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Why are Brits so obsessed with buying their own homes?

51 points by fat-chunk 11y ago

theinternetman 11y ago
As a brit born a few years too late for this to be a sensible possibility at all I'm sick and tired of the social pressure from every angle telling me I'm not a real adult until I have a mortgage.
- outside1234 11y ago
  Your response to that should be: "you are not a responsible adult until you are debt free." That is actually one of the secrets to a lower stress longer lasting life IMO.
  - grecy 11y ago
    Relevant: http://i.imgur.com/eIM5o.jpg http://i.imgur.com/eIM5o.jpg
    - jacquesm 11y ago
      The moral of that cartoon is that we should all become beggars I guess. It's a funny way to represent it, but there is one person missing from that cartoon. The person that refuses to go into debt, saves until they have the money to spend on whatever it is they want to buy. Another useful addition would be someone with a mortgage that they actually pay off on, their net worth would likely dwarf the net worth of the beggar.
      - s_kilk 11y ago
        > The person that refuses to go into debt, saves until they have the money to spend on whatever it is they want to buy. Bingo. Never been in debt and glad of it.
      - moonchrome 11y ago
        >It's a funny way to represent it, but there is one person missing from that cartoon. The person that refuses to go into debt, saves until they have the money to spend on whatever it is they want to buy. There's another person missing from that picture - a person who has debt and has positive net worth. Honestly debt is not a boogeyman, it can be very enabling and given the current economic situation, interest rates and economic outlook people saving are going to end up on the losing side in the long run.
        oneeyedpigeon 11y ago
        It looks to me as if several people in that cartoon have debt but a positive net worth.
        moonchrome 11y ago
        Yeah true (and the point actually) I was responding to OP who was talking net worth and got confused I just bunched all those people in comic into negative net worth :D
      - justincormack 11y ago
        Yeah, in the UK average house price inflation has been above average total incomes a lot of the time, people simply cant save up to buy houses.
      - grecy 11y ago
        > The person that refuses to go into debt, saves until they have the money to spend on whatever it is they want to buy That's me! > Another useful addition would be someone with a mortgage that they actually pay off on, their net worth would likely dwarf the net worth of the beggar And they're so old their body has given up and they spend their days sitting in front of the TV, thinking about all the things they wish they did in their life.
        jacquesm 11y ago
        > And they're so old their body has given up and they spend their days sitting in front of the TV, thinking about all the things they wish they did in their life. That is very much not necessarily true.
    - akavi 11y ago
      Really only works if you willfully ignore the notion of "non-cash assets".
  - psaintla 11y ago
    You're not a responsible adult until you recognize debt is a tool. You can use the tool well or poorly but it is just a tool.
    - branchless 11y ago
      And when private banks provide near-unlimited debt the total cost of the average mortgage will consume all income after paying for food/heating/fuel. And if we get more productive disposable income will go up and that will feed into land prices. All the rentier need do is wait. edit: would love to hear the counter to this from whomever downvoted me - it's a fact that with our system productivity improvements flow into land prices therefore speculating on land sees you capture these gains.
      - psaintla 11y ago
        I didn't down vote you but here is the flaw. Rent typically trends upward with property values which eats away at a tenants ability to save. This is particularly true in markets like NYC, SF, LDN and HK where people are paying over 50% of their paycheck to rent.
  - ape4 11y ago
    There is a stress in renting too. You never know if your landlord might want to change things resulting in a request for you to move out. eg he wants relatives to have the apartment, etc.
    - avn2109 11y ago
      This is less of an issue if your landlord is a giant faceless soulless holding company that operates many real estate businesses. Though such landlords have their own problems.
    - horv 11y ago
      This is something that is definitely overlooked in these discussions. I'm in the US, not living in SF or NYC but in a city growing fairly rapidly and closing on a house in a few weeks. I know that my mortgage won't increase (property taxes excluded), and I don't have to worry about a landlord deciding he wants to redevelop the property or just raising the rent enough that I'm forced to move - both of which are happening with regularity in my area. I don't think home ownership is a decision to be made lightly and I disagree with the idea presented in the article that it should be done to make money, but there are definitely numerous benefits and the idea of a mortgage being somehow evil just because it's debt is extreme. As another commenter mentioned, debt is a tool which can be used poorly or wisely.
    - Mikeb85 11y ago
      No landlord would want their family renting the place in lieu of real tenants. Real tenants pay, on time. Family likes to take advantage of you (ie. they find excuses to pay less or not at all).
      - dpark 11y ago
        Family is a convenient way to push out tenants in many cities, though. Even cities with strong tenant protections often have exceptions for evicting tenants in order to allow family members to occupy the rental.
  - Nullabillity 11y ago
    Renting is just another form of debt, though.
    - icebraining 11y ago
      How so?
      - moron4hire 11y ago
        You have a future obligation to fulfill and are contractually bound to it for a set period of time.
        icebraining 11y ago
        Well, at least around here, after the first six months, you never have an obligation beyond one month (you must give two months notice, but since you must usually pay two months in advance at the start, you don't pay the last).
      - rconti 11y ago
        It would be like renting clothes. Yes, you could stop renting them at any time, but... you don't really have an alternative.
    - spdustin 11y ago
      It's an expense, not a debt. It's like an operating expense, versus a mortgage, which is more like a capital expense amortized over a number of years. I have no issue with mortgages entered into by people who understand how to live within their means. There are lenders who prey on those who don't truly understand what their means are, sure, but that doesn't make the whole enterprise of home ownership a faulty one. And before anyone nitpicks: yes, you do own the house you buy with a mortgage. It's security for the loan, and the mortgage gives the banks the right to take the property away from you to settle your debt. On well negotiated loans used to purchase property smartly, it can actually be an investment. One that may not pay as much as an index fun after 30 years, but in the meantime, you've had a place to live. I would also suggest that many (not most, just many) people without a mortgage are unmarried and/or not parents. There is an intangible benefit to "setting down roots" and "making a home of memories" with a family. I, personally, have found that to be invaluable.
  - dfraser992 11y ago
