The crushing housing burden on the young. Boomers, investors and landlords profit

ruggedtoast

The Guardian:


Eva Wiseman, being crushed by the haves

http://www.theguardian.com/commentisfree/2013/aug/11/housing-renting-rising-property-prices

Its impossible to selectively quote any part of this achingly honest, apposite article so I have reproduced in it's entirety with some highlights.

Britain is booming. House prices in England and Wales have reached their highest ever level, which is great news for the wealthy, the government and the forgetful. Because in 2008, the last time this happened – the last time houses turned to gold, the bricks of mansion blocks flaking saffron – we learned quickly that booms go bust. We learned that our houses should not be treated as centrally heated investments, that we should start thinking about success in different ways. We learned also, that what is good news for one person can be crushingly, life-alteringly bad for another.

How many of us are really cheering at the rise of house prices? Scrolling through property website Zoopla is my low-level self-harm – fork scratches instead of razors. Savills says the average price of its London stock has reached £3.2m, so here are the houses I will never own. Here are the kitchens I'll never argue in, the bathrooms I'll never paint regrettable shades of green. But mine is a sad and secretive habit.

In my world, my world that reaches horizontally to the London suburbs and vertically into the internet, my friends don't talk about house prices. They talk about the impossibility of paying rent. And we're working, we're all delighted to be working. We're working in kitchens, offices, bars, other people's front rooms, and the conversation when we get home is never of houses but of rising rents and frozen salaries.

There is no point in saving, now. Not only is interest so low as to be meaningless, but, without a charity cheque from a deceased relative or rich parent, my peers will be 62 before they can afford their own home. Largely due to foreign investors, rents have gone up eight times faster than wages; for my generation, the threat of homelessness feels far more real than concerns about home-owning.

Every week, more friends are trickling down motorways from their homes of over a decade, another weekend of shovelling mattresses into vans in the awful tarmac sun, another forwarded email: "Does anybody want my wardrobe?"

When possible, they move into their mums' houses; when possible, their mums give them their savings. Last year, parents gave their children £2bn to help with housing costs; Shelter has launched a campaign imploring the government to build more new, affordable homes, because the current situation, it says, is unsustainable. The increase in the supply of mortgages (one in 10 of which is buy-to-let) and a chronic shortage of housing mean prices are rising at the fastest rate ever. We need more homes. We are overheating. We are the summer of 2008.

Last Thursday, Channel 4's provocatively named How to Get a Council House visited my east London borough, a diverse and thick-aired place, where each week 24,000 people hope to get one of the 40 council properties available. To me, it painted a portrait of a system that is as humiliating as it is impenetrable, but Twitter's hashtag showed that much of Britain was seeing something quite different.

The hashtag #howtogetacouncilhouse revealed a humming swarm of racism and anger. "What a bunch of lazy, scrounging, teenage pregnant scum"; "Can someone knock me up please? I'm bored of paying a mortgage"; "How to get a council house? Become a Somali, have eight kids and then get a £2m house in London for a grand a month". If their opinions didn't exactly mirror those of Kirstie Allsopp, they certainly reflected them in a dirty puddle. She claims that young people are "losing the concept that you make sacrifices to get on the ladder". Sian Astley, a TV presenter, agreed. "Many twentysomethings seem to want Hollywood and handbags, rather than pensions and property… Hard work reaps rewards."

People shock me, constantly. Who still believes this? Who, in these times of zero-hours contracts still believes that the unemployed, the poor, the young, are simply not working hard enough? Who still believes that it is possible to buy a house on a single income, without an injection of family money?

There's a moment in Noah Baumbach's new film Frances Ha, where Greta Gerwig's character is told by her flatmate (a bohemian writer whose parents' wealth is evident in his every eye-roll): "You're not poor." Saying you're poor, he says, "is offensive to actual poor people". And yet. And yet she is living on the very edge of comfort. She, like so many people I know, is floating. It was a reminder that as summer 2013 fades to a close, gradations of poverty get ever murkier.

When did social housing become the last stop, the final sigh? When did it stop being desirable, a place of hope and gardens? Today, those claiming housing benefits are routinely dismissed as scroungers, yet more and more, there are clues that this is a title that might better fit their landlords. Landlords who are profiting from exploiting their tenants' desperation – these are the people screwing the system, not the tenants. They just want a bed.

Simon Childs, a reporter for Vice magazine, went to the Property Investor show in London, where he sat through a talk by Mike Frisby, a "housing benefit expert" with Cameron hair who teaches landlords how to squeeze every penny from the local housing allowance. Key to this, he said, was charging the highest possible rents on the lowest value properties (the difference is paid by the council and taxpayers), and remembering that you can get more money from four single LHA tenants than a family of four. One in 12 families in Britain is on the waiting list for social housing. But, increasingly, as a housing benefit cap (at £500 per week for couples and £350 for singles) is being introduced, private landlords are turning down tenants on benefits, simply because they won't be able to afford the rent.

And me? I have this great idea. Where all my friends and I club together and buy an office block. And in it we build a modest utopia, with amazing broadband and a really good bin rota. I just want out of it, really, all this. All this news that means the carpet you walk on is a mirage, moving. I don't want to be at the mercy of hungry landlords or to scratch together that extra 3% stamp duty on top of the £250,000 I'm borrowing for a tiny flat above a fried chicken shop. I want to sit there, in a home I can afford, and eat pasta with my friends and wait for the bubble to burst. And then, we can start again.

Eva Wiseman is wise indeed. She speaks with the wise, wounded indignity of a younger generation who are little more than debt fodder to some economic meat grinder designed to package them into monetised units of utility for landlords and retiring downsizers.

I hope when some on this board are gloating about their shameful buy to lets and, and their appalling asking prices, they might think, just for a moment, of the human cost of their 'success'.


