House buying dreams are dying

ruggedtoast

pqrdef wrote: »

It was always a privilege of elites. The more usual rite of passage used to be putting your name down on the council house waiting list. That was deemed quite good enough for the working classes.

When did we decide we could afford for the whole country to be middle-class?

When most of the council houses and working class jobs were disappeared and the Tories promised the trade off would be upward social mobility, presumably.

ash28

‘It is preventing millions of people from living the sort of lives they want to. Buying your first home is no longer a joyful rite of passage for young adults, but returning to being a privilege of elites.’

We have had 4 housing booms and busts that I can remember. (1970–73,1978–79,1985–89,2000–07)and four corrections, or periods of slow or falling prices and low sale volumes, of which the last two have been the most severe.

Buying your first home has never been joyful rite of passage for young adults - for most young adults it has been a struggle and not a particularly joyful one.

Back in the early 1970s when everyone knows that you could buy a family home on one income and high house prices, difficulties in raising a deposit and getting a mortgage were not even a consideration........except that they were.

There was a housing price boom on the back of a commercial property boom - that culminated in a secondary banking crisis in 1973. Lots of smaller banks had made loans to commercial property companies and when the bottom fell out of the market - putting lots of banks in precarious position.

Google - 1971-1974 Competion and Credit Control under Heath/Barber

The BOE had to step in 3 weeks after the first collapse- especially when Natwest was threatened.

The bank supplied liquidity to keep the financial system functioning - sound familiar?

House prices - rocketed and then collapsed - interest rates reached 13% - and mortgages were in effect rationed. People stuggled to raise deposits etc. Although inflation masked the price drops I think the fall in real terms was about 25%.

In the mid 1990s after the 1980s Lawson induced boom - it was said the housing market would never recover..........

At the end of each of the booms the number of first time buyers falls.........but picks up again - eventually.

YoungBusinessman

moneyinmypocket wrote: »

Get banks lending and the yooth should learn to save = job sorted

Exactly what i said in a post on another thread not 5 minutes ago.

Housing ownership at a 64% low, this will not improve until 95% mortgages without crippling rates become available combined with a decent financial understanding/education being taught in schools.

Graham_Devon

ash28 wrote: »

We have had 4 housing booms and busts that I can remember. (1970–73,1978–79,1985–89,2000–07)and four corrections, or periods of slow or falling prices and low sale volumes, of which the last two have been the most severe.

None were as big, or as long (in terms of timeframe) as the last / current though.

CLAPTON

YoungBusinessman wrote: »

Exactly what i said in a post on another thread not 5 minutes ago.

Housing ownership at a 64% low, this will not improve until 95% mortgages without crippling rates become available combined with a decent financial understanding/education being taught in schools.

this will prove to be incorrect although it will take a little time.

YoungBusinessman

CLAPTON wrote: »

this will prove to be incorrect although it will take a little time.

What makes you say that, Clapton?

CLAPTON

YoungBusinessman wrote: »

Exactly what i said in a post on another thread not 5 minutes ago.

Housing ownership at a 64% low, this will not improve until 95% mortgages without crippling rates become available combined with a decent financial understanding/education being taught in schools.

we don't need to wait until 95% mortgages are available; 10% deposit is both reasonable and achievable for people able to afford the mortgage

'crippling' rates : goodness they have never been so low:

while financial education in schools may or may not be appropriate, huge numbers of people have managed to buy houses without it and there seems no new factors that would make it essential.


higher numbers of FTB purchases will need
-higher confidence amoungst FTB about job security
-higher confidence amoungst FTBs that prices won't drop any more
-more mortgages available at 90% LTV mark (although I don't really know how many such people get turned down)

grizzly1911

CLAPTON wrote: »

we don't need to wait until 95% mortgages are available; 10% deposit is both reasonable and achievable for people able to afford the mortgage

'crippling' rates : goodness they have never been so low:

while financial education in schools may or may not be appropriate, huge numbers of people have managed to buy houses without it and there seems no new factors that would make it essential.


higher numbers of FTB purchases will need
-higher confidence amoungst FTB about job security
-higher confidence amoungst FTBs that prices won't drop any more
-more mortgages available at 90% LTV mark (although I don't really know how many such people get turned down)

As you point out rates are the lowest they have probably ever been.

For YBM not you .

Anyone entering into a long term commitmnent should ensure they are able to cope with an increases in that rate. It is sure to happen. If they can't afford a 3-4% hike should they be entering into the commitment?

Jegersmart

I don't see why lower rates of house "ownership" (in partnership with the relevant bank) is a worry or problem? Any clarification would be welcome.

Thanks

J

GeorgeHowell

Jegersmart wrote: »

I don't see why lower rates of house "ownership" (in partnership with the relevant bank) is a worry or problem? Any clarification would be welcome.

Thanks

J

In the context of this particular thread it's probably seen as a problem in order to spread some negative thoughts about the Conservative-led government. Whatever Jack Dromey says most of the present perceived problems started under Labour.

But objectively some see it as a problem because home ownership is perceived as pretty much always preferable to renting. In practice there are many pros and cons involved in both. But because of domestic house prices rising faster than inflation for most of recent history, owning a home is seen by many as an investment, whereas renting is supporting someone else's investment. Even though this rise in house prices has slowed, if not stopped, for several years now, many have not given up on the ambition to own a home as a perceived good investment. Some people -- rather incredibly -- still even think that buy-to-let is a good investment. It's a bit like the people who do not refrain from recommending stock market related investments even though that's been even flatter for even longer. But it is of course low savings interest rates and flat stock market that makes housing look more superficially attractive as an investment.

Many of the young are encouraged to aspire to home ownership by their parents, because the latter -- mainly the dreaded Baby Boomers -- are conditioned to think that way since for most of them it did prove preferable to renting. And there is probably a deep cultural thing around it too based around the notion that "An Englishman's home is his castle."

For those who want to own a home, and can it afford it but can't raise the deposit it is a pity that our dreadful banks are screwing people yet again by raising the bar too high in many cases (from a situation where there was virtually no bar). But it is probably healthy that there is a sizeable rented sector alongside the owner-occupier sector. Not everyone wants or needs the responsibility, commitment, and ties involved in owning their own home. And with ever more people in this country land is becoming more scarce and supply and demand tends to make affording a property tougher. The left can't grasp that because they don't really believe in supply and demand, nor in countryside and rural areas. So they would just, by means of state directive, concrete over more and more land whilst they incentivise those who cannot afford to have more children to have more children, and reintroduce unlimited immigration, thus exacerbating the problem.

According to these statistics about two thirds of homes are owner occupied and one third are rented. Judgmentally that doesn't strike me as anything to get too worried or depressed about.