Hands off our homes

HAMISH_MCTAVISH

Graham_Devon wrote: »

. Lower house prices, more building. Would all achieve the same desire you put forward.

Now you're just dreaming though.

Prices won't fall meaningfully from here unless an awful lot more houses are built without a corresponding increase in demand.

But nobody is going to build massively more houses unless far more people can buy, which would of course be an increase in demand.

The only practical solution is to reverse the new capital withholding requirements, get more funding available for banks to lend, so they can reduce deposit requirements and get more people buying houses and more houses built.

There isn't another workable option.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Now you're just dreaming though.

Prices won't fall meaningfully from here

And banks won't just magically turn around and offer 5% deposits tommorow either.

ukcarper

Graham_Devon wrote: »

And banks won't just magically turn around and offer 5% deposits tommorow either.

So we are stuck where we are with people who could afford to pay a mortgage unable to buy.

I suppose their only choice is to tighten their belts and save or be prepared to rent until deposits reduce or prices fall significantly.

N1AK

It's hard to know what would have happened if bank lending hadn't restricted. I think it's safe to assume prices would be higher and that would also make buying harder for FTBs.

It's notable that the mortgage market remained around 50% FTB until the latest boom really took off when the FTB % fell to just ~35% in 2006/2007. Clearly FTBs were struggling to get mortgages, based on price, before lending became more restricted.

The market is currently going through a relatively gentle rebalancing and, although it is politically impossible to leave it alone, we should let that process continue.

Loughton_Monkey

ukcarper wrote: »

.....I suppose their only choice is to tighten their belts and save or be prepared to rent until deposits reduce or prices fall significantly.

I don't know how 'carefully' you intended to write those exact words, but within your statement is a lot of truth. It is in reality an either/or situation.

The second option is the choice of those rather closer to Lah-lah land. THe actual chance of prices falling significantly or deposits falling will either not happen, or take a long time. The cost of renting meanwhile prohibits many from saving significant amounts in any reasonable time.

The first choice - for those still at parents homes - yet to co-habit/marry - is relatively easy. If you can afford rent for a 'decent place' then you can afford to gather the deposit.

It's down to choice really. I sense that the country is full of those who made the wrong choice. They chose to rent a 'decent' place - possibly thinking that they only need to save for a a modest solicitor's fee, stamp duty, moving expenses etc. and then get 100% mortgage. Now the music has stopped, no surprises about them being a bit miffed.

chewmylegoff

Graham_Devon wrote: »

Theres more than one way to skin a cat to reach the same conclusion. Lower house prices, more building. Would all achieve the same desire you put forward.

Well not really as if you wanted deposits to halve as a result of house price falls you would need house prices to halve. The trouble with that is that if house prices were to halve in nominal terms then you would need a 100% deposit as no bank would be capable of lending to you or to anyone else...

ukcarper

Loughton_Monkey wrote: »

I don't know how 'carefully' you intended to write those exact words, but within your statement is a lot of truth. It is in reality an either/or situation.

The second option is the choice of those rather closer to Lah-lah land. THe actual chance of prices falling significantly or deposits falling will either not happen, or take a long time. The cost of renting meanwhile prohibits many from saving significant amounts in any reasonable time.

The first choice - for those still at parents homes - yet to co-habit/marry - is relatively easy. If you can afford rent for a 'decent place' then you can afford to gather the deposit.

It's down to choice really. I sense that the country is full of those who made the wrong choice. They chose to rent a 'decent' place - possibly thinking that they only need to save for a a modest solicitor's fee, stamp duty, moving expenses etc. and then get 100% mortgage. Now the music has stopped, no surprises about them being a bit miffed.

As 4x earnings and 20% deposit seem to be the norm it means you need to save a years gross income so not impossible if you are prepared to stay with parents or rent a room in house share and go with out for a couple of years.

wotsthat

Graham_Devon wrote: »

And banks won't just magically turn around and offer 5% deposits tommorow either.

Prices don't appear to be falling anywhere near enough to reduce deposit requirements significantly. Building is very unlikely to fill the demand gap and 5% deposits won't be mainstream for a long long time.

A rational FTB would see the reality and get saving whilst hoping that prices fall in the meantime - what's the alternative?

Gracchus_Babeuf

homelessskilledworker wrote: »

http://www.guardian.co.uk/commentisfree/2012/sep/24/homes-for-living-in



Today the average deposit on a home across the UK has reached £65,000. In London it is £100,000. We have reached the point in Britain where it is simply impossible for people to buy a home without significant help from their parents, grandparents or some other benefactor. For many others whose family do not own their home or who do not have a stash of assets, and in particular the nearly one in five who live in council or other social housing, the door may well now be firmly closed on the possibility of future home ownership.
This is not a result of the cuts. There has been a long-term decline in the affordability of housing, the legacy of many years of both Conservative and Labour majority governments. The average deposit needed on a home has risen tenfold since 1990, while incomes have risen only three times.

Not at all surprised - that's life I'm afraid. When I bought for the first time in 2005 I was already 38 and my wife 35. We had £110k to put down, though much of that was inheritance from a deceased maiden aunt and help from parents, as well as a sizeable chunk of our savings. Without that money we could not have done it.
One of the problems is that there is still a perception that buying a house is something you need to do as soon as possible after you start work. On the continent most people don't buy until they are around 40, so why should it be different here, especially given that most people will have to work until 70 before retiring? Why the hurry? We are not in the 1970s any more - people no longer retire at 50 or 55 after having paid off their mortgages. We need to put things into perspective.

FTBFun

wotsthat wrote: »

A rational FTB would see the reality and get saving whilst hoping that prices fall in the meantime - what's the alternative?

A buyer's strike? Moaning incessantly on internet forums?