Welcome to your new mid terrace outer London home, as long as you have a doctor's salary, a gifted deposit, and no student loan debt


A landlord, working hard


Banker: Thanks for taking out that mortgage landlord!


People who actually do things, first to pay out, last to receive anything back

Cornucopia

I'm looking at downsizing at the moment.

I'm looking at 1-2 bed flats in good condition with long leases in the SouthEast, commutable but away from the London hot spot.

Prices are £80-130K for these kinds of properties. Small houses also feature within this price bracket.

It does beg the question - how much is a reasonable price for a FTB?

I'm all for greater supply of affordable housing - and the planning process needs reform in order to achieve that.Rather than pointlessly complaining to/about their neighbours or their landlord, people should be exercising their democratic rights to lobby MPs to free up planning for affordable development.

JencParker

Eva Wiseman is wise indeed. She speaks with the wise, wounded indignity of a
younger generation who are little more than debt fodder to some economic meat
grinder designed to package them into monetised units of utility for landlords
and retiring downsizers.

I hope when some on this board are gloating
about their shameful buy to lets and, and their appalling asking prices, they
might think, just for a moment, of the human cost of their 'success'.

Completely agree, except for this.....

We learned that our houses should not be treated as centrally heated investments, that we should start thinking about success in different ways. We learned also, that what is good news for one person can be crushingly, life-alteringly bad for another.

I don't think the boomers, investors and landlords - or those in power have learned a thing as they are intent on continuing the madness.

ruggedtoast

Cornucopia wrote: »

I'm looking at downsizing at the moment.

I'm looking at 1-2 bed flats in good condition with long leases in the SouthEast, commutable but away from the London hot spot.

Prices are £80-130K for these kinds of properties. Small houses also feature within this price bracket.

It does beg the question - how much is a reasonable price for a FTB?

I'm all for greater supply of affordable housing - and the planning process needs reform in order to achieve that.Rather than pointlessly complaining to/about their neighbours or their landlord, people should be exercising their democratic rights to lobby MPs to free up planning for affordable development.

I would like you to provide a rightmove link to these £80k 2 bed flats within a commutable distance to London please.

ruggedtoast

JencParker wrote: »

Completely agree, except for this.....

We learned that our houses should not be treated as centrally heated investments, that we should start thinking about success in different ways. We learned also, that what is good news for one person can be crushingly, life-alteringly bad for another.

I don't think the boomers, investors and landlords - or those in power have learned a thing as they are intent on continuing the madness.

Exactly JenCParker.

It is hear no evil, speak no evil, see no evil as far as many are concerned.

Mr._Pricklepants

Savills says the average price of its London stock has reached £3.2m, so here are the houses I will never own. Here are the kitchens I'll never argue in, the bathrooms I'll never paint regrettable shades of green.

Bleh. I can't afford a £3.2m London property either.
It's just not fair!

Jack_Johnson_the_acorn

Saved up 13k whilst living at home with parents... took 1 year..... 3 bed maisonette £130k....Aged 24.... London might be different but in Cheshire prices are quite affordable, I imagine they are just as affordable in the rest of the country. Too many people are full of self pity.

Radiantsoul

Are Guardian journalists really poorly paid or something?

CLAPTON

lets take Romford, Chadwell Heath, Elm Park all on the District line into London


one bed flats under 100k

http://www.rightmove.co.uk/property-for-sale/property-39459353.html

http://www.rightmove.co.uk/property-for-sale/property-41321756.html


two bed flat under 125,000

http://www.rightmove.co.uk/property-for-sale/property-26244333.html



http://www.rightmove.co.uk/property-for-sale/property-40579223.html



3 bed house for under 250,000


http://www.rightmove.co.uk/property-for-sale/property-39993052.html


http://www.rightmove.co.uk/property-for-sale/property-41130311.html?premiumA=true



Obviously these are working class areas where no guardian writer has every been
but real people live here all their lives.

collywollys

Jack_Johnson_the_acorn wrote: »

Saved up 13k whilst living at home with parents... took 1 year..... 3 bed maisonette £130k....Aged 24.... London might be different but in Cheshire prices are quite affordable, I imagine they are just as affordable in the rest of the country. Too many people are full of self pity.

Not everyone can live at home with Mummy & Daddy. Did you manage to pay them the average rent price for your area while you saved your 13K ??

[Deleted User]

Excellent, so the 'regular joe' under 30 can afford a small flat (which is most likely an ex-council one) in a dodgy area... but good luck with that move to a family home

Just found this... #epic! http://www.rightmove.co.uk/property-for-sale/property-41638130.html?backListLink=%2Fproperty-for-sale%2Fmap.html%3FlocationIdentifier%3DOUTCODE%255E2762%26maxPrice%3D125000%26displayPropertyType%3Dflats%26oldDisplayPropertyType%3Dflats%26radius%3D10.0%23_includeSSTC%3Don%26auction%3Dfalse%26displayPropertyType%3Dhouses%26locationIdentifier%3DOUTCODE%255E2762%26maxPrice%3D200000%26minBedrooms%3D2%26oldDisplayPropertyType%3Dhouses%26previousSearchLocation%3DW2%26radius%3D10.0%26searchLocation%3DW2%26searchType%3DSALE%26useLocationIdentifier%3Dfalse%26box%3D-0.61815%2C0.31019%2C51.29166%2C51.77347%26popupPropertyId%3D41638130&fromMap=true

It'd be nice if they did something about the crippling stamp duty. For our 'family' home, we've had to move out right to the edge of London (I can walk to a bridge over the M25). BUT... we had to pay £9k in 'sorry you're too young to have much equity' tax

Occasionally I look at what i could buy if we sold ours, then moved up north. It's bloody depressing. I am glad we didn't try to buy 'in' London though