Housing

[cpa]

The bit highlighted in red is because landlords are profiteering. They dont have to pass on the cost as the property is not declining in value, but instead the private landlord is still gaining equity, it just means they aren't doing it at the same rate as before.

I'll admit it im part of the problem, having two rental properties, but the rent charged has remained the same for the last 15 yrs and as a result Ive had the same people renting the houses and looking after them all this time. Zero hassle, they are happy and I have assets that are increasing in equity year on year and will be paid off in a few years time.

Of course the landlords are making money, why would they do it otherwise ? Its an investment.
At the end of the day most people will charge what the market will stand .
I have a feeling that there's not many landlords like yourself.
You must be lucky and not need the extra money because it doesnt make any business sense.
If there was a glut of properties it wouldn't be an issue and rents wouldn't be spiralling ever upwards.
Your very lucky with your tenants , a lot more come and go, moving jobs ,students etc lot more hassle and expense re-decorating getting all the checks done , vetting , estate agent fees etc .
I to had 2 properties , sold one a few years ago when the rules kept changing and will sell the next one when my current tenant leaves, she's a great tenant and weve not increased the rent since she's been there which is over 6 years but we are lucky as its mortgage free.
Not really gone up that much in price after 15 years,and if it was only on the equity I would have made more money on a high interest account or shares.
We were going to use it as a pension boost but its just not worth the hassle anymore.

 

[Blue Maverick]

Owning a house is quite simply beyond the realistic means of many young people. The whole spiel about not buying German cars or lattes is frankly the final insulting kick in the face for a generation of people who have been completely left behind. And I say this as somebody in my mid-30s who owns my own home. You know how I did it? Dumb luck like everybody else. I got married to somebody and we both have high paying jobs but I couldn’t have bought alone.

I was the mug who listened to people like the ones in this thread. I didn’t have a car, I didn’t go on holiday for over a decade, made all my own meals at home, lived frugally every day under the belief I would somehow make it one day and be able to afford a home. And you know where it got me? Fucking nowhere - I just led a miserable hermit crab existence. If I married somebody who wasn’t earning well I would still be renting. People who are still under the notion it is a meritocracy or this is something you can work towards are living on a different planet.

You either inherit money (and this can either be in the form of cash gift or living for free at home - a luxury many don’t have), get a job that pays obscenely well (being a teacher or some honest job like that wouldn’t cut it), or marry somebody who gives you a good combined income. These are now the only paths to owning a home, and for most ordinary folk one of those isn’t an option.

It’s simple maths. House prices have reached escape velocity, they are growing faster than young people’s salaries can keep up. No bank is giving them a mortgage even if through some miracle, or financial help they manage to get a deposit together, because they aren’t meeting the affordability criteria. People don’t quite understand how much things have changed in that respect. Young people on £25k a year cannot withstand a shock in interest rate increases. They can get a mortgage for at most £120k if that is their salary. Just looked in my area and the cheapest flat for 20 miles around is £150k so… oh well I guess?

The graduates I speak to in their early 20s have simply stopped trying - they’ve just gotten used to the idea they will rent forever. Because they’ve realised the maths makes it impossible. So why try? Why live like a monk in a monastery for something that realistically isn’t going to happen. I don’t blame them.

I agree with this mate in that it’s something like 10 times average salary compared to maybe 3 times 30 odd years ago, but do they really need to spend. £3-400 month leasing a car or paying £5 for a coffee, I’m nit saying people should live like hermits and life is for living but you can move to less desirable areas to get on the ladder, I know people slag oldham off (and quite rightly) but you can pick up a house under £150k, it’s a start and near the metro link and m60. Unfortunately many will need the bank of mum and dad to get that deposit unlike in the past, for many this is not an option I know and I don’t know what the answer is. I did see a suggestion where there was a call for lifetime mortgages backed by the government at a low rate so people could get on the ladder, the government make money back etc, I don’t know how workable that could be. I know there’s a suggestion of rent control and how that wouldn’t work, could they put in a price control for areas, so you couldn’t overcharge for a two bedroom house, I suppose that would be the end of capitalism!

 

[hilts]

I started saving mt first deposit the day I got my first job. I then bought a small house and later traded up. I know things are a lot harder now but people have to help themselves. My son saved half his deposit and I gave him the rest. My daughter is house hunting and has saved all the deposit she needs.
Both gave up some social stuff to make it.

People have to help themselves, you gave your lad half his deposit.

Priceless haha

 

[Kompany Car]

Of course the landlords are making money, why would they do it otherwise ? Its an investment.
At the end of the day most people will charge what the market will stand .
I have a feeling that there's not many landlords like yourself.
If there was a glut of properties it wouldnt be an issue and rents wouldnt be spiralling ever upwards.
Your very lucky with your tenants , a lot more come and go, moving jobs ,students etc lot more hassle and expense re-decorating getting all the checks done , vetting , estate agent fees etc .
I to had 2 properties , sold one a few years ago when the rules kept changing and will sell the next one when my current tenant leaves, she's a great tenant and weve not increased the rent since she's been there which is over 6 years but we are lucky as its mortgage free.
Not really gone up that much in price after 15 years so in your thoughts I can charge more than somebody elses place thats shot up .
Doesnt really make business sense .

Is it a business or an investment ? The agents fees and renovation costs by the way are tax deductable. Some landlords and Im by no way pointing at you, are wanting their cake and eating it because they have created a pyramid system of rental properties based upon leveraging money from swathes of buy to lets. However with the increase in mortgage rates, instead of absorbing the risk they are just moving it onto the renters who are then at the whim of a distorted and unregulated market. There needs to be a bit more of a social conscience around the whole property rental system or appropriate rent controls.

 

[Ifwecouldjust.......]

