Why trying to buy a house in the UK is a farce

Last year when we were house hunting, we found a pocket of properties we could afford to buy without a mortgage in an area where we’d like to live. We would also have been happy to pay the asking price on some of them rather than try to ‘knock them down a bit’.

house hunting
The vendors were keen, if not desperate, to sell, but we were not allowed to purchase their property.
Why?
Because either there was an agricultural restriction on it (make a living off the land or previous family connections) or we hadn’t lived in the area for 5 years, neither had we worked in the area for three.
Thus, people needed to sell but there were no local buyers because, well, they couldn’t afford to as they also needed to sell due to lack of work or financial difficulties.
Outsiders, even if they were positively loaded with dosh (not us by the way, but we had enough), weren’t welcome thanks to Local Authority bureaucracy.

Roll on a few months, and the situation there hasn’t changed much and has actually overflowed into another area on the South Coast, but now there is a new bit of red tape and legislation stopping people like us from getting back on the property ladder.

property ladderEven though we live on the boat, we have kept our hand in as to the property situation, and quite honestly the Government help packages are a joke, not that they would apply to us anyway.

We discovered by accident the meaning of their ‘Help to Buy’ schemes.
In the 90s, Shared Equity was a way to get into the property market. We were aware of several young people who became our neighbours that had signed up for this scheme before the market crashed putting most of us into Negative Equity.
We had a mortgage of £45000 on a property worth only £35000, but the poor souls with the Shared Equity schemes were way worse off than us.
One lad in his twenties had a 50% share in his one bedroom flat which was valued at £38000 when he bought it in 1990. He took out a mortgage for £19000 and paid rent on the rest.
bangNegative Equity put him in a property now valued at just £17000, but he had the financial debt of £38000, and if he sold, he would still have to pay his landlord £19000.
However, if property prices had risen and he sold at a profit, he would have been expected to pay 50% of the selling price (not proceeds) to his ‘landlord’.
He ended up moving back in with his parents and renting the flat out until he could sell at a more realistic price.

The ‘Help to Buy’ scheme would appear to be the new Shared Equity, as you can purchase 25, 40, 50, or even 75 per cent of a property and pay rent on the remainder.
‘Affordable Housing’ is another name for it, where properties are being built, but none will be sold to purchasers outright and ‘owners’ only have a share.
Win Win for the builder and mortgage companiescashLose, Lose for people like us.
crying smiley 2We got excited seeing a new property advertised for £117,000, when older and larger houses in a five mile radius were selling for £150k plus.
Hubby went in, and was inside the estate agents for some considerable time.
When he came out, he was hovering about 3 inches off the ground, he was that angry.

For said £117000, you could purchase a 28% share in a new two bedroom terrace house, and pay rent on the remaining 72%. That makes the property price almost £418,000.
(watch your blood pressure, dear Reader)
frustration 4But it doesn’t stop there.

Apparently, you have to apply to the selling agent for eligibility to buy.
If you get through round one, you will then be put forward when details of the plots are released and have to go on a waiting list to see if you will be allocated a property by the builder. Again you will be processed for your eligibility to buy.
If you want a mortgage, this has to be arranged through the selling agents who ‘will be happy to act on your behalf’, for commission of course, but there are no guarantees you will be successful.
Time factor involved?
About six to nine months, for properties not even built yet.
And just to get your name down, you have to pay a deposit. This does not secure or confirm anything, not even the purchase price.

You still have to engage a solicitor, and their fees for purchase are around £1000, plus ‘disbursements’ costs for local authority searches, water and drainage, environmental and commons registration if applicable, mining rights, land registry and personal credit checks. (All done on the internet from the comfort of their chair in the office with coffee and biscuits to hand, and subject to 20% VAT of course.)
Some will even charge double the bank fee for a same day funds transfer and add VAT to that as well (our bank charged us £20 when we bought the boat, our solicitor charged us £35 plus VAT for remitting funds when we sold the house).

We’ve looked into Flats, Retirement Apartments and Complexes for the over 55s, as well as Park Homes, which in many areas are more expensive than damn houses!
And even then, you have to jump through hoops and fork out through the nose.

Apart from the eligibility crap, you have to think about additional costs on top of local taxes, utility bills and property insurance:
Maintenance fees, Ground rent and/or Lease, Warden fees, Service Charges (even if you don’t need them). These can add up to in excess of £3000 a year.

If you find a property and you need a mortgage to purchase it, there are even more restrictions in respect of applicants age, length of mortgage required, available deposit and percentage required to value, management/arrangement fees, insurance, fixed rate periods, and we mustn’t forget income.

