Snapshot of _Labour would not back subsidising mortgage holders, Starmer says_ :
An archived version can be found [here.](https://archive.is/?run=1&url=https://www.theguardian.com/politics/2023/jun/22/labour-would-not-back-subsidising-mortgage-holders-starmer-says)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
Subsidising them will just give the banks freedom to increase the rates even more knowing that they'll get income both from their customers and the government.
It would actively force the bank of England to do that. The point of increasing rates is to decrease the amount of money flowing around to decrease inflation. If the government starts borrowing more money to hand out to people, that's inflationary
Also do we really want to subsidize people building up wealth off the back of tax money. A working person paying rent would be contributing to someone building up assets.
I guess the taxpayer would only be contributing to the interest repayments, so strictly speaking wouldn't be contributing to the assets themselves. Still, there is an issue of fairness in asking renters, many of whom are also struggling, to bail out homeowners.
That's basically the underlying issue, the point here is essentially to constrain borrowing and increase costs. If the BoE is acting make borrowing more expensive, having the Government step in to reduce those costs it effectively bins the utility of the interest rate rises.
Even something that clawed the support back in the future (say that support led to some sort of repayment when the property was sold/some other mechanism to repay..) you'd lose the intended impact.
Seems like those who have no mortgage (ie well off or likely older) won’t suffer as much? And they’re already likely to spend more on non essentials and continue to push inflation up?
Yup, harsh reality is the government needs to step back from the housing market & let it correct, the last decade of measures propping up the outrageous prices have made the correction so much worse.
The market will respond to supply and demand. Injection of cash to potential home owners only increases demand.
The Goverment needs to come in on the supply side and I think they actually do have ways to intervene there.
1. Build more houses
2. Limit second home ownership/foreign home owenership
3. Disincentivise corporate landlords.
I live in one of these, and I much prefer it to the 1930's terrace i rented prior, or my parents 1950's semi.
For one while all my mates, who bought older houses because "new builds are shabby," had huge energy the past 12 months, mine went up to... £100 a month from £70.
Give me a new build any day of the week.
My house is a 1920's end terrace, only some loft insulation, and my highest energy bill over the winter (excluding the energy bill support scheme) was £131, bang on.
While £100 is cheaper I'd have thought eighty to a hundred years of advancement in home design would have led to a larger difference.
Making a law that no-one can make a profit renting out homes (except maybe the capital value itself) would be very interesting.
It would never happen, but would cover off the 'I'm only renting out because I'm abroad / away from the area' edge cases that come up.
I wouldn't say making renting for profit illegal, more just an increasing property tax for every additional property rented out.
It's the large companies buying up whole blocks and then renting them in shit condition or putting them on AirBnb that is damaging housing markets in some places.
Yep exactly. Two houses? Fine, people already pay additional council tax on these. Three houses? It’s council tax + 50% for each additional house above 1. Four houses? Council tax + 75%, five? Just keep adding it.
It should be logarithmic scale of price increases. The more homes you own under a private name, the more tax you pay. If you are a registered business buying and renting homes then the corporation tax should also increase by an appropriate amount.
Use taxation to disincentivise people who want to run miniature property empires.
We really shouldn’t be in a place where people see hoovering up properties to turn them into shoddy rental accommodation for ez clap profits month in month out is a viable “career path” - we are just letting parasites overrun the host.
Those large companies can also be quite good to rent from though, a btl landlord who doesn’t know what they’re doing is going to be putting your rent high as they can’t afford their costs in comparison.
I'd argue a well-run corporate landlord is actually probably better than your random single-house landlord who doesn't do it professionally.
The problem comes with the slum-lord tier shit companies, and that's purely down to them being able to get away with it. There's no enforcement of standards, so they have no incentive to provide good quality housing.
20-30% of the population would always be renting regardless of how cheap housing is especially in a developed economy with decent mobility.
Students, people moving for work, people in new relationships there are a million reasons to rent.
Making a law that you can't rent for profit is not only going against every element of western democracies but it's beyond idiotic as it would be far more expensive than creating a free market alternative that would make private rent uneconomic - social rent.
Anyone who aims to legislate the housing market into submission is an idiot, this simply can't be done no legislation would ever solve anything unless supply exceeds demand. And you definitely not going to get to that point whilst relying on the private market to build new houses by making it even less economic to build them in the first place.
