99% Mortgages Are A Terrible Idea.
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- Опубликовано: 28 сен 2024
- News is circulating that the UK government is planning to introduce 1% deposit mortgages in an attempt to help first-time buyers, but is this a good idea?
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Such a stupid idea, 99 percent loans, Subprime markets all over again.
Didn't they recently uncap bankers' bonuses? Much like they did the pre-2008 crash. De ja vu.
The solution should be not fuelling massive demand through forced interest rate (and soaring house prices), but increasing the supply of new homes.
Exactly.
A basic need is either made abundant or priced exploitatively. It’s all about supply.
I don't think this is as required as you think, a lot of homes sit unoccupied, so I think this wouldn't be required if they slowly removed the ability for people to earn money from their properties. If you want to own a property you must live in it. Too long has it gone on where people are stuck renting perpetually, if they can afford the rent they should be able to eventually own the house. It makes me sick that people can rent the same home for 30 years and never come to own it (which I'm pretty sure is more common than you think)
The trouble here though, is if there are enough properties to go around, house prices decrease. Scarcity keeps the prices up, and that's what the government do. They say they will build new homes, but always less than needed, to keep house prices up, and of course the bankers happy.
We have enough homes, more empty homes than homeless, so what drugs are you on...
There is an abundance of supply...@@SigFigNewton
So basically the U.K. will try anything to fix a supply shortage except increasing the supply.
It's chicken and egg. It took me until I was 42 (2022) to buy a home with a 10% deposit (in the North of England). Neither myself or my partner have ever had financial help from our families. We understand the struggle to get on the ladder, but voting to increase supply with 90% LTV when we have less prime earning years to overpay the mortgage would be madness. Couple this with the fact we never had a pension match system in place in our 20s and most of our 30s, our home is essentially our only retirement fund. At least people in their 20s still have time on their side. The government needs to step in to look after both of these demographics.
It doesn't matter if you increase supply, as long as there is buy-to-let - there will be shortages for new home buyers
You can see how rents skyrocketed with interest rates increasing, because the whole of the rental market is dominated by buy-to-let mortgages.
I love how everyone looks at the problem like its a housing supply shortage, rather than demand increase while we net import a population the size of Birmingham year on year lmfao
Yeh. This is a plan to actually increase demand
This government is desperate to prop up the last game in town, property. It's 15 years overdue a correction.
As long as people can afford asking prices, the housing market will continue to go up. This new idea will make house prices unaffordable for the next generation. It's a short term fix only.
Once the UK population stops being able to afford housing the government will bring in people who can.
Some would say that is already happening.
As with everything in this country, the younger you are, the harder life will be for you
This does absolutely fuck all for affordability. They can tinker with supply, or the structure of mortgages, or even wages as much as they want, but so long as homes are treated as investment vehicles first and things to live in second the situation will continue to get worse. Any such policy will at the very best act as a temporary alleviation.
If you want to help first time buyers, take action on house prices and low income. As you said, reducing the deposit level is explicitly targeting people who can't afford to save 5%. Getting on the ladder is all well and good, but if the average house price is still 10x the average salary, all you are doing is introducing more people to enormous amounts of debt compared with their income.
Build more (any?) council housing. Reduce the profitability of the rental market. Stop companies from paying poverty wages. You can't simultaneously help the lowest income population while protecting the ridiculous profit of multimillionaires. This government has been clear about which side it's on.
UK salaries are ridiculously low and employers profiting culture destroying backbone of economy and society
Indeed, gov has never been on peoples side ever.
@@rdtheskaldfalse. US subsidized the increase in availability of residential real estate a handful of times in the past.
Then it stopped and housing became unaffordable
@@SigFigNewton This is about UK, not US.
It’s impossible, if you raise wages you cause inflation. Building new homes isn’t simple, materials are and labour are expensive. I think k Greece did this, they built houses like crazy created loads of new jobs for a period of time and then bang it all stopped and became a mess.
The issue is the UK economy has been stagnant for too long. Foreign investments get away with too much here, the UK will always be a haven for the rich, great for investments and safe, especially London. If the rich want to park their money in the UK then they need to pay for it.
