Stamp duty holiday ?

[Deleted User]

Peony2016 said:

I don’t know why they’d bother to make the announcement on Wednesday but not bring it into effect until Autumn. It seems that would just freeze the housing market for a few months.

I’m due to exchange contracts on my chain tomorrow! If they do put the SDLT holiday into place immediately, would it be likely to be based on date of completion rather than date of exchange?

If it was me, Id just wait and see what is announced Weds before exchanging 

danlightbulb

SpiderLegs said:

I’ve read some drivel in my time but this goes to a new level.

If you want rent controls then just say so.

I absolutely think there should be rent controls yes.

Grumpy_chap said:

Quite often landlords have an interest only mortgage and the tenant is covering only the interest charges.  The landlord never pays for the capital, but recovers it when selling (along with whatever gain there has been).  So, the tenant is not covering the capital.  If they were, the tenant would buy a house and repay the capital plus interest.

To buy their own house a tenant needs the ability to save his own deposit, something that is often very difficult to do whilst also renting.

You don't think tenants are covering the capital purchase of a house? I have paid over £65k in rent over 10 years on the house I rent and the landlord bought it for around £100k ish a couple of years before I moved in. Its probably worth £150k now. So over 20 years renting I will have paid my landlord's mortgage off. Yes he has to have insurance, and do some maintenance from time to time.

However which way you cut it though, almost all, if not all, of that capital would be paid by me over that 20 year period if I stayed here that long.

Why didn't I spend that £65k on my own house? Simply because for many years I could not save a sufficient deposit. If 100% mortgages were still around, I'd have immediately bought my own place and the affordability would have been fine, the mortgage most likely less than the rent payment I was making.

Its pretty disgraceful in my opinion, that people here think this is an acceptable scenario. Rentals might be fine for a couple of years or for people who deliberately want flexibility, but for long term there are serious problems with the fairness of it.

SpiderLegs

Sounds to me like @danlightbulb is directing all their anger at their landlord, rather than wondering why they haven’t been able to save a deposit of their own in their ten years of renting.

Perhaps @danlightbulb has sat round waiting for a handout in those ten years rather than cracking on and earning a bit more brass of their own?

AdrianC

danlightbulb said:
To buy their own house a tenant needs the ability to save his own deposit, something that is often very difficult to do whilst also renting.

Not if they live within their means and prioritise expenditure.

I have paid over £65k in rent over 10 years on the house I rent

£6,500/year, £540/mo.
Minimum wage has average over the last 10yrs at around £7.12. Full time, that's just under £14k/year. Let's call it a grand a month in round numbers.
So you've been paying about half your income, assuming you were on minimum wage. Obviously, a much smaller fraction if you were earning more.

So over 20 years renting I will have paid my landlord's mortgage off.

Perhaps he didn't have one?

However which way you cut it though, almost all, if not all, of that capital would be paid by me over that 20 year period if I stayed here that long.

A raw yield of 5%. Not exactly a great return on investment.

Why didn't I spend that £65k on my own house? Simply because for many years I could not save a sufficient deposit.

And why not? Because you didn't earn enough.

If 100% mortgages were still around, I'd have immediately bought my own place and the affordability would have been fine

Let's assume lenders would have given a 100% mortgage on a 4x income multiple, so a minimum of £25k/year. About national average income. At today's income tax, that's £1,700/mo. Yet here you are, complaining you can't save because you have to pay £540/mo rent. So you're spending around £1,200/mo on top of that rent, with nowt to show for it.

Obvs, if you were on minimum wage, a 100% mortgage would have been nearly 7x income.

the mortgage most likely less than the rent payment I was making.

£100k 25yr repayment mortgage at 3.5% is £500/mo. At 20yr, £580. At 10yr, £990.
Plus all those other outgoings.

Its pretty disgraceful in my opinion, that people here think this is an acceptable scenario. Rentals might be fine for a couple of years or for people who deliberately want flexibility, but for long term there are serious problems with the fairness of it.

Wah! I want to have + eat cake!

If you really wanted to buy, you'd have saved.
If you really couldn't save while paying so little rent, you clearly weren't earning enough to afford to buy.
The answer, either way, was in your hands all along - but, like Crashy, it's everybody else's fault.

Grumpy_chap

danlightbulb said:

Rentals might be fine for a couple of years or for people who deliberately want flexibility, but for long term there are serious problems with the fairness of it.

On that we agree.  Though I am not of the school of thought that everything that is not how it should be is automatically unfair.

danlightbulb said:

To buy their own house a tenant needs the ability to save his own deposit, something that is often very difficult to do whilst also renting.

