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Why are Brits so obsessed with buying their own homes?

theguardian.com

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Re: Why are Brits so obsessed with buying their own homes?

#71

Post by ghaff »

dfraser992 wrote: post #56
abritinthebay wrote: post #5

As a Brit in the US I don't feel the pressure is much different here. It's a little resigned and accepting that in a big city you can't afford it, but it's still expected that eventually you'll move to the suburbs and have a home. That's not surprising though as owning a home is generally about two things: financial responsibility and stability (obviously desirable), and actually owning the place that you live. "A pl…

When I was growing up in the US, suburbs were "the thing". I have read (sorry, can't remember where - the Atlantic?) they are becoming less that, due to social changes and increasing population density in the cities. So the projection is that the suburbs in the future will become almost slums as the poor migrate - the housing slump in Florida is one data point.

There are a lot of generalities and anecdata thrown around in these sorts of demographic discussions. Certainly "white flight" has generally reversed and there's a fair bit of gentrification going on in formerly rundown areas of certain cities.

However, the "millennials are all moving to cities" meme seems to be much overstated. e.g. from fivethirtyeight [1] "Millennials overall, therefore, are not increasingly living in urban neighborhoods. Rather, the most educated one-third of young adults are increasingly likely to live in the densest urban neighborhoods. That’s great news for cities trying to attract young graduates and a sign that urban neighborhoods have become more desirable for those who can afford them. But the presence of more smart young things in Brooklyn is not evidence that millennials are a more urban generation."

I don't know much about Florida is particular. Anecdotally, I'd say that the cliche of retiring to Florida doesn't seem to apply to just about anyone I know. If anything, they're retiring to the desert Southwest if they're seeking a warm climate.

[1] http://fivethirtyeight.com/features/why-millennials-are-less...

Re: Why are Brits so obsessed with buying their own homes?

#72

Post by themartorana »

spdustin wrote: post #40
Nullabillity wrote: post #21

Earlier quoted context omitted.

Renting is just another form of debt, though.

It's an expense, not a debt. It's like an operating expense, versus a mortgage, which is more like a capital expense amortized over a number of years. I have no issue with mortgages entered into by people who understand how to live within their means. There are lenders who prey on those who don't truly understand what their means are, sure, but that doesn't make the whole enterprise of home ownership a faulty one. An…

A house is a risky investment. Over the life of a 30 year mortgage, you may spend 100% the price of the house on interest, plus ever rising property taxes, repairs, roofs, driveways, land care and maintenance, and more. There's also transfer tax in some municipalities (2% on buy and sell in Philadelphia for example), 6% to a realtor to sell, and so on.

You'll need your house value to rise to at least ~225% of its initial purchase price over the life of your mortgage just to break even.

That doesn't count the time you spend on repairs and maintenance of your property that you never get back.

Here in the US, I have friends still under water from 2008, so house values don't always go up (and this is in the pricy DC metro area).

All investment is a risk. Never buy a house because you feel you should - do it because you want to. You want to put in the kitchen of your dreams, you want to live near family, you want your kids to grow up in one house their whole childhood.

If you make a profit in the end, wonderful! But don't do it for that. Rather, decide the kind of life you want to lead (do you enjoy moving every few years? Do you want to live abroad for 5 years? Do you prefer he flexibility and lack of responsibility that comes with renting?) and live that - if a house fits into it, great!

Re: Why are Brits so obsessed with buying their own homes?

#73

Post by cthalupa »

themartorana wrote: post #53
jamescun wrote: post #48

For me, wanting to buy is not about an investment. I want somewhere secure and stable to live. The "dead money" aspect of rent versus a mortgage is just a bonus. It must seem alien to most in the west the sheer lack of protection renters have in England (property law is devolved); it is based entirely in private contracts, and what law does exist is rarely if ever enforced. Just last week Parliament rejected an amend…

It does seem odd to me (in the US). Renting here is not without risk and slum lords and rising rents, but there is a minimum expectation of consumer protection, much in the same way there is with most transactions. Either way, if you care to live anywhere near a city, housing prices are astronomical. We make a decent living, my wife and I, but still don't have what it takes to buy a two bedroom apartment in one of th…

Honest question: Is your credit bad?

