Generation Rent a "ticking time bomb" for housing benefits

HAMISH_MCTAVISH

LOWER rates of home ownership are set to cost the government an extra £8bn a year in housing benefit, a think-tank said this morning.

Once today’s generation of renters retire, there will be 3.45m pensioners claiming housing benefit by 2060, the Strategic Society Centre (SSC) has calculated.

In today’s prices, these claimants will cost the state £13.45bn a year – around two and a half times the size of the current £5.32bn bill for housing benefit.

“In the debate on ‘generation rent’, what everyone forgets is that most pensioners who rent rely on state support,” said SSC director James Lloyd. “So, in future, when there will be far more pensioners than today, if more pensioners are renting, the cost of housing benefit to the state is going to explode.”

http://www.cityam.com/latest-news/uk-heading-time-bomb-over-housing-benefit

Mortgage rationing has of course been a disaster, as builders won't build what they can't sell.

With the biggest housing shortage in a century rapidly worsening, it's only a matter of time until house prices boom again. And in the meantime rents have soared making it difficult to save a deposit. Which will make it even harder to buy for the young until mortgage lending returns to normality, meaning more renters stuck enriching their landlords.

Mortgage rationing is a crime against the young generation, and we'll all pay the price eventually.

the_flying_pig

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EchoLocation

HAMISH_MCTAVISH wrote: »

...as builders won't build what they can't sell.

Well they could just lower their prices.

HAMISH_MCTAVISH wrote: »

Mortgage rationing is a crime against the young generation, and we'll all pay the price eventually.

Sensible lending not mortgage rationing.

It's the maniplulation and greed of those that caused, and continue to cause, the insane high house prices that is the crime against the young generation.
Take a good look in the mirror Hamish, you can't lie to yourself you know.

The_J

What mortgage rationing?

What, no 100% mortgages? You're right, those were a !!!!ing great idea.

Graham_Devon

This records broken already Hamish.

HAMISH_MCTAVISH

EchoLocation wrote: »

Well they could just lower their prices.

Profit margins for all the major builders are in the single digits in percentage terms.

They can't lower them very much....

And lowering the price by a few percent does absolutely nothing to help more people buy when they can't get mortgages anyway.

Sensible lending not mortgage rationing.

Absolutely false.

It's not sensible lending when just 1.8% of all mortgages issued are with a 10% deposit. Or just 0.38% of mortgages issues are with a 5% deposit.

Historically normal, prudent and sensible lending would mean anyone with an average or better credit score, a decent work history, and a 5% deposit could walk into a bank today and walk out with a mortgage offer.

That is clearly not the case....

What we have now is record banks margins fuelling sky-high banker bonuses, absurd deposit requirements, rationing of mortgages, and the financial ruin of Generation Rent forced to enrich their landlords.

And all cheered on by muppets who delusionally think if it continues they might get a house on the cheap.:rotfl:

HAMISH_MCTAVISH

Graham_Devon wrote: »

This records broken already Hamish.

Indeed.

Bankers have broken the old record for average mortgage margins above funding costs.... And set a new one at previously unimaginably high levels.

Amazing what you'll cheer on just to keep the last desperate hope of a crash alive...

michaels

If there is a fixed amount of money out there that the banks will lend the builders make more profit selling fewer expensive houses than more cheaper ones.

Suppose your customer had £100 to spend on widgets, you could sell him 2 at £50 each making a nice profit or 4 at £25 each making no profit. Which would you do?

EchoLocation wrote: »

Well they could just lower their prices.



Sensible lending not mortgage rationing.

It's the maniplulation and greed of those that caused, and continue to cause, the insane high house prices that is the crime against the young generation.
Take a good look in the mirror Hamish, you can't lie to yourself you know.

Sampong

HAMISH_MCTAVISH wrote: »

Profit margins for all the major builders are in the single digits in percentage terms.

They can't lower them very much....

Once again you're quoting your own opinions as if they were gospel, and once again they are completely wrong. In contracting margins are single digit thin percentage wise, but this is in reference to the civil sector, commercial building, hospitals, schools, studios, major refurbishments etc.

Housebuilders profit margins are much higher, between 20-30%. If you seriously think housebuilders could possibly stay afloat by selling houses on a 1% margin, I will have some of what you're drinking.

Housebuilding is a completely different business model to contracting.

EchoLocation

HAMISH_MCTAVISH wrote: »

Profit margins for all the major builders are in the single digits in percentage terms.

They can't lower them very much....

So what's their biggest cost?

No comment on the fact that it's clear to any rational thinking person that it's the insanely high house prices that are the crime against young people? Or you still think the real crime is not handing young people enough debt?

abaxas

HAMISH_MCTAVISH wrote: »

Indeed.

Bankers have broken the old record for average mortgage margins above funding costs.... And set a new one at previously unimaginably high levels.

Amazing what you'll cheer on just to keep the last desperate hope of a crash alive...

Actually plot and build costs are not very high at all.

It's planning permission which is the largest part. Something that only exists as a concept.

This is why 2 bed flats of similar volume are £54k new in once place, while £250k in another.