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LandOfConfusion

YouGov: Would you prefer to buy or rent your home?

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I was thinking about putting this on the front page but it's not really a news item so I'll post it here instead.

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In my many debates with BTL'ers I've regularly seen the argument that renting is a choice and that all their tenants prefer renting over ownership. Now anecdotally I know this isn't true and arguably it defies logic: why would you pay someone hundreds of pounds a month for largely nothing and take the added risk nit to mention potential hassle that you'll be kicked out with only 6 months notice?

But this isn't itself proof and what I really needed was some statistics, even if they weren't perfect. Well today Yougov ran a poll:

 

CEDnGam.png

 

:)

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If you added in... But hpi would be no more than inflation and you could get a good long term tenancy from a well regulated landlord... the answer may be different. Except no one has experience of that so I guess nothing would change.

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The big elephant n the room is if renting all your life, who will pay the monthly rent when people are too old to work, sick to work or the job able to do and or pension does not cover the rent let alone living costs?......The state?

......Because if not there will be thousands of homeless people or people living in shared accommodation with strangers sharing the toilets and kitchen.;)

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Quote

If you added in... But hpi would be no more than inflation and you could get a good long term tenancy from a well regulated landlord... the answer may be different. Except no one has experience of that so I guess nothing would change.

Possibly, although again it might depend on what you meant by "well regulated landlord". Economically speaking, the cost of renting would have to be very, very low to make this viable as I suspect most people would realise that they can do all the 'services' that the landlord does themselves, and at a much lower cost.

Also I would logically expect those with more experience too understand this and therefore you'd see more people favoring ownership over renting as their age increases. Actually this is indeed what the result say:

XYTkWIN.png

As we can see, "Would rather rent" falls from a surprisingly high 22% to just 8% once people mature and see how their life is going.

Edited by LandOfConfusion

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22 minutes ago, LandOfConfusion said:

Possibly, although again it might depend on what you meant by "well regulated landlord". Economically speaking, the cost of renting would have to be very, very low to make this viable as I suspect most people would realise that they can do all the 'services' that the landlord does themselves, and at a much lower cost.

Also I would logically expect those with more experience too understand this and therefore you'd see more people favoring ownership over renting as their age increases. Actually this is indeed what the result say:

XYTkWIN.png

As we can see, "Would rather rent" falls from a surprisingly high 22% to just 8% once people mature and see how their life is going.

The difference can also be explained in terms of experience of HPI. Those in the 60+ bracket have seen the value of their homes rocket and are nearing or at retirement age: the ideal outcome as they can downsize and release huge amounts of equity. Many of those in the under 24 bracket have simply given up on the idea of buying because prices are so high: they may actually prefer to buy but not at these prices and so they say they prefer to rent, out of circumstances not preference.

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This survey might mean something if they changed the wording to

Would you prefer to buy at price £ X or rent at price £ Y

Then randomise the values of X and Y to see how price affects the desirability of each option.

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Perhaps just "would you choose to buy, if you could" would have been better. I think the results may have been even more overwhelmingly in favour of buying.

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14 minutes ago, Digsby said:

Many of those in the under 24 bracket have simply given up on the idea of buying because prices are so high: they may actually prefer to buy but not at these prices and so they say they prefer to rent, out of circumstances not preference.

That may well be correct and might explain why the "would prefer to rent" is so high.

2 minutes ago, Habeas Domus said:

This survey might mean something if they changed the wording to

Would you prefer to buy at price £ X or rent at price £ Y

Then randomise the values of X and Y to see how price affects the desirability of each option.

This would show at what point various age groups would prefer one other the other, which would itself be quite an interesting statistic.

It's a shame the wording wasn't tighter like "If the cost of renting was the same as the cost of buying, what would you rather do?" but the results are still nonetheless quite interesting.

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45 minutes ago, LandOfConfusion said:

Possibly, although again it might depend on what you meant by "well regulated landlord". Economically speaking, the cost of renting would have to be very, very low to make this viable as I suspect most people would realise that they can do all the 'services' that the landlord does themselves, and at a much lower cost.

Also I would logically expect those with more experience too understand this and therefore you'd see more people favoring ownership over renting as their age increases. Actually this is indeed what the result say:

XYTkWIN.png

As we can see, "Would rather rent" falls from a surprisingly high 22% to just 8% once people mature and see how their life is going.

The question was 'if you were young...' I personally believe that, without hpi, anyone would be mad to buy a 1 bed flat. 

In a perfect world, the first house you should buy would be the one you expect to bring your family up in because it is at that time you need to prioritise stability over flexibility.

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I think many folks here could buy but choose not to at current prices...if buying is a pipe dream why worry about prices...folks rent and get on with stuff...if buying is an option then you may begin to obsess about prices and join website like this one

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19 minutes ago, Wayward said:

if buying is a pipe dream why worry about prices...

