E-Bikes: The phenomenon, The Problem.

FastFreddy2 · Jul 17, 2023

It's a sad fact of life, demand for housing in the UK, and especially in built up areas where there's a reasonable amount of employment opportunities, is unlikely to see a fall in house prices or the cost of renting. The buying/selling process may slow down, and some desperate people who HAVE to sell may reduce their selling price but otherwise prices will not reduce.

I was around in 1992 when interest rates went through the roof - in a day. From 10% to 15% ..... That day, the bosses secretary made no secret of the fact "We've lost our home" because they felt they couldn't afford the new mortgage rate. They didn't lose their home. In fact pretty soon afterwards, folk got used to an increased rate, which didn't stay at 15% anyway.

Another fact is that the UK Building Industry doesn't build enough homes for those that need them, and there is ALWAYS a standing shortfall in supply from demand. There is a fairly constant stream of newcomes arriving here too, exacerbating any previous shortfall and helping to insure the shortfall grows, year on year.

Land is in short supply, and the county where I live, green belt land is quietly being built on. I don't mean a street of 20 homes either, I mean hundreds of dwellings. There is very little property available for under £250k, and these are mostly 2 bed shoe-boxes with a patio for a garden, and overlooking by 3 or 4 other dwellings. Bedfordshire is no better. Biggleswade will have almost doubled in size in 5 years with all the new dwellings there. Are any empty? Is there any shortage of buyers? Nope.

Renting vs. buying. When I was younger, my parents moved out of private rented accomodation (from what was basically an East End slum) into a brand new NewTowns Commission home in South Herts. They never did anything other than rent from respective councils all their lives, paying for accomodation, several times over. Luckily, they enjoyed reasonably priced rents, something not currently available. There is a lot less social housing available in the 2020's. I got on the house buying ladder in 1986, and through prudent buying and selling, have only had to contend with a mortgage for 8 years. Ironically, 5 years of that with a property me nor anyone else lived in. (It was a doer upper.) I've saved an absolute fortune during the last 20+ plus years being rent and mortgage free. If ever there was a reason to get involved with property ownership, it's the freedom of financial worries when it matters most, when you get older. There's also the legacy aspect, if you are a parent. Instead of funding council pensions with your rent, the money you have in the equity of your home, can be passed onto your children.

saneagle · Jul 18, 2023

WheezyRider said:
I think house prices will drop a bit, but they will not collapse. There are too many people and too little available housing stock, so in the long run prices will go back up again.

I know at least two people, who are selling because they can't afford the mortgage repayments when their fixed rates finished. They will both end up renting. With the higher mortgage rates, the repayments have gone up by about 40% for a long mortgage. That means if someone else were to buy their house at the same price as they did and with a typical long mortgage, it'll cost them 40% more. There will be plenty of demand, but people won't be able to afford the repayments unless the house prices go down.

FastFreddy2 · Jul 18, 2023

saneagle said:
I know at least two people, who are selling because they can't afford the mortgage repayments when their fixed rates finished. They will both end up renting. With the higher mortgage rates, the repayments have gone up by about 40% for a long mortgage. That means if someone else were to buy their house at the same price as they did and with a typical long mortgage, it'll cost them 40% more. There will be plenty of demand, but people won't be able to afford the repayments unless the house prices go down.

Moving to an interest only mortgage for a couple of years, makes more sense than selling up. They must have some equity in their properties, or a spare bedroom to rent out? Hanging on to what they have, is a much better move unless they have lost their jobs.

Extending a 25 year mortgage to 35 years, is another route to keeping their property. Renting will save very little money, and then only in the short term. Unlike mortgages, rents, never-ever reduce. With so many one or two property owning landlords leaving the market, rents are going to get 'stupid high' by 2025. Government legislation on rental accommodation is pushing honest landlords out of the market, and higher interest rates on their loans for those that stay, will be moved onto tenants. A house two doors down from me, rents out at £1700 a month. Outrageous.

A mate of mine was telling me recently, how his fixed rate mortgage is going to increase significantly when his cheaper rate period ends. I drive a car I bought 13 years ago for 10k and owes me nothing. He drives a three year old 4x4 truck with a current market value of around £42k. He owes almost as much on his mortgage now, as he did when I first met him 15 years ago. He likes to drive around a big beast of a motor, with fuel consumption to match. My car costs £30 a year to tax, his will cost £300+. It's not hard to work out why I don't have a mortgage, and why he will be lucky to be paying £1500 a month to live where he does by the end of the year. My house is larger, although he lives 9 miles away in a slightly pricier town.

