7 ms·

Hmmmm. Am I supposed to sympathize the guy who lives in 1M$ worth apartment and complains his 10M$ neighbors get more of everything?

notahacker 5y ago
Tbf, he's a guy that lives in what would probably be a £100k apartment in most UK cities who pays rent on the 75% of his property he doesn't own even after putting down £200k. I mean, it's not exactly the poverty line, but I can understand him not being delighted the deal includes subsidising the maintenance of facilities for the exclusive use of his wealthy neighbours.
- pc86 5y ago
  Is it common in the UK to put down large sums of money on real estate you'll never own outright? What sorts of rights does he have to sell, sublet, etc.? What sort of guarantees does he have that his rent will truly be 75% of the market rate and not just increase to 100% over time? The whole thing sounds about as financially responsible as putting a large down payment on a leased car.
  - ealexhudson 5y ago
    It's relatively new. The basic idea is to bridge the gap between rental and home ownership: you don't need as big a mortgage to buy a share of a property, and you can benefit (proportionately) from any capital gains from the increase in value of the property. In that sense it's potentially more beneficial and opens up access to the property market; in practice it seems to help push up demand and therefore prices. In recent years it has arguably been too lucrative to be a landlord which has pushed back against home ownership and pushed up values; that's changing a little bit. Shared ownership schemes are a band-aid over a more general problem.
    - bsenftner 5y ago
      That general problem being financial literacy. These sound like terrible financial deals.
    - Nursie 5y ago
      > in practice it seems to help push up demand and therefore prices All of these schemes do that, because they address the housing market from the government-preserving invariant condition of "We can't ever let the market drop, we'd be voted out in a second" So they come up with schemes and financial products to allow more people to access home ownership in some form or other without impacting property values. See also stamp-duty holidays. More or less by definition these things increase demand and push house prices up further. It's insanity. It's also massively to my benefit as a homeowner who is about to leave the UK...
    - fy20 5y ago
      It's worth mentioning the purpose is to provide low income families - there is a limit on how much your family can earn to be eligible - an opportunity to own a property that they otherwise could not afford. That limit is £80k (£90k London) which puts you well into the middle class though. There's no way someone working in a supermarket and supporting a kid on their own would ever be able to afford something like this.
  - ivanbakel 5y ago
    >Is it common in the UK to... It's not "common", but it's becoming increasingly necessary for some as prices rise far beyond what most people can afford, even on a high-interest mortgage. You're far more likely to see it in Central London than anywhere else in the UK, though. Do people want to do it? No. It's a situation forced on people by property owners and the housing market. "Financial responsibility" can't be everyone's first priority when talking about housing.
- randompwd 5y ago
  That's not the case. The only people being subsidised in any way, shape or form are the affordable housing people. FTA: > They stress that the affordable housing blocks are managed by Peabody and Optivo, which “had the option to choose which facilities they wanted to buy into for their residents”. > Spokespeople for Peabody, Optivo and L&Q all say that it is never their intention to make any community feel excluded, and that their policies do not include access to the private amenities in order to keep the service charges to a minimum.
