Wednesday, May 23, 2007

Deluded FTBs

First-timers feel 'the big squeeze'

"We have had seven years of renting, which means seven years of dead money, so it is nice to know we are working towards something solid, our own bricks and mortar"... bet they are paying much more in bank interests now, without taking into account the forgone interests on their 10k deposit. "Yet they count themselves hugely fortunate to be just-haves"...?!

Posted by confused76 @ 09:42 AM (752 views)
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22 thoughts on “Deluded FTBs

  • Surfgatinho says:

    “I don’t remember the big interest rate rises of the early 90s, so I haven’t been burnt – but life is a bit of a gamble.” – If he did a bit of research then it might have realised the odds. Doh!

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  • The_equalizer says:

    Quite simple amazing! Eye-watering debt as well as a large ‘helping hand’ deposit in an article dressed up by the usual clichés.

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  • The_equalizer says:

    Quite simple amazing! Eye-watering debt as well as a large ‘helping hand’ deposit in an article dressed up by the usual clichés.

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  • * “We don’t go out drinking. I take packed lunches to work which saves £25 a week, or £100 a month,” says Charlotte, who works in PR.” *

    Sounds like she’s living the dream! What’s the point stretching yourself to the utter limits if you can’t then actually go out and have a life?

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  • “And it is worth remembering that, provided house prices continue to rise, the just-haves will find it all comes good in the end for them.”

    And if house prices crash 90’s style then they’d better hope they can live on fresh air otherwise it’s repossession, repossession, reposession.

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  • A house is a huge millstone around your neck. It is not easy to sell if you need cash quickly or if you need to re-locate quickly. Everything that goes wrong with it is now your responsibility and you have to pay for it, whereas this is the landlord’s responsibility if you rent. You are in hoc to the building society – if you loose your income they will whip your house away and sell it cheaply. You only get what is left over, if there is anything left over. If they fail to get a high enough price to cover your mortgage debt, they can pursue you for any wealth you accumulate in the future. That is the reality of home-owning. How can these facts loose out to the illusion of ‘dead [rental] money’? If you rent, you get what you pay for – a space to live in for a period of time. If you buy, you also get a place to live, but you pay more for it. You also loose the interest or investment income on your savings. What you do get in addition is a big bet on the property market – if the market rises, you win – if it falls, you loose!

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  • Talking to friends who don’t own property they feel like second class citizens because they rent which is mad. Maybe it’s a social thing, this obsession with buying a house is fairly recent, is it that society is now so fragmented and insecure that the only way people can feel part of it is to buy a house, for a lot of people it’s all they’ve got where as in the past you could always fall back on friends and family.

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  • “And it is worth remembering that, provided house prices continue to rise, the just-haves will find it all comes good in the end for them.”

    Rather a big if there…..

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  • george monsoon says:

    I rent, and my only hang up is that I cannot make any changes to the property to suit my personal needs.. i.e. new garage, bigger shed, different kitchen.. etc.. and.. I have no inheritance to pass to my children.

    but I suppose the pro’s outweigh the cons when renting.. and on an upside, if I ever split with my Wife, there is no half a house to part with!!

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  • “Charlotte Lewis, aged 25, has just bought the one-bedroom flat she was renting in Clapham” .

    So the landlord got out in time .

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  • Perhaps the Goverment has a hidden agenda in that a work force, increasingly forced into rented accomodation is more flexible in terms of work mobility and the globalisation. However to cope with the latter, rents will have to be kept down to keep wages competitive.

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  • George

    Don’t worry. Your friends who own will not be able to pass an inheritance to their children either, unless they are lucky enough to have a good pension and can afford to buy their own old-age care. My spouses aging grandmother was in the awful position of being forced to sell her home to pay for a place in a Care Home and to provide some income. People of today are risking a lot by “assuming their home is their pension” but where will they live if they sell. If they rely upon equity withdrawal, their Bank will own the house not them so what will they be passing onto their children?

    The Government’s economic policies are short termist because most of the public can no longer plan much beyond next week. There is good political sense in this too. The long term is merely a large number of short terms one after the other. So if you are always alright over the short-term, by the time you’ve had 20 short-terms, you’ve been alright over the long term as well.

    Basically Gordon Brown is dependent upon borrowing from the future to fund the present; this is a marked reversal from saving in the present to sepnd in the future. He can not continue to levy stealth taxes on income or personal spending (such as VAT, quasi-green energy taxes etc) so eventually, housing will become less of a tax advantage then it is now. The onloy politically acceptable way is to tax a home when the occupant is dead because dead people can’t complain; and the living can’t complain because they never owned the house in the first place.

