Alternatives to living in a house?

[wannabedamned]

Landlords knowingly charging high rents in places with very low incomes (hello Cornwall) is classic exploitation.

I was always under the impression landlords for the most part charge using current market guidelines:-

Number of bedrooms, facilities, room sizes, garden size, and location = Price

I didnt realise they were run by exploiting masterminds

 

[[TW]Fox]

Come on Fox, is that even a serious question?

I don't need Range Rover do I. I do, however, need a house to live in.

Chinese people also need a job. Sweat shop owners give them a job, but don't compensate them fairly for their time. It's exploitation.

So really the problem then is your employer not paying you a living wage, if you must find somebody to blame?

Landlords knowingly charging high rents in places with very low incomes (hello Cornwall) is classic exploitation.

Why wouldnt the landlord charge market value? It's basic economics - price is the point at which demand and supply meet?

Why would he rent it to you for £300 a month when somebody else would pay £500, it makes no sense?

 

[dowie]

Landlords knowingly charging high rents in places with very low incomes (hello Cornwall) is classic exploitation.

You're acting as though its one evil landlord or some cartel/syndicate controlling rent prices. The reality is that its a free market and anyone with the means can enter it and chose to rent out property.

Why on earth would you expect a private individual, taking on risk, to decide to charge less rent than the market rate because some random people living locally don't earn much and are bitter about it.

 

[mdb08]

Last time I checked the gas company wasn't asking for 30-50% of my wages to provide gas.

If rent was reasonable I wouldn't make the claim that landlords are exploiting the poor. But down here a small 1 bedroom house costs £500 p.m.

Chinese sweat shops wouldn't be exploiting their workers if they paid them decent wages. Same principle.

Do you understand the concept of supply and demand?

 

[Slade2]

In defence of the OP he does have a point when talking about cornwall.

It has probably the lowest average wage of any county in the country but over inflated house prices due to `middle aged`people buying up all the good housing as `holiday homes` to rent out. I have friends from Cornwall and most of them cant find jobs apart from seasonal ones that dont pay very much.

I myself lived in Plymouth for a good number of years and would have stayed if the job market wasnt so dire and I could afford to buy a house there I probably would have stayed but crappy jobs means crappy pay and no house so I moved to the midlands.

 

[Mr^B]

I don't see what's so difficult to understand.

The landlord is charging you the rent you are willing to pay. If you can't afford it, move out and someone else will move in. If they don't the rent will be lowered or the accommodation improved until someone does. If the area you are in is too expensive, then move somewhere else. If you want to stay in that area, then that's entirely your choice.

They aren't charging you that much because they are greedy or exploiting you. They are charging that much simply because you'll pay it.

I'd suggest going and reading some basic economics books and having another go.

 

[BDEE]

Last time I checked the gas company wasn't asking for 30-50% of my wages to provide gas.

If rent was reasonable I wouldn't make the claim that landlords are exploiting the poor. But down here a small 1 bedroom house costs £500 p.m.

Chinese sweat shops wouldn't be exploiting their workers if they paid them decent wages. Same principle.

You can thank The Labour Party for the state of the rental market in the private sector - With thier years of ever increasing housing benefit for private rented properties it fuelled the Buy To Let market and increased average rents.

Shame for the people who will now find themselves struggling to pay thier rent when thier housing benefit goes down........

Rents will probably drop in the coming years because of this. House prices probably will too because buying will no longer be the cheaper option at current levels.

Sad times. Thanks Labour.

 

[AHarvey]

A landlord doesn't make money off other people's backs. He exploits his investments. You've managed to pick one line of business that doesn't depend on the labour of others. Well done.

Of course it depends on the labour of others, if they don't work, they don't get paid and your investment doesn't make you any money

Its the never ending circle

As for other suggestions, I've a single mate who lives in a caravan and works as a tree surgeon. He also has his caravan full of comics and action figures as well as going to comiccon events dressed as the punisher

As suggested, a boat is another valid option. As for people saying that the cost would equal a deposit on a house, it would, however, no mortgage to pay

 

[Wicksta]

Yeah I have no idea where he got that idea. Not all of us have top-of-the-range i7 machines with quadfire 6970s. You can make a half-decent computer for not too much money if you're careful.

I think we must have a very different concept of what working class is then if 'not having a top of the range i7' constitutes being so.

 

[hurfdurf]

It depends on what you believe, some people believe that in the market economy, people who are rich have more freedom than people who are poor. Rich people can fly to exiting places, have better medical care, can enjoy more things - they're more free to do what they want. Freedom by virtue of how much money you have is unfair.

Businesses are totalitarian institutions. They are organized such that there is a boss telling you what to do. We would never accept that in the political sphere of life, so why should we accept that in the economic sphere of life? Money is just as important as politics in this modern world. Spending half your life in an institution where you have no say seems like a bum deal.

