Monday, 14 September 2015

Housing? No problem.

It is a Labour party policy that they will, if they ever get back in power, place a cap on rent rises in the private sector; give people three year tenures and stop them having to pay the agent extortionate fees. I can’t help but argue that this is a good policy. There are enough people robbing the less well off among us without small time property investors wringing the last pennies out of people who are in absolutely no position to argue.

However the opponents of the policy say that such measures will only reduce the supply of houses to rent. Woah! Just a minute. I don’t mind people commenting on what is happening, but to openly lie to the public at large is totally reprehensible.

Those people that have lots of houses to rent will not keep those houses empty just because the rent is static. If they do find owning houses a trial (and it’s never been that) they will sell and add to the supply of available houses on the market. In fact if people stopped buying houses with the express idea of renting them for profit then there would be more houses on the market and that would suppress the cost of housing. This may have a beneficial effect on the housing market. People who have just one or two houses, for what ever reason, are renting out to pay the mortgage while they are getting on with their lives doing what ever it is they wish to do so that they are ‘on’ the housing ladder when they eventually decide to look for a house they wish to spend the rest of their lives in.

Of course there are those who having paid off their mortgage are buying to let, with the surplus cash they now have, to offset the cost of their future care in old age. Those people who are in a position to do this are using their financial position to fund their future care from those that are poorer than themselves. This brings to mind a rhyme I heard at school, “Little fleas have lesser fleas upon their backs to bite ‘em and lesser fleas have smaller fleas and so on, ad infinitum”. If the big investors in housing and the small ones release their stock back on to the market how many houses would flood the market? What would happen to the market value of a house? Would this allow more people to afford their own home?

If there was no such thing as buy to let what would the housing market be doing today? Is the intervetion of investors really a necessary part of the housing system? People get into rent to buy to make money. The opportunity to make money through savings has virtually collapsed unless you are prepared to take a big risk. Housing is virtually risk free! So it would seem that those who wantonly destroyed the economy have forced people into a feeding frenzy. Everybody is getting screwed over by those above them and more and more it the smaller people who are being screwed by the lesser people who are being screwed by the little people who are being screwed by the not so little people. The big people are encouraging the ordinary man in the street to do their dirty work for them.

Ten years ago I made £500 per month on £65K just in an ordinary bank savings account. Today I am making £15 on a similar amount. This is disgraceful. Now I don’t want to complain but did we really have an economic collapse or was it engineered because the ordinary folk, were for once, coming out on top. Personally I wouldn’t trust any government to do anything to benefit the common man!

There are over 600,000 properties currently empty in England. If any government wanted to sort out the housing situation proper legislation would stop this abomination. Why should any one keep houses empty when we have a housing shortage! Such owners are not patriots, they are not my ‘fellow’ countrymen.

When I bought my house, twenty years ago, I took out an endowment policy to pay the mortgage at the end of a fixed term. I paid a professional to ensure that, at the end of the fixed term that sufficient money was available to pay off the capital of the interest only mortgage. It was to produce £35,000. However, not long after I took out the policy the endowment policy business took a nose dive! Ever since the company have have been telling me that the policy is unlikely to meet the obligation and I should make ‘other arrangements’ to pay off the short fall when the policy becomes due. During all this time the CEO has been regularly taking a fat performance related bonus and I don’t doubt many of his subordinates too. The policy matures later this year. And is not expected to pay much more than I paid in over the 20 year run. I know there was a problem 15 years ago and again about 5 years ago but even so I cannot believe that a finance/insurance/assurance company couldn’t manage to double my money over twenty years. You can bet that during this time my ‘professional’ has been taking his cut from my policy payment.

It is my belief that the financial problems of the last twenty years are being used as an excuse for either incompetence or mass fraud.


Dave,Beryl Bradshaw said...

Hi Maffi we are in same boat our endowment policy won't payout as much as predicted. My gripe is that it lost it's value on the stock market so what does government do Makes companies invest in bonds which will never increase like shares they lost value by shares so should have been allowed to recover with shares.I should have been given the option to leave our investment where they where.

Maffi said...

I think not Dave. I sold my house and whatever I receive goes in my pocket. Dem is apples I like!