People in this country need to get over the idea that they have to buy a property and borrowing many times the joint or single salary. Especially with utilities going to go through the roof.
This way of thinking, I never quite understood. And I don't understand what utilities have to do with anything - you will pay that whether you rent or buy, so it's irrelevant. With few tiny, small exceptions, just about anywhere in South East it is cheaper to pay mortgage than rent. And with lack of rent control, legal ruleset of who and how can rent and complete and utter absence of long term renting, if you rent, you are practically overpaying someone to be at their mercy - because in current "renting" system in UK (and it's not renting at all - current British renting style is more akin to long term motel business than renting of any kind) - landlord can kick you out at a months notice, stipulate rising your rent at will in contract and in exchange, in most cases you can't even hang a picture on the wall, add a phone line or keep pets. No adult can live like that, it's not that we don't want to, but it just makes no sense to do so.
Let me give you an example of how renting market should work. My parents used to rent their apartment under 30 year term. Vetting process was long and thorough, and there was a "trial period" involved, but once accepted for tenancy - it was up to my folks to decide how long within that 30 year period they would like to stay. They could leave with a six months notice but should they, or I, as a registered tenant for many years, decide to stay, we had legal "first dibbs" on securing further 30 years lease. The landlord, once the rent agreement was signed, could not cancel the agreement (unless tenant became negligent or danger to the others and/or property) and could not rise the rent and upkeep fees above inflation rate. And that automatically meant there were no "hit and run" cowboy landlords - you know the type - buy entire terrace, rent it out, let it run to the ground, roofs collapse and skim fall off facades, then sell it at five times market value to another "developer" to divide each property into mop cupboard sized bedsits with a single bog and kitchen to share between 10 students, immigrants or yuppies. No. Renting was long term investment with fantastic long term income.
And for my folks, it made sense to rent too:
What my parents were renting was the space between four walls of the apartment, which meant they could not only do whatever they liked to the "decor" but, within planning regulations and safety, even knock down the walls to open plan and turn balcony into hothouse if they wanted to. And that made perfect sense - they could live in a fully maintained building, with a well kept, swept and lawnmowed courtyard, and because the apartment building was purpose built with rental in mind by the syndicate leaseholding most of the streets in that area, compared to freehold places available on the market, based on geographical position and floorspace, we lived in a place my parents couldn't possibly afford to buy with their own money BUT with absolute piece of mind that it is their family home for many decades to come.
Too many 20 somethings controlled by mortgage repayments instead of actually living their lives and enjoying their time together without kids.
It's the right thing to do in current situation, many of them have a chance to repay it all by age of 40-45 and live rent free for the rest of their lives, whereas most of us, who "enjoyed our time together without kids" care free will try to puzzle together a way to pay off three or four times as much mortgage or rent with a good chance that £140 per week retirement dole will somehow have to pay for the last leg of it.
I personally would like to see tighter controls on the multiplier for borrowing for houses, which would have to bring house prices down to more realistic levels.
That's exactly opposite of what happened. Because renting made no sense and was more expensive, demand for houses rose, and because of the town planning (where most houses are single family tenancy low rise, rather than apartment blocks [ don't mistake with council style anthilling ]) there were not enough properties to cope with demand. In effect the prices rose, and bigger multipliers were required. You kill off high multiplier mortgages and all you going to achieve is more foreign a-holes buying "run to the ground short term rental investments" with suitcases of cash - 1990ies style.
[TW]Fox;18982070 said:
If you dont buy a property you are a massive loser and basically fail at life.
With current rental market and in South East - this is actually - very true. If you don't buy a property you will loose a lot of money.
My personal story is even better anecdote - and you're going to love this Fox - my initial mortgage was the very "no-no" subrime economy crushing 5 times multiplier 100% crazy mofo mortgage taken at the peak of the pricing curve your economy teacher told you gloomy stories about.
And you know what? Best decision ever made. At no point, not even at the very start, were the repayments higher than average rent on the same street. Six years on, with economy down, my repayments are less than half of average rent on the same street. And what is my worst case scenario? That if I'm finally sick of living in this a-hole of the world (Chatham, true story) I will have to sell it and earn no money on it, or maybe even, should economy collapse more - lose few grand at point of sale. Which would still be, financially, in a long run, better off or close to what throwing money away into landlords pocket over the last few years would equate to. In the meantime - I can keep pets, paint my walls and have massive satellite equipment in my garden - for the castle is mine, Baldrick. Now, of course should the economy completely collapse and interest rates hit levels of eighties, I'm screwed, but so is almost every renting tenant on my street, since vast majority of rental properties in this area are rented on the back of BTR mortgages anyway. Someone will have to pay for it.
