Tuesday, 4 January 2011

The End Of My Property-Owning Dream

Back in 2000 when I was buying my first (and only) flat, a Japanese friend of mine emailed to say that now I was entering the property owning class that he anticipated that I would not wish to communicate with him being simply an employee, at the time working in a record shop, subsequently when laid off for being too old for that work (at the age of 30) he became a carer.  I know there has always been snobbery in the UK around owning property, but no-one has ever said to me here that I should or should not talk to them because I was or was not an owner of property at the time.  I note this now because finally we have had an offer on the house, probably just in time because I am running out of money to pay the mortgage.  Of course, the offer is less than we paid for the house, by £25,000 (€28,750; US$39,500) and is £15,000 less than the asking price we insisted on (which itself was £15,000 higher than the price the estate agent recommended).  Aside from the slump of 1990-3 the UK, especially southern England, has been used to constantly rising house prices and in general property has been the best investment if you want a decent return on your money.  In fact as I have often noted, house prices have been an obsession in the UK and I can think of no other country where just a simple slowing in the rise of house prices, not even a fall, makes the news broadcasts.  With mass unemployment reappearing and a depression in full bloom, this has already begun coming to an end.

For me, of course, the profitability of owning houses never really turned into a reality.  I owned a flat in London for seven years.  It rose from £80,000 to £130,000 in that time, so I did very well out of it.  The only trouble was, with work taking me away from London on a series of short-term contracts in the Midlands and on the South coast, I was deemed to be running it as a business (I let it out so that I could cover the council tax charged on empty furnished properties) and so I ended up with a £16,000 capital gains tax bill and then, of course, Newham Council, which makes up charges for all kinds of things at a whim, charged me £16,000 as well for work done in the street and to the building which held my flat.  I was compelled to sell the flat far cheaper than the going rate.  It was a two-bedroomed flat but was sold at the price of a one-bedroomed flat, about £20,000 less, partly because the estate agents were in on some deal with buyers (often landlords in the area) and because I was being hassled by my own landlord to move very quickly.  Always remember that however nice estate agents appear to be, they are always playing off the buyers against the sellers.  As a seller, they will never even get you the price that they recommended, expect to lose many £10,000s on that price.  Buyers are also getting very greedy.  When I sold my flat, the buyer, who was being granted constant access to the flat by the estate agent, began demanding various £500 sums for things such as cleaning the flat, something I could get done for less than a tenth of that price.  Clearly informed by the estate agent that I was desperate to move the buyer felt he could twist lots of little bonuses out of me.  The estate agent actually broke the lock to the front door something I had to pay over the odds to have replaced hours before the contracts were exchanged.  I was angered by the buyer's arrogant behaviour and in the end did not pay for the flat to be cleaned; I left the toilet unflushed and a range of food items for the buyer's delectation when he arrived.  It was a small victory, but you can see I was desperate to get something back for all the hassle and lost money.

I suppose I should not complain that I came away with £20,000 profit from the flat.  What was worse was that with the landlord compelling me to move so fast, I had to buy a house (the woman who shared the house with me was sick of renting, but maybe with hindsight we should have done that for a period more) when prices and interest rates were at their highest; more time could have made a huge difference, but I am never lucky that way.  Consequently, of the £20,000 I made on my flat, I will take away about £12,500.  I suppose I should not complain.  I could be facing negative equity meaning that I would still be paying off a loan on a house that I no longer owned.  At least with this deal, I do not get the black mark of repossession against me and all my debts will be cleared.  A lot of people will be far worse off than me.  Of course, I will never own property ever again.  I am now 43 which means that even with the raised retirement age I could not pay off a 25-year mortgage before I retired.

So, after a decade of owning a flat/house, though only a total of four years of actually living in the property I owned, I am back into the rental sector.  Of course, it has worsened since even the bad landlord I experienced back in 2007.  Now you can pay £600 per month to rent a single room in a house.  In addition, you have to go through the humiliation of an extensive selection process.  I am not glamorous, I look peculiar and am told I taught too much.  Like a lot of people looking for a room, I am going to find myself going through fruitless beauty contests.  Landlords/ladies know that people are desperate for housing and so can use this against you.  People renting out property generally think their tenants are slovenly and filthy, no matter how hard they work to keep the place clean.  Rights to be informed of a landlord's inspection are often ignored and you get levied charges like £40 for dust in a drawer or £60 for soap residue in a sink or £400 for the lawn having grown.  I should go into business as one of these cleaners/handypeople who charges such high prices for rectifying these things.

