Urban75 Home About Offline BrixtonBuzz Contact

The New Tories - Ruthlessly Incompetent. Post Examples of Tory Stupidity Here

I think all the overseas territories could come under direct rule, and have elected representation in the Commons. France manages it alright with Guadeloupe, Martinique, etc. I have a feeling it's the archaic rules about remote voting which mainly stands in the way, which the various lockdowns proved were no practical barrier.
 
two sheds said:
I've heard of people paying more in rent than they would on a mortgage but have still been refused a mortgage. Wonder whether that will be addressed.
Click to expand...

The whole "paying more for rental than a mortgage" has been a thing for a while now. Most rental prices I see in estate agent windows are greater than what you'd pay on most 25yr mortgage terms and have been, on and off, for several years. This is in London of course which might be an especially fucked market but I suspect it's widespread throughout the country. The term "tenant paying off my mortgage" is a fairly common one in the BtL crowd.

Capital requirements for mortgages in light of most people being unable to save up 10% or even 5% deposits mean many people will be stuck in the rental trap for the foreseeable. Consider an "average" £250k house (unrealistically cheap for London) - even if you saved up the £25k for a 10% deposit, you'd be looking at taking out a mortgage of £225k. A quick check at the MSE mortgage calculator says that in order to qualify for this, two people would both need to be earning £50kpa (something that plenty of people are nowhere near earning) and that's right at the maximum end of the borrowing range (and thus incurring higher interest). I know vanishingly few people earning over £50kpa. Even with large drops in the capital requirements for mortgages (something which comes with its own dangers, but that's another story) most people still won't be able to achieve that sort of earning.

Prices simply need to come down to prices that ordinary people can afford (but that's probably going to mean a massive crash needs to happen before it does). Until that happens the UK housing market is largely funnelling more and more money from the have-nots to the haves both in terms of rents to private landlords and interest on ever-more hugely inflated mortgages.
 
stdP said:
Prices simply need to come down to prices that ordinary people can afford (but that's probably going to mean a massive crash needs to happen before it does). Until that happens the UK housing market is largely funnelling more and more money from the have-nots to the haves both in terms of rents to private landlords and interest on ever-more hugely inflated mortgages.
Click to expand...
Good post. Yep - need a house price crash. As I remarked to someone today though: when house prices go up rents go up with them, when house prices come down rents generally stay where they were. :mad:
 
two sheds said:
Good post. Yep - need a house price crash. As I remarked to someone today though: when house prices go up rents go up with them, when house prices come down rents generally stay where they were. :mad:
Click to expand...

Look at it from your average landlord's perspective - they've still got the same mortgage to pay, so there's no way they can reduce the rents without looking at defaulting on their debt and losing the house (or selling it, quite likely during a period of negative equity and thus possibly "losing out" on their "investment"). People buying houses so they have a place to live are much less affected by this mindset but since losing your house is a sure-fire loser of votes, and property/rental is often seen as a hedge to supplant the rapidly-vanishing idea in the UK of a retirement with a pension, there's a lot of political capital invested in keeping the property market train wreck a-rollin' because it's broken state is sadly still a vote-winner.

Trying to swerve further back to the topic, of course Boris' policy is total non-starter and as much a vacuum of detail as ever. But even if it did work (and I don't see how it can TBH), I think it'd still largely proceed along the lines of Thatcher - votes won via dangled carrot (because who doesn't want a house at a knock-down price?), affordable housing becomes even less available than it is already, and I wouldn't be at all surprised to see taxpayer's money being used to put affordable accommodation in to the hands of private landlords as happened with RtB.
 
The sort of policy that would only work if no one else at any point ever in the future who hasn’t got a house now might at some point need a house (if you also conveniently ignore all the people who already need housing)

Just another part of the Tories ongoing 40 year quest to transfer public assets into the hands of their mates.
 
stdP said:
Look at it from your average landlord's perspective - they've still got the same mortgage to pay, so there's no way they can reduce the rents without looking at defaulting on their debt and losing the house (or selling it, quite likely during a period of negative equity and thus possibly "losing out" on their "investment").
Click to expand...
True for people buying now, but most(?) landlords will have bought a few years ago when house prices were lower. Twenty years ago prices were four or five times lower, and those landlords are still renting out at market rates. Quids in.
 
stdP said:
The whole "paying more for rental than a mortgage" has been a thing for a while now. Most rental prices I see in estate agent windows are greater than what you'd pay on most 25yr mortgage terms and have been, on and off, for several years. This is in London of course which might be an especially fucked market but I suspect it's widespread throughout the country. The term "tenant paying off my mortgage" is a fairly common one in the BtL crowd.