I'll be honest and admit when I was younger, I didn't understand how important it is for anyone's financial future, to avoid renting property if at all possible. As a single person with a regular wage, renting at that time seemed ideal, but that was back in the day when social housing (my council flat) didn't need to be rented out at almost the same cost as privately rented accomodation.

This pricing is not unique. I bed maisonette, £1100 per month for rent alone.

Furnished (it looks like) to the same standard as a 2 or 3 star hotel room. Two bedroomed properties in the same area, about £1400 per month. Family homes (3 beds) around £1600 per month. These are private lets of course. I've no idea what councils charge, but then no single person in that town would ever get a flat from them these days, unless they were a single parent.

These rental prices are what I would describe as "crippling". Without two incomes, I don't know how they would be affordable at all, and would pretty much hinder the ability of the renter to save a deposit for a mortgage.

guerney · Jul 18, 2023

soundwave said:
https://www.zoopla.co.uk/for-sale/details/65125425/?search_identifier=01edab2b-bab8-4942-9dfe-8e848e1a05d4

50/50 on planning permission tho but there is road access

IMHO getting planning permission to build a dwelling to live in, or to live on that land, is going to be extremely difficult, might even be impossible. Better when there's a house or planning permission already. Could be cheap if in a very bad state. Such land can be found - a friend bought a house with land a couple of years ago, then applied for and got planning permission to knock down the house to replace with a bigger house.

guerney · Jul 18, 2023

Homeless grandmother living in van after rent hike forced her out of flat in Kent

" Lyn Pearman, 66, was told by her landlord she was hiking her rent from £433 to £700 a month. Her housing benefit and pension wouldn't cover it, and so she was served an eviction notice. "

https://www.itv.com/news/meridian/2023-04-12/homeless-grandmother-living-in-van-after-rent-hike-forced-her-out-of-flat

Nealh · Jul 18, 2023

A lot of folks who may be struggling or borderline to pay their mortgages still want all the trappings of life, they often won't sacrifice the luxury holidays/exp cars or must have gadgets that are haemoraging monthly charges/fees.

saneagle · Jul 18, 2023

FastFreddy2 said:
Moving to an interest only mortgage for a couple of years, makes more sense than selling up. They must have some equity in their properties, or a spare bedroom to rent out? Hanging on to what they have, is a much better move unless they have lost their jobs.

Extending a 25 year mortgage to 35 years, is another route to keeping their property. Renting will save very little money, and then only in the short term. Unlike mortgages, rents, never-ever reduce. With so many one or two property owning landlords leaving the market, rents are going to get 'stupid high' by 2025. Government legislation on rental accommodation is pushing honest landlords out of the market, and higher interest rates on their loans for those that stay, will be moved onto tenants. A house two doors down from me, rents out at £1700 a month. Outrageous.

A mate of mine was telling me recently, how his fixed rate mortgage is going to increase significantly when his cheaper rate period ends. I drive a car I bought 13 years ago for 10k and owes me nothing. He drives a three year old 4x4 truck with a current market value of around £42k. He owes almost as much on his mortgage now, as he did when I first met him 15 years ago. He likes to drive around a big beast of a motor, with fuel consumption to match. My car costs £30 a year to tax, his will cost £300+. It's not hard to work out why I don't have a mortgage, and why he will be lucky to be paying £1500 a month to live where he does by the end of the year. My house is larger, although he lives 9 miles away in a slightly pricier town.

I'll be honest and admit when I was younger, I didn't understand how important it is for anyone's financial future, to avoid renting property if at all possible. As a single person with a regular wage, renting at that time seemed ideal, but that was back in the day when social housing (my council flat) didn't need to be rented out at almost the same cost as privately rented accomodation.

This pricing is not unique. I bed maisonette, £1100 per month for rent alone.

View attachment 52828

Furnished (it looks like) to the same standard as a 2 or 3 star hotel room. Two bedroomed properties in the same area, about £1400 per month. Family homes (3 beds) around £1600 per month. These are private lets of course. I've no idea what councils charge, but then no single person in that town would ever get a flat from them these days, unless they were a single parent.

