'Social Housing' .. and Rip Off Landlords

Rob7Lee said:

Chunes said:

Rob7Lee said:

Chunes said:

AFKABartram said:

Chunes said:

Was it was hard to buy a house in the 80's and 90's. Houses were only 4x earnings, the mortgage market was less regulated, mortgages were easier to get and sometimes even with 5% deposits. The deposit amounts themselves were much less. Rent was cheaper, entertainment was cheaper, transport was cheaper, groceries were cheaper, energy was cheaper. There was more money left at the end of the month to save towards a deposit that also cost far less. And when you did get a house, you paid it off much quicker.

It will never be that easy again. 

Whilst loans for mortgages were smaller in size, offsetting that was interest on them was far higher than anything that’s been seen in the 20 years since.

The numbers don't bear out when compared to the additional cost of the house. The maths I did earlier factored in the higher interest rates of the 90's. Back then there was also the additional help of MIRAS. 

Miras was only worth about £17 a month from memory, whilst every little helped it wasn't a massive benefit. Income tax was higher back then. When I started work the starting rate was 25% and over 1/4 of my then ridiculously low main job salary was taxable as the personal allowance was very low. Was £3k which in todays money is £7k allowing for inflation whereas the allowance is over £12k today.

As always things aren't as black and white on either side.

We did the maths on all this on the HoC at length, remember! I included everything you wanted included and that was all being compared to a generous 1.5% interest rate for the 2023 part. From reading back, I believe we both came to the same conclusion in the end.

I'm not disputing that it may be harder now than 30 years ago (definitely with current interest rates), just like it was harder for my parents than me in many respects. I was urging the younger people at work two years ago who'd saved their deposit to get on the ladder then and fix at 2% for 10 years, a couple did.

But you can only play the cards you've been dealt, make use of any benefit that may be available such as LISA's to save a deposit and get on the ladder, by hook or by crook.

Maybe as I work in the city I have a blinkered view, it feels to me that cohort have it considerably easier than us 30 years ago in buying, but they choose not to, again their prerogative, but don't moan about the fact you want to live then buy in Central London and run an expensive car, holidays in Dubai, spunk £30k on food and drink and order the latest iPhone every year but can't quite manage it despite earning more than double the average London salary. For that I have very little sympathy.

I think Chunes has disproved that hasn’t he?  The situation in London is crazy and needs rectifying. God knows how though. 

DaveMehmet said:

AFKABartram said:

Saving money is the gap between your ego and your income“

That’s an interesting quote, can someone simplify it for me so I can understand it properly 

Don’t spunk all your dough on expensive shit just to look like a flash c***

Think the author gave it a bit more subtlety, but that's largely spot on!

You have your income and you have your basic overheads that need covering to survive, mortgage/rent, bills, food. Whatever is left over from that becomes your potential savings pot and your ego dictates how much of that remains come month end. Beyond some other essential purchases, it is usually your ego that will determine whether you need to have the top of the range versions of a product or the cheaper one be that Waitrose v Lidl, Merc v Kia etc and it is definitely your ego that drives certain products purchased just to look a certain way. Nobody needs to have a £500 white t shirt.

Going off on yet another tangent, but I'd say dating/attracting partners in modern day society and with the pressures of social media and impressions of what a 'good life' is leads to large spending and flashing the cash. Comparison culture is rife - another thing I have probably been guilty of getting caught up in lol

JamesSeed said:

Rob7Lee said:

Chunes said:

Rob7Lee said:

Chunes said:

AFKABartram said:

Chunes said:

Was it was hard to buy a house in the 80's and 90's. Houses were only 4x earnings, the mortgage market was less regulated, mortgages were easier to get and sometimes even with 5% deposits. The deposit amounts themselves were much less. Rent was cheaper, entertainment was cheaper, transport was cheaper, groceries were cheaper, energy was cheaper. There was more money left at the end of the month to save towards a deposit that also cost far less. And when you did get a house, you paid it off much quicker.

It will never be that easy again. 

Whilst loans for mortgages were smaller in size, offsetting that was interest on them was far higher than anything that’s been seen in the 20 years since.

The numbers don't bear out when compared to the additional cost of the house. The maths I did earlier factored in the higher interest rates of the 90's. Back then there was also the additional help of MIRAS. 

Miras was only worth about £17 a month from memory, whilst every little helped it wasn't a massive benefit. Income tax was higher back then. When I started work the starting rate was 25% and over 1/4 of my then ridiculously low main job salary was taxable as the personal allowance was very low. Was £3k which in todays money is £7k allowing for inflation whereas the allowance is over £12k today.

