Home ownership back to 1988 levels.....

HAMISH_MCTAVISH

Home ownership has fallen to 66%, a level last seen in 1988.

A staggering statistic.

Two decades of progress with home ownership levels wiped out in just a few years, mostly as a result of the credit crunch and associated mortgage rationing.

An entire generation of potential FTB-s forced to enrich their landlords instead of themselves.

Thanks to the banks mortgage rationing, FTB buyers this year are projected to be around one third of the the number that were able to buy in 2007, when both prices and interest rates were far higher.

And as a result, rents have risen so that they are more expensive than a mortgage payment in 90% of the UK, further reducing the ability of FTB-s to save the exorbitant deposits now required.

While of course, house prices have fallen just 13% (land registry), despite 65% of mortgage funding being removed from the market. Proof indeed that there never was a speculative bubble in UK house prices, just a severe shortage of housing driving up prices through a good old fashioned supply/demand imbalance....

An imbalance that is getting worse and sowing the seeds of the next boom, as thanks to the credit famine house building shrinks to levels last seen 100 years ago, while population growth and new household formation soar to record highs.

If this country does not find a way to get mortgage lending back to historically sensible, normal, and prudent levels where a 5% deposit and a stable employment history were enough to get a mortgage at a non-punitive rate, then house building will continue to be short 150,000 a year of the levels needed, and we will be storing up a monumental housing crisis for future generations.

homelessskilledworker

I started off feeling quite interested in your post, you seemed to be posing many questions and raising some interesting points, and then the inevitable happened and you then listed what WILL then happen(in your mind anyway), and of course it was a scenario of ever rising house prices, it always is.

I was thinking about some of the points you make over the last week, and even found myself having a moment of clarity at one point, My conclusion was I don't have a clue how things are going to pan out, well not so much how things will pan out but in what form it will pan out.

None of us could possibly know what is going on in the head of homeowner Mr& Mrs Smith of 7 Average street, but what I do know is there is a lot of sitting it out today with the property market, many are putting properties on then off then on again, some property is even sitting there for a year or so or more.

Lending is dismal, so again homeowners and sellers are sitting it out. Disposble income is getting worse for most, as much as some posts on here will try and have us believe that they have never been so flush in general people are struggling.

The housing market is stagnant, which in part is holding back badly needed recovery. The people you go on about being forced to rent are doing so because of lack of money and for many other reasons, none of them postive, how you think they can be squeezed more in beyond me.

We have had changes to housing benefit that will soon come into effect, eastern europeans will soon be encouraged to bog off home through lack of work, and I would personally take preference over an Englishman than a Pole if I had a job on offer(another thread).

Something has to give is the way I see things, how this will play out is anyones guess, but what me and you can agree on Hamish is that things are not good out there, what I cannot agree with you is the scenario of rising property prices, how can there be.

moneyinmypocket

When the credit taps turn on again and the country is doing better with its debts (2015 on wards) there will be a surge of new buyers but lack of housing forcing prices to rise. Some people will never own a house that is just fact

wotsthat

homelessskilledworker wrote: »

Something has to give is the way I see things, how this will play out is anyones guess, but what me and you can agree on Hamish is that things are not good out there, what I cannot agree with you is the scenario of rising property prices, how can there be.

There's no need to guess at what's going to happen. Fairly simple economics allows a reaonably educated prediction to be made. Not enough housing leads to higher accomodation costs for renters and buyers.

Lending criteria and benefit changes will have an effect but as far as I see they are secondary factors to the shortgage of housing. Where these factors will have more of an effect is in respect of the type of property buyer - the proportion of owner occupiers will continue to decline.

I think that's bad news for UK society.

Mr._Pricklepants

homelessskilledworker wrote: »

I would personally take preference over an Englishman than a Pole if I had a job on offer(another thread).

Sadly for you and your bigot mates, the majority of employers seem to think differently, preferring a hardworking, motivated Pole over a lazy, spoiled and uneducated local. :T

It's simple. Any hard working, motivated, skilled Brit can buy a house. But when you have an education system that produces 16 year olds who can barely write nor read, coupled with an over generous benefits system, you have issues of course. But don't blame immigrants for that.

homelessskilledworker

wotsthat wrote: »

There's no need to guess at what's going to happen. Fairly simple economics allows a reaonably educated prediction to be made. Not enough housing leads to higher accomodation costs for renters and buyers.

