House prices rose 7.3% this year, average now almost £250k

[HACO]

I agree that we should suffer the downturns as well as the rises, but IMO the reason housing is so attractive in this country is very much because the government seems hell-bent on protecting it. I do not think it's fair at all, but at the same time cannot begrudge anyone for pouring money into at as an investment because historically it's been shown to be a very sound choice.

I also don't blame individuals from taking advantage, it's not the fault of the home owners, but failure of government policies. However, I also don't shed tears for individuals who have benefited from it tremendously who oppose sensible policies "because it's unfairrrrrrr" to them. Unfair meaning, they're may get less advantage now, i.e. their £200k house is now £600k, but they think a £100 extra mortgage payment or a 0.5% LTV tax is unfair and they're being targeted. Or those who feel like they're entitled to risk-free indefinite growth.

edit: My understanding is that US policy throughout the pandemic essentially bolstered the stock market to a level that surprised many. Is this so different to what the UK government did with house prices?

They're doing the same thing when it comes to stock markets. But the US did not give a holiday to real estate taxes or real estate transfer tax. And the people survived. US real-estate market only grew about 1% this year which is roughly inflation.

Our housing policies are so insane that the US seems like the sane ones, despite them being the insane ones when it comes to healthcare, education, and many other things. That shows how off the chart crazy everything is here.

 

[HACO]

We should definitely be copying the US.

Last time I was there. I will likely have seen more homeless people in 2 weeks than I did in 2 years in the UK.

Last time I checked housing in America isn't cheaper especially if you were to compare New York or Los Angeles with London. It will be if you look at Detroit but then there are similar places in the UK too.

US median property price to median household income is 4.5x. UK is now over 8x.

Remember that thing called statistics. You can measure these stuff instead of just going by your feelings.

UK has 280,000 homeless people (66 million population). So 4.2 people out of 1000.
US has 550,000 homeless people (320 million population). So 1.7 people out of 1000.

What you've seen or haven't seen is not relevant. Statistics has been invented for several centuries.

 

[HACO]

Also we shouldn't be like a lot of europe where everyone rents.

I agree, however with the ever-increasing prices, there's no choice anymore. Home ownership in the UK has been declining significantly and will continue to do so given the current government policies.

Our home ownership rate is about 65% now. Similar to France, lower than the Netherlands and higher than Germany. So we're become middle of the park in that aspect.

 

[HACO]

You do realise that statistics are useless if you aren't including majority of the effected?

We have a much better benefits system so people in the UK will register as homeless to access it.

In America it doesn't quite work the same way so you have a far larger proportion that are hidden homeless.

Maybe you should go look at DW documentaries on YouTube so you can see with your own eyes the state of homelessness in America rather than numbers on paper that don't reflect the reality.

It's the same with the census in the UK that was used earlier. Do you think illegal immigrants fill out a census? Therefore none of them are officially included in the statistics.

I can assure you that the figures are much higher in terms of population than believed. figures are massaged in this country across the whole public sector so directors can get promotions and bonuses.

The police refused to for example in the official report write that my car was vandalised even though it had a broken window, dented panel and scuffed/scraped paint.

I had to argue with someone in a station and read the law to them before they agreed to send someone out again and then they had to file a second report because once the first one was done it could not be changed. It took great effort for me to get the crime classified as what it should have been in the first place. I ended up with 3 different crime reference numbers for the same incident.

It was vandalised by accident but it was still vandalism. It was not the intention of the person to vandalise it but they acted in such an irrational manner that it was no shock damage ended up being caused.

So do you believe the statistics when they say crime is lower than ever? It's all been massaged. I've had 2 break ins on my street in 6 months. Had the police round 5 times during lockdown asking me to look through my cameras. I've never been asked before in all the time I've lived here.

There are methods in statistics to correct for all of these, and if you get your stats from proper sources, they're almost always already corrected. And their ability to correct for these effects is better than your (or my) gut feeling because they're actually people who do these stuff for a living. You don't know about housing prices or crime rates better than Office of National Statistics for example. They hire 3500 people and have a £200 million budget to study these things.