A 1% deposit as a single person on a salary of £30500? LMAO, OK. Should be able to lend enough to buy a shed with a monthly payment of £805 for 25 years. 🤦♂️
Great vid, but the 99% mortgage is ludicrous and totally not what is needed. The govt always does this. Try and get people to borrow more rather than make housing more affordable. This is why we are on the mess we are. 🤬
Feels like legislation by lenders
The problem with any of these schemes is that they artificially prop up high prices. I've never understood why people are happy for their property prices to increase, as everything is relative, so their next house will cost them more. They also forget that over the course of their mortgage, they've made it impossible for their children to get on the ladder. It's silly.
I strongly object to my taxes being used by government to prop up or further inflate house prices. They are using my money to price me out of the market.
Higher property prices => more tax collected
@@theamateurguitarist6187 I'm sure you do.
If the proposed solution does not increase housing supply, treat the proposition with contempt.
Maintain respectfulness toward the people being used by mortgage lenders to sell the idea, but treat with derision the supposed solution that fails to increase supply.
7:20 I LOOOOVED your final take, really sums up the whole point!
The problem with a 1% mortgage is it means 9% more of an already unaffordable house now has intrest to be paid on it, higher monthly payments to people who already had nothing spare to save for the original 10% asking.
Add the fact we're in an inflationary period with relatively high interest, meaning monthly payments and affordability checks will be far more of an issue than a deposit. All they're doing is trying to look like helping the issue, and raising house prices further, rather than actually deal with it and build more houses!
And it’s a lot easier to end up in negative equity
And the UK Gov has FUCKED us with Brexit & everything else!
but if that 9% more allows you to buy your own place rather than be at the mercy of landlords then it's worth it.
It's 1% equity more than when you are renting for similar, or maybe less, per month. OK you are paying a mortgage provider but each month you are building equity and there will be a point when you own the whole property.
The idea you can time the house market for a low is as good idea as trying to time the stock market
If u need to borrow 99% of your purchase, maybe u shouldn't buy it, off topic but i feel Saving for a market slump is also a bad idea. There are different perspectives on recessions and depressions; we cannot always expect significant rewards; and taking risks is preferable to doing nothing. The bottom line is that by diversifying your portfolio and making sensible judgments, you will accomplish exceptional outcomes. In just 5 months, my portfolio's raw earnings increased by $608k.
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UK gov be like: Here's a bandaid for your axe wound.
And the bandaid/plaster (in the uk) will cost 40% of your take home salary
When will these absolute melts realise it’s time to finally build houses again, and some of those homes need to be for social housing as well as for private sale…
“21% of homes in the UK were built before 1919, 38% before 1946, and only 7% after 2000“
When you have 5/6 house developers holding a monopoly on house building…. It isn’t in their interest to build lots of affordable homes for us peasants. Best to keep the housing stock in a shortage and charge us a fortune for the next 30/40 years of our lives 👌
The greed is crushing the economy.
When you spend 60% of your income on mere housing, you spend nearly zero percent at local small businesses.
Correct.
I've watched a few of your videos so far but wasnt sure about what a 1% deposit mortgage would mean for me, and you've been so informative, thank you
Shocking idea in a falling market. If you can fix for 5 years, dont overpay, can stay put for 5 years, it could help certain people. Years of huge interest payments to look forward too!!!
Reckless lending practices approved by government - what could go wrong. Two things are adding to the problem, you have way too much immigration in total (legal and illegal) and you basically will never be able to build enough houses to cope with that added pressure. The NetZero environmental regulations are also going to hit hard from 2030 which is going to make things even more difficult for home builders. So all this has been created by clueless ministers.
The elephant in the room finally addressed! You need to look at the factors driving the lack of supply. We have land...but most of it is greenfield countryside which people understandably don't want houses built on. So that creates a land premium.
Builders are facing material supply issues with costs increasing all the time for basics such as lumber etc. So that creates a cost premium.
We have a falling birthrate but an increasing overall population. That creates a supply vs demand premium.
All of the red tap and bureaucracy surrounding Net Zero etc. and changing regulations and demands creates another cost premium (things like mandatory inclusion of electric car charging provisions, air source heat pumps etc.)
There are multiple factors at play. But yet, NONE of them are being looked at or addressed. Simply, brushed under the carpet using a headline slogan like 99% mortgages.
Let's feed further this property bubble 😂
Keep on pumping!
There is no bubble, I think that’s what people misunderstand. It doesn’t always have to be a bubble and a crash, it can just be a rise and a correction. The language used for the housing market is alway so extreme.