As always things aren't as black and white on either side.

We did the maths on all this on the HoC at length, remember! I included everything you wanted included and that was all being compared to a generous 1.5% interest rate for the 2023 part. From reading back, I believe we both came to the same conclusion in the end.

I'm not disputing that it may be harder now than 30 years ago (definitely with current interest rates), just like it was harder for my parents than me in many respects. I was urging the younger people at work two years ago who'd saved their deposit to get on the ladder then and fix at 2% for 10 years, a couple did.

But you can only play the cards you've been dealt, make use of any benefit that may be available such as LISA's to save a deposit and get on the ladder, by hook or by crook.

Maybe as I work in the city I have a blinkered view, it feels to me that cohort have it considerably easier than us 30 years ago in buying, but they choose not to, again their prerogative, but don't moan about the fact you want to live then buy in Central London and run an expensive car, holidays in Dubai, spunk £30k on food and drink and order the latest iPhone every year but can't quite manage it despite earning more than double the average London salary. For that I have very little sympathy.

I think Chunes has disproved that hasn’t he?  The situation in London is crazy and needs rectifying. God knows how though. 

I would say relatively the 'city job' is better paid now than 30+ years ago. My equivalent salary from then indexed up after I had 5 years experience would be circa £30k, it's more like double that now.

JamesSeed said:

Chunes said:

1995.
Average London salary: 20k
Average house price: 80k.
Ratio to annual earnings: 4x 

2023.
Average London salary: 37k
Average house price: 537k
Ratio to annual earnings: 14x 

Mortgage Repayment as % of Salary
(For average London house, on average London salary)

1995: 29% of salary

2023: 79%* of salary

*The av. London house is no longer affordable to the average Londoner. 

I’m surprised by those 1995 figures. Was the average London house really 80k? I bought a one bedroom flat (in a reasonably nice area) in 1993 for 100k, and I don’t remember being able to get much for 80k. Also the ratio to annual earnings with your figures was 4x, but I’m sure it was more than that in 1995. It was 4x in 1980 I think:

1980 (when I bought my first flat):
Ave London annual salary was around 6.5k 
Ave London house price c. 25k
So just 4x annual salary. 

I think there was a period post the crash when property was cheaper for a period. I bought a new 3 bed end of terrace in 93/94 (Grove Park) for 79,950. Probably varied massively by area just like now. That same house is around £430k now based on a couple of sales late last year. I sold in Feb 2008 for £257k despite the agent telling me due to stamp duty cut off we'd never get more than £249,999!

seth plum said:

Rent controls can be brought in based on size and nature of the space. So there would be no reason for a landlord to evict and re let as the rules or laws would remain the same.

At the moment a Landlord could simply not renew the tenancy/section 21.

seth plum said:

Indeed. So I would change the law if I were in power.
Same as regulating and fining water companies to never ever pollute.
It seems authoritarian but I wouldn’t budge until there was a huge increase in real affordability (which I would base on the minimum wage for a 40 hour week) and more people had a secure place to call home.
Properties left empty without a credible reason for, say, a year, would be confiscated (possibly with a 60% of ‘market value’ paid as compensation) by the local authority for use to help with the housing crisis.
I know a section of society would disagree with me, but anyway there is a suggestion to throw into the conversation.
And if landlords wouldn’t like it, they can do something else for all I would care.

All noble ideas, but whether we like it or not the current situation is that the rental market in the country is heavily reliant on the BTL market due to successive governments way back to the 80's happily and actively pushing that onto the private sector rather than retain or build social housing, it's still heavily subsidised by housing benefit or UC which is paid to around 2.8m people.

We need to be careful not to throw the baby out with the bath water otherwise those we try to help will be the ones who suffer most. There's around 5m BTL properties currently all be it shrinking by the day, if we push too hard the rental market will become even more tough for tenants and it's already extremely tough. To put that in perspective that is around 1m more than the total current social housing stock from Councils and housing associations.

Had the current government not introduced some of the changes it has, specifically around taxation, rents wouldn't be as high as they are right now. Usual dumb ass governments who couldn't see that increasing tax or the way it is calculated would just get passed down to the tenants. Shock horror rents go up.

The answer of course is to transition away from that reliance on BTL, either by building more (lots more) social housing or purchasing, but I won't hold my breath.

