Why do people think they are entitled to home ownership?

[ez8004]

It's a no brainer.....buy every time.

I bought a £10,000 house years ago.

Over the 25 years mortgage payments I paid out approximately £30,000 for it.

Lived mortgage free for a few years and then sold it for £100,000.

Bought a nice little modernised house in the countryside for £60,000 and lived rent free for the last five years.

I have a roof over my head, plus a nice bank balance....and property to leave to my kids.

 

Why rent?

 

I never said it was better to rent than to buy. Getting a large enough deposit to be in a position to to buy is the main obstacle. As many have said so far, servicing the mortgage repayments is just as expensive as renting. What I am asking is why does there need to be government intervention to help people buy as if owning their own home is an expectation?

[cgksheff]

. What I am asking is why does there need to be government intervention to help people buy as if owning their own home is an expectation?

 

The answer to your question is simple. There is no need, as your assumption is flawed.

[Cyclone]

I can't understand why some people resent council houses being sold/bought. People are awarded a council house presumably to be in it for virtually their entire life, making it unavailable to anyone else during that time, therefore what difference does it make if its been sold off?

 

The difference that when they either die or choose to move, the house continues to be unavailable to council tenants.

If you continually reduce the pool of council houses by discounted selling then quite clearly there are less council houses available for the next generation.

 

---------- Post added 15-08-2016 at 07:33 ----------

 

I have a far longer list for Labour. But this is not the thread for that.

So will you, as a principled socialist, be refusing to participate in the right to buy scheme?

 

Why do you bother to respond with a quip about labour... As if that somehow excuses the conservatives.

 

---------- Post added 15-08-2016 at 07:35 ----------

 

And when will you get to use that £150,000 of money invested?

 

There's at least 1 option for that, equity release...

 

On the other hand you could consider that investment to be reducing your monthly costs later in life when your income is likely to fall.

 

And there are many other downsides to renting in the UK, like the short leases that make it impossible to guarantee staying in the same house for any length of time.

[El Cid]

I never said it was better to rent than to buy. Getting a large enough deposit to be in a position to to buy is the main obstacle. As many have said so far, servicing the mortgage repayments is just as expensive as renting. What I am asking is why does there need to be government intervention to help people buy as if owning their own home is an expectation?

 

House prices used to be 3x a persons salary, that figure now is roughly 5x; low interest rates have helped, but house prices are still higher than income in recent years.

What normally happens when prices get too high, is that there is a crash and prices adjust to what people can afford.

Making the situation worse is buy to let investors, who would normally invest in other things, but with a base bank rate of 1% and less, they prefer to invest in housing.

The Government also help people to buy, assisting them to the tune of thousands of pounds, so house prices stay high and do not crash.

 

So high house prices benefit those that already have a house, the rich, at the expense of the poor.

[Cyclone]

Mortgages were limited to 3* a persons salary. Not house prices.

The long term average for house prices compared to average salaries was 4*.

 

Mortgages are now based on affordability, and since the 2007 crash you're unlikely to get 5* your annual salary.

 

BTL has been targeted recently of course, with the additional stamp duty on buying a 2nd property and the removal of tax efficiencies for (smaller) landlords (of course the conservatives wouldn't want to harm the really wealthy who own tens or hundreds of BTL properties).

 

High house prices don't even benefit those who already own, unless they own multiple houses or intend to downsize. And it's actively harmful for anyone who wants to move up the ladder (so that would be many people under the age of maybe 50).

 

High house price inflation only benefits the rich (who own multiple properties) and the very rich.

[El Cid]

Mortgages were limited to 3* a persons salary. Not house prices.

The long term average for house prices compared to average salaries was 4*.

 

Mortgages are now based on affordability, and since the 2007 crash you're unlikely to get 5* your annual salary.

 

 

From Zoopla ""Most lenders currently lend between 3.5 and 4.25 times income, although 5.5 times is still possible with the right criteria, they said. This may include not having children, which are seen as a financial commitment.""

[Danny_Boy]

From Zoopla ""Most lenders currently lend between 3.5 and 4.25 times income, although 5.5 times is still possible with the right criteria, they said. This may include not having children, which are seen as a financial commitment.""

 

I have access to over 90 lenders as an advisor and non of them will do 5.5* salary max you will get is 5* salary and that's with a large deposit no liabilities & no children.

[El Cid]

I have access to over 90 lenders as an advisor and non of them will do 5.5* salary max you will get is 5* salary and that's with a large deposit no liabilities & no children.

 

There used to be people filling out their application forms that were self employed, I understand they could write what they wanted.

I have one child that is 16 and very little contact, not a clue how to declare this.

[Cyclone]

From Zoopla ""Most lenders currently lend between 3.5 and 4.25 times income, although 5.5 times is still possible with the right criteria, they said. This may include not having children, which are seen as a financial commitment.""

 

So, 3.5 to 4.25 is common. Glad we cleared up the roughly 5* as being inaccurate.

 

---------- Post added 15-08-2016 at 10:28 ----------

 

There used to be people filling out their application forms that were self employed, I understand they could write what they wanted.

I have one child that is 16 and very little contact, not a clue how to declare this.

 

They will ask about dependants, if you are not the primary carer then the child is not your dependant. If you pay child maintenance then you'll declare that as an outgoing.

 

---------- Post added 15-08-2016 at 10:38 ----------

 

http://www.moneysavingexpert.com/mortgages/how-much-can-i-borrow

 

More details about it here.

[El Cid]

My repayments for a 20 year mortgage would be £324.70, which is £2 less than I pay in rent, but they will need to take my pension into account, I am hopeful.