Time for a new generation to enjoy same opportunities as their parents...

LydiaJ

HAMISH_MCTAVISH wrote: »

I'm saying that mortgage rationing and the abnormally high % deposit required for the last few years has been the biggest factor by far in why the young have been unable to buy.

Fortunately, that is now ending.

As the government/BOE are repairing the broken mortgage market and restoring availability of mortgages with historically normal, prudent, and sensible 5% deposits.

Hamish, I used to think along the lines that "if xyz changed, then more people (or more young people, or whatever) would be able to buy houses." You were the person who explained to me that most of these things make no difference at all. Unless we build lots more houses, then changes to policy of one kind or another only shuffle who can buy and who can't, they don't change how many people can. So the only ways to increase the proportion of families who can own their own homes are (a) to build houses faster than new households are being created, (b) to change the balance so it's easier for owner occupiers and harder for BTL-ers, or (c) to change the balance so it's easier for home-grown owner occupiers and harder for foreigners. Or did I misunderstand you?

As far as I can see, bringing back 95% mortgages will push prices up a bit, and also make it rather less of an advantage to be able to live with parents while saving a deposit, or to get a gifted deposit from them.

HAMISH_MCTAVISH

LydiaJ wrote: »

. Unless we build lots more houses, then changes to policy of one kind or another only shuffle who can buy and who can't, they don't change how many people can.

True, to a large extent.

So the only ways to increase the proportion of families who can own their own homes are (a) to build houses faster than new households are being created, (b) to change the balance so it's easier for owner occupiers and harder for BTL-ers, or (c) to change the balance so it's easier for home-grown owner occupiers and harder for foreigners. Or did I misunderstand you?

Proportion" is of course different to "absolute numbers", but in a nutshell, the only thing that will sustainably lower the cost of housing over the long term is to build many millions more houses.

We could build more than we do now and less than is required, which would increase the absolute numbers of homeowners while proportion continues to decline, if you see what I mean.

As far as I can see, bringing back 95% mortgages will push prices up a bit, and also make it rather less of an advantage to be able to live with parents while saving a deposit, or to get a gifted deposit from them.

It will push prices up in the short term, for sure, as more people are able to buy today instead of waiting.

In the absence of more homebuilding, those rises were inevitable, should have happened years ago and only didn't because of mortgage rationing preventing a million people from buying..... An artificial restraint on demand that was never going to be sustainable for long.

The can of price rises was only kicked down the road, and in the absence of more homebuilding it was never, and could never have been, averted by lending restrictions.

But of course the increase in lending will also eventually lead to an increase in supply, increasing the absolute numbers of houses being built, and therefore reducing the rate of house price increases over the long term as a result.

As well as enabling those without capital to better compete with landlords and the rich in the meantime.

Loughton_Monkey

LydiaJ wrote: »

.......So the only ways to increase the proportion of families who can own their own homes are (a) to build houses faster than new households are being created, (b) to change the balance so it's easier for owner occupiers and harder for BTL-ers, or (c) to change the balance so it's easier for home-grown owner occupiers and harder for foreigners......

The % of families who own there own homes is merely a statistic. It differs significantly from country to country and doesn't necessarily have a direct correlation with housing adequacy, wealth, happiness etc.

Yes, there is often a tendency for politicians to gloat 'under our leadership, home ownership has increased from X% to Y%, since it implies (but doesn't prove) increased wealth. But I wouldn't like a government to 'target' this statistic specifically.

Instead, it should target boosting wealth creation in the economy generally, providing good educational and health opportunities, and encouraging individuals and families to prosper within that 'umbrella' and do the best they can to provide a living and a roof over their heads for themselves.

In the context of jobs, for example, most people these days don't expect the government directly supply jobs [as in come and work for the civil service, or become a dustman or library assistant]. Rather, we expect the government to encourage enterprise and employers to create wealth and supply jobs.

In the context of food, the government does very little other than regulation. All food, and the pricing thereof is generally left to the free market. By and large this works.

In the context of housing, the government has always (rightly or wrongly) physically supplied houses for rent at subsidised rates and, quite rightly in my view, is trying to unwind what is rapidly becoming an expectation that the taxpayer must supply every UK resident with free education, free health care, free pensions, free safety-net benefits, and free housing. This is the thin end of an extremely unsustainable wedge.