 

[FoxEye]

I think we must have a very different concept of what working class is then if 'not having a top of the range i7' constitutes being so.

Well, what is it then? A working class person doesn't own a computer?

Surely that's not what you're saying... Perhaps that a working class person doesn't visit an internet forum about computers?

Either way I can't see why anyone would think that.

 

[Rameses]

I probably could cope on a narrow boat, they seem nice and cosy inside but I think you'd quickly feel trapped if you don't go out often. Our local pub is near a canal basin where barges park up for long term and a guy I know, he was always in the pub because he didn't have anything else to do after work. Sold up and rented a house after like 2 years.

The only type of caravan I could live in is a static one, it would have to be a bobby dazzler too cos' some of the ones I've stayed in were bland and old looking, but were of a decent size, much akin to a single bed flat.

Also there was an article on the BBC about these mini-bungalows being built in peoples back gardens which seem to be getting more popular for people who can't get out of their parents houses due to sheer cost of deposits etc, I'd absolutely love one of them, it would give me more privacy but I could still get help from my parents when/if needed (I'm disabled), certainly be more practical for me than the 2 above.

 

[Nikias]

It's all very well talking about the free market with buy-to-let landlords et al. and, indeed, they are not 'evil' or anything like that, but their proliferation is nevertheless a problem in our society. The market is, not, after all, truly free. It is subject to being skewed by various factors, not least tax policy.

Why is there so much tax on work and so little on assets like land? Someone going out and slogging away for 50 hours every can be taxed for 40-50% on what they earn, plus National Insurance tax, pension tax, etc. Rich foreign oligarchs can come and buy up swathes of cities and pay very little tax on it. Fair? I think not. Not to mention the effect it has had on the economy with the housing bubble etc.

Buy-to-let landlords are not bad people, but neither have they been very clever or hard-working. Hard work and innovation, at all income levels, should be encouraged and rewarded in our society, not just being in a minority able to afford large capital sums leading to ever-more wealth.

 

[Makhaira]

Sorry but when did it become some sort of 'right' that everyone in the universe should own property?

Ahh, the polarising guy that is [TW]Fox. I'm 100% with him this time though.

Lots of people both in the UK and abroad spend their lives renting. Owning property is absolutely not a right, it's a privilege. Landlords renting out property is a business model that allows them to make profit whilst allowing people to have a roof over their heads without having to fork out tens of thousands on a deposit.

The idea that a market is somehow "wrong" because it is skewed by various factors is madness! Markets are by their very nature affected by the world at large and local environmental factors, this is the way supply and demand and the effect of economic factors works.

 

[Dr House]

Last time I checked the gas company wasn't asking for 30-50% of my wages to provide gas.

If rent was reasonable I wouldn't make the claim that landlords are exploiting the poor. But down here a small 1 bedroom house costs £500 p.m.

Chinese sweat shops wouldn't be exploiting their workers if they paid them decent wages. Same principle.

Come one man grow up and start to understand how the world really works.

landlords rent their property for what ever the market is willing to pay. They have made a investment and need to see a return on it.

Rental prices are generally dictated by the value of the property. Some number for you


Take a 300 000 home which is easy in london
Investor buys it
stamp duty legal fees, mortgage arrangement fee... 11 000
75 % mortgage (225 000) at 5.3% = 12 000 in intrest per year
Now factor in that the 86k invested this money would be giving some sort of return if invested somewhere else (stock market...) say at 5% = 4300 lost per year
Now factor in maintenance costs, insurance and letting fees, say 1200 per year (its probably a lot higher)


Total cost per year to landlord = 17 500, this is not even taking into account the possibility that the house will be empty for any period of time or that you have tenants that damage the house or refuse to pay.


A very optimistic rental yield in london is around 5.5% for a 3 bed house = 16 500 rent per year on the above 300k home.

So the landlord is actually loosing +/- 1k per year on his investment, plus he is taking on the risk of a fall in property prices, rent prices (rental prices dropped 30% in prague over the last year), large repair bills, empty house.....

Also do not forget if there where not so many buy to let investors it would be harder to find a place to rent, demand would outstrip supply and rental prices would be much higher, for example my friend rents a place in Gurgaon India, there are very few good properties for rent in the area he woks. He pays 3000 euro per month in rent on a property valued at 300 000 euro simply because demand outstrips supply.

 

[LiamC]

My aunt / uncle live in a static caravan.

Conservetary built onto the side, Jacuzzi in the bathroom, Garage with enough room to park a car in front, A Drive-way on the side and a pretty large garden.

Hard to explain how nice it is. Only cost them around £15K around 20 years ago.

