Mortgage misery: The homeowners facing repossession

[sleepwello'nights]

9 minutes ago, goldbug9999 said:

The problem is with the system that make it rational for you to take that action (and to continue to scalp other people income). Punitive legislative and taxation is need to give priority to getting as many people as possible to have the opportunity to own one house.

Its only recently that home ownership has been available to a majority of the population. When I was a child we lived in a house on a new build council estate. My parents always aspired to own their own home. They looked at a few houses but never took the step of buying one. I'm sure my fathers income would have enabled them to get a mortgage, he never did. Back in those days, early 50s the average house price was what, under £1000. No idea what average wages were, I'll guess about £10 per week. 

I recall discussions about whether to rent or buy. The rationale was that it cost so much to rent, the repayments on a mortgage were slightly more, but there was a certainty that the mortgage repayments would remain constant over the life of the mortgage whereas the rent was likely to increase over time. My parents agreed that it would give financial stability to buy, but they never did. Probably the thought of the commitment hanging over them for 25 years was too great. Little did they know. 

They admired people they knew who were buying their own house, but they never did. After my parents divorced my mother bought our house under the right to buy scheme. I think with a discount it cost £8000. Fast forward to last year when we sold it after she died, £475,000. I agree nuts, but there it is. What would you have done sold it for less?

My father remarried two or three times after he divorced my mother. I've no idea what women found attractive about him, but they obviously did. He lived quite well from what I hear. I only saw him once after the divorce, about 20 years later, and I can only go on what uncles and aunts told me in addition to what he told me on that one afternoon meeting.  He had bought houses and had a property portfolio. Back in those days even with controlled rents being a landlord generated a good income, and they weren't despised like some posters here think. There were some bad landlords, Rachman is the archetypal landlord, how about "Rigsby" from rising damp, not so evil. 

So we were brought up with the aspiration that home ownership was a good thing. I missed the first housing boom of the 1960s when I bought my first car, I'd have been far better off now if I'd put the money down as a deposit on a house. Prices more than doubled from £3000 is to £10,000 ish for a small terraced house. The Aston Martin I dreamed of owning would have cost about, what £3000 - £4000. 

As I've said before my mother was Italian, my parents got to know a number of Italian families who lived in London. They struggled to buy their own home in the 1950s when they came to the UK. They were all doing very nicely, some had struggled and saved to buy more properties and were landlords. We knew of Sikhs who came to the UK, clubbed together to buy their first house and then bought more and rented them. Being a landlord is not new. 

Nowadays home ownership is thought to be everyone's birth right. It is easier now to own a house, that's because the of availability of credit. Sure it overheated and has cooled down now. There is no way I am going to accept criticism of being a money grubbing parasite because I took the risk of borrowing money to buy houses to rent. I took a risk and as things turned out it worked out well for me. If it hadn't I might very well be on here or another forum crying about how unfair life turned out to be, I doubt it though. Sure I'd be licking my wounds but I would tell myself, your decision, it didn't work out, tough 

 

!

[goldbug9999]

3 minutes ago, sleepwello'nights said:

Nowadays home ownership is thought to be everyone's birth right.

I don't find the idea especially offensive, I think in a modern highly productive economy, if we were so minded we could quite easily provide everyone with a basics home of their own at a cost of maybe 1/20th of their lifetime earning, think about the engineering and ingenuity to make a mobile phone - a basic house is piss easy compared to that.

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It is easier now to own a house, that's because the of availability of credit.

Its much harder because the easy credit has been soaked up by price rises and furthermore there is very little wage inflation to erode the debt over the term. How many manual labourers, let alone how many "professional" people were able to afford a decent house back in the day who would now need two earners and to like frugally for 20 years ?. I'm not minded to argue this point further because if you have, in spike of all the contrary experiences of myself and pretty much every I've talked to, persuaded yourself that its easy now then we just have no possible common ground on this point.

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There is no way I am going to accept criticism of being a money grubbing parasite because ...

Buying a house from existing stock and renting to to someone is an economically parasitic activity, its only rational to do so because the government colludes in this activity by various measures including the usual suspects such as  historically loose regulation on BTL loans, a highly rationed new housing stock, high levels of immigration etc. A rental market can only add significant economic value if it occurs against a backdrop of elastic supply (e.g. the car rental market).

Remember I'm not criticising you, I'm criticising the system that makes it profitable.

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I took the risk of borrowing money to buy houses to rent.

