The insanity of house buying

Leviathan2009

real1314 wrote: »

Take away the property owning fantasy, what are you left with? Renting. Back to the landlords then?

There seems to be a gap in your logic.

Less a gap - more an omission.

A major problem in this country has been the buy to let market. We need a fundamental re-investment in Local Housing Authorities and Council Housing. Renting is not a problem - the problem lies with the excessive rates buy to let landlords charge in rent to cover their buy to let mortgages.

There is nothing wrong with renting, but I would be wholly in favour of abolishing private landlords. No problem with people owning their house if they are to afford it - otherwise decent housing and decent rates should be readily available.

Leviathan2009

PasturesNew wrote: »

The trouble comes solely from viewing property as an investment.

Both the young 'uns on that programme were looking to sell the property on in 2-3 years probably ... so they must think they'd not lose money and it would fund their next adventure.

Buying a house should be about securing a home that you can stay in for as long as you want to, so long as you keep up the payments.

Everybody wants to be "settled" at some point in their life. If you can't be sure where you'll be living this time next year then you stop making plans. You don't join groups, you don't get involved in the local community, you just stop doing things because you don't know if you'll be around.

People moving about all the time, not from choice, isn't something you want to do in your 40s, 50s, 60s ... etc.

There is a time and a reason to buy. It's not to make money.

This would require a fundamental culture change. I have always found the ideals of those extolling the virtues of house buying (even if you can't afford it) that it creates a property owning democracy of people who are more involved in their community and local politics.

Whereas many have to move quite some distance from friends, family and neighbours whom they know - when they may want to remain in that area. The result - many people would struggle now to actually know the names of their neighbours - never mind the names of their local MPs.

Leviathan2009

skcollobcat10 wrote: »

I started off very small, eventually I got up this stupid property ladder, (so what!), then in later years of my life I had extra money, so I bought 2 flats which I rent out through an agency. I only charge what mortgage payments are for the flats through the agency. The reason for me to have these is: 1) a small extra amount to add to my pension when in may be 20 years I might need it and I am sure the value of the flats will have gone up. 2) if I don't need the money, well, I can leave them to my kids.

You my friend are a case in point in regards to Buy to let Landlords. Housing is not a form of investment - it is meant to be a safe and secure holding that you can make a home in. You may say that you are the congenial landlord - but only security can come from renting for LHA. You may dress your situation up - but at the end of the day - somebody is paying your mortgage off.

A person should only be allowed to buy a house if they plan to live in it themselves. Buy to Let should be severely curtailed. And even if somebody chooses to buy years from now - you buying up properties has just contributed to the housing shortage that made the situation worse than it already was. You may say you only have two properties - but plenty of other landlords say the same thing - so multiply that 2 by around 20000.

If you want financial investment - then invest in the plethora of other financial vehicles out there. A house should not be an investment - it should be a home.

Sorry for the diatribe - but I have a pathological hatred of buy to let landlords.

westv

If most LLs have their mortgage paid off by tenants how is it that a large number of BTL mortgages are interest only?

Leviathan2009

westv wrote: »

If most LLs have their mortgage paid off by tenants how is it that a large number of BTL mortgages are interest only?

That little fact is born of the fantasy that house prices would forever rival the Tower of Babel. Therefore it would not matter that you could not pay your mortgage - you could easily buy.

Sammy85_2

Lets just go back in time a little bit and solve all the housing problems of the 21st century, because it was so much better in the past....

A few well-to-do's owned all the houses and everyone else were low-class tenants. You had no rights, the law was on the side of the rich (your landlord). You had a problem; deal with it, cos noone else was going to sort it for you.

There was NO council housing or housing benefits. If you werent working then you were on the streets or in the workhouse.

You only have to go back 80-90years ago in our town to see that only the very wealthy owned property.

Most of the town was owned by the shipyard and the workers paid back almost 70% of their wages to the yard in rent. (the rest went to the alehouse on the way home!)


What has changed since then?

