How I won the housing market without trying
theguardian.com
How I won the housing market without trying
1–10 of 116 posts
Re: How I won the housing market without trying
#2Be nice to have got into the market early, many people over here in Australia get the benefit of negative gearing too as they accumulate more houses.
I'd particularly be worried as a young person in the States now, a hefty mortgage on top of some of the student loans I've seen look like it'd spell an entire lifetime of loan repayments.
Re: How I won the housing market without trying
#3I don't get it: she sold up and made a profit, but unless she downsized, the profit is gone on buying a new place.
Re: How I won the housing market without trying
#4In the UK it's normal practice to get in a chain. You sell yours, line up the one you want to buy, and all 14 people in the chain complete on the same day. Not sure you should be selling your house, then deciding to look.
You have to ask yourself what changed in the UK mortgage market to create this increase in housing value. It comes down to a bank regulation change the government put in place in 1996. Banks were able to offer buy-to-let mortgages.
This has fundamentally distorted the housing market in the UK.
In London you also have another issue. Apparently 40% of new build apartments are bought and never lived in. They are used as an investment to hold money 'safely' primarily by foreign buyers.
[EDIT] Citation for "buy to leave" http://www.theguardian.com/business/2014/dec/04/property-inv... http://www.theguardian.com/commentisfree/2014/dec/08/islingt...
So you have a situation where the Banks leant like crazy inflating the housing market, the crash happened, the banks hardened their mortgage lending criteria, which forced most people into renting, enabling landlords to maximise returns and invest further in rental properties using buy to let mortgages that use rental income as part of the payment calculation.
It's one hell of a vicious circle.
From my point of view I have benefited, but I honestly cannot see my 11 year old daughter ever owning her own property.
Re: How I won the housing market without trying
#5I don't get it: she sold up and made a profit, but unless she downsized, the profit is gone on buying a new place.
The article does say that she downsized, with about £200k difference in price. There's the profit!
Re: How I won the housing market without trying
#6In the UK it's normal practice to get in a chain. You sell yours, line up the one you want to buy, and all 14 people in the chain complete on the same day. Not sure you should be selling your house, then deciding to look. You have to ask yourself what changed in the UK mortgage market to create this increase in housing value. It comes down to a bank regulation change the government put in place in 1996. Banks were ab…
I thought a major reason was Thatcher letting people who should not be owning a house buy one at a cut price?
Re: How I won the housing market without trying
#7In the UK it's normal practice to get in a chain. You sell yours, line up the one you want to buy, and all 14 people in the chain complete on the same day. Not sure you should be selling your house, then deciding to look. You have to ask yourself what changed in the UK mortgage market to create this increase in housing value. It comes down to a bank regulation change the government put in place in 1996. Banks were ab…
I thought a major reason was Thatcher letting people who should not be owning a house buy one at a cut price?
No - 'right to buy' is not related to the UK's housing crisis, aside from the fact it depleted social housing stock (which is a separate issue that should not have been allowed to happen).
Offering cut-price sales of social property to council tenants is an amazingly powerful tool for giving people ownership over their communities.
Re: How I won the housing market without trying
#8In the UK it's normal practice to get in a chain. You sell yours, line up the one you want to buy, and all 14 people in the chain complete on the same day. Not sure you should be selling your house, then deciding to look. You have to ask yourself what changed in the UK mortgage market to create this increase in housing value. It comes down to a bank regulation change the government put in place in 1996. Banks were ab…
"Apparently 40% of new build apartments are bought and never lived in" : this is totally incorrect
Re: How I won the housing market without trying
#9A couple of things are worth mentioning. Firstly, everything but housing is much cheaper now than in the 80s/90s. People will spend their money somewhere. The ability to do your own repairs is also much greater, as the huge (and cheap!) hardware stores have sprung up and the DIY culture has become stronger.
Secondly, I don't know about the UK, but here in Australia, home loans in the 80s had interest rates of almost 20%, as opposed to 5-6% today. It had calmed a little in the 90s though. The cost in dollar terms was much cheaper, sure, but it was still difficult to service at the time. Buying a house was still monumentally stressful. I know a few boomers who were unable to maintain their mortgages in that time.
Just because the sticker price was significantly smaller doesn't mean that it was all that much easier.
Edit: it's also worth mentioning that the median wage in the UK has increased about 50% from 1990 to 2010 (~16k to ~24k) and the average wage more than that. Housing is still depressingly expensive, but the numbers aren't quite so wildly different as shown.
Re: How I won the housing market without trying
#10I don't get it: she sold up and made a profit, but unless she downsized, the profit is gone on buying a new place.
Yes. Usually when you sell one house, you buy another, so it is a bit of a zero-sum game. However, what does matter is when you entered the market. Entering the housing market today is relatively speaking much more expensive than it was 20 years ago.