- homonomics 5y ago
  The affordable housing units are subsidised by the wealthy neighbours.
- ryanlol 5y ago
  He’s also a guy that lives in a relatively fancy area of probably the most desirable city in the world.
  - vidarh 5y ago
    I still don't understand why anyone would want to live there. It's an area that - irrespective of price - would end up near the bottom of my list of places in London I'd consider living, alongside far more run down places.
    - notahacker 5y ago
      Anticipated price appreciation and a relatively central location. But yeah, "fancy" is really pushing the description of a district composed of council estates, building sites, an industrial-scale wholesale market and rail junctions
      - ryanlol 5y ago
        “relatively fancy” :) Embassy gardens is very fancy compared to how most Londoners live.
        vidarh 5y ago
        The buildings are fancy, but there area has no character. I'd pick a much less fancy building most other places in London over living there.
    - ryanlol 5y ago
      The prices are almost half of what they’d be on the other side of the river for comparable developments, it’s a reasonably short drive to central london.
      - vidarh 5y ago
        I'm saying I don't think living there would be worth it for half of areas on the other side of the river with some actual character. If I had the money for flats there, I'd prefer to spend it almost anywhere else in London - either somewhere smaller somewhere with more character, or something much larger further out. I can't imagine the conditions that'd make me consider living there. A lot of the developments along the river (both sides) that stretch will end up with significant modifications over the coming decades, as so many of those areas are just soulsuckingly dead and awful.
niffydroid 5y ago
I understand where you are coming from, but for me the issue is more about affordable housing. It's basically gentrification of an area and forcing poor people out. I cannot remember by law how much % of a development has to be deemed social housing, but it is generally a requirement now days since councils cannot really purchase or build properties. Now days you will not see any sort of massive council estates being built any more, which is why these developments have to have social housing. You can trace this all back to the 80s when the government privatised council housing stock and allowed people to buy their social housing. I grew up on a council estate and it can be hell, it's the same families and group of people which cause most of the issues and it comes in waves as they get rotated around the various council estates in the region. The estates are generally neglected by the council as well. Near me an ex 3 bed council house, with a dodgy raft foundation, breeze block ends and a timber frame goes for £210,000! You'd be looking at a mortgage of around £800 per month, and if renting it will cost more. You've now also got to deal with the housing benefit (from the government) changes. Before it would be straight up paid by the council or government to the property owner, recent changes means people are given the money to pay for the rent (I think you can opt in for it to go directly to landlord) which has reduced the social housing stock even more as landlords do not want deal with the payment issues. With how bad the benefit system has become and is being run, after reforms, people are often in arrears or not getting the money because the system is just borked. Poor people are very much getting priced out of areas where they live, with a lack of social housing stock available combined with a chaotic benefit system, they are very much forced out into other areas, if they they do get somewhere, then bare minimum will be done to maintain it.