    I recently bought a flat - my only real debt is the mortgage. There is a psychological shift - I was in London for 7 years and thought I'd rent forever. But it bugged me to be pissing away 1300 a month to a landlord... and it was never big enough. And London is its own headache. The shift for me at least has to do with 'settling down'. I bought this current flat (outside of London) primarily as an investment (gentrification is already happening here) and so the much lower "rent"/mortgage (than even renting in this city) is an upside. I wish I'd bought in King's Cross 10 years ago, but that's how life goes. But I do get the social pressure to "own". Under 30s these days are screwed. I always thought London was overpriced, but it kept going up and up and up... At some point, the bubble will burst, but the Tories don't care about the future for anyone but themselves at all. As an aside, my friend just finished off his <$100 quid a month mortgage he got in the 80s and his two up-two down is easily worth 200K now. I think he paid like 50K overall?
    - banku_brougham 11y ago
      A Seattleite here, I know someone who bought a townhouse near Dollis Hills station on Jubilee line. £750K. Seemed like an eye-watering amount for a crummy looking neighborhood. What am I missing?
  - bphogan 11y ago
    Responsible adults manage debt. In my opinion it's a sign of immaturity to exclude funding sources available to you to accomplish goals. If the goal is starting a business, borrowing money to do so helps you get to market. If you have employees working for you and you cannot make payroll because profits were poor as you start, borrowing money to make payroll keeps you afloat. On a personal level, buying a house might be more than you care to take on. But with a mortgage, you can certainly predict what your payments will be for the next 10, 15, or 30 years. And it can be renegotiated when interest rates drop. Understanding this is what makes people responsible adults. What makes them irresponsible is buying things on a whim on credit and carrying large credit card balances. That is indeed a great way to ensure a stressful life.
    - kmonsen 11y ago
      The tax rules also favors mortgage debt substantially.
abritinthebay 11y ago
As a Brit in the US I don't feel the pressure is much different here. It's a little resigned and accepting that in a big city you can't afford it, but it's still expected that eventually you'll move to the suburbs and have a home. That's not surprising though as owning a home is generally about two things: financial responsibility and stability (obviously desirable), and actually owning the place that you live. "A place to call your own". Now we debate if that last one is actually useful but it's not hard to understand it. At this point it's a cultural force too. Also understandable.
- lkrubner 11y ago
  > but it's still expected that eventually > you'll move to the suburbs and have a home. That might be true for the whites, but I don't think that expectation exists for the blacks or hispanics or Koreans or Chinese or basically anyone. I've known affluent Koreans who dream of eventually being wealthy enough to buy apartment buildings, but I don't know any who want to move to the suburbs.
  - abritinthebay 11y ago
    Sure, the suburbs was probably a bad general example (though a majority one). However most minorities that I know still have a house or condo in their plans. Wherever the location the desire is real
- dfraser992 11y ago
  When I was growing up in the US, suburbs were "the thing". I have read (sorry, can't remember where - the Atlantic?) they are becoming less that, due to social changes and increasing population density in the cities. So the projection is that the suburbs in the future will become almost slums as the poor migrate - the housing slump in Florida is one data point.
  - ghaff 11y ago
    There are a lot of generalities and anecdata thrown around in these sorts of demographic discussions. Certainly "white flight" has generally reversed and there's a fair bit of gentrification going on in formerly rundown areas of certain cities. However, the "millennials are all moving to cities" meme seems to be much overstated. e.g. from fivethirtyeight [1] "Millennials overall, therefore, are not increasingly living in urban neighborhoods. Rather, the most educated one-third of young adults are increasingly likely to live in the densest urban neighborhoods. That’s great news for cities trying to attract young graduates and a sign that urban neighborhoods have become more desirable for those who can afford them. But the presence of more smart young things in Brooklyn is not evidence that millennials are a more urban generation." I don't know much about Florida is particular. Anecdotally, I'd say that the cliche of retiring to Florida doesn't seem to apply to just about anyone I know. If anything, they're retiring to the desert Southwest if they're seeking a warm climate. [1] http://fivethirtyeight.com/features/why-millennials-are-less-urban-than-you-think/ http://fivethirtyeight.com/features/why-millennials-are-less...
toredash 11y ago
Same situation in Norway. But the tax incentives are so many that if you can you should buy, from an economic perspective. of course there is risks. And if mobility / freedom is weighing more than money, maybe you shouldn't buy?
- ra1n85 11y ago
  I find mobility to be a valuable asset. That may be a byproduct of working in the technology industry.
  - spdustin 11y ago
    I work in the technical industry. A "founder", even. I've been in the same house for 14 years. Owned my business a bit longer than that.
    - ra1n85 11y ago
      What area?
      - spdustin 11y ago
        Chicago suburbs.
CM30 11y ago
An Englishman's home is his castle? Maybe it's simply that owning a home lets you do more with than renting one. You can add extensions, remodel much of it, potentially demolish the entire thing and rebuild it, that sort of thing.
- nextos 11y ago
  Actually, as someone renting several flats in the UK during the last few years I'm still shocked by the lack of rights I have as a tenant. For example, landlords can enter your property by only giving you a 24-hour notice in writing. I have had real state companies entering my flat without prior notice to show it to potential new tenants several times. Other countries in the EU would take these incidents very seriously. And I'm talking about expensive flats (>$2000 / month) and reputable companies, so I imagine it can get much worse.
  - cstross 11y ago
    Those landlords are breaking the law (and the terms of your tenancy) and I believe you can file a report with the police that will get them into very hot water with their local council -- potentially fined and booted off the register of landlords (which means it'd be an offense for them to let any flats out at all). Source: my sister is a landlord.
    - lambada 11y ago
      And then after doing that you're left without a flat and have to find yet another one, with another landlord or agency who will likely do exactly the same
    - eterm 11y ago
      England doesn't have a register of landlords, anyone can let out property.
      - semanticist 11y ago
        Scotland does: https://www.landlordregistrationscotland.gov.uk https://www.landlordregistrationscotland.gov.uk
elcct 11y ago
That article just tells that France is more fascist than the UK and their government arbitrarily decided that their people are too dumb to manage their finances.
- oneeyedpigeon 11y ago
  Authoritarian != fascist
  - elcct 11y ago
    Social engineering is an element of fascism.
JumpCrisscross 11y ago