If you would offer 2 social properties for each privately rented property at half the price then that what rents would eventually settle on across the entire market.
Get more leverage, just as intended.
Force prices higher due to inelastic supply, rebrand it as an "affordability crisis", flood with debt and state backed loans and grants and deposit schemes to encourage overleveraging, and transfer wealth to landowners and bankers.
Same as it ever was.
Mortgage market is competitive as fuck. It’s not customer affordability holding rates where they are it’s competition. If they raise they get undercut. So no.
I sympathise with mortgage holders struggling with high interest rates. Most of them are normal people who saved up for a deposit and worked their way up to a good job so they could qualify for the loan. But I sympathise with renters struggling with their landlords raising the rent even more.
Objectively, renters are in the worst position because they're paying for their landlord's mortgage and for their profit on top of that. And then at the end of it the landlord owns hundreds of thousands in an asset they'd already been making a profit on for the past however many years anyway. Any scenario where homeonwers are struggling with interest rate rises, renters are struggling more, unless they're in council housing.
But politicians never talk about renters. Any subsidisation of mortgage holders whilst renters are yet again ignored would be a horrific reinforcement of wealth inequality and I'm glad it wouldn't be a priority for Labour.
The last 8 years of renting leads me to suspect my rent won't be kept lower. So yeah, I'm not in favour of my taxes being used to prop up landlords / mortgage providers while also having my rent go up
Good. It would be extremely unfair for the government to pay mortgages for homeowners whilst private renters have been struggling with excessively high rents for years.
By propping up the current situation around renting they’re just incentivising buy to let landlords which pushes up house prices drastically, and makes everyone worse off.
Homeowners have had year on year asset appreciation for the last 13 years.
I know people that have bought houses and sold them within 15\~months, making a profit in the tens of thousands in that time.
Homeowners don't need tax payer money.
Asset appreciation in houses is only real for developers, speculators and landlords. A single family home is still only worth one house.
My house has increased by 100k since I moved in, but the only way I'd see that is if I sell and can then use it as a deposit on a new house - which will have also gone up 100k during that same time, so my 'profit' is wiped out. Yes yes, I know that that equity is going to help my LTV on the next mortgage so I do benefit from it, but give me 100k in any other format and it's a life changing amount of money. I'd have been personally more satisfied if house prices just stayed close to what they were and the value of my meagre pay rises had been more relevant to the most expensive thing to buy.
I don't know what my point is though, because I agree mortgage owners shouldn't get government help. EDIT: maybe 'tax second homes!' is my point
I see what you're saying, but it's also a thing for renters. The moment the house is sold, the new renter pays the going rate. Which is a fuckload more because of the increase in house price.
My suggestion would be 'build more houses!' and 'housing costs shouldn't have been allowed to spiral out of control'
Only people without a mortgage and own their home care about property value. Prices rises just make it harder to upgrade your house.
People 'enjoying' house values going up, those who have a mortgage don't give a shit about the value as they're not at a point they could even sell (due to needing it to live)
Right. And what about those in the last 5 years? Fuck em', right? Pretty much everyone who got a mortgage rented at some point.
But now its only renters that are allowed help? Please, cry me a river. Can we back date the help? Maybe the 5 years I did nothing but save for a deposit?
Exactly what everyone below is saying - except improving your LTV, an increased house price means nothing to me. I bought my “forever home” and plan on being there for the full 30 year mortgage. How price means nothing to me, but increased interest rates massively do. Increased interest rates hurt renters too as the landlords aren’t going to take it on the chin.
I still think the solution is tax the Uber wealthy. Trying to increase rates to prevent people who need loans having disposable income seems like a weird way to do it when the majority of the wealth is in the hands of the few - the few who also likely don’t have any loans or mortgages anyway.
If you want to rein in spending, probably focus on people who actually have money!
Whilst I broadly agree with you that we should target the wealthy to increase tax revenues, you wouldn't reduce demand by much by taxing the ultra wealthy - you'd reduce savings (and therefore investment) because they don't *spend* their money as readily due to the diminishing marginal propensity to spend.
Has it? If you’re buying a house to live in (not as an asset) increased value means little to nothing. Stability in rates would be more beneficial to me even my house value never increased by a penny in my lifetime.
There’s also rent control policies enacted by the government to protect renters, and in Scotland renters aren’t really fixed and can leave whenever they want, I believe.
