Home Ownership down – Cost of Buying Up

IveSeenTheLight

http://www.yourrightmove.co.uk/blog/home-ownership-down-cost-of-buying-up/

The big news after the Bank Holiday weekend is based on the recent report from the National Housing Federation regarding Home Ownership going down, while the cost of renting and Buying continues to spiral out of control.
They predict the number of home owners will drop to just 64% as house prices soar, compared to 73% in 2001.
David Orr, Chief Executive, National Housing Federation told reporters, “Home ownership is increasingly becoming the preserve of the wealthy”.
Home Ownership down - Cost of Buying and rental going Up

Due mto rising costs of renting and buying added to the huge deposits and a tightening of lending criteria are causing the property market to head back to the eighties. In addition to the confidence being low, there is also a shortage of properties as lees than predicted number are being built.

Rental market

The report also predicts prices in the rental market will increase sharply as people struggle to own their own home.
The group, which represents housing associations in England, says a shortage of homes in the UK is also to blame.
House Prices set to rise

Across the UK, home ownership is expected is presently 67% of the UK population are owner-occupiers.
Oxford Economics which produced the forecasts for NHF, predicts the average house price in England will rise by over a fifth in the next five years from £214,647 in 2011 to £260,304 in 2016.

IveSeenTheLight

found the direct link
http://www.housing.org.uk/news/housing_market_crisis_as_home.aspx

Housing market crisis as home ownership lowest level since 1980s, study warns

The housing market is in crisis as owner occupation rates tumble and house prices and private rents soar, according to a new study.
30 August 2011
Home ownership in England will slump to just 63.8% over the next decade - the lowest level since the mid 1980s - as an entire generation are effectively locked out of the housing market, according to a new study.

• Read the Oxford Economics report (Word, opens new window)

Huge deposits, combined with high house prices and strict lending criteria, have sent home ownership into decline in recent years and the downward trend will continue for the foreseeable future, the National Housing Federation’s independently-commissioned forecasts predict.
The Federation warned the housing market will be plunged into an unprecedented crisis as it forecast steep rises in the private rental sector, huge social housing waiting lists, and a house price boom – all fuelled by a chronic under-supply of homes.

• In England, the proportion of people living in owner occupied homes will fall from a peak of 72.5% in 2001 to 63.8% in 2021.
• In London, the majority of people living in the capital will rent by 2021 with the number of owner occupiers falling from 51.6% in 2010 to 44% by 2021.
• The North East will be the only English region to see any increase in owner occupier numbers over the next decade, rising marginally from 66.2% to 67.4%.
• The average house price in England will meanwhile rise by 21.3% over the next five years from £214,647 in 2011, to £260,304 in 2016, according to Oxford Economics, who were commissioned to produce the forecasts.

At the heart of the problem remains a chronic under-supply of new homes. In 2010/11 just 105,000 homes were built in England – the lowest level since the 1920s.
More government investment in affordable housing would stimulate a wider, faster economic recovery and help fix our broken housing markets, according to the Federation.
It is calling for suitable surplus public land to be made available for the building of affordable homes, for local authorities to regularly assess housing need and for ministers to make a renewed commitment to building the homes the country needs

ruggedtoast

Hmm, you are very active with these threads today. Like a furtive squirrel, eager to present your best nuts to an attractive mate.

The NHF usually over eggs the pudding in terms of housing unavailability, as their existence depends on the government putting money into social housing. They famously predicted the million pound semi in 2007.

Pimperne1

ruggedtoast wrote: »

Hmm, you are very active with these threads today. Like a furtive squirrel, eager to present your best nuts to an attractive mate.

The NHF usually over eggs the pudding in terms of housing unavailability, as their existence depends on the government putting money into social housing. They famously predicted the million pound semi in 2007.

Sure that wasn't these people:

http://www.youtube.com/watch?v=9YNo_cgbRFQ

shortchanged_2

Look lets put this straight ISTL. There is very little downward pressure on house prices while the BoE base rate remains at 0.5%.

At the moment there are very few forced/distressed sellers on the market

geneer

Of course by "rents spiraling out of control" they mean they're a few quid more expensive than they were 3 years ago.
zzzzzzzzzzzzzzzz

nollag2006

shortchanged wrote: »

Look lets put this straight ISTL. There is very little downward pressure on house prices while the BoE base rate remains at 0.5%.

At the moment there are very few forced/distressed sellers on the market

Fully agree. And with interest rates not likely to rise for at least another year, rents rising dramatically, and mortgage rationing there really is a lot of pent up demand out there

Graham_Devon

nollag2006 wrote: »

Fully agree. And with interest rates not likely to rise for at least another year, rents rising dramatically, and mortgage rationing there really is a lot of pent up demand out there

It's worth thinking about further than next week though.

You suggest there is pent up demand, with low rates.

But suggest rates may start rising after a year, or however long.

What is going to happen when interest rates do increase. Is it going to allow that pent up demand to buy? Or is it going to make it even harder to buy?

What point were you trying to make?

nollag2006

Graham_Devon wrote: »

It's worth thinking about further than next week though.

You suggest there is pent up demand, with low rates.

But suggest rates may start rising after a year, or however long.

What is going to happen when interest rates do increase. Is it going to allow that pent up demand to buy? Or is it going to make it even harder to buy?

What point were you trying to make?

Do keep up Graham - you're surely not that stupid to only look at next week

Rates will only rise once the economic recovery has gained ground, thereby enticing new buyers and new mortgage providers into the market.

We will see a situation of rising house prices with little change on residential mortgage rates despite any low level rises in BOE base rate.

MacMickster

Graham_Devon wrote: »

What is going to happen when interest rates do increase. Is it going to allow that pent up demand to buy? Or is it going to make it even harder to buy?

The fact that interest rates MUST rise at some point in the future is the elephant in the room that those who believe that house prices will increase significantly somehow continually overlook.

They complain of mortgage rationing, expecting lenders to ignore even the possibility of price falls in the future, and feel that they should judge affordability based upon the base rate remaining at 0.5% rather than factoring in the possibilty of it rising to even 5% over the term of the loan.

Graham_Devon

nollag2006 wrote: »

Do keep up Graham - you're surely not that stupid to only look at next week

Rates will only rise once the economic recovery has gained ground, thereby enticing new buyers and new mortgage providers into the market.

We will see a situation of rising house prices with little change on residential mortgage rates despite any low level rises in BOE base rate.

Ok, so you seem to believe we will see increases in house prices to go hand in hand with increases in the cost of buying the house?

I.e house prices will rise at the same time mortgage costs rise? I'd ask where the money is going to come from, but there would be little point...you seem to now suggest base rates will rise, house prices will rise, but mortgage rates will stay static. Good lord.

As a sidenote, rates would be better rising when the economic recovery has gained ground. However, that does NOT mean thats the only time rates will rise. The BOE may be left with no option for a variety of reasons.

The housing market is totally manipulated currently by the base rate. It's good now. But it may not be quite so good tommorow.