Even adding in PMI, property taxes, a 30 year rate, etc, the mortgage of house should be about the same, and often less than the rent unless you just can't get a good rate. A landlord has to make money, including the costs of longterm upkeep, replacing things like the air conditioner, paying real estate agents their commission, etc.

If you can't make a 20% down payment I've seen PMI be enough to push it to a bit over what the rent would be at the house, but that certainly shouldn't take you 10-15 years to pay off and get out of PMI range.

The only thing I can figure is you have a significantly higher interest rate than people would get in the 'average credit' category

About the only places where I've ever seen this not be true is where rent control is in effect.

Re: Why are Brits so obsessed with buying their own homes?

#74

Post by dpark »

Mikeb85 wrote: post #24
ape4 wrote: post #9

Earlier quoted context omitted.

There is a stress in renting too. You never know if your landlord might want to change things resulting in a request for you to move out. eg he wants relatives to have the apartment, etc.

No landlord would want their family renting the place in lieu of real tenants. Real tenants pay, on time. Family likes to take advantage of you (ie. they find excuses to pay less or not at all).

Family is a convenient way to push out tenants in many cities, though. Even cities with strong tenant protections often have exceptions for evicting tenants in order to allow family members to occupy the rental.

Re: Why are Brits so obsessed with buying their own homes?

#75

Post by ra1n85 »

spdustin wrote: post #50
ra1n85 wrote: post #13

Earlier quoted context omitted.

I find mobility to be a valuable asset. That may be a byproduct of working in the technology industry.

I work in the technical industry. A "founder", even. I've been in the same house for 14 years. Owned my business a bit longer than that.

What area?

Re: Why are Brits so obsessed with buying their own homes?

#76

Post by lewiscollard »

scholia wrote: post #45

It makes sense to buy a house because, over the long term, the value of houses goes up while the value of money goes down. Even better, the real cost of mortgage payments keeps going down (thanks to inflation) while the real cost of rents keeps rising. My house would now rent for around 3x my mortgage payments, except I paid off the mortgage more than a decade ago so my rent is zero. There's always a chance house pri…

> over the long term, the value of houses goes up while the value of money goes down

That which cannot go on forever, won't.

> There's always a chance house prices could collapse, but that's unlikely in the UK.

The population in Britain was 58.95 million in 2000 and is currently 64.04 million.[1] In the same time house prices have risen by an average of 153%.[2] It's reasonable to subtract baseline inflation from that at 55%[3], in which you STILL end up with a 98% increase. And I'm not ignoring the silliness in London; nearly every region of the UK has seen near-doublings of house prices since 2000, with a population increase of about five percent.

Simple supply and demand dynamics are not at work here.

> It seems pretty much insane to imagine that this will always be true

Yes, it certainly does. I'm sure there was a crisis not so long ago where lots of people were betting on house prices continuing to go up for the foreseeable future which didn't end too well.

Maybe, just maybe, the problem is too many people thinking of housing as an investment?

[1] http://www.worldometers.info/world-population/uk-population/ [2] http://www.nationwide.co.uk/about/house-price-index/house-pr... [3] http://www.thisismoney.co.uk/money/bills/article-1633409/His...

Re: Why are Brits so obsessed with buying their own homes?

#79

Post by icebraining »

moron4hire wrote: post #60
icebraining wrote: post #27

Earlier quoted context omitted.

How so?

You have a future obligation to fulfill and are contractually bound to it for a set period of time.

Well, at least around here, after the first six months, you never have an obligation beyond one month (you must give two months notice, but since you must usually pay two months in advance at the start, you don't pay the last).

Re: Why are Brits so obsessed with buying their own homes?

#80

Post by Overtonwindow »

jamescun wrote: post #48

For me, wanting to buy is not about an investment. I want somewhere secure and stable to live. The "dead money" aspect of rent versus a mortgage is just a bonus. It must seem alien to most in the west the sheer lack of protection renters have in England (property law is devolved); it is based entirely in private contracts, and what law does exist is rarely if ever enforced. Just last week Parliament rejected an amend…

Just when I think I have the perfect response to an article, I find someone has already said it better. I think the Brits have come to their senses on homeownership better than many Americans.
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