Housing crisis solutions

[mid_gen]

People have 'moaned' about immigration and EU regulations and all that stuff for years. We live in a democracy, politicians (however much it may not seem it sometimes) are beholden to the will of the people and if enough people express their dissatisfaction then things will change.

It's quite possible to be working hard to deal with the current reality while at the same time expressing an opinion that things need to change.

To write it off as 'moaning' is just patronising.

 

[Kingdom34]

People have 'moaned' about immigration and EU regulations and all that stuff for years. We live in a democracy, politicians (however much it may not seem it sometimes) are beholden to the will of the people and if enough people express their dissatisfaction then things will change.

It's quite possible to be working hard to deal with the current reality while at the same time expressing an opinion that things need to change.

To write it off as 'moaning' is just patronising.

OP shouldnt be "struggling" to get on the ladder...as previously mentioned...but i agree with your post...we have a right to express after all.

 

[KillBoY_UK]

Im talking about the current situation my friend, not the past....i understand teh gravy train yes...i never benefitted from such gravy train...my situation absolutely mirrors the OP situation but i still managed to get onto the ladder in the SE....and from what...sacrifice and graft...sorry i see too many people making excuses these days.

Have you heard of commuter towns? Life also flows in circles, you will get your chance again to make it on easier than ever...dont you worry.
In this particular example the OP has the ability to save surely, 10% isnt much of an ask these days, its standard. £20k between two people...over a year etc.

Teachers collecting bins? No they will be teachers teaching mate. As i said i commute 20miles to work, i also live 20miles away in an area i didnt grow up in...am i bleating...no sorry im not, i saw the wood for the trees and sucked it up fella...its what you have to do in some cases.

Yes and everyone has access to a stable and affordable roof....as I've stated from a financial aspect its well within the financial realms of the OP to succeed. It just seems the angle of the post is.....well...il say no more

£20k is a big ask when you are single earning less than £25k and have to pay half your salary on rent. I already live on one of the satellite towns near oxford and if I move out even further out any savings I make on the rent get consumed by the extra cost of the trains and bus's to get to work as well as taking longer to get to work,

I never said teachers would be collecting bins lol, i used teachers and people who collect bins as example of vital services workers who are getting priced out. I know of a several teachers who have to pay high rents to live in small rooms so they can go and do there jobs.

I could go on.

 

[Rroff]

Then I just think we fundamentally disagree with one another. I don't think house ownership is a right. Having a place to live, yes. But ownership? No.

Maybe I am too right wing for my own good ha!

But I have just bought my own house so I am probably bias as well.

I strongly ascribe to the ideal that in a responsible society every individual has a right to work and benefit from the labour of their hands to eat, cloth themselves and if they choose a roof over their head that is their own to enjoy those things under - even if it is fairly basic. IMO it is morally wrong if people are born into a world where previous generations have made the decision on whether they can (realistically) own a house or not - which is fast a road we are going down even though the story is more complex than that.

EDIT: Yes that is a bit left wing leaning and ironically I'm generally more right wing.

I already live on one of the satellite towns near oxford and if I move out even further out any savings I make on the rent get consumed by the extra cost of the trains and bus's to get to work as well as taking longer to get to work,

This is quite a lot of the perspective I post from - living in one of those satellite areas that people used to move to to be able to afford to work in the area and now even here they are being priced out - there is only so much more they can move never mind the considerations of travel cost and/or employment opportunities elsewhere.

 

[daz]

Next, we need to bring as much supply as possible on the market. This means abolishing stamp duty. It is not just inefficiently costly to collect. It creates even more inefficiency by deterring buyers and sellers. In effect, it is a tax on moving, which slows labour mobility and keeps people trapped in parts of the country where they no longer want to live or work. It also slows down the downsizing (and upsizing) needed if the housing market is to work properly. Both recent major UK tax policy studies, the Mirrlees Review (by the Institute for Fiscal Studies) and one from the 2020 Tax Commission, recommended abolishing this tax entirely.

