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Debate House Prices
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Thousands trapped on first rung of housing ladder
Graham_Devon
Posts: 58,560 Forumite
Apparently second time property is at a ratio of 5.2x gross household income, whereas FTB property is at 4.1x gross household income.Thousands of young families are trapped in their first homes because they cannot afford to move up the housing ladder.
Two-thirds of those who are looking for a bigger home have been unable to make the move they want for at least 12 months, research shows.
A combination of factors, including a lack of affordable property, high deposits on mortgages and a shortage of buyers, are leaving these couples stuck in limbo – and paralysing the rest of the housing market.
Lloyds are urging the government to give more support to second time buyers.
One in three stated that the problem was lack of affordable property or a shortage of buyers for their home (probably due to their home being equally unaffordable!).
71% stated the deposit needed for ther second home was too high. Many of this group will struggle to raise deposits as, in the articles words, they are likely to have bought their houses close to 2007 and therefore hold little if any equity.
Another factor is the high costs of moving. Lloyds found on average, the cost of moving is now £8,922, compared to £3,362 in 2001.
http://www.thisismoney.co.uk/money/mortgageshome/article-2106298/Thousands-young-families-trapped-rung-housing-ladder.html
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Comments
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Graham_Devon wrote: »Apparently second time property is at a ratio of 5.2x gross household income, whereas FTB property is at 4.1x gross household income.
71% stated the deposit needed for ther second home was too high.
Yes Graham, we all know this is a problem and indeed I've been warning of this for years.
The main reasons why....
1. FTB houses have fallen by a greater margin than 2TB houses, so the gap between rungs has widened instead of narrowing.
2. Deposit requirements have increased while house prices have fallen or stagnated, so even with savings many people are stuck.
This crash has done nothing to help more people buy houses, in fact just the opposite.
More people are excluded from buying houses now than were when both interest rates and house prices were far higher.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Yes Graham, we all know this is a problem and indeed I've been warning of this for years.
The main reasons why....
1. FTB houses have fallen by a greater margin than 2TB houses, so the gap between rungs has widened instead of narrowing.
2. Deposit requirements have increased while house prices have fallen or stagnated, so even with savings many people are stuck.
This crash has done nothing to help more people buy houses, in fact just the opposite.
More people are excluded from buying houses now than were when both interest rates and house prices were far higher.
Things should get back to normal eventually.0 -
HAMISH_MCTAVISH wrote: »Yes Graham, we all know this is a problem and indeed I've been warning of this for years.
The main reasons why....
1. FTB houses have fallen by a greater margin than 2TB houses, so the gap between rungs has widened instead of narrowing.
2. Deposit requirements have increased while house prices have fallen or stagnated, so even with savings many people are stuck.
This crash has done nothing to help more people buy houses, in fact just the opposite.
More people are excluded from buying houses now than were when both interest rates and house prices were far higher.
"The crash" finished some time ago. Were a few years into stagnation now, so I don't think you can really deduce what you have from it.
Prices are simply still too high.
Look at all the issues in the article. The deposit required to move, the fees to move, the ratio of earnings to value, can't sell their home as FTBs can't afford that. Every single one revolves around price.0 -
It's all the way up the chain, sadly, Not just at the bottom.0
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Graham_Devon wrote: »Prices are simply still too high.
Well the people that matter (those transacting) seem to disagree with you.
It's become clear that those who don't need to sell will not accept lower than the price they want. They might be deluded but they're staying put. I'd say that 'the crash' has to a certain extent been shaped by a larger proportion of distressed sellers as non-distressed sellers sit it out.
Something will give - my guess is that it'll be wages rather than prices when the economy picks up. The silver lining, if there is one, is that I suspect a lot of those refusing to sell are focused on nominal value and won't be inflating their target prices.0 -
Yes, I'm one of these people. We have a small 3 bedroom house and would like a bigger one. The problem is the difference in price is high enough to put us off even though we have considerable savings and the capacity to take on a much bigger mortgage. The idea of having to pay 3% stamp duty is a major disincentive too. It just doesn't seem value for money so we'll stay put for now.0
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MrsRewired wrote: »More faux tears and concern from Mr Devon. This is precisely the situation that you and your ilk wanted although no doubt, quite disturbingly sickening, you'd prefer to see theses neg eggers bankrupt, on the dole, and homeless just so you could steal their house from them on the cheap. How abhorrant characters like you and CRASH_BANG_WALLY, homoskilledworker, and others sleep at night is beyond the right-minded people on here.
How is cheaper affordable property going to make people homeless?
serious question0 -
Graham_Devon wrote: »Prices are simply still too high.
Well you would say that, wouldn't you....Look at all the issues in the article.
OK then....The deposit required to move,
Listed by 71% as a problem.
Unsurprising really, seeing as how the average deposit percentage has doubled since 2007.
The doubling of deposit requirements by banks since 2007 is by far the biggest problem stopping people moving.the fees to move,
Minor impact.the ratio of earnings to value,
No, the difference in earnings to value between FTB houses and 2TB houses, because FTB houses devalued in the crash far more than 2TB houses.
The rungs got wider apart, instead of narrower like the bears wrongly predicted.
And mostly because FTB-s have been worst affected by higher deposit requirements and thus more starved of mortgage finance than any other group.
.can't sell their home as FTBs can't afford that
FTB-s can afford it just fine.
But they can't get the mortgages.
Other than fees, every single one of these issues revolves around banks absurdly tight lending criteria.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Other than fees, every single one of these issues revolves around banks absurdly tight lending criteria.
Absolutely true.
That's why almost every upward transaction be it FTB, 2TB or people further up the chain wanting to buy are finding it difficult.
Having said that, we can't go back to the total stupidity we had.
Banks just don't seem able to find anything in between
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HAMISH_MCTAVISH wrote: »Well you would say that, wouldn't you....
OK then....
Listed by 71% as a problem.
Unsurprising really, seeing as how the average deposit percentage has doubled since 2007.
The doubling of deposit requirements by banks since 2007 is by far the biggest problem stopping people moving.
Minor impact.
No, the difference in earnings to value between FTB houses and 2TB houses, because FTB houses devalued in the crash far more than 2TB houses.
The rungs got wider apart, instead of narrower like the bears wrongly predicted.
And mostly because FTB-s have been worst affected by higher deposit requirements and thus more starved of mortgage finance than any other group.
.
FTB-s can afford it just fine.
But they can't get the mortgages.
Other than fees, every single one of these issues revolves around banks absurdly tight lending criteria.
During the boom i could have bought a house without a deposit.
I chose not to because the price of a house was too high.
High house prices caused all the problems you see in the housing market today.
High house prices happened because the banks started giving out stupid amounts of money to people.
As far as i can see, its all been one big con to get people in the maximum amount of debt possible.0
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