Is it worth buying a home?

Is it worth buying a home?

15:19 PM, 18th August 2020, About A year ago 16

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The illusion or delusion of buying your own home.

Let me tell you about my Parents. We lived in a Council House on an estate. My Parents were conditioned to aspired to own their own home. To get on the property ladder! They brought a rundown small terraced house, back then, for £10K. They both worked two jobs to pay for it, and did it up, going without Holidays or newish cars. Just before my father’s retirement, they paid the mortgage off. A few years later my farther now an OAP, confessed he wished he hadn’t brought it. He said, when they lived in the council house, he only had to pay rent and the Council fixed everything. Now in the middle of the night, he worries about the slates falling off the roof, the water taps braking and Tradesmen ripping him off.

My Father passed away. I went to look at an assisted living apartment, in a brand new block, for my 80-year-old mum to move into. I was told that because she owned her little terrace house, now worth about £150K she would have to sell that to buy her flat at £95K and pay £100 a week service charge until she only had £16K left. Virtually all the other occupants had come from the same council estate my parents had left. They had moved in for free and didn’t pay anything. My mum would have completed a loop and been back with the neighbours she left 30 years earlier.

My mum stayed in her Terrace house. If she goes into care, we will have to sell it to pay for the care home, whilst no doubt there will be others in the same care home that will have come from the same council estate and will be there for free. My Parents worked hard and went without, to buy and pay for their own home. Later the maintenance of it became a liability. Yes, it’s an asset, but the Government stands first in line to profit from that asset. If we the children get anything, it will be about enough for each of us to buy a second-hand car. In reality, my parents never made it out of the “nothing to nothing loop”. In fact, they became more trapped by owning their own home, than benefitting from it. I wish I could go back in time. I would have advised my parents to stay in their rented home and work fewer hours and spend their money on foreign holidays and expensive cars.

I am a landlord and have a portfolio, so I have broken out of the loop and risen above my roots. Property owning does work for me.

I have had Tenants who have moved out of one of my rented houses to buy their own house and I have also had Tenants who inform me, that whilst they are on their month-long holiday in Australia, it would be a good time for me to redecorate their house or renovate their bathroom. Which is right?

For these reasons, I have come to question, that in this increasingly socialist country, that people that saddle themselves with the task of buying a modest home, are doing the right thing. I suspect private homes will also soon become the target of capital gains tax and equity release loans will be taxed.

Graham



Comments

by Yvonne Francis

18:16 PM, 21st August 2020, About A year ago

This is a well written post and probably has certain truths, but not from where I am standing. I think people who buy houses have some period in their life when they are rent free and often at a good time of their life when they are at or very near retirement. Not only that but it can give you a security and freedom that no private renting could possibly give. I don't really understand all these children mentioned here, who do not want to own their own property, and think them short sighted, as my children have lived good lives and also aspired to own property. They work hard and have good jobs.

I guess Council's provided accommodation may be slightly different, but do you really want the government to provide everything? And partly, if not entirely, at everyone else's expense. That's a very dangerous path to tread.

I've lived a more independent life than my children, being one way or another self employed, and invested in property since 1970, and it has all paid handsomely. Even in these difficult times I feel reasonably secure. My only grump is Inheritance tax which in my circumstances is difficult to avoid having taken good professional advice. But I guess the government have to pay for all those not prepared to risk buying their own homes! There is a moral in there somewhere?

by loretta wight

18:48 PM, 21st August 2020, About A year ago

mortgages are long term now . Mine is to the age of 75 yrs . But if you rent and retire if you don't have a private pension to top up your income or are low income you will get help with the rent Meanwhile with no worry about repairs. I look around the area and I can tell who are the elderly in the area just because they cant afford repairs. You got into property at a good time but us younger ones will struggle with the fall in houses prices and costs. My family have all bought houses from 23 yrs, small flats initially but most of their friends claim they cant afford to buy . They want the holidays , clothing , socialising , and 3/4 detached new built houses which require large deposits. They want their cake and eat it at a young age. The mortgage rate was 16% when I got my first cheap flat. The rate is low now. No one wants to sell their home to pay for their care but savers are always punished while fecklessness supported . Should have bought that sports car after all !.

by Jon D

18:34 PM, 30th August 2020, About A year ago

I met a girl who left a marriage - moved into a private rental in Windsor with 2 kids. Rent is £1400. Govt pays all of it plus the extras. Wow. She works too - 30 hours.
In Birmingham her rent would be £650. But Govt will pay the market rate down south. I mean, what's the alternative? Govt don't want pics on social media of Single moms on the streets with kids. Write the cheque.
Friend lost his business this year. Moved out of a flat he was paying £600 per month. Moved into a detached 4 bed home backing onto the golf course. Nice. Rent is £1200. Govt pay the lot.
In fact they give him £1500 with kids.
I was astonished.
To pay that rent yourself after tax and expenses means you have to earn quite a chunk gross. Why bother? The govt is paying whatever the rent is, in full, no caps. When did this happen?
The future is welfare, universal basic income and MMT (magic money tree?).
But it's okay. The Bank of England print the money.

by colette

19:27 PM, 30th August 2020, About A year ago

It is not all doom and gloom and you have to understand how local authorities assess the assets of people paying care homes etc and you can work your way round it (and not have to sell the family home) provided you do so in time and not when they are involved with your (or your parents) or just about to become involved. I have already made provision for this possibility with my own child's inheritance in mind. It would take too long to explain all this and also the fact that English care home financial assessments are different to those in Wales (and Scotland). My child rented his first home at £650 pm and his mortgage now he has bought one is £300 pm and as a relative new build it will be many years before he has to fork out for repairs/maintenance and all the time he has a growing asset against which he can borrow money.

by loretta wight

19:59 PM, 30th August 2020, About A year ago

They say put it into a trust. But the authorities are catching on this and will access if you did it to avoid care costs . It is also hard if you have a mortgage on the property. They are less interested. Or put it into someone else's name , but you have to live for 7 yrs at least and hope they don't throw you out ! A new fairer system needs to be created ...imagine being left with only a few thousand after 40 yrs of working. This country encourage fecklessness and benefit dependency.

by colette

18:37 PM, 1st September 2020, About A year ago

Reply to the comment left by loretta wight at 30/08/2020 - 19:59
hi, if you do it early enough it is up to the local authority to prove you did it to avoid care costs and if you are not involved with social services in any way (ie needing care of some sort), there is no way to prove it, esp if you are in your sixties and do not need care until your eighties. I am looking at discretionary trusts. If you put into a 3rd party name there may be cgt to pay and you cannot continue t live there. As I said there are ways round it you just have to know the system


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