Buying cheaper than social housing for half the country

cells

michaels wrote: »

Ah - but 5 years as a social tenant and you get an 80k reduction in the price of the housing you are living in - even better than hpi in most cases

yes if you can get a council house making use of the RTB subsidy could be better than buying straight away but that option is simply not open to anyone who wants it

I was wondering, why it is so few people now make use of RTB. I understand in London prices are expensive so that stops people but why arent more social tenants buying their £60k council flat with a 50-70% RTB discount? Surely a £18-£30k for a flat is a bargain? Or their £100k terrace for £50k-£65k?

System

RTB policy should be scrapped.

AG47

cells wrote: »

Average social rents are ~£385 pm PLUS THEY GO UP YEARLY
Mortgage with 10% deposit 3% interest rate.

North East & North West average terrace price less than £70,000
18 year repayment mortgage, repayments of £378 a month

Yorkshire&Humbar Average terrace price is less than £79,000
21 year repayment mortgage (£380pm)

Wales average terrace price is less than £83,000
22 year repayment mortgage (£384pm)

E-Midlands & W-Midlands average terrace price is less than £90,000
25 year repayment mortgage (£384pm)


So all cheaper than the council rents and you get to keep the house at the end of the 18 - 25 year period with no rent or mortgage to pay. Also the mortgage is more or less fixed for the term while the social rents just keep going up (greedy social landlords!)


So what do the crash wishers think?
Is the north and Midlands and Wales, home to more than half the population and housing stock expensive when it costs less than social rents?

You are thinking interest rates will stay this low for the next 25 years?

What if IRs go back to normal?

AG47

thequant wrote: »

Main reason being they didnt pay rent anyway (as they were on benefits) and would lose out on having a new kitchen every 5 years provided by the council.

This is the main point being missed, if you buy then you are responsible for all upkeep and repair bills.

If you rent then your landlord is responsible for new kitchen/bathroom every few years. Plus when the fridge/washing machine breaks it's the landlords problem if you rent, if you buy then you have to pay for it.

cells

AG47 wrote: »

You are thinking interest rates will stay this low for the next 25 years?

What if IRs go back to normal?

what if they go down instead of up? Already they are cheaper now than when I started this thread about 8 months ago

2 fix for 1.44% now available
or a 5 year fix for 2.29%
or 10 year fix for 2.69%

And what if social rents go up, which they do pretty much on an annual basis so there is the maybe risk of mortgage rates going up vs the certainty of social rents going up

The house price crash cheerleaders need to be more MSE. Rent at 5-8% yield plus annual rent increase or buy at 2.29%/2.69% fixed for 5/10 years? which is the MSE option?

cells

AG47 wrote: »

This is the main point being missed, if you buy then you are responsible for all upkeep and repair bills.

If you rent then your landlord is responsible for new kitchen/bathroom every few years. Plus when the fridge/washing machine breaks it's the landlords problem if you rent, if you buy then you have to pay for it.

I just had a look at Birmingham £140k house and a less desireable rental of similar size and locaiton for £600pm

If a person buys the £140k house on a 20 year repayment mortgage fixed for 10 years at 2.69% the owner and the renter pay the same amount in year 1. The renters on average will see 3% annual rent price increase while the owner is still paying £600pm for 10 years.

The renter has nothing at year 10 while the owner is half way through the mortgage and has paid about half of it down. The owner can remortgage at year 10 for another 10 years. Even if rates are higher, so are rents which at that point are £800pm. At year 20 the owner owns outright and the renter is still renting


If you had any sense you would say 'ok guys I did expect a huge !!!! HPC and I still think prices are high, but the fact that mortgages are now so cheap means house prices are affordable are very affordable so the MoneySavingExpert move is to buy rather than rent. I can always fix for 10 years if higher rates scares me while I cant fix my rent which is likely to go up. I made a mistake Im human at least Ive learnt my lesson'

PasturesNew

I don't know how/where you'd find out social rents in my area .... but renting's £800-900/month for a regular 2-bed terrace that'd cost you about £240-250k to buy.

Not everybody has access to social housing.... so it's not a straight choice.

cells

PasturesNew wrote: »

I don't know how/where you'd find out social rents in my area .... but renting's £800-900/month for a regular 2-bed terrace that'd cost you about £240-250k to buy.

Not everybody has access to social housing.... so it's not a straight choice.

this was a thread to show that housing is very affordable. Since the definition of affordable is subjective I choose to look at the cheapest option, social homes, and compare it to buying. The result is clear that in much of the country buying is the cheapest option, followed by social and then finally private renting.

Crashy_Time

cells wrote: »

this was a thread to show that housing is very affordable. Since the definition of affordable is subjective I choose to look at the cheapest option, social homes, and compare it to buying. The result is clear that in much of the country buying is the cheapest option, followed by social and then finally private renting.

You just missed out the bit where the taxpayer pays for your social rent, making it far and away the "cheapest" option.

cells

Crashy_Time wrote: »

You just missed out the bit where the taxpayer pays for your social rent, making it far and away the "cheapest" option.

what is wrong with you?