> My parents rented the family home in Paris for 45 years, and although they did buy a seaside flat and a cottage in the country in the 1970s, their value has only kept pace with inflation American home prices only started rising, in real terms, after WWII [1]. This is driven by people wanting to drive more income to buying land, i.e. treating land as a superior good. Growing government intervention is also a cause. In the long-run, real house prices appreciate at the rate of inflation. This effect is stable across countries, cultures, and centuries [2]. It vanishes in the short term amidst the noise of credit markets. Can't find the source at the moment, but the most fascinating study on the subject looks at asset prices in Austria-Hungary and surrounding states. The story is uncomfortably familiar. Decade after decade, credit-fuelled gains were safeguarded in the form of development restrictions. This served to transfer wealth to the landed elites. [1] https://www.dallasfed.org/assets/documents/institute/wpapers/2014/0208.pdf https://www.dallasfed.org/assets/documents/institute/wpapers... [2] http://www.amazon.com/Houses-Historical-Analysis-Property-Prices/dp/1907994017 http://www.amazon.com/Houses-Historical-Analysis-Property-Pr...
- Mikeb85 11y ago
  > In the long-run, real house prices appreciate at the rate of inflation. Some one should tell this to Canadians. Since the early-mid 2000s, house prices have been rising much quicker than inflation, to the point where people think homes are an 'investment' that will always rise, leading to a massive housing bubble (also propped up by foreign buyers, many of whom are using land to launder money gained through corruption, and Canadian banks/government just look the other way) and also unaffordable housing for young prospective buyers and tenants.
  - goalieca 11y ago
    I'm really concerned. Take a look at Vancouver. http://m.realtor.ca/PropertyDetails.aspx?PropertyId=16209292 http://m.realtor.ca/PropertyDetails.aspx?PropertyId=16209292 The thing to remember about that city is that incomes are pretty low (unlike sv)
  - branchless 11y ago
nickpsecurity 11y ago
This could be rephrased as, "Why aren't Brits happy to be landowner's serfs or banker's future target?" Then, it's so ridiculous that it doesn't merit an answer. If they need help, there's tons of people from 2008 onward that can tell them all about the risk of the alternative.
oneeyedpigeon 11y ago
A: because renting is so expensive. We have no rent caps in this country, so it's actually cheaper to pay off a mortgage than it is to rent. Plus you actually get to keep that money rather than having it line the pockets of a landlord. Plus house prices are increasing at a much higher rate than inflation. So it's a triple win. I had to rent for almost 20/years before I could afford the deposit on a house, but I'm glad I finally could because I simply couldn't afford to rent any longer, even though I would've quite liked to.
- hackerboos 11y ago
  Renting is also extremely unstable in the UK. Most tenancy agreements are 6-12 months and you can be turfed out after the term with no reason whatsoever. Landlords are also allowed to increase rents as much as they like between tenants. Contrast this with Germany's system - http://www.telegraph.co.uk/expat/expatlife/11417359/Germany-the-country-where-renting-is-a-dream.html http://www.telegraph.co.uk/expat/expatlife/11417359/Germany-... Estate agents are also a huge problem. They charge the landlord and the tenant to put an agreement together. Tenants are charged every renewal - sometimes £200 for what is essentially a piece of paper.
- J-dawg 11y ago
  Although there are plenty of other factors, this is basically the answer. Every time a friend has bought a house (and none of them have done it without being loaned the deposit by their parents), they have reported that the mortgage payments are a few hundred pounds cheaper than the equivalent rent. This will continue to be true as long as interest rates stay near zero.
djsumdog 11y ago
Debt: The First 5000 Years Read it. All of this and so much more is explained within. The history of money, credit, coin, slavery...they're all related. It's a life changing book.
Al-Khwarizmi 11y ago
The old Catholic distrust of money and profits permeates our view. This is probably why generations of French people, my family included, have never fantasised about owning their home. We didn’t have to. It didn’t make any sense and wasn’t an ambition in life. Spain is also a Catholic country and everyone has always wanted to own a home, as in the UK. Lately there are more rented flats but the reason is sky-high house prices and low income, not that people like renting.
nnutter 11y ago
I've always thought the point of owning a home is so that you have a place to live that is paid off when you retire. From what I've seen renting usually costs more than the mortgage + property taxes + insurance; of course there are still maintenance costs which are more ambiguous. But a large portion (~50%) of my "mortgage payment" is going into equity instead of going into a landlord's equity. If I wanted to rent and save enough to be able to rent during retirement (or to save enough to be able to buy my retirement home at retirement age) then I would have to be spending significantly more per month until retirement. Going into debt by taking a mortgage is a trade-off that makes sense to me given low interest rate and no depreciation in value (hopefully appreciation). Edit: This is a US perspective but we've had the same question posed here. Edit: The article's title is misleading. It conflates buying a home with irresponsible use of debt.
deleted 11y ago
[deleted]
shhudson 11y ago
For some reason this is a really popular topic to drag up on a slow news day in the UK. The facts are that UK own-home ownership is actually quite average compared to other European countries and others around the world. Wikipedia has a helpful table [1] about this topic. The UK ranks 37th lowest out the 46 countries included. France is nearly the same. Germany and Austria are the only two large European countries that are lower. [1] https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate https://en.wikipedia.org/wiki/List_of_countries_by_home_owne...
- oneeyedpigeon 11y ago
  It's also interesting to note that, contrary to the tone in the original article, those countries near the top of the list are hardly paragons of capitalism.
scholia 11y ago
It makes sense to buy a house because, over the long term, the value of houses goes up while the value of money goes down. Even better, the real cost of mortgage payments keeps going down (thanks to inflation) while the real cost of rents keeps rising. My house would now rent for around 3x my mortgage payments, except I paid off the mortgage more than a decade ago so my rent is zero. There's always a chance house prices could collapse, but that's unlikely in the UK. First, it's a small island with a rising population so there is real demand, mainly in the south of England. Second, it's seen as a "safe haven" so foreigners are buying houses in the UK -- new developments are actively marketed in China, Singapore etc. Third, if you buy a house and rent part or all of it out, the tenants will pay the mortgage for you, and they really have no choice. Governments supporting a "property-owning democracy" (a Conservative Party ideal) have made it harder to rent by selling off social housing, removing rent controls, giving tax allowances on mortgages etc. Historically, on average, buying a house has been a one-way bet in the UK for around 50 years. It seems pretty much insane to imagine that this will always be true, but it has been true for my entire lifetime.
- lewiscollard 11y ago
  > over the long term, the value of houses goes up while the value of money goes down That which cannot go on forever, won't. > There's always a chance house prices could collapse, but that's unlikely in the UK. The population in Britain was 58.95 million in 2000 and is currently 64.04 million.[1] In the same time house prices have risen by an average of 153%.[2] It's reasonable to subtract baseline inflation from that at 55%[3], in which you STILL end up with a 98% increase. And I'm not ignoring the silliness in London; nearly every region of the UK has seen near-doublings of house prices since 2000, with a population increase of about five percent. Simple supply and demand dynamics are not at work here. > It seems pretty much insane to imagine that this will always be true Yes, it certainly does. I'm sure there was a crisis not so long ago where lots of people were betting on house prices continuing to go up for the foreseeable future which didn't end too well. Maybe, just maybe, the problem is too many people thinking of housing as an investment? [1] http://www.worldometers.info/world-population/uk-population/ http://www.worldometers.info/world-population/uk-population/ [2] http://www.nationwide.co.uk/about/house-price-index/house-price-calculator http://www.nationwide.co.uk/about/house-price-index/house-pr... [3] http://www.thisismoney.co.uk/money/bills/article-1633409/Historic-inflation-calculator-value-money-changed-1900.html http://www.thisismoney.co.uk/money/bills/article-1633409/His...