Because I can't stand parasites. Because I won't stop making a fuss about something so important and unjust. Because I suspect there are some on here who have kids, kids they would rather not see grow up to be economic slaves to those with the simple fortune of nothing more than being able to buy at the right time.

Why should be favor those who are wealthy and yet are net takers from society over those that are poorer but who create the wealth? Were the 1700 and 1800's so good that we should return to them and create a new class of the idle rich?

Edited by LandOfConfusion

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3 hours ago, Wayward said:

I think many folks here could buy but choose not to at current prices...

If you've earned your money from working or your own business you assign a certain value to it. Buying something that is seen as an investment class and which is at its peak (like the stock market) is a stupid idea, particularly if all you need a house for is somewhere to live.

If on the other hand you obtained the money via debt or asset leverage, for the purpose of asset inflation, then...

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5 hours ago, LandOfConfusion said:

I was thinking about putting this on the front page but it's not really a news item so I'll post it here instead.

---------------------------

In my many debates with BTL'ers I've regularly seen the argument that renting is a choice and that all their tenants prefer renting over ownership. Now anecdotally I know this isn't true and arguably it defies logic: why would you pay someone hundreds of pounds a month for largely nothing and take the added risk nit to mention potential hassle that you'll be kicked out with only 6 months notice?

But this isn't itself proof and what I really needed was some statistics, even if they weren't perfect. Well today Yougov ran a poll:

 

CEDnGam.png

 

:)

When generation rent, become generation retire then you will see the country go bankrupt.. Its great if 40% of us rent but when your pension does not cover your rent, or your savings don't cover your care home.. Then the benefits system will collapse! 

 

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All parties have shown themselves to be total liars over housing provision, pricing and bailing out the banks.

Maybe there will will be a brexit scale revolt at a forthcoming election from generation rent.

 

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The question should be accompanied by a photograph of the kind of property a 30-year old could afford to buy, next to a photo of what they could afford to rent.

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17 hours ago, LandOfConfusion said:

Because I can't stand parasites. Because I won't stop making a fuss about something so important and unjust. Because I suspect there are some on here who have kids, kids they would rather not see grow up to be economic slaves to those with the simple fortune of nothing more than being able to buy at the right time.

Why should be favor those who are wealthy and yet are net takers from society over those that are poorer but who create the wealth? Were the 1700 and 1800's so good that we should return to them and create a new class of the idle rich?

I totally agree...I didn't explain myself very well - I was just observing that many folks accept they will never buy and therefore don't worry about prices, they get on with life.  They should be up in arms at the injustice of the deliberate transfer of wealth from the poor and young to the rich and old. 

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14 hours ago, Arpeggio said:

If you've earned your money from working or your own business you assign a certain value to it. Buying something that is seen as an investment class and which is at its peak (like the stock market) is a stupid idea, particularly if all you need a house for is somewhere to live.

If on the other hand you obtained the money via debt or asset leverage, for the purpose of asset inflation, then...

I think that's right...I would like to know how many houses are bought outright with money that has been earned and taxed...not many I suggest.  You would have to be a nut to do that.

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3 hours ago, hotairmail said:

The BIG ISSUE for politics and society. The biggest.

A majority with absolutely no stake in their country.

Not just having no stake in their country but actively turning against it...I used to be broadly accepting of the monarchy and British traditions etc...I now loathe it as the embodiment and symbol of neo feudalism and oppression.  I hate spending my hard earned money in this country and will save to deliberately spend it overseas.  Needless to say I resent paying tax and pay as little as possible.  There is so much I resent about the system here in the UK that I really should just leave and I am drawing plans together to that end.

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3 hours ago, Shea VanHaven said:

Why is there not the option  "would you rather buy a home, and then rent it out to someone else?   Seems a valid one considering the circumstances.

Many already do that....not eligible for a regulated OO mortgage, so only way is to get an unregulated BTL mortgage and rent the property out either stay living at parents or renting a place themselves elsewhere.....investment innit.;)

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14 hours ago, macca13 said:

When generation rent, become generation retire then you will see the country go bankrupt.. Its great if 40% of us rent but when your pension does not cover your rent, or your savings don't cover your care home.. Then the benefits system will collapse! 

 

Its interesting they are already pushing through reform of housing benefit for social housing tenants to mirror the local housing allowance.In other words if you are 70 and single or a couple youl only get enough HB to fund a one bed.Its for new tenancies but it doesnt stop at 65.Given the new pension is also the means test limit it means any other pension coming in will be means tested away.Thats why the work place pensions arent generous.They are only designed to give people £80 a week because that can/will be taken for the rent.

"Yes Mrs Smith,i know your 78,but your only getting enough to live with those young people in a HMO,your cat isnt our concern.".My boss at the council has several HMOs though,,here is his phone number".