These rental prices are what I would describe as "crippling". Without two incomes, I don't know how they would be affordable at all, and would pretty much hinder the ability of the renter to save a deposit for a mortgage.

I rent out 5 houses. One is 2 bedroom, the rest have three. All the rents are in the range £600 to £675 which is what houses in Telford rent for. Why are you looking ar rents for furnished houses? They're not typical of normal rents.

FastFreddy2 · Jul 18, 2023

saneagle said:
I rent out 5 houses. One is 2 bedroom, the rest have three. All the rents are in the range £600 to £675 which is what houses in Telford rent for. Why are you looking ar rents for furnished houses? They're not typical of normal rents.

I looked for renting anything. In that particular town, the one I chose was the cheapest found on the search web site. Around here, you can't rent anything for under £800 per month, unless you share with 5 others in a 6 bed HMO. I don't live in Telford, I live in a London commuter belt with a large University close by, and several large distribution centres providing unskilled work for international workers, who may or may not, also house share. (They do.) I'm not bragging when I say my home could rent out for £1700 a month unfurnished. It's what people have to pay in this area for a family home.

No single person in Hertfordshire on moderately low wages can afford to rent on their own, nor at this time, afford a mortgage either. My point was if someone is already on the ladder, they should fight tooth and nail to stay on it.

If you are financing your lets on mortgages, will you be absorbing the interest rate increases then? If you are not financing them via BTL loans, you've pretty much made my case for buying. When 2025 arrives, will you still be able to keep renting out the same properties, when the new legislation kicks in for thermal efficiency? If you need to upgrade, will you absorb the costs of these improvements, or pass them on to your tenants? These investments will have to need to be paid for, and the tenant will almost certainly be the longterm finance source.

Again responding to what I've written, how often have you reduced rents in your properties? And as the pool of private renters like yourself reduces, demand increases, and so do prices. Soon after 2025, stories like Lyn Pearman will be common place, as will be tents on river banks as mentioned previously.

saneagle · Jul 18, 2023

FastFreddy2 said:
I looked for renting anything. In that particular town, the one I chose was the cheapest found on the search web site. Around here, you can't rent anything for under £800 per month, unless you share with 5 others in a 6 bed HMO. I don't live in Telford, I live in a London commuter belt with a large University close by, and several large distribution centres providing unskilled work for international workers, who may or may not, also house share. (They do.) I'm not bragging when I say my home could rent out for £1700 a month unfurnished. It's what people have to pay in this area for a family home.

No single person in Hertfordshire on moderately low wages can afford to rent on their own, nor at this time, afford a mortgage either. My point was if someone is already on the ladder, they should fight tooth and nail to stay on it.

If you are financing your lets on mortgages, will you be absorbing the interest rate increases then? If you are not financing them via BTL loans, you've pretty much made my case for buying. When 2025 arrives, will you still be able to keep renting out the same properties, when the new legislation kicks in for thermal efficiency? If you need to upgrade, will you absorb the costs of these improvements, or pass them on to your tenants? These investments will have to need to be paid for, and the tenant will almost certainly be the longterm finance source.

Again responding to what I've written, how often have you reduced rents in your properties? And as the pool of private renters like yourself reduces, demand increases, and so do prices. Soon after 2025, stories like Lyn Pearman will be common place, as will be tents on river banks as mentioned previously.

I'm lucky and therefore so are my tenants. I don't have any loans so we can ride out the storm, but at the Landlords Assiciation meetings, the increase in loan repayments and the pressure to increase rents is nearly all they talk about. Expect rents to increase by around 20% in the next 12 months.

WheezyRider · Jul 18, 2023

FastFreddy2 said:
I looked for renting anything. In that particular town, the one I chose was the cheapest found on the search web site. Around here, you can't rent anything for under £800 per month, unless you share with 5 others in a 6 bed HMO. I don't live in Telford, I live in a London commuter belt with a large University close by, and several large distribution centres providing unskilled work for international workers, who may or may not, also house share. (They do.) I'm not bragging when I say my home could rent out for £1700 a month unfurnished. It's what people have to pay in this area for a family home.

No single person in Hertfordshire on moderately low wages can afford to rent on their own, nor at this time, afford a mortgage either. My point was if someone is already on the ladder, they should fight tooth and nail to stay on it.