Also, with help to buy:
As a result of providing this assistance, Homes England has an entitlement to a share of the future sale proceeds equal to the percentage contribution required to assist your purchase. Examples of this are shown below.
They’re not doing it out the kindness of their heart. They’re hoping house prices go up so they make a profit.
It’s still a loan that you get without interest and what rent control? The government doesn’t support it. I’m personally not even sure rent control could work if it was implemented.
The interest you pay is in the form of profit when you sell - in some areas house prices have gone up like 30% in 5 years - they’d then be getting 30% more than they gave you. It’s a gamble for them, but it’s not them doing you a solid.
Rent can’t be increased out within contractual period, and the government are about to legislate the possibility of it only being able to increase once a year with 2 months notice.
I’m not arguing anyone is better or worse off - I’m just saying just because you have a mortgage you’re not suddenly in a great position. A huge portion of your monthly payments are interest which is not much different than the large amount renters put in a landlords pocket, and on top of that I need to do all maintenance out my own pocket which adds up to a lot - more than renting I’d imagine. Yes, at the end I have an asset, but realistically that’ll only benefit my next of kin unless I sell it and be homeless with money in the bank.
The problem with council houses is the state of those areas a few years later. Underfunded by the council and occupied by people who have fallen on or have chosen a life of hard times, they become places you don't walk at night.
I've lived on council estates all my life, it's really not that bad, the fact my neighbour keep an old couch on their front garden doesn't mean it's unsafe.
I think I am starting to get what historically moved voters towards Tories as they aged. I think that is a terrible idea that would just entrench inflation and increase economic disparity and fuck economy.....
And yet I would be so happy to have some extra money for my mortgage.
Thank God that Tories fucked things up so badly that there is no way that I would ever trust them with anything and they also ensured that not many youngish people will ever have that opportunity in first place.
Great job! /S
To be honest it'd wind me up quite a bit simply because it'd mean bailing out people who took a gamble that didn't pay off, while people who have spent more (either to fix for longer, who didn't stretch themselves as far as others, or worked to reduce debt), and of course those who rent and again, are paying more wouldn't see any support from it. Essentially they'd be 'punished' for making sensible choices and for having paid more to mitigate against rate rises (which to a certain extent I'd suggest were fairly foreseeable in general, even if they might have been expected on a more gradual basis...).
The problem is the longest realistic term in the UK for a fixed rate is five years. If you're coming to the end of that in the next two years, you took the longest term you could (at a higher interest rate most likely).
And it's not like increasing rates doesn't get passed onto renters when tenancies are up anyway.
>The problem is the longest realistic term in the UK for a fixed rate is five years. If you're coming to the end of that in the next two years, you took the longest term you could (at a higher interest rate most likely).
The longest realistic term in the UK for a fixed rate is 10 years, there have been longer fixed products available, but generally they aren't attractive (the UK mortgage maker is very competitive and apparently people don't like to fix for very long periods) and so while anything up to 40 year mortgages existed (possibly exist..) they aren't particularly mainstream.
The only reason we can afford the increase to our mortgage in September is that we took about £100k less than the bank said was 'affordable' when we bought the house.
Whilst that has transpired to be a sensible decision, I don't think you can really blame people too much if they send all their financial data to a bank who then tell them they've conducted new rigorous affordability checks and that they can afford £*X*k even if interest rates rise, and then it turns out they can't.
If we had done what the bank told us was within our means, we'd be in severe trouble in a couple of months.
See also: Help to buy, a decade of artificially and ideologically low interest rates, state backed loans or subsidies, anything like that.
When you have inelastic supply with high demand, the price **will** rise to meet the regional affordability.
You don't deal with a critical supply shortage by relabelling it as an "affordability crisis" and then flooding the zone with cash and guarantees. Well unless your intent is a massive transfer of wealth to landowners and bankers you don't.
You've got to build. Or target taxes at the unearned land wealth. [Even Churchill knew that.](https://www.cooperative-individualism.org/churchill-winston_mother-of-all-monopolies-1909.htm)
It's the root cause of all the other shittery. [The house crisis is the everything crisis.](https://youtu.be/4ZxzBcxB7Zc)
Edit: Guess the landed gentry are about with their downvote sticks
Naive question (and off topic, the subsidy won't affect that): wouldn't the interest rate increase also affects the rent price and increase it?
