Article about Crashy in the DT today

getmore4less

BananaRepublic wrote: »

The reality is quite different. Those with sufficient income can save for a deposit, and then hop onto the property merry go round. From then on their hard earned money goes into paying off the mortgage. Those on lower incomes never save enough to cover the deposit and remain as renters for the rest of their lives. Unless of course they have recourse to the bank of mum and dad, or rich relatives pop off.

This is something that strikes me as grossly unfair. I would support a government scheme whereby the state builds homes, and then allows people to rent the homes, in the understanding that after 15 years say, they will have paid off a certain proportion of the value, and will become entitled to buy the property at a market value minus the amount notionally paid off. No longer needing a deposit, they will be able to get a mortgage to cover the purchase. I suspect there will be huge problems with this, the main one being the sheer cost of building sufficient properties in the first place. And then of course many will object on political grounds.

In effect the government has already done that without building/buying/renting the houses with help to buy.

access to lower cost money(lower LTV) with a second loan.

It is not just the deposit that are a barrier to entry it is the rates.

take a snapshot of nationwide 2y fix no fee products.

75% LTV 1.74%
95% LTV 4.04%
75% LTV 1.79% (5% + 20% HTB)

on a £200k house that HTB for the risk of 20% equity changes
£190k @ 4.04% £640pm interest only into
£150k @ 1.79% £224pm interest only for 5 years

nearly £25k to put into increasing equity.

caronoel

westernpromise wrote: »

http://www.telegraph.co.uk/news/2017/11/12/population-silver-renters-set-hit-million-people-leaving-late/

According to analysis carried out by campaign group Generation Rent, the number of private renter households in England headed by someone aged 65 or older is set to increase from 370,000 in 2015-16 to 995,000 by 2035-36.

The rise will come as the result of more people reaching their forties without having made their first step onto the housing ladder, at which point it becomes increasingly difficult to get a mortgage, the report said.

That is really unfair on Crashy, he is not in his forties - he's in his fifties.

Single, living in a rented bedsit, and in his fifties - what a catch for the ladies!

GreatApe

westernpromise wrote: »

The main problem would be that few FTBs stay in the same house for 15 years so the houses would rarely be held long enough to be sold. The shortfall between what they cost to build and what they let for would be handed to me. So I would certainly oppose any such scheme.

Average house transacts once every 23 years so contrary to popular belief most FTBs do stay a long time in their first home. There is also no housing ladder (multiple steps) there is a housing step. Transaction data suggests someone buys their first home and then about 23 years later buys their second and final home.

GreatApe

BananaRepublic wrote: »

The reality is quite different. Those with sufficient income can save for a deposit, and then hop onto the property merry go round. From then on their hard earned money goes into paying off the mortgage. Those on lower incomes never save enough to cover the deposit and remain as renters for the rest of their lives. Unless of course they have recourse to the bank of mum and dad, or rich relatives pop off.

Private renting is a temporary tenure. Some 75% of private renters end up buying (or moving onto social housing) in less than 10 years. I myself rented for 9 years and then bought a home.

Also that does not mean 25% of renters rent forever. In that 25% there are migrants, divorced people, people who both own and rent etc.

This is something that strikes me as grossly unfair.

Why?
Even a couple on the national minimum wage working full time can easily buy a starter home in most the regions in the country. For instance a 3 bedroom terrace in Birmingham (which would be above the average as the average is a 2.7 bedroom home) costs £120k. A couple on min wage earn £30k and only need to save up ~£8k to buy said house. Buy it on a 2 year fix and then remortgage onto a lower cheaper 90% at that point and then 2 years later remortgage onto an even lower cheaper fix etc

I would support a government scheme whereby the state builds homes, and then allows people to rent the homes, in the understanding that after 15 years say, they will have paid off a certain proportion of the value, and will become entitled to buy the property at a market value minus the amount notionally paid off.

It is not necessary. Just bring back 100% LTV mortgages at decent rates. If necessary have the government give a loan guarantee for the first 20% for FTBs so the banks offer 100% LTV mortgages at 80% LTV prices.

No longer needing a deposit, they will be able to get a mortgage to cover the purchase. I suspect there will be huge problems with this, the main one being the sheer cost of building sufficient properties in the first place. And then of course many will object on political grounds.

It simple is not necessary we have an excess of housing in most the country so much so that even in our #2 city it costs less to buy a starter home than it does to rent the council poor stock. In Birmingham a £120k house put £20k down and your repayment mortgage is £400 a month for 27 years and then £0 for the rest of your life. That is cheap.

If people are finding it hard to get together 10% of £120k they need to get their act together and live more within their means or aim to better themselves and get higher paid work.

This may sound like me being an !!!! but there are lots of lazy people and lots of very non MSE people. Not forgetting there must be a few million dysfunctional people too. For instance alcoholics and drug abusers and gamblers you arent going to get them into homeownership from renting even if houses cost less than a new car.

kinger101

chucknorris wrote: »

The best part is that he actually thinks that he is getting the value.

westernpromise

Crashy's not been around lately. Is he OK, or is it just his week to clean the house toilets?

Herzlos

GreatApe wrote: »

Average house transacts once every 23 years so contrary to popular belief most FTBs do stay a long time in their first home. There is also no housing ladder (multiple steps) there is a housing step. Transaction data suggests someone buys their first home and then about 23 years later buys their second and final home.

Or people buy their first home, and within a few years buy their forever home, which they keep for 40+ years.