The reason there is no bubble, is because there is a housing shortage and rents are high and will only continue to get higher. Until an interest only mortgage on a property is substantially higher than rent on the same property, then the market will stay fairly stable. A lot of people are talking about the cliff edge for homeowner mortgages with interest rates, but no one mentions how that same cliff edge is going to impact BTL mortgages and rent prices. And remember BTL mortgages are already 1-2% higher than residential. Landlords will either pass the additional cost plus 45% for tax, on to tenets or sell the property, lowering the number of rentals on the market. Either way rent is going up and until that comes down, house prices won’t “crash”.
@@theamateurguitarist6187too much focus on the word bubble.
If a basic need is not made abundant, it’ll be priced exploitatively.
We can reword the original comment “let’s maintain insufficient housing supply and therefore economy-strangling home prices”
This will just push house prices up even more and end up with 45 year mortgages
Catastrophically stupid idea
Yet you probably will still continue to vote Tory
I think the issue is more theres so many rental properties its doubled from 20 years ago nearly 20% of all properties are, it drives up prices
I agree. Building more houses doesn’t solve the issue.
@@JM-yf3olNo economic line of thought supports that
Owner occupied homes and rented homes are close substitutes, and prices are correlated
This issue so needs covering. Bravo!
Your analysis is superb.
Thanks.
Here is a radical idea, end government regulations and BUILD MORE HOUSING!! It worked in the 1950s and it can work again
We don't have the same amount of land as in the 50s though! Unless you intend on building high-rise apartment buildings in rural villages?
Sounds like sub prime mortgages to me. How did that go?
"Helping, and at the same time not helping, according to his therapist" - Eleanor Shellstrop, "The Good Place"
UK is not only London. They’re many areas , where is possible to buy fairly cheaply. If young person or couple from Leeds, who pay £850 rent , is able to get 99% mortgage for £140k , payment will be about the same. If someone doesn’t want to move out from area for another 5 years, it may be a god option for them.
Through their inflationary effects, demand-side measures tend to price out 10 times as many people as they 'help' (read: help to get into a less sustainable level of debt). And, of course, they do this at the expense/risk of the taxpayer.
Why is the answer to a supply problem always props to demand.
The corrupt teaching the ignorant to “address” the problem
Treat it with the contempt it deserves. If a state adopts mindset of only taking seriously proposed solutions that increase supply, that state will solve the problem.
It won’t help. Interest from a bank on 99% LTV will be insane, affordability calcs vs what you can rent means you will buy substantially less house than you can rent. My house has a market rent of £1200 pcm, so you’d need a household income of about £38k to rent it but my mortgage is £1650 pcm, 25% down on a house that was £330k, meaning you’d need a household income of £60k or thereabouts to afford it. It would be even worse borrowing a higher LTV. We should be focusing on lowering the price of the houses, not being so worried about a deposit. If that means that my house loses value that’s fine by me, I bought it for the security of not having a landlord who could throw me out, as long as I can make the payments until I’m 52 and it’s paid for I don’t care.
Evening fella, love the content 👌 but can I make a suggestion? ..can you leave a few seconds at the intro before the video begins as sometimes we miss what's initially said ...cheers dude 😊
The better idea I read this week was 25 years fixed mortgage. I think taking away the worry for buyers of market conditions is a win win
Long term fixes are the norm in the US, I don't see why we can't have that here. A middle ground interest rate to balance out the peaks and troughs long term, while providing certainty to buyers is surely a good idea.
@IAMMARTICUS1470 yeah the uncertainty that is happening now would not be as bad if people were on fixed long term mortgages
If you can't get 5% together, you can't afford the house.
I get the sentiment, but it's not factually true. Rent is often more expensive than a mortgage would be.
i would go even further, if you can not get 15 to 20 percent together, you can not afford a house. if the markets shift, which they do every few years. 5 percent is going to offer no protection at all
@@MinkieWinkle Agree. To me even 5% feels sketchy. Personally I have always had at least 30% down, and I am 52 and bought multiple houses over the years. But it was easier 'in my day' - our first house cost £55K and my GF and I had saved 10K each, from a salary of £20K each. The house price / wage ratio is so bonkers those days now, I do feel for youngsters just starting out.
