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Hopeful FTB

A Perspective....

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My Grandfather, who is 82, has recently bought his first home using his savings. He had rented the council house for 52 years and finally got around to buying it last year at a discount using his savings.

Probably should have bought it sooner but just never got around to it as was too busy living his life! His reason now was that he wanted something to leave to his family when he dies although he had probably bought the house 5 times over in the years that he had rented it.

My reason for posting this is just perspective really- he lived his whole life renting, brought up his family, lived his life etc etc and saved a lot of money.

Maybe its never too late but my point is that, as much as I would love to own my own home- it is possible to have a normal life without it! Sometimes it is easy to forget that in our obsessive culture! And spending so much time on this site!!

Maybe if we all save as much as we can, we may also, in a few years, be the ones that can virtually buy a house outright! :P

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His reason now was that he wanted something to leave to his family when he dies.

Hmmm I know its your grandad, but wouldnt the money be better to leave to the family rather than a depreciating house in a crashing market?

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That’s a good perspective, I was reading an article yesterday that claims the UK and other western societies make it really easy to borrow money so you can buy your house, but when you start looking around, Italy, Germany, Caribbean, and others, these people can't buy their houses, the banks may only lend 50% of the house value, and expect it to be paid off in 10years etc.. And because of this, these people live their whole lives renting. Maybe its not such a bad thing, and when you read about the Expats trying to sell there property before they move and the Visa's running out etc... It makes renting seem so much nicer. Think about it, you only have to give 1-6months notice then you can move, no chain, no surveys, no problems. stress free life. If you don't like you neighbourhood you can move, if you change job, you can move.

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That’s a good perspective, I was reading an article yesterday that claims the UK and other western societies make it really easy to borrow money so you can buy your house, but when you start looking around, Italy, Germany, Caribbean, and others, these people can't buy their houses, the banks may only lend 50% of the house value, and expect it to be paid off in 10years etc.. And because of this, these people live their whole lives renting. Maybe its not such a bad thing, and when you read about the Expats trying to sell there property before they move and the Visa's running out etc... It makes renting seem so much nicer. Think about it, you only have to give 1-6months notice then you can move, no chain, no surveys, no problems. stress free life. If you don't like you neighbourhood you can move, if you change job, you can move.

Does anyone know why European banks demand higher deposits and shorter loan periods? The obvious answer is risk management, but how can UK and continental banks differ so greatly on their opinions? Seems strange.

Are there other structural factors at play? Do continental banking laws prohibit the scale of lending that we see in the UK? Or is it cultural - do the borrowers prefer to keep their debts low?

Any Euro-dwellers out there who can shed some light on this mystery?

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Hmmm I know its your grandad, but wouldnt the money be better to leave to the family rather than a depreciating house in a crashing market?

That is a good point- however, he got the house for literally next to nothing as he had lived there for so long - seemed like too good an opportunity I guess!

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Heres the artical I read, some interesting stuff in there

http://money.cnn.com/2004/11/11/real_estat...f_worldhousing/

Interesting, but a bit of a lightweight article.

I'd be really interested to know why German and Italian banks basically discourage lending for house purchases. It is extremely at odds with the UK and US. If there is money to be made, you would imagine they would be doing it....

I know in Germany it has been traditional for the major banks to own equity stakes in german industry (e.g. Daimlerchrysler, volkswagen, in fact most large german corporates). Does this leave less cash available for mortgage lending?

It seems more sensible for banks to invest in industry which can create genuine wealth for a country rather than in individuals.

As the grandfather of economics Adam Smith pointed out for us:

"Ask any rich man of common prudence to which of the two sorts of people he has lent the greater part of his stock, to those who, he thinks, will employ it profitably, or to those who will spend it idly, and he will laugh at you for proposing the question. Even among borrowers, therefore, not the people in the world most famous for frugality, the number of the frugal and industrious surpasses considerably that of the prodigal and idle."

In this context, borrowing to buy a house is NOT a profitable use of money, as it does not lead to any increase in wealth. A house is a house is a house.

Have German banks maintained this sensible perspective, whilst in the UK we have (mistakenly) come to regard housing as an investment? After all, a house is a house is a house. Where is the increase in wealth?

Do German banks themselves choose to limit mortgage lending for this reason? Or is there a restriction on such lending in German banking law?

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He had rented the council house for 52 years and finally got around to buying it last year at a discount.

Oh great. Another cheery story about how the older generations have lived the high life at our expense and then been given even more money. That'll cheer up the indebted youngsters looking for a 1 bedroom flat at 18 times earnings!

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That’s a good perspective, I was reading an article yesterday that claims the UK and other western societies make it really easy to borrow money so you can buy your house, but when you start looking around, Italy, Germany, Caribbean, and others, these people can't buy their houses, the banks may only lend 50% of the house value, and expect it to be paid off in 10years etc.. And because of this, these people live their whole lives renting. Maybe its not such a bad thing, and when you read about the Expats trying to sell there property before they move and the Visa's running out etc... It makes renting seem so much nicer. Think about it, you only have to give 1-6months notice then you can move, no chain, no surveys, no problems. stress free life. If you don't like you neighbourhood you can move, if you change job, you can move.

theres nothing fundementally wrong about a rental society. provided the landlords are not profiteering off you.

i would gladly rent a council house that was a suitable size. i would not need to move. the rents would rise inline with uk inflation (not hyped inflation) and i would have a secure tenancy.

its the privateer that ruins it with rent hikes, over charging, deposit stealing. lack of security and general leeching.

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Oh great. Another cheery story about how the older generations have lived the high life at our expense and then been given even more money. That'll cheer up the indebted youngsters looking for a 1 bedroom flat at 18 times earnings!

what a load of boll*ks :ph34r:

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what a load of boll*ks  :ph34r:

Sorry, I'll add a note for the hard of thinking. I didn't actually mean it was great. That was sarcasm.

Actually, I'm inclined to be against wasting even more of our tax money on giving extra bounty to those lucky enough to have benefited from subsidised housing for a number of years.

HTH.

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This thread got me thinking about today's generation and the unaffordability of housing.

"Is this the generation waiting for its grandparents/parents to die?"

By that I mean, for some, prices are so unreachable that the only way they will ever own is when their family leaves them money and/or property in inheritance.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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