To be considered for a Bank Loan, the minimum income per applicant is £10K per annum.
We laughed louder than our Bank Manager.
laughing smile

About pensitivity101

I am a retired number cruncher with a vivid imagination and wacky sense of humour which extends to short stories and poetry. I love to cook and am a bit of a dog whisperer as I get on better with them than people sometimes! We have recently lost our beloved dog Maggie who adopted us as a 7 week old pup in March 2005. We decided to have a photo put on canvas as we had for her predecessor Barney, and now have three pictures of our fur babies on the wall as we found a snapshot of my GSD so had hers done too. From 2014 to 2017 'Home' was a 41 foot narrow boat where we made strong friendships both on and off the water. We were close to nature enjoying swan and duck families for neighbours, and it was a fascinating chapter in our lives. We now reside in a small bungalow on the Lincolnshire coast where we have forged new friendships and interests.
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22 Responses to Why trying to buy a house in the UK is a farce

  1. Capt Jill says:

    Wow, what a huge scam! I thought we had it bad in the US. We do, but not quite that bad yet.

    • It’s quite a nightmare.
      In 2007, we had a substantial pot of money having made a killing on the sale of our previous house. The estate agents didn’t take us seriously and only showed us details of their dumpster drawer. The property we eventually bought in Lincolnshire was a money pit, and we lost thousands, not just selling for much less than we bought for but also everything we’d invested.
      There are properties out there we can afford, but are in either dodgy or run down areas, plus there is no work there either.
      Young people, couples and families have little chance of owning their own home, and those that do are finding it difficult to run them. Rents are also high and the deposits and money up front are ridiculous (can equate to the equivalent of 6 months rent).

      • Capt Jill says:

        that really sucks! I bet you’re glad you moved onto the boat now. Can you take it somewhere else? Do you want to?
        I always thought that was the best part of having a boat, you can just take off and go somewhere else on short notice. Hopefully somewhere better.
        I think lots of places in the states are the same as you describe. My brother still lives in FL and he tells me he can’t afford a shithouse for $100,000!! He’s been renting a slum apartment for $850/mo (and he has to pay his own bills- water, cable, electric, gas, etc)! For that amount, he could get a REALLY nice place around where I live.
        Not much work over there, that’s why I moved away years ago.
        I own some rental property. I only ask for 1st and last months rent as a deposit. Hopefully I don’t lose too much on them when people don’t pay their rent and I have to evict them. Usually I wind up losing at least a month or 2, just because of the time it takes to do an eviction (and Texas pretty much favors the landlord).
        I only charge around $500/month for small 2 bedroom/1 bathroom houses (around 900-1000 sq ft). I think it’s pretty damn cheap, but seems an awful lot of people have a VERY hard time coming up with the rent every month. It irks me when I see they’d rather pay their cable and phone bills over the rent.

      • We can move the boat to another marina or just live on the canals. However, it appears you have to have an address, and Boat on the River Bank doesn’t quite cut it, so we have to have a residential mooring which is expensive. Rents over here are also pricey, especially if you have a dog. Pity you’re not in the UK, we’d ask if we could rent from you!!

      • Capt Jill says:

        have you looked at getting a PO box? Or a mail forwarding service. They have places that will collect all your mail and forward it to you. That way you can just go wherever, whenever you want.
        I thought my dock rent was expensive when I had the boat, but I had a REALLY good deal. It was ‘only’ $350/month (the boat sank and I got rid of it back around 2008). One of the saddest days of my life. I grew up on that beautiful old boat. 😦
        Dock space is even higher now.

      • We’re paying around that in pounds for residential mooring fees. We looked into Post Boxes etc and another bit of red tape states you need an address. Banks and government departments won’t send to a PO Box or mail service (hence our problems last year with our change of address as the bank sent me something I DIDN’T ASK FOR OR WANT and it could not be forwarded, so got returned. Result, accounts and cards blocked until I could get to a branch to sort it out. More red tape, proof of identity, utility bill for an accommodation address to prove we lived there (our friend, who had to come in with us to tell them we were staying with him) sh!t, it was yet another nightmare to an already stressful situation for us.)
        Sorry to hear about your sinkage.

      • Capt Jill says:

        yeah, all that crap. It’s all about CONTROL. Hope you can find a way to sort it all out. I am looking at all that stuff myself.
        I haven’t bought another boat yet, tho I’m thinking seriously about it. That was my fathers boat that he left to me. I’m not sure I really want to get back into boat ownership again. All that stress of worrying about it every time a storm came through the Gulf of Mexico. As long as I spend so much of my time at sea WORKING, I don’t think I want to spend the rest of my time cooped up on another boat! Especially since a sailboat (which is what I prefer) wouldn’t have anywhere near the comforts I’ve gotten used to at work out here. Things like unlimited power, laundry room, air conditioner, refridgeration, etc. I’m spoiled now.
        I am thinking about quitting this work. Or maybe trying to do something like crewing for passages. The main thing holding me back now is this damn obamacare! Its SO expensive to have to buy, and it really doesn’t cover anything I need. So, for me, it’s just a complete waste of my hard earned money.
        I seriously object to being forced to pay another 10-15 thousand a year for basically nothing.
        As long as I keep working where I’m at, I’m OK. But if I go back to working temp jobs (which I prefer), then I’ll be hurt badly by obamacare penalties.
        I’m trying hard to find a way to move out of the USA. Then I would escape the penalties from obamacare (and probably have better and much cheaper medical care) and also a much lower cost of living all around.
        Problem is: as long as I keep working, I don’t have the time to stay in a place long enough to get the visa paperwork straight. And if I’m not working, I don’t have the money to prove to the immigration that I should be allowed to stay.
        I think it’s coming to a point where I’m just going to say the HELL with it all and quit working again, maybe for good this time. I just don’t know how in the world I’ll manage to pay my bills. I’ve worked SO hard for so long to think of losing everything I’ve worked for. But that’s what it’s coming to for a lot of us here in the states.