@@thegrinderman1090 but Rent is the maximum you pay, whereas a Mortgage is the minimum you will pay, if you own you need an extra 1-2% of the value of a property annually in repairs and maintenance. If you can't save a 10-20k deposit, what happens when the boiler breaks or there's a leak somewhere?
@@pvelectronics4291 This is the crux of it. House prices have exploded at a disproportionate rate to wages. I remember my mum saying when my dad bought a car in the late 90's that 16k was extortionate for a car as their first house was £18k.
My first house in 2012 was £218k. And that was a 3 bed semi. The family home which was bought for £190k in 1997...now 'worth' nearly half a million, if not more! It's pretty insane!
Let's fix the problem at the source; I'd rather see the tax on rental earnings on a second home increased to 75-90%. Then lets see how long this 'shortage' of housing remains.
*Edit* fixed typos
Buy as much real estate you can afford, debt is now an asset. We gonna fly high in inflation in the coming years. Rates would have to stay low enough to not bankrupt countries and major institutions due to the accumulative credit and debt the US, UK, France and many more powerful countries are currently in. With all that debt there is no way they can raise those rates too high to curb that inflation. This is going to be the biggest blow off top in the markets in the coming years. Get onnnnnnn it!!
Instead of doing this to help young people how about giving us proper payrises. Im 32 this year and never had a payrise in my adult life. 2008 was the last nursing payrise. We need huge payrises and tax reductions (only for those on PAYE)
It's simple supply and demand by giving out 99% mortgages you are just increasing the demand by making more and more people able to buy when there is no more supply so prices are just going to go up
Supply is too low, boys, time to increase demand!
It’s not legislation by idiots it’s legislation by and for lenders and land owners.
Fails the “does it increase supply” test, so don’t take it seriously as a potential solution
You are absolutely right. When I point out the problems with the government's 'assistance' to home buyers elsewhere, I get ignored. No one even replies. Some people are just beguiled by the idea of government interference. They never bother to think about what is going on.
The ONLY thing that matters in this regard is supply side. Build more homes. But that damages the interests of the mostly well to do home owners (including myself, as it happens) whose home values would fall.
Agreed, I strongly object to my taxes being used by government to prop up or further inflate house prices. They are using my money to price me out of the market.
Problem is, the homes they are building are absolute garbage.
Very easy to assess housing solutions.
Allowing smaller down payments? Doesn’t increase supply. Fail.
Down payment assistance programs? Doesn’t increase supply. Fail.
Rent control? Doesn’t increase supply. Fail.
Vacancy taxes? That’s a win.
Subsides or tax breaks to builders who inexpensive units? That’s a win.
Remove regulations that’ve been getting in the way of building that aren’t safety related? That’s a win.
(Mortgage Advisor) 100% mortgage with Skipton never had anyone approved based on credit
Interesting this! Thank you for sharing
millennial here, made some decent money from investing, and i'm leaving the UK before next tax year starts, pay your own pensions 👍
Just coming out of a broken marriage I was lucky getting 100% mortgage 14 years ago as I had nothing,now I have moved got a better home and paid off lots
Just let the housing market keep dropping, keep the interest rate around this level for another 12 months. Support savers. Offer better savings rates.
We have always had 0% deposit mortgages now it’s 1%, but 30 years ago you could even get 130% to have some funds to remodel the house and buy a car 😮 (Netherlands)
Cut immigration and bring back social housing at one end, incentivise building companies to make more houses by giving them tax breaks (corporation) at the other. This problem is controllable, you just need a government that are going to put young people first instead of the older demographic with real estate portfolios, which is absolutely not what we are seeing.
Have you seen that Argentina's stock market is up 300%?
On the back of them actually having a good Libitarian president. I hope we follow suit and stop being ran by career politicians.
The 5% deposit scheme really helped me buy a house last year. Although I'm only 27, I'm in a career where I know income will steadily increase over time, and affordability wont be an issue. But saving up a deposit was taking ages, and I couldn't find anywhere to rent that wasn't at best £100 more expensive than my mortgage ended up being.
Perhaps it's a relatively unique scenario, but it did really help.
Obviously other solutions would've been better, like building new houses, but it seems like that's not happening regardless.
What do you do for a job?
