Locked out of the property market. Generation X and Y's Dreams stymied.

ruggedtoast

http://www.guardian.co.uk/lifeandstyle/2012/may/06/renting-property-eva-wiseman

"My generation have always suspected we wouldn't be able to buy a home of our own, but now we're realising we might not be able to rent one either"

I spend a lot of time looking around strangers' homes. I spend a lot of time peering at their bookshelves, at their colour-coded hardbacks, at their artfully organised fruit. I like to see how they illustrate their personalities through the placing of vintage lamps, how they communicate their successful relationships in the language of exposed brickwork and re-appropriation of pallets. I refresh wowhaus.co.uk and themodernhouse.net's pages of architect-designed bungalows for sale daily, and later theselby.com, and @PropertyJazz on Twitter for its brilliantly, disgustingly covetable selections of fantasy houses in Los Angeles, Mexico, Camden – and it feels deliciously painful, like plucking ingrown hairs or leaping into an outdoor pool.

Because for most people I know, owning a house will no doubt remain a fantasy. It's something that's become clear over the past few years – that those of us who live in cities, whose jobs are not secure, who are flitting from call centre to job centre and back again throughout our 20s and 30s, whose parents don't have property portfolios, those of us who are single, or still trying to do art or music or something they dreamed of, are unlikely to be able to afford the deposit for a flat. Ever. Which would be fine – especially fine when the bath fills with soupy, rust-coloured water, or the smell from the downstairs chicken shop actually stops you in your tracks when you walk through the door even though they promise their filter system meets legal standards – if only renting wasn't significantly more expensive (on average 16%) than buying.

As the mayor of Newham attempts to move his tenants out to Stoke-on-Trent saying that, with a cap on housing benefits and increasing rents, the council can no longer afford to house them locally, I feel a little panic rising. Elsewhere in "prime" London – Chelsea, Mayfair, Knightsbridge – estate agents say they are seeing a buying "frenzy". One was recently quoted as having clients who are purchasing their sixth properties, or one for them and another for the kids. He recalled a buyer asking if he had any homes for sale for £30m. "I had one at £50m, so I said: 'Is there room for movement?', and they said no – the other children had £30m spent on their properties, so it wouldn't be fair."

In my borough, Tower Hamlets (one of the poorest areas in the UK), the charity Shelter calculates that the annual earnings a tenant needs to make renting a flat affordable are £67,669. It's a figure I find difficult to read out loud without lisping, let alone conceive of earning myself. It's not achievable – in fact, it makes me feel like I'm going a bit mad. And it highlights the ever-lurking threat of homelessness – that slow slide over a year from being made redundant, to being priced out of your shared flat, to carrying your rucksack between friends' futons, and then, after a clipped conversation in their little blue kitchen, sitting on a bench at dawn with nowhere to go.

So what happens now? What happens to a generation living with the quiet and dreadful realisation that we might only be capable of buying a flat if our parents or grandparents die? A generation holding its breath when they see their fathers slip on ice, sliding more fried toast on to their mothers' breakfast plate. The awful coming-to as they adjust their grandma's three-bar fire. Will we be here hunched over our computers in 20 years' time, addicted to the property !!!!!! that we'll never be able to afford? These sites, their picture galleries of rubber-poured and parquet floors, of lightboxes for coffee tables, breakfast bars and double-height windows, inspiring in us a bleak sort of creative envy, and the growing acceptance that a home of our own may always be just out of our reach.

Eva Wiseman

A beautifully written piece that sums up the bleak hopelessness of younger people in modern Britain, crushed between the twin pillars of job insecurity and a rocketing cost of living.

A society that treats its' young this way should hang it's head in shame.

HAMISH_MCTAVISH

I am Gen X, and have been a homeowner for the last two decades.

Gen X had the opportunity to take advantage of the cheapest houses relative to income in history during the mid 90's, they had the opportunity to take advantage of both cheap houses and falling interest rates in the late 90's, low deposit requirements in the early 2000's, and easy lending criteria in the mid 2000's.

If you're Gen X and you failed to buy a house through all of those... You probably have nobody to blame but yourself.

As for Gen Y, they're mostly screwed unless they bought before the crash. But that's thanks to mortgage rationing, not house prices.

Running_Horse

ruggedtoast wrote: »

A society that treats its' young this way should hang it's head in shame.

The real shame is the huge debt we are leaving our children and grandchildren.

Owning a house is not a human right.

What to make it easier? Are you going to ban all immigration, or build over the south east England countryside?

We can all point to the problem. What's your solution?

abaxas

HAMISH_MCTAVISH wrote: »

As for Gen Y, they're mostly screwed unless they bought before the crash. But that's thanks to mortgage rationing, not house prices.

There is no rationing other in your mind. Banks are freely lending with the correct underwriting procedures.

A._Badger

"....those of us who live in cities, whose jobs are not secure, who are flitting from call centre to job centre and back again throughout our 20s and 30s, whose parents don't have property portfolios, those of us who are single, or still trying to do art or music or something they dreamed of....."

There's your problem, in a nutshell. And out of the writer's own mouth, too.