Capital requirements for mortgages in light of most people being unable to save up 10% or even 5% deposits mean many people will be stuck in the rental trap for the foreseeable. Consider an "average" £250k house (unrealistically cheap for London) - even if you saved up the £25k for a 10% deposit, you'd be looking at taking out a mortgage of £225k. A quick check at the MSE mortgage calculator says that in order to qualify for this, two people would both need to be earning £50kpa (something that plenty of people are nowhere near earning) and that's right at the maximum end of the borrowing range (and thus incurring higher interest). I know vanishingly few people earning over £50kpa. Even with large drops in the capital requirements for mortgages (something which comes with its own dangers, but that's another story) most people still won't be able to achieve that sort of earning.

Prices simply need to come down to prices that ordinary people can afford (but that's probably going to mean a massive crash needs to happen before it does). Until that happens the UK housing market is largely funnelling more and more money from the have-nots to the haves both in terms of rents to private landlords and interest on ever-more hugely inflated mortgages.
Click to expand...
Your numbers aren’t right here. Mortgages are typically available at about 4-4.5 times salary. Two people earning 50k each would be able to borrow about £400,000. To get a mortgage of £225k requires two people to be earning more like 50k between them, i.e. £25k each. Indeed, one of the reasons house prices have risen so much is precisely because of this availability of mortgages — the average couple can afford the average house price based on the average mortgage multiple. Buy-to-let has certainly been a nasty upwards pressure on houses, but they comprise a minority of homes (about 25-30%).

There are some misunderstandings about “tenant pays for the mortgage” thing too. The average UK rental yield is 3.6%. Mortgage rates are typically in the ballpark of 3%. However, you have to load the capital cost of the deposit in to the calculation and owning property is pretty expensive in terms of management fees, repairs and so on too. Basically, the average income from rent will, typically, roughly cover the average cost of the debt and equity put into the property. Could be more, will often be less. However, even if the rent covers these costs, that isn’t “paying for the mortgage”, because the debt still has to be paid off.

So then people think they’ll make money on the capital gain of the property. Trouble there is that the frictional costs are very high. They’ll have paid 3% stamp duty on top of the basic stamp duty on purchase, plus solicitor fees. On sale, they’ll pay estate agent fees. If the property rises in value enough, they’ll pay capital gains tax at top rate — you either sell the property or you don’t, so there is no chance to phase the capital gain to avoid the CGT. However, average property rises in typical BTL properties have not been anywhere near as much as you might guess over the last 10-20 years. There have been some eye watering rises but there are also been some periods of crash. It’s very regional.

My experience with people generally and landlords in particular is that almost none of them do (or even know how to do) the financial calculations properly to genuinely compare this stuff. Landlords often think they’re making money by renting out a property whereas they actually aren’t. Property returns in reality are actually pretty shitty. Net of all the things I am talking about, the result over the last 10 years or 15 years or 20 years will have been noticeably worse than putting the same money into the stockmarket, say.

Now, you might wonder about the point of saying all this. It’s certainly not to suggest that there is nothing to worry about or that BTL isn’t a problem. BTL is a massive problem! It’s more that I think the myth of landlords making easy money is actually feeding the problem. People who have some spare money to invest just default to buying property because they don’t know about anything else and everybody is telling them that this is the easy way to do it. My hope is that countering that propaganda might slowly help to defuse the situation.
 
prunus said:
It’s a non-policy that will go nowhere. He thinks it’s a good soundbite, but the core tories hate it, and it will help no-one. I think he’s managed to stick his foot firmly up his own backside again. Cunt.
Click to expand...

What it will probably do is get tacked on to the long-promised housing bill that would ban section 21 evictions, delaying it again. Meanwhile hundreds of people a day are kicked out of their homes for no reason and with no recourse.
 
kabbes said:
Your numbers aren’t right here. Mortgages are typically available at about 4-4.5 times salary. Two people earning 50k each would be able to borrow about £400,000. To get a mortgage of £225k requires two people to be earning more like 50k between them, i.e. £25k each. Indeed, one of the reasons house prices have risen so much is precisely because of this availability of mortgages — the average couple can afford the average house price based on the average mortgage multiple. Buy-to-let has certainly been a nasty upwards pressure on houses, but they comprise a minority of homes (about 25-30%).

There are some misunderstandings about “tenant pays for the mortgage” thing too. The average UK rental yield is 3.6%. Mortgage rates are typically in the ballpark of 3%. However, you have to load the capital cost of the deposit in to the calculation and owning property is pretty expensive in terms of management fees, repairs and so on too. Basically, the average income from rent will, typically, roughly cover the average cost of the debt and equity put into the property. Could be more, will often be less. However, even if the rent covers these costs, that isn’t “paying for the mortgage”, because the debt still has to be paid off.