The risk you took was not one that was beneficial to the wider economy since it didn't create new utility in the economy and so there is no reason why such a risk deserves reward.

 

[sleepwello'nights]

7 minutes ago, goldbug9999 said:

 

The risk you took was not one that was beneficial to the wider economy since it didn't create new utility in the economy and so there is no reason why such a risk deserves reward.

 

There are lots of me to businesses that are not beneficial to the wider economy, because they don't affect you as directly as high house prices you don't criticise them. In any case by using my capital and taking on the risk of a loan I do create the utility that a renter can occupy a dwelling without having to use their own capital or take on the risk of a large loan.

Lets not forget that some people are in the situation that it suits their circumstances to rent rather than buy. Also the houses I bought were all new build so I didn't take an existing dwelling out of the market. Just being picky BTW.

[goldbug9999]

4 minutes ago, sleepwello'nights said:

There are lots of me to businesses that are not beneficial to the wider economy, because they don't affect you as directly as high house prices you don't criticise them.

Tell me what you have in mind and maybe I will.

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In any case by using my capital and taking on the risk of a loan I do create the utility that a renter can occupy a dwelling without having to use their own capital or take on the risk of a large loan.

This is offset (and then some) by the increase in prices for prospective home owners which has resulted from the extra injection of credit money from BTL. By the BoEs own figures BTL has increased the amount of money chasing the housing stock by about 20% a year. Its really hard to argue that creating credit money to price someone out of buying something, only to buy it yourself and rent it back to them, is beneficial to them.

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Lets not forget that some people are in the situation that it suits their circumstances to rent rather than buy.

Yes some people elect to rent, but from what I remember of some poll a few years ago only about a quarter of long term renters are renters by choice, the vast majority would buy given any reasonable opportunity.

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Also the houses I bought were all new build so I didn't take an existing dwelling out of the market. Just being picky BTW.

Unless you personally obtained the planning permission and funded the building then those houses would have been bought by OO's in the absence of BTL buyers so in my book that does not qualify as increasing the stock above what it would otherwise have been.

[sleepwello'nights]

Tell me how does your purchase and storing of gold add utility to the economy. Do you only buy freshly mined gold?

[goldbug9999]

19 minutes ago, sleepwello'nights said:

Tell me how does your purchase and storing of gold add utility to the economy. Do you only buy freshly mined gold?

Holding gold is economically neutral at worst. If it was discovered that gold had some unique property that say allowed its use in curing cancer I would support legal and tax disincentives for people hoarding it. 

I would not be anti BTL if it was economically neutral, but it isn't, it is very damaging to standards of living and vibrancy of the economy generally. The opportunity to buy a surplus of housing is pretty much a unique economic situation because housing is both scarce and essential for most people.

Pretty much everything else is either  something people can reasonable live without (gold) or plentiful. This is by design, a well functioning capitalist economy seeks to increase access to, and reduce costs of, things that people need. The UK economy manages to do this fairly well with the various staples of human existence such like healthcare, food , personal security and transport and yet fails to do so for shelter and while BTL is not the sole cause of this it does exacerbate the problem considerably.

 

[sleepwello'nights]

13 minutes ago, goldbug9999 said:

Holding gold is economically neutral at worst. If it was discovered that gold had some unique property that say allowed its use in curing cancer I would support legal and tax disincentives for people hoarding it. 

 

Bit of a difference investing ones money in productive job creating companies 

[maynardgravy]

2 hours ago, sleepwello'nights said:

Nowadays home ownership is thought to be everyone's birth right.

Wow what a deplorable thought. Seems nowadays being a parasite is a birthright. It's actually an easy thing to provide one affordable home for each family if the tiniest of wills was there - it;s gonna happen for political reasons now more than anything and the parasites are gonna burn and I'll be grinning as i line up my 'low ball' offers - the stars are aligning once more.

[goldbug9999]

4 minutes ago, sleepwello'nights said:

Bit of a difference investing ones money in productive job creating companies 

There are already incentives to invest money in productive activities e.g. venture capital trusts but ... there is probably a case to be made for further disincentives to hold cash/money (of which gold is essentially a form) though. I have to say this like of argument is getting somewhat thin.

[goldbug9999]

10 minutes ago, maynardgravy said:

Wow what a deplorable thought. Seems nowadays being a parasite is a birthright. It's actually an easy thing to provide one affordable home for each family if the tiniest of wills was there - it;s gonna happen for political reasons now more than anything and the parasites are gonna burn and I'll be grinning as i line up my 'low ball' offers - the stars are aligning once more.