_puk 11y ago
The UK has historically been a society where the poor majority worked the land and rented from a few wealthy landowners. [0] This builds a psyche whereby to own land becomes a social status. Bring into that heady mix the likes of Maggie Thatcher's "right to buy" [1] scheme, whereby the lesser class (council house residents) are in a position to buy their homes at a fraction of their apparent worth, and suddenly you need to own your house or be seen to be less than those that do. Then a new generation comes along and sees that their parents "foolishly" sold off a couple of houses years ago that would now have been worth a mint, and everyone must buy a house else be caught out like their parents. Buy to let then brings in the mentality of "why would you give money to someone else to pay off their mortgage when you could be paying off your own?" and everyone must buy as early as possible. Pure conjecture on my part. 0: https://en.wikipedia.org/wiki/Social_structure_of_the_United_Kingdom#History https://en.wikipedia.org/wiki/Social_structure_of_the_United... 1: https://en.wikipedia.org/wiki/Right_to_Buy https://en.wikipedia.org/wiki/Right_to_Buy
- SixSigma 11y ago
  You also got rent-for-life arrangements at not unreasonable cost
jamescun 11y ago
For me, wanting to buy is not about an investment. I want somewhere secure and stable to live. The "dead money" aspect of rent versus a mortgage is just a bonus. It must seem alien to most in the west the sheer lack of protection renters have in England (property law is devolved); it is based entirely in private contracts, and what law does exist is rarely if ever enforced. Just last week Parliament rejected an amendment requiring all rented property be "fit for human habitation". Rent rises are not capped and often used to evict tenants, the legal minimum notice for eviction is two weeks (this does not increase with time rented), the landlord is required to carry out repairs but notifying them of such can be grounds for eviction. These may be the extremes of renting in England; however you can ask any renter about being charged outrageous contract fees, referencing fees and being screwed over on leaving over the deposit and "cleaning fees" (even when the property is left in a professionally cleaned state). There is little-to-no repeat custom in renting so they get away with it. Little movement has come from either of the two main parties (Labour & Conservatives) to improve this, thus to have stable accommodation you have to look to buying.
- themartorana 11y ago
  It does seem odd to me (in the US). Renting here is not without risk and slum lords and rising rents, but there is a minimum expectation of consumer protection, much in the same way there is with most transactions. Either way, if you care to live anywhere near a city, housing prices are astronomical. We make a decent living, my wife and I, but still don't have what it takes to buy a two bedroom apartment in one of the cheaper cities in the country. We've been house poor before, and I'd rather not be again. I mean I get it - fixed mortgage means in 10-15 years my mortgage may be less than rent of something similar, but that's a long time to be house poor.
  - teamonkey 11y ago
    > in 10-15 years In many parts of the UK it's closer to 5-10 years. Which is great if you can afford the high price of entry. Also great if you can afford a buy-to-let mortgage, because it means you can be profitable within a much shorter time, while containing the supply of purchasable housing and raising the average rental price...
rconti 11y ago
As an American, this is hilarious to read, given how high British mortgage rates are compared to those in the US, and how home ownership is so often considered to be "the American dream". Also, the brits I know (who do not live in London) aren't so cutthroat about money. Again, I think they'd accuse Americans of being that way. But this may be true of Londoners.
stegosaurus 11y ago
So there's food, water, and shelter. You can get by as a vagabond without a stable source of these - but let's assume that particular lifestyle doesn't appeal (I've tried it. Fun for a while.). You can work, for an amount sufficient to subsist - and nothing more. A lifetime of work. You can be independently wealthy. Not much to say there. Let's say we're between 2 and 3. How do you get towards 3, if you're in 2? Realistic options, no lottery wins here. Well, you can save some of your income. Maybe that'll be enough, and maybe you'll eventually have enough to be able to rent until there's no more you. You can try to improve your income. To do that, it helps if you're mentally fit. Having a table at home to eat at; having a computer setup if you're a remote worker; a nice bookshelf; whatever. Things help. It's hard to work for years on years in material discomfort to build a retirement fund. So you own some of these things, and you rent. Every so often, perhaps every year, all of that Stuff gets bundled up. Boxed away; sent in transit. You remove shelves; buff up floors; repaint walls. Then you sit and wait for the bill from the landlord. Bugger, that's a hefty deduction. Next time, you'll be a bit smarter, I suppose. You won't drill that hole in the wall. You won't pester about the broken washing machine. The cycle continues. Maybe you alternate material discomfort. Eventually, though, you're probably going to get tired of it. Because fundamentally, you're doing all of this not because you want to, but because you have to - you can't rely on the landlord to provide you with stability. What next?
adblocker9877 11y ago
Sponsored by: Lloyds Bank An article sponsored by a bank trying to persuade you to get a mortgage. How original!
mgiannopoulos 11y ago
So how do we explain this? - Home ownership rates 37 United Kingdom 64.6 38 United States 64.5 39 France 64.3 Source https://en.m.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate https://en.m.wikipedia.org/wiki/List_of_countries_by_home_ow...
hestefisk 11y ago
From an Australian perspective, this is an interesting read. I live in Sydney where houses are so unaffordable that it is cheaper to rent. Protection for landlords and tenants is pretty good and balanced, and in times where nutcases would gladly spend in excess of 60% of their monthly net income on a mortgage, I would rather wait and see until the market has settled. Analysts say the market is about to burst and that, for first time in history, it is considered more feasible to rent as opposed to buying and selling the property 30 years later (the NPV would be less than if I kept the money in a high interest savings account). Property is all the craze here, but soon the average Aussie will wake up with a huge financial hangover.
banku_brougham 11y ago
Can't pick just one comment to respond to. Short version: y'all are bonkers. Assuming that home prices can only go up is harmless when that mortgage is manageable. But holding on through several business cycles is problematic when debt service is a high proportion of income. If you miss a few payments you'll learn that you never really owned the home. Again, the harmless part I mentioned applies to many places but certainly not London.

