Is it really THAT important to own your own home?

Mollymop5

Hi,
I rent a lovely house from my local council, 3 good size bedrooms, bathroom, large kitchen diner, living room, hall and utility room with toiletand a huge garden! My rent is £57 per week. I can decorate as I like, put in my own kitchen, bathroom or anything else I like.I have a secured tenancy which means I'm safe and all repairs are taken care of.

My friend has a tiny box for a house, continually worries about her large mortgage repayments and lack of money for repairs etc.

I can save for my future if I so wish and don't feel the need to invest in property

PasturesNew

charmoljak wrote: »

Hi,
I rent a lovely house from my local council, 3 good size bedrooms, bathroom, large kitchen diner, living room, hall and utility room with toiletand a huge garden! My rent is £57 per week. I can decorate as I like, put in my own kitchen, bathroom or anything else I like.I have a secured tenancy which means I'm safe and all repairs are taken care of.

My friend has a tiny box for a house, continually worries about her large mortgage repayments and lack of money for repairs etc.

I can save for my future if I so wish and don't feel the need to invest in property

I rent a self-contained bedsit for £80/week. Got 6 months in here. Had to sign up for minimum contracts on stuff like phone line etc even though I don't know if I can stay beyond 6 months.

Landlord has a small BTL portfolio. He's already had a real pension go to the wall, so this is his pension. If the prices fall, I know what he paid for it and so I know 10% down and he starts to make a loss. I know my rent is covering the mortgage but not the overheads, so he could decide to sell up quick if he sees this 2nd "pension" going to the wall.

I don't buy "things" as I don't want any moving costs if I have to move on. Everything I own must always fit into my small car so I can move on easily if I have to.

However, I am luckier than most. I could buy a house if I wanted to. But I am new to the area and here to see if there is a future/job here for me. So until I get a job I can't put down roots.

carolt

Well said, lieutenant dan. As you say, time and again one sees buy-to-let 'investors' (what a nice grown-up, neutral-sounding word!) like HugoSP, kid themselves they are providing some sort of social service through their parasitic activities, conveniently forgetting that far from being the solution to people's problems, they form a very large part of the cause! Obviously, one BTL landlord does not a problem make, and it's nothing personal - but you are wrong, HugoSP, if you imagine that everyone out there is a would-be BTL landlord and you bear no responsibility. Yes, I could choose to buy somewhere cheaper to rent out to someone else as a BTL, if I don't feel comfortable (financially) buying my own home at the moment - but I have chosen not to, as I would not want to deprive someone else in a cheaper part of the country from buying their own home.

Your examples make no sense - neither oil nor foodstuffs are rationed - if ambulance drivers or restaurateurs want to buy more food, and so do I, more can be imported from abroad. But we can't start housing everyone in a different continent, can we? Also, if the supermarket has, temporarily run out of peppers, or whatver, we can choose to buy, say cucumbers instead. Or if petrol prices have gone up, we can - shock horror! - choose to walk, or get the bus or cycle.

It is precisely because housing is both an absolute essential - having a roof over your head is NOT optional, under any circumstances, and a limited, finite resource, that trading in it is an abuse of a monopolistic position. I do not think it is right to 'trade' in something which is so crucial to people's basic everyday survival and health - any more than I would if you suggested a health service based on people's ability to pay. That is probably a rather better analogy than your own.

Certainly, if we were going to return to the position that existed prior to the 1980's, when rents were fixed and tenancies secure, then renting would be a viable long term solution for the many - as it clearly is for charmoljak. But unfortunately, his/her position is no longer the norm - and of course, it is precisely the fact that tenants' rights have been so removed that has made BTL such a good investment.

No, despite what you claim, HugoSP - and you may genuinely believe it, yourself - you are not really interested in the welfare of your tenants. I am sure your tenants do not share charmoljak's security of tenure, rent costs or ability to decorate. Or are you prepared to put your money where your mouth is, and agree that we should return to a situation where all tenants rights are protected as they used to be?

I personally feel that the existing tax breaks for landlords make an already sloping (or whatever is the opposite of level?!) playing field even more so. There is clearly something wrong with the market - HugoSP's comment that "Our tenants are paying less rent than a mortgage for a similar houses would cost, that is one of the reasons why they are tenants." clearly shows there is a problem as the only reason for rental yields to be so low is, self-evidently, that house prices are way too high. But,assuming Gordon doesn't pull another fast one in a desperate attempt to prop up the market (and I'm not that sure what he could do to achieve that, TBH), market forces are about to work on correcting that.

Though, along with lieutenant dan, I for one, won't shed any tears over the fate of over-extended BTL landlords......

PasturesNew

pickles110564 wrote: »

Why not get on your bike look for jobs in another part of the country that is not so expensive to buy and rough to live.
you make your own choices in life so get on and make something of yourselves.

Nice theory. But most people can't.

I could and can and did. Cost to relocate £5,000, including having to pay 6 months' rent up front as I didn't have a job. And, now I've moved 200 miles ... things have taken a downturn here too for jobs.

I am lucky. I don't need to work to live. I only have myself to worry about. Others are not in that situation.

Things aren't black and white.

franklee

carolt wrote: »

No, despite what you claim, HugoSP - and you may genuinely believe it, yourself - you are not really interested in the welfare of your tenants. I am sure your tenants do not share charmoljak's security of tenure, rent costs or ability to decorate. Or are you prepared to put your money where your mouth is, and agree that we should return to a situation where all tenants rights are protected as they used to be?

