Time to give up the dream....?

sjaypink

Interesting article in the Independant

It's time to give up the dream of home ownership, says minister

People should get used to idea of long-term renting, housing spokesman argues

The era in which all Britons aspire to own their own home may be coming to an end, according to the Housing minister, John Healey. In a controversial speech, he suggested that Britain may be moving towards a European model, with renting on a roughly equal footing with buying. He said home ownership had fallen from 71 per cent of households in 2003 to 68 per cent today, noting that this trend began in 2005, well before the recession. "I'm not sure that's such a bad thing," he said....

.... "Yet not even a drop in the housing market can convince people not to use their home as a store of wealth." He said almost a third of people rely on their home to top up pensions. "The property piggybank is unsustainable and unfair," he added....

....The number of first-time buyers getting parental assistance has doubled in just three years to four out of every five....

...."Increasingly, those without the property-funded 'Bank of Mum and Dad' are finding it hard to buy homes of their own," Mr Healey said. The gap has widened in the recession, during which the average age of first-time buyers getting parental assistance has stayed the same but the average age of a first-time buyer without parental help has risen from 33 to 37. "As housing wealth is passed from parents to children, inequality is compounded over the generations," he said.


Will/ Can European style renting happen in the UK?

carolt

Very interesting.

I assume this means the govt are about to reintroduce proper secure tenancies for long-term renters, as all those Eropean countries he mentions as a model already have?

Otherwise, it's not worth the paper it's written on, frankly.

doire_2

carolt wrote: »

Very interesting.

I assume this means the govt are about to reintroduce proper secure tenancies for long-term renters, as all those Eropean countries he mentions as a model already have?

Otherwise, it's not worth the paper it's written on, frankly.

No thats too much like common sense for Nu Labour

Lotus-eater

He said home ownership had fallen from 71 per cent of households in 2003 to 68 per cent today, noting that this trend began in 2005, well before the recession.

Maybe I'm thinking crazy here, but that could be because of the cost of houses.... Nothing to do with the recession.

.The number of first-time buyers getting parental assistance has doubled in just three years to four out of every five....

...."Increasingly, those without the property-funded 'Bank of Mum and Dad' are finding it hard to buy homes of their own

That means that house prices are out of reach for most first timers? Unless they get parental help.
I suppose this means that the housing market must rely on money coming from the top of the market to go back into the bottom. Be interesting to see if this business model can continue to increase/or sustain, house prices.

sjaypink

carolt wrote: »

Very interesting.

I assume this means the govt are about to reintroduce proper secure tenancies for long-term renters, as all those Eropean countries he mentions as a model already have?

Otherwise, it's not worth the paper it's written on, frankly.

Exactly what I was thinking....

I am not against an inrease in renting at all- traditionally am a supporter of more social housing .... but what I think I actually support is not the provision of housing by the state (shouldn't really matter who the LL is), it the security of tenure etc

ThrowingStonesAtYou

Lotus-eater wrote: »

I suppose this means that the housing market must rely on money coming from the top of the market to go back into the bottom. Be interesting to see if this business model can continue to increase/or sustain, house prices.

Don't pyramid schemes work along this line.. people who have already had a payout buy back in in the hope of getting another one?

thescouselander

There is nothing wrong with renting - I rented for a long time before buying a house. The problem is what happens after retirement. If you have bought your house and paid the mortgage your main living cost is sorted. If you are still renting at that point you'll still need to pay rent from your pension which will be much less than your working wage.

For these reasons I believe property ownership is the best way but prices have to come down to a more reasonable level.

drc

sjaypink wrote: »

Interesting article in the Independant

It's time to give up the dream of home ownership, says minister

People should get used to idea of long-term renting, housing spokesman argues

The era in which all Britons aspire to own their own home may be coming to an end, according to the Housing minister, John Healey. In a controversial speech, he suggested that Britain may be moving towards a European model, with renting on a roughly equal footing with buying. He said home ownership had fallen from 71 per cent of households in 2003 to 68 per cent today, noting that this trend began in 2005, well before the recession. "I'm not sure that's such a bad thing," he said....

.... "Yet not even a drop in the housing market can convince people not to use their home as a store of wealth." He said almost a third of people rely on their home to top up pensions. "The property piggybank is unsustainable and unfair," he added....

