2000... 😉

My parents bought a 5 bed terrace in the same year for £2400. The deposit of £500 was an inheritance on the death of my grandfather. 

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11 hours ago, ditchcrawler said:

I think lots are interest only, not repayment. So in reality the owner is renting off the lender and reletting to the tenant 

 

This is exactly it. To expand on the point the landlord buys the BTL relying on the rent to pay the mortgage in a lot of cases. While "affordability" an OO mortgage borrower can be assessed by the lender comparing the applicant's income and liabilities to the requested loan, the lender can't do this with a BTL loan as the borrower is the one who makes the decisions about who to rent to.

 

Consequently, the repayments on a BTL loan are dependent on the tenant paying the rent, and the lender gets no say in who to rent to and has to rely on the good judgement (or otherwise) of the borrower. This adds an additional layer of structural risk to a BTL loan so they will always have a higher interest rate than an otherwise equivalent OO mortgage.

 

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11 hours ago, doratheexplorer said:

The main reasons affordable homes don't get built is because developers are able to wriggle out of affordable housing commitments

 

The fact that these developers are "allowed" to wriggle out of their planning requirements, and they are not enforced, is entirely the fault of councils/government.

 

This is exactly why Government/councils should take the responsibility for actually building the needed social/affordable homes, (council houses).

 

Until such a time, (which might be "never"), without the provision of homes by the private rented sector, (PRS), where are all the currently housed going to live.

 

In addition, given that, as things are gradually introduced to make the PRS less attractive, more and more private landlords will leave the market**, thus reducing supply, when demand is actually increasing, therefore increasing the rents for all those who need/want to rent.

 

** Not necessarily a bad thing for those who wish to buy, because it increases supply, thus making it easier.

 

 

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10 minutes ago, Richard10002 said:

 

The fact that these developers are "allowed" to wriggle out of their planning requirements, and they are not enforced, is entirely the fault of councils/government.

 

This is exactly why Government/councils should take the responsibility for actually building the needed social/affordable homes, (council houses).

 

Until such a time, (which might be "never"), without the provision of homes by the private rented sector, (PRS), where are all the currently housed going to live.

 

In addition, given that, as things are gradually introduced to make the PRS less attractive, more and more private landlords will leave the market**, thus reducing supply, when demand is actually increasing, therefore increasing the rents for all those who need/want to rent.

 

** Not necessarily a bad thing for those who wish to buy, because it increases supply, thus making it easier.

 

 

 

I'm not so sure. My son and his GF who are currently trying to buy, are renting a £1k a month house and to buy an equivalent house in the same area is now going to cost them £1,400 a month. So for the first time in many years, buying a house around here is a LOT more expensive month-by-month than renting the same thing. 

 

Just before the TrussQuake, they were on the cusp of exchanging contracts on a house at a price that would have bankrupted them had they succeeded, when their two year fixed rate mortgage rolled over to variable. Lucky escape I reckon. 

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12 hours ago, MtB said:

 

I'm not so sure. My son and his GF who are currently trying to buy, are renting a £1k a month house and to buy an equivalent house in the same area is now going to cost them £1,400 a month. So for the first time in many years, buying a house around here is a LOT more expensive month-by-month than renting the same thing. 

 

Just before the TrussQuake, they were on the cusp of exchanging contracts on a house at a price that would have bankrupted them had they succeeded, when their two year fixed rate mortgage rolled over to variable. Lucky escape I reckon. 

 

This is what happens when interest rates go up rapidly thanks to the Kwarteng/Truss fiasco; people locked in on fixed-rate mortgages (owners and landlords) are fine, new buyers are clobbered -- so for a short time renting can be cheaper than a mortgage.

 

When the fixed-rate deals run out in a few years renting will become more expensive than a new mortgage again, just like they were before the interest rate rise.

 

If rates ever drop back the reverse will happen, renting from landlords locked into a higher-rate mortgage renting will become *way* more expensive than buying -- unless they exit early and remortgage, which usually carries a big financial penalty.

 

It's the way that renting vs. buying works -- at least if you buy you're in control, as opposed to paying whatever the landlord demands, which is why so many people want to do it -- but many can't afford the deposit... 😞

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On 02/02/2023 at 16:03, 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. 

 

You speak as though this is a new thing? People have been renting their homes for decades, (centuries?), and, in the context of your questions, it seems to have worked reasonably well over the years.

 

Given the above, the problems you seem to be suggesting "could" happen, will already have happened, so you could do a bit of research and find out for yourself?

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