Millions give up on owning property

JonnyBravo

debtistheft wrote: »

I could not be happier at the way our country is going. Throw off the shackles of debt and rent!

It's a nice soundbite but you seem to be confused.

Did you mean "Throw off the shackles of debt and rant!"?

You do much better on this tenet.

nicko33

debtistheft wrote: »

But the property will then be earning its keep. It is a proper investment, making money that is then taxed and put back into the economy rather than it just being dead money held in equity. A large rental sector also helps the wider economy in that it enables us to have a more mobile and fluid workforce.

So we should all become landlords then. Let's all buy houses as investments and rent them out to each other.

debtistheft

JonnyBravo wrote: »

It's a nice soundbite but you seem to be confused.

Did you mean "Throw off the shackles of debt and rant!"?

You do much better on this tenet.

That seems to be the case with the so-called bears on this site. They want prices to fall so that they can afford to get onto the property gravy train. I want prices to rise because I want more people priced out so that the UK will finally drop the obsession with home ownership, money is locked unused in the equity of homes and the tenancy laws will be better for everyone.

It amazes me that so many so called bears have large deposits invested in accessible and diverse portfolios and they cant wait to lock it all away in a single asset, untouchable until they die and their kids inherit. You couldn't make it up.

roddydogs

Ok, its really tough trying to buy a house now, but would you really want to go back to the, say 1970s Just so you could perhaps afford a house ? think about it re Mobiles, computers, multi channel TV, Flatscreen, etc, etc, virtually everthing else is cheaper in real terms, not to mention the increase in life expectancy.

ViolaLass

debtistheft wrote: »

...money is locked unused in the equity of homes...

How is the money any less locked if the house is let? OK, it's an investment and earning money - if it's your home and you don't have a mortgage, then it's saving you the same amount of money, which you can then invest elsewhere.

debtistheft

ViolaLass wrote: »

How is the money any less locked if the house is let? OK, it's an investment and earning money - if it's your home and you don't have a mortgage, then it's saving you the same amount of money, which you can then invest elsewhere.

I have money invested in property funds. These funds invest in companies that have a diverse portfolio of commercial and residential properties through out the whole of the UK. I would never recommend investing in a single asset, whether a home or a BTL. However, at least with a BTL, the money invested is providing a return that is more than simply subsidizing mortgage debt.

If its your home and you don't have a mortgage then you either inherited a large amount of money and bought outright or you bought the house with a mortgage that you subsequently paid off over a large number of years, being in hock to the bank and paying a substantial amount of interest. Either way, you have invested a significant amount of money into a single asset that just provides shelter and nothing else.

Usually by the time people have paid off a mortgage, especially if they have moved a few times, the majority of their working life has passed by and so there is not much time left to grow investments before they retire.

ruggedtoast

roddydogs wrote: »

Ok, its really tough trying to buy a house now, but would you really want to go back to the, say 1970s Just so you could perhaps afford a house ? think about it re Mobiles, computers, multi channel TV, Flatscreen, etc, etc, virtually everthing else is cheaper in real terms, not to mention the increase in life expectancy.

This argument pops up all the time, but its not comparing like for like. Contrary to marketing departments of multinationals everywhere, there is no evidence whatsoever that access to modern consumer durables improves quality of life.

Conrad

debtistheft wrote: »

Either way, you have invested a significant amount of money into a single asset that just provides shelter and nothing else.

Your argument is steeped in over-simplification.

For example, having control over ones dwelling, gives the owner much greater peace of mind and thus a greater propensity to spend money on the property, money that goes into the productive economy, for example paint and kitchen unit manufacture, wi fi systems and plant nursery business.

I have some property in Germany and as such met a lot of Germans in thier rented homes. Even the wealthy property managment co owner has a very spartan rented property on which he is not inclned to spend money.

A property gives you a great life anchor, a central meaniningful plank upon which your sanity and well being are largely built. Stephen Fry was saying the best place on Earth is home, far beyond the temporary enjoyment a holiday affords.

Living in someone elses property would simply be very depressing for many of us.
I get great inner peace from my own garden that I made over years with sweat and money. That has a value beyond petty bean counting.

debtistheft

Conrad wrote: »

For example, having control over ones dwelling, gives the owner much greater peace of mind .

I would argue that you have greater control over your dwelling if you are able to leave it and move to another without spending thousands of pounds to do so. You have greater control over your finances if you are more mobile; either to relocate due to better job opportunitites or to relocate because of changes to your personal or financial circumstances.

I would rather have a feeling of well being from knowing that if I lose my job or get too ill to work that I can relocate to a more prosperous area for a job or more to a cheaper one while I recover than I would get from having a well tended garden that I have grown for the next person to enjoy. If you like gardens then go to a park or country house, they are free for the most part.

dtsazza

new_home_owner wrote: »

i think if a bank offered a attractive rate to first time buyers with a 5 percent deposit, the market would be flooded with first time buyers.

Until this happens first time buyers wont be back, its like the banks have moved the goalpost's making it more or less impossible for any first time buyers to get onto the housing ladder.

I don't agree with that argument - if it's possible for FTBs to save up a 5% deposit, it's just as possible for them to save up a 20% deposit, only it'll take four times as long.

They're going to have to save up 100% of the property value anyway over their lives in order to pay off the mortgage (in fact more likely 130-160%); having to get an extra 15% before taking out the mortgage is merely going to push back the start date of the mortgage, not necessarily the end date (more saved up in advance => less to pay overall, and in fact lower total interest paid because of this, ceteris paribus).

So it doesn't make it "more or less impossible", it just means that a greater proportion of the saving towards the house occurs pre-mortgage rather than intra-mortgage.

(I think the entitlement mentality has crept into homeowning to an overarching degree. To my mind, unless you have the cold hard cash available to buy a house, you're always effectively relying on the discretion of others. If you can persuade someone to lend you several hundred thousand pounds - great, good for you, you get to live in the house sooner albeit with a greater overall cost due to interest. However, it's not like anyone has a right to be loaned money.

The "goalposts" are fundamentally at saving 100% of purchase price; private businesses are likely to make mutually beneficial offers below that, but there's no moral or economic law that says these offers must exist or be accepted.

And in case anyone wonders - I'm a prospective future FTB currently renting, not someone who wants to "pull up the ladder" from the "have-nots".)