Home ownership becoming 'exclusive members' club'

http://www.bbc.co.uk/news/business-29198736

The NHF, which represents housing associations, says only the wealthiest of the next generation will be able to buy a home if current trends continue.

Its report, Broken Market, Broken Dreams, says the average first time buyer needs a £30,000 deposit and to borrow 3.4 times their annual income.

How do you feel about this and what social implications do you think a lack of housing will have on our generation?

Scroll to see replies

Reply 1

Quady

Depends where you are.

For most northern cities its pretty cheap.

The main issue is London. Top tip - don't live there.

Reply 2

ebam_uk

Another thing... it is hard... I mean at the moment, its a case of get a job, get the highest mortgage possible and get (borrow from parents etc) the biggest deposit possible...

After you have bought the biggest place possible.. rent it out... and go on holiday etc... Borrow against your mortgage to pay back any amount for the deposit and go sleep for 10 years... as the biggest bubble continues to earn more money than everyone who is working to pay rent...

Reply 3

Quady

Original post by ebam_uk

Right.......

I borrowed less than 2 times my income in April for my first place.

Reply 4

Camoxide

I don't understand how it can be justified how much property prices have increased over the passed two decades. The average property price has gone up far more than the average wage.

Reply 5

ebam_uk

Original post by Quady

Right.......

I borrowed less than 2 times my income in April for my first place.

How many bedrooms did u buy?

I was just saying if u borrowed more... Ie got a more bedrooms in the property ( ie a bigger property)... rent the spare bedrooms or do not even live in the property... your leverage ie the bigger mortgage can generate more money...

Reply 6

Rakas21

Original post by Bill_Gates

These people are far too negative. One afford a house across large swathes of the country.

With that being said what we need is a house building programme and for government to stop their credit schemes so that house price growth stalls.

The implication in the main will be that in later life they will have less purchasing power since they won't have an asset to sell or borrow against.

Reply 7

Quady

Original post by ebam_uk

Two.

If I didn't live in the property I'd need to pay rent/council tax/bills elsewhere plus have a larger interest bill on the place as it'd be buy to let.

I could have got a bigger place and rented out a room or two (still could), but since I've lived alone for six years getting a housemate(s) would seem like a bit of a backwards step.

Reply 8

BlackMagicV

My boyfriend's sister has her own place in Cambridge with her boyfriend. It's doable, just rare. My dad used to work in Middlesbrough and the taxi driver had bought his house outright for £12k.
My house was on the market for £525k in spring, but that's a 10 minute drive from 3 mainline stations, including Cambridge, making it commuter paradise. It also has 5 bedrooms and is within an hour's drive of London, which drives the price up further.
My brother lives in London and rents. He's looking to move to Berlin or Eastern Europe to work, though.
My uncle works at channel 4 news and most of the younger generations don't see themselves ever buying a house.

Reply 9

Clip

That's some exclusive club - with 15m people in it.

Reply 10

Good bloke

Original post by Camoxide

I don't understand how it can be justified how much property prices have increased over the passed two decades. The average property price has gone up far more than the average wage.

The value of property is not entirely directly related to incomes. Supply and demand is of far more importance. Natural population growth, broken families and immigrants increase the demand for homes. Houses aren't built fast enough to cope with the change and, ultimately, they can never be as they depend on the supply of land (which, you may have noticed, is no longer manufactured in the UK).

Many foreign buyers are wealthy and don't need to borrow so push up prices too. This is a strong factor in the London market.

In other words, it is inevitable that property prices have a strong upwards trend, above that of inflation.

Reply 11

RF_PineMarten

You have to remember that this varies a lot from area to area - there are some parts of the country where no real "housing crisis" exists and others where it most definitely exists. A planning application in our village was rejected recently, and one of the refusal reasons was there would actually be an oversupply of housing in the district.

Reply 12

Gherk

I don't understand how there is a housing crisis when there are a million empty homes. It just seems like greedy property owners are intentionally keeping houses off the markets to create artificial scarcity.

Reply 13

ManifoldManifest

Original post by Quady

Depends where you are.

For most northern cities its pretty cheap.

The main issue is London. Top tip - don't live there.

"Live in the North" isn't exactly a helpful or useful tip for all the people who have to live in London. My job doesn't exist in the North, it exists in Central London, this is going to be true for a lot of the other people suffering overinflated property prices here.

Reply 14

Rakas21

Original post by Good bloke

A lot of house price growth is actually linked to the inflated credit supply. One mortgage lending falls, house prices will to a point where supply and demand for land drives the price.

Reply 15

Rakas21

Dam autocorrect. Should say once mortgage and will fall.

Reply 16

Good bloke

Original post by Rakas21

A lot of house price growth is actually linked to the inflated credit supply. One mortgage lending falls, house prices will to a point where supply and demand for land drives the price.

In London over 30% of house purchases do not involve the need for a mortgage. The supply of credit is irrelevant if you are a cash buyer.

Reply 17

Quady

Original post by ManifoldManifest

Not all the people no.

But that really only applies to IB, Fleet Street (not that that is in Fleet Street anymore), and law to a certain extent.

I work in government/politics and haven't had an issue working away from Whitehall (its a train ride away when I need to go). Although that might change come Friday!

London prices are high because people want to live there (duh I know), they must find a net advantage living there to the north (and doing something else potentially). Its a choice.

Reply 18

Quady

Original post by Good bloke

In London over 30% of house purchases do not involve the need for a mortgage. The supply of credit is irrelevant if you are a cash buyer.

Since nationally the proportion is more like 40% surely that is an issue more relavent to the rest of the UK? :P

http://www.theguardian.com/money/2014/feb/21/properties-bought-cash-on-increase

I'm guessing the respective figures are wonky, but the point being, what is the difference between London/non-London cash buyer proportions?

Reply 19

Commercial Paper

Original post by Bill_Gates

When I speak to most of my friends about this (nearly 20), they don't seem to get it. I'm convinced most in our generation haven't either worked out or woken up to this fact. And that in ten years there will be an out-cry by which point this problem will have been building up for decades. I also don't understand why people are willing to work for so little and act like 20k is a great salary when you can't even purchase a garage on that salary.

Also, I'm slightly lost as to why house price inflation isn't reported in the actual inflation figure - after all, isn't the main aim of BoE to use interest rates to stop something like this happening? Instead, everyone just seems to pretend it doesn't exist. According to the current inflation figure, we are living in some kind of utopia.

The other issue is, of course, people say just build more houses but this doesn't solve the issue if you build no infrastructure with it. We've seen massive house building where I live, I mean, if you drive through, you will literally see it every two minutes. Yet, no increase in infrastructure at all. In fact, our rail route has just been voted one of the most overcrowded in the country.

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(edited 9 years ago)