How can houses become affordable ?

poppysarah

Thinkingbob wrote: »

What would need to happen to make houses affordable for first time buyers?

They could build special houses that were genuinely affordable. As opposed to the affordable home scam whereby they convince guilable people that a house is worth more and throw in some equity loan/.shared equity nonsense.

But then that's also market interference and screws up chains that need FTB in at the bottom.

Suspect leaving well alone other than ensuring honestly in the mortgage market and sensible lending.

ukcarper

Build more council houses mind you I can’t see it happening.

jjlandlord

esuhl wrote: »

House prices are left to market forces, so they reflect what people are willing to pay. As the population continues to increase and less land is available for development, demand will go up but supply won't keep pace

While I agree that, if we believe projections, population increase will help boost prices, it should be acknowledged that supply has been, and still is, artificially constrained, and people just want houses, houses, houses.

Key things on this for me:
- Everyone wants a house,
- Flats are usually not very attractive,
- Local authorities do their best not to allow development.

On the other side of the channel they have very nice smallish apartment buildings, supplying nice, family-oriented flats.
Perhaps people here need to warm up to such an option. After all, newer houses are usually extremely small with a garden the size of a balcony, so what's the point?

ashleypride

Armorica wrote: »

I'm not sure what banks have to do with the high cost of housing - they are only responsible for providing a mortgage if you can't afford to pay cash

Banks have everything to do with the cost of housing. Lending criteria directly impacts who can 'afford' housing, increasing demand. One of the many reasons we have seen the cost increasing is due to 'greedy' bankers.

Derivative

Armorica wrote: »

I'm not sure what banks have to do with the high cost of housing - they are only responsible for providing a mortgage if you can't afford to pay cash

It's simple supply and demand, for cheaper houses - there need to be more of them. Or move to a region where not many people want to live and houses will be cheap.

Yes, but the majority of homeowners don't pay cash.
If mortgages didn't exist, houses would definitely be cheaper as there would be less potential buyers at the same price.

Thinkingbob

Derivative wrote: »

Yes, but the majority of homeowners don't pay cash.
If mortgages didn't exist, houses would definitely be cheaper as there would be less potential buyers at the same price.

Good contributions so far but this is the type of thing I was looking for. Thinking out of the box.

Why should mortgages exist? The status quo is so ingrained in us we never question the norm. Living well beyond our means has become normal? Have we ever questioned why?

If people couldn't borrow such huge amounts that take a lifetime to pay off then surely the the housing market would be quite a different beast altogether.

We survived as a species before mortgages existed so what makes us think we can't survive without them now?

Now don't flame me for this. It's purely to generate thought and discussion but if things were to ever change it would be when we started to think of the flaws of the system that we have created and come to accept.

A cursory google search gave me some rough figures about house ownership in the UK. The figures could be a bit out of date but lets just hang in there and suppose that they are correct for the purpose of this discussion.

25 Million Houses in UK.

17.5 Million houses in UK owned outright

A Purely hypothetical scenario follows so dont get upset.

To think outside of the mortgage box lets assume that out of the 17 million house owners those that had more than one house decided to conditionally sell that house to a first time buyer for just £20,000 above the actual 'build cost' with the condition being that the house could not not be sold on for more than £20,000 above what it would cost to rebuild it if it collapsed. What would happen to the housing market and the UK economy?

Who would be the winners if it did happen and who would be the losers.

What prevents this from happening now?

Great forum btw.

Running_Horse

You're new here Bob and no doubt mean well, so let me point you in the right direction:

http://forums.moneysavingexpert.com/forumdisplay.php?f=149

This forum is for people buying, selling and renting looking for a specific answer to a problem. The house price debate forum is better for people looking to redesign the economic system.

Mrs_Arcanum

Cap land prices at a reduced level and release more land with approved residential permission.

Thinkingbob

Running_Horse wrote: »

You're new here Bob and no doubt mean well, so let me point you in the right direction: ....

This forum is for people buying, selling and renting looking for a specific answer to a problem. The house price debate forum is better for people looking to redesign the economic system.

Sorry about that.

Is it possible for a moderator to move this thread to the correct section please?

propertyman

Actually we have to thank the banks for making funds available for loans to be borrowed to buy homes.

The house price is a function of inputs land cost and build cost, plus profit, all of which depend on supply and demand.

Until you can redirect economic activity and free up land to build them, quickly, supply is limited and the price will always exceed the need and demand.

As a result saving hard doesn't work as the money will move the best returns
from sales, not savings returns.

If you limit lending to sensible levels that people can repay, without relying on a rising market to eliminate the debt, it is undermined by the sheer weight of numbers and expectations- it can't keep up.

We need another New Town policy, but with £1 trillion deficit, most created by govt entitlement spending NOT toxic bank loans, we are not going to have the public funds to get it kick started.

And if you "tax the bankers" 20% of our economy "leaves the building" at which time the real depression will start- Egypt is a Sunday picnic by comparison to what will happen.