4 ms·

crowd out the market Which market? To a pretty good approximation, most people live in exactly one property. If they own more, they rent out the surplus. (Plea

by mafribe 10y ago

crowd out the market Which market? To a pretty good approximation, most people live in exactly one property. If they own more, they rent out the surplus. (Please don't What-About-XYZ me with exceptional cases like billionaires who own multiple properties and let them stand empty. Yes, that happens, but is marginal.) So the owner/renter fraction doesn't as such directly change the amount of available property. push up prices Rental prices are largely determined by two three things: (1) salary levels of the tenants, (2) what fraction of their salary tenants are willing to spend on their dwelling, and (3) supply/demand of housing. I doubt (1, 2) have changed all that much. The main problem in London is (3) because a lot more people moved to London that new housing was built. Neither have all that much to do with buying vs renting.

Nursie 10y ago
>> So the owner/renter fraction doesn't as such directly change the amount of available property. It changes the prices of properties. When existing owners have much easier access to cheap credit than potential owner-occupiers, they compete with these folks and push prices up. There is more demand to purchase. Not more demand for properties to live in, but more demand to purchase. First time and young buyers get priced out. >> Rental prices I wasn't talking about rental prices, I was talking about purchase prices. The result is that instead of younger people paying a mortgage and gaining an asset over time, they are doing that for someone else.
- mafribe 10y ago
  young buyers get priced out It's good that younger people can't easily buy property. They have a substantially higher risk of financial irresponsibility. As dwellings are pretty much the biggest financial investment we make in our lifetimes, care is warrented. Dwellings should be purchased only by those who are very likely to be able to afford this -- even in the event of unplanned and costly life events like illness, children, the dwelling needing costly and unexpected repair etc. That's why stable job with good career prospects, married with children, being able to afford substantial deposit, being older, are good heuristics for who should by property. Giving a mortgage to everyone encourages financial rectlessness, which lead to the financial crisis of 2007–2008.
  - Nursie 10y ago
    >> It's good that younger people can't easily buy property. No, it's not, and it's not even to the owner-occupier's benefit that the market inflates so much. >> Dwellings should be purchased only by those who are very likely to be able to afford this Young people can afford this, who the hell do you think is paying the buy-to-let mortgage crowd's mortgage? The fecking fairies? >> That's why stable job with good career prospects, married with children, being able to afford substantial deposit, being older, are good heuristics for who should by property. They're good heuristics for who should already have property, and already have a substantial sum paid down. Something unachievable if people cannot get started in their 20s. >> Giving a mortgage to everyone encourages financial rectlessness, which lead to the financial crisis of 2007–2008. I'm not advocating giving a mortgage to everyone, I'm advocating giving out fewer mortgages to those who wish to buy more homes - they're effectively leveraging cheap mortgages to get someone else to buy them a huge asset, and at the same time making that asset further out of reach for the person who is really paying for it.
    - mafribe 10y ago
      who the hell do you think is paying Typically a collection of ever changing tenants, few of whom are in the position to manage, or even interested in managing a long-term investment like a dwelling. should already have property Why? What's wrong with renting? As I said in a previous post, Chancellor Merkel in Germany rents. I'm advocating giving out fewer mortgages I'm advocating building enough dwellings, not doctoring with symptoms like restriction on mortgages, rent control, draconian building codes, zoning laws and the like. I find it supremely baffling that the obvious solution seems to be deeply unpopular.
      - Nursie 10y ago
        >> Typically a collection of ever changing tenants, few of whom are in the position to manage, or even interested in managing a long-term investment like a dwelling This is less frequently the case in the UK, as the inflated market keeps people renting for longer. >> Why? What's wrong with renting? A lot, if that's not where you want to be, and have seen the market mutate in the space of a few years from somewhere that was inclusive for most people earning a decent wage, to something reserved for few, or those who already have property. >> I'm advocating building enough dwellings, Good luck with that. Restriction of mortgage is not "doctoring the symptoms" when easing up on certain mortgage categories has been a major cause. I haven't mentioned those other methods, I have no opinion on them.

by mafribe 10y ago

Nursie 10y ago

>> So the owner/renter fraction doesn't as such directly change the amount of available property. It changes the prices of properties. When existing owners have much easier access to cheap credit than potential owner-occupiers, they compete with these folks and push prices up. There is more demand to purchase. Not more demand for properties to live in, but more demand to purchase. First time and young buyers get priced out. >> Rental prices I wasn't talking about rental prices, I was talking about purchase prices. The result is that instead of younger people paying a mortgage and gaining an asset over time, they are doing that for someone else.

mafribe 10y ago
young buyers get priced out It's good that younger people can't easily buy property. They have a substantially higher risk of financial irresponsibility. As dwellings are pretty much the biggest financial investment we make in our lifetimes, care is warrented. Dwellings should be purchased only by those who are very likely to be able to afford this -- even in the event of unplanned and costly life events like illness, children, the dwelling needing costly and unexpected repair etc. That's why stable job with good career prospects, married with children, being able to afford substantial deposit, being older, are good heuristics for who should by property. Giving a mortgage to everyone encourages financial rectlessness, which lead to the financial crisis of 2007–2008.
- Nursie 10y ago
  >> It's good that younger people can't easily buy property. No, it's not, and it's not even to the owner-occupier's benefit that the market inflates so much. >> Dwellings should be purchased only by those who are very likely to be able to afford this Young people can afford this, who the hell do you think is paying the buy-to-let mortgage crowd's mortgage? The fecking fairies? >> That's why stable job with good career prospects, married with children, being able to afford substantial deposit, being older, are good heuristics for who should by property. They're good heuristics for who should already have property, and already have a substantial sum paid down. Something unachievable if people cannot get started in their 20s. >> Giving a mortgage to everyone encourages financial rectlessness, which lead to the financial crisis of 2007–2008. I'm not advocating giving a mortgage to everyone, I'm advocating giving out fewer mortgages to those who wish to buy more homes - they're effectively leveraging cheap mortgages to get someone else to buy them a huge asset, and at the same time making that asset further out of reach for the person who is really paying for it.
  - mafribe 10y ago
    who the hell do you think is paying Typically a collection of ever changing tenants, few of whom are in the position to manage, or even interested in managing a long-term investment like a dwelling. should already have property Why? What's wrong with renting? As I said in a previous post, Chancellor Merkel in Germany rents. I'm advocating giving out fewer mortgages I'm advocating building enough dwellings, not doctoring with symptoms like restriction on mortgages, rent control, draconian building codes, zoning laws and the like. I find it supremely baffling that the obvious solution seems to be deeply unpopular.
    - Nursie 10y ago
      >> Typically a collection of ever changing tenants, few of whom are in the position to manage, or even interested in managing a long-term investment like a dwelling This is less frequently the case in the UK, as the inflated market keeps people renting for longer. >> Why? What's wrong with renting? A lot, if that's not where you want to be, and have seen the market mutate in the space of a few years from somewhere that was inclusive for most people earning a decent wage, to something reserved for few, or those who already have property. >> I'm advocating building enough dwellings, Good luck with that. Restriction of mortgage is not "doctoring the symptoms" when easing up on certain mortgage categories has been a major cause. I haven't mentioned those other methods, I have no opinion on them.