As for crime statistics, yes I do believe it that this country (and the world) in general, has much lower crime rates than a few decades ago. There are ups and downs every year, but the trend has been consistent. If someone steals my wallet tomorrow, it doesn't change the reality. If it happened again next week, it still doesn't mean the statistics were wrong.

You're pretty much waging a war against mathematics at this point. What's next? 2+2=5 because you feel like 4 is not accurate?

 

[HACO]

https://www.independent.co.uk/news/uk/politics/government-housing-target-300000-b1784575.html

The government is set to miss its housebuilding target by almost a decade after failing to invest in social housing, a new analysis has warned.
Boris Johnson has promised to increase housebuilding to 300,000 a year by the mid-2020s in a bid to tackle Britain's housing shortage.
But at the rate of increase achieved before the coronavirus lockdown, the government will not reach its target until 2032 – eight years later than planned.​

Surprising that they never miss any targets when it comes to giving tax breaks to the homeowner class. They always find money for that! But investing to build homes when we have a shortage of millions? It doesn't matter at all.

 

[HACO]

260,000 homes are empty

https://www.actiononemptyhomes.org/facts-and-figures#:~:text=There are over 216,000 homes,300,000 additional homes each year.

While 260,000 is nothing given the scale of our shortages, these should be taxed quite aggressively.

 

[HACO]

This govt won't do anything and is indeed ideologically opposed to doing anything as "communist" as HACO's ideas (Think of the Telegraph headlines!)

If the housing market does crash it won't be soon. And before it happens, things will get a lot worse. But it will get worse for the have-nots not the haves, so the Tories will turn a blind eye.

The other thing is, if the housing market does crash, the most likely outcome of that is the well-off buying up even more of the housing stock. The people losing their houses won't be Lord Smythe-Buckingham-Jones-McArthur. It'll be Joe Bloggs the plumber, and maybe even his cousin Fred the web developer. But the upper-middle class and the actually genuinely wealthy will simply be able to swoop in and buy all the repossessions.

Yeah, a random market crash will mean rich folk will just add to their portfolios, that's why it has to come alongside or as a result of sensible policies (like the ones I listed) to make sure that we return to sensible housing prices that most people can afford by removing the investment aspect of housing.

And of course, this Tory government will never do that. If prices crash, they will do something to prop up the market again.

There is no way the statistics are correct when it comes to the true state of homelessness in America.

2+2=16.25 because I feel like it.

 

[HACO]

Can you explain to me your logic here as I disagree. The 'rich folk' you describe mostly put their capital to work in investments, very few people actually keep large swathes of dry powder in the form of cash in bank accounts. If the housing market goes down it won't just be lower paid home-owning workers who suffer, it'll be overleveraged middle class people with large property portfoios with no tenants to pay the rent forced into distressed selling. It's also unlikely people will lap up property if the economic prospects are grim and the markets have wiped out their investment returns. What a crash will do is return the irrefutably insane house price:wages ratio to more realistic and sustainable levels and with that present an opportunity to non home owning workers with reasonable salaries (assuming they don't lose their jobs with the crash) but not enough capital to get on the exisitng ladder. In short, a correction wlll not solely act as a 'dip buying' exercise for the rich. You don't need a crystal ball to predict the future just look what happened after the GFC.

I didn't say it 'solely' acts as a dip buying opportunity for the rich, but most of the benefit goes to the rich, unless coupled with policies to make sure that it doesn't happen, like ones similar to what I listed in previous pages.

And we're talking about a different kind of 'rich folk' here, I'm not talking about the average guy down the street that has 5 BTL properties and can afford a Tesla, that guy might go down during a crash. I'm talking about the people with £100mn+ net worth, family offices managing billions of pounds of wealth, investment funds or hedge funds that have hundreds of properties in tens of different countries and access to super cheap or free capital given the QE and lower interest rates that happens during market downturns, and the willingness of the banks to lend to people/institutions with super high net worths. It's those people that come in and wipe the market clean during a downturn.

Step away from principles of personal finance for you and I, and the perception of 'rich people' as a rich version of people like you and I. Cash in bank is only a thing for us. Once you're really rich, you never spend with cash.

 

[HACO]

Why not?