51 points by fat-chunk 11y ago

As a brit born a few years too late for this to be a sensible possibility at all I'm sick and tired of the social pressure from every angle telling me I'm not a real adult until I have a mortgage.

outside1234 11y ago
Your response to that should be: "you are not a responsible adult until you are debt free." That is actually one of the secrets to a lower stress longer lasting life IMO.
- grecy 11y ago
  Relevant: http://i.imgur.com/eIM5o.jpg http://i.imgur.com/eIM5o.jpg
  - jacquesm 11y ago
    The moral of that cartoon is that we should all become beggars I guess. It's a funny way to represent it, but there is one person missing from that cartoon. The person that refuses to go into debt, saves until they have the money to spend on whatever it is they want to buy. Another useful addition would be someone with a mortgage that they actually pay off on, their net worth would likely dwarf the net worth of the beggar.
    - s_kilk 11y ago
      > The person that refuses to go into debt, saves until they have the money to spend on whatever it is they want to buy. Bingo. Never been in debt and glad of it.
    - moonchrome 11y ago
      >It's a funny way to represent it, but there is one person missing from that cartoon. The person that refuses to go into debt, saves until they have the money to spend on whatever it is they want to buy. There's another person missing from that picture - a person who has debt and has positive net worth. Honestly debt is not a boogeyman, it can be very enabling and given the current economic situation, interest rates and economic outlook people saving are going to end up on the losing side in the long run.
      - oneeyedpigeon 11y ago
        It looks to me as if several people in that cartoon have debt but a positive net worth.
        moonchrome 11y ago
        Yeah true (and the point actually) I was responding to OP who was talking net worth and got confused I just bunched all those people in comic into negative net worth :D
    - justincormack 11y ago
      Yeah, in the UK average house price inflation has been above average total incomes a lot of the time, people simply cant save up to buy houses.
    - grecy 11y ago
      > The person that refuses to go into debt, saves until they have the money to spend on whatever it is they want to buy That's me! > Another useful addition would be someone with a mortgage that they actually pay off on, their net worth would likely dwarf the net worth of the beggar And they're so old their body has given up and they spend their days sitting in front of the TV, thinking about all the things they wish they did in their life.
      - jacquesm 11y ago
        > And they're so old their body has given up and they spend their days sitting in front of the TV, thinking about all the things they wish they did in their life. That is very much not necessarily true.
  - akavi 11y ago
    Really only works if you willfully ignore the notion of "non-cash assets".
- psaintla 11y ago
  You're not a responsible adult until you recognize debt is a tool. You can use the tool well or poorly but it is just a tool.
  - branchless 11y ago
    And when private banks provide near-unlimited debt the total cost of the average mortgage will consume all income after paying for food/heating/fuel. And if we get more productive disposable income will go up and that will feed into land prices. All the rentier need do is wait. edit: would love to hear the counter to this from whomever downvoted me - it's a fact that with our system productivity improvements flow into land prices therefore speculating on land sees you capture these gains.
    - psaintla 11y ago
      I didn't down vote you but here is the flaw. Rent typically trends upward with property values which eats away at a tenants ability to save. This is particularly true in markets like NYC, SF, LDN and HK where people are paying over 50% of their paycheck to rent.
- ape4 11y ago
  There is a stress in renting too. You never know if your landlord might want to change things resulting in a request for you to move out. eg he wants relatives to have the apartment, etc.
  - avn2109 11y ago
    This is less of an issue if your landlord is a giant faceless soulless holding company that operates many real estate businesses. Though such landlords have their own problems.
  - horv 11y ago
    This is something that is definitely overlooked in these discussions. I'm in the US, not living in SF or NYC but in a city growing fairly rapidly and closing on a house in a few weeks. I know that my mortgage won't increase (property taxes excluded), and I don't have to worry about a landlord deciding he wants to redevelop the property or just raising the rent enough that I'm forced to move - both of which are happening with regularity in my area. I don't think home ownership is a decision to be made lightly and I disagree with the idea presented in the article that it should be done to make money, but there are definitely numerous benefits and the idea of a mortgage being somehow evil just because it's debt is extreme. As another commenter mentioned, debt is a tool which can be used poorly or wisely.
  - Mikeb85 11y ago
    No landlord would want their family renting the place in lieu of real tenants. Real tenants pay, on time. Family likes to take advantage of you (ie. they find excuses to pay less or not at all).
    - dpark 11y ago
      Family is a convenient way to push out tenants in many cities, though. Even cities with strong tenant protections often have exceptions for evicting tenants in order to allow family members to occupy the rental.
- Nullabillity 11y ago
  Renting is just another form of debt, though.
  - icebraining 11y ago
    How so?
    - moron4hire 11y ago
      You have a future obligation to fulfill and are contractually bound to it for a set period of time.
      - icebraining 11y ago
        Well, at least around here, after the first six months, you never have an obligation beyond one month (you must give two months notice, but since you must usually pay two months in advance at the start, you don't pay the last).
    - rconti 11y ago
      It would be like renting clothes. Yes, you could stop renting them at any time, but... you don't really have an alternative.
  - spdustin 11y ago
    It's an expense, not a debt. It's like an operating expense, versus a mortgage, which is more like a capital expense amortized over a number of years. I have no issue with mortgages entered into by people who understand how to live within their means. There are lenders who prey on those who don't truly understand what their means are, sure, but that doesn't make the whole enterprise of home ownership a faulty one. And before anyone nitpicks: yes, you do own the house you buy with a mortgage. It's security for the loan, and the mortgage gives the banks the right to take the property away from you to settle your debt. On well negotiated loans used to purchase property smartly, it can actually be an investment. One that may not pay as much as an index fun after 30 years, but in the meantime, you've had a place to live. I would also suggest that many (not most, just many) people without a mortgage are unmarried and/or not parents. There is an intangible benefit to "setting down roots" and "making a home of memories" with a family. I, personally, have found that to be invaluable.
- dfraser992 11y ago
  I recently bought a flat - my only real debt is the mortgage. There is a psychological shift - I was in London for 7 years and thought I'd rent forever. But it bugged me to be pissing away 1300 a month to a landlord... and it was never big enough. And London is its own headache. The shift for me at least has to do with 'settling down'. I bought this current flat (outside of London) primarily as an investment (gentrification is already happening here) and so the much lower "rent"/mortgage (than even renting in this city) is an upside. I wish I'd bought in King's Cross 10 years ago, but that's how life goes. But I do get the social pressure to "own". Under 30s these days are screwed. I always thought London was overpriced, but it kept going up and up and up... At some point, the bubble will burst, but the Tories don't care about the future for anyone but themselves at all. As an aside, my friend just finished off his <$100 quid a month mortgage he got in the 80s and his two up-two down is easily worth 200K now. I think he paid like 50K overall?
  - banku_brougham 11y ago
    A Seattleite here, I know someone who bought a townhouse near Dollis Hills station on Jubilee line. £750K. Seemed like an eye-watering amount for a crummy looking neighborhood. What am I missing?
- bphogan 11y ago
  Responsible adults manage debt. In my opinion it's a sign of immaturity to exclude funding sources available to you to accomplish goals. If the goal is starting a business, borrowing money to do so helps you get to market. If you have employees working for you and you cannot make payroll because profits were poor as you start, borrowing money to make payroll keeps you afloat. On a personal level, buying a house might be more than you care to take on. But with a mortgage, you can certainly predict what your payments will be for the next 10, 15, or 30 years. And it can be renegotiated when interest rates drop. Understanding this is what makes people responsible adults. What makes them irresponsible is buying things on a whim on credit and carrying large credit card balances. That is indeed a great way to ensure a stressful life.
  - kmonsen 11y ago
    The tax rules also favors mortgage debt substantially.

