A question on succession…

Running_Horse

What makes you think they would want to live together as adults?

Can't think of any of my five siblings I would now choose to live with.

The best thing you can do is equip them with the educational and social skills to make their own way in life.

Don't let this anxiety spoil their childhood. Reminds me of the negative attitude to parenting some had due to fear of nuclear holocaust during the cold war.

You are lucky to have two young children and a roof over their heads. Enjoy it.

ILW

I would suggest you try to have a little more ambition for your kids than worrying about whether they can take over a council house.

princeofpounds

Most long term social tenants will pay more in rent than a mortgagee for a similar property.

- This is probably only the case right now, if it is at all, due to the fact that interest rates have cut to historically unprecedented low levels to stave off an economic collapse.

- Social housing tenants do not have any capital in their property, increasing amounts of which provide discounts on the monthly payments as the mortgage shrinks. Comparing the two at anything other than a 100% mortgage rate would not be sensible.

I should also add, that if social tenants really *were* paying more for the property than an owner occupier they would also jusst go out and BE owners.

Owner-occupiers do not pay a high cash cost as their mortgage shrinks, but they do still pay a huge opportunity cost (i.e. they are giving up a return on the cash that is 'stuck' as equity in the property).

joerugby

Surely your kids will have moved out long before you are ready to pop off?

Wee_Willy_Harris

princeofpounds wrote: »

- This is probably only the case right now, if it is at all, due to the fact that interest rates have cut to historically unprecedented low levels to stave off an economic collapse.

- Social housing tenants do not have any capital in their property, increasing amounts of which provide discounts on the monthly payments as the mortgage shrinks. Comparing the two at anything other than a 100% mortgage rate would not be sensible.

I should also add, that if social tenants really *were* paying more for the property than an owner occupier they would also jusst go out and BE owners.

Owner-occupiers do not pay a high cash cost as their mortgage shrinks, but they do still pay a huge opportunity cost (i.e. they are giving up a return on the cash that is 'stuck' as equity in the property).

It's not just the current low interest rates that make this so. It has always been the case. In fact, historic low house prices seen in past decades made the gap between the price a mortgagee paid and the rent collected over a tenancy even wider than it is today.

Mortgage payments, over the length of the mortgage, will remain relatively stable. Rents, even those of social tenants, will rise throughout the entire duration of the tenancy, beyond even the 25 year length of a typical mortgage. If, as is the subject of this thread, the tenancy is subsequently succeeded, rents could continue to be paid on the same tenancy for over twice the length of time of that of a typical mortgage against a similar property. Unlike the person who inherits a mortgage free property,

Running_Horse

Does that allow for cost of repairs and potential discount?

Wee_Willy_Harris

Running_Horse wrote: »

Does that allow for cost of repairs and potential discount?

I'm happy to include that. But of course you would then have to factor in increased capitol value and equity for the mortgagee. I'd guess that would just make the gap wider again.

Running_Horse

In that case you should factor in the cost of lower life expectancy and expectations and education for those living in council housing.

Wee_Willy_Harris

Running_Horse wrote: »

In that case you should factor in the cost of lower life expectancy and expectations and education for those living in council housing.

The duration of a typical mortgage would comfortably fit with the average life expectancy of a social tenant. Education would have no impact on housing costs for either party.

NASA_2

Wee_Willy_Harris wrote: »

Most long term social tenants will pay more in rent than a mortgagee for a similar property.

Isnt that because the landlord will be responsible for repairs whereas a homeowner has to do it themselves?