How we can fix the 'housing crisis'?

surfer9

This is just a random thought I had......

Basically I live in shared accommodation, a 5 bedroom house in which me and 4 others share. We all have a double bedroom each.

We basically pay £6360 each per year in rental costs (excluding bills). In this day and age it is difficult to save enough money to purchase a property.....

Is there anything out there in which instead of renting a room - you can purchase your room and effectively mortgage the room?

So the house I am in is worth around £500,000, therefore each room could be bought for say £100,000 per person. A huge amount of young people would be able to afford that no problem. Instead of paying rent, they could just get a mortgage on the room in the house as well as having shared ownership on the rest of the house. The house would never be able to be sold, but the rooms can be sold on. So at some point the young person owning the room will have paid enough of the mortgage off and therefore have a big enough deposit to afford a house/flat of their own and give the opportunity to another young person to do as they did, and the cycle can go on and on.

Why don't the Government build houses like this and bring a scheme like this in for the under 30's? Even better - why don't they building large blocks of buildings like this, similar to Halls rooms at Universities but of a high standard all with double bedrooms and shared communal areas.

Basically young people would have a starting point to get on the property ladder easily, you are not losing money through paying rents, the money goes into your mortgage and into your kitty to afford a place of your own. Once you have left - the cycle goes on, another youngster comes in and so on. It's tough to even afford a 1 bed flat for a lot of young people......this type of 'buy a room' scheme bridges the large gap between renting and buying a first property.

Or is this actually something that has been done, is being done and I simply have not heard about it?

Or is there some major floors in this idea that I have completely neglected......

booksurr

as an idea it has merit

as a reality it is no different to how every block of flats is already run. Someone (freeholder) has responsibility foe the fabric of the building, they levy service charges and /or charge lump sums for works. Residents (ie leaseholders) can exercise their right to manage the property themselves, sometimes that is just as good as a freeholder who ensures that works are done when needed, other times if leaseholders choose to delay works because of short term issues over lack of funds the building may suffer.

marksoton

surfer9 wrote: »

Is there anything out there in which instead of renting a room - you can purchase your room and effectively mortgage the room?

Not that i'm aware of. I doubt lenders would be very keen!

moneyistooshorttomention

Someone has to do "blue skies thinking" - no reason why it shouldn't be you.

Yep...that is voice of experience time (in a very different context) - and it worked.:)

Keep thinking round the details/studying the possibilities - you never know.

AdrianC

surfer9 wrote: »

We basically pay £6360 each per year in rental costs (excluding bills). In this day and age it is difficult to save enough money to purchase a property....

How much do you earn?

Is there anything out there in which instead of renting a room - you can purchase your room and effectively mortgage the room?

So the house I am in is worth around £500,000, therefore each room could be bought for say £100,000 per person. A huge amount of young people would be able to afford that no problem.

Yes, there is. It's quite common.

Convert the house into flats.

Why don't the Government build houses like this and bring a scheme like this in for the under 30's? Even better - why don't they building large blocks of buildings like this, similar to Halls rooms at Universities but of a high standard all with double bedrooms and shared communal areas.

Why on earth would anybody BUY such a room? The sheer cost and delay in moving would be ridiculous, given the amount of time people would typically live there.

you are not losing money through paying rents

Aha. And that's why. The massive misconception that rent is somehow "wasted". It isn't. It pays for you to live somewhere.

I cannot figure out why people are so against renting property - with the massive increase in flexibility and cost-predictability that gives - yet actively prefer three-year-renting cars to owning them.

Gorecki

Something similar is in the works by most housing authorities (it has a three letter acronym but can't remember the name).

The idea is to build similar set-ups to student halls of residences.
You would buy your room, which would be small with an ensuite but otherwise very limited facilities.
There would be high-spec but communal lounges, gyms, kitchens, washing facilities etc.

It sounds a bit rubbish initially, but allows you to get a foot on the housing ladder.
It also particularly helps people new to areas or with mild social issues as they have a community of other people around.

Rosemary7391

Flats are bad enough. What happens when you have bad housemates? How do you sell your room? No one will buy it if the shared kitchen and bathroom are a tip!

You'd also have to save at least £10k for a 10% deposit - doubt lenders would touch it with less given the problem above. So how much longer would it take to save and buy a whole flat instead? I'm not sure it'd be long enough to make this scheme, with its risks, all that attractive.

marksoton

As to housing shortage...

Why in this day and age do blue chip companies require their employees to commute. Email, video conferencing etc mean it's not needed in many cases.

Less offices would free up property and land for conversion to residential. Not to mention massive overhead savings for business and a stronger economy.

And the brucie bonus? Vastly reduced traffic and pollution. Win win.

Gorecki

It's best not to think of them as a house/housemates, more a building of apartments (similar to how most accommodation is in large American cities) and purchasers/other home owners.

The difference is the apartments are much smaller than normal (typically one room), and typical individual services (washing machines, lounges, etc) are much nicer but communal and central to the building (hence much cheaper to build/sell).

How another purchaser (they're not renters/housemates) behaves in their room shouldn't affect you.
Communal areas are cleaned and monitored as in a hotel, so bad behaviour shouldn't be an issue there.

I'm not defending the scheme, just mentioning it (personally I think landlords are kidding themselves if they think they're being moral and it's the rise of the buy-to-let industry which has largely caused this issue), but I can see why it would be attractive for lots of people.

Cornucopia

surfer9 wrote: »

This is just a random thought I had......

Basically I live in shared accommodation, a 5 bedroom house in which me and 4 others share. We all have a double bedroom each.

We basically pay £6360 each per year in rental costs (excluding bills).

So, that's 6.3% on a property value of £500k? That doesn't seem disproportionate to me.

Is there anything out there in which instead of renting a room - you can purchase your room and effectively mortgage the room?

Yes - you and a group of like-minded friends can group together and buy a house that you can live in. The advantage of that (rather than something bigger, organised by someone else) is that you can make your own arrangements for sharing and ultimately disposing of the property. If it were purchased by you as members of a company created for the purpose, it would be possible for shares to be traded i.e. for people to come and go.

ruperts

House of Multiple Occupation, is the acronym I believe.

A room in a shared house can't be much cheaper than a small studio flat all things considered. I think most people in that situation, if they're prepared to stump up £10k for a deposit for a mortgage on a room, would be willing to go a few extra thousand for the privacy of a studio flat.