UK housing crisis: how did owning a home become unaffordable? | opinions of EU members welcome

[Yousafzai_M]

I feel like prices in UK are gonna go down.. we are looking to buy house through mortgage but still work in progress..

I am in the same position but doubt that will happen this year. With the stamp duty holiday, the prices are WAY too inflated! No thanks!

 

[313ghazi]

while themselves living in a rental property?

No, they'll own multiple homes.

Take me for example, I am paying a mortgage for my own home. I could save up some money and get a loan to buy a second home using my existing home as collateral. I could also tell the bank I am buying it to rent it. The bank will lend me the money knowing that the people I rent to will likely pay the mortgage and if I can't make payment they could take the house and sell it.

Now 1 have 1 I live in, 1 I rent. In a few years after saving some more I do the same again. Using the properties I have as collateral I gain more and more. Needing only enough money per house to secure a loan.

Tbh I won't do it personally, I'm not sure I consider the income halal. Even the mortgage I have on my own home, I'm not sure is halal. There is a mix of opinions in molvi.

A lot of the older generation bought properties outright in cash when they were a lot cheaper.

I am in the same position but doubt that will happen this year. With the stamp duty holiday, the prices are WAY too inflated! No thanks!

I doubt they'll fall unless there is a big global impact on the economy. Even the it will be a short dip.

 

[kingQamaR]

A Muslim isn't allowed to benefit from lendingmoney or receiving money from somebody else. In other words, a bank or individual cannot charge interest (known as 'riba' in Arabic) when lending money. Renting an asset is permissible, but renting money is strictly prohibited in Islam.

 

[crankthatskunk]

I feel like prices in UK are gonna go down.. we are looking to buy house through mortgage but still work in progress..

Did you see the prices are going up since May 2020, despite COVID-19!!
There were talk that after Brexit price would cumble , didn't happened.
As long as the interests are low, it wouldn't happen.
For some it is too easy to buy a house even in this climate.

 

[TheSnakeEatingMarkhur]

Did you see the prices are going up since May 2020, despite COVID-19!!
There were talk that after Brexit price would cumble , didn't happened.
As long as the interests are low, it wouldn't happen.
For some it is too easy to buy a house even in this climate.

Rest are like us bro

 

[crankthatskunk]

In the UK its actually not. My mortgage payment is less than I could get if I rented the house. The buy-to-let scheme has created so many mini landlords, all renting out property at the minimum price of thier mortgage repayment + Estate agents fees.

So you can buy a property and borrow 95% of the property value from the bank. You can then hire an agency to find you tenants, collect rent and manage the property. You set the rent at the cost of the fee + your mortgage repayment as a minimum. You sit back and in 15-20 years time someone else has paid off your mortgage and now the house is yours and the rental income pure profit.

Not that easy anymore. Have you try to get a buy to let mortgage on 5% deposit. Go to the banks and get the answers straight from the horses' mouths.

As you know, the government has introduced +3 % premium on stamp duty on Buy to let Properties compared to houses for personal habitat. At the moment for which there is no Stamp Duty up to £500,000.
But the facility is not available for 2nd homes and buy to let properties. You have to disclose it to your solicitors. If you didn't disclosed or lie purposefully already owing the property, you could be prosecuted, so step with caution.

Rest are like us bro

I am certainly not. I bought my first house at a very early age, before 30 I owned it outright. That house is sadly gone few years back. I now live in the second house I bought as investment.

The house that gone, I bought it for £129,000 a hefty price at the time.
But in that area of London, that house is worth now anything between £1.6 million to £1.8 million.
Here you have it.

I now have helped my daughter to buy a house at a very young age.
I also own other properties.

 

[xyxmt]

No, they'll own multiple homes.

Take me for example, I am paying a mortgage for my own home. I could save up some money and get a loan to buy a second home using my existing home as collateral. I could also tell the bank I am buying it to rent it. The bank will lend me the money knowing that the people I rent to will likely pay the mortgage and if I can't make payment they could take the house and sell it.

Now 1 have 1 I live in, 1 I rent. In a few years after saving some more I do the same again. Using the properties I have as collateral I gain more and more. Needing only enough money per house to secure a loan.

Tbh I won't do it personally, I'm not sure I consider the income halal. Even the mortgage I have on my own home, I'm not sure is halal. There is a mix of opinions in molvi.

A lot of the older generation bought properties outright in cash when they were a lot cheaper.

Thats how it has always worked, some people are willing to go thru the troubles of buying a home and renting it, others do not want to go thru the trouble of tenants and instead start to invest in stocks. Myself being the first type in the process of converting to 2nd type. Once you have enough equity in the house (say 50%) you can start looking into buying a 2nd house for rental income and bank will give you a mortgage with eyes closed.

 

[waz]

I came across this very interesting interactive article in the Guardian about the history of UK housing and how it's come to the state it's in. Currently in many places in the UK, the average family house costs 7-8 times the average income. The model for mortgages has been re-worked to take into account HOUSEHOLD incomes, ie the incomes of two partners.