Rob7Lee said:

seth plum said:

If they really are noble ideas then perhaps they ought to happen.
I would put on a substantial bet that my local authority and local MP would be in favour of the idea I suggest above.
Land, or space with or without buildings on, is pretty finite, so if those who own land (a concept which in itself is open to a moral and philosophical debate) are not prepared to accept that ‘ownership’ is actually part of the social contract we are all obliged to live by then feck ‘em.
Land was seized and held by force originally anyway for the most part.

Whilst noble, IMHO unworkable and in many respects would have the opposite effect to what you desire. I think you may get one wish though that landlords do something else.

A rebalance back to council/government owned property is the only way I can see a real change, anything else is just a sticky plaster over already many sticky plasters and I don't trust governments to not stick a knife in the already open wound before trying to wack another plaster on to stem the bleed.

Chunes said:

Rob7Lee said:

JamesSeed said:

Rob7Lee said:

Chunes said:

Rob7Lee said:

Chunes said:

AFKABartram said:

Chunes said:

Was it was hard to buy a house in the 80's and 90's. Houses were only 4x earnings, the mortgage market was less regulated, mortgages were easier to get and sometimes even with 5% deposits. The deposit amounts themselves were much less. Rent was cheaper, entertainment was cheaper, transport was cheaper, groceries were cheaper, energy was cheaper. There was more money left at the end of the month to save towards a deposit that also cost far less. And when you did get a house, you paid it off much quicker.

It will never be that easy again. 

Whilst loans for mortgages were smaller in size, offsetting that was interest on them was far higher than anything that’s been seen in the 20 years since.

The numbers don't bear out when compared to the additional cost of the house. The maths I did earlier factored in the higher interest rates of the 90's. Back then there was also the additional help of MIRAS. 

Miras was only worth about £17 a month from memory, whilst every little helped it wasn't a massive benefit. Income tax was higher back then. When I started work the starting rate was 25% and over 1/4 of my then ridiculously low main job salary was taxable as the personal allowance was very low. Was £3k which in todays money is £7k allowing for inflation whereas the allowance is over £12k today.

As always things aren't as black and white on either side.

We did the maths on all this on the HoC at length, remember! I included everything you wanted included and that was all being compared to a generous 1.5% interest rate for the 2023 part. From reading back, I believe we both came to the same conclusion in the end.

I'm not disputing that it may be harder now than 30 years ago (definitely with current interest rates), just like it was harder for my parents than me in many respects. I was urging the younger people at work two years ago who'd saved their deposit to get on the ladder then and fix at 2% for 10 years, a couple did.

But you can only play the cards you've been dealt, make use of any benefit that may be available such as LISA's to save a deposit and get on the ladder, by hook or by crook.

Maybe as I work in the city I have a blinkered view, it feels to me that cohort have it considerably easier than us 30 years ago in buying, but they choose not to, again their prerogative, but don't moan about the fact you want to live then buy in Central London and run an expensive car, holidays in Dubai, spunk £30k on food and drink and order the latest iPhone every year but can't quite manage it despite earning more than double the average London salary. For that I have very little sympathy.

I think Chunes has disproved that hasn’t he?  The situation in London is crazy and needs rectifying. God knows how though. 

I would say relatively the 'city job' is better paid now than 30+ years ago. My equivalent salary from then indexed up after I had 5 years experience would be circa £30k, it's more like double that now.

JamesSeed said:

Chunes said:

1995.
Average London salary: 20k
Average house price: 80k.
Ratio to annual earnings: 4x 

2023.
Average London salary: 37k
Average house price: 537k
Ratio to annual earnings: 14x 

Mortgage Repayment as % of Salary
(For average London house, on average London salary)

1995: 29% of salary

2023: 79%* of salary

*The av. London house is no longer affordable to the average Londoner. 

I’m surprised by those 1995 figures. Was the average London house really 80k? I bought a one bedroom flat (in a reasonably nice area) in 1993 for 100k, and I don’t remember being able to get much for 80k. Also the ratio to annual earnings with your figures was 4x, but I’m sure it was more than that in 1995. It was 4x in 1980 I think:

1980 (when I bought my first flat):
Ave London annual salary was around 6.5k 
Ave London house price c. 25k
So just 4x annual salary. 

I think there was a period post the crash when property was cheaper for a period. I bought a new 3 bed end of terrace in 93/94 (Grove Park) for 79,950. Probably varied massively by area just like now. That same house is around £430k now based on a couple of sales late last year. I sold in Feb 2008 for £257k despite the agent telling me due to stamp duty cut off we'd never get more than £249,999!

