Renters pushed to breaking point as Britain's selfish homeowners gloat their hands

HAMISH_MCTAVISH

cells wrote: »

I have a lot of sympathy for renters but the truth is that most of them could not buy at current prices or prices that are 25% off today.

And that is where we differ.

A mortgage is cheaper than rent in around 90% of the UK, even at todays prices, and even if mortgage rates were at 5%.

The problem is that thanks to some rather short sighted regulation, banks are perfectly willing to accept the rental stream from a tenant as the basis upon which to lend to a landlord, but in many/most cases they won't lend directly to that tenant so they can buy their own place.

It is absurd and socially unjust.






Edit: mortgage cheaper than rent, not the other way round

cells

HAMISH_MCTAVISH wrote: »

And that is where we differ.

Rent is cheaper than a mortgage in around 90% of the UK, even at todays prices, and even if mortgage rates were at 5%.

The problem is that thanks to some rather short sighted regulation, banks are perfectly willing to accept the rental stream from a tenant as the basis upon which to lend to a landlord, but in many/most cases they won't lend directly to that tenant so they can buy their own place.

It is absurd and socially unjust.

What exactly do you think needs to be done?

10% mortgages with SVR as the stress affordability benchmark?

BTW I don't see how that would reverse the growth of rentals without a corresponding increase in stamps issued

I think it would be more fair to solve the stamps issue first and the mortgage issue second they could both be done within a year

HAMISH_MCTAVISH

cells wrote: »

What exactly do you think needs to be done?

Well 100% mortgages up to rental yield equivalent for the local area would be a good start.

The USA has 30 year fixed mortgages at 4%, so shouldn't be impossible to achieve, particularly with govt backing.;)

PixelPound

We are encouraging more BTL than FTB policies. Low interest rates are likely to continue, any increase will be modest. The problem is that renters pay high rents, privately, which combined with high deposit amounts required make it an uphill struggle that BTL don't need. Rather than RTB housing associations we need a RTB private rentals. All rent paid above a base rate can be seen over time as going towards a deposit to buy off of the landlord.

HAMISH_MCTAVISH

nic_c wrote: »

Rather than RTB housing associations we need a RTB private rentals.

There is precisely zero chance of this ever coming to pass.

Any attempt at forced transfer of private property would render the UK a pariah state.

Far easier and simpler to remove the regulatory restrictions that penalise lending to FTB's and give buyers a lending platform that allows them to compete effectively with landlords.

The availability of credit is the great equaliser.

Restriction of credit is unjust and unfair.

the_flying_pig

HAMISH_MCTAVISH wrote: »

...Far easier and simpler to remove the regulatory restrictions that penalise lending to FTB's and give buyers a lending platform that allows them to compete effectively with landlords...

What, you mean like a system whereby owner occupier mortgages had lower deposit requirements and interest rates than BTL ones? And then possibly something a bit extra on top, maybe some kind of 'help to buy' type scheme? Or something else?

ruggedtoast

Realistically, not much is going to change now over the life of this parliament.

While the Tories will occasionally trample over Middle England's focus groups, in the case of ensuring the oil industry gets fracking rights in the Home Counties for example, they aren't going to do so to build more housing on the Greenbelt where Rupert and Camilla ride their ponies.

I am hoping that some tenancy reform can be brought in. The AST gives tenants about as many rights as a mobile phone contract and the notice period that landlords can give is much too short. Two months is nothing like long enough to uproot your entire life and start again. Most letting agents are just conveyor belts to separate tenants from their money, again - Scots enjoyed reform of these people but England gets no such benefit.

mwpt

HAMISH_MCTAVISH wrote: »

Restriction of credit is unjust and unfair.

I don't understand how you can justify this statement. Credit isn't a natural right. I take the opposite view and say that the next global crisis will again be caused because of the absurd high levels of debt, particularly (again) mortgage debt, pumped up by low rates.

One way to find out, wait

mwpt

HAMISH_MCTAVISH wrote: »

And now we end up in a position where the events of the last 7 years have only worsened the housing shortage, driven rents to new record highs, caused building to fall to the lowest levels in a century, and prices have now risen to a new peak regardless.

Yes, and why? What caused the event in the first place? Stupidly high and reckless lending. But you advocate more lending.

Mortgage rates should never have been allowed to fall so low. Deposit requirements should have eased, and salary multiple checks enforced but perhaps not so stringently. My view is that this would have allowed house prices to fall to levels more supported by the underlying asset fundamentals, allowed more people to borrow and buy. Now instead we see prices pushed up by absurdly cheap credit, but fewer people able to afford the deposit or the salary multiple checks. That's what cheap credit does.

(and yes, lack of supply)

cells

HAMISH_MCTAVISH wrote: »

Well 100% mortgages up to rental yield equivalent for the local area would be a good start.

What does that mean?