The economic impact of Covid-19

[Davkaus]

The government gave us an insight in to what they consider affordable when they launched the Help To Buy ISA.

Affordable was deemed up to £250,000, or up to £450,000 in London.

If that's what they consider to be affordable, it tells a bit of a story as to whom they expect to be buying homes, doesn't it.

[Demitri_C]

18 hours ago, chrisp65 said:

 

It really really isn’t in everyone’s interests that house prices stay high. How is that in our kid’s interest?

It’s in your interest, currently, due to the way the system is currently contrived. But if the system changed once as you mention, why can’t it be changed again, to protect you against a change in loan to value?

  

 

I actually agree with you Chris  (first time for something eh)

Its in no ones interest for house prices tk stay high. Even if you sell your house for a lot of money your still paying more for another property.  Unless of course your downsizing moving cheaper  area or just wait for a recession.

But it benefits no one having high house prices. Jusf means more debt for most and higher mortgages tahg take longer to pay back.

[cheltenham_villa]

8 hours ago, Sam-AVFC said:

It's nice in principle but doesn't really work in the way it's implemented. You'll have councils and housing associations buying way overpriced property that is considered 'affordable' because it's 20% below the average price in a development. 

It also doesn't really allow for scalable development either. I just think integration is better and it really helps with the stigma of social housing that I know I experienced growing up. Councils should be setting the price, they allow the planning, make it conditional. You can only build if you build x houses and sign them over. They need to be built to an agreed standard and the cost is a fixed percentage of the average sale price. That way houses will have to be at market value and you will pay a lower price.

 

[cheltenham_villa]

2 hours ago, Demitri_C said:

I actually agree with you Chris  (first time for something eh)

Its in no ones interest for house prices tk stay high. Even if you sell your house for a lot of money your still paying more for another property.  Unless of course your downsizing moving cheaper  area or just wait for a recession.

But it benefits no one having high house prices. Jusf means more debt for most and higher mortgages tahg take longer to pay back.

Maybe it's the wrong argument, house prices are high, we cant really change that without screening over a lot of people.

It's less the benefit of high prices, more the impact of a house price crash.

[cheltenham_villa]

10 hours ago, snowychap said:

That's a problem. The stigma that comes with it is largely imposed from the outside even when it's repeated by those who live in it.

Another problem is Housing Associations. So many of them are amalgamating that they're becoming huge landlords covering a wide geographical area with a huge portfolio of properties being run as though the HA is a super (private but not for their own profit) landlord rather than as a social good. This is by design and not by accident, I fear.

I agree with you that more integrated areas are better (just as a general idea - though they often just shove the 'stigma' in people's faces, for example see some of the places with two entrances and play areas fenced off) but the government's recent planning proposals will see that further eroded, surely? And this is on the back of their attacks on section 106 obligations that go back to the days of the coalition.

HV's point (from the report) is interesting about whether supply would sort out prices but one would assume it's the only way to address the demand.

I'm not sure, for many of the reasons already discussed (including some of the things that you've rightly pointed out), that a government, certainly of a blue hue but probably a red one as well, could afford to be the ones holding the parcel if/when any ill effects from addressing all of the issues relating to housing were to hit the wider economy. I think we're in a situation where policy can't address it and that the only way government(s) could be forced in to actually doing what they obviously don't want to go near is if a catastrophe such as an implosion in the housing market were to force them to do something. The pretty catastrophic situation for the rest of people, i.e. those in need of social housing/affordable housing and the vast majority of those seeking to 'get on the housing ladder', is obviously not enough to get them to do anything other than tinker or use the situation to try and benefit their own vested interests (for which read donors or faithful).

 

One of the huge catastrophes you talk of could hit us soon. The maturity of interest only mortgages. A material amount of these are due to expire and many of these residents do not have the capital to repay the mortgage and will be forced into sales.

Without government intervention, this will likely see an increase in repossessions or sales below Market value. This could cause some of the house price crash that many are asking for, it comes with victims though. Unfortunately those victims are most likely to be close to retirement age with with a below average income where they believe an interest only mortgage was their best opportunity of owning a house.

[Davkaus]

If you took out an interest only mortage over a 25 year term and didn't start saving to actually pay it off, "victim" isn't necessarily the word I'd use. 

[Xela]

27 minutes ago, Davkaus said:

If you took out an interest only mortage over a 25 year term and didn't start saving to actually pay it off, "victim" isn't necessarily the word I'd use. 

Foolish is the only word to describe it. 

If they purchased the house 25 years ago then it'll have probably tripled/quadrupled in value by now anyway. Thinking of my folks old house - purchased in 93 at £60k, sold in '18 at £260k for a typical midlands semi-detached. I guess the option for them would be to sell and downsize. 