Lending criteria and benefit changes will have an effect but as far as I see they are secondary factors to the shortgage of housing. Where these factors will have more of an effect is in respect of the type of property buyer - the proportion of owner occupiers will continue to decline.

I think that's bad news for UK society.

On the one hand some posters point out that those who rent are bottom feeders, then they go on to say they will "just put the rent up", if many are strugling today there is every chance they will be struggling even more tommorrow.

I am not sure how many of the posters on this board run a real business(BTL not included), but working out a cashflow plan or a business plan on a saturday evening, it is usually the last option to increase prices, quite simply your business will then fail if you do so. For some reason BTL types seem to think the simple answer is to "I will just increase the rent mate".

People on this board have a tidy little path of how things will happen in the next few years, very few take politically motivated decisions into account or how much more can people be squeezed and by how much.

For example I wonder how many of you predicted the banking crisis in 2007, and more importantly I wonder how many of you think the problem has REALLY been resolved.

wotsthat

homelessskilledworker wrote: »

I am not sure how many of the posters on this board run a real business(BTL not included), but working out a cashflow plan or a business plan on a saturday evening, it is usually the last option to increase prices, quite simply your business will then fail if you do so. For some reason BTL types seem to think the simple answer is to "I will just increase the rent mate".

Most of the 'BTL types' that post here seem to cherish long term good tenants and are reluctant to increase rents. Quite a sensible attitude.

Price increases in any business, BTL included, have to be implemented in whatever market conditions operate. If you sell crisps and put the price up by 10p the market will decide whether they'll stand it or not. If there are plenty of other good suppliers of crisps that are cheaper there's a very good chance that you won't get your price increase past the retailer let alone the consumer.

Same with BTL. Put your rent up and the tenant has the same options as the crisp buyer - find a new landlord or pay the price. Rents are increasing - there's a shortgage of properties that people want to rent.

Crisps, milk, BTL, light bulbs - the same basic economics apply.

homelessskilledworker

wotsthat wrote: »

Most of the 'BTL types' that post here seem to cherish long term good tenants and are reluctant to increase rents. Quite a sensible attitude.

Price increases in any business, BTL included, have to be implemented in whatever market conditions operate. If you sell crisps and put the price up by 10p the market will decide whether they'll stand it or not. If there are plenty of other good suppliers of crisps that are cheaper there's a very good chance that you won't get your price increase past the retailer let alone the consumer.

Same with BTL. Put your rent up and the tenant has the same options as the crisp buyer - find a new landlord or pay the price. Rents are increasing - there's a shortgage of properties that people want to rent.

Crisps, milk, BTL, light bulbs - the same basic economics apply.

We 100% agree:)

ruggedtoast

http://www.independent.co.uk/money/mortgages/exclusive-home-ownership-at-lowest-level-since-1988-7180874.html

A report into attitudes towards housing last year found that 77 per cent of all non-homeowners still aspired to owning their own home – but many younger people expected renting to become the norm. The study, produced for the Halifax by the National Centre for Social Research also found two-thirds of non-homeowners believed they had no prospect whatsoever of buying a home. The report found that 95 per cent of 20- to 45-year-olds questioned said they had no spare cash, no interest in saving for a deposit or were trying to save but failing to do so.

If this is to be the norm now something must be done to drastically reform private tenancy regulations.

homelessskilledworker

ruggedtoast wrote: »

http://www.independent.co.uk/money/mortgages/exclusive-home-ownership-at-lowest-level-since-1988-7180874.html



If this is to be the norm now something must be done to drastically reform private tenancy regulations.

You cannot continue with a system where people and families are trying to settle with them moving on every six months or allways with the threat they might get 2 months notice at anytime.

Todays BTL is a bad product that will need overhauling in the not t0o distant future.
In my view if we are going to keep some BTL(and I think we should) once a house becomes a rented property it stays as a rented property unless a substantial penalty is paid to take it out.

pqrdef

HAMISH_MCTAVISH wrote: »

If this country does not find a way to get mortgage lending back to historically sensible, normal, and prudent levels where a 5% deposit and a stable employment history were enough to get a mortgage at a non-punitive rate

You've got a very short view of history.

It's much more likely that the home-ownership boom of recent decades was merely an aberration that will not return.