Council tenants subsidising property owners.

[carosio]

Council tenants pay for their houses many times over in rent, it is as simple as that.

 

Have you worked out how much more than the purchase price an owner pays over the lifetime of a mortgage (not forgetting insurance, maintenance, repairs etc) ?

[I1L2T3]

Many existing home owners chose to buy by taking on excessive debt for houses they couldn't really afford, banking on a one-way bet on house prices continuing to increase.

 

It was their choice. Now we all pay for it. Any of the main parties will not take the step of allowing for interest rate rises. The reason is that millions would simply no longer be able to pay their mortgages, even if only modest interest rate rises happened.

 

It's such a mess. The credit that allowed many effectively sub-prime borrowers to become home owners also allowed over a million to enter the buy to let business. The credit helped push up house prices, and rents.

 

Now we have a situation where there is a push to align rent for social housing with rent for private housing. The problem is that private rents should be driven down, rather than social housing rent pushed up to align with the horribly inflated private sector.

 

---------- Post added 23-06-2013 at 08:46 ----------

 

Have you worked out how much more than the purchase price an owner pays over the lifetime of a mortgage (not forgetting insurance, maintenance, repairs etc) ?

 

How much does an interest only mortgagee pay?

 

Interest only mortgages are widespread in the buy to let sector.

[Longcol]

Have you worked out how much more than the purchase price an owner pays over the lifetime of a mortgage (not forgetting insurance, maintenance, repairs etc) ?

 

Yes - I found that odd.

 

If a council/housing association tenant pays £60 pw rent then over 25 years they're paying £75k - which wouldn't buy you much of a property, let alone pay for maintenance, repairs etc.

 

Also housing association rents are effectively subsidised (by the taxpayer) as HA's get capital grants towards the building cost as that's the only way the homes can be let at affordable rents.

[Mecky]

Yes - I found that odd.

 

If a council/housing association tenant pays £60 pw rent then over 25 years they're paying £75k - which wouldn't buy you much of a property, let alone pay for maintenance, repairs etc.

 

Also housing association rents are effectively subsidised (by the taxpayer) as HA's get capital grants towards the building cost as that's the only way the homes can be let at affordable rents.

 

They don't stop paying rent after 25 years though

[I1L2T3]

Yes - I found that odd.

 

If a council/housing association tenant pays £60 pw rent then over 25 years they're paying £75k - which wouldn't buy you much of a property, let alone pay for maintenance, repairs etc.

 

Also housing association rents are effectively subsidised (by the taxpayer) as HA's get capital grants towards the building cost as that's the only way the homes can be let at affordable rents.

 

I'll ask the question again. How much does it cost on interest only, say for a buy to let landlord.

 

OK, they might stump up a deposit and they might splash a bit of cash.

 

But after that they receive rent. The rent will most likely cover mortgage and other costs.

 

Ten years down the line they cash in for a capital gain. It has cost the landlord nothing in the long-term but. In the meantime they have received profit from rent and at the end extracted a capital gain. They have extracted excess rent and done little to earn it.

[Longcol]

They don't stop paying rent after 25 years though

 

Do all tenancies last 25 years these days though. In the council flats and housing association properties near me I can only think of a handful of people who've been here longer than me (22 years) - and a couple of those bought their council flats.

 

Also like several have pointed out - that calc didn't include maintenance, repairs etc that inevitably happen over the life cycle of a property, nor any insurance, housing management etc. From my time working in a housing association it took over 25 years for a property to pay for itself -and that's with the build cost being subsidised by government grants.

[sedith]

Council tenants pay for their houses many times over in rent, it is as simple as that.

Of course they do ... why don't they just buy a house then instead of renting?

[I1L2T3]

Of course they do ... why don't they just buy a house then instead of renting?

 

Because a lot of them are priced out, and the days of easy credit and being able to fraudulently apply (I.e. self-cert) for a loan are gone.

[harvey19]

Council tenants pay for their houses many times over in rent, it is as simple as that.

 

Thank goodness that at last it is being recognised that Margaret Thatcher was trying to help the working classes to avoid this by offering tenants the opportunity to buy their council homes.

[WeX]

Council tenants pay for their houses many times over in rent, it is as simple as that.

 

if I rented a car for a long period I would pay for it many times over. The same goes for EVERYTHING you rent. Do you expect the council to make a loss? Then who would foot the bill for the loss? council tax payers.