[Xela]

46 minutes ago, cheltenham_villa said:

Without government intervention, this will likely see an increase in repossessions or sales below Market value. T

Why should the Government intervene? 

[chrisp65]

56 minutes ago, cheltenham_villa said:

It also doesn't really allow for scalable development either. I just think integration is better and it really helps with the stigma of social housing that I know I experienced growing up. Councils should be setting the price, they allow the planning, make it conditional. You can only build if you build x houses and sign them over. They need to be built to an agreed standard and the cost is a fixed percentage of the average sale price. That way houses will have to be at market value and you will pay a lower price.

 

You’ve mentioned the stigma of social housing twice now. I don’t know where you live, if it’s a Midlands thing maybe? 

I grew up in a council house on a council estate, I don’t recall any stigma? Perhaps I was just too immersed to realise or a bit too thick skinned. I just don’t get this stigma thing. Is it something internal, or have you been victimised in some way?

Not a trap, genuinely interested.

 

 

[Genie]

32 minutes ago, chrisp65 said:

I grew up in a council house on a council estate, I don’t recall any stigma? Perhaps I was just too immersed to realise or a bit too thick skinned. I just don’t get this stigma thing. Is it something internal, or have you been victimised in some way?

Me too, and I had a brilliant childhood too. We weren’t poor, I didn’t have free school dinners and my parents didn’t get any benefits as far as I am aware but I lived most of my childhood on a council estate and didn’t feel any kind of stigma.

This is my old council estate, look at all that space. Fields for football, hide and seek etc. They don’t make them like this any more.

 

[Delphinho123]

I’m in the process of buying a house now and the stamp duty cut is making it even harder because prices are just insane and everyone is moving.

I don’t know if y’all agree, but it feels like a false economy to me right now. I genuinely think in 7 months time, when another 5 million people are unemployed and stamp duty is back, the overall cost of me buying a house will be lower as this ‘mini-boom’ will have ended. 

Looking for advice really. I like the idea of avoiding 10-15k in stamp duty but honestly, bog standard 4 beds in decent places are going for 425-500k whereas 6 months ago these were around the 400k mark. 

Everything is just so weird right now. 

[Genie]

I definitely think it’s a fake discount. I have rightmove alerts setup from years ago when I was looking to move and I can see the real-time inflation. My in laws have their house on the market and said there’s no way we’re going to offer anything off the price because they’re saving on the stamp duty whereas before they were willing to negotiate.

I mentioned the other week that the house builders building houses by me immediately put the £489k k houses up to £505k... taking the £15k stamp duty “saving” for themselves. 

[cheltenham_villa]

52 minutes ago, chrisp65 said:

You’ve mentioned the stigma of social housing twice now. I don’t know where you live, if it’s a Midlands thing maybe? 

I grew up in a council house on a council estate, I don’t recall any stigma? Perhaps I was just too immersed to realise or a bit too thick skinned. I just don’t get this stigma thing. Is it something internal, or have you been victimised in some way?

Not a trap, genuinely interested.

 

 

I live close to Cheltenham but grew up close to the Midlands. Mentioned twice but in the same conversation  and context, I dont want you to think I spend my days worrying about it

It is something I feel quite strongly about and is probably something that I've been more aware and reflected on recently.

Growing up I was very aware of how poor my family were. For school meals I was made to stand in a particular queue, when my parents coildnt afford school trips I was made to work alone (often feeling punished as a result). I hid where I lived as I knew my mainly middle class friends and their parents would feel intimidated. 

I think I now look for it and when you look for something you see it more. I'm now incredibly middle class, career in banking, a shame to my roots (and probably VT) but as a result I see it more. 

Young lads who cant find a place in a football team because of their families or the street they live in.

More recently a very strongly performing c of e school in Cheltenham repointed their catchment area to exclude a council estate 50 yards from their front door.

So now I try to stop people experiencing the same, I'm a school governor and take a strong interest in those from socially deprive homes. I'm a football coach and will do all I can to make sure children that want to play can play, if their parents cant afford subs, shin pads or boots I make sure the kids have them but arent made to feel like second class citizens.

I should also add that I loved my upbringing, very similar, huge estates, so many friends, football games for hours. 

Edited August 24, 2020 by cheltenham_villa

[cheltenham_villa]

1 hour ago, Davkaus said:

If you took out an interest only mortage over a 25 year term and didn't start saving to actually pay it off, "victim" isn't necessarily the word I'd use. 

Is that the society we live in? 