Yes, city finance workers' wages have risen through the roof in comparison to the rest of us shit munchers. 

But in conversations about the affordability of housing, I'm not sure most people are worrying about them!

Agreed, I was just replying to JS as to why I think the younger generation in that role/job do have it easier now than many times in the past purely as the salaries have increased over the last 30 years way beyond inflation. It's very much its own little bubble up there when it comes to salaries. Average is around 80k I believe.

I get what you're saying here, but 80k in 2023 puts you in the top 5-10% of earners in the country, if you were in the top 5-10% of earners in the country back in 1990 it would have been much easier for you to buy property than now. Salaries may have gone up for everyone but cost of living including rent/property prices has gone up more

jacob_CAFC said:

Rob7Lee said:

seth plum said:

If they really are noble ideas then perhaps they ought to happen.
I would put on a substantial bet that my local authority and local MP would be in favour of the idea I suggest above.
Land, or space with or without buildings on, is pretty finite, so if those who own land (a concept which in itself is open to a moral and philosophical debate) are not prepared to accept that ‘ownership’ is actually part of the social contract we are all obliged to live by then feck ‘em.
Land was seized and held by force originally anyway for the most part.

Whilst noble, IMHO unworkable and in many respects would have the opposite effect to what you desire. I think you may get one wish though that landlords do something else.

A rebalance back to council/government owned property is the only way I can see a real change, anything else is just a sticky plaster over already many sticky plasters and I don't trust governments to not stick a knife in the already open wound before trying to wack another plaster on to stem the bleed.

Chunes said:

Rob7Lee said:

JamesSeed said:

Rob7Lee said:

Chunes said:

Rob7Lee said:

Chunes said:

AFKABartram said:

Chunes said:

Was it was hard to buy a house in the 80's and 90's. Houses were only 4x earnings, the mortgage market was less regulated, mortgages were easier to get and sometimes even with 5% deposits. The deposit amounts themselves were much less. Rent was cheaper, entertainment was cheaper, transport was cheaper, groceries were cheaper, energy was cheaper. There was more money left at the end of the month to save towards a deposit that also cost far less. And when you did get a house, you paid it off much quicker.

It will never be that easy again. 

Whilst loans for mortgages were smaller in size, offsetting that was interest on them was far higher than anything that’s been seen in the 20 years since.

The numbers don't bear out when compared to the additional cost of the house. The maths I did earlier factored in the higher interest rates of the 90's. Back then there was also the additional help of MIRAS. 

Miras was only worth about £17 a month from memory, whilst every little helped it wasn't a massive benefit. Income tax was higher back then. When I started work the starting rate was 25% and over 1/4 of my then ridiculously low main job salary was taxable as the personal allowance was very low. Was £3k which in todays money is £7k allowing for inflation whereas the allowance is over £12k today.

As always things aren't as black and white on either side.

We did the maths on all this on the HoC at length, remember! I included everything you wanted included and that was all being compared to a generous 1.5% interest rate for the 2023 part. From reading back, I believe we both came to the same conclusion in the end.

I'm not disputing that it may be harder now than 30 years ago (definitely with current interest rates), just like it was harder for my parents than me in many respects. I was urging the younger people at work two years ago who'd saved their deposit to get on the ladder then and fix at 2% for 10 years, a couple did.

But you can only play the cards you've been dealt, make use of any benefit that may be available such as LISA's to save a deposit and get on the ladder, by hook or by crook.

Maybe as I work in the city I have a blinkered view, it feels to me that cohort have it considerably easier than us 30 years ago in buying, but they choose not to, again their prerogative, but don't moan about the fact you want to live then buy in Central London and run an expensive car, holidays in Dubai, spunk £30k on food and drink and order the latest iPhone every year but can't quite manage it despite earning more than double the average London salary. For that I have very little sympathy.

I think Chunes has disproved that hasn’t he?  The situation in London is crazy and needs rectifying. God knows how though. 

I would say relatively the 'city job' is better paid now than 30+ years ago. My equivalent salary from then indexed up after I had 5 years experience would be circa £30k, it's more like double that now.

JamesSeed said:

Chunes said:

1995.
Average London salary: 20k
Average house price: 80k.
Ratio to annual earnings: 4x 

2023.
Average London salary: 37k
Average house price: 537k
Ratio to annual earnings: 14x 

Mortgage Repayment as % of Salary
(For average London house, on average London salary)

1995: 29% of salary

2023: 79%* of salary

*The av. London house is no longer affordable to the average Londoner. 