abritinthebay 11y ago

As a Brit in the US I don't feel the pressure is much different here. It's a little resigned and accepting that in a big city you can't afford it, but it's still expected that eventually you'll move to the suburbs and have a home. That's not surprising though as owning a home is generally about two things: financial responsibility and stability (obviously desirable), and actually owning the place that you live. "A place to call your own". Now we debate if that last one is actually useful but it's not hard to understand it. At this point it's a cultural force too. Also understandable.

lkrubner 11y ago
> but it's still expected that eventually > you'll move to the suburbs and have a home. That might be true for the whites, but I don't think that expectation exists for the blacks or hispanics or Koreans or Chinese or basically anyone. I've known affluent Koreans who dream of eventually being wealthy enough to buy apartment buildings, but I don't know any who want to move to the suburbs.
- abritinthebay 11y ago
  Sure, the suburbs was probably a bad general example (though a majority one). However most minorities that I know still have a house or condo in their plans. Wherever the location the desire is real
dfraser992 11y ago
When I was growing up in the US, suburbs were "the thing". I have read (sorry, can't remember where - the Atlantic?) they are becoming less that, due to social changes and increasing population density in the cities. So the projection is that the suburbs in the future will become almost slums as the poor migrate - the housing slump in Florida is one data point.
- ghaff 11y ago
  There are a lot of generalities and anecdata thrown around in these sorts of demographic discussions. Certainly "white flight" has generally reversed and there's a fair bit of gentrification going on in formerly rundown areas of certain cities. However, the "millennials are all moving to cities" meme seems to be much overstated. e.g. from fivethirtyeight [1] "Millennials overall, therefore, are not increasingly living in urban neighborhoods. Rather, the most educated one-third of young adults are increasingly likely to live in the densest urban neighborhoods. That’s great news for cities trying to attract young graduates and a sign that urban neighborhoods have become more desirable for those who can afford them. But the presence of more smart young things in Brooklyn is not evidence that millennials are a more urban generation." I don't know much about Florida is particular. Anecdotally, I'd say that the cliche of retiring to Florida doesn't seem to apply to just about anyone I know. If anything, they're retiring to the desert Southwest if they're seeking a warm climate. [1] http://fivethirtyeight.com/features/why-millennials-are-less-urban-than-you-think/ http://fivethirtyeight.com/features/why-millennials-are-less...

toredash 11y ago

Same situation in Norway. But the tax incentives are so many that if you can you should buy, from an economic perspective. of course there is risks. And if mobility / freedom is weighing more than money, maybe you shouldn't buy?

ra1n85 11y ago
I find mobility to be a valuable asset. That may be a byproduct of working in the technology industry.
- spdustin 11y ago
  I work in the technical industry. A "founder", even. I've been in the same house for 14 years. Owned my business a bit longer than that.
  - ra1n85 11y ago
    What area?
    - spdustin 11y ago
      Chicago suburbs.

CM30 11y ago

An Englishman's home is his castle? Maybe it's simply that owning a home lets you do more with than renting one. You can add extensions, remodel much of it, potentially demolish the entire thing and rebuild it, that sort of thing.

nextos 11y ago
Actually, as someone renting several flats in the UK during the last few years I'm still shocked by the lack of rights I have as a tenant. For example, landlords can enter your property by only giving you a 24-hour notice in writing. I have had real state companies entering my flat without prior notice to show it to potential new tenants several times. Other countries in the EU would take these incidents very seriously. And I'm talking about expensive flats (>$2000 / month) and reputable companies, so I imagine it can get much worse.
- cstross 11y ago
  Those landlords are breaking the law (and the terms of your tenancy) and I believe you can file a report with the police that will get them into very hot water with their local council -- potentially fined and booted off the register of landlords (which means it'd be an offense for them to let any flats out at all). Source: my sister is a landlord.
  - lambada 11y ago
    And then after doing that you're left without a flat and have to find yet another one, with another landlord or agency who will likely do exactly the same
  - eterm 11y ago
    England doesn't have a register of landlords, anyone can let out property.
    - semanticist 11y ago
      Scotland does: https://www.landlordregistrationscotland.gov.uk https://www.landlordregistrationscotland.gov.uk

elcct 11y ago

That article just tells that France is more fascist than the UK and their government arbitrarily decided that their people are too dumb to manage their finances.

oneeyedpigeon 11y ago
Authoritarian != fascist
- elcct 11y ago
  Social engineering is an element of fascism.

JumpCrisscross 11y ago

> My parents rented the family home in Paris for 45 years, and although they did buy a seaside flat and a cottage in the country in the 1970s, their value has only kept pace with inflation American home prices only started rising, in real terms, after WWII [1]. This is driven by people wanting to drive more income to buying land, i.e. treating land as a superior good. Growing government intervention is also a cause. In the long-run, real house prices appreciate at the rate of inflation. This effect is stable across countries, cultures, and centuries [2]. It vanishes in the short term amidst the noise of credit markets. Can't find the source at the moment, but the most fascinating study on the subject looks at asset prices in Austria-Hungary and surrounding states. The story is uncomfortably familiar. Decade after decade, credit-fuelled gains were safeguarded in the form of development restrictions. This served to transfer wealth to the landed elites. [1] https://www.dallasfed.org/assets/documents/institute/wpapers/2014/0208.pdf https://www.dallasfed.org/assets/documents/institute/wpapers... [2] http://www.amazon.com/Houses-Historical-Analysis-Property-Prices/dp/1907994017 http://www.amazon.com/Houses-Historical-Analysis-Property-Pr...