Is it a business or an investment ? The agents fees and renovation costs by the way are tax deductable. Some landlords and Im by no way pointing at you, are wanting their cake and eating it because they have created a pyramid system of rental properties based upon leveraging money from swathes of buy to lets. However with the increase in mortgage rates, instead of absorbing the risk they are just moving it onto the renters who are then at the whim of a distorted and unregulated market. There needs to be a bit more of a social conscience around the whole property rental system or appropriate rent controls.

Agreed .... a rent should be set at the beginning of a tenancy and no increases allowed for a set number of years. Thereafter Increases limited to RPI plus a % so people know what's coming.

 

[cpa]

My thoughts were as stated its down to private landlords leaving the market so therefore there are less properties due to more and more regulation also increase costs
Supply and demand really.
There are other factors such as rising costs,but I agree landlords will charge what the market states.
If my tenant left tomorrow I would go to my estate agent and ask him to market it , he would advise me what the going rate was, would many people ignore him and put it on lower, doubtful.
People who are struggling naturally want more regulation and cheaper rents but this just drives more landlords out of the market exacerbating the problem and I' not talking about those that have multiple properties, they will always find a way to make money out of it but the landlord like yourself who has 1 or 2 properties and looks after everything himself and there was quite a few like that but its a dwindling pool.
Could it be a business and an investment ;-)

 

[Mr Kobayashi]

People have to help themselves, you gave your lad half his deposit.

Priceless haha

Mastercard advert?

 

[Palerider]

From the Internet.

At the time of writing (August 2024) the average monthly repayments on a £180,000 mortgage are £1,052. This is based on current interest rates being around 5%, a typical mortgage term of 25 years, and opting for a capital repayment mortgage. Based on this, you would repay £315,679 over the mortgage term.

And

On a £25,000 salary, your take home pay will be £21,271 after tax and National Insurance. This equates to £1,772.58 per month and £409.06 per week. If you work 5 days per week, this is £81.81 per day, or £10.23 per hour at 40 hours per week.

My comment.
Difficult to see how you afford a mortgage (or indeed rent if they are at similar levels) on one salary. However, has that not always been the case? What seems to have changed is that most of us used to live on council estates with reduced rents to help us along. It seems to me that the council house 'right to buy' (which we benefited from and was the greatest single bump up the ladder we have ever had. It changed our lives) has meant that councils no longer give the affordable mass council house estates as an option.

 

[SkyBlueFlux]

I agree with this mate in that it’s something like 10 times average salary compared to maybe 3 times 30 odd years ago, but do they really need to spend. £3-400 month leasing a car or paying £5 for a coffee, I’m nit saying people should live like hermits and life is for living but you can move to less desirable areas to get on the ladder, I know people slag oldham off (and quite rightly) but you can pick up a house under £150k, it’s a start and near the metro link and m60. Unfortunately many will need the bank of mum and dad to get that deposit unlike in the past, for many this is not an option I know and I don’t know what the answer is. I did see a suggestion where there was a call for lifetime mortgages backed by the government at a low rate so people could get on the ladder, the government make money back etc, I don’t know how workable that could be. I know there’s a suggestion of rent control and how that wouldn’t work, could they put in a price control for areas, so you couldn’t overcharge for a two bedroom house, I suppose that would be the end of capitalism!

Of course mate, I’m not disputing there are people out there who live beyond their means. The thing is though, I think that was ever thus. It’s not the experience of every young person, and when you look at the statistics fewer young people are driving than ever before. Only a fifth of under 25s commute by car. So clearly comparatively few people are spending that kind of money. Yet if you ask some people you’d think everybody under 30 is driving a BMW around. That’s the stuff of fantasy.

There’s absolutely nothing special about this generation of kids. Some of them spend money on shit, some of them are extremely frugal. Many would move heaven and earth for the opportunity to get a flat in Oldham. But this idea of moving area to find an affordable house sort of proves my point, nobody ever had to do that before and moving miles away from home is an extra barrier if you have a job and god forbid a family.

My problem with the discourse around this is that a lot of older people seem intent on tarring every young person with the brush of spending beyond their means, when that is simply not the case for many. The reason people aren’t buying houses is not because an entire generation is addicted to avocados and lattes. And pretending this is the main issue is to ignore the massive problem at the heart of our housing market which is, as you’ve recognised, the fact house prices as a multiple of average salary are the highest they’ve been since the 19th Century. Victorian times!

 

[mexico1970]

Of course mate, I’m not disputing there are people out there who live beyond their means. The thing is though, I think that was ever thus. It’s not the experience of every young person, and when you look at the statistics fewer young people are driving than ever before. Only a fifth of under 25s commute by car. So clearly comparatively few people are spending that kind of money. Yet if you ask some people you’d think everybody under 30 is driving a BMW around. That’s the stuff of fantasy.

There’s absolutely nothing special about this generation of kids. Some of them spend money on shit, some of them are extremely frugal. Many would move heaven and earth for the opportunity to get a flat in Oldham. But this idea of moving area to find an affordable house sort of proves my point, nobody ever had to do that before and moving miles away from home is an extra barrier if you have a job and god forbid a family.

My problem with the discourse around this is that a lot of older people seem intent on tarring every young person with the brush of spending beyond their means, when that is simply not the case for many. The reason people aren’t buying houses is not because an entire generation is addicted to avocados and lattes. And pretending this is the main issue is to ignore the massive problem at the heart of our housing market which is, as you’ve recognised, the fact house prices as a multiple of average salary are the highest they’ve been since the 19th Century. Victorian times!

Houses are just too expensive to buy and that's down to supply and demand. We aren't going to solve the problem by building more private houses because people with more money than first time buyers will buy the new houses first.

Council houses need to be built and on top of that no right to buy, bring back a proper direct works and keep the rents cheap.