Tuesday, March 2, 2010

Nothing to do with the price of a house though.

More householders will have to rent, says mortgage body

Increasing numbers of Britons are likely to be forced to rent in future as a shortage of housing supply pushes home ownership out of many people's reach, research showed today. The Council of Mortgage Lenders said the proportion of people who are homeowners is likely to fall in the coming years, while increasing numbers of people will instead be tenants, mainly renting in the private sector.

Posted by flintster1994 @ 03:06 PM (1526 views)
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13 thoughts on “Nothing to do with the price of a house though.

  • What a stupid article. How can more people be forced to rent due to a lack of supply? More people have to live in a house due to a lack of houses?!? What they mean is that speculators are keeping the price high so that only money’d speculators can afford to buy, forcing the rest of the population to rent off them and pay their mortgage while they get rich.

    I really think it is time for a renters strike.

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  • mark wadsworth says:

    Hurray!!! More people renting is inevitable outcome of a sellers’ strike. If all tenants agreed that they would not even consider buying until prices have dropped 50%, then what would happen?

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  • I thought the same thing inbreda. There is no shortage of houses or apartments, my area is absolutely littered with ‘To Let’ signs.

    also:

    “On a brighter note, the CML said the recovery in house prices seen during 2009 reduced the number of people in negative equity by more than a quarter.”

    So, what exactly is the CML saying? The bad news is that people who can’t afford to buy a house will have to rent, but the good news is that house prices are going up.

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  • “Increasing numbers of Britons are likely to be forced to rent in future as a shortage of housing supply pushes home ownership out of many people’s reach”

    Cr*p!

    The real reason is mentioned in the third paragraph:

    “but the rising number of renters would also be due to affordability pressures”

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  • The CML are experts are driving populist opinion – and I’m afraid a lot of people fall for it.

    The whole prose polarises the reader into thinking they are being FORCED into rented against their will because “it’s so much better to buy”.

    The numpties have not worked out that if noone buys, then sellers will have to drop prices to sell as Mark says.

    If owners don’t sell, they’ll be forced to keep it, rent the place out or leave it empty.

    This can only be in the interests of people looking for accommodation since then living costs (rent or house price) will decrease.

    The CML just want you – jo public – to help pressure Government to drive up lending to pay for the stupidly high prices by using the very transparent and populist tool of the property owning (thus implied better off) class system myth.

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  • The CML are panicking. It shows.

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  • “On a brighter note, the CML said the recovery in house prices seen during 2009 reduced the number of people in negative equity by more than a quarter.”

    Great, so we’ve helped all those people who paid to much for their property!

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  • The first comment below the article says it all. If there were a general shortage of housing, rents would have gone up at a similar rate to house prices. What there has been is a shortage of houses in relation to the massive increase in availability of mortgage finance through low interest rates and RMBS securitisation. The government has done its best to keep the party going with interest rates at a 300-year low and state mortgage finance for banks to replace the closed wholesale markets, but fairly soon now the money’s going to run out.

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  • tenyearstogetmymoneyback says:

    I have many a time here that if house price inflation is zero then an interest only mortgage
    should be cheaper than renting. I know that the letting agency was charging my previous
    landlord over 10%. Where does that money come from – the rent. Factor in other things like
    mandatory Gas inspections, void periods etc and renting SHOULD be more expensive.
    Possibly even more expensive than buying on a repayment mortgage.

    Of course if prices are going up 20% a year it doesn’t really matter if you have any tennants.

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  • @8 “if house price inflation is zero then an interest only mortgage
    should be cheaper than renting.”

    If house price inflation is zero an interest only mortgage makes absolutely no financial sense whatsoever, don’t you think? You would be ‘renting’ from the bank and then still have to pay all the money back. That would be no different to sub-letting, in fact sub-letting would be better because you don’t have to worry about interest rate rises or having a debt.

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  • “The group warned that a “chronic lack of housing supply” of all types looks set to persist” Ha ha ha this made me laugh. A very well known economist just told them that there is no shortage because rents would go up t0o. Personally I think right now the number of existing sellers or those needing to sell in the future is matching the numeber of genuine buyers excluding investors.

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  • @8 tenyears… I always thought that buying should be the right thing to do when :

    a) it’s a similar price to buy as to continue renting
    b) the purchased house offers similar or better accomodation than continuing to rent

    given those criteria are met, then buying should work out cheaper in the long run because at least your mortgage will remain constant(ish) over time whereas rent will always increase over time.

    Conditions at the moment are nowhere near this.

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  • tenyearstogetmymoneyback says:

    I think you missed the second point there. If an interest only mortgage (a recent concept) is
    cheaper than renting you could put the saving towards paying off the capital. That is how it
    always used to work, whether through a repayment or endowment mortgage.

    Taking HPI out of the equation.

    Benefits of renting . Flexibility. Easy to move etc.

    Benefits of buying a) House is eventually yours. (hopefully before retirement) b) More security c) Ability to decorate how you want. d) Possibilities to add value by building extensions etc.

    Of course in places like Germany renters get b) and c) above

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