I’m surprised by those 1995 figures. Was the average London house really 80k? I bought a one bedroom flat (in a reasonably nice area) in 1993 for 100k, and I don’t remember being able to get much for 80k. Also the ratio to annual earnings with your figures was 4x, but I’m sure it was more than that in 1995. It was 4x in 1980 I think:

1980 (when I bought my first flat):
Ave London annual salary was around 6.5k 
Ave London house price c. 25k
So just 4x annual salary. 

I think there was a period post the crash when property was cheaper for a period. I bought a new 3 bed end of terrace in 93/94 (Grove Park) for 79,950. Probably varied massively by area just like now. That same house is around £430k now based on a couple of sales late last year. I sold in Feb 2008 for £257k despite the agent telling me due to stamp duty cut off we'd never get more than £249,999!

Yes, city finance workers' wages have risen through the roof in comparison to the rest of us shit munchers. 

But in conversations about the affordability of housing, I'm not sure most people are worrying about them!

Agreed, I was just replying to JS as to why I think the younger generation in that role/job do have it easier now than many times in the past purely as the salaries have increased over the last 30 years way beyond inflation. It's very much its own little bubble up there when it comes to salaries. Average is around 80k I believe.

I get what you're saying here, but 80k in 2023 puts you in the top 5-10% of earners in the country, if you were in the top 5-10% of earners in the country back in 1990 it would have been much easier for you to buy property than now. Salaries may have gone up for everyone but cost of living including rent/property prices has gone up more

That's sort of my point, the jobs I'm talking about at or around that 80k level now weren't of the same caliber/equivalent salary 30 years ago. Which is a good thing don't get me wrong. Lets be honest there should be no issue with someone earning around £80k being able to save and buy a place in London (and many have done), whether it's easier or harder than 30 years ago, it shouldn't be an issue of affordability.

seth plum said:

Rent controls can be brought in based on size and nature of the space. So there would be no reason for a landlord to evict and re let as the rules or laws would remain the same.

this would only work if the government provided  fixed btl loans to the landlord at interest rates that reflect the rent, that and not introduce new rules and regulations that cost the landlord money; plus tax rates and allowances can’t change for the duration…and if inflation could be wiped out entirely that would help. Barring the above, rents will always have to be flexible 

seth plum said:

If they really are noble ideas then perhaps they ought to happen.
I would put on a substantial bet that my local authority and local MP would be in favour of the idea I suggest above.
Land, or space with or without buildings on, is pretty finite, so if those who own land (a concept which in itself is open to a moral and philosophical debate) are not prepared to accept that ‘ownership’ is actually part of the social contract we are all obliged to live by then feck ‘em.
Land was seized and held by force originally anyway for the most part.

I know it's not the point you are making, Seth, and that I may have mentioned it once or twice before , but though land is of course finite, there is plenty avialable to build on, and at the moment that appears to be increasing rather than decreasing.

https://www.cpre.org.uk/about-us/cpre-media/record-breaking-number-of-brownfield-sites-identified-for-redevelopment/

seth plum said:

Algarveaddick said:

seth plum said:

If they really are noble ideas then perhaps they ought to happen.
I would put on a substantial bet that my local authority and local MP would be in favour of the idea I suggest above.
Land, or space with or without buildings on, is pretty finite, so if those who own land (a concept which in itself is open to a moral and philosophical debate) are not prepared to accept that ‘ownership’ is actually part of the social contract we are all obliged to live by then feck ‘em.
Land was seized and held by force originally anyway for the most part.

I know it's not the point you are making, Seth, and that I may have mentioned it once or twice before , but though land is of course finite, there is plenty avialable to build on, and at the moment that appears to be increasing rather than decreasing.

https://www.cpre.org.uk/about-us/cpre-media/record-breaking-number-of-brownfield-sites-identified-for-redevelopment/

I think I read that in the UK only 5% of the land mass is built on (yes there are ‘reasons’), so there is plenty of space, including space for the sad, frightened, and desperate people who arrive across the channel in small boats.

5% might be the correct figure. 
But that is for the UK as a whole. 
Scotland is almost the same size as England yet more people live in and around London than the whole of Scotland. 
If we are going to build thousands of new houses I would like to see them spread across the UK. 
London and the South should largely be left alone.