Then we should introduce a real land-value tax. This would be levied not on the value of the house (as with current council tax, and the old rates) but on the value of the land itself. This has many advantages. First, it hits the rich (who own land) much harder than the poor (who don’t). In particular, it raises the cost of living in a big house, but hardly affects people in small flats. It penalises those who sit on land waiting for it to rise in value — as was scandalously the case for decades with Battersea Power Station. If you pay tax on land whether you use it or not, you are more likely to bring it into productive use or sell it. Most taxes depress economic activity; land-value taxation actually stimulates it. It is cheap to collect and hard to dodge.

This is not the worst idea in the world, but in my mind a better option would be to make further distinctions within the council tax system.

 

[Scam]

This is quite a lot of the perspective I post from - living in one of those satellite areas that people used to move to to be able to afford to work in the area and now even here they are being priced out - there is only so much more they can move never mind the considerations of travel cost and/or employment opportunities elsewhere.

To those saying "move further out" where does it stop?

Commuter town prices are now rising faster in some places than London itself.

To some people trying to do the maths and work out how "easy" it is to save £20k for a £200k house, this is what happens when prices are rising by 19% (in Slough, that wonderful place where we all aspire to live)

If you're aiming to save 20k in two years for example, that's roughly £1k/month which is do-able.

By the time you've got that 20k for your 200k house, prices have risen by 19% (in both years) so that 200k house is now £283k. Woops. So you can't buy that, and need to save more. How much do you need for that £283k house then? Let's say 10% again, maybe round up to £30k. So you're saving for another year. In that year the prices have risen by another 20% so the house is now worth £339k. Oh dear, this isn't going well is it. Your optimistic £30k now needs another few grand on it.

Sure, you'll get there in the end but for a single person to save £1000/month whilst renting for example is going to be tough. And to be honest I've made it sound a lot easier than it is, because really a FTB should be aiming for 20% deposit. Getting a good deal on a 10% seems unlikely, I dunno. So, err.. double all those figures.

 

[Woden]

Hey just earn more

 

[Kingdom34]

To those saying "move further out" where does it stop?

Commuter town prices are now rising faster in some places than London itself.

To some people trying to do the maths and work out how "easy" it is to save £20k for a £200k house, this is what happens when prices are rising by 19% (in Slough, that wonderful place where we all aspire to live)

If you're aiming to save 20k in two years for example, that's roughly £1k/month which is do-able.

By the time you've got that 20k for your 200k house, prices have risen by 19% (in both years) so that 200k house is now £283k. Woops. So you can't buy that, and need to save more. How much do you need for that £283k house then? Let's say 10% again, maybe round up to £30k. So you're saving for another year. In that year the prices have risen by another 20% so the house is now worth £339k. Oh dear, this isn't going well is it. Your optimistic £30k now needs another few grand on it.

Sure, you'll get there in the end but for a single person to save £1000/month whilst renting for example is going to be tough. And to be honest I've made it sound a lot easier than it is, because really a FTB should be aiming for 20% deposit. Getting a good deal on a 10% seems unlikely, I dunno. So, err.. double all those figures.

But the OP isnt single?! They have a combined salary of £50k?!

I see your point though but "rounding up" from £20k to 30k is a bit absurd...but i do see your point.

Whole reason commuter prices are rising is because of London pricing people out of the market i agree.

The point is....lets be honest, if youve been saving say 5-6 years at 10k a year i can sympathise...but me personally i bought my first house at 27, im now 34. Why should i have to suffer my house decreasing when i was in the exact same position 7 years ago? Because back then it was the same situation for me...this is the reality of the property market. Back then i was on 4k less than i am now...i just grafted and i still do for everything i have.

My main point here is the OP has the tools and structure to afford...go do it.

Yes the market can be mental, but if you find that gap in the market you will reap the rewards.

I work with a guy whose 38 years old and harps on the same way, hes been working for 20 years now....found out the other day for the first 10 years he had p*ssed all his savings up the wall....sympathy level....zero....why, because too many people these days would rather be snapped holding a bottle of grey goose in their hands, with their head tilted to the side....aimlessly vying for those 15mins of fame as a side piece to some roid ridden numbnut on Geordie Shore...is that going to reward you in 10 years time...nope....you will just be another stat....Sorry i digressed

 

[Rifte]

because really a FTB should be aiming for 20% deposit. Getting a good deal on a 10% seems unlikely, I dunno. So, err.. double all those figures.

A 10% deposit is the 'standard' target/goal for any FTB, but to get the tastier interest rates you really need 15% as a bare minimum, 20% to 25% would be ideal.