The building industry will, and can only, respond to demand and it may be the government's job to encourage this, but not to dictate whether the property is sold to an occupier or to a landlord. If you earn little money, then you probably can't afford to buy. Nor can you afford caviar & champagne. That's life.

The majority can afford to buy, if they want. They can also afford cavier and Champagne. But most cannot enjoy both at the same time. It's either or. The government cannot (and probably should not) intervene directly and try to influence these lifestly choices. All it can do is encourage personal responsibility and give everyone opportunities, but I would like to see a little bit less 'subsidy' to those who deliberately throw opportunities away.

LydiaJ

Loughton_Monkey wrote: »

In the context of housing, the government has always (rightly or wrongly) physically supplied houses for rent at subsidised rates and, quite rightly in my view, is trying to unwind what is rapidly becoming an expectation that the taxpayer must supply every UK resident with free education, free health care, free pensions, free safety-net benefits, and free housing. This is the thin end of an extremely unsustainable wedge.

The building industry will, and can only, respond to demand and it may be the government's job to encourage this, but not to dictate whether the property is sold to an occupier or to a landlord. If you earn little money, then you probably can't afford to buy. Nor can you afford caviar & champagne. That's life.

The majority can afford to buy, if they want. They can also afford cavier and Champagne. But most cannot enjoy both at the same time. It's either or. The government cannot (and probably should not) intervene directly and try to influence these lifestly choices. All it can do is encourage personal responsibility and give everyone opportunities, but I would like to see a little bit less 'subsidy' to those who deliberately throw opportunities away.

Even if the government don't interfere in people's lifestyle choices, the nature of tenancy agreements are determined by legislation, and that makes a big difference to the extent to which renting is a reasonable alternative to buying. At present, council tenants and owner occupiers can remain in their homes as long as they can continue to pay for them, and when they want to move, they can take steps to do so with whatever timing suits them. Private tenants have neither this security nor (in many cases) this flexibility.

The rise and rise of private sector renting as a long term lifestyle rather than a temporary stage for young adults makes this increasingly problematic in a way that it is legitimately the government's responsibility to address.

HAMISH_MCTAVISH

LydiaJ wrote: »

The rise and rise of private sector renting as a long term lifestyle rather than a temporary stage for young adults makes this increasingly problematic in a way that it is legitimately the government's responsibility to address.

The rise in private sector renting has been dramatically inflamed by mortgage rationing though.

An additional million or so people into private rented accommodation in the last 7 years. While the number of "accidental landlords" has increased as well thanks to there being insufficient buyers that can get mortgages.

The government is addressing this problem through restoring people's access to historically normal, prudent and sensible mortgage lending with 5% deposits.

Which will let more people buy, and hence let more people (including many accidental landlords) sell, and also get more houses built.

It's just so blindingly obvious that this is a very good policy.....

Loughton_Monkey

LydiaJ wrote: »

......At present, council tenants and owner occupiers can remain in their homes as long as they can continue to pay for them, and when they want to move, they can take steps to do so with whatever timing suits them.

One of the biggest faults in the 'social housing' arrangements if you ask me. Means tested when you move in. Never means tested again, so you continue to get the huge subsidy. Bedroom tax is a lame attempt to do so, but it still doesn't get that fat-cat Bob Crow out of his subsidised 'social housing' does it?

LydiaJ wrote: »

Private tenants have neither this security nor (in many cases) this flexibility.

True. And if private landlords had to give 'lifelong security' how many private landlords do you think there would be?

The vast majority of private tenants do not have this security despite paying 100% of the rent themselves. Why would you want the taxpayer to pay 100% of the rent AND give them cast iron security as well!

Let's throw in free breakfast, free dinner, free broadband with satellite and 55" screen? Maybe a £2,000 a year furniture allowance perhaps? Free insurance. Oh. Energy bills are high. Let's get the landlord to write a blank cheque or maybe throw it on the rent which is paid by the taxpayer anyway. Or maybe force landlords to redecorate once a year, and pay for a week's holiday for them all to go to Majorca for a fortnight while it's being done......