    Rottie’s top tip: Buy a boat. A narrow-boat has enough space to live on reasonably comfortably and a dutch barge is relatively luxurious. (It is possible to buy one approaching the sq ft of a modern day Cookie-Cutter house.) You can avoid Council Tax, TV License and a whole host of other stealth taxes. It does have disadvantages too though: There is little legal protection if the guy who owns your mooring triples the monthly costs overnight but this is bad for his business. Word get around! Parking can also be a problem too but pubs tend not to be.

    It is a bit of a life-style choice but the dutch barge I almost bought had all modern conveniences (telly, washing machine, microwave, fridge/freezer) and a nearby pub; being a dutch barge, you can also scoot across the Channel and explore the waterways of Europe. I stopped at the last minute though because my job took me to Germany for a number of years longer then I expected. Shame really. I stress though, river living is not romantic, it is not as easy as being ashore and it is certainly not for everyone.

    If you’re worried about Global Warming (something I’m not), your home will never be flooded.

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  • george monsoon says:

    Talking rot, sounds good..
    What does one of these beauties cost to buy?

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  • shipbuilder says:

    Why has swapping your enjoyment of life for constant stress and financial burden become a good decision? Surely the rules are simple – rent when renting is cheaper, buy when buying is cheaper? All for a mythical future in which anything can happen? What happened to sensible planning, saving and leaving a bit to enjoy yourself? My head hurts.

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  • Shipbuilder

    What happened to sensible planning, saving and leaving a bit to enjoy yourself ?

    It’s all about borrow-spend, borrow more-spend, borrow even more-spend otherwise Gordon’s ‘miracle’ consumer economy will collapse.
    Prudence my ar$e !

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  • I think the government will face big revolt of FTBs if they do not put a lid on the BTL market. The easiest would be to disallow the tax shield on the mortgage interest payments. Where I live in London close to 100% of purchases are BTLs, and the BTLers are content with expected rental yields of 2-3% (way below interest costs). Before I used to think a soft landing was the realistic outcome, but considering BTLers are “chain-borrowers” I believe the largest crash will be here in London, but that could be far in the future since so much foreign capital is pouring in as we speak. What can be done to convince foreign investors that it is not such a safe bet buying in London? I guess one should have higher taxes on investment purchases…

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  • TR, if you ever buy that barge, please be aware that you do actually have to pay council tax if you are on a permanent mooring – you either have to hope the local council doesn’t find out (but then what do you think all those public sector workers are for if not to snoop around spotting things like this) or keep moving all the time. There again, you will only be in Band A!

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  • talking rot says:

    dugmug

    Good point. I was looking to buy our barge in 1999 but moved to Germany. I can not recall if we had to pay Council Tax back then but our permanent mooring was on the Thames with access only across private land. I seem to recall feeling quite safe from the Government’s Gestapo.

    George

    Costs of narrow boats/barges depends on the size and quality of the boat/barge. Good live-aboard narrow boats range from #50K to #80K. (Sorry, I’m currently abroad and there is no Pounds sign on this keyboard). Good live-aboard dutch barges now cost about #100K to #120K. When I was looking a few years ago, they were much cheaper. It appears more then a few things has changed since I was planning to river-live.

    An associate of mine (can’t call him a friend) has lived on a narrow boat for about 10 years now. He is a bit naughty because he doesn’t pay anything other then his mooring fees but does have to use a local laundrette.

    I stress that river-living is not for everyone. A balanced view has to be taken because it is harder then living in a house but hey, I would have done it (and would probably still be doing it) if I had not gone to Germany.

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  • Why not just buy a caravan and park yourself on the local playing fields, if the local authority try to move you along you can claim your a gypsy and your human rights are being abused.

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  • Why not buy a caravan park yourself on the local playing fields and if the local authority try to get rid of you ring up Shami Chakrabarti and tell her your having your human rights crushed.

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  • George

    I wouldnt worry to greatly about inheritance either, i have just checked and at age 65 you currently need £100000 in a deposit pot for every £6700 PA ( Taxable ) you want back as an annuity / Pension, most people will want about £20000 at least as a couple so you need at least £300000 to buy a semi decent pension.

    Better hope the BTL and Property does pay off or there will be a lot and i mean a lot of sorry people come old age, 75% of the pensioners you see today have some kind of occupational pension, followings Gordons master raid thats expected to be 17% by 2040, a very very different world

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  • talking rot says:

    MrMickey

    Life on a boat is quiet, peaceful and graceful. A narrow boat passing along the canals of Hampshire, Wiltshire, Shropshire,and Yorkshire (areas where I have moored hired boats) causes locals to wave and smile. I still remember a particularly pretty girl!

    A caravan causes the same folk to curse you and shout at you.

    You can live life on a boat but on a caravan you merely exist.

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