Mikeb85 11y ago
> In the long-run, real house prices appreciate at the rate of inflation. Some one should tell this to Canadians. Since the early-mid 2000s, house prices have been rising much quicker than inflation, to the point where people think homes are an 'investment' that will always rise, leading to a massive housing bubble (also propped up by foreign buyers, many of whom are using land to launder money gained through corruption, and Canadian banks/government just look the other way) and also unaffordable housing for young prospective buyers and tenants.
- goalieca 11y ago
  I'm really concerned. Take a look at Vancouver. http://m.realtor.ca/PropertyDetails.aspx?PropertyId=16209292 http://m.realtor.ca/PropertyDetails.aspx?PropertyId=16209292 The thing to remember about that city is that incomes are pretty low (unlike sv)
- branchless 11y ago

nickpsecurity 11y ago

This could be rephrased as, "Why aren't Brits happy to be landowner's serfs or banker's future target?" Then, it's so ridiculous that it doesn't merit an answer. If they need help, there's tons of people from 2008 onward that can tell them all about the risk of the alternative.

oneeyedpigeon 11y ago

A: because renting is so expensive. We have no rent caps in this country, so it's actually cheaper to pay off a mortgage than it is to rent. Plus you actually get to keep that money rather than having it line the pockets of a landlord. Plus house prices are increasing at a much higher rate than inflation. So it's a triple win. I had to rent for almost 20/years before I could afford the deposit on a house, but I'm glad I finally could because I simply couldn't afford to rent any longer, even though I would've quite liked to.

hackerboos 11y ago
Renting is also extremely unstable in the UK. Most tenancy agreements are 6-12 months and you can be turfed out after the term with no reason whatsoever. Landlords are also allowed to increase rents as much as they like between tenants. Contrast this with Germany's system - http://www.telegraph.co.uk/expat/expatlife/11417359/Germany-the-country-where-renting-is-a-dream.html http://www.telegraph.co.uk/expat/expatlife/11417359/Germany-... Estate agents are also a huge problem. They charge the landlord and the tenant to put an agreement together. Tenants are charged every renewal - sometimes £200 for what is essentially a piece of paper.
J-dawg 11y ago
Although there are plenty of other factors, this is basically the answer. Every time a friend has bought a house (and none of them have done it without being loaned the deposit by their parents), they have reported that the mortgage payments are a few hundred pounds cheaper than the equivalent rent. This will continue to be true as long as interest rates stay near zero.

djsumdog 11y ago

Debt: The First 5000 Years Read it. All of this and so much more is explained within. The history of money, credit, coin, slavery...they're all related. It's a life changing book.

Al-Khwarizmi 11y ago

The old Catholic distrust of money and profits permeates our view. This is probably why generations of French people, my family included, have never fantasised about owning their home. We didn’t have to. It didn’t make any sense and wasn’t an ambition in life. Spain is also a Catholic country and everyone has always wanted to own a home, as in the UK. Lately there are more rented flats but the reason is sky-high house prices and low income, not that people like renting.

nnutter 11y ago

I've always thought the point of owning a home is so that you have a place to live that is paid off when you retire. From what I've seen renting usually costs more than the mortgage + property taxes + insurance; of course there are still maintenance costs which are more ambiguous. But a large portion (~50%) of my "mortgage payment" is going into equity instead of going into a landlord's equity. If I wanted to rent and save enough to be able to rent during retirement (or to save enough to be able to buy my retirement home at retirement age) then I would have to be spending significantly more per month until retirement. Going into debt by taking a mortgage is a trade-off that makes sense to me given low interest rate and no depreciation in value (hopefully appreciation). Edit: This is a US perspective but we've had the same question posed here. Edit: The article's title is misleading. It conflates buying a home with irresponsible use of debt.

deleted 11y ago

[deleted]

shhudson 11y ago

For some reason this is a really popular topic to drag up on a slow news day in the UK. The facts are that UK own-home ownership is actually quite average compared to other European countries and others around the world. Wikipedia has a helpful table [1] about this topic. The UK ranks 37th lowest out the 46 countries included. France is nearly the same. Germany and Austria are the only two large European countries that are lower. [1] https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate https://en.wikipedia.org/wiki/List_of_countries_by_home_owne...

oneeyedpigeon 11y ago
It's also interesting to note that, contrary to the tone in the original article, those countries near the top of the list are hardly paragons of capitalism.

scholia 11y ago

It makes sense to buy a house because, over the long term, the value of houses goes up while the value of money goes down. Even better, the real cost of mortgage payments keeps going down (thanks to inflation) while the real cost of rents keeps rising. My house would now rent for around 3x my mortgage payments, except I paid off the mortgage more than a decade ago so my rent is zero. There's always a chance house prices could collapse, but that's unlikely in the UK. First, it's a small island with a rising population so there is real demand, mainly in the south of England. Second, it's seen as a "safe haven" so foreigners are buying houses in the UK -- new developments are actively marketed in China, Singapore etc. Third, if you buy a house and rent part or all of it out, the tenants will pay the mortgage for you, and they really have no choice. Governments supporting a "property-owning democracy" (a Conservative Party ideal) have made it harder to rent by selling off social housing, removing rent controls, giving tax allowances on mortgages etc. Historically, on average, buying a house has been a one-way bet in the UK for around 50 years. It seems pretty much insane to imagine that this will always be true, but it has been true for my entire lifetime.

lewiscollard 11y ago
> over the long term, the value of houses goes up while the value of money goes down That which cannot go on forever, won't. > There's always a chance house prices could collapse, but that's unlikely in the UK. The population in Britain was 58.95 million in 2000 and is currently 64.04 million.[1] In the same time house prices have risen by an average of 153%.[2] It's reasonable to subtract baseline inflation from that at 55%[3], in which you STILL end up with a 98% increase. And I'm not ignoring the silliness in London; nearly every region of the UK has seen near-doublings of house prices since 2000, with a population increase of about five percent. Simple supply and demand dynamics are not at work here. > It seems pretty much insane to imagine that this will always be true Yes, it certainly does. I'm sure there was a crisis not so long ago where lots of people were betting on house prices continuing to go up for the foreseeable future which didn't end too well. Maybe, just maybe, the problem is too many people thinking of housing as an investment? [1] http://www.worldometers.info/world-population/uk-population/ http://www.worldometers.info/world-population/uk-population/ [2] http://www.nationwide.co.uk/about/house-price-index/house-price-calculator http://www.nationwide.co.uk/about/house-price-index/house-pr... [3] http://www.thisismoney.co.uk/money/bills/article-1633409/Historic-inflation-calculator-value-money-changed-1900.html http://www.thisismoney.co.uk/money/bills/article-1633409/His...