 

[wez130]

I haven't read the whole thread so shoot me if this has already been suggested, but to me, the real issue buying a property in this day and age is saving the deposit.

There are similar schemes to this already i think but they are few and far between, but, i think the government should look into a way to do the following....

You see a house you like but you can't afford the deposit, say for arguments sake it's £150k, so, you initially rent the property for 2 years at a rental price that you can afford, say £700 / month, over two years, if you don't like the house, you leave and find somewhere else to live and start over, if you like your home, the 2 years rent you've paid should be able to be used as a deposit for the house you agreed a price on at the beginning of the tenancy (£150k), you've just paid £16,800 over the last 2 years which is just over 10% deposit, you should be then allowed to apply for a mortgage for the remaining cost (£133,200) with no additional deposit if you can't afford any, or even better, with even more of a deposit to keep rates lower. Obviously, rental terms and prices can be whatever you can afford etc and agreed on application.

Discuss?

 

[balky12]

I haven't read the whole thread so shoot me if this has already been suggested, but to me, the real issue buying a property in this day and age is saving the deposit.

My sister suffers from quite the opposite. She has saved and saved and saved for the last 4 years and has a substantial deposit. Probably double what mine was. But the multiplier on her wage doesn't let her get much more than a flat or at best a 1 bed maisonette a bit further out than where she lives with our parents.

Not only that it's living costs. The living costs from one person to two people hardly changes. A bit more gas/water/electric and a bit more on food. But everything else is the same.

By the time you have your mortgage, food, bills, petrol, insurances, council tax, internet, phone line, etc. You can easily be >£1,500 a month plus travel into London for her job.

She would essentially move out (if a higher multiplier was there) to have no life...

 

[Kingdom34]

I haven't read the whole thread so shoot me if this has already been suggested, but to me, the real issue buying a property in this day and age is saving the deposit.

There are similar schemes to this already i think but they are few and far between, but, i think the government should look into a way to do the following....

You see a house you like but you can't afford the deposit, say for arguments sake it's £150k, so, you initially rent the property for 2 years at a rental price that you can afford, say £700 / month, over two years, if you don't like the house, you leave and find somewhere else to live and start over, if you like your home, the 2 years rent you've paid should be able to be used as a deposit for the house you agreed a price on at the beginning of the tenancy (£150k), you've just paid £16,800 over the last 2 years which is just over 10% deposit, you should be then allowed to apply for a mortgage for the remaining cost (£133,200) with no additional deposit if you can't afford any, or even better, with even more of a deposit to keep rates lower. Obviously, rental terms and prices can be whatever you can afford etc and agreed on application.

Discuss?

Agree but in the meantime the house has increased in value...nullifying your initial 2 year rental investment....but the very fact youve paid your rent on time, every month and are of a sound investor....this should add up to something. Perhaps a 100% LTV! As youve proven you can pay your way...but is the said rent the equiavelent to the mortgage repayments...usually its above tbh from what ive seen. So once again good idea.

But there will always be someone that trashes the place and also no initial research etc taken by the bank for just a renter. So a more structured link/scheme with guidelines need to be implimented....but very good idea could work well

 

[FoxEye]

My sister suffers from quite the opposite. She has saved and saved and saved for the last 4 years and has a substantial deposit. Probably double what mine was. But the multiplier on her wage doesn't let her get much more than a flat or at best a 1 bed maisonette a bit further out than where she lives with our parents.

Not only that it's living costs. The living costs from one person to two people hardly changes. A bit more gas/water/electric and a bit more on food. But everything else is the same.

By the time you have your mortgage, food, bills, petrol, insurances, council tax, internet, phone line, etc. You can easily be >£1,500 a month plus travel into London for her job.

She would essentially move out (if a higher multiplier was there) to have no life...

Exactly the situation I'm in. I've been saving 10k a year for 4 years, but only earn £17k a year doing IT for the local council. Living at home keeps my expenses to about £2.5k a year inc rent and bills. Tax and NI takes the rest.

4x my salary + my deposit only allows me to get a single-room "studio" flat, which is ludicrous. Nobody can live in those things - they are like prison cells! Worse, it's a prison cell that you must pay for!!

But not buying is not smart either. For every year I save *less* than the rate at which properties are increasing in price.