I do think that tenants who pay all the rent on time should have more security of tenure. As it is tenants are in a precarious position and therefore can be forced into accepting repairs aren't done or that the rent will increase above the market level or face having to move in a hurry. That's without the "Sword of Damocles" that seeks to take away even the tenant's right to two months notice :mad:

My solution to this has been to slim down and be ready to move fast, but it's getting tiresome.

carolt wrote: »

There is clearly something wrong with the market - HugoSP's comment that "Our tenants are paying less rent than a mortgage for a similar houses would cost, that is one of the reasons why they are tenants." clearly shows there is a problem as the only reason for rental yields to be so low is, self-evidently, that house prices are way too high. But,assuming Gordon doesn't pull another fast one in a desperate attempt to prop up the market (and I'm not that sure what he could do to achieve that, TBH), market forces are about to work on correcting that.

I agree with your logic but will house prices fall? It feels like 2005 all over again, prices were sliding until the interest rate cut in August 2005 stopped the falls. Then by the end of 2006 prices were rising again! Interesting to remember that Mervyn the head of the BoE voted against that cut and the cut has been criticised widely. That doesn't mean they won't do it again. Although I note our shiny new chancellor is lining the lenders up to take the rap.

Lenders reject Darling's attack
http://news.bbc.co.uk/1/low/programmes/moneybox/7054321.stm

Although of course BTL owners are a sitting duck for new regulations be they more taxes or changes to the letting laws which may become a hot potato if too many tenants can no longer afford to rent or are chucked out if the landlord gets into financial difficulties due to tightening lending criteria. Why our shiny new chancellor has just given landlord's a CGT tax break should they sell after April is beyond me is he trying to create a stampede for the exit ...

wherediditallgo

I think it's not so much owning property that some people want, but security. I'm not yet at the point where owning my home matters that much to me for various reasons, but twenty years from now I'll probably feel differently. As you get older, it's harder to face having to move (even if it's just you on your own) - why should a pensioner be looking for a new roof over their head just because a landlord who already has his/her roof sorted out decides to sell up? If there was more security for good tenants in the rental market, & better security in renting anyway, fewer people would be going for mortgages that they can barely afford now never mind if interest rates go up a notch.

I understand BTLs who own one or two properties, especially if they've got children & bought them at a good price to provide homes for their children when they need them. I don't get the complaints though from people who own 8, 10, 20 or more - surely they don't need that many, so they must have bought to make money out of them one way or another. The more you buy & the more rent you charge in your rental area, the bigger the risk to yourself if the market takes a downturn - to them, I say mitigate your own risks before that happens, & don't complain if you were too busy raking in your profits in better times to do so.

Lavendyr

pickles110564 wrote: »

Why not get on your bike look for jobs in another part of the country that is not so expensive to buy and rough to live.
you make your own choices in life so get on and make something of yourselves.

How dare you suggest that just because we don't own a house, we can't make/haven't made something of ourselves? Why should we sacrifice our good jobs and ability to save substantial amounts of money, just to buy a house right now? For that matter, you have no idea of our situation, but to help you along to some understanding, my OH's career doesn't allow him to just up and live wherever he likes - the jobs in his line of work are only available in certain areas of the country.

You have an extremely narrow-minded view of the world, it seems, and I pity you it.

carolt

franklee wrote: »

I agree with your logic but will house prices fall? It feels like 2005 all over again, prices were sliding until the interest rate cut in August 2005 stopped the falls. Then by the end of 2006 prices were rising again!

No, I disagree - in 2005, the SIPPS fiasco meant that loads of BTL landlords put the breaks on buying until they could qualify for SIPPS. When that was removed, along with the interest rate fall, prices shot up again.

I think the big difference this time round - and its importance should not be underestimated - is the huge turnaround in the attitude of the media. Two years ago, the media published every story about falling house prices as one of doom and gloom, and were clearly on the side of existing homeowners willing it not to happen. This time round, the media seems almost to be willing a crash - non-stop front page stories about imminent crashes in The Times etc is not the way to calm sentiment...

And at the end of the day, sentiment, not cold hard cash, is what matters. People will buy if they think the market is going to rise, and even pay over the odds to do so, viewing it as a longer-term saving, but avoid/put off buying if they think prices are going to or might fall.

Supply and demand are not absolutes - people demand to buy not for need but, increasingly in recent years, for profit. If enough people believe - thanks to media publicity - that prices will fall, then demand will shrink and it will be a self-fulfilling prophecy. Likewise, if enough people believe prices are going to fall, or at any rate not rise, those who have bought into property, often on high LTV or on 100%+ or interest only mortgages, ie those most at risk if prices fall, will take fright and sell up, thus increasing supply.

I do think property !!!!!! has a lot to answer for - peddling the notion that property was a one-way bet and a sure-fire way to make money. The result - that any Tom, !!!!!! or Harry who was capable of inventing a salary figure and signing their own name on the self-cert form has now bought into property as a homeowner or BTL landlord, despite being in many cases financially illiterate (and looking at the spelling of some of the 'investors' on here, conventionally illiterate, too) is a sad one, as undoubtedly some of these amateur 'investors' will be the first ones to get their fingers burnt....

I'd like to think the media would become more responsible in future, but I very much doubt it, as crashes or huge rises make news and sell papers - static markets, staying level for years, though much better for the overall economy and the vast majority of individuals - don't. Is better financial education the answer? Or regulation? Probably not the latter, until it ceases to be in politicians' self interest to artificially engineer a boom, which is inevitably followed by a bust....

carolt

Ignore pickles 110564, Lavendyr, he's clearly just a wind-up merchant. Or Norman Tebbit, I'm not sure which....

Lavendyr

I realised after posting my reply to pickles that there was actually a very interesting (and calm!) debate going on between you and the other posters, so I do apologise for having broken into that and will carry on reading with interest.