Age of home ownership coming to an end...

HAMISH_MCTAVISH

Britain's "golden age of home ownership" is coming to an end, and millions of young people face a lifetime of renting instead, a major housing organisation warns today.

The Chartered Institute of Housing is calling on the government to turn its attention urgently to the needs of more than three million households in the private rental sector.

Its wake-up call comes as figures reveal that in the most expensive parts of the country first-time buyers need to amass deposits of more than £40,000, almost double the average income, to have any chance of buying a home.

Research released today by Hometrack, the property analyst, shows that in London a single person would need to earn more than £50,000 a year to obtain a mortgage for a two-bedroom flat at the bottom end of the market.

The CIH says home ownership is becoming an increasingly untenable aspiration for millions of Britons – marking the start of an immense cultural shift. Families who cannot save deposits or access mortgages are falling into a black hole in the market.

In a study released today, the CIH also calls for action to help the "in-betweens", who tend to earn more than £12,000 but less than £25,000. They are too well-off to stand a chance of obtaining social housing – which has a waiting list of 1.8 million – but too poor to make it on to the housing ladder.

It claims shared ownership schemes, where people buy 50% to 75% of a property while a housing association buys the rest, are also out of reach.

Sarah Webb, CIH chief executive, says the "in-betweens" do everything the government asks but get little in return. "This idea that an Englishman's home is his castle gained momentum in the 1980s with right-to-buy, and then post the 1990s downturn when people saw owning a home as not just accumulating somewhere to live but also an investment," she said. "That home ownership is out of reach for a lot of people and we need to move to a situation where renting is a positive choice.

A golden age of home ownership is coming to an end. The time has come to move away from the notion of 'right-to-buy' and 'wrong-to-rent'."

Webb said she was concerned by the lack of "policy focus" on people who rent privately. Government figures show that four out of 10 homes in the sector are "non-decent", with problems such as damp, inadequate bathrooms and kitchens and broken windows. The CIH is calling for councils and housing associations to refocus their attention and consider "intermediate renting" schemes, which offer homes at below the market rate.

Richard Donnell, a director at Hometrack, said that, while the "long-term" aspiration for people around 30 was to own a home, increasing numbers believed it would not happen in the next three to five years. "The argument is that we are moving towards a more European model, where first-time buyers are in their late 40s and come in with 50% deposits."

According to David Orr, chief executive of the National Housing Federation, we are "in the midst of an unprecedented housing crisis" unparalleled in its breadth and depth.

A Department of Communities and Local Government spokesman said it had taken action to support the private rental sector but still wanted to support those who aspired to buy.

http://www.guardian.co.uk/society/2010/aug/15/housing-crisis-rental-market

As expected.

Divide widening between property haves and have nots.

twadge_face

HAMISH_MCTAVISH wrote: »

http://www.guardian.co.uk/society/2010/aug/15/housing-crisis-rental-market

As expected.

Divide widening between property haves and have nots.

You expected it. OK.

Can I ask, humbly, if you think it is a good or bad thing? Or is that too simplistic a question?

I mean, is this something you prefer, or would you be happier to see the "divide" narrowing instead?

...and if you answer can I also ask why you feel that way?

PasturesNew

So it's like one big pass the parcel, the music's stopped and if you've got one you're stuck with it - and if you haven't it's tough.

HAMISH_MCTAVISH

!!!!!!_face wrote: »

You expected it. OK.

Can I ask, humbly, if you think it is a good or bad thing? Or is that too simplistic a question?

I mean, is this something you prefer, or would you be happier to see the "divide" narrowing instead?

...and if you answer can I also ask why you feel that way?

The price of an asset class can never be good or bad. Only a function of supply and demand.

What you or I may prefer is of no relevance or significance. None of the words we type that appear as pixels on someone else's screen can ever make the slightest difference to 70,000 purchases a month.

All anyone can do is take a viewpoint on the long term direction of any market and position themselves accordingly. Which I have done.

HAMISH_MCTAVISH

PasturesNew wrote: »

So it's like one big pass the parcel, the music's stopped and if you've got one you're stuck with it - and if you haven't it's tough.

More like an increasing concentration of wealth and property in an ever decreasing percentage of the population.

But nice try PN.:D

treliac

HAMISH_MCTAVISH wrote: »

http://www.guardian.co.uk/society/2010/aug/15/housing-crisis-rental-market

As expected.

Divide widening between property haves and have nots.

So, where does this leave your theory of ever increasing house prices Hamish? <confused smilie>

HAMISH_MCTAVISH

treliac wrote: »

So, where does this leave your theory of ever increasing house prices Hamish? <confused smilie>

How do you see there being a conflict between millions forced into renting for decades, and house prices going up?

A growing number of households and an insufficient number of houses being built will compound the existing housing shortage and will force up asset values and yield on those assets regardless of whether they are owned by owner occupiers or investors.

treliac

HAMISH_MCTAVISH wrote: »

How do you see there being a conflict between millions forced into renting for decades, and house prices going up?

A growing number of households and an insufficient number of houses being built will compound the existing housing shortage and will force up asset values and yield on those assets regardless of whether they are owned by owner occupiers or investors.

You think!

nembot

I think you forgot to add the beer smiley in the first post Hamish

phil_b_2

A cultural shift to long-term renting isn't as ridiculous as some people might think. It's very normal in other parts of Europe. In Germany a lot of people rent for their whole lives and take the kitchen etc with them when they switch rental, literally, the sink and all!

TDS_2

Largely because the extraordinary taxes on home ownership, rather than the 'wealth' of those that own. Renting is a viable alternative since long term contacts are the norm. Gettin. Onthe illusive 'property ladder' is not the be all and end all as in the UK since house prices rise with inflation rather than boom and bust cycles.