MSE News: Home ownership dream dwindles for young renters

Turnbull2000

Two bed terraces or flats that come onto the market in my area (Tynemouth) are seemingly falling into the hands of BTL landlords. A couple of people I know in the area both sold to investors recently, and many SOLD signs are followed by TO LET. First-time buyers look a rarity.

Doshwaster

Turnbull2000 wrote: »

Two bed terraces or flats that come onto the market in my area (Tynemouth) are seemingly falling into the hands of BTL landlords. A couple of people I know in the area both sold to investors recently, and many SOLD signs are followed by TO LET. First-time buyers look a rarity.

Buy-to-letters are certainly a problem for first time buyers but apart from a major change in the law (and a huge political row that it would cause. Would any government dare ban or restrict BTL?) I cannot see what can be done about it.

You can understand why people do it - and I may be joining them in the next few years.

HAMISH_MCTAVISH

Froggitt wrote: »

Two words.....Northern Rock.

Froggitt wrote: »

And a few more......RBS and Halifax/Lloyds.

I'd be fascinated to hear your reasoning for how the global financial crisis was caused by "a few thousand borrowers walking away from their loans" to Northern Rock and RBS.....

Is it possible that the dumbing down of the media has led to a situation where people actually believe that UK mortgage lending standards had anything to do with the credit crunch?

Do tell.....

Froggitt

Look at Ireland for another example......all the "ghost estates"......same reason that Ireland is bust.......people walking away leaving banks with stuff worth less than what the banks owe on them.

FTBFun

Froggitt wrote: »

Look at Ireland for another example......all the "ghost estates"......same reason that Ireland is bust.......people walking away leaving banks with stuff worth less than what the banks owe on them.

That's a consequence of the global financial crisis, not a cause.

HAMISH_MCTAVISH

Froggitt wrote: »

Look at Ireland for another example......all the "ghost estates"......same reason that Ireland is bust.......people walking away leaving banks with stuff worth less than what the banks owe on them.

Still waiting to hear the answer to the first question.;)

Could you explain the mechanism for how you think Northern Rock went under?

Or how RBS was brought to it's knees by a few thousand UK borrowers walking away from their mortgages?

More importantly, if that really is what you think, where did you pick that up from?

On another note, I wonder if this is how anthropologists feel when they discover a tribe that thinks the moon is actually made of cheese?

Ms_Sparkle

I have 3 children and a husband who's on a fairly decent wage, we're in our early 30's and rent. We are saving to buy but the rent is very high and the house prices just keep rising where I am, so it's taking us longer and longer. We don't mind renting but we have been together 5 years and have moved 5 times in that period, one with having more children as a result but twice because the owners have sold. We'd happily rent more if we could have longer term rent but twice they've sold on us when we've just renewed a contract. If they made it better for the tenants with longer tenancies without being kicked out with 2 months notice, and not keeping our deposit for 2 weeks after we've moved out, making us have enough deposit for another rent beforehand we would rent longer. I know you think don't have the kids but I didn't want to wait and I chose having them over buying.
As I said already live in an expensive area but I was brought up here, my children go to school here and I get free childcare here so I can't move away as id have to pay for that instead. I think they do need to think of something whether to realise there is a huge divide in areas of prices and lend accordingly! Take into account how much rental outlay a person pays already when applying for a mortgage with a 5% deposit as nowadays most people in my area do not earn 3times the house value! or better and longer term tenancies for renters.

Turnbull2000

Doshwaster wrote: »

Buy-to-letters are certainly a problem for first time buyers but apart from a major change in the law (and a huge political row that it would cause. Would any government dare ban or restrict BTL?) I cannot see what can be done about it.

You can understand why people do it - and I may be joining them in the next few years.

Yup, BTL certainly seems to be the way to go - especially if you want to put yourself on the right side of the emerging wealth divide. I can see it becoming more popular than ever over the coming years. The only hope renters have is that tenancy laws are reformed to offer greater protection, but the chances of that are slim to non. It wouldn't be so bad if these properties were being bought by large institutional investors - rather than the current trend of masses of amateurish muppets snapping up a BTL or two with complete ignorance of the law and responsibilities. The prospects for a new generation of tenants are dire.

littlemrs29

I have just read every post on this thread with great interest - and here's why -

I am 29, a single mother of 2, take home pay is £1300 a month and after what can only be described as the most horrendous advice ever I am paying a £810 a month mortgage - and have been for the last 4 years! I ask myself every single day (with no word of exaggeration) whether or not I should just take the hit and sell. I have a 3 bed mid terrace property with a garden, only worth £120,000 in the middle of a council estate although every home bar one in my street is owned. My fear is if I 'get off the ladder' how on earth will I get back on? No one I know pays more for their accommodation than I do but at least half of them have nicer homes/areas!

It does however make me feel better that I am on the ladder - I was never brought up to 'expect a council house'. The comment about personal choice and life style is of interest to me because as much as I hate the fact I have no money to spend on fancy holidays, clothes, nice food etc I have seen more of my own country (Scotland) than ANYONE I know due to camping trips - a fact I am very proud of, I do not waste therefore do not feel guilty that others are starving and do not have anything hanging in my wardrobe I have never worn (although sometimes that might be nice)

I look forward to next year when my 5 year fixed rate of 6.99% ends with Northern Rock and I can get a cheaper living cost and finally stop asking myself everyday if I should just 'give up and bail'.

jamesd

littlemrs29, it might be worth considering changing now, even if there is a penalty. That penalty could be less than the saving from a lower rate.

I think that it would be difficult for you to get a mortgage with a different lender, though, because of the amount of money the mortgage is compared to your income.

I do think that it would be best to stay where you are for now. Prices will eventually increase.