Good to see the Guardian still living down to its standards - the schoolteachers' Daily Mail.

chewmylegoff

£66k to be able to afford to rent in tower hamlets is nonsense. You can get a 2 bed within walking distance of canary wharf for £1400 and you can afford that easily on e.g. £50k. Two incomes of £25k gives a combined net income of £3,200 per month (noting that average full time income in london is much higher than that - about £40k) and could easily cover that rent.

Lewis1967

abaxas wrote: »

There is no rationing other in your mind. Banks are freely lending with the correct underwriting procedures.

Cheap easy credit is still with us, compared to how expensive credit will be in a few years.

HAMISH_MCTAVISH

abaxas wrote: »

There is no rationing other in your mind. Banks are freely lending

I see.

That must be why everyone from the BBC to the CML has pointed it out then.


A survey of chartered surveyors said that potential buyers were still being put off by economic worries and continued mortgage rationing.
http://www.bbc.co.uk/news/business-13760176

Mortgage rationing, which has depressed UK property sales, will stay in force until at least the end of 2012, the CML says.
http://www.bbc.co.uk/news/business-13620099

the rationing of mortgage funds by lenders are attributed to the general stagnation of the market.
http://www.mortgageintroducer.com/mortgages/240338/5/Industry_in_depth/House_prices_still_sliding.htm

One factor weighing on the market has been the continued rationing of mortgage funds by lenders
http://www.vanguardngr.com%2F2011%2F05%2Fuk-housing-market-still-lacklustre%2F

And finally, from the CML themselves, who readily accept that the UK mortgage market is "dysfunctional".....

In our view, the key point about UK mortgage and housing markets is that they remain dysfunctional, and are not effectively meeting the needs of consumers.

What is really needed is a sufficient flow of mortgage lending to allow those who can fulfil their financial commitments to move home in response to their changing circumstances if they want to, and for first-time buyers to realise their reasonable aspirations to become home-owners.

homelessskilledworker

Running_Horse wrote: »

The real shame is the huge debt we are leaving our children and grandchildren.

Owning a house is not a human right.

What to make it easier? Are you going to ban all immigration, or build over the south east England countryside?

We can all point to the problem. What's your solution?

True!!

Owning a house is not a human right. Some need to remember that remaining in a mortgaged home is not one either.

ruggedtoast

HAMISH_MCTAVISH wrote: »

I am Gen X, and have been a homeowner for the last two decades.

Gen X had the opportunity to take advantage of the cheapest houses relative to income in history during the mid 90's, they had the opportunity to take advantage of both cheap houses and falling interest rates in the late 90's, low deposit requirements in the early 2000's, and easy lending criteria in the mid 2000's.

If you're Gen X and you failed to buy a house through all of those... You probably have nobody to blame but yourself.

As for Gen Y, they're mostly screwed unless they bought before the crash. But that's thanks to mortgage rationing, not house prices.

I think its time for Ruggedtoast's "HAMISH _MCTAVISH Multiple Choice Test".

1)

Is HAMISH_MCTAVISH a satisfied home-owner with several properties predominantly because:

A) His incredible business acumen and drive to succeed saw him overcome all odds to achieve pecuniary advantage against a background of privation, poor schooling, and stunted opportunity.

After enjoying a privileged middle class public school background with all the advantages that affords he found himself in adulthood still unable to afford a house, so got his mum to buy him one as a wedding present.

?????????????????????????????????????????????????????????



2) After having received this ladleful of good fortune does HAMISH_MCTAVISH:

A) Recognise the privileged start in life he has had, and reflect with humility and hubris that "there but for the grace of God go I" when hearing of the plight of those less fortunate

Persist in some bizarre fantasy that he's a self made Aberdonian Alan Sugar who has had the same opportunities as everyone else less fortunate than he, whom he then reserves nothing but scorn and derision for despite having no right whatsoever to look down on them.

??????????????????????????????????????????????????????????????

3) Considering the considerable life advantages HAMISH_MCTAVISH has been afforded, correlated with how judgemental he is of others, is his current station in life as landlord to two tenants and some mysterious job he won't ever define:

A) About right
A bit disappointing really

????????????????????????????????????????????????????????????

Answers on a postcard please.

HAMISH_MCTAVISH

ruggedtoast wrote: »

I think its time for Ruggedtoast's "HAMISH _MCTAVISH Multiple Choice Test".

That would be funny, if only you could at least get the facts right.

But when you make stuff up, it just makes your argument look a bit on the sad side really.

I've never been anything other than frank about my house owning history, so just to correct your points....

-he found himself in adulthood still unable to afford a house, so got his mum to buy him one as a wedding present.

False.

We increased our deposit size by a few grand, through adding a wedding present of a few grand to a larger saved deposit.

But that's hardly remarkable, in this day and age or previously. And we could of course have afforded the majority of houses just fine without help. Just not quite as nice a house as the one we ended up buying.

landlord to two tenants

False again.

I don't rent out my houses.

I do provide one free of charge to an aging relative though.

Remind me again, how many houses have you provided so that someone you care about can live rent free?