Petition to extend the SDLT holiday to be debated in Parliament on Monday

SpiderLegs

BikingBud said:

SpiderLegs said:

BikingBud said:

So he's gone and done it then.......

But in steps Martin (Superhero) Lewis to challenge the Chancellor:
"I have concerns about the SDLT holiday and 5% mortgage help. Are you really helping struggling buyers or are you stoking the house price market? Some figures, before SDLT holiday:
Average price gone up from £252k to £269k, an extra £17k. The SDLT saving was £2600 but buyers are now paying an extra £27k over the life of the mortgage. Is intervening in the housing market really helping or does it actually harm FTBs and other when they are trying to buy property?

Is house price inflation a good thing? "

As this seems to be heresy to some on here perhaps they will now cast Martin as a HPC type too.

Is Martin suggesting that all of that 17k price increase is down to a 2.6k saving? That doesn’t even sound remotely logical.
Every other factor which has affected HPI disappeared and only the SDLT cut was in play?

Watch it yourself and see what you think:
https://www.moneysavingexpert.com/news/2021/03/martin-lewis-interviews-chancellor-rishi-sunak---the-key-questio/

Seems quite clear to me.

Indeed it does. Looks like martin can’t even understand basic principles of analysis.

Crashy_Time

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Not really.  Try thinking of things from a different angle.
So, everyone needs somewhere to live and most people start off by renting their home.  This is going to cost them £x every single month for as long as they are alive.
Now think of a scheme by which you sign a contract for, say, 25 years at a cost of £y every month and at the end of that time you end up owning your own home with no more payments needed for the rest of your life.
Now imagine that £y was the same as £x (maybe a little more or a little less, but basically the same).
Would you choose to pay £y for the rest of your life or £x for only 25 years?

Note that I've not referred to the amount of the mortgage because in practice only the repayments matter.  Also note that I've not referred to the price of the property, because again in practice only the repayments matter.  It therefore follows that if the price of the property and the mortgage amount don't matter then 'negative equity' also doesn't matter.  Nor does it matter if house prices rise or if they crash.   As long as you make the monthly payments then your home is secure - which is always the case whether you're renting or buying.  But by buying instead of renting, you will only have find 25 years of payments instead of a whole lifetime of payments.

Of course, there are some nuances to the above, but the fundamental fact is that it's always going to be cheaper to buy your home than to rent one, over a lifetime.

Interesting take on things, I feel you may just be stretching what doesn`t matter a little far though? I think you will find that a lot of these things matter a lot to many people, and interest rates are the most important thing of all? If we are being honest most people now realise that cheap basic shelter is the best thing for hardworking hard money saving ordinary people, wouldn`t you agree?

These things certainly seem to matter a lot to you. 
And now you're saying that interest rates are the most important things of all . . . does that imply you agree that house prices themselves are less important, for the reasons I've mentioned?  I'd agree that interest rates are important but most people who had a mortgage through the 80s and into the 90s managed to survive double-digit interest rates relatively easily.  12%+ rates didn't seem to crash the housing market as far as I can remember.  Perhaps it's the AVAILABILITY of mortgages that's the most important factor.  As far as I can see, interest rates have never been lower and therefore have never been more affordable yet it doesn't seem to have gotten any easier to get a mortgage today.

So, again, in the context of renting-vs-buying, house prices and interest rates don't really matter - it will always be financially advantageous to buy a home rather than rent a home over a person's lifetime.

As for 'cheap basic shelter' being the best thing for 'ordinary people', how unambitiously patronising is that?!  And no, I don't agree.  We should be aiming for better quality housing for all.

I said ordinary people have the right to buy basic shelter at a price they can comfortably afford.

But what does that actually mean in practice?  What defines the 'ordinary' person?  What defines 'basic shelter'?  What defines 'comfortably afford'?

Well banks used to lend three maybe three and a half times salary max, that defined what price different types of houses went for and who lived in them.

Mickey666

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Not really.  Try thinking of things from a different angle.
So, everyone needs somewhere to live and most people start off by renting their home.  This is going to cost them £x every single month for as long as they are alive.
Now think of a scheme by which you sign a contract for, say, 25 years at a cost of £y every month and at the end of that time you end up owning your own home with no more payments needed for the rest of your life.
Now imagine that £y was the same as £x (maybe a little more or a little less, but basically the same).
Would you choose to pay £y for the rest of your life or £x for only 25 years?

Note that I've not referred to the amount of the mortgage because in practice only the repayments matter.  Also note that I've not referred to the price of the property, because again in practice only the repayments matter.  It therefore follows that if the price of the property and the mortgage amount don't matter then 'negative equity' also doesn't matter.  Nor does it matter if house prices rise or if they crash.   As long as you make the monthly payments then your home is secure - which is always the case whether you're renting or buying.  But by buying instead of renting, you will only have find 25 years of payments instead of a whole lifetime of payments.

Of course, there are some nuances to the above, but the fundamental fact is that it's always going to be cheaper to buy your home than to rent one, over a lifetime.