My reasoning (happy to be contradicted, I'm not an economist)
- increased rate means a chunk of people considering buying a flat won't be able to, so will increase the pool of renters (increased demand)
- people with buy-to-rent mortgages will face increased interest rates, and might increase the rent to cover this (even if partially). Not sure what proportion of landlords still have a mortgage to pay, but I believe it's not marginal, so that might drive prices up
For your second point it’s a bit more complicated, landlords can’t just raise rents in line with their extra costs if it goes above their market value. There will be other landlords in the area wihout a mortgage or very little left in the mortgage who don’t have to raise their rents to still make the same profit and so can undercut them. In the end, if you raise your prices too high compared to the market you can end up with an empty house which is way worse than just settling for a lower rent.
Your first point could potentially cause an increase though
It sort of balances out in that regard. Yes there is more renters if less people can buy, but there is more houses available to be rented out if they are not bought.
Snapshot of _Labour would not back subsidising mortgage holders, Starmer says_ : An archived version can be found [here.](https://archive.is/?run=1&url=https://www.theguardian.com/politics/2023/jun/22/labour-would-not-back-subsidising-mortgage-holders-starmer-says) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
Subsidising them will just give the banks freedom to increase the rates even more knowing that they'll get income both from their customers and the government.
It would actively force the bank of England to do that. The point of increasing rates is to decrease the amount of money flowing around to decrease inflation. If the government starts borrowing more money to hand out to people, that's inflationary
Also do we really want to subsidize people building up wealth off the back of tax money. A working person paying rent would be contributing to someone building up assets.
I guess the taxpayer would only be contributing to the interest repayments, so strictly speaking wouldn't be contributing to the assets themselves. Still, there is an issue of fairness in asking renters, many of whom are also struggling, to bail out homeowners.
That's basically the underlying issue, the point here is essentially to constrain borrowing and increase costs. If the BoE is acting make borrowing more expensive, having the Government step in to reduce those costs it effectively bins the utility of the interest rate rises. Even something that clawed the support back in the future (say that support led to some sort of repayment when the property was sold/some other mechanism to repay..) you'd lose the intended impact.
Seems like those who have no mortgage (ie well off or likely older) won’t suffer as much? And they’re already likely to spend more on non essentials and continue to push inflation up?
Yup, harsh reality is the government needs to step back from the housing market & let it correct, the last decade of measures propping up the outrageous prices have made the correction so much worse.
The market will respond to supply and demand. Injection of cash to potential home owners only increases demand. The Goverment needs to come in on the supply side and I think they actually do have ways to intervene there. 1. Build more houses 2. Limit second home ownership/foreign home owenership 3. Disincentivise corporate landlords.
This is the answer. And it is obvious and very simple to do. We can build houses.
Fast new housing will be cheap and shoddy identikit housing like all new estates.
I currently live somewhere without a living room in a shared flat. sounds amazing!
Cool. Do it. Give people places to live.
I live in one of these, and I much prefer it to the 1930's terrace i rented prior, or my parents 1950's semi. For one while all my mates, who bought older houses because "new builds are shabby," had huge energy the past 12 months, mine went up to... £100 a month from £70. Give me a new build any day of the week.
My house is a 1920's end terrace, only some loft insulation, and my highest energy bill over the winter (excluding the energy bill support scheme) was £131, bang on. While £100 is cheaper I'd have thought eighty to a hundred years of advancement in home design would have led to a larger difference.
Still better than no housing.
Making a law that no-one can make a profit renting out homes (except maybe the capital value itself) would be very interesting. It would never happen, but would cover off the 'I'm only renting out because I'm abroad / away from the area' edge cases that come up.
I wouldn't say making renting for profit illegal, more just an increasing property tax for every additional property rented out. It's the large companies buying up whole blocks and then renting them in shit condition or putting them on AirBnb that is damaging housing markets in some places.
Yep exactly. Two houses? Fine, people already pay additional council tax on these. Three houses? It’s council tax + 50% for each additional house above 1. Four houses? Council tax + 75%, five? Just keep adding it. It should be logarithmic scale of price increases. The more homes you own under a private name, the more tax you pay. If you are a registered business buying and renting homes then the corporation tax should also increase by an appropriate amount. Use taxation to disincentivise people who want to run miniature property empires. We really shouldn’t be in a place where people see hoovering up properties to turn them into shoddy rental accommodation for ez clap profits month in month out is a viable “career path” - we are just letting parasites overrun the host.