....The number of first-time buyers getting parental assistance has doubled in just three years to four out of every five....

...."Increasingly, those without the property-funded 'Bank of Mum and Dad' are finding it hard to buy homes of their own," Mr Healey said. The gap has widened in the recession, during which the average age of first-time buyers getting parental assistance has stayed the same but the average age of a first-time buyer without parental help has risen from 33 to 37. "As housing wealth is passed from parents to children, inequality is compounded over the generations," he said.


Will/ Can European style renting happen in the UK?

I don't think it can unfortunately. The British are obsessed with HPI and in my opinion many LL want to have their cake and eat it. They want to be able to set high rents but not allow their tenants to decorate or make the property they live in their own. Tenants end up feeling like they are living in temporary accomodation rather than a home, even though they are paying all the bills etc. I also think Europeans (or my experience of renting in Germany) have a much more relaxed attitude to money and tenancies. There seems to be a more humane relationship between renters and LLs and things are set out very clearly but also flexible. There are also a lot more rights for tenants there (plus of course you normally get much more m2 for your money in Europe). I think the whole housing bubble has made many LLs completely obsessed with making money at any cost and they see tenants as cash cows to fund their mortgage/pension rather than as human beings. Likewise, tenants don't trust LLs because they tend to take ages to address any problems and always want to try and keep the hefty deposits from the tenants (at least in my experience as a serial renter).

Perhaps over time the whole relationship between LL and tenants will change but I think this will correlate with the easing/end of HPI and not seeing housing as a way of making quick and easy money.

ThrowingStonesAtYou

carolt wrote: »

Very interesting.

I assume this means the govt are about to reintroduce proper secure tenancies for long-term renters, as all those Eropean countries he mentions as a model already have?

Otherwise, it's not worth the paper it's written on, frankly.

I'm confused as to why this is being suggested now.. the graphs here:

http://www.ft.com/cms/s/0/4fda2cc8-525a-11dd-9ba7-000077b07658,dwp_uuid=e70ca99e-a4b0-11db-b0ef-0000779e2340.html?nclick_check=1

Indicate that European house prices changes have been broadly similar over the last 10 years, so what is so different now?

HAMISH_MCTAVISH

sjaypink wrote: »

The era in which all Britons aspire to own their own home may be coming to an end, according to the Housing minister, John Healey.

Era? It's barely been 50 years, a mere short term blip in the big scheme of things.

In a controversial speech, he suggested that Britain may be moving towards a European model, with renting on a roughly equal footing with buying. He said home ownership had fallen from 71 per cent of households in 2003 to 68 per cent today, noting that this trend began in 2005, well before the recession. "I'm not sure that's such a bad thing," he said....

Not very controversial at all. Theres no way you can build enough houses to keep up with population growth, therefore significant price rises are inevitable.

In an increasing population, a declining (but increasingly wealthier) percentage of population can own, whilst the absolute number of owners increases.

It's not rocket science.

But it is a masterful use of spin and smoke and mirrors.:rolleyes:

.... "Yet not even a drop in the housing market can convince people not to use their home as a store of wealth." He said almost a third of people rely on their home to top up pensions. "The property piggybank is unsustainable and unfair," he added....

No kidding John.... I wonder why that is? Oh yes, thats right, it's because YOUR government raided our pensions pot, taxed our other savings and investments to death, and gave us no other choice, you flaming idiot.

....The number of first-time buyers getting parental assistance has doubled in just three years to four out of every five....

Gee, I wonder why.... Could it be because three years ago an FTB could walk into a bank and get a 95% or 100% mortgage approved the same day at a decent rate? Whereas today they'll need a 25% deposit, which is extremely difficult to save without help?

"As housing wealth is passed from parents to children, inequality is compounded over the generations," he said.

WHich is what happens when you compound the situation by further limiting an already short supply with ridiculous planning regulations. Want to help more people afford homes? Then build more of them.:rolleyes:

the_ash_and_the_oak

certainly possible a smaller % of people will own in the future than in recent years but not sure this will be because of higher prices. prices have risen relative to wages in tandem with rising owner occupancy imo (because finance became gradually cheaper and more accessible to more people). If prices fall it will be because finance is harder/dearer to access which means a smaller % of people will be able to buy, reducing the demand imo