 

[ntg]

Come one man grow up and start to understand how the world really works.

landlords rent their property for what ever the market is willing to pay. They have made a investment and need to see a return on it.

Rental prices are generally dictated by the value of the property. Some number for you


Take a 300 000 home which is easy in london
Investor buys it
stamp duty legal fees, mortgage arrangement fee... 11 000
75 % mortgage (225 000) at 5.3% = 12 000 in intrest per year
Now factor in that the 86k invested this money would be giving some sort of return if invested somewhere else (stock market...) say at 5% = 4300 lost per year
Now factor in maintenance costs, insurance and letting fees, say 1200 per year (its probably a lot higher)


Total cost per year to landlord = 17 500, this is not even taking into account the possibility that the house will be empty for any period of time or that you have tenants that damage the house or refuse to pay.

all fine so far, but:

A very optimistic rental yield in london is around 5.5% for a 3 bed house = 16 500 rent per year on the above 300k home.

So the landlord is actually loosing +/- 1k per year on his investment, plus he is taking on the risk of a fall in property prices, rent prices (rental prices dropped 30% in prague over the last year), large repair bills, empty house.....

16.5k p.a for a 3bed house in London? Where, I'll have two of them.

You are lucky if you can get a studio flat in a half-decent area for £1100 (that's c13k per annum)

Also do not forget if there where not so many buy to let investors it would be harder to find a place to rent, demand would outstrip supply and rental prices would be much higher, for example my friend rents a place in Gurgaon India, there are very few good properties for rent in the area he woks. He pays 3000 euro per month in rent on a property valued at 300 000 euro simply because demand outstrips supply.

I'm not sure how BTL investors who have more cash than the regular hom****** and can outbid them in auctions are supporting the market?? The assertion that if they didn't buy them to let them then there would be fewer properties available to rent is countered by the argument that a lot of people who are forced to rent would be buying instead - if the prices wheren't pushed up by the BTL brigade.

The house prices in UK got out of sync (esp. in London) with wages ever since housing costs were excluded from inflation figures. That allowed house prices to skyrocket without affecting government inflation targets, and consequently without an impact on wages. Hence the imbalance observed now. There may be a massive supply problem but if property costs were part of the inflation figures things would be better now.

 

[Dr House]

My aunt / uncle live in a static caravan.

Conservetary built onto the side, Jacuzzi in the bathroom, Garage with enough room to park a car in front, A Drive-way on the side and a pretty large garden.

Hard to explain how nice it is. Only cost them around £15K around 20 years ago.

I assume they own the land? sounds nice but the average uk house price in 1991 was 61k so its still 1/4 of the cost of a house.

According to the BBC average 2010 house price in the uk was 232k
http://news.bbc.co.uk/2/shared/spl/hi/in_depth/uk_house_prices/html/houses.stm

 

[Dr House]

16.5k p.a for a 3bed house in London? Where, I'll have two of them.

You are lucky if you can get a studio flat in a half-decent area for £1100 (that's c13k per annum)

This house is 5 to 10 min walk from a train station which has direct trains (3 stops) 19 min into london, 10 min drive or 20 min walk from tooting underground. The area is not bad and its quite a nice house.

http://www.findaproperty.com/displayprop.aspx?edid=00&salerent=1&pid=8642187

The Studio flat you mentioned is probably that much because its worth 250 to 300k due to the area.

I'm not sure how BTL investors who have more cash than the regular hom****** and can outbid them in auctions are supporting the market?? The assertion that if they didn't buy them to let them then there would be fewer properties available to rent is countered by the argument that a lot of people who are forced to rent would be buying instead - if the prices wheren't pushed up by the BTL brigade.
.

Have you ever been to a property auction?
Very few people buy homes to live in at auction its generally only investors. If you do happen to have someone that wants to buy a home to live in at auction they will almost always out bid the BTL investor.

BTL investor buy at auction because they want to pay under market value if someone wants to buy the house to live in they are much more likely to play closer to market value.

Also buying at auction is a huge risk, at the fall of the hammer you are in contract and there is nothing you can do to get out of it even if there is something wrong with the house (there often is).

The other thing with auctions is that you have to put down 10% on the day and the balance normally within 30 days which is not easy for most home buyers. Many BTL investors take bridging fiance which generally has a 1.25% entrance fee, 1.25% ext fee and 1% per month until they get finance sorted with the bank.

Its not as lucrative as many people think. You only really make big money if you are lucky and the market keeps going up.

 

[s0ck]

The house prices in UK got out of sync (esp. in London) with wages ever since housing costs were excluded from inflation figures. That allowed house prices to skyrocket without affecting government inflation targets, and consequently without an impact on wages. Hence the imbalance observed now.

At what point in time did that happen and who was responsible?