@@OldQueer Software developer. Very fortunate position that there are more jobs than people, which will take a long time to change, so career growth is practically a given
Search for a rental property in any Scottish town and you will be shocked at how few properties are available to rent. If you need a home, you need a home and if a 1% mortgage gets them an affordable home then I support it. Having said that negative equity is a real risk as obviously getting trapped is a very real risk. Bottom line is that demand for affordable homes (both rental and purchase) far outstrips supply and increasing supply is the only way to solve property scarcity and desperation for homes in the UK
I remember back in the day when I got my 105% mortgage to help me cover the legal fees, but that was when there were plenty of properties at realistic prices. ALLOT of people are gonna get in a lot of trouble me thinks if this comes into play!
If you can't save money you aren't in a position to buy. There's so many associated costs with home ownership and the initial process.
If the government wanted to actually help there would be so many ways to do that...
95% LTV loan but with fixed low interest, funded by long term bond sales for instance.
Government oversight, stability and low risk for all involved.
Like all governmemt housing incentives its designed to help developers and increase house prices. It'll do nothing to help first time buyers by loading them up with more debt to buy a home which should be much cheaper if the market was allowed to adjust back to long term norms.
Just would make house prices more unaffordable.
Lower starting equity and bigger loans also mean that you're going to pay a lot more in interest over the life of the loan. This is great news for banks that are desperate to lend but don't really want to take on any additional risk.
They would be taking on additional risk, because the buyer cannot provide the standard deposit. So the Interest Rate offer will be at the high end as a risk premium. That kills the deal on affordability, and as such buyers tend not to have lifetime employment, they are by definition, sub-prime borrowers. I think this suggestion will disappear faster than an mist on a clear summer morning. It's not a good deal for borrowers or lenders.
@@BigHenFor You're right, there is clearly additional risk for the lender in a higher LTV loan. I really just meant to say "deploying the capital in the same market sector" i.e. still within mortgages, and not personal loans, corporate bonds, etc.
Basically make it easier to put more inflation into the housing market..
What’s needed are more homes. Not schemes to make it easier for people to take on debt when the market is making it clear they can’t afford it..
The government needs to go all in with building social housing where they can offer reduced rents that working families can afford.
Will private land lords like that.. nope.. but it will cool down the market and give people a chance.
Correct. Proposed solutions can be divided into two categories: those which increase supply and should thus be considered, and those which do not and can be thrown rapidly into the rubbish bin
I think it's an excellent idea for those stuck paying high rents anyway. There monthly outgoings might be the same or even less.
Well, in Poland for 2nd half of 2023 we had 2% with possibility of 0 downpayment (gov bank guarantee up to 20%) up to 500-600k PLN (125-150k USD). I bought my first apartment with this financing to save on interest and get some of my tax money tax back.
These sorts of "free money" schemes like this and the bounce back loans will be a sign of things to come as we pivot from monetary to fiscal dominance as predicted by the likes of Russell Napier and Lyn Alden. Current pensioners will be stuck with the low yield bonds from the pre Covid era while inflation, wages and rates run hot (relative to past 20 years). It'll effectively nullify the effect of rates and QT performed by central banks
400k house. 4k deposit. 396k mortgage. No one has a high enough salary to afford the mortgage amount. They wouldn't give anyone the mortgage 😂
Indeed, if it happens folk that get a 1-5% deposit mortgage need a plan to have their 10 percent together when they renew or they are going to be stuck!
The paradox of all this, is that these these government schemes push house prices higher up, which puts more first time buyers out of reach, which then causes more government schemes... And the cycle continues.
I agree feelers to win votes in the spring budget, let's see what is introduced then
I think the government needs to go all in on shared ownership. Either people staircase out and the government gets the money back, or when properties sell they get first refusal on buying the other half to add to social housing stock.
The more they mess with the housing market, the worse it gets.
Increase supply, build.
Reduce demand, lower migration.
Short term price decrease is a good thing.
What we need is reform in the house building sector. They should not be allowed to land bank. They should have a time limit to commence the build on the land or be forced to sell it. They are purposely reducing supply to maintain prices. It's a cartel!
I think it's a bad & risky idea... But (and I hate to say this) I also know it doesn't always pay to be prudent in the housing market, govt have shown they will print their way out of problems, all that inflation ultimately feeds it's way back into assets like houses (and quite easy to see a prudent person saving away for a bigger deposit, see house prices inflate faster than they can save). If the monthly payments are affordable, you don't see yourself moving away for a long time then jump onboard, if you get through the next 10yrs you'll look back and (as absurd as it might sound in the present) you'll think you bought cheap.
