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Britain Becomes A Nation Of Renters As Buy-To-Let Prices Out New Buyers

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http://www.thetimes.co.uk/tto/life/property/article4311161.ece?shareToken=15b2410d946d0a35bf4bb875d204d1d6

Of 2.9m new homes built since 2000, 2.5m (i.e.86%) bought by landlords, 400k by owner-occupiers as home ownership plunges to lowest since 1988.

Woo renter-savers should pay off these property-investors residential mortgages, or refill the equity they released from their main homes, to buy a BTL/investment property.

That's the answer for some on hpc. Whist we're at it, maybe renters should hand over all their savings to help pay down the landlords commercial debt, and allow the investors to buy even more housing stock.

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I find this "64.3% home ownership" number that Eurostat reported this week very suspect. People assume it means that 64.3% of UK adults own residential property when it actually tells you the proportion of residential properties that are owner-occupied. It's a number that focuses on the status of buildings, not the status of people. Buildings don't vote.

There are many people living in owner-occupied properties who don't have their name on the mortgage/deeds e.g. the 3.3m 20-34 year olds living with their parents, or couples where one person moves into the other person's house without buying a share. They are not owner-occupiers. None of these people feel wealthier when house prices increase.

Also, shared private rentals have a high number of voters under one roof. It would be very rare to find an owner-occupied property with 5 of the occupants' names on the mortgage/deeds but it is completely normal for a shared house to have 5 adult tenants.

I would not be too surprised if that "64.3% home ownership" figure actually translates to something closer to 50% of the adult population who have their name on a mortgage/deeds for a residential property. Having home ownership reported in this way is probably tricking politicians into thinking that pro-HPI policies will be good for more voters than is actually the case.

Edited by Dorkins

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http://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate

1 23px-Flag_of_Romania.svg.pngRomania 96.6 2012[2]

2 23px-Flag_of_Lithuania.svg.pngLithuania 91.9 2012[2]

3 23px-Flag_of_Hungary.svg.pngHungary 90.5 2012[2]

3 23px-Flag_of_Singapore.svg.pngSingapore 90.5 2013[3]

5 23px-Flag_of_Slovakia.svg.pngSlovakia 90.4 2012[2]

23px-Flag_of_the_People%27s_Republic_of_China 90 2012[4]

7 23px-Flag_of_Croatia.svg.pngCroatia 89.5 2012[2]

8 23px-Flag_of_Bulgaria.svg.pngBulgaria 87.4 2012[2]

9 23px-Flag_of_India.svg.pngIndia 86.6 2011[5]

10 21px-Flag_of_Norway.svg.pngNorway 84.8 2012[2]

Edited by SarahBell

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'Owner' is a joke if they are leveraged on it.

Especially if it's an interest only mortgage. Incredibly, over 50% of mortgages in London, SE England and SW England are interest only. There are an awful lot of people swimming naked in the UK property market, especially in southern England.

Edited by Dorkins

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Especially if it's an interest only mortgage. Incredibly, over 50% of mortgages in London, SE England and SW England are interest only. There are an awful lot of people swimming naked in the UK property market, especially in southern England.

Imagine that. Having a swim in Ashford council pool. Surfacing from a dive to be met by Fergus' sagging, naked ********. Nice.

Has he sold his the banks houses yet?

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Especially if it's an interest only mortgage. Incredibly, over 50% of mortgages in London, SE England and SW England are interest only. There are an awful lot of people swimming naked in the UK property market, especially in southern England.

Yup, always good to be reminded of this astonishing fact. Mugs stepping up to the plate to buy these properties will likely have to do so on a repayment basis so it is easy to see why transaction numbers are low.

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My 1st time buyer flat I bought where 90% were owner occupied is now almost all rented out, hardly anyone who lives there has their own mortgage.....my sister said her old road in South London is mainly now all rented out...first and second time buyer property is being hovered up by property investors......pretty clear to see.

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My 1st time buyer flat I bought where 90% were owner occupied is now almost all rented out, hardly anyone who lives there has their own mortgage.....my sister said her old road in South London is mainly now all rented out...first and second time buyer property is being hovered up by property investors......pretty clear to see.

Investments can go down....

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Well since 2009 / 2010 London prices are up by 40 to 60 % so they will not be worried about the IO mortgages .... providing prices do not fall and even today no-one (MPs, VIs, EAs etc) wants prices to fall, just to stop rising so quickly so that more can join in the fun.

Even if London prices fall by 20% they will only be at the level they were a year ago. And 20% was the fall in 2009 before the props were put in place to get prices rising again.

Land Reg says Greater London up 39% since January 2010, (54% on January 2009).

Of course rents did not move by the same amount, nor wages from which rents are paid. Hence if you exit it is all gravy, if you don't a crappy rent services a paper gain and you are none the richer, except on paper.

Land Reg also says that Greater London gain from Nov 2013 to Nov 2014 was only 15%.

You say potato and all that, but 25% off today takes you back to the 2008 peak.

As I've evidenced on other threads, lots and lots of BTL since 2008.

