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Priced out of home ownership

bbc.co.uk

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Re: Priced out of home ownership

#251

Post by newsclues »

phoehne wrote: post #188
speeder wrote: post #104

I live in Portugal and here the situation is outright ridiculous. 1. There are a ridiculous amount of abandoned properties, when I walk the streets of major cities, sometimes more than half of the buildings even in expensive areas are boarded-up. 2. Meanwhile I am afraid of being homeless soon, I lost my job recently, and the unemployment benefit I can receive is literally half of my rent. Thing is, there is no "wors…

I'm not sure if it's the case in your location, but sometimes foreign buyers come in and buy properties they don't expect to inhabit (unless something goes really bad in their country). Europe and the US have strong rule of law systems that prevent the state from just taking property. (The government charging you with a bogus criminal charge to justify taking their property in in their home country). It's also an ass…

It’s dirty money.

Re: Priced out of home ownership

#252

Post by criddell »

bsenftner wrote: post #65
jeffbee wrote: post #59

None of the measures mentioned in the article — lower interest rates, lower transaction fees, down payment subsidies — will lower costs. Every one of them will raise prices. You can only fix this with supply: build homes.

Make home ownership and renting them back to single families by corporations illegal. Seriously. It's the corporations doing ALL this. The people don't have the money.

If you buy a second home as an investment property and plan to rent it out to a single family, your accountant and lawyer will probably recommend you form a corporation to operate under.

Just having a flat rule against corporations owning property will likely reduce the number of rentals available and a reduced supply will lead to higher prices.

Re: Priced out of home ownership

#253

Post by rahimnathwani »

lkdfjlkdfjlg wrote: post #242
rahimnathwani wrote: post #195

Earlier quoted context omitted.

Something about the tax position of letting mortgaged property. EDIT: I had misremembered. Landlords can still get a tax deduction for mortgage interest, but only at the 20% rate, not at their marginal tax rate. For most landlords with mortgages, this probably halves the tax credit. In the UK, if a private landlord receives £1000 in rent, and pays £800 in mortgage interest, they pay tax on the whole £1000, not just o…

> Why should a landlord be unable to deduct business expenses from revenue before calculating taxable profit, when all other businesses can? I think you nailed it. This is effectively the government saying "renting is not a business". Think about it. The ability to "deduct expenses" is one of the characteristics of businesses. Individuals also can't deduct rent, food etc from their taxes.

  This is effectively the government saying "renting is not a business".
Yes, but only if you're an individual landlord. If you register a company and buy the property through that, the normal rules apply and all interest expense is deductible. Of course, the mortgage might be harder to get or more expensive, as it's no longer secured on an individual's assets and future income.

Re: Priced out of home ownership

#254

Post by Carrok »

IAmGraydon wrote: post #248
jb1991 wrote: post #218

Earlier quoted context omitted.

It's not as simple as that. Home ownership can be a lucrative investment long-term, it depends on many factors. When property values appreciate a lot, as they have been recently, home owners have done very well.

The recent rate of appreciation is not typical. Homes generally appreciate at 3-4% per year. Subtract from that taxes, insurance and upkeep. They’re a terrible investment unless you own rental property, at which point your tenants are paying down the loan.

So, the alternative to buying, which is a terrible investment according to you, is renting, where you pay down the loan of the landlord. That’s better, how?

Re: Priced out of home ownership

#255

Post by IAmGraydon »

jb1991 wrote: post #220
caeril wrote: post #51

Earlier quoted context omitted.

Indeed. My home "value" has roughly doubled in the last five years. Sounds nice, but land/home values in the area I'd like to move to has nearly tripled in the same timespan. I feel bad for renters priced out of the market, but many of us who have "enjoyed" the upside are actually deeply underwater relative to our preferences, to say nothing of the doubling of insurance premiums, and ~25% property tax hikes in the la…

> many of us who have "enjoyed" the upside are actually deeply underwater relative to our preferences what do you mean by this?

What he said makes zero sense. Of course a more desirable area is going to appreciate faster. He’s acting like he should be able to trade his less desirable property for a more desirable one 1:1.

Re: Priced out of home ownership

#256

Post by fire_lake »

jb1991 wrote: post #220
caeril wrote: post #51

Earlier quoted context omitted.

Indeed. My home "value" has roughly doubled in the last five years. Sounds nice, but land/home values in the area I'd like to move to has nearly tripled in the same timespan. I feel bad for renters priced out of the market, but many of us who have "enjoyed" the upside are actually deeply underwater relative to our preferences, to say nothing of the doubling of insurance premiums, and ~25% property tax hikes in the la…

> many of us who have "enjoyed" the upside are actually deeply underwater relative to our preferences what do you mean by this?

Rising prices are great for people who want to downsize and terrible for people who want to upsize. Many millennials are “better off” than their peers having bought an apartment but can’t afford to move to a modest family home. The traditional housing ladder no longer applies.

Re: Priced out of home ownership

#257

Post by Tiktaalik »

fairity wrote: post #208

I don’t get articles like this. It’s arguably a better financial decision to NOT buy a home, and park your downpayment in a broad based index fund. I get that there are arguments for or against, but there doesn’t seem to be a clear financial advantage to home ownership. So, what’s the big fuss about? Just pay rent and carry on? Surely, there are better things to focus on?

Even aside from the many places where there has been a clear financial advantage to home ownership, a core value that drives desire of home ownership is stability of tenure. The control over ones destiny and the nigh impossibility that one could be forced to move has strong value.

Re: Priced out of home ownership

#258

Post by gundmc »

sharma-arjun wrote: post #226
whoknowsidont wrote: post #196

Earlier quoted context omitted.

That's not the problem at all. Stop allowing people to buy multiple homes. Stop allowing landlords to "collaborate" on prices.

The causes of homelessness are a little more complex than that, at least in the US: https://homelessness.ucsf.edu/blog/vacancies-are-red-herring

I don't think anyone said anything about solving homelessness. I read this in the context of outrageous home purchase prices. Those can be related but are certainly not the same thing.

Re: Priced out of home ownership

#259

Post by IneffablePigeon »

postalrat wrote: post #194
DGAP wrote: post #180

Stop subsidizing demand at the national level. Stop restricting supply at the local level.

Land is cheap but building a house is expensive. If you want more supply then you are going to need to make building more economical.

My (UK) house is worth 3x the total rebuild value my mortgage provider wanted me to insure it for. This implies the land it’s built on (and the planning permission to build the house) is worth twice what the structure is worth.

Re: Priced out of home ownership

#260

Post by Carrok »

ayakang31415 wrote: post #238

I am sure people are priced out of "desirable" places. I don't think this can be fixed by oversupplying homes in specific areas. You need to incentivize people to move into low dense areas.

The reason no one else lives there are the same reasons I don’t want to live there. Not everyone will be happy living in the middle of nowhere. I’d wager most wouldn’t.
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