These people are the ones who are ensuring that the young can't get on the ladder to own their own homes, they aren't some philanthropic carers any more than the Russian and Saudi money launderers are.

As to "Buy To Let" (BTL), it should be "Buy To Exploit" (BTE)

Context my friend, context.

 

[HACO]

Oh yes. When I talk to homeowners that don't care about the broken housing market I like to point out that they are infact also propping it up and directly paying into landlord's pockets.

Private landlords get £9.3bn in housing benefit from taxpayer

So, as a tenant I get to pay off my landlord's mortgage and pay my taxes to pay off other landlord's mortgages. Fantastic!

I'm still hankering for a crash. My girlfriend and I have a generous deposit, just not quite generous enough for what we'd want to buy around here. If prices crash that'd mean a lower LTV for us and probably no issues getting a mortgage. In an ideal world that would mean that finally our sensible money-saving habits engrained in our youth will actually come to fruition - rather than sitting there paying into a pathetic 0.5% ISA and not even breaking even over inflation like we've spent the last XX years doing!

Sadly, when the market crashes, mortgage availability also goes down. High LTV mortgages disappear too and mortgage interest rates go up on all mortgages except those with 60% LTV or less. And your 90% LTV might now be 85% LTV, but there interest rate would shot up from 1.79% to 3.49%, meaning you'd be paying more in monthly payments than you would have otherwise.

The whole system is F'ed up.

Ok how so? I'm a homeowner how exactly am I paying directly into a landlords pocket unless you mean by my tax being paid to people on benefits that is then used to house them but that's totally out of my control.

What he's saying is that the whole system is set up to benefit BTL landlords, even when people don't actively participate in it. Just by being alive, you're helping BTL landlords. UK has always historically been about land ownership, people exist to serve the land owner class, and despite the appearances, it's not any different now compared to 1000 years ago.

 

[HACO]

And Ive argued this till the cows come home . It’s people’s sense of entitlement in this country that makes me sick , I’d like a house on Park Lane Mayfair or St Mawes In Cornwall or even Sandbanks - guess what ? I can’t afford it .

Theres plenty of cheap property around the UK . Even if you don’t want to live there buy it and rent it out , rinse and repeat every 7-8 years when you can take some equity out - it’s really not that hard to do .

What???? Are you seriously suggesting that people should go and buy properties in cheaper towns, drying up the supply for local people and drive up prices, and then cash in and buy something for themselves or else they're entitled???????? Or maybe you're the freaking entitled one who thinks you can just walk in and take advantage of poor locals in poorer areas of the country.

While it's not that hard to act like a psychopath if you're actually a psychopath, but it's very difficult to act that way if you're not a psychopath.

Both myself and the missus started with nothing and worked our careers up from nothing. We are about to buy a lovely 4 bed detached with a double garage, nice area, schools etc for 300,000. It's in the midlands but we have access to everything. Within an hour to East Midlands airport etc. Our salary is above the national average and whilst we might theoretically get another ten grand between us down south the quality of life will be far worse.

There is plenty of housing available and accessibility for everything. People just need to realise the south is just uneconomical to the vast majority of people. We managed to save a 30k deposit in two years whilst both working around the national average wage ten years ago but we were very frugal. Everyone wants the latest I phone or car lease but then moan about renting.

My brother in law came to this country in 2005 with nothing and no skills. Even his English wasn't the best. He bought a decent sized detached house ten years ago and will be mortgage free within the next decade.

The good old avocado toast argument.

FYI, young people now spend a smaller % of their income on lifestyle items, holidays and leisure than young people did 30 years ago. Literally hundreds of studies across UK, Europe and the US confirm this.

 

[HACO]

I bought my house ten years ago and am only 34. Not 30 years ago.

Good for you. Do you want a cookie?

 

[HACO]

Cornish Landlords:

FoxEye, Fubsy and the boys:

Like it or not, we can't keep going on like this. Young generation was already under immense pressure, had highest levels of poverty, worst prospects in decades, etc.

Add COVID, so young people had to make sacrifices primarily so that old folk who keep mocking them and keep insulting them get to live a few more years. Young people lost their jobs, while old people got their assets pieces increased and even got a pay bump in their pensions. And now they judge those same young people for having a phone. FFS.