The conservative government is totally clueless.
I had a 100% mortgage back in 2001, best financial decision I ever made.
To comment specifically on the negative equity situation you refer to about Skipton’s 100% mortgages.
I work for a company that is owed by Skipton, as a mortgage advisor.
They have said countless times in many meetings with them, that they have run many many tests about negative equity and it’s all been fine. And if it doesn’t ever get to them, they do have options in place for those situations.
So the conclusion for me would be, it’s all well and good offering these products, but make for damn sure the mortgagee is protected if the worse were to happen, that is out of their control.
Good video. Yes affordability Issue: low income people can afford and make payment but lender won’t trust. Lenders also have to change their affordability criteria in line with that? Thanks
I promise I will watch you know me. But I'm going to go ahead and say yes.
Need to offer council / local gov tax reductions for young people. Forcing millionaire pensioners 70+ to downsize property would help. (My area full of them with large family homes. With single or couple occupancy)
I guess covid 2.0 will fix this big home problem 🤣
Council tax reductions will lead to more money to bid up rents and house prices, what we need is a shift to land value tax and off wages/productivity.
ah yes. What we need is a totalitarian government forcing some people out of their homes to house others. Great idea. What could possibly go wrong. I wonder who these "millionaire" pensioners are ? Most pensioners I know are living on or below the breadline.
What we need is more homes to be built. We are building less than 40,000 homes annually if we built enough homes, prices would come down and we would not need to worry about whichever tax system to use as far as this problem is concerned.
Forcing older people from their family home is NOT the answer. That could only ever affect a few homes and would disproportionately affect less well off pensioners. Would you really want your grand parents forced from their home ?
Taxation changes are rarely actually a solution to real world problems.
We just need to stop sending money for genocidal Israel
your videos are so well scripted. v v good. Well done!
Lowering the required deposit only benefits those who are new to the employment market, have a stable job, and will have significant salary growth over their early career, such as new Doctors. With this lower deposit requirements they can buy instead of rent, but for most this is an inappropriate product.
Baby boomers and GenX annoy me with their wealth and their inability to realise just how lucky they were
The best solution to help FTB is add a surcharge on BTL mortgages and use that money to match FTB deposit up to 10%
Absolutely! I spent 2016-2018 trying to get on the ladder, deposit sat there ready to go but everything at the bottom end of the market in my area was immediately hoovered up by BTL.
The only things that stuck around long enough to actually view them were money pits or massively overpriced.
Although I'd go as far as capping private rents at a price that stops BTL being attractive as an immediate return investment.
Not a real solution, doesn’t increase housing units
@@SigFigNewton But, it could force BTL landlords to sell up parts of their portfolio which will bring stock on to the market. If it happens at a similar time, then it will also bring prices down too.
@@lankyboy90 does it increase the number of homes available to be lived in? Oh, good, maybe it’s not an idea to ignore completely
Fled the UK in 2021 to Mexico. I saw the writing on the wall. Inflation was garunteed when we printed money and froze the economy. Watching the UK burn from Sunny Mexico is sad but also I cant help but say i told you so. Good luck guys. I am sorry but you are paying for what you signed up for. It will take at least 5-10 years for UK to bounce back.
You ever going to do a video about your investments mate like what your portfolio looks like index funds etc be cool to see what you do with your money !
It would end up with Terraced houses once again being hyped up when in reality they should have been replaced decades ago.
I can’t see how, if we are in a housing crisis, it is a good idea to penalise landlords. I am a landlord though so I am biased. I’d love to hear some unbiased views and fair solutions.
@Contact___DamienTalksM0ney but Damo old buddy, surely you are the one with 1930s phone cards.
What’s the point in getting on the ladder if you’ll never own it?
Aww, Spanky is so cute...most people won't even know who he is
The were so many catches to the Skipton home loan.
It's not like the tories to have a policy which mostly benefits themselves.
The problem in the housing market is inequality. Property isn’t about homes anymore, they’re an asset class. It’s where the super rich park their money to generate rents. BTL properties are double what they were 2 decades ago.
Stop interest only mortgage
Stop property developers from bullying the housing market
Start encouraging people to make money using their skills and hard work
End passive income - It’s bad for us
Better to rent and if the rates go up u haven't got the hassle of selling to move cos u can't afford the mortgage! Let it b the homeowners issue! OR, set up something similar to a migrant camp somewhere with a bunch of disgruntled people who don't like the government either!