In addition to being once again a tenant, I have also dropped down the social scale even further.  Now, I am a man who has been unemployed for 7 months and will be dependent on housing benefit.  This rules me out from even applying for the bulk of rental property in my area and I am restricted to only those offering 'social housing'.  Housing benefit is falling and will quickly be below the rate necessary for the region in which I live in.  Consequently I will be compelled to move into one of the 'benefit ghettos' that are liable to harden once the new rules of housing benefits really begin to bite.  It seems incredible that twelve months ago that my career seemed to be advancing and I had a house and a stable situation and now that has been stripped of me.  At 43 I am cast on the scrap heap.  My career has halted and I cannot even get manual work because there are too many younger people with the right NVQ to step into those roles.  I suppose pride comes before a fall, but I do feel, that rather than much to do with my efforts, this has been inflicted on me by a government which loves pushing people down the social scale so as to enhance the standing of its people.  I am harangued by the Job Centre to be positive and see some future, but, despite all my efforts, there is no work even in a 250 Km radius, that will take me, I am apparently too much of everything for these employers, too high, too low, too practical, too strategic, too involved, too detached and so on.  Before Christmas I was interviewed for a job and came in as first reserve.  Given unemployment levels it seems unlikely that the winning candidate will turn the post down.  However, I then found out that the funding for the post has not even been approved yet, they were just building up a clutch of potential employees.  I was not even applying for a real job, just simply the opportunity that if a job does appear then I will have a chance to get it.  How much more like disposable batteries can workers become?  'Keep some in the drawer if we need them; chuck those ones out: they're past their use-by date.'

Anyway, I suppose returning to the rental sector will give me issues to post on here, assuming, that is, that I can get internet connection in whatever cramped flat I can get and hear myself think over the noise of screaming neighbours.  What about the woman and nine-year-old boy who have shared my house through the past few years?  Well, with the little money derived from the house sale, they are emigrating to Germany.  With the EU and online sales, small business have a lot more ability to relocate.  Apparently Berlin is desperate for people to rent there and is offering particular breaks.  There are a string of bilingual English-speaking schools there too.  Being an entrepreneur relocating is one thing; an unemployed office manager who does not speak German is something different. 

I am glad that they are getting out of the UK because the future here is going to be incredibly nasty.  As I have noted before people these days often ask: 'why did people not flee from Nazi Germany sooner?' and seem to think that they were naive or foolish.  For my views on this see: http://rooksmoor.blogspot.com/2008/05/respect-difficulties-of-escaping.html  Sitting here in the UK with a new regime, which I trust will never come close to the horrors of Nazi Germany, but certainly seems well on the path to something like the Francoist regime in Spain (1939-75), I can see how hard it is to flee.  You need lots of money and know how you are going to access it in the new country.  You need to be able to speak a foreign language, very well, and to be able to handle all the bureaucracy of the destination country.  You have to try to get some of your belongings out with you.  You have to think about the welfare of your children and how they will be educated when you arrive.  You have to think about what you will do for work.  You have to learn a new set of not only laws, but also customs and expectations.  If you think how challenging a lot of this is, even when you move from town to town in the UK (supplement accent for language in that case), think how many more times it is moving abroad.  I wish I had the ability to go.  Given the damage to UK education that is already beginning, I am glad the boy is getting out.  His mother seems to have paid heed to the warnings I have given about going abroad, see: http://rooksmoor.blogspot.com/2008/09/british-people-dont-be-foolish-in.html and finding a school that was English-speaking, was her first task.  Berlin is very different from the rest of Germany, more international and at the moment welcoming to immigrants from western Europe.  The EU makes things a lot easier for moving around than was the case in the 1930s, but it is still a challenge.

A couple of years ago I wrote on this blog that life does not 'begin at 40' as many have claimed, instead it 'begins to end', see: http://rooksmoor.blogspot.com/2007/09/life-begins-to-end-at-40.html  It is clear now that through bad luck, probably not being assertive enough, and living in particular times, my future is going to be a lot worse than the life I have lived so far.  I have had a brief period owning a house and having a kind of family, the type of lifestyle that the Conservatives are supposed not only to support but to foster.  That period of my life is over.  My one shot at establishing myself in the middle class has gone and now I am an over-aged, over-educated something that will be pushed around by bullying landlords and officials simply because I failed to scrape together enough money to keep a house or said the wrong thing to a question at one of my interviews.

If you have the means to get out of the UK, I advise you to do it now.

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