The so called "housing ladder"

auroan

How many of you believe there is still a "housing ladder" available to all ? Or even exists anymore ?

The popular definition of this term is;

(http://dictionary.cambridge.org/dictionary/british/the-property-ladder)
the property ladder noun



Definition


a series of stages in owning houses in which you buy a small house or apartment first and then buy a bigger or more expensive house when you have enough money


But in a time of falling house prices.... majority (not minority) down sizing, or unable to sell due to negative equity....

How can such a term still be used or even exist ? Are those who still think the so called ladder is there, deluded ?

Discuss ......

twirlypinky

I think there are still a lot of people out there playing that game, and good for them. Not necassarily for profit - but just because their family is growing.

This is not the case for hubby and i though. We just want to buy one forever house and stay in it, at least until we're frail and old, then we'll flog it and buy a little flat

Pimperne1

There was a ladder but those that climbed it pulled it up behind them. There are people on the ground shouting "You're going to fall off" but, to be fair, those people have been shouting for about 8 years now and only a few who shouldn't have climbed the ladder in the first place have fallen.

auroan

Discounting anonmalies to the norm.... There is no "ladder" in the current climate.

A "ladder" as such can only exist when there is either wage inflation or HPI..... neither exist at the moment. So there can be no "ladder" for the majority.

LydiaJ

But people still get promoted to better paying jobs as they get older, and they also get bigger families, as twirlypinky has already pointed out, and need more space. Sometimes needing more space coincides with having more money when a SAHM goes back to work, or a working mum increases her hours, when the kids reach school age. I can think of at least two friends who've upsized for those reasons within the last couple of years or so.

pinkteapot

The housing ladder is a long-term thing. We're talking about the properties people own from their 20s/30s to their 60s at least. That's 30-40 years. Someone buys a flat in their 20s. They stretch themselves and are paying £600 a month on their mortgage which is 40% of their take home pay. In 10-15 years time, £600 is less money due to inflation (I am assuming the UK doesn't turn into Japan in saying that). In addition, in that time their salary should have gone up, assuming some reasonable amount of career progression. As a result, their mortgage repayments are a considerably lower % of their take-home pay and they can afford to buy a bigger house (if they want to). That process repeats itself in the next 15 years and they move again.

We're talking about a 30 year process. Sure, it's stalled in the last 3 years and that's going to happen over short-term periods (and has previously in other recessions and house price crashes). For some who bought at the top of the market right before a crash and massively over-stretched themselves, it probably will stop them ever climbing it. But these are minority cases.

auroan

auroan wrote: »

Discounting anonmalies to the norm....

Needing more space != being able to afford a bigger home.

The "ladder" is no longer available to the masses anymore..... so there is a strong argument that the "ladder" doesn't exist in the definition quoted at the top of the thread, any more.

DervProf

auroan wrote: »

Definition


a series of stages in owning houses in which you buy a small house or apartment first and then buy a bigger or more expensive house when you have enough money


But in a time of falling house prices.... majority (not minority) down sizing, or unable to sell due to negative equity....

How can such a term still be used or even exist ? Are those who still think the so called ladder is there, deluded ?

Discuss ......

According to the above definition, a housing ladder can still exist in a falling market. The rungs on the ladder will get closer together, making the next step up a little easier.

Of course, it might not be so simple as this. If you are in negative equity, due to falling prices, it may well be that you have trouble raising finances to move to the next step. However, just because prices are falling, it doesn't mean that everyone will be in negative equity, so in theory, the ladder still exists.

I think there is a bit of a myth about "the ladder" in that rising house prices help people to climb it. I think that static prices are more likely to enable people to get to the next rung. Rising prices might appear to encourage ladder climbing, but that will only go on for so long until the rungs become too far apart.

auroan

pinkteapot wrote: »

I am assuming the UK doesn't turn into Japan in saying that

Thats the thing. No body wants to say it... but thats exactly what the UK housing market appears to be doing. And so far thats 25 years worth of no ladder for Japan.

pinkteapot

I was talking about the UK economy, not the UK housing market. In fact, long term, if we have a growing economy and a stagnant housing market that would be great! It won't happen though.

HAMISH_MCTAVISH

auroan wrote: »

But in a time of falling house prices....

House prices are not falling, for most people in most areas.

Up 4%, or around £7,000, since January, and pretty much flat year on year. (nationwide)

But of course those "blunt averages" as some like to call them, mask the regional variations as shown by the RICS survey, where prices are rising or stable in 70% of the UK, and falling only in 30%.

majority (not minority) down sizing,

Population is growing, and the biggest generation of people in history, bigger even than the boomers, is about to start reaching FTB age.

From 2013 until 2025 the numbers of FTB age people will increase until it peaks at 50% more per year than today. And it won't be until 2035 that your average FTB-er has as little competition for houses as he does today.

So where the hell are you getting this absurd idea the majority are going to downsize?

or unable to sell due to negative equity....

The numbers in N'equity are decreasing, not increasing.

How can such a term still be used or even exist ? Are those who still think the so called ladder is there, deluded ?

Discuss ......

Nothing has changed.

The last few years are merely a blip.