UK housing crisis: how did owning a home become unaffordable?

Buying a house is off-limits to many thanks to rising rents, pay freezes and a lack of affordable homes. But it hasn’t always been this way. What went wrong?

www.theguardian.com

I think there are lessons for Pakistan in this, as well as other developing countries. Social housing is essential in driving wealth creation and keeping money from falling into the lazy property industry. I'd love to know the experiences of social housing members from the EU have? I know Germany has a particularly good model.

Sadly it's never going to become affordable for the following reasons;

1. Massive migration to the UK. I remember Tony Blair loosening the immigration rules for everyone which resulted in a net excess of 2.9 million coming to our shores. Thereafter we had the same government give freedom of movement to nations which just joined the EU back in 2005, which ran against expert advice. We now have 5 million EU workers and their families in the UK. With such a surge, the corresponding knock on affect on rent, house prices was astronomical.

2. Failure of successive governments to build more houses. Be it Labour or Conservative they are just not interested. Old council housing stock was sold off to people who cashed in and upgraded, but never replaced. When we do have housing developments, 90% of the new builds are put up for sale at market prices which price out the vast majority of first time buyers. Social stock also makes up a tiny fraction of the new development, as everyone knows its bad for business. No one will buy next to social housing.

3. The cash cow that is the landlord/property developer. Landlords and developers by the nature of the industry they are in tend to buy more houses. This results in good levels of stamp duty. With landlords they can also receive steady steams of taxable income. Yes they have made it harder, but not by much. I know of landlords e.g. several British Pakistanis who have several hundred properties each (yes you read that right). Such people are just going from strength to strength. It's actually the single home owner who wanted another property for investment that was hit, or the one who already has one and maybe wants to expand to make two.

4. Schemes that inflate demand. Like many posters have already written, the government just seems hellbent on scheme that hike up demand e.g. help to buy. 5% deposits are not hard to put together for a couple, this feeds into pricing strategies for developers, and for those who wish to sell their homes. The demand will just keep on soaring.

5. Bricks and mortar, the safe investment. There simply isn't any investment which has such a minimised risk and yet delivers good returns. As someone stated you don't even need to make rental profit i.e. just be able to cover our repayments and bank on an appreciating asset. So therefore anyone with significant spare cash will turn to property. Savings and bonds rates are low, the markets are deemed risky, so the choice is obvious .

 

[yuba]

Sadly it's never going to become affordable for the following reasons;

1. Massive migration to the UK. I remember Tony Blair loosening the immigration rules for everyone which resulted in a net excess of 2.9 million coming to our shores. Thereafter we had the same government give freedom of movement to nations which just joined the EU back in 2005, which ran against expert advice. We now have 5 million EU workers and their families in the UK. With such a surge, the corresponding knock on affect on rent, house prices was astronomical.

2. Failure of successive governments to build more houses. Be it Labour or Conservative they are just not interested. Old council housing stock was sold off to people who cashed in and upgraded, but never replaced. When we do have housing developments, 90% of the new builds are put up for sale at market prices which price out the vast majority of first time buyers. Social stock also makes up a tiny fraction of the new development, as everyone knows its bad for business. No one will buy next to social housing.

3. The cash cow that is the landlord/property developer. Landlords and developers by the nature of the industry they are in tend to buy more houses. This results in good levels of stamp duty. With landlords they can also receive steady steams of taxable income. Yes they have made it harder, but not by much. I know of landlords e.g. several British Pakistanis who have several hundred properties each (yes you read that right). Such people are just going from strength to strength. It's actually the single home owner who wanted another property for investment that was hit, or the one who already has one and maybe wants to expand to make two.

4. Schemes that inflate demand. Like many posters have already written, the government just seems hellbent on scheme that hike up demand e.g. help to buy. 5% deposits are not hard to put together for a couple, this feeds into pricing strategies for developers, and for those who wish to sell their homes. The demand will just keep on soaring.

5. Bricks and mortar, the safe investment. There simply isn't any investment which has such a minimised risk and yet delivers good returns. As someone stated you don't even need to make rental profit i.e. just be able to cover our repayments and bank on an appreciating asset. So therefore anyone with significant spare cash will turn to property. Savings and bonds rates are low, the markets are deemed risky, so the choice is obvious .

My dad always said bricks and mortar is the best investment and got us, boys, on the housing ladder soon as he could and im grateful. Even when in the late 80s and interest rates went crazy he advised his mates to ride it out when many were struggling to pay mortgage he helped them financially to hold on to their home. Late 80s early 90s maybe can't remember exact time this from memory . He now has a few houses here two in states and does not touch his savings or pension he lives like a king back in punjab on rental income but he was also lucky that the houses were cheaper then .

 

[waz]

My dad always said bricks and mortar is the best investment and got us, boys, on the housing ladder soon as he could and im grateful. Even when in the late 80s and interest rates went crazy he advised his mates to ride it out when many were struggling to pay mortgage he helped them financially to hold on to their home. Late 80s early 90s maybe can't remember exact time this from memory . He now has a few houses here two in states and does not touch his savings or pension he lives like a king back in punjab on rental income but he was also lucky that the houses were cheaper then .

