Does the property ladder still work at today's prices

lynzpower

RHemmings wrote:

I only posted some of my points in my first post. In a rather pretentious plan I was waiting for someone to come along and claim that the property ladder was working all fine and dandy so that I could post the second half of my argument. Surely someone believes that the property ladder is working fine, or at least will lie due to vested interests.

Nah not me either mate.

How can it, when most people I know ( way worse off than me BTW) have bought themselves a one bedroom flat and are paying almost a grand a month for it.

Just cant work can it.

seraphina

I don't think it does.

"Traditionally", DH and I would probably have been able to buy a 1/2 bedroom flat, live there for 5 years or so before having kids and buying a house. However we've missed out that step entirely and our first house purchase will most likely be a three bed semi, and we'll probably stay there for as long as possible.

It doesn't help that 1//2 bed places are so expensive, whereas the price difference between a two bed flat/terrace and a 3/4 bed family is pretty small where we are, so for the sake of saving a larger deposit, we can get much more for our money.

RHemmings

lynzpower wrote:

Nah not me either mate.

How can it, when most people I know ( way worse off than me BTW) have bought themselves a one bedroom flat and are paying almost a grand a month for it.

Just cant work can it.

Even though everyone agrees with me, I'd still like to make an extra point. If "mid-priced" properties are stretched to the limits of affordability, then this must take into account the fact that many people selling FTB properties nowdays have a whole lot of "free" equity from recent house price inflation. If prices stabilise at a high level then future FTBs won't have this free equity, and will have been able to save far less from their salaries due to massive interest payments on their massive mortgages. So there's a double whammy considerably reducing the amount they can afford to pay for "mid" or "high" price properties from the amount that current buyers can afford. And that's without a house price crash, without interest rate rises, without wage deflation, without additional unemployment.

lynzpower

My thoughts exactly Rhemmings, just could not agree with you more.

Which is why I am now selling.

whambamboo

gbmacqueen wrote:

Do you think that higher value houses are increasing in value slower therfor the gap gets narrower. As a result the ladder bends higher up?

Let's have a look randomly:

Guildford flats:
http://www.upmystreet.com/property/prices/flats/l/guildford.html
1996
Average price £60k
2006
Average price about £210k

Increase of 250%

Guildford detached
http://www.upmystreet.com/property/prices/detached/l/guildford.html
1996
Average £150k
2006
Average £550k

Increase of
267%

Harrogate terraces
http://www.upmystreet.com/property/prices/detached/l/harrogate.html
1996, £50k
2006, £185k

Increase of
270%

Harrogate detached
http://www.upmystreet.com/property/prices/detached/l/harrogate.html
1996, £120k
2006, £390k

Increase of
225%

Liverpool terraces
http://www.upmystreet.com/property/prices/terraced/l/liverpool.html
1996 £28k
2006 £90k
+222%

Liverpool detached
http://www.upmystreet.com/property/prices/detached/l/liverpool.html
£90k to £290k
+222%

So, no, there's no real evidence for your conjecture. Things seem to have got faster at the same pace regardless of price. Maybe in the £2m+ range, but certainly not with normal people's houses.