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So the less wealthy unhoused are pushed into a rented sector where demand far exceeds supply and the rents expected have become ridiculous. Typical rents for a 2 bedroom flat within commuting distance of London in a half decent area can go as high as £1000 a month. A four bedroom house two doors away from me is rented at £2500 a month. Considering that the mortgage on such a property is generally 1/3 - 1/2 of the cost of renting, you can understand the traditional push for home ownership.

There has been a recent big push of people going for second home ownership as substitutes for a pension scheme, the parasites of the the financial industry having been eyed and found wanting. Much of this is funded by a "Buy to let" mortgage. These mortgages almost always come with the condition that the rent should be set at a minimum of 110% or 120% of the mortgage, to prevent the mortgage company losing out while a property is between tenants. As many of the buy to let houses were brought in the run up to the financial crash, tenants are paying  120% of peak mortgage rates, plus administration fees, plus whatever profits the owner cares to add into the situation. it's generally considered reasonable that an investors rental return should be about 8% of house cost

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Wed Jun 1st, 2011 at 06:28:09 AM EST

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