Would you expect headline A to be "banks quite rightly repossess homes of people who didnt honour the terms of their mortgage" 

Or 

Headline B "banks in latest mis selling saga, thousands risk losing their homes because they were encouraged to take risky interest only mortgages"

We live in a compensation culture.

[HanoiVillan]

14 minutes ago, cheltenham_villa said:

I live close to Cheltenham but grew up close to the Midlands. Mentioned twice but in the same conversation  and context, I dont want you to think I spend my days worrying about it

It is something I feel quite strongly about and is probably something that I've been more aware and reflected on recently.

Growing up I was very aware of how poor my family were. For school meals I was made to stand in a particular queue, when my parents coildnt afford school trips I was made to work alone (often feeling punished as a result). I hid where I lived as I knew my mainly middle class friends and their parents would feel intimidated. 

I think I now look for it and when you look for something you see it more. I'm now incredibly middle class, career in banking, a shame to my roots (and probably VT) but as a result I see it more. 

Young lads who cant find a place in a football team because of their families or the street they live in.

More recently a very strongly performing c of e school in Cheltenham repointed their catchment area to exclude a council estate 50 yards from their front door.

So now I try to stop people experiencing the same, I'm a school governor and take a strong interest in those from socially deprive homes. I'm a football coach and will do all I can to make sure children that want to play can play, if their parents cant afford subs, shin pads or boots I make sure the kids have them but arent made to feel like second class citizens.

I should also add that I loved my upbringing, very similar, huge estates, so many friends, football games for hours. 

(Love the post but) if you live near Cheltenham you still live in the Midlands IMO!

[cheltenham_villa]

1 minute ago, HanoiVillan said:

(Love the post but) if you live near Cheltenham you still live in the Midlands IMO!

Thank you, for my villa supporting alligiences I claim to be from the Midlands, when selling my house I'm all about the south west.

[HanoiVillan]

Just now, cheltenham_villa said:

Thank you, for my villa supporting alligiences I claim to be from the Midlands, when selling my house I'm all about the south west.

Yes, round there you can parlay it both ways. I've always considered Gloucester to be in the Midlands but Stroud to be in the south west. Maybe controversial.

[chrisp65]

28 minutes ago, cheltenham_villa said:

I should also add that I loved my upbringing, very similar, huge estates, so many friends, football games for hours. 

Everyone where I lived was pretty much in the same boat, it was pretty much Comp before I even realised other people had a very different background and then College before I really had any friends that weren’t like me.

We buddied up with a guy from a really posh family out in the Vale, all became mates. He wanted us over his house in St Hilary for a party, but his mum said no because she was worried we would steal all the cutlery.

Months later when we were still mates, a couple of us did have permission to visit his big house.

So we knicked all the **** spoons we could find. He had to ask for them all back on the Monday in college. In fairness I think everyone got the joke.

 

 

[Demitri_C]

47 minutes ago, Delphinho123 said:

I’m in the process of buying a house now and the stamp duty cut is making it even harder because prices are just insane and everyone is moving.

I don’t know if y’all agree, but it feels like a false economy to me right now. I genuinely think in 7 months time, when another 5 million people are unemployed and stamp duty is back, the overall cost of me buying a house will be lower as this ‘mini-boom’ will have ended. 

Looking for advice really. I like the idea of avoiding 10-15k in stamp duty but honestly, bog standard 4 beds in decent places are going for 425-500k whereas 6 months ago these were around the 400k mark. 

Everything is just so weird right now. 

Ye it isnt helping its just oeeping prices high. I a tually think april onwards may  be better time to buy due to the stamp duty ending and sellers being more willing to negotiate.

Sellers are not knocking like they were nefore. I luckily put a offer in about 4 weeks before the stamp duty announcement was made so i got about 28k off the asking price as had been on there since feb.

But the problem im having is this tenant leaving we my missus house cant  buy it unless her place sells so might have to pull out. Grrrrr

[cheltenham_villa]

1 minute ago, chrisp65 said:

Everyone where I lived was pretty much in the same boat, it was pretty much Comp before I even realised other people had a very different background and then College before I really had any friends that weren’t like me.

We buddied up with a guy from a really posh family out in the Vale, all became mates. He wanted us over his house in St Hilary for a party, but his mum said no because she was worried we would steal all the cutlery.

Months later when we were still mates, a couple of us did have permission to visit his big house.

So we knicked all the **** spoons we could find. He had to ask for them all back on the Monday in college. In fairness I think everyone got the joke.

 

 

I remember the first time I went to visit my friends, my mum was insistent i took sandwiches so they wouldnt think we were poor. She also gave me my dads lunchbox as it was the only one that wasnt an ice cream tub