Critic says tenants paying off a landlord’s mortgage ‘can’t be right’

I agree that the younger generation have way more than we did when we were younger. However people's response is usually to say there should be more affordable housing built but I truly believe affordable housing just doesn't exist anymore, it's an impossible concept. Affordable housing is a house which is discounted by 20% (I think) by the developer because they have to provide a percentage of affordable homes. However as we all know costs are so high now and the new building regulations call for more building materials than in the past, eg insulation, heat pumps instead of combis etc, then the new levy imposed by the Gov (CIL)etc, wage growth has been huge, NI costs etc etc so it is impossible to build a "cheap" house anymore. The younger generation didn't ask and create the situation they are growing up in and I have noticed that they seem to be quite accepting of the rent figures. As someone said before it's "almost" a fixed cost they don't need to worry about maintenance or suddenly have to pay 13K for new lead valleys or 2.8K for a new boiler or pay for furniture or replace the washing machine or the dryer or the fridge or the freezer or the oven etc etc

Reply to the comment left by Slooky at 05/02/2025 - 18:12
In theory at least, the affordable requirement is more about the value of the land than the builder funding it out of their actual operating margin.

On the basis that there is competition between house builders for sites, they will bid for land with an idea of the profit they have to make to keep shareholders happy with dividends.

If there is a planning permission requirement for 20, 30 or even 50% to be ‘affordable’ (which there invariably is nowadays) then that has to be factored in to the maximum price a house builder can pay after factoring their own costs and required profit margin.

In other words if builders could just build whatever was most profitable the land price would be bid up to higher as a result - so the seller of the land is taking at least some of the hit for requirements to provide below market housing.

I believe there are often arrangements in place that make the final price a seller receives for land conditional on the terms of the planning permission that the house builder applies for.

Hmmm most money goes to the tax??

Reply to the comment left by Keith Wellburn at 05/02/2025 - 18:28
But then the developer won't build any affordable housing, leave them to the "last" phase, then say, it's unaffordable and just walk away. It's a very common issue. If you want it, they need to be forced to build them first. Adding them into planning permission doesn't help. I believe in London, the developers can pay into a fund rather than build suitable housing.

Its all relative to location. I paid 35k for my first house, a terrace in not great condition or location. Today there's a similar house up for sale in the next street for 85k.

I applaud any youngsters who would buy it as their first rung on the ladder. We all had to start somewhere. The issue with generation rent is they expect a lot more for less, without haveing to save for it.

There are plenty of places where you can still get properties like this.

They might not want to live in these places and to be fair niether did I. But i was happy enough to have my own place at 25 knowing that it was my first step.

Then why don't tentants get their own mortgages and all the other responsibilities that comes with this action? Also, what's wrong with taking care of my retirement, old age care ,etc etc. At least the government will not hv to pay for my v expensive care!

Reply to the comment left by Jonathan Willis at 05/02/2025 - 18:56
Yes, I’m sure there is abuse and of course making a payment into a fund would place the onus onto the holder of the funding to then arrange to build the affordable (and of course there are other requirements sometimes as health and education facilities are usually lacking before any new build takes place).

My point was focussed on the notion that it is just the developer who has to subsidise the affordable housing, the variable is the land cost.

The land is the huge variable. The local property market dictates the potential return from the site’s market housing, take away the build costs and the amount of loss making activity to provide affordable or Section 106 requirements allow for the builder’s profit margin and you end up with the value of the land.

I have share holdings in house builders amongst other things after selling off the majority of my portfolio. Housebuilders are able to actually facilitate the building of affordable homes but unless they can pay a reasonable dividend to shareholders they won’t be building anything ‘affordable’ or not.

I remember a Labour local authority brought in a 50% affordable requirement about fifteen years ago - very little of anything actually got built as builders wouldn’t build out existing land at a loss and landowners didn’t think it worth selling land at the low price that builders would have to pay to make any margin.

Of course in the era of high council house building local authorities either had their own building operations or commissioned the building of them rather than relying on crumbs from speculative development. I believe Labour were talking about plans to compulsory purchase land without giving any uplift once planning was granted for social housing - obviously won’t be popular with landowners but that’s perhaps the only way to get them built at scale (assuming enough labour and materials).

quite a few tenants are ignorant of the fact that some landlords don't have a mortgage on a property..however income is used for maintenance insurance service charges council taxes etc.. the fact is that if they were able to buy a property instead of renting they would not be renting...they need to realise that nothing in this world is free clothes 65" oled TVs food and accommodation...to actually buy a property for 100% cash or on a part mortgage requires saving especially if it's for a mortgage...also a landlord also does unpaid work looking after and managing a property...this kind of headline is basically a headline of envy.

Reply to the comment left by Zen at 05/02/2025 - 19:02
It is very much about expectations and perceived entitlement with the 'younger' generation. The idea that they would have to put up with less than they are use to at home, and also actually work for that, is anathema to them.

When we had our first child, we rented the top of an old house in a not so good part of East London, backing onto a cemetery. It was cold and damp, with a coal fire only, and we had to decorate and carpet it ourselves. Whereas, I had grown up in a 5 floor Georgian townhouse (still cold!). We had very little spare cash, and no car, but with hard work and risk, we bought our first home 7 years later, and built a very nice home 5 years after. But we had to leave London to afford it.

Reply to the comment left by Keith Wellburn at 05/02/2025 - 19:36
I can see the councils setting up their own building companies to build the houses, probably train up apprentices at the same time. I suspect it would be terrances or flats to maximise number of people. Might be cheaper than paying for so much for emergency accommodation. I don't know the figures, so that's just pure speculation.