Decades of "property purchasing hype" People (not just BTL Landlords) under the impression that they have to own property regardless of their circumstances and Banks willing to lend to these people.

I have no problem with BTL landlords (im on myself) providing they fulfill their legal obligations, charge a reasonable rent and can make the repayments (capital and interest) on their property without relying on the tenants rent.

So what if its an investment for someones pension? Its also ensuring that someone who couldnt afford to buy has a home.

If i had put my money "in the plethora of other financial vehicles out there" then my tenants would probably be lving in council housing with little/no choice over where they lived. All three are single mums and would probably never be able to afford a deposit on their own houses even if house prices fell by 50%.

Leviathan2009

How selfless you are Sammy85. You speak of the lack of choice in where people can live - and you provide a service in that respect. The problem you describe is because of the culture that is currently in existence in regard to property.

Have I advocated a return to the time of King Edward VII and Britannia still ruled the waves? What I am advocating is a systematic rethink of property, or homes. It is not a zero sum game - housing association as they are currently being redeveloped in Glasgow - are a shining example of improving peoples homes, investment and giving people a say in how the collective housing stock is run.

So spare me the long winded speech about the return to Victorian era slums - society has moved on - the problem is the greed that was manifest then - it manifest still in Buy to Let landlords like you.

I am pretty pro business - but a having secure house and being able to put down roots is a right.

mahdlo

Leviathan2009 wrote: »

You my friend are a case in point in regards to Buy to let Landlords. Housing is not a form of investment - it is meant to be a safe and secure holding that you can make a home in. You may say that you are the congenial landlord - but only security can come from renting for LHA. You may dress your situation up - but at the end of the day - somebody is paying your mortgage off.

A person should only be allowed to buy a house if they plan to live in it themselves. Buy to Let should be severely curtailed. And even if somebody chooses to buy years from now - you buying up properties has just contributed to the housing shortage that made the situation worse than it already was. You may say you only have two properties - but plenty of other landlords say the same thing - so multiply that 2 by around 20000.

If you want financial investment - then invest in the plethora of other financial vehicles out there. A house should not be an investment - it should be a home.

Sorry for the diatribe - but I have a pathological hatred of buy to let landlords.

why??????????

PasturesNew

In these discussions it's often forgotten how the change in law and BTL changed the marketplace.

Before 1996 there were BTL landlords. They would take out a commercial mortgage, with a large deposit and they'd be repaying the loan. As it was a business, they had to prove a business case and acumen to run the business.

The new breed have been able to put no money down and borrow on interest only.

Some spivs spotted a gap in the marketplace and were selling off plan with a 15% deposit paid (so no money down), liar loans and interest only mortgages. This meant "anybody" suddenly got sucked into doing this. As house prices were rising, rising, rising (price rises were feeding off the urgency created by the hype) more and more people found it easy to cash in their equity from their family home and have a go too. Lending became lax, liar loans were promoted as 'the way everybody does it' and it rolled on .. and on ... and on.

Even this morning on Homes Under the Hammer there were two blokes who had just been laid off from their job and they needed a job, so they said "we watched your programme and thought we'd have a go". There's no way 15-20-25-30 years ago two blokes being laid off would have turned up in an auction and started buying houses.

It used to be builders who did up the occasional house here and there. Not like we've seen, with spivs literally buying one a week.

carolt

I think many of those comenting on the virtues of BTL are not actually old enough to recall the changes to the market in 1996, and imagine that BTL as we have now is how it's always been.

It hasn't.

And before you ask - no, I never had a problem finding a suitable property to rent before 1996, or know anyone who did.

The difference then was that (a) there was far more council/social housing still available, so private renting really was a 'choice'. (b) house prices were far more affordable, so again, only those actively wanted to rent in preference to buying did so and (c) you didn't get all these greedy BTL idiots - you got professional landlords who'd actually put some thought into what they were doing.

Not claiming they were all angels - but you couldn't 'fall into' buying investment property then the way anyone could post 1996.