Plenty of houses for sale in West Cumbria and the ex mining towns of the North East under 60k.
If the next generation of workers insist on working from home, then the location becomes irrelevant to where you buy.
Is the average first time buyer expecting all the bells and whistles on their first purchase?
Mine didn't even have an inside toilet. Miss-matched 2nd hand furniture and carpets is all I could manage.
Kettle and toaster were a house warming gift :)
Any update on adding Legal & General to your pension spreadsheet? Cheers👍🏻
This scheme only works for high income earners. What for low income earners?
The problem is housing isn’t so much the amount of deposit required, it’s more that a 2 bed flat is 300k and lenders 4.5x income doesn’t let anyone borrow enough in areas in the south east 🤷🏼♂️🤷🏼♂️
As someone who is looking to buy a property within the next 2 years, this would benefit me personally (I live in South Dorset). I appreciate that I would be paying more interest, but (in most cases) I would still be paying less that the cost of renting, and atleast some of the money will be going towards my ownership of the property and not someone elses. I think this move could encourage landlords to reduce rent in a bid to prevent their younger tenents from buying instead of renting - To achieve this, their monthly rental price would need to match or be cheaper than the cost of interest.
The problem is if you want to move house, but your house has dropped in value, you wont be able to sell it for enough to pay off your loan and then you'll be trapped in that home. Which doesn't happen with rent. But yes it is generally cheaper than rent. And it's fine if you know you won't want to move for a very long time
@maartenstevenson5499 Yeah it definitely does seem to be a risk, at the same time prices could also go the other way making it even harder to get into the market. Feels like a rock and a hard place.
📺 tv 🧟♀️ zombie
This is only really helping home owners and banks.
I will never own the home. Minimum wage and low wage income will never own a home in nothing get change. I can afford to pay 1200 monthly for rent but I can not afford a mortgage which requires deposit of minimum 5% , in my case around 12k , impossible to save in this times
Move back to your parents for a year
All of a sudden you'll have over 14k saved
@@haroondaman7162 It will be a solution but in my case is not applicable
99% Mortgage is a great idea, if you're paying rent anyway that is often more expensive than a mortgage then it's dead money and you're better off putting that in to a house you own at the end of the day. I can understand the affordability argument but this isn't 2006 where you could "self declare" your earnings, all the checks are till being done, it's just easier to make a better financial decision.
Anything above 70% ltv feels uncomfortable to me already
But who's going to be able to save a £45k deposit for a £150k house? Nevermind that the average is over £300k
Let's hope so - house prices would go through the roof.
Then drop so badly you couldn’t give one away
Captain Sunak of the Titanic spots the iceberg, First Mate Hunt suggests ramming it at high speed to shatter it as it doesn't look very big, the spads all start arranging the deckchairs, non doms and multinationals first into the lifeboats, form an orderly queue!
If the government (and, of course, the lenders) wanted to improve the situation of borrowers, then they could introduce 30-year fixed-rate mortgages.
There already is a 30 year fix search perenna they come with higher interest rates
@@leemarsden1846 Thanks for that. I didn't know about Perenna. It's super-expensive though. How come you can get a 30-year fixed in other countries at 3.5% and the most recent rate from Perenna is about 6%? Does that say something worrying about their prediction for BoE base rate over the coming years?
@@frmcf they have to build in their own profit margins. The longer the fix, the more risk, so the higher the interest they charge, also there isn't the competition in that space. Banks can offer 5/10 because it's relatively short, and they know most mortage have another 20/25 years after the first to re adjust their rates.
America has 30 year mortgages at low rates, because lots of palces offer it
@@frmcf because banks sell mortgages to make money they ain’t giving you a cheap mortgage the idea is to pay it off as fast as you can if stay away from a 30 year mortgage I’ll be paying mine off in a total of 14 years
@@leemarsden1846 You do you, but I see no point in paying mine off early. It's the cheapest credit I'll ever have, and whatever extra I was thinking of paying off, I could almost definitely get a better return on it by investing elsewhere.
The house market resembles to a giant scam. 550k for a shitty one bedroom and even that if you earn 130k a year. Hopefully those earning this amount will be smarter than to partake into this. We need a 50% drop in the prices, then it will be reachable.