A day of reckoning is coming. If you keep your feet on a generation's throats, it won't be long before they kick back. This is how revolutions happen and dynasties collapse.

 

[HACO]

Tax year 2019/2020 was the last year landlord got any relief on mortgage interest.

Wrong, there still is a 20% mortgage interest tax credit for landlords.

Personally, I'd penalise BTL mortgages, e.g. 3% annual tax on the mortgage amount. That's on top of a property and/or land value tax that should be on the place, combined with rent control to ensure that it's not passed down to the renter.

 

[HACO]

OK, that's BTL. But what about my circumstance? If it cost me money then I'd just keep it empty which would further the issue and consider it a retirement fund or an asset to sell when I needed the money.

Tax empty properties at 10% of the value per year.

 

[HACO]

Here’s an example from a online calculator.
Last year on £10k of rental income. Profit £1100. £1600 tax

This year on same numbers. £864 profit, £1764 tax.
Next year. £626 profit. £2k tax

Look back at 2016-17 £1577 profit. £1k tax

it’s significant less. So what will landlords do to cover this reduction ? It’s also a pretty crap return vs investment/hassle

If it's crap they can sell the property. It's funny how people feel they're entitled to make a profit from their lands.

Landlords class often mocks other people for acting entitled because they want housing that doesn't cost 65% of their income, but in reality they're ones acting like entitled babies. It's all projection.

 

[HACO]

It's a game ultimately. Don't hate the players...hate the game. I've paid off £150,000 - £200,000 off of previous landlords mortgages over the years.

Hate the game and those who play it to their advantage.

 

[HACO]

Flats in Reading have fell on their arse in the last few years. The flats were 250k a few years agot now two havent sold for 4 months for 215-225k. Not idea time to sell really.

I think the anti BTL retoric needs a reality check. Often people end up having one or two properties, sometimes witout some grand 'i want to be a property mogul' plan which sometimes are a hassle but you keep them cause you hope they go up in the future. The tax chanegs screwed the little guys, anyone with 3+ properties will now be operating as a limited company anyway so it wont impact them.

As said, if its so easy then why arent you all doing it? It used to be easy but people have ignored the changes over the last few years brough in to make BTL less profitable 'to help houses on market' but its literally had no impact apart from potentially increaseing rents. The giverment removed 10% wear and tear, tapered off interest allowance and removed tenant fees.

Because I don't want to get rich on the blood and sweat of those less fortunate than me.

It's a moral issue for me. I would never, ever, in a million years, take a property that someone could buy as their home off the market so that I can rent it out and get rich from its price appreciation, while I decrease supply and increase prices for everyone else as well. Never. Ever.

I'd rather be poor, hell, I'd rather ******* die than do this to other human beings.

 

[HACO]

How would that work though - what would stop them employing a part time "personal assistant", "secretary", etc. to do the job for them?

What if two landlords join up and together hire a personal assistant? What if that assistant sets up a company for their business? We've reinvented letting agents

The market needs serious regulation and massive massive tax increases though.

 

[HACO]

I think you might have suffered a hefty loss in terms of opportunity cost in being intransient w.r.t renting a place, and in turn widening the scope for jobs/careers beyond the apparently limited opportunities in your local area.

That is why I rent. I can't afford not to. But every payment feels like I'm slaving away for someone else's benefits, and that's exactly what it is.

At the beginning of 2020 I was 1 year away from being able to buy the kind of place I wanted (£500k house with £50k deposit at about 2% interest rate).

Right now I have my £50k deposit, but those £500k places are now closer to £600k, and 90% LTV mortgages are now at 3.6% interest, meaning I can't afford them anymore. I need to bring that deposit up to £120k to bring monthly payments down to a level I can afford (£480k @ 2% interest), so I need to rent for another 2-3 years. But maybe by then the prices would be £800k and I may need a £200k deposit. This is how people get priced out of the market indefinitely.

My BTL landlord however, is popping up champaign. His properties are worth a lot more, and people are forced to rent for longer before they can buy their own place.