Interesting take on things, I feel you may just be stretching what doesn`t matter a little far though? I think you will find that a lot of these things matter a lot to many people, and interest rates are the most important thing of all? If we are being honest most people now realise that cheap basic shelter is the best thing for hardworking hard money saving ordinary people, wouldn`t you agree?

These things certainly seem to matter a lot to you. 
And now you're saying that interest rates are the most important things of all . . . does that imply you agree that house prices themselves are less important, for the reasons I've mentioned?  I'd agree that interest rates are important but most people who had a mortgage through the 80s and into the 90s managed to survive double-digit interest rates relatively easily.  12%+ rates didn't seem to crash the housing market as far as I can remember.  Perhaps it's the AVAILABILITY of mortgages that's the most important factor.  As far as I can see, interest rates have never been lower and therefore have never been more affordable yet it doesn't seem to have gotten any easier to get a mortgage today.

So, again, in the context of renting-vs-buying, house prices and interest rates don't really matter - it will always be financially advantageous to buy a home rather than rent a home over a person's lifetime.

As for 'cheap basic shelter' being the best thing for 'ordinary people', how unambitiously patronising is that?!  And no, I don't agree.  We should be aiming for better quality housing for all.

I said ordinary people have the right to buy basic shelter at a price they can comfortably afford.

But what does that actually mean in practice?  What defines the 'ordinary' person?  What defines 'basic shelter'?  What defines 'comfortably afford'?

Well banks used to lend three maybe three and a half times salary max, that defined what price different types of houses went for and who lived in them.

Yes, I remember it well, and it severely limited the range of houses I could afford to buy.  I don't think it actually did very much to determine house prices because there were always people with more money than me who could buy the houses I could not afford.

The 3.5x salary was a shorthand for personal affordability because of the high interest rates.  Most of my mortgage payments had an interest rate of between about 8-12%.  Today, interest rates are very low, which means people can afford to borrow more, which is why banks will now lend around 5x salary. 

Crashy_Time

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Not really.  Try thinking of things from a different angle.
So, everyone needs somewhere to live and most people start off by renting their home.  This is going to cost them £x every single month for as long as they are alive.
Now think of a scheme by which you sign a contract for, say, 25 years at a cost of £y every month and at the end of that time you end up owning your own home with no more payments needed for the rest of your life.
Now imagine that £y was the same as £x (maybe a little more or a little less, but basically the same).
Would you choose to pay £y for the rest of your life or £x for only 25 years?

Note that I've not referred to the amount of the mortgage because in practice only the repayments matter.  Also note that I've not referred to the price of the property, because again in practice only the repayments matter.  It therefore follows that if the price of the property and the mortgage amount don't matter then 'negative equity' also doesn't matter.  Nor does it matter if house prices rise or if they crash.   As long as you make the monthly payments then your home is secure - which is always the case whether you're renting or buying.  But by buying instead of renting, you will only have find 25 years of payments instead of a whole lifetime of payments.

Of course, there are some nuances to the above, but the fundamental fact is that it's always going to be cheaper to buy your home than to rent one, over a lifetime.

Interesting take on things, I feel you may just be stretching what doesn`t matter a little far though? I think you will find that a lot of these things matter a lot to many people, and interest rates are the most important thing of all? If we are being honest most people now realise that cheap basic shelter is the best thing for hardworking hard money saving ordinary people, wouldn`t you agree?

These things certainly seem to matter a lot to you. 
And now you're saying that interest rates are the most important things of all . . . does that imply you agree that house prices themselves are less important, for the reasons I've mentioned?  I'd agree that interest rates are important but most people who had a mortgage through the 80s and into the 90s managed to survive double-digit interest rates relatively easily.  12%+ rates didn't seem to crash the housing market as far as I can remember.  Perhaps it's the AVAILABILITY of mortgages that's the most important factor.  As far as I can see, interest rates have never been lower and therefore have never been more affordable yet it doesn't seem to have gotten any easier to get a mortgage today.

So, again, in the context of renting-vs-buying, house prices and interest rates don't really matter - it will always be financially advantageous to buy a home rather than rent a home over a person's lifetime.

As for 'cheap basic shelter' being the best thing for 'ordinary people', how unambitiously patronising is that?!  And no, I don't agree.  We should be aiming for better quality housing for all.

I said ordinary people have the right to buy basic shelter at a price they can comfortably afford.

But what does that actually mean in practice?  What defines the 'ordinary' person?  What defines 'basic shelter'?  What defines 'comfortably afford'?

Well banks used to lend three maybe three and a half times salary max, that defined what price different types of houses went for and who lived in them.

Yes, I remember it well, and it severely limited the range of houses I could afford to buy.  I don't think it actually did very much to determine house prices because there were always people with more money than me who could buy the houses I could not afford.

The 3.5x salary was a shorthand for personal affordability because of the high interest rates.  Most of my mortgage payments had an interest rate of between about 8-12%.  Today, interest rates are very low, which means people can afford to borrow more, which is why banks will now lend around 5x salary. 

Unlikely that could match up to what happened when just about everyone could borrow a LOT at very low rates though? We can probably agree that if rates rise a lot of people could be in trouble if they have over-stretched?