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Oh, so I'm wrong because you've never met anyone who's saving towards a house? I work in a restaurant with a bunch of poorly paid staff with young families, so I think I've met a few people who are attempting to save towards an house. And the only ones who managed it are people without kids who bought it back when 2 up 2 downs were about £50k, rather than the £100k they are now.
Yes, because I've never met them, I'm talking about my experiences and from what I have read
What else do you suggest I base it on, my imagination?
Even on forums, I read posts from people moaning they can't afford a house, so then you ask them where they are trying to buy, how much they have saved
and it's always "nothing, theres no point"
or "nothing, I can't afford it"
"I'm in too much debt"
etc
I am in the same boat as above, but I am not moaning about being able to move areas?
I am working 70-80 hour weeks to clear my debts down to enable me to save a larger deposit
You were wrong in what you thought my point was
That is what I was trying to say
shoot me now
We have a combined income of nearly forty grand a year and we can only afford a 2-bed mid terrace miles out of the city centre.
People on less can't afford to buy, and they can't save because they're paying someone else's mortgage through their rent.
BTL has driven property inflation. I can't wait to see BTL landlords going bankrupt. Even with my professional hat on I'll find it hard not to laugh.
How am I chatting shite?
You made a very bold statement that
I would love to read some info on this, do you have any?
Or are you the one talking shite?
As usual, I would guess it's you, from what I see from some of your other posts on some financial matters - it's truly worrying, not re-assuring, that you use this knowledge in a professional capacity.
And if I'm not mistaken, you are a debt counsellor, not an IFA, or in any way a financial markets expert, lol
You are less equivalent to technical money matters than WhoWhere is to the real police force
But you're a gobshite to boot.
This is particularly worrying - Some people have bought info the fad of BTL in an attempt to better their lives or try to build something for their families, but you still wish the same shit on them? Even as a professional.
Pathetic.
Right, good logic there lol.
I would of thought as a debt counsellor, you would be used to seeing people over-spend and poorly managing their finances, which is real reason that the majority can't/don't save
And here's another eye opener for you - there are jobs outside London
gasp.
Of course, I am grateful to have a roof over my head at all etc but we wouldn't necessarily be forced to rent if the first time buyer type houses hadn't been bought by BTLers. You can't deny that, surely?
With a family, things get more and more difficult, I will have two kids by the end of the year, and only the past few months my girlfriend has returned to work so we have lived on one salary for years.
I am looking forward to putting the majority of her salary in the big pot to move in 2-3 years if all goes to plan
I personally, don't share the opinion that it's a black hole, you are paying for the most important material aspect of your life, somewhere to be safe and warm!
I don't think the First Time Buyer type houses have neccesarily been bought by BTLers
When is this supposed to have happened?
I believe there were around 300,000 BTL mortgages issued in 2006 .. how many houses are there in Britain?
And how many BTLers were selling up through that year? Especially at the peaks of the boom?
last year, 8% of houses were bought by 1st tmie buyers, traditionally it's about 15-25%
hell you can't blame the boomers for wanting a safe investment after the tech crash in 2001 put people off stocks, and pension funds were disappearing left right and centre, property was the ideal ticket for many as it seems more tangible and real, unfortunately that's not gonna save anyone on the way down.....ironically houses aren't going to be anymore affordable for the rest of us as the days of cheap credit are over, it doesn't matter if house prices fall by 50% and the bank still won't give you a loan unless you have a sizeable deposit.
Mind you, if it was a Welshman trying to buy a cottage, he'd probably just burn it instead.
Wouldn't you agree you that part of the reason there has been excessive BTL 'demand' for property (which will according to my demand and supply diagram increase prices
Of course
They are hardly going to sit and let the market collapse are they? Look what it has done to the American economy
It is all part of keeping the wealthy elites happy at the poor mans cost
And who do you think are the ones putting the spin on all the other factors such as BTL etc ?? The goverment!
Obviously they would want the perfect excuse to say whoops, not our fault, etc.
Should've bought a rare painting or something instead. They always go up in value. Or a bar of gold.
Yep, but not on the internet, natch.
Look at google if you give a shit.
Hmm, which posts would they be, poppet? I'm genuinely interested in where you think I'm wrong about what I say about financial matters and benefit entitlement. Clearly you're an expert in saving and financial management, given your posts on other financial forums.
Most people cannot save because they cannot afford to save. That is shown by people having to live on credit. When rental prices are the equivalent of mortgages for many people, and when you have to move every six months paying the exporbitant agent fees, there is no spare cash to save up. Simple fact.
The average household income in the UK is about £15,000, which will be about £11,500 after tax. For a 2-bed terrace around here the rent is £450 per month (£5300 per year). Basic living costs are probably about £90 per week (£4700) per year, including council tax and food, and then there is travel on top of that. And then when your landlord boots you out with one month's notice you have to find £500 in agents fees to find a new place.
Most people can't find work in the poorer areas and they can't commute for six hours every day from the Rhondda into central London. Some may be lucky, consultants who work from home, but for most people it is impractical.
And certainly core workers- police, fire, nurses, teachers- can hardly commute to Romford from Blaeneau Ffestiniog every day.
Most people I deal with through work tend to have fallen into debt because of bad luck- unemployment, bereavement, illness- or tend to have fallen into rent arrears because rental prices are far higher than the "fair rent" paid by housing benefit.
I don't see Buy-to-Let as a bad thing anyway - if there wasn't a strong demand for rental, there wouldn't be the market to support the practice. If anything, that demand is born from the introduction of right-to-buy, which I do have a problem with.
