Help to Buy is nothing but an election ploy....

grizzly1911

mayonnaise wrote: »

grizzly, may I recommend a S.A.D. lamp as pictured here below.




Your posts are a never ending gloomfest brimming with negativity and despair..
Alternatively, you could spend some time with your tribe in the Atacama to get a sense of perspective.

Thanks Reno have you got those windows in yet.

I will be trekking over Saddleworth this week I will look out for the rhinestone shimmer.

No quite sure what an Atacaman tribe have to do with the prospects of the young in the UK but if it helps your straw man so be it.

Jason74

Loughton_Monkey wrote: »

But how do you know? This mythical 21 year old has another 7 years to go before he's at the same age you bought your house?

Student loan repayment will not switch in until he hits a certain salary and will then be only a small proportion of salary.

But look at your own 2 cars (worth £2K) and maybe look at his little runabout costing £5K and the same again for insurance, not to mention his £45 a month Vodaphone contract.

The rate some of these age groups pour out of the expensive night clubs at the weekend, as if their whole Facebook credibility is at stake, informs us that the future is of no concern to them.

If there's any reason at all that they 'have to' work longer is little to do with the economy. It's to do with the good news that we all live a lot longer these days. Retirement age is 100% our own choice. If you plan on living to, say, 90, you can aim for 34 years work plus 34 years retirement (like I did), or 44 years work and 24 years retirement, or anything in between. It's merely a 'simple' matter of adjusting your lifestyle to match....

How do I know that a younger person will have it much harder than I did?. Simple maths tell you that. When I bought my property, I paid £92,000 for it, and earned £26,000 at the time. Just over 3.5 x salary. And the first few years were an absolute killer (as of course they always have been for most FTBs). I know that the same property today would cost around £200k, as a couple of more or less identical properties have gone onto the market recently at just over that figure, and gone under offer pretty quickly. I also know that the job I did then would typically pay around £35k now.

So in the last twelve years, the cost relative to income for effectively the same person to buy an unexceptional 2 bed maisonette in one of London's cheaper areas has gone out from 3.5x income to around 5.7x . If house prices and wages continue on a similar trajectory, the same property will cost around £310k in seven years, while the job will pay around £43k. That means the "mythical" current 21 year old looking to buy at the same age I did will be looking at a house price to income ratio of around 7.2. More than double the ratio that I faced.

Even interest rates at high LTV aren't much different now to where they were when I first bought. I went for a 5 year fixed rate as I had so little margin for error, and the rate was just under 6% (I could have got lower by going variable, but I just couldn't afford the risk of rate rises). A buyer wanting the same security now would still be looking to pay around 5%.

When you put all that together, I really don't see how it adds up to anything other than people in young adulthood now facing a far tougher time to get on the housing ladder than I did. I think people need to be far more realistic about the scale of the challenge facing young people today, rather than taking a view that their difficulties are somehow their own fault because "the future is of no concern to them"

HAMISH_MCTAVISH

Jason74 wrote: »

So in the last twelve years, the cost relative to income for effectively the same person to buy an unexceptional 2 bed maisonette in one of London's cheaper areas has gone out from 3.5x income to around 5.7x . If house prices and wages continue on a similar trajectory, the same property will cost around £310k in seven years, while the job will pay around £43k. That means the "mythical" current 21 year old looking to buy at the same age I did will be looking at a house price to income ratio of around 7.2. More than double the ratio that I faced.

That is just the market working exactly as it's supposed to and rationing goods in limited supply through price.

If you want the house prices to fall, or at least stop going up as much, both sustainably and for the long term, you need to build millions more houses to deal with the chronic housing shortage and increase in household formation.

There really is no other way.

Jason74

HAMISH_MCTAVISH wrote: »

That is just the market working exactly as it's supposed to and rationing goods in limited supply through price.

If you want the house prices to fall, or at least stop going up as much, both sustainably and for the long term, you need to build millions more houses to deal with the chronic housing shortage and increase in household formation.

There really is no other way.

While I would very much be of the view that given limited supply, curbing BTL must be part of the solution, I don't argue for a second either with your fundamental premise that we need to build more homes, or the idea that prices will rise faster than incomes until we do. We've discussed this on other threads, and while we disagree on much (more in terms of what is desirable rather than what is likely to happen), we're 100% in agreement on that particular point.

However, if the market "working as it should" drives up prices over time, it stands to reason that each generation of young people attempting to enter the market will find it harder to do so than the one that came before. One inevitably follows the other.That in turn means that in one key area at least, younger people will find it harder to build up economic security than previous generation. This is a simple fact.

CLAPTON

Jason74 wrote: »

While I would very much be of the view that given limited supply, curbing BTL must be part of the solution, I don't argue for a second either with your fundamental premise that we need to build more homes, or the idea that prices will rise faster than incomes until we do. We've discussed this on other threads, and while we disagree on much (more in terms of what is desirable rather than what is likely to happen), we're 100% in agreement on that particular point.

However, if the market "working as it should" drives up prices over time, it stands to reason that each generation of young people attempting to enter the market will find it harder to do so than the one that came before. One inevitably follows the other.That in turn means that in one key area at least, younger people will find it harder to build up economic security than previous generation. This is a simple fact.

typically the occupancy of rental properties is higher than owner occupier properties, so if rental properties are reduced the housing problem will get worse for the poor although better for the richer.

HAMISH_MCTAVISH

Jason74 wrote: »

curbing BTL.

We know, you think that it will make a difference.

But it's neither politically sustainable nor economically sound to do so.

So it's simply not going to happen.

However, if the market "working as it should" drives up prices over time, it stands to reason that each generation of young people attempting to enter the market will find it harder to do so than the one that came before.

Well, it stands to reason that ever larger numbers of people must be excluded from owning their own home if there aren't enough homes to go around.

You seem to regard this as being bad from a social justice perspective.

I regard this as being bad from an economic growth perspective.

We agree on more than we disagree.

mayonnaise

Graham_Devon wrote: »

Seems helptobuy has it's own facebook page.
https://www.facebook.com/HelptoBuyEngland

Graham_Devon

HAMISH_MCTAVISH wrote: »

That is just the market working exactly as it's supposed to and rationing goods in limited supply through price.

If you want the house prices to fall, or at least stop going up as much, both sustainably and for the long term, you need to build millions more houses to deal with the chronic housing shortage and increase in household formation.

There really is no other way.

How can you describe the market working "as it should" while at the same time, congratulating the government on intervention schemes for the demand side?

If the market was working "as it should" there would be no intervention to increase demand.

nickj_2

it's like sticking a band aid over a severed limb , it's not dealing with the problem of houses becoming more and more unaffordable to the average man on the street

Graham_Devon

mayonnaise wrote: »

Not surprised really.

The commnts though are interesting. Difficult to find a comment in favour. Surprised they are allowing them in all honesty.