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20 minutes ago, durhamborn said:

Its interesting they are already pushing through reform of housing benefit for social housing tenants to mirror the local housing allowance.In other words if you are 70 and single or a couple youl only get enough HB to fund a one bed.Its for new tenancies but it doesnt stop at 65.Given the new pension is also the means test limit it means any other pension coming in will be means tested away.Thats why the work place pensions arent generous.They are only designed to give people £80 a week because that can/will be taken for the rent.

"Yes Mrs Smith,i know your 78,but your only getting enough to live with those young people in a HMO,your cat isnt our concern.".My boss at the council has several HMOs though,,here is his phone number".

Nice touch!

What do you know about Service Charges?

Am I right in thinking that a Social Landlord can charge a higher amount to people on benefits, than a private landlord whose housing benefit is limited by the LHA.

Quote

 

If you claim benefits

If you are a council or housing association tenant, housing benefit might cover your full rent if you get any of the following benefits:

income-related employment and support allowance (ESA)
income-based jobseeker's allowance (JSA)
income support
pension credit guarantee


Your full rent won't be covered if:

your rent includes ineligible service charges
you have more bedrooms than you are allowed under the rules
non-dependents live with you and are expected to contribute to the rent
the benefit cap applies


If you rent privately then your housing benefit is calculated using the local housing allowance (LHA) rules. If you get means-tested benefits, you will usually get the maximum LHA rate for your household unless you are subject to non-dependent deductions or the benefit cap applies.

Eligible rent

Eligible rent is the maximum amount of rent your housing benefit can cover. This can be less than your actual rent.

Your eligible rent is reduced if:

your rent includes certain service charges
your home has more bedrooms than you are entitled to under the rules
you have non-dependant adults living with you who could contribute to the rent
Service charges

Some service charges can be covered by housing benefit but others can't.

Housing benefit will cover charges for:

fuel for communal areas
communal facilities
lifts and entry phones


Housing benefit will not cover 'ineligible charges'. These include charges for:

meals
personal alarm system
personal care and support
water charges
most fuel charges

https://england.shelter.org.uk/housing_advice/housing_benefit/how_housing_benefit_is_calculated

 

 

 

 

 

 

 

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Im not sure how that works Democorruptcy ,but at the moment yes a social landlord can charge more in HB than LHA rates.They are changing things though for new tenancies so they only get the LHA or HB whatever is lower.

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23 minutes ago, durhamborn said:

Im not sure how that works Democorruptcy ,but at the moment yes a social landlord can charge more in HB than LHA rates.They are changing things though for new tenancies so they only get the LHA or HB whatever is lower.

OK thanks.

I know that the online benefit checker implies there is no limit to a service charge (e.g. I used £1m as a test!) but someone on here told me LHA would limit it. Though I don't expect anyone to get as much as that, I couldn't see a limit to a social landlord's service charge.

From 2013
 

Quote

 

He cited a DWP survey published in 2010 showing that more than 400 descriptions of service charges are used by landlords. He said there could be legal disputes as social landlords try to ‘shoehorn’ charges into one of the four headings in the guidance.

According to the most recent global accounts for housing associations, service charge income is worth £870 million a year.

http://www.insidehousing.co.uk/dwp-spells-out-service-charges-eligible-for-benefit/6525260.article


 

Not for profit those housing associations, with one CEO on over £500,000 a year!

Highest paid housing association chief executives 2015/16

  Chief executive Housing association Total pay Rise/fall
1 David Cowans Places for People £528,870 9.8%
2 Jane Ashcroft Anchor £400,010 12.1%
3 David Montague L&Q £355,105 32.1%
4 David Bennett Sanctuary Group £340,000 6.6%
5 Keith Exford Affinity Sutton £320,933 6.7%
6 Simon Dow Guinness Partnership £273,242 1.6%
7 Darrell Mercer A2 Dominion Group £261,873 2.9%
8 Elaine Bailey Hyde Group £251,478 9.8%
9 Brian Johnson Metropolitan £251,281 10.1%
10 Peter Walls Gentoo Group £245,996 1.9%

Highest percentage total pay increases 2015/16

  Chief executive Housing association Rise
1 David Montague L&Q 32.1%
2 Jo Savage Wellingborough Homes 15.6%
3 Harj Singh Aldwyck 14.1%
4 Robert Nettleton Merlin 13.7%
5 Elizabeth Austerberry Moat Homes 12.9%
6 Paul Lees Adactus Housing Group 12.5%
7 Anthony Whittaker United Welsh 12.2%
8 Jane Ashcroft Anchor 12.1%
9 Gary Fulford Walsall Housing Group 11.8%
10 Mike Hinch Newlon 11.2%

 

http://www.insidehousing.co.uk/inside-housing-salary-survey-2016/7016527.article

 

 

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