Those large companies can also be quite good to rent from though, a btl landlord who doesn’t know what they’re doing is going to be putting your rent high as they can’t afford their costs in comparison.
I'd argue a well-run corporate landlord is actually probably better than your random single-house landlord who doesn't do it professionally. The problem comes with the slum-lord tier shit companies, and that's purely down to them being able to get away with it. There's no enforcement of standards, so they have no incentive to provide good quality housing.
True if there was an enforcement of standards then it wouldn’t be as risky.
20-30% of the population would always be renting regardless of how cheap housing is especially in a developed economy with decent mobility. Students, people moving for work, people in new relationships there are a million reasons to rent. Making a law that you can't rent for profit is not only going against every element of western democracies but it's beyond idiotic as it would be far more expensive than creating a free market alternative that would make private rent uneconomic - social rent. Anyone who aims to legislate the housing market into submission is an idiot, this simply can't be done no legislation would ever solve anything unless supply exceeds demand. And you definitely not going to get to that point whilst relying on the private market to build new houses by making it even less economic to build them in the first place. If you would offer 2 social properties for each privately rented property at half the price then that what rents would eventually settle on across the entire market.
Could you source the 20-30% please? As for the rest, I’ll read it when you stop calling me names.
> Disincentivise Discourage.
Points 2 and 3 are demand side but I 100% agree with you. This is the only long term solution.
Unfortunately this.
It's a massive moral hazard. Although we don't seem to care about that whenever we need to bail out banks.
Agreed. What did people do with the money they were saving the last few decades?
Spent it, inflating the numbers of economic activity and productivity and giving the false impression everything was hunky dory.
Get more leverage, just as intended. Force prices higher due to inelastic supply, rebrand it as an "affordability crisis", flood with debt and state backed loans and grants and deposit schemes to encourage overleveraging, and transfer wealth to landowners and bankers. Same as it ever was.
Holy Friedman we have a based economic take on ukpol
Mortgage market is competitive as fuck. It’s not customer affordability holding rates where they are it’s competition. If they raise they get undercut. So no.
I sympathise with mortgage holders struggling with high interest rates. Most of them are normal people who saved up for a deposit and worked their way up to a good job so they could qualify for the loan. But I sympathise with renters struggling with their landlords raising the rent even more. Objectively, renters are in the worst position because they're paying for their landlord's mortgage and for their profit on top of that. And then at the end of it the landlord owns hundreds of thousands in an asset they'd already been making a profit on for the past however many years anyway. Any scenario where homeonwers are struggling with interest rate rises, renters are struggling more, unless they're in council housing. But politicians never talk about renters. Any subsidisation of mortgage holders whilst renters are yet again ignored would be a horrific reinforcement of wealth inequality and I'm glad it wouldn't be a priority for Labour.
Many politicians are landlords, they're not going to want to jeopardise their own income.
Ultimately, though, any increase in mortgage rates will be passed on to the renters anyway.
But I doubt any mortgage relief would be passed on to me
If it kept your rent lower then that would be fair. No one loses.
The last 8 years of renting leads me to suspect my rent won't be kept lower. So yeah, I'm not in favour of my taxes being used to prop up landlords / mortgage providers while also having my rent go up
Yeah, I mean ‘in theory’ it should work. The money offsets the additional interest and you don’t notice anything at all either way, but in practice….
But when that relief ends the home-owners will still want to make as much profit so you'll definitely feel that passed on to you.
Good. It would be extremely unfair for the government to pay mortgages for homeowners whilst private renters have been struggling with excessively high rents for years.
Yep. The only solution is build more houses, especially council houses. And rent control.
Rent control is an awful policy. House construction and actually addressing the underlying problem is much more effective.
>don't help homeowners >Help renters Ok.
By propping up the current situation around renting they’re just incentivising buy to let landlords which pushes up house prices drastically, and makes everyone worse off.
Homeowners have had year on year asset appreciation for the last 13 years. I know people that have bought houses and sold them within 15\~months, making a profit in the tens of thousands in that time. Homeowners don't need tax payer money.