Universal cheap housing is fundamentally at odds with housing as a source of investment wealth. EDIT - that one scentence is basically the thrust of a decades with of discussion of millions of posts on ToS. 

[sleepwello'nights]

1 minute ago, goldbug9999 said:

There are already incentives to invest money in productive activities e.g. venture capital trusts but ... there is probably a case to be made for further disincentives to hold cash/money (of which gold is essentially a form) though. I have to say this like of argument is getting somewhat thin.

Your arguments are also getting a tad desparate. The bedrock of our capitalist system is property rights. Without the wider society through the state being able to allow an individual the right to own their own property then it becomes might is right. The strongest or best organised can then take what they want from those weaker than them. It is after all how all empires expanded.

I've provided you with an explanation of why a landlord owning property and renting it out is a legitimate and economically beneficial activity. Your arguments apply equally to the owner of a gold mine. Your argument basically boils down to its not fair that he owns the mine. He has denied me the opportunity to own it. 

Using your arguments I'm also a parasite because I have money on deposit with a bank and they pay me interest for being able to use it. 

[goldbug9999]

8 minutes ago, sleepwello'nights said:

I've provided you with an explanation of why a landlord owning property and renting it out is a legitimate and economically beneficial activity. Your arguments apply equally to the owner of a gold mine. Your argument basically boils down to its not fair that he owns the mine. He has denied me the opportunity to own it. 

The key is whether the captured resource is both scarce and a necessity of living, I think my argument as to how BTL is very different this respect to for example (gold). Of course we are never going to persuade each other so I'm happy that I've layed out the points as clearly as I can that other readers can make of it what they will, I'm kind of out of enthusiasm now for this particular line of debate, I only jumped in in the first place to try to turn the discussion from a mud slinging match to something that is informative. Feel free to claim victory.

[leonardratso]

it is what it is, cycles turn, political will changes and bends to capture those perceived votes, fortunes are made and burned and made and burned.

Nothing goes on forever. Arguments on both sides can be valid today, invalid tomorrow and valid again next year.

Todays enreupeneur is tomorrows parasite.

Havent these arguments churned for years on TOS? no end in sight to them yet.

[goldbug9999]

For those interested in delving a bit deeper in the technical economics of whats being discussed this is a good starting point.

 

[Band]

16 hours ago, goldbug9999 said:

The key is whether the captured resource is both scarce and a necessity of living, I think my argument as to how BTL is very different this respect to for example (gold). Of course we are never going to persuade each other so I'm happy that I've layed out the points as clearly as I can that other readers can make of it what they will, I'm kind of out of enthusiasm now for this particular line of debate, I only jumped in in the first place to try to turn the discussion from a mud slinging match to something that is informative. Feel free to claim victory.

These btlers would be the first to complain if people were allowed to build where they want thus making their triffic investment that is reliant on strict planning controls pretty much worthless.

He is here to tell everyone how great he is and how others need to pull their finger out. A blatant troll.

[Band]

15 hours ago, leonardratso said:

 

Todays enreupeneur is tomorrows parasite.

Rent harvesting has never been deemed anything other than parasitic. Landlordism shouldnt be in the same sentence as "entrepreneur".

[sleepwello'nights]

16 hours ago, goldbug9999 said:

 Of course we are never going to persuade each other so I'm happy that I've layed out the points as clearly as I can that other readers can make of it what they will, I'm kind of out of enthusiasm now for this particular line of debate, I only jumped in in the first place to try to turn the discussion from a mud slinging match to something that is informative. Feel free to claim victory.

Its not a question of winning or losing. I accept and understand your arguments, just as I hope you understand my viewpoint. 

The issue is that you see a landlord renting a house as an immoral activity. I don't. To each their own, I thank you for your courteous posts. That we disagree does not mean we have to hurl insults at each other, nor that one of us is an idiot, or twat as I've been called. 

As I said before I lucked in when the GFC resulted in interest rates plummeting. At one stage I feared a re-run of the recession under John Major, if that course had been taken I would have suffered a great deal of financial pain.  I see Banned is continuing in with his tantrum, I think that reflects more on him than me. 

Anyway it was an interesting debate, and I thank you once again for your curtesy.