      • I can identify with everything you say here. It makes you wonder why we bothered!

      • Capt Jill says:

        I still dream about it. At least you’re finding out what it’s really like. I hope it all works out for you.

      • Capt Jill says:

        maybe get a friend to let you use their address. I’ve done that for some friends of mine.

      • Our friend has done just that for us as we don’t know where we’ll be in 6 months.

  2. lbeth1950 says:

    This is ridiculous!

  3. I will echo everyone else: this is crazy! I have never heard of a system like this. I complained a lot when I recently sold my house – in retrospect, I should have been happy it was so easy here in the States!

    • In the US, you have a Realtor who does everything. Here in the UK, we have too many different people doing too many things and nobody talks to each other. The time span for purchasing is months, not weeks, and if you are selling as well, hell.
      Our last house sale was a nightmare (all documented here in my blog!), nobody told us what was going on, ie. estimated dates, progress on our buyers sale etc so that we could plan ahead. We ended up having a phone call whilst out walking the dog to say they had completed on their sale and wanted to move in the following week, or else they’d walk! We had nowhere lined up to purchase (couldn’t give dates on a repossessed property we were interested in), had to arrange storage for our furniture, and needed 15 days to cancel utility bills, all of which they would also have had to arrange, and they tried to tell us they didn’t know when they were going to complete???? What clinched it was mail arriving for them the following day for their SKY TV package and another confirming taking over our telephone line. By the time we left, we had 7 letters for them. It was a terrible time for us and our nerves were shot to hell at the end of it.
      Nothing is straight forward in this country. There is so much crap, red tape, restrictions, age discrimination etc, that people like us who wish to buy a small property are being penalised because we don’t want to borrow to do it (cash buyer), are too old even if we wanted to, and proving our identity is another farce as we have to show a utility bill to prove we live where we say we do (photo ID and passports aren’t enough!).
      This is just what we have come up against. Maybe Estate Agents just don’t like us!!

      • This sounds like a nightmare for a hundred reasons! I will have to go back and read the whole saga.

        Has it always been this difficult to buy/sell property there? Or is this a more recent phenomenon?

      • When we bought our first house (1990) it wasn’t too bad, we got a mortgage OK etc etc, but got caught by the property crash the following year. Our second was OK as we managed to clear our negative equity and saved the deposit and legal fees to start afresh.
        The third was also OK and we made a killing only to lose most of it on the last one. However, when we bought said last house (2007), the price was agreed and we were in in 10 days! There was just us with nothing to sell and funds in the bank, and the vendor was going into military married quarters. Plus We had a brilliant solicitor.
        House prices have rocketed beyond most pockets and the cheaper properties are snapped up by the Buy to Let landlords, so first time buyers have little chance of getting on the property ladder. Now with changes to Pensions, people are cashing in their retirement funds to buy property instead, which will probably push the market prices even higher.

      • A lot of people here have negative equity here in the States – when I bought my first house, I know the previous owners sold it for about 60% of what they purchased it for, having gotten caught in the housing bubble here (obviously, it worked out fine for me). Thankfully, I’ve never been in that situation, but housing prices seem to be creeping back up after the last crash, so I definitely worry about it.

      • House prices here are crazy, with first time buyers looking at properties of £250K if the media is to be believed (heavens knows what their repayments would be, and that’s before interest rates go up). A property was advertised recently as being the smallest on the market: the stairs began on the kitchen worktop going up the wall over the cupboard to a mezzanine ‘bedroom’ (mattress on the floor) and the shower room by the front door was no bigger than a cubicle with a loo in it and drop down sink! Asking price over half a mil I think and it sold in hours. In comparison space wise, we live in a mansion on a boat measuring 41 feet by 6’10”. It’s nuts.

      • That is insane – how do people afford these places? I make good money and I think house prices here are absurd. You wonder if people will ever save anything, if they are spending all their money on housing. I imagine many people won’t be retiring very early – if ever.

      • You got it……plus our government has moved the retirement age to 66, possibly 67 and rumoured 70. We don’t think we’ll ever qualify for a state pension. With a general election coming up, Mr Ed has promised to scrap stamp duty on properties up to £300,000 for first time buyers. (gulp!!)

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