MSE News: U-turn means flatmates' poor credit won't harm you

HAMISH_MCTAVISH

princeofpounds wrote: »

True, but it is not the same thing. Can't get car finance, buy a smaller car (or none at all). Can't afford such a large mortgage, buy a smaller house...

... Or rent...

Rent is already more expensive than a mortgage in most areas. It's no longer the cheap option it was.

... But if you can't afford to rent the most basic property thanks to poor credit, what do you do? There isn't a possibility to economise further because it's a bare bone essential. It means homelessness (or falling back o the state)

There is a severe shortage of housing in this country, hence why despite mortgage lending for new purchase falling by 65% from peak, prices remain at 90% or so of peak on average and rents have risen to new record highs lately.

The market will work as it should to ration limited supply through financial means. Those with good income and/or credit will be able to rent alone. Those with sub-par income and acceptable credit will have to share.

And those at the bottom of the income/credit spectrum will have to rent rooms as lodgers, (and realistically with no credit checks), but little risk for landlords as easy to evict for non-payment.

Or rent rooms in landlord managed HMO's specialising in the field.

Or pay a premium for being sub-prime to rent alone.

Or live with family.

Or failing all of the above, resort to state funded accommodation.

But the reality is that there simply are not enough houses to go around... and the market will find a way to ration them according to ability to pay somehow.

MissMoneypenny

princeofpounds wrote: »

... But if you can't afford to rent the most basic property thanks to poor credit, what do you do? There isn't a possibility to economise further because it's a bare bone essential. It means homelessness (or falling back o the state)

I think most tenants' would love a shortcut to the top of the housing lists. Pay your rent a few days late, for a few months, then let the landlord give you a S21 and whoops....top of the housing list please.

I don't think my paypacket (taxes) will like the extra funding needed for all the extra subsidised housing: the council have a duty to house the homeless.

MissMoneypenny

HAMISH_MCTAVISH wrote: »

There is a severe shortage of housing in this country,

Did you miss this?

Good News! Cameron is backing plans to build more towns in the countryside. That should ease the housing shortage and give work to constuction. The economy will get a big boost.

The Coalition is prepared to risk "short-term unpopularity" over controversial plans to build new towns, runways and roads across miles of British countryside, David Cameron has said.

http://www.telegraph.co.uk/earth/hands-off-our-land/9154150/Im-prepared-to-risk-unpopularity-over-developing-the-countryside-says-David-Cameron.html

HAMISH_MCTAVISH

MissMoneypenny wrote: »

Did you miss this?

Good News!

No I didn't miss it, and yes it is good news.

Doesn't change the fact that we have a massive and rapidly worsening shortage of housing in this country though.

We're currently adding a million people every two years. We build enough houses to deal with only a third of that.

If all of Cameron's plans do end up happening, then maybe in a decade or so we'll be building half the houses we need instead of just a third.

Of course, there's an election before then, and those plans are very unpopular....;)

brit1234

Hamish you do realise there is over 1 million empty homes in the UK. I also thought the population was rising a about 500k not a million every 2 years. The rate could also fall with falling immigration.

HAMISH_MCTAVISH

brit1234 wrote: »

Hamish you do realise there is over 1 million empty homes in the UK.

Not any more.

There were a million empty houses in the UK.

But that was a couple of million people ago.....

According to the latest DCLG housing survey, there are now just 300,000.

I also thought the population was rising a about 500k not a million every 2 years.

Population rose by slightly over 470,000 last year alone.

There were nearly 270,000 additional households formed last year.

The rate could also fall with falling immigration.

What falling immigration?

You lot have been claiming immigration would fall for years as the recession kicked in, but net migration rose instead.

The only part of immigration the UK government has the power to change is that from non-EU countries. Which is only a small fraction of total immigration to begin with.

Any new rules can therefore only ever result in changes to a fraction of a fraction of total immigration..... And the reality is they can't do anything about the vast majority of it, even if they wanted to.

Which despite Cameron's Daily Mail appeasing bluster to the contrary, they actually don't.

Which is no doubt why the ONS has recently revised upwards the population growth forecasts.

We're now on track to hit 73 million people by 2035. That's another 12 million people in just the next 23 years. And that was released after the Tories came to power with their empty promises to cut immigration.

jjlandlord

HAMISH_MCTAVISH wrote: »

Not any more.

There were a million empty houses in the UK.

Yeah, now there are millions of empty offices... In my area there are plenty of brand new, classy, office buildings completely empty and they have been so for a couple of years now.
I guess that the property bubble in commercial property was something.

HAMISH_MCTAVISH

jjlandlord wrote: »

Yeah, now there are millions of empty offices...

Not quite, but yes I agree there is still a lot of empty commercial.

In my area there are plenty of brand new, classy, office buildings completely empty and they have been so for a couple of years now.
I guess that the property bubble in commercial property was something.

Commercial is immensely cyclical in nature, and given the ever changing trends in business and industry what is highly sought after today might be totally useless tomorrow.

Factories in Northern towns were prime property 50 years ago, but many are worth very little now..

Canalside warehouses or ship building yards were prime property 100 years ago, and also mostly worth very little today.

Retail sites on the outskirts of town, miles away from the main shopping streets, were worth next to nothing 50 years ago but now result in bidding wars from supermarkets.

Things change rapidly in commercial.... Much more slowly in residential.

c-m

Alowing rental payments to appear on credit reports is an extremely bad idea at the moment. I understand it in principle, but I don't think the market is ready.

Firstly, there must be hundreds of thousands if not millions of landloards/letting agencies in the uk. Not all of them will sign up.

If i live for 10 years in a flat/house rented from a non-reporting landloard, it would then probably be more difficult for me to move home as reporting landlords would most likely favour tennents who's credit reports show rental payments.

My biggest worry would be that the market for landlords/estate agents isn't properly regulated. Every over market (where transations appear on credit reports) is fully regulated. We might see some poorer quality landlords/agents playing fast and loose.

Thirdly, what will landlords/agents be able to check? If its public information and rental information only, then its not so bad. If they can check all credit agreements such as creditcards, bank accounts, mobile phone etc.. Then I'm firmly against it, as they may score on items that have nothing do with the ability to pay rent. Will 100,000s suddenly be homeless because of missed payments on a CC or mobile phone?

Forthly, there is no credit involved, so why should any transactions appear on credit reports? Rent is always paid in advance.

aldredd

c-m wrote: »

Thirdly, what will landlords/agents be able to check? If its public information and rental information only, then its not so bad. If they can check all credit agreements such as creditcards, bank accounts, mobile phone etc.. Then I'm firmly against it, as they may score on items that have nothing do with the ability to pay rent. Will 100,000s suddenly be homeless because of missed payments on a CC or mobile phone?

Most letting agents already do a full credit check on you. That said, I once got 'accepted' when I knew I had a lot of problems on file, so I don't think they're concerned with you missing the odd phone payment.

c-m wrote: »

If i live for 10 years in a flat/house rented from a non-reporting landloard, it would then probably be more difficult for me to move home as reporting landlords would most likely favour tennents who's credit reports show rental payments.

Quite possible, I would agree. However, I'm sure a signed letter from your previous LL stating that you paid on time for x number of years and gave this with your application, I can't see that not fulfilling their needs.

Forthly, there is no credit involved, so why should any transactions appear on credit reports? Rent is always paid in advance.

True, but it's about your ability to meet your contractual financial agreements as much as credit.