Given the leverage, if prices trace back 20% lots of people are losing lots of money. The idea that these BTL clowns are safe is nonsense.

Back in 2003 it was obvious that pursuing credit fuelled HPI would in due course end badly for everybody. In 2008 we hit a wake-up call for anyone with an IQ greater than the IQ of your average fencepost. Since then more people piled into BTL and prices went up. They get to win if they now bail out. But what if they all bail out?

A bubble in something that you can't avoid purchasing is still a bubble - the fact that reality compels you to rent it shows that it is a bubble.

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Especially if it's an interest only mortgage. Incredibly, over 50% of mortgages in London, SE England and SW England are interest only. There are an awful lot of people swimming naked in the UK property market, especially in southern England.

The residential IO situation looks bad enough in itself - although perhaps they will be bailed out by extend and pretend, SMI and sale on death - I'm sure the BTL situation is much, much worse.

Over the next 30 years, the key findings are:
  • 2.6 million interest only mortgages will be due for repayment and while nine out of ten (90 per cent, 2.34 million people) have a strategy to repay their mortgage, 10 per cent do not – equivalent to 260,000 people.
  • Some borrowers are underestimating the problem as around a third (37 per cent) believe they may not have enough money to pay off the loan, yet estimates produced for the FCA suggest that the figure is closer to half (48 per cent).
  • Borrowers who are able to give a figure believe their shortfall will be, on average £22,100. However estimates produced for the FCA are that around half these shortfalls are expected to be over £50,000.
  • Those expecting a shortfall say they will use savings (21 per cent) or downsize (19 per cent) to pay off their mortgage, while 15 per cent say they will remortgage.
  • The vast majority of interest only borrowers (81 per cent) say they understood the terms of the loan at the point of sale. But 13 per cent say they did not and another 6 per cent were unsure. However, only 2.5 per cent were both not aware at point of sale and currently do not have a repayment strategy in place.
  • While most borrowers (70 per cent) check their annual mortgage statement to ensure they are on track to repay at maturity, about one in seven (14 per cent) never check.
  • The average outstanding balance of an interest only mortgage customer is £55,000 for those with an ‘endowment mortgage’ (i.e. one that was sold backed by an endowment policy), and £121,000 for those without.

http://www.fca.org.uk/news/interest-only-mortgages

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http://www.fca.org.uk/search?cx=007702012814746907219%3Aygc2cqogj8e&cof=FORID%3A9&ie=UTF-8&q=interest+only

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In he UK, housing is seen as no different than any other requirement that is needed for an economy to function - a commodity to be traded first and a basic need second. Successful economies of the future will be where where these basic needs are seen as enablers to real economic growth and not the primary means of fake economic growth.

Edited by campervanman

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In he UK, housing is seen as no different than any other requirement that is needed for an economy to function - a commodity to be traded first and a basic need second. Successful economies of the future will be where where these basic needs are seen as enablers to real economic growth and not the primary means of fake economic growth.

No

And no

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Si1, I am a bit puzzled by your response. What part of my post do you disagree with? Is it that you do not think that for an economy to be successful that there should be enablers in place that are affordable enough to allow people to contribute both financially and physically to the real economy or maybe you do not agree that housing has become a commodity to be traded instead of a basic human need?

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Si1, I am a bit puzzled by your response. What part of my post do you disagree with? Is it that you do not think that for an economy to be successful that there should be enablers in place that are affordable enough to allow people to contribute both financially and physically to the real economy or maybe you do not agree that housing has become a commodity to be traded instead of a basic human need?

Housing is not currently treated as a commodity, it's too protected by tptb, that's the problem. If it WAS a commodity then the market would have solved the housing crisis. Instead its a means of wealth transfer and financial repression.

And your ideas about universal financial suffrage are commendable but false, given the choice most people only contribute in return for getting something back, socialism simply doesn't exist in natural human behaviour

Edited by Si1

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Si1, I am a bit puzzled by your response. What part of my post do you disagree with? Is it that you do not think that for an economy to be successful that there should be enablers in place that are affordable enough to allow people to contribute both financially and physically to the real economy or maybe you do not agree that housing has become a commodity to be traded instead of a basic human need?

In that list of housing ownership, which nations would you think were good to be part of?

Would you be happy to live in any of the top 20?

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In that list of housing ownership, which nations would you think were good to be part of?

Would you be happy to live in any of the top 20?

Norway

Czech republic

Iceland

Maybe the better parts of Spain (Asturias)

Why do you ask?

Edited by Si1

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Housing is not currently treated as a commodity, it's too protected by tptb...

In the real world, land is a service.

Land is currently treated as a commodity, and it can only be treated as a commodity because it is protected by the government.

That is the cause of the housing crisis and many other social problems.

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BTLers who buy for profit have an unfair competition over ordinary owner occupiers that live and pay for their own homes......BTLers can only pay the interest only and mostly do that is a huge tax advantage to them, OO now find it hard to do that which is right but still very unfair....BTL mortgages are unregulated so anything goes, OO mortgages are regulated and are subject to MMR.....something needs to change. ;)

Edited by winkie

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