[janch]

On 22/07/2018 at 14:22, kibuc said:

Whenever I read such stuff I cannot help but think about slavery. It was legal, socially acceptable and quite frankly, if you weren't doing it you were missing out. Why wouldn't you join the rest of those brilliant enterpreneurs who were doing nothing wrong and simply played the hand they were given?

There's legal, there's financialy advisable, and then there's moral. If you can combine all three then even more power to you, but if you have to pick, and often you have to pick, which one you go with speaks volumes about what kins of person you are.

Good post

[Wight Flight]

1 hour ago, sleepwello'nights said:

Its not a question of winning or losing. I accept and understand your arguments, just as I hope you understand my viewpoint. 

The issue is that you see a landlord renting a house as an immoral activity. I don't. To each their own, I thank you for your courteous posts. That we disagree does not mean we have to hurl insults at each other, nor that one of us is an idiot, or twat as I've been called. 

As I said before I lucked in when the GFC resulted in interest rates plummeting. At one stage I feared a re-run of the recession under John Major, if that course had been taken I would have suffered a great deal of financial pain.  I see Banned is continuing in with his tantrum, I think that reflects more on him than me. 

Anyway it was an interesting debate, and I thank you once again for your curtesy.

One question I have always wanted to ask the 118ers - who are always banging on about if their costs increase, they must put the rent up to cover it (innit).

How much did they reduce rents by when interest rates fell to almost nothing overnight?

[spunko]

On 22/07/2018 at 09:56, Banned said:

Look you thick twat i work in the oil industry and my day rate will by many more times what a thick twat like you could earn per day using his own knowledge.

So how the fuck that isn't helping myself is beyond belief ... what do you think those who havent bought on here are the kind that are struggling to earn £12 an hour?

What the fuck is some thick twat buy to let landlord doing on a site related to house prices crashing for anyway, is it just to troll and get people to pay attention to you.

Fuck off back to 118 you utter cock as they will tell you how well you adapted people on here will just point out that you're a thick twat who got lucky.

 

 

Can you tone down your abusive language, or your username may prove to be strangely fortuitous... 

Seriously though, there is no need for such behaviour, if you cannot form an argument without gratuitous use of insults then consider stepping away from the keyboard for a while.

 

[Castlevania]

5 minutes ago, spunko2010 said:

Can you tone down your abusive language, or your username may prove to be strangely fortuitous... 

Seriously though, there is no need for such behaviour, if you cannot form an argument without gratuitous use of insults then consider stepping away from the keyboard for a while.

 

Stop being such a thick twat

[Band]

42 minutes ago, spunko2010 said:

Can you tone down your abusive language, or your username may prove to be strangely fortuitous... 

Seriously though, there is no need for such behaviour, if you cannot form an argument without gratuitous use of insults then consider stepping away from the keyboard for a while.

 

A decade of giving money to these people can get a man worked up, he even wants me to get a new job and work harder to give his kind more money FFS!

[Option5]

3 minutes ago, Banned said:

A decade of giving money to these people can get a man worked up, he even wants me to get a new job and work harder to give his kind more money FFS!

You would only have given it to the banks of you hadn't given it to "his kind"

You spend most of your working life paying for a house and then have to use it's value to pay for your care or death duties. Oh and of course it gives your children something to fight over.

And no, I don't own a property even though I earn well into six figures ( no not £1000.99 ) as I don't see the point in paying out for something that will last a lot longer than I will have a use for it.

[Band]

2 minutes ago, Option5 said:

You would only have given it to the banks of you hadn't given it to "his kind"

His kind have have received the free handout via the banks, central banks and govt via QE, ZIRP, TFS, FFL + bank bailouts.

 

[Option5]

15 minutes ago, Banned said:

His kind have have received the free handout via the banks, central banks and govt via QE, ZIRP, TFS, FFL + bank bailouts.

 

History, can't change it so why get bitter? They just got lucky, they could have ( and still could be) in trouble if things change. These things are cyclic, I know people who ended up in negative equity last property crash, wish they had never bought.

I will admit that I rent by choice, I tend to work 2-4 year contracts so just rent somewhere close to where I'm working.

No commute, no estate agents fees, no moving expenses (well apart from a days van hire). I can move if I don't like the neighbors, don't like the job, don't like the landlord (which has never happened, must be lucky). I also don't get stuck with something that doesn't sell, have to deal with beuracracy, worry about repairs, etc. etc.