In short, there is no way out of this situation.

 

[Scam]

I see your point though but "rounding up" from £20k to 30k is a bit absurd...but i do see your point.

The rounding up was from £28k deposit (now that the house was £283k) to £30k. But as said above anyway; FTBs should be aiming more for 20%.

I agree with the point that everyone should get on with it and fight their own personal battles, but the truth of the matter is that the housing market is broken and a whole generation has been dealt a very poor hand and are going to suffer for it for the rest of their lives. Yes, personally I might scrape onto the "ladder" in my late thirties but I will not be able to move on up as quickly or as easily as my parents did.

 

[balky12]

In short, there is no way out of this situation.

Can you not make yourself attractive? to the opposite or same sex. Both acceptable nowadays. Literally doubled your chances.

 

[Rroff]

Can you not make yourself attractive? to the opposite or same sex. Both acceptable nowadays. Literally doubled your chances.

Catch 22 - no one will look at you twice if you don't own your own home.

 

[balky12]

Catch 22 - no one will look at you twice if you don't own your own home.

I don't know the age of Foxy. However average age of first time buyers is 32 now I believe. Anything south of 25 is impressive and anything north is normal imo.

If a girl won't look at you twice for that she isn't worth knowing.

Perhaps look for a cougar?

 

[wez130]

Agree but in the meantime the house has increased in value...nullifying your initial 2 year rental investment....

Which is why everything should be set out at the beginning of the term.

but the very fact youve paid your rent on time, every month and are of a sound investor....this should add up to something. Perhaps a 100% LTV! As youve proven you can pay your way...but is the said rent the equiavelent to the mortgage repayments...usually its above tbh from what ive seen. So once again good idea.

But there will always be someone that trashes the place and also no initial research etc taken by the bank for just a renter. So a more structured link/scheme with guidelines need to be implimented....but very good idea could work well

The annoying thing is, i cannot find any real negatives or flaws in this idea, and it'd be really, really easy to implement onto a mortgage plan to help FTB's.

I'm currently still renting as we don't know where we want to buy yet still, (here or in NZ), and we could save a decent deposit if we really wanted, we save about £1k every month between my wife and i, however, we're enjoying a lot of travel atm, so our savings have paid for our 7 week trip to NZ / OZ / Dubai last december to get married, and a few holidays this abroad this year!

I think once we get back from NZ / Bangkok in February next year, we'll knuckle down and save whilst we decide on our future!

 

[Dr Jack]

I agree with the point that everyone should get on with it and fight their own personal battles, but the truth of the matter is that the housing market is broken and a whole generation has been dealt a very poor hand and are going to suffer for it for the rest of their lives. Yes, personally I might scrape onto the "ladder" in my late thirties but I will not be able to move on up as quickly or as easily as my parents did.

To put this into some numbers: I bought my first house in my mid twenties, I'm now in my late thirties. In that time I've garnered £60k in equity and saved somewhere in the order of £3k/year in savings due to the lower costs of mortgage vs. rent. Some of that has gone on upkeep and costs, of course, (but there are plenty of hidden costs in renting too) so let's say £2k a year saving. That means I'm about £90k better off because it was easy for me to buy when I got my first house.

The problem in the UK isn't just the high cost of houses, it's the low quality and high cost of renting, which makes buying a house such a hugely beneficial proposition compared to renting.

 

[UTmaniac]

Exactly the situation I'm in. I've been saving 10k a year for 4 years, but only earn £17k a year doing IT for the local council. Living at home keeps my expenses to about £2.5k a year inc rent and bills. Tax and NI takes the rest.

4x my salary + my deposit only allows me to get a single-room "studio" flat, which is ludicrous. Nobody can live in those things - they are like prison cells! Worse, it's a prison cell that you must pay for!!

But not buying is not smart either. For every year I save *less* than the rate at which properties are increasing in price.

In short, there is no way out of this situation.

If I was in your situation, I would get on the housing ladder ASAP, even with a studio float if that is all you can get. Do it up gradually over time and then move to the next rung.

I'm presuming you have had some of your saving in a Help To Buy ISA since they started last December.

If you still haven't started a mortgage by next April, move that HTB ISA into a Lifetime ISA and then instantly dump another £4200 of your savings into it.