So then people think they’ll make money on the capital gain of the property. Trouble there is that the frictional costs are very high. They’ll have paid 3% stamp duty on top of the basic stamp duty on purchase, plus solicitor fees. On sale, they’ll pay estate agent fees. If the property rises in value enough, they’ll pay capital gains tax at top rate — you either sell the property or you don’t, so there is no chance to phase the capital gain to avoid the CGT. However, average property rises in typical BTL properties have not been anywhere near as much as you might guess over the last 10-20 years. There have been some eye watering rises but there are also been some periods of crash. It’s very regional.

My experience with people generally and landlords in particular is that almost none of them do (or even know how to do) the financial calculations properly to genuinely compare this stuff. Landlords often think they’re making money by renting out a property whereas they actually aren’t. Property returns in reality are actually pretty shitty. Net of all the things I am talking about, the result over the last 10 years or 15 years or 20 years will have been noticeably worse than putting the same money into the stockmarket, say.

Now, you might wonder about the point of saying all this. It’s certainly not to suggest that there is nothing to worry about or that BTL isn’t a problem. BTL is a massive problem! It’s more that I think the myth of landlords making easy money is actually feeding the problem. People who have some spare money to invest just default to buying property because they don’t know about anything else and everybody is telling them that this is the easy way to do it. My hope is that countering that propaganda might slowly help to defuse the situation.
Click to expand...

Being stupid as well as greedy is not a moral defence.
 
Where to start today...

www.theguardian.com

Rishi Sunak ‘wasted £11bn by paying too much interest’ on UK debt

Labour accuses chancellor of wastefulness for failing to insure against interest rate rises
www.theguardian.com www.theguardian.com

Hopefully this becomes Sunaks equivalent of "Gordon Brown sold off all the gold" moment and people realise the conservatives aren't economic masterminds.

www.theguardian.com

Home Office tried to ‘sanitise’ staff education module on colonialism

Disagreements have led to delay in course rollout as civil servants think empire material ‘too controversial’
www.theguardian.com www.theguardian.com

And then this...
 
Artaxerxes said:
Hopefully this becomes Sunaks equivalent of "Gordon Brown sold off all the gold" moment and people realise the conservatives aren't economic masterminds.
Click to expand...

This is just accepted as fact by a large percentage of the population. Actual evidence for it, if ever there was any, evaporated long ago.

It often seems like a mental defence mechanism created by people who have voted tory and seen their lives turn to shit, 'ah, but labour would be worse because they just spend loads of money and ruin the economy'.
 
kabbes said:
Your numbers aren’t right here. Mortgages are typically available at about 4-4.5 times salary. Two people earning 50k each would be able to borrow about £400,000. To get a mortgage of £225k requires two people to be earning more like 50k between them, i.e. £25k each. Indeed, one of the reasons house prices have risen so much is precisely because of this availability of mortgages — the average couple can afford the average house price based on the average mortgage multiple. Buy-to-let has certainly been a nasty upwards pressure on houses, but they comprise a minority of homes (about 25-30%).
Click to expand...

That has been the case recently because of low interest rates. Looking at the way those are going, couples on a joint income of £50k will struggle with their £200k mortgage.
 
bluescreen said:
Then I wonder why we're being told any of this, except to illustrate that there are credulous people out there, which tbh most of us already
Click to expand...
It was simply me sharing some gossip from someone who claimed to know the family. It is nothing more profound or sinister than that. It is something I'd mention to someone over a pint in the pub. People can make of it why they will, I cannot vouch for this woman's veracity in any way.

What my sharing of this conversation definitely isn't is proof of anything.

I think some here are taking it too seriously. Nothing more than a mildly interesting piece of gossip from someone claiming to know Johnson. That is all.
 
You must log in or register to reply here.

Similar threads

MrCurry
  • Poll
Tory leadership contest 2024
31 32 33 34 35
Replies
1K
Views
36K
prunus
prunus
V
Hooray,hooray,hooray; we're Tory free today
Replies
0
Views
249
vanya
V
P
Is the Tory Era Over? Farage Predicts Massive Shift to Reform
2 3 4 5 6
Replies
153
Views
8K
Monkeygrinder's Organ
M
Dog_Voodoo
Tory Mark Menzies, who are these bad people?
2
Replies
43
Views
2K
Wilf
Wilf
RevolutionSound
Tory councillor accuses Dawn Butler of anti semitism on LBC
Replies
1
Views
624
GarveyLives
G
Back
Top Bottom