But while I feel little sympathy for BTLers who failed to recognise that its a long term investment, with short term risks, I do feel sorry for their tenants if the are "forced" to sell.
fine art and PMs are also in a huge speculative bubble just like most other asset classes, in the end they will go the same way as property unless we get hyperinflation which is unlikely imo.....look at recent sotheby's auctions and you can already see it happening, gold is on a decent run but a lot of that is due to dollar weakness and spec positions.
My family home had been student accomodation before my parents bought it, the house I live in was built as a rental, but got right-to-bought by the previous owners. To my shame my sister bought her council house. The increase in student numbers, the shift away from lodging, and the increase in single occupancy have all increased the demand for rental, which has fueled Buy-To-Let - which, because it relies on having tenants paying the mortgage, isn't possible unless there is a rental shortage.
I don't see BTLs leaving property empty to inflate demand, nor would they risk losing good tenants after six month in the hope of getting a rent rise unless they were confident of re-letting; only a strong shortage of accommodation would allow that kind of shady practice.
I will agree that a side effect of BTL is more people with plenty of money buying, which removes a downward pressure on prices, but I wouldn't go as far as to say it was a deliberate effect - which is how I read GWST's reponse. However, whichever is correct, building more social housing provides an answer.
Just thought I should quote the most rational response in this thread which is not largely driven by emotional responses (i.e. the home vs. investment semantics). The reason why there is now an influx of repossessions is directly related to the sub-prime mortgage business model we've all come to know and love over the past 6 months or so.
Most private landlords don't accept tenancies from those in receipt of state benefits and they never have done. Certainly having a brief look on rightmove.co.uk shows few private landlords who are prepared to accept "DSS" tenants.
I'd agree that in university towns a lot of the BTL market is to accomodate students, but that's a completely different argument that I don't really want to get into. Needless to say the BTL landlords have driven up prices dramatically in most university towns, completely pricing out locals. Most of the housing inflation in Newcastle is centred around student housing and the student areas are expanding.
This is accomodation the university should be providing in purpose-built campuses, but they don't. Locals now cannot afford to buy in most of the city. A 2-bed mid-terrace Tyneside flat in Heaton, which was always an area that provided dockyard workers, now costs £170,000.
I'd agree that right-to-buy is a bad thing and has done a lot of damage to the housing stock in the UK, but I don't think right-to-buy has driven price inflation. Under right-to-buy legislation firstly the buyer gets a discount and secondly the buyer is tied into the house for five years unless they pay a significant wedge to the council as an early sale penalty. If anything right-to-buy places more properties on the sale market, which should lower prices.
I also don't think more social housing would ease pressure on prices. There are already more than enough houses for everyone, the problem is that those looking to buy to live in a property are often out-bid by landlords and property speculators who can normally complete a sale faster as they don't have a chain and can put a larger cash deposit down. Those looking to buy their first home often can't afford to save because they are paying so much to rent. What little they can save generally gets swallowed by agents' fees (which around here are currently half of one month's rent + VAT, which for a two-bed flat normally tops out at around £400).
More social housing would lower private rental prices, which would make BTL less financially sustainable, which is only a good thing. More social housing would protect tenants; most tenants at the moment can be booted out of their home with a month's notice under s21 Housing Act.
There should be more social housing, though. If people could get more secure tenancies the pressure to buy would be less. I'd be happy not buying a house if I could get a secure tenancy with a social landlord, as would a lot of people; sadly, the local housing association here has a waiting list of about five years for couples in our situation.
I read this, I also remember reading their guide/advice on how to be successful in the BTL market, quite ironic really.
The problem with houses in wales and scotland is that there are no jobs to go with them. What would you do if you moved there? Sure if you work from home it's not a problem, except you may end up hundreds of miles from anyone you know.
I think after a market correction people will be (unfortunately) repossessed, and the price will drop, and FTB will go in and put new money into the market, taking out more mortgages and the whole economy will look healthy again. It's just a shame that so many people have been conned for want of a better word, for the benefit of the banks that give mortgages.
Some people on MSE were actually advised by the banks to make up an income figure in order to get a bigger mortgage. It's simply ridiculous. There's making profits and then there's exploitation.
Do you think in Wales and Scotland we live in the middle of nowhere or something? lol
I am about 30 miles from England, let alone 100s of miles from nowhere
Why would house prices dropping lead to repossesions??
The prices may well drop, but if they drop as bad as the scaremongers want, then it would have a horrendous effect on the economy, and interest rates would probably go up again in the end, making houses just as unaffordable again
Even if the prices drop 25% now, we are still only going back to about late 2005/early 2006 prices or so ?
errr. ok. How do you figure that? We have recession looming, and you think that house prices falling is going to sort that out!?
Got a link for this? I would love to know which banks did that, maybe the brokers, but I doubt the banks would risk that in most cases
And it's hardly exploitation, no one forced them to buy
It's everyone elses fault eh
Even if that article was to be taken as 100% accurate, £14000, while it is definately a big amount, is not that significant when you take the rest of it into consideration
I don't think people would be much happier in the circumstances and it's a far call from certain members here who seem to think the BTL is the be all and end all of the housing market boom.
Heh, I was thinking of the remote areas of Scotland, but you have a fair point
Sorry, I worded this wrongly. I meant:
a) people can no longer afford their mortgage repayments
b) houses get repossessed
c) increase in supply of houses causes a fall in prices
Still, the lower the prices go, the more FTB who have been saving will be able to buy. Even if interest rates go up, demand and supply must balance at some point. What I'm trying to say is that it wont be gradual and then a halt, it will probably be a slight panic of house prices crashing, but then they'll be affordable so they'll bounce back a bit. After that, I think confidence will be restored slightly and it will be back to business as usual. That's the business cycle is it not?
Not right now, I can dig one out for you though if you're fussed.