LydiaJ

Loughton_Monkey wrote: »

One of the biggest faults in the 'social housing' arrangements if you ask me. Means tested when you move in. Never means tested again, so you continue to get the huge subsidy. Bedroom tax is a lame attempt to do so, but it still doesn't get that fat-cat Bob Crow out of his subsidised 'social housing' does it?

True. And if private landlords had to give 'lifelong security' how many private landlords do you think there would be?

The vast majority of private tenants do not have this security despite paying 100% of the rent themselves. Why would you want the taxpayer to pay 100% of the rent AND give them cast iron security as well!

Let's throw in free breakfast, free dinner, free broadband with satellite and 55" screen? Maybe a £2,000 a year furniture allowance perhaps? Free insurance. Oh. Energy bills are high. Let's get the landlord to write a blank cheque or maybe throw it on the rent which is paid by the taxpayer anyway. Or maybe force landlords to redecorate once a year, and pay for a week's holiday for them all to go to Majorca for a fortnight while it's being done......

Where have I ever said I thought the taxpayer should provide 100% of the rent? Indeed, where in my post does it say anything about what the taxpayer should provide? If a way can be found to get people like Bob Crow out of social housing without creating a disincentive for council tenants to start earning over some threshold value, I'd be all for it.

I am merely expressing the opinion that since the demographics of those who rent privately have changed considerably since the AST was designed, it may be time for a rethink. I imagine lifetime security would be a swing too far in the other direction, but I do feel there's scope for some changes that move in that direction while not going quite that far. If that decreases the number of private landlords, that's no bad thing IMO, as long as it doesn't change too suddenly. I regard the massive increase in BTL during the 90s and 00s as, on balance, a bad thing for the country as a whole.

I write as somebody with no experience of council housing, or of having rent paid by the taxpayer, but I do think I know a fair amount about private renting, from both sides of the fence. I rented privately (and happily) as a young adult, and then again in my late 30s (rather less happily) after sudden and unwelcome changes in my personal life. I've experienced having to move at a couple of months' notice because the landlords wanted their house back, and landlords who wouldn't let tenants put up picture hooks etc. After further sudden changes, I'm now living in a house that I own outright. I've never been a landlord myself, although I have a sibling who owns a house and lets it while living in tied accommodation, and a parent who inherited property that's been let out to a tenant who's been there more than 30 years and therefore has a protected tenancy.

shortchanged_2

BJV wrote: »

Sorry do not agree.

I bought my first house was I was 23. I needed a deposit and both of us had to save 3 years.

Although it was not a million pounds in relation to what I was paid it was a fortune.

No new clothes no going out. No I am not 95 just over 40 however I think it is about priorities. I have a friend who moans and groan constantly about never having the deposit yet she has enough money to go out, have lots of new clothes. !!!

So I'm guessing you bought in about 1996 - 1997, is that about right?

So fast forward 10 years (in a time machine if you like) and you are still a young happy 23 year old. Do you think you could have bought your current house at the 2006/2007 prices?

In that 10 year period house prices boomed ridiculously. You were very lucky to get on the housing ladder when you did.

chucky

shortchanged wrote: »

So I'm guessing you bought in about 1996 - 1997, is that about right?

So fast forward 10 years (in a time machine if you like) and you are still a young happy 23 year old. Do you think you could have bought your current house at the 2006/2007 prices?

In that 10 year period house prices boomed ridiculously. You were very lucky to get on the housing ladder when you did.

The same could have been said for most 10 year periods, house prices increase...

That's how inflation works, prices go up. People pay what they feel the price is they should pay for a house. It really is quite simple logic

shortchanged_2

chucky wrote: »

The same could have been said for most 10 year periods, house prices increase...

That's how inflation works, prices go up. People pay what they feel the price is they should pay for a house. It really is quite simple logic

Yes but come on chuckles. There is HPI and there is ridiculous HPI.

That decade of HPI certainly has shafted a large number of that generation.

If governments and central banks can't/don't/won't do anything to prevent these house price bubbles then a large proportion of the population always lose out as the cycle repeats itself.

Pretty much anyone who bought pre 2000 is laughing now. Those that bought 2005 onwards were not so lucky. So yes, luck of timing has a lot to do with it as well.