Coalition plans new housing stimulus

Loughton_Monkey

Wookster wrote: »

The only reason housing is affordable at the moment is because interest rates are at an all time low. If interest rates were at their average then property wouldn't be quite so affordable after all.

Factually correct, but doesn't change my argument. 'Affordability' is a spectrum. If base rates go up 0.25% or House Prices by £250, then by definition it makes them 'less' affordable.

Compared to my own experience of buying and moving in my 'youth', I have to say:

1. The actual cost of 'a house' - compared to salaries - is as affordable as ever I remember it. [But the difference is the reluctance of today's FTB to buy a 'starter' home].

2. The cost of the mortgage is laughably low. A prudent buyer would budget for at least double repayments - at which rate it would still be no less affordable than 70's/80's etc.

3. Saving for a deposit is (as I freely admit) more difficult than over the last decade or two, but perfectly within the possibility of anyone who can afford to service the mortgage.

So I still don't see any major difference - and certainly no hardship (economically/financially) - in buying a house today. But conversely I see a massive change in the perceptions and behaviour of the generation 2 below mine. It is this behaviour, rather than the current fiscal climate, that will ultimately dictate why many will never get on the housing ladder, never save for retirement, and once 50 or over, will regret their actions for the rest of their lives.

CLAPTON

One needs to be careful about using the word 'affordable'

when the government / HA etc use the word it has a special meaning and DOESNOT mean what you mean by the word.

In government speak it is a type of house build to be rented out by HA to social tenants. The price of the 'affordable' house is heavily subsidised by (typically) first time buyers who pay higher prices for newbuilds. Obviously this makes newbuilds small and expensive and of course unattractive to most sensible buyers and so means that builders are reluctant to build properties they can't sell at a reasonable price.


As the concept was introduced by labour but adopted by the Coalition there is a conspiracy of silence on the matter.