Mortgage rates

All sounds very simplistic.

 

More social/affordable housing would be a start

 

Banks and building societies have, over the years, created the problem, by lending people far too much money.. When I bought my first house, in 1979, it was the norm for people to be allowed to borrow just 2.5 times the annual salary of the main wage earner + 0.5 times the salary of the second wage earner, in the event of an application by a couple. As house builders generally price houses at how much people can borrow, the more people are allowed to borrow, the more prices rise. If prospective purchasers are allowed to borrow 5 or 6 times their salary, prices will rise to reflect this. When mortgage interest rates are very low, some would say ridiculously low, people are encouraged to borrow huge amounts of money. This was not possible years ago, because lending institutions would not lend people such multiples of the salary from which they made their repayments.

 

I'm the owner of a limited company and I'd never dream of being a landlord, if that helps. Times are admittedly tough at the moment, but there are still plenty of routes to financial security without taking advantage of people who need somewhere to live.

 

I think this shows how complex the issue is. Nowadays people want to leave home as soon as possible yet also get on the housing ladder. We have become a very entitled country.

Now for other posters to say that what landlords are doing is unethical seems a step too far. I think the crux of the issue relates to people wanting their own place (with the garden, spare room etc), and being able to jump onto the housing ladder at the earlier opportunity.

Something has to give, people need to compromise. Until they do, landlords can quite rightly cash in.

 

As someone who rents: it's impossible to save up the deposit for a mortgage because all my wage goes on rent, which is far higher than monthly mortgage repayments would be for the property as I'm not only repaying the mortgage for the owner, I'm also earning them a profit, but I can't get out of this trap because the rent is so high leaving nothing left to save for a deposit for a mortgage.

 

People are living at home with parents far longer than they used to. Since when did such a large amount of people still live with their parents into their 30s? Your post sounds like a bunch of cliches you have heard about the younger generations (wanting to move out sooner, wanting the perfect large house from the start (despite people having to rent tiny **** holes as that’s all they can afford)) that doesn’t bear any semblance to reality. You’ll be blaming Netflix and avocados next.

 

"Very entitled" to want somewhere to live?

Jesus wept.

 

But there's still a option to live with parents to save instead of renting privately. Social housing is in high demand and short supply.

 

How would this help?
They either wouldn’t still own the house and/or would be contributing towards a companies profits.

I find this thread interesting that people slate the individual for investing money into properties but nobody seems bothered that it’s the construction companies that are driving the market the most.
After that estate agents are constantly pushing the prices to increase their revenue.

Persimmon homes as an example nearly £1 billion pre tax profit with an average of £66k clear profit on each property(that includes the % of affordable houses they are forced to build).
The CEO in the last 3 years has had a salary increase from £250k a year to £2.5m last year with bonuses.

Barratt homes the next largest hit £1 Bn pretax for first time the other year and are currently reporting £1/2Bn for first 6 months this FY (although unlikely they will hit due to slow down of housing market in recent months).

 

I understand and don't dispute what your saying, I was referring to someone that has got a deposit.
Buying or renting an house must be at its most expensive ever at the moment. I'm sure Skipton recently launched a 100% mortgage for people that have a good history of renting.

 

Great for those who parents are able and want them to stay living with them That's not always the case.

 

True but as said there is also the option of help to buy and now some lenders have started doing 100% mortgages.

 

What's your age? Have you rented privately all your life?

 

I'm in my 50s. I rented throughout my teens and 20s while saving. I then became seriously ill in my late 20s and relied on the generosity of others for accommodation. I started again from scratch in my 40s. I still rely to some extent on the generosity of others as I know the owner of the place I currently rent and the rental market value is much higher than I am being charged.

 

If people live at home until their 30s, they have around 10 years of work behind them. If they saved £100/month over that time they'd have at least a 12k deposit (I'm assuming this is possible as they would be paying little to nl rent as living at home). There are properties available for 100k; they would get a mortgage with that deposit. It's of course a very simplistic view of looking at things and there will always be lots of variables at play.

My comments were in relation to those saying BTL landlords are unethical, scum etc. The system, and people's desire to leave home, mean that they have to exist.

Now in some cases it's not possible to stay at home, and in others it might not be possible to save for a deposit while living at home.

 

Ah sorry to hear that. I know a few who have had to start again later in life, some too old to get mortgage some don't want one, I suppose your fortunate you know the landlord and he doesn't sound scum.

 

This is a very good point the builders throwing houses up all over for extortionate prices making massive profits. You only have to go to Sheffield the old park hill flats that have been regenerated used to be the slums of Sheffield. Now a pokey flat will cost you near on 250k. So 1st time buyers are priced out.

 

100% mortgages are a result of the situation, and not a good result at that.