Mortgage 100% LTV question

[Boycey0211]

Don't take this the wrong way, I'm not having a go at you, but..

Frankly, we got into this mess by thinking exclusively about people like you (home owners); the dominant thinking being "I want my asset to appreciate in value." And boy has your asset appreciated over the last couple decades

We've exclusively pandered to existing home owners and literally sacrificed the future in doing so.

To re-balance I'm afraid existing home owners are going to have to take some (long overdue) pain. There's just no doubting that many home owners have had it their own way for far too long. Maybe we can say that's more true of the so-called "baby boomer" generation than those who only recently entered the housing market. But of that latter group, many have "baby boomer" parents sitting on fortunes in property who could help them out.

Re-balancing will mean pain for you and your parents. But it's the fairest long-term outcome.

Also councils need to be allowed to start building new council housing again (which the Tory govt don't like ideologically).

I bought last year, took me 10 years to save enough for a deposit on a cheap(ish) terrace in my area.

I'm not looking for it to gain value, but it was affordable to anyone who wanted to save (I bought when i was single) and would rather not get left with massive negative equity.

I was a first time buyer and had no help from anyone else.

Why is pain on me fair? I worked hard and sacrificed a lot to do it.

 

[Haggisman]

Yes, but the people most hurt will be going back to their parents (least hurt), who far more often than not will help them out.

Hahaha hahaha.

Wait you're serious?!

You really believe that 30+ year olds are going to be getting bailouts of £100k+ from their parents or that their parents are going to just give it to them (assuming they are even still alive)? And if the parents have 2-3 "kids", they'll happily just hand out £2-300k?

Also, where are these parents going to get that money from exactly? Bearing in mind you've just slashed the value of the only significant asset many of them actually own...

Clearly you have a chip on your shoulder about house prices (it's hard to miss, you mention it in almost every thread), but you don't appear to have thought this through. The only people who will (possibly) benefit are those who are about to buy, everyone else will get hit in one way or another. I agree that more affordable homes are needed for FTB, but bankrupting half the country is not the way to do it (if it were even possible to do so in some artificial way)

 

[FoxEye]

Well we know if we keep on the current trajectory more and more people are going to be priced out. With house prices out-pacing earnings the problem just gets worse every year.

I'm glad you find it so amusing. Clearly you own your own house and clearly you feel others who don't simply aren't working hard enough, prioritising correctly, etc.

Anyway, I've read articles that say more homes are needed; I've read the opposite - that building new homes won't solve anything - they'll be bought by foreign speculators in sufficient quantities that there will be no improvement in availability for FTB.

I've read that rent caps and rent regulations will make people homeless; alternatively that it'll be good for renters.

I've read that we should follow Germany's model; also that we can't and it won't work here.

Nobody has a ***** clue tbh. Including me.

But yes the chip is real and so is the ***** up housing situation. Thanks for noticing. And also for not caring.

 

[Haggisman]

clearly you feel others who don't simply aren't working hard enough, prioritising correctly, etc.

That's some pretty spectacular mental gymnastics for that to be what you took away from my post, but go ahead and feel free to continue deriding those who do actually sympathise and understand your situation (having been there recently themselves), that's sure to get them on your side.

 

[danlightbulb]

Things could be done now which would be a reasonable middle ground and wouldnt risk losing too many votes.

1. State housebuilding programme. Hardly anyone, whatever party you support, is going to disagree with this policy because rich or poor, people can see this is needed. Millions of homes cant be built overnight so plan for a thirty year programme and the positive effects would trickle in to the system.

2. Ban foreigners buying uk property. Again, not many people are really going to disagree with this enough that it effects votes. Id imagine it only effects London but there may be trickle effects to the rest of the country over time. The principle is more important on this, look after our own citizens first where housing is concerned.

3. Bring back 100% mortgages. Proper ones, not this parent deposit scheme. With proper affordability checks, there is nothing wrong with a 100% mortgage for a genuine young family purchaser. The previous problem was caused by lax affordability checks. This eliminates need for years saving a deposit whilst trying to rent and works in conjunction with state housebuilding programme for younger families.

4. No favouritism for buy to let in the tax system. Should be same tax paid on rental income as on earnings. This may have the effect of releasing some lower value property over time.

5. Come down hard on housing developers. Land banking; not meeting quotas; silly small houses that no-one really wants but its all thats built these days. Id go further and regulate the industry, a margin cap per unit for example. Housing is as much a public necessity as water or energy - developers need to be working to a wider uk strategy that is in the customer interest.

 

[Rifte]

House prices dropping short term? Yes very possible.

House prices dropping long term? I don't see it. A finite amount of land and a growing population, demand vs supply will always trigger a rise.

I bought my first house in 2007, I took a negative equity hit after the 2008 crash, and in the years since my property price has effectively doubled on what I purchased it for.

The second house I have in Bedfordshire has added just over £175k (according to the recent valuation I got for my remortgage), and I completed on that in 2015!

I have learnt two things from this :

1)I am lucky
2)If you have the deposit, don't wait, get onto that housing ladder.

In respect to increasing the tax liability of landlords even more than the recent changes relating to mortgage interest tax write offs? Not a great move in my opinion. Any additional cost is only going to go one way, towards those tenants that are forced into the rental market because they either want the flexibility of renting or cannot afford a deposit.

 

[Simon]

4. No favouritism for buy to let in the tax system. Should be same tax paid on rental income as on earnings. This may have the effect of releasing some lower value property over time

Like it already is you mean ?