We agree again. 
Though, sometimes, people who rent have a different "mindset" on what they can do without to get that deposit.  I have cut back many things to get a house and the mortgage has absolutely throttled me at times.  I compare to my brother who has been renting for the past 10 years now and hides behind the "impossible to save deposit while renting" line.  In that 10 years, he has had 3 brand new cars, grand holiday every other year to the other side of the world plus a skiing holiday every other winter.  He then moans that the possibility of ever getting the deposit for rising house prices gets ever more impossible and the irony that the value of just one of those brand new cars would have been a deposit.  Conversely, I stick rigidly to my belief that buying was the right decision while driving a 2007 Focus, budget holiday in Spain if we can and the TV still needs an external harddrive to work since they turned off analogue.

danlightbulb said:

I absolutely think there should be rent controls yes.

We don't agree, but I can see that there could be some form of rent control. 
I really don't see how that could be linked to the percentage of the mortgage payment as you suggested (as there are so many ways Landlords would be able to manipulate that and some Landlords do not have a mortgage or have a mortgage connected to a portfolio of properties so difficult to allocate to individual properties).
IF there were to be external limits on rent, I could see something whereby a tenant enters into an agreement at market rate, but the yearly uplift is capped to a suitable inflation index.  That would work, as the original "entry" point would have to be at a level that the Landlord can operate satisfactorily as a business and it may give Landlords the benefit of longer tenancies (security) so long as there is some way of being able to manage a "bad" tenant (payment / behaviours / damage).  When the tenant decided to move on, the property would then be available to let at the revised market rate.

Steve_KCS

Again, it doesn't make sense to announce holiday now and then implement in October. All papers are reporting this and they must have had this information from somewhere... 

danlightbulb

AdrianC said:

Wah! I want to have + eat cake!

If you really wanted to buy, you'd have saved.
If you really couldn't save while paying so little rent, you clearly weren't earning enough to afford to buy.
The answer, either way, was in your hands all along - but, like Crashy, it's everybody else's fault.

So many wrong assumptions. Of course in your eyes everyone who cant buy must not be trying hard enough?

I was married, in an abusive relationship and with two young kids. I had to leave the marriage due to this mental abuse and move into rented, and was left with debt from loans took out to build an extension on the house I previously owned. At the same time as paying rent I had to pay child maintenance of 15% of my net salary. I had my kids at weekends, and on top of child maintenance obviously I chose to clothe them, feed them, take them to activities and places so that they had a happy life amongst all this disruption. I put them first.

There was no equity in the property I owned with my ex-wife at the time we separated, and she couldn't afford to take on the mortgage on her own. I had to sit on the mortgage having the risk of that liability for around 3 years before she was able to take it on by herself. She couldn't afford to buy me out for any cash payment, and I didn't want to force a sale and potentially make my children homeless. So in our divorce settlement (another cost to bear) we agreed on her getting the house in return for not taking a share of the pension I had built up by that point. My pension fund was about the same value as the equity in the house at the time.

So paying rent, previous debt, child maintenance and making sure my kids didn't go without nice things (they weren't spoilt). Every other bill and outgoing I had is cut to the bone.

I have a good job, that I've been promoted twice in over the past 8 years and have an above average income, but those previous debts and child maintenance costs meant I could not save anything. Several years ago now I redid all my budgets, cut all the costs I could. But well over a grand in rent and child maintenance  every month kind of dwarfs saving £3 a week at the chippie doesn't it.

I have since cleared over £15k in debt and saved a £25k deposit. But its took 10 years to do that. I don't have rich family to call on, and I've never found another relationship so have no-one to share housing costs with.

A 100% mortgage 10 years ago, which would have been perfectly affordable in terms of monthly payments, would have meant I'd have today paid that £65k towards my own house instead of to a landlord. But instead, simply not being able to get say £7k for a 5% deposit, which may seem like small change to many here, has locked me into rent for that period of time paying off someone elses mortgage.

So tell me, what could I have done different? Not picked an abusive wife would have helped for sure. What else?

Grumpy_chap

danlightbulb said:

So many wrong assumptions. Of course in your eyes everyone who cant buy must not be trying hard enough?

No, that is not what I said.  Please re-read my post and note the "sometimes" and the specific example of an individual that I know the behaviour very well.

I sympathise with your tough experiences and no doubt you are outside the typical renter.

danlightbulb

Grumpy_chap said:

danlightbulb said:

So many wrong assumptions. Of course in your eyes everyone who cant buy must not be trying hard enough?

No, that is not what I said.  Please re-read my post and note the "sometimes" and the specific example of an individual that I know the behaviour very well.

I sympathise with your tough experiences and no doubt you are outside the typical renter.

My reply was to AdrianC, not you. Your post happened to appear in the middle as I was typing mine.

swajarbal

SpiderLegs said:

Sounds to me like @danlightbulb is directing all their anger at their landlord, rather than wondering why they haven’t been able to save a deposit of their own in their ten years of renting.

Perhaps @danlightbulb has sat round waiting for a handout in those ten years rather than cracking on and earning a bit more brass of their own?

Care to retract the above assumptions now @SpiderLegs ?