notahacker 5y ago

Tbf, he's a guy that lives in what would probably be a £100k apartment in most UK cities who pays rent on the 75% of his property he doesn't own even after putting down £200k. I mean, it's not exactly the poverty line, but I can understand him not being delighted the deal includes subsidising the maintenance of facilities for the exclusive use of his wealthy neighbours.

pc86 5y ago
Is it common in the UK to put down large sums of money on real estate you'll never own outright? What sorts of rights does he have to sell, sublet, etc.? What sort of guarantees does he have that his rent will truly be 75% of the market rate and not just increase to 100% over time? The whole thing sounds about as financially responsible as putting a large down payment on a leased car.
- ealexhudson 5y ago
  It's relatively new. The basic idea is to bridge the gap between rental and home ownership: you don't need as big a mortgage to buy a share of a property, and you can benefit (proportionately) from any capital gains from the increase in value of the property. In that sense it's potentially more beneficial and opens up access to the property market; in practice it seems to help push up demand and therefore prices. In recent years it has arguably been too lucrative to be a landlord which has pushed back against home ownership and pushed up values; that's changing a little bit. Shared ownership schemes are a band-aid over a more general problem.
  - bsenftner 5y ago
    That general problem being financial literacy. These sound like terrible financial deals.
  - Nursie 5y ago
    > in practice it seems to help push up demand and therefore prices All of these schemes do that, because they address the housing market from the government-preserving invariant condition of "We can't ever let the market drop, we'd be voted out in a second" So they come up with schemes and financial products to allow more people to access home ownership in some form or other without impacting property values. See also stamp-duty holidays. More or less by definition these things increase demand and push house prices up further. It's insanity. It's also massively to my benefit as a homeowner who is about to leave the UK...
  - fy20 5y ago
    It's worth mentioning the purpose is to provide low income families - there is a limit on how much your family can earn to be eligible - an opportunity to own a property that they otherwise could not afford. That limit is £80k (£90k London) which puts you well into the middle class though. There's no way someone working in a supermarket and supporting a kid on their own would ever be able to afford something like this.
- ivanbakel 5y ago
  >Is it common in the UK to... It's not "common", but it's becoming increasingly necessary for some as prices rise far beyond what most people can afford, even on a high-interest mortgage. You're far more likely to see it in Central London than anywhere else in the UK, though. Do people want to do it? No. It's a situation forced on people by property owners and the housing market. "Financial responsibility" can't be everyone's first priority when talking about housing.
randompwd 5y ago
That's not the case. The only people being subsidised in any way, shape or form are the affordable housing people. FTA: > They stress that the affordable housing blocks are managed by Peabody and Optivo, which “had the option to choose which facilities they wanted to buy into for their residents”. > Spokespeople for Peabody, Optivo and L&Q all say that it is never their intention to make any community feel excluded, and that their policies do not include access to the private amenities in order to keep the service charges to a minimum.
homonomics 5y ago
The affordable housing units are subsidised by the wealthy neighbours.
ryanlol 5y ago
He’s also a guy that lives in a relatively fancy area of probably the most desirable city in the world.
- vidarh 5y ago
  I still don't understand why anyone would want to live there. It's an area that - irrespective of price - would end up near the bottom of my list of places in London I'd consider living, alongside far more run down places.
  - notahacker 5y ago
    Anticipated price appreciation and a relatively central location. But yeah, "fancy" is really pushing the description of a district composed of council estates, building sites, an industrial-scale wholesale market and rail junctions
    - ryanlol 5y ago
      “relatively fancy” :) Embassy gardens is very fancy compared to how most Londoners live.
      - vidarh 5y ago
        The buildings are fancy, but there area has no character. I'd pick a much less fancy building most other places in London over living there.
  - ryanlol 5y ago
    The prices are almost half of what they’d be on the other side of the river for comparable developments, it’s a reasonably short drive to central london.
    - vidarh 5y ago
      I'm saying I don't think living there would be worth it for half of areas on the other side of the river with some actual character. If I had the money for flats there, I'd prefer to spend it almost anywhere else in London - either somewhere smaller somewhere with more character, or something much larger further out. I can't imagine the conditions that'd make me consider living there. A lot of the developments along the river (both sides) that stretch will end up with significant modifications over the coming decades, as so many of those areas are just soulsuckingly dead and awful.

niffydroid 5y ago

I understand where you are coming from, but for me the issue is more about affordable housing. It's basically gentrification of an area and forcing poor people out. I cannot remember by law how much % of a development has to be deemed social housing, but it is generally a requirement now days since councils cannot really purchase or build properties. Now days you will not see any sort of massive council estates being built any more, which is why these developments have to have social housing. You can trace this all back to the 80s when the government privatised council housing stock and allowed people to buy their social housing. I grew up on a council estate and it can be hell, it's the same families and group of people which cause most of the issues and it comes in waves as they get rotated around the various council estates in the region. The estates are generally neglected by the council as well. Near me an ex 3 bed council house, with a dodgy raft foundation, breeze block ends and a timber frame goes for £210,000! You'd be looking at a mortgage of around £800 per month, and if renting it will cost more. You've now also got to deal with the housing benefit (from the government) changes. Before it would be straight up paid by the council or government to the property owner, recent changes means people are given the money to pay for the rent (I think you can opt in for it to go directly to landlord) which has reduced the social housing stock even more as landlords do not want deal with the payment issues. With how bad the benefit system has become and is being run, after reforms, people are often in arrears or not getting the money because the system is just borked. Poor people are very much getting priced out of areas where they live, with a lack of social housing stock available combined with a chaotic benefit system, they are very much forced out into other areas, if they they do get somewhere, then bare minimum will be done to maintain it.