That's a great thing to have done and it's no coincidence that Pakistanis and Sikhs tend to have the highest rates of home ownership. Our families drill into us that a roof over your head is priority number one, leave the car and exotic holidays for the time being.
After the first we're told to build up.

 

[Saddam Hussein]

Wealthy russians and khaleejis bought entire London

 

[yuba]

That's a great thing to have done and it's no coincidence that Pakistanis and Sikhs tend to have the highest rates of home ownership. Our families drill into us that a roof over your head is priority number one, leave the car and exotic holidays for the time being.
After the first we're told to build up.

So true start work get a mortgage that's all you hear they start looking in the paper for home for you to buy .Cars and exotic holidays were always the excuses they gave why the Gora has no savings their words not mine . Who wants to pay a mortgage at a young age but i tell you waz so grateful to their advice.I own this house here and my home in the states we plan to pay off in next couple of years When the last mortgage payment went out of the bank and I knew this mine and no matter what I always had a roof overhead felt great. But not stopping want at least another one in this country.

 

[waz]

So true start work get a mortgage that's all you hear they start looking in the paper for home for you to buy .Cars and exotic holidays were always the excuses they gave why the Gora has no savings their words not mine . Who wants to pay a mortgage at a young age but i tell you waz so grateful to their advice.I own this house here and my home in the states we plan to pay off in next couple of years When the last mortgage payment went out of the bank and I knew this mine and no matter what I always had a roof overhead felt great. But not stopping want at least another one in this country.

Lots of my white English pals wasted their money away on women, holidays, cars etc, then found themselves meeting the financial wall in their 30's....They simply lived life each day as it came, and for them to the fullest. It's all great when you have the youth and energy of your 20's, but when the wall hits in your 30's and you also lack the strength you had in your 20's, things can turn very sour. Hence the prevalence of mid life crises's for many of them.

 

[yuba]

Lots of my white English pals wasted their money away on women, holidays, cars etc, then found themselves meeting the financial wall in their 30's....They simply lived life each day as it came, and for them to the fullest. It's all great when you have the youth and energy of your 20's, but when the wall hits in your 30's and you also lack the strength you had in your 20's, things can turn very sour. Hence the prevalence of mid life crises's for many of them.

The funny thing was the excuses some of the English of our parent's age use for the money our parents had I've heard the lot including the goverment gave us tax breaks we lived 20 to a house we were tight all sorts the list goes on. The truth is our parents worked all the hours did not waste money on things that were not needed and started a business that tied them down. Holidays were back home every so often and they saved and saved also they were sending money back home. I am 45 and my wife and kids in the states i miss them so much and truth be told i could retire in 5 years but i won't i have to think of my kids give them a headstart like my dad did to me and my brothers. That work and save ethic my parents instilled in us is the best thing and I will instill it in my kids. My mom died a few months ago and truth be told my whole world has been ripped away to not have a mother's love no more is devastating i just want to lay in bed and smoke or digest something that will takes this feeling away. Im alone here i told my wife and family i want it like that but its my mom's sister she not real sister she pakistani she be knocking on my door everyother day with uncle to give me food and check on me she even makes smaller rotis because that how we have themyesterday it was keema and my punjabi brahmin best mate stayed with me first couple of weeks i was a mess and my history of using things to alter mind scared him . Yesterday i was callled a sensitive sikh here but look at what I wrote how can i hate any community when basically they all have shown me love. Im blabering here but we losing them waz and i dont want that hope nobody would have to face this life is so. painful as the years grow

 

[waz]

The funny thing was the excuses some of the English of our parent's age use for the money our parents had I've heard the lot including the goverment gave us tax breaks we lived 20 to a house we were tight all sorts the list goes on. The truth is our parents worked all the hours did not waste money on things that were not needed and started a business that tied them down. Holidays were back home every so often and they saved and saved also they were sending money back home. I am 45 and my wife and kids in the states i miss them so much and truth be told i could retire in 5 years but i won't i have to think of my kids give them a headstart like my dad did to me and my brothers. That work and save ethic my parents instilled in us is the best thing and I will instill it in my kids. My mom died a few months ago and truth be told my whole world has been ripped away to not have a mother's love no more is devastating i just want to lay in bed and smoke or digest something that will takes this feeling away. Im alone here i told my wife and family i want it like that but its my mom's sister she not real sister she pakistani she be knocking on my door everyother day with uncle to give me food and check on me she even makes smaller rotis because that how we have themyesterday it was keema and my punjabi brahmin best mate stayed with me first couple of weeks i was a mess and my history of using things to alter mind scared him . Yesterday i was callled a sensitive sikh here but look at what I wrote how can i hate any community when basically they all have shown me love. Im blabering here but we losing them waz and i dont want that hope nobody would have to face this life is so. painful as the years grow

Very sad to hear about that brother, my prayers are with your mother Raab rest her soul, and yourself. You'll be stronger as time goes along.
I'm glad people are there to check up on you.