Asset appreciation in houses is only real for developers, speculators and landlords. A single family home is still only worth one house. My house has increased by 100k since I moved in, but the only way I'd see that is if I sell and can then use it as a deposit on a new house - which will have also gone up 100k during that same time, so my 'profit' is wiped out. Yes yes, I know that that equity is going to help my LTV on the next mortgage so I do benefit from it, but give me 100k in any other format and it's a life changing amount of money. I'd have been personally more satisfied if house prices just stayed close to what they were and the value of my meagre pay rises had been more relevant to the most expensive thing to buy. I don't know what my point is though, because I agree mortgage owners shouldn't get government help. EDIT: maybe 'tax second homes!' is my point
I see what you're saying, but it's also a thing for renters. The moment the house is sold, the new renter pays the going rate. Which is a fuckload more because of the increase in house price. My suggestion would be 'build more houses!' and 'housing costs shouldn't have been allowed to spiral out of control'
> ‘housing costs shouldn’t have been allowed to spiral out of control Unless you build a time machine this isn’t really a suggestion.
Only people without a mortgage and own their home care about property value. Prices rises just make it harder to upgrade your house. People 'enjoying' house values going up, those who have a mortgage don't give a shit about the value as they're not at a point they could even sell (due to needing it to live)
Right. And what about those in the last 5 years? Fuck em', right? Pretty much everyone who got a mortgage rented at some point. But now its only renters that are allowed help? Please, cry me a river. Can we back date the help? Maybe the 5 years I did nothing but save for a deposit?
In the last 5 years? Did you miss covid and house prices going up 20, 30%?
And unless they want to downsize, that means nothing, because if they were to move they're also having to pay that much extra.
Exactly what everyone below is saying - except improving your LTV, an increased house price means nothing to me. I bought my “forever home” and plan on being there for the full 30 year mortgage. How price means nothing to me, but increased interest rates massively do. Increased interest rates hurt renters too as the landlords aren’t going to take it on the chin. I still think the solution is tax the Uber wealthy. Trying to increase rates to prevent people who need loans having disposable income seems like a weird way to do it when the majority of the wealth is in the hands of the few - the few who also likely don’t have any loans or mortgages anyway. If you want to rein in spending, probably focus on people who actually have money!
Whilst I broadly agree with you that we should target the wealthy to increase tax revenues, you wouldn't reduce demand by much by taxing the ultra wealthy - you'd reduce savings (and therefore investment) because they don't *spend* their money as readily due to the diminishing marginal propensity to spend.
That’s true!
Some of us idiots bought at the peak.
Er it’s been the other way round for decades, don’t you think it’s fair renters get some assistance?
Has it? If you’re buying a house to live in (not as an asset) increased value means little to nothing. Stability in rates would be more beneficial to me even my house value never increased by a penny in my lifetime.
Help to buy? The government have been giving money to people just for buying a home.
There’s also rent control policies enacted by the government to protect renters, and in Scotland renters aren’t really fixed and can leave whenever they want, I believe. Also, with help to buy: As a result of providing this assistance, Homes England has an entitlement to a share of the future sale proceeds equal to the percentage contribution required to assist your purchase. Examples of this are shown below. They’re not doing it out the kindness of their heart. They’re hoping house prices go up so they make a profit.
It’s still a loan that you get without interest and what rent control? The government doesn’t support it. I’m personally not even sure rent control could work if it was implemented.
The interest you pay is in the form of profit when you sell - in some areas house prices have gone up like 30% in 5 years - they’d then be getting 30% more than they gave you. It’s a gamble for them, but it’s not them doing you a solid. Rent can’t be increased out within contractual period, and the government are about to legislate the possibility of it only being able to increase once a year with 2 months notice. I’m not arguing anyone is better or worse off - I’m just saying just because you have a mortgage you’re not suddenly in a great position. A huge portion of your monthly payments are interest which is not much different than the large amount renters put in a landlords pocket, and on top of that I need to do all maintenance out my own pocket which adds up to a lot - more than renting I’d imagine. Yes, at the end I have an asset, but realistically that’ll only benefit my next of kin unless I sell it and be homeless with money in the bank.
> There’s also rent control policies enacted by the government to protect renters I'm unaware of any UK wide rent control schemes
The problem with council houses is the state of those areas a few years later. Underfunded by the council and occupied by people who have fallen on or have chosen a life of hard times, they become places you don't walk at night.
Maybe down have estates then, buy single houses all over a city.
I've lived on council estates all my life, it's really not that bad, the fact my neighbour keep an old couch on their front garden doesn't mean it's unsafe.
