Housing

[Darcydog]

My first house was bought for £10,500. and two years later we had mortgage rates of 14% and the three day week. I nearly lost that house and if it wasnt for my parents helping us out we would have done. Then things improved and we sold it for £23,000 and bought another for £34,000, extended the mortgage to over £50,000 to improve it.

Lived in it for 33 years - spent a lot of money doing it up over the years and sold it for £280,000 many years ago - downsized a bit and am now reasonably secure.

Sounds good doesn't it.

However- yet again - part way through those 33 years the economy hit rock bottom (again) and I lost my job and the house was valued at less than the mortgage we had on it.

The dreaded "negative equity" - had I not managed to get another job the house would have been repossessed, sold for about £40,000 and we would have had no where to live and a debt of £10,000 because unlike the USA where you just hand the keys back to the lender and walk away - here in the UK you still own any debt - negative equity is not funny.

Buying a house may sound wonderful - and it is now I have done it - but the security you have is not as great if you lose your job, and all the maintenance costs are yours - nobody else's.

Mortgages may be difficult to get but that is because the economy is still poor, BoE base rate is 0.5% which means that interest rates can only go up.

So if you get a mortgage today and your repayments are £600 per month - based on my experience - over the next 25 or 30 years - be prepared for those repayments to go up to £1200 a month or even £1800 a month.

Because that is what has happened in the past - and I am ruddy certain that it will happen again.

[lady zed]

Originally Posted by Darcydog

My first house was bought for £10,500. and two years later we had mortgage rates of 14% and the three day week. I nearly lost that house and if it wasnt for my parents helping us out we would have done. Then things improved and we sold it for £23,000 and bought another for £34,000, extended the mortgage to over £50,000 to improve it.

Lived in it for 33 years - spent a lot of money doing it up over the years and sold it for £280,000 many years ago - downsized a bit and am now reasonably secure.

Sounds good doesn't it.

However- yet again - part way through those 33 years the economy hit rock bottom (again) and I lost my job and the house was valued at less than the mortgage we had on it.

The dreaded "negative equity" - had I not managed to get another job the house would have been repossessed, sold for about £40,000 and we would have had no where to live and a debt of £10,000 because unlike the USA where you just hand the keys back to the lender and walk away - here in the UK you still own any debt - negative equity is not funny.

Buying a house may sound wonderful - and it is now I have done it - but the security you have is not as great if you lose your job, and all the maintenance costs are yours - nobody else's.

Mortgages may be difficult to get but that is because the economy is still poor, BoE base rate is 0.5% which means that interest rates can only go up.

So if you get a mortgage today and your repayments are £600 per month - based on my experience - over the next 25 or 30 years - be prepared for those repayments to go up to £1200 a month or even £1800 a month.

Because that is what has happened in the past - and I am ruddy certain that it will happen again.

And very little good quality social housing available for those fallen on hard times through no fault of their own

[Ravinder]

What kind of deposit is required these days to secure a house?

[topman]

About 10%, more like 20% if you want the best rates. Although there are some help to buy schemes that you don't have to pay a deposit on or a very small one.

[lady zed]

If you're really lucky there are some 95% mortgages around.....

[wraymond]

Thatcher and council houses eh? She’s always the demon of everything and I’m certainly not here to defend her or her ilk. However, dogma rarely has a sound foundation.

As previously noted, council house sales to existing tenants were commonplace as early as 1970, it was only 1980 when tenants were given the right by law to buy their rented houses. Invariably their new mortgages were significantly higher than the rent they had been paying, paving the way to a credit (mortgage and second mortgage) based explosion. You can’t blame the government for the profligacy of newly enrolled consumers.

So Margaret Thatcher ‘got the blame’. Ever since then she has been the devil incarnate for all the plagues of Egypt, measles, whooping cough and chicken pox can’t be far behind! It was the biggest shake-up of the housing market in history and becoming law did not increase the rate of applicants but consolidated the principle. It led to a huge improvement in the economy and especially the jobs market.

The policy was hugely popular and the effects still felt today. The policy did have a fatal fault however. The money councils received had to be hived and ring fenced to prevent spendthrift councils from splurging it away on grandiose schemes. It should have gone into new building to replace the stock being sold. If this had been done it would have at least been a brake on the rise of Buy To Let (BTL) inflation of rents which is the largest villain in this piece.

Not only have rents become as unaffordable as mortgages thus pushing the price of houses up, they are the single largest part of the welfare budget (through housing benefit claims) and are therefore a factor in the recent austerity climate.

The assumption of many that they have a right of expectation to buy a house wherever they want one is unhelpful. It was always an ambition that only became a reality after years of progression, the only spur causing change being the creation of cheap money. Today’s problems can be resolved by

1. Preventing developers from hoarding land and waiting for prices to rise even further.
2. Re-zoning brownfield sites (hundreds of thousands of acres already there) into ‘Community Redevelopment Areas’. Compulsory purchase prior to the re-zoning would ensure land at a base price making economic sense.

[topman]

Helping smaller house builders might help too, they used to build a small but significant number of houses. Virtually all gone now.

[topman]

'As previously noted, council house sales to existing tenants were commonplace as early as 1970,NAUGHTY WORD-'

I did say they started in selling them in the 70s, I'm not sure they were commonplace. Others started the ball rolling but that relative trickle didn't turn into an avalanche until 1980. I haven't researched the numbers btw but that was what i recall from what I've read.

[James.uk]

When the Gov changed the rules so people could have more than one Mortgage, they did it because it was a better way for wealthy people to gain money without working. than playing the very dodgy stock market (they just had Black Monday and lost money) ...

The cure is make it illegal to own more than one property in the UK, and you have to live in the one you own for at least 20 months of every year.

We need to bring back council houses with the original means tested "cheap rent" rules... With none available for sale, ever.

Forget "property ladders", People don't want to get on any property ladders, they just want to buy themselves a home to live in.....

This island is just too small for anyone to own multi houses innit.
...

[topman]

Originally Posted by James.uk

The cure is make it illegal to own more than one property in the UK, and you have to live in the one you own for at least 20 months of every year.
.

20 months a year that'd be impressive

Seriously though i don't think that would work though. Who would monitor who stayed in each house and for how long?