To rent or not to rent – this is not the question

As a 28 year old graduate living in London I am stuck in an indefinite rut of having to rent instead of buy. I’m on an ok-ish salary as is my partner, who is 30 this year, yet we are in no position to even save for a deposit let alone be granted a mortgage from the over restrictive banks of the moment. An average flat is currently £228, 681 in our area of SE London, but if we were to be granted a mortgage we would only be able to get 3 times our joint income totalling £165,000. Forget the fact that we would have to somehow save a 10% deposit of £16,500 (over half of my annual salary), but where would we find the remaining £63,681? We could of course move further out of London, however travel costs (which could then affect the mortgage we could afford) would then be an issue in addition to commuting time.

It is all well and good eliminating stamp duty on properties up to £250k for first time buyers, but we can’t even get over the first hurdle of affording a property in the first place. What the government should be looking into; is increasing tax on ‘buy to let’ investments in order to stop the out pricing of properties for first time buyers. What happens very often is an investor is happy to pay whatever and offers a higher amount than the asking price in order to get it and then lets it out at a high amount. Commonly entire blocks of flats are being bought immediately after being built and let out. This artificially increases the cost of properties and in addition increases the cost of renting in the market too. If the government really wants to get the economy moving again they need to back 100% mortgages for first time buyers and put a new policy in place preventing investors from outbidding hard working people who are just trying to make it in the world.

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