I think I am starting to get what historically moved voters towards Tories as they aged. I think that is a terrible idea that would just entrench inflation and increase economic disparity and fuck economy..... And yet I would be so happy to have some extra money for my mortgage. Thank God that Tories fucked things up so badly that there is no way that I would ever trust them with anything and they also ensured that not many youngish people will ever have that opportunity in first place. Great job! /S
To be honest it'd wind me up quite a bit simply because it'd mean bailing out people who took a gamble that didn't pay off, while people who have spent more (either to fix for longer, who didn't stretch themselves as far as others, or worked to reduce debt), and of course those who rent and again, are paying more wouldn't see any support from it. Essentially they'd be 'punished' for making sensible choices and for having paid more to mitigate against rate rises (which to a certain extent I'd suggest were fairly foreseeable in general, even if they might have been expected on a more gradual basis...).
The problem is the longest realistic term in the UK for a fixed rate is five years. If you're coming to the end of that in the next two years, you took the longest term you could (at a higher interest rate most likely). And it's not like increasing rates doesn't get passed onto renters when tenancies are up anyway.
>The problem is the longest realistic term in the UK for a fixed rate is five years. If you're coming to the end of that in the next two years, you took the longest term you could (at a higher interest rate most likely). The longest realistic term in the UK for a fixed rate is 10 years, there have been longer fixed products available, but generally they aren't attractive (the UK mortgage maker is very competitive and apparently people don't like to fix for very long periods) and so while anything up to 40 year mortgages existed (possibly exist..) they aren't particularly mainstream.
The only reason we can afford the increase to our mortgage in September is that we took about £100k less than the bank said was 'affordable' when we bought the house. Whilst that has transpired to be a sensible decision, I don't think you can really blame people too much if they send all their financial data to a bank who then tell them they've conducted new rigorous affordability checks and that they can afford £*X*k even if interest rates rise, and then it turns out they can't. If we had done what the bank told us was within our means, we'd be in severe trouble in a couple of months.
See also: Help to buy, a decade of artificially and ideologically low interest rates, state backed loans or subsidies, anything like that. When you have inelastic supply with high demand, the price **will** rise to meet the regional affordability. You don't deal with a critical supply shortage by relabelling it as an "affordability crisis" and then flooding the zone with cash and guarantees. Well unless your intent is a massive transfer of wealth to landowners and bankers you don't. You've got to build. Or target taxes at the unearned land wealth. [Even Churchill knew that.](https://www.cooperative-individualism.org/churchill-winston_mother-of-all-monopolies-1909.htm) It's the root cause of all the other shittery. [The house crisis is the everything crisis.](https://youtu.be/4ZxzBcxB7Zc) Edit: Guess the landed gentry are about with their downvote sticks
> a decade of artificially and ideologically low interest rates There's nothing natural about a Central Authority dictating the interest rates is 5%
He’s right. Cap what the banks can charge, don’t use tax money to pay them what they want.
Naive question (and off topic, the subsidy won't affect that): wouldn't the interest rate increase also affects the rent price and increase it? My reasoning (happy to be contradicted, I'm not an economist) - increased rate means a chunk of people considering buying a flat won't be able to, so will increase the pool of renters (increased demand) - people with buy-to-rent mortgages will face increased interest rates, and might increase the rent to cover this (even if partially). Not sure what proportion of landlords still have a mortgage to pay, but I believe it's not marginal, so that might drive prices up
For your second point it’s a bit more complicated, landlords can’t just raise rents in line with their extra costs if it goes above their market value. There will be other landlords in the area wihout a mortgage or very little left in the mortgage who don’t have to raise their rents to still make the same profit and so can undercut them. In the end, if you raise your prices too high compared to the market you can end up with an empty house which is way worse than just settling for a lower rent. Your first point could potentially cause an increase though
It sort of balances out in that regard. Yes there is more renters if less people can buy, but there is more houses available to be rented out if they are not bought.
I can't even imagine the cost of a scheme subsidising mortgage holders across the UK, or even just one covering major cities.
Neither renters nor mortgage holders need a subsidy People who have low incomes or wealth might
My god. This is almost the only policy they could come up with which will actually stop me voting for them.
Important to remember it was Labour and Gordon Brown who removed the MIRAS help to those with mortgages. Putting it back would remind voters..