If you are financing your lets on mortgages, will you be absorbing the interest rate increases then? If you are not financing them via BTL loans, you've pretty much made my case for buying. When 2025 arrives, will you still be able to keep renting out the same properties, when the new legislation kicks in for thermal efficiency? If you need to upgrade, will you absorb the costs of these improvements, or pass them on to your tenants? These investments will have to need to be paid for, and the tenant will almost certainly be the longterm finance source.

Again responding to what I've written, how often have you reduced rents in your properties? And as the pool of private renters like yourself reduces, demand increases, and so do prices. Soon after 2025, stories like Lyn Pearman will be common place, as will be tents on river banks as mentioned previously.

When I last lived in London the only place I could get was over £600 per month for a single room in a HMO in Zone 2, not including bills and that was over 10 years ago. I dread to think what it is now.

AndyBike · Jul 18, 2023

Just looking at the next door neighbour to Mumsies house which was recently up for sale at offers over- £350K+. Terraced road(Mum is the end with the huge garden and an extension).£350K+ for a mid terrace.
Sold in 2014 for £202,000, so thats a fair old jump in 9 years.

Nice part of Glasgow, seem to be doing well and no real degradation of prices.

flecc · Jul 18, 2023

At 24 years old in 1961 I bought the 3 bedroom bungalow below for my parents to live in FoC. Large garden, 108 foot frontage with detached garage just out of photo on the right. Near Dunstable Downs:

£2650

Today, offers in excess of £395,000

FastFreddy2 · Jul 19, 2023

saneagle said:
..... but at the Landlords Association meetings, the increase in loan repayments and the pressure to increase rents is nearly all they talk about. Expect rents to increase by around 20% in the next 12 months.

I rest my case ......

If private landlords increase rents, it opens the door to councils asking for increases to keep their rents 'competitive' to the market. Typically with newer dwellings, that is 80% of the private/association rent charging rates. From April 2023, councils were allowed to increase rents by (up to) 7%. There was no limit set on the increase in service charges if they made any. (Typically lighting or warden services in flats or managed housing for the elderly for example.)

And even more bad news is in the way. The government has decided it doesn't want 'little landlords' to build their own own pension pots with BTL's, because sometimes, the income is invisible. If it's invisible, it doesn't produce any tax revenue. The government prefers big housing associations that are too large to hide their income, hence the increasingly onerous legislation tilted towards private landlords.

I watched the first 10 minutes of this YT broadcast

which provided some interesting statistics. ...... Renters, and rentees, are in for a rough couple of years.

StuartsProjects · Jul 27, 2023

Cadence said:
I'm tempted to get a 250w. sticker off ebay, but not really sure if I want to deliberately devious.

Have your own printed, these 37mm diameter ones below cost £2.40 delivered;

Plenty of spares.

lenny · Jul 28, 2023

FastFreddy2 · Jul 28, 2023

lenny said:

Of course, investing in stocks and shares can be more profitable than investing in property. Those that know what they are doing, can also make more profitable investments at a race track or a casino too.

There are nearly always better returns, where risk is greater. Should a family man/woman with a regular job (steady but national average income) use that income for essentially gambling on the stocks and share markets? Well yes, if they have the skills to manage the risk. Do most people have that?

There is enough time, during a 25 year mortgage period, to ride any market downturns and still accumulate a profit. Not so, when share markets crash and billions are wiped off investment portfolios over night. Higher returns, come at higher risk. I have always been told, don't gamble with money you can't afford to lose. Home vs. investments? Personally, I'm not a gambler. Been to a casino once, because I wanted to see the inside of one. (Was disappointing.) Never been to a racetrack, and only once I have entered a bookies, where I met a friend before we went off elsewhere. Never placed a bet my entire life.

I know too many people who have paid more in rent for the last (say) 25 years, than I have in mortgage repayments. In fact they have paid significantly more in rent during the last 35 years, than I have in mortgage payments. They have no assets, I own a house outright in the London commuter belt. I am what might be called a 'plodder' investor, and have enjoyed minimum risk with a moderately good return. Not paid a penny in rent since 1986. Probably made my last mortgage payment 12 years later. (Which was my second property with a gap inbetween where I stayed with my parents for a while, and then a couple of girlfriends.) I was in the right place at the right time to make good purchases. Minimal risk.

E-Bikes: The phenomenon, The Problem.

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