_puk 11y ago

The UK has historically been a society where the poor majority worked the land and rented from a few wealthy landowners. [0] This builds a psyche whereby to own land becomes a social status. Bring into that heady mix the likes of Maggie Thatcher's "right to buy" [1] scheme, whereby the lesser class (council house residents) are in a position to buy their homes at a fraction of their apparent worth, and suddenly you need to own your house or be seen to be less than those that do. Then a new generation comes along and sees that their parents "foolishly" sold off a couple of houses years ago that would now have been worth a mint, and everyone must buy a house else be caught out like their parents. Buy to let then brings in the mentality of "why would you give money to someone else to pay off their mortgage when you could be paying off your own?" and everyone must buy as early as possible. Pure conjecture on my part. 0: https://en.wikipedia.org/wiki/Social_structure_of_the_United_Kingdom#History https://en.wikipedia.org/wiki/Social_structure_of_the_United... 1: https://en.wikipedia.org/wiki/Right_to_Buy https://en.wikipedia.org/wiki/Right_to_Buy

SixSigma 11y ago
You also got rent-for-life arrangements at not unreasonable cost

jamescun 11y ago

For me, wanting to buy is not about an investment. I want somewhere secure and stable to live. The "dead money" aspect of rent versus a mortgage is just a bonus. It must seem alien to most in the west the sheer lack of protection renters have in England (property law is devolved); it is based entirely in private contracts, and what law does exist is rarely if ever enforced. Just last week Parliament rejected an amendment requiring all rented property be "fit for human habitation". Rent rises are not capped and often used to evict tenants, the legal minimum notice for eviction is two weeks (this does not increase with time rented), the landlord is required to carry out repairs but notifying them of such can be grounds for eviction. These may be the extremes of renting in England; however you can ask any renter about being charged outrageous contract fees, referencing fees and being screwed over on leaving over the deposit and "cleaning fees" (even when the property is left in a professionally cleaned state). There is little-to-no repeat custom in renting so they get away with it. Little movement has come from either of the two main parties (Labour & Conservatives) to improve this, thus to have stable accommodation you have to look to buying.

themartorana 11y ago
It does seem odd to me (in the US). Renting here is not without risk and slum lords and rising rents, but there is a minimum expectation of consumer protection, much in the same way there is with most transactions. Either way, if you care to live anywhere near a city, housing prices are astronomical. We make a decent living, my wife and I, but still don't have what it takes to buy a two bedroom apartment in one of the cheaper cities in the country. We've been house poor before, and I'd rather not be again. I mean I get it - fixed mortgage means in 10-15 years my mortgage may be less than rent of something similar, but that's a long time to be house poor.
- teamonkey 11y ago
  > in 10-15 years In many parts of the UK it's closer to 5-10 years. Which is great if you can afford the high price of entry. Also great if you can afford a buy-to-let mortgage, because it means you can be profitable within a much shorter time, while containing the supply of purchasable housing and raising the average rental price...

rconti 11y ago

As an American, this is hilarious to read, given how high British mortgage rates are compared to those in the US, and how home ownership is so often considered to be "the American dream". Also, the brits I know (who do not live in London) aren't so cutthroat about money. Again, I think they'd accuse Americans of being that way. But this may be true of Londoners.

stegosaurus 11y ago

So there's food, water, and shelter. You can get by as a vagabond without a stable source of these - but let's assume that particular lifestyle doesn't appeal (I've tried it. Fun for a while.). You can work, for an amount sufficient to subsist - and nothing more. A lifetime of work. You can be independently wealthy. Not much to say there. Let's say we're between 2 and 3. How do you get towards 3, if you're in 2? Realistic options, no lottery wins here. Well, you can save some of your income. Maybe that'll be enough, and maybe you'll eventually have enough to be able to rent until there's no more you. You can try to improve your income. To do that, it helps if you're mentally fit. Having a table at home to eat at; having a computer setup if you're a remote worker; a nice bookshelf; whatever. Things help. It's hard to work for years on years in material discomfort to build a retirement fund. So you own some of these things, and you rent. Every so often, perhaps every year, all of that Stuff gets bundled up. Boxed away; sent in transit. You remove shelves; buff up floors; repaint walls. Then you sit and wait for the bill from the landlord. Bugger, that's a hefty deduction. Next time, you'll be a bit smarter, I suppose. You won't drill that hole in the wall. You won't pester about the broken washing machine. The cycle continues. Maybe you alternate material discomfort. Eventually, though, you're probably going to get tired of it. Because fundamentally, you're doing all of this not because you want to, but because you have to - you can't rely on the landlord to provide you with stability. What next?

adblocker9877 11y ago

Sponsored by: Lloyds Bank An article sponsored by a bank trying to persuade you to get a mortgage. How original!

mgiannopoulos 11y ago

So how do we explain this? - Home ownership rates 37 United Kingdom 64.6 38 United States 64.5 39 France 64.3 Source https://en.m.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate https://en.m.wikipedia.org/wiki/List_of_countries_by_home_ow...

hestefisk 11y ago

From an Australian perspective, this is an interesting read. I live in Sydney where houses are so unaffordable that it is cheaper to rent. Protection for landlords and tenants is pretty good and balanced, and in times where nutcases would gladly spend in excess of 60% of their monthly net income on a mortgage, I would rather wait and see until the market has settled. Analysts say the market is about to burst and that, for first time in history, it is considered more feasible to rent as opposed to buying and selling the property 30 years later (the NPV would be less than if I kept the money in a high interest savings account). Property is all the craze here, but soon the average Aussie will wake up with a huge financial hangover.

banku_brougham 11y ago

Can't pick just one comment to respond to. Short version: y'all are bonkers. Assuming that home prices can only go up is harmless when that mortgage is manageable. But holding on through several business cycles is problematic when debt service is a high proportion of income. If you miss a few payments you'll learn that you never really owned the home. Again, the harmless part I mentioned applies to many places but certainly not London.