House buying dreams are dying

GeorgeHowell

IveSeenTheLight wrote: »

Interesting graph, however does it affect the voting population much?

I find it interesting that there has been a decline even from 1997 when we cam out the last bottom of the house price cycle.

Could this be an indicator that through the ages, even when property was considered to be cheap, the demographics of youth choosing to buy have lowered.

Are the percentage of youth decreasingly being able to save for a deposit since 1997?
this graph certainly appears so.

You can't argue that property has been overpriced throughout this period, which therefore questions the under 30's desire to be homeowners.

Culturally and in terms of maturity many young people today are teenagers until they are 30 so not wanting to take on that responsibility would be characteristic.

coastline

IveSeenTheLight wrote: »

Interesting graph, however does it affect the voting population much?

I find it interesting that there has been a decline even from 1997 when we cam out the last bottom of the house price cycle.

Could this be an indicator that through the ages, even when property was considered to be cheap, the demographics of youth choosing to buy have lowered.

Are the percentage of youth decreasingly being able to save for a deposit since 1997?
this graph certainly appears so.

You can't argue that property has been overpriced throughout this period, which therefore questions the under 30's desire to be homeowners.

You can see in the link that Uni picked up sharply around 1990 from 600,000 students.

http://www.economicshelp.org/blog/3190/education/number-of-students-at-university-in-uk/

this link is a continuation from 1995...now heading for 2.5m.

http://learningarchitecture.files.wordpress.com/2011/06/students-in-he-by-country.jpg

Now we've got to factor in 1m under 25 yo unemployed.
16-18 yo aren't registered unemployed...
How many young people work for £15,000 and under...
Years ago people walked into work...apprentices were common and on full pay by 21 yo..

Jegersmart

GeorgeHowell wrote: »

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.

Thanks for the in-depth reply. The problem I see is that most people seem to be unable to stop relating everything back to themselves which makes it difficult to debate these things, because most people have a biased view whether they realise it or not. This usually manifests itself in hostility or rudeness towards people that do not have a similar opinion and the debate goes nowhere. Why would it matter to anyone whether ownership figures went down in the UK as long as those people are happy with the choice they have made?

My own opinion is that house prices have historically increased more or less as fast as the money supply has been increased over the same period. There are periods of boom and bust that form outliers in terms of the longer term trend, however in general this seems to me to be the case. What we do know is that the amount of debt in the system has also been increasing and I wonder whether this will continue in the coming decades as it has in the past? My own thinking is that it can't but we all know these things can go on for much longer than you think. We will see.

From my side I am not exposed to house prices in the UK, but I am exposed to rent. Currently my rent is around 10-15% lower than the interest on a mortgage would be so I am happy to pay that and put aside a suitable amount to offset what I am not forced to pay on a repayment mortgage and engaging activities to create a good return on that portion. If the rent increased so that it would be "cheaper" to get a mortgage then of course I would do that if I was sure that I will stay in my current location for several years.

I am not sure how politics and personal feelings come in to this, surely it is a financial decision? Those are better made "cold"...

imho

J

coastline

Jegersmart wrote: »

From my side I am not exposed to house prices in the UK, but I am exposed to rent. Currently my rent is around 10-15% lower than the interest on a mortgage would be so I am happy to pay that and put aside a suitable amount to offset what I am not forced to pay on a repayment mortgage and engaging activities to create a good return on that portion. If the rent increased so that it would be "cheaper" to get a mortgage then of course I would do that if I was sure that I will stay in my current location for several years.

Rent or Buy...this is the grand debate and everyone has their reasons.
Just out of interest I looked at the calculator below and loaded it at £100,000...20 years...5%...no fee...coming out at £660 month on repayment.
What surprised me was the debt remaining after 5 years...which came in at £83,000.
Thats a fair bit better than I guessed at....It seems a difficult decision to make when rates are low.

http://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator

IveSeenTheLight

coastline wrote: »

You can see in the link that Uni picked up sharply around 1990 from 600,000 students.

http://www.economicshelp.org/blog/3190/education/number-of-students-at-university-in-uk/

this link is a continuation from 1995...now heading for 2.5m.

http://learningarchitecture.files.wordpress.com/2011/06/students-in-he-by-country.jpg

Now we've got to factor in 1m under 25 yo unemployed.
16-18 yo aren't registered unemployed...
How many young people work for £15,000 and under...
Years ago people walked into work...apprentices were common and on full pay by 21 yo..

So in terms of youth being able to afford average properties, price and deposit is not the only issues, it's levels of income obtained to gain the deposit requirements

IveSeenTheLight

coastline wrote: »

Rent or Buy...this is the grand debate and everyone has their reasons.
Just out of interest I looked at the calculator below and loaded it at £100,000...20 years...5%...no fee...coming out at £660 month on repayment.
What surprised me was the debt remaining after 5 years...which came in at £83,000.
Thats a fair bit better than I guessed at....It seems a difficult decision to make when rates are low.

http://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator

Is it a tough decision?
5 years on and paid off 17% of the mortgage.
Even if prices are still nominally stagnant in 5 years time, that's 5 years less mortgage free.

Jegersmart

coastline wrote: »

Rent or Buy...this is the grand debate and everyone has their reasons.
Just out of interest I looked at the calculator below and loaded it at £100,000...20 years...5%...no fee...coming out at £660 month on repayment.
What surprised me was the debt remaining after 5 years...which came in at £83,000.
Thats a fair bit better than I guessed at....It seems a difficult decision to make when rates are low.

http://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator

Thanks for that, it confirms roughly my calculations. An interest only mortgage based on 4.5% rate at 20% deposit level would cost 5.7% more than my rent and as a renter I don't pay annual maintenance charges or water rates - these amount to approx. £3250 per annum. I would also need to have say £85k of my cash "invested" as a deposit.

I just want to clarify that I am not saying renting is better in general, only that in my case on this property (and those in my area) it doesn't make sense to buy for me. I do not have children though, so my circumstances are quite different to most.

Thanks again

J

IveSeenTheLight

Jegersmart wrote: »

Thanks for that, it confirms roughly my calculations. An interest only mortgage based on 4.5% rate at 20% deposit level would cost 5.7% more than my rent and as a renter I don't pay annual maintenance charges or water rates - these amount to approx. £3250 per annum. I would also need to have say £85k of my cash "invested" as a deposit.

I just want to clarify that I am not saying renting is better in general, only that in my case on this property (and those in my area) it doesn't make sense to buy for me. I do not have children though, so my circumstances are quite different to most.

Thanks again

J

£85k as a 20% deposit, so £425k property

Location makes a difference. I'm buying a plot of land and building a 240 square meter propertyfor 3/4 of that.

To rent however it would be vastly more than the mortgage costs.

coastline

IveSeenTheLight wrote: »

Is it a tough decision?
5 years on and paid off 17% of the mortgage.
Even if prices are still nominally stagnant in 5 years time, that's 5 years less mortgage free.

I was considering where you're located and whats happening in your area..
The houses in the next street to me are going for 290 now and they are down from 375.
Again using that calculator I reloaded with 9%...your favourite number ....this time we've paid off 11%.
End of the day If you see the house of your dreams...buy it..

Conrad

moneyinmypocket wrote: »

Get banks lending = job sorted

The FSA is doing all it can to stop them. No one in Gov't is properly aware of this. Blaming Banks is only halve an answer.