Affordable Housing - Can it be done?

pcwilkins

Romani_Ite_Domum wrote: »

It appears that the people who will unjustly suffer in a crash will be those who bought a home recenty and are in NE.

If a person makes a bad investment and suffers for it, it can hardly be called "unjust". They weren't forced to buy a home recently and in my view they were stupid to do so.

There are clear indications that the market has peaked but there is also much VI media spin that HPI will continue for many years.

So the lesson is, listen to the clear indications, not the media spin. At the end of the day they chose to buy.

There are many people who have bought houses as family homes over the last couple of years. They may have not liked HPI but wanted to be a OO and have had to buy at an over price.

They have not had to buy at all. It was entirely their own decision.

I would have sympathy for these people if they were unable to move due to NE.

Yes I suppose I would too...a bit :-)

Peter

olly300

morg_monster wrote: »

I don't know about a small minority - I'm 26 and many friends have bought 1 & 2 bed flats in the last 18 months. If prices do crash/correct it will be at just the time when they are all wanting to start a family and move to a bigger place and then they will be stuck ... I'm sure that anyone in their mid-late 20s who have bought a 2 or fewer bedroom house in the last 1-2 years will be in this position if prices crash/correct in the next few years.

Actually I know plenty of people who were brought up in 2 bedroom houses/flats and they are not only children. And also know 2 people who brought their 2 bedroom flats in the late 90's off couples with 2-3 children. These vendors brought in the late 80's/early 90's and had to stay put otherwise they would have lost lots of money.

It's the people who don't have 2 proper sized bedrooms (i.e can fit a double bed in the room and walk around it) who will suffer like previously as they will have to move. If you have a 2 bed property you can manage it's just that people have unrealistic expectations about space.

morg_monster

I know it is perfectly possible to bring kids up in small houses/flats and many people have no choice - however it is certainly not what my friends will want to be doing! As I said above, I will only have a limited amount of sympathy for them if this happens as they do have plenty of disposable income and it is just the negative equity thing which will be more of an inconvenience - they will just rent the flat out and buy somewhere bigger as the market stabilises unless a recession hits their areas of work hard and someone gets made redundant.

although to be fair, most of them live in converted flats, say on the 2nd or 3rd floor or higher and I wouldn't fancy getting a buggy down those stairs... and they don't have 2 proper bedrooms in general either, like you say, one double and one box/single room.

DontBelieveTheHype_4

morg_monster wrote: »

dannyboycey - I couldn't agree more. The friends who have bought 1-2 bed flats are our friends with great salaries. The poorer ones (relatively) like us look on a bit jealously but it will be interesting if a crash does occur and us poorer ones can buy bigger places roles will be reversed...

on the other hand, who am I kidding, we all live in London so probably won't feel a crash as much, and the ones who have bought are on ridiculously giant salaries (for their mid-20s) and probably won't even notice as their current flats become part of their pension and they move out to the Home Counties... :-)

Surely London will feel a crash more than anywhere else in the UK? This is where the most overvalued property is ... property that, in many cases, is actually pretty poor and/or located right next to social housing and estates with gangs on the increase. the overvaluation of London beggers belief

As for your friends current London flats becoming part of their pension, if there is a crash then they would be better off selling now to maximise returns otherwise they could have a pretty poor investment on their hands

olly300

DontBelieveTheHype wrote: »

Surely London will feel a crash more than anywhere else in the UK? This is where the most overvalued property is ... property that, in many cases, is actually pretty poor and/or located right next to social housing and estates with gangs on the increase. the overvaluation of London beggers belief

This is how London is and always has been.

Extremely rich areas next to very poor areas.

People from outside London don't understand it.

morg_monster

This is how London is and always has been
Extremely rich areas next to very poor areas.
People from outside London don't understand it.

Its one of the things I like about London - you can be in the grottiest area but you know you probably only have to walk 5 minutes to be somewhere nice. And likewise, there are few true "enclaves" of privilege in London, there's always someone weighed down with poundland and primark bags taking a shortcut through the posh area to the council estate etc. (not dissing poundland or primark btw!)

The fact is there are always people wanting to move into London. no matter what happens, ie recession etc, this will always be true. OK maybe not if there was another plague... in general there'll always be more people moving in than out and hence there's a shortage of housing and hence the market stays afloat. any crash will be muffled in London I think...

Bargain_Rzl

morg_monster wrote: »

Its one of the things I like about London - you can be in the grottiest area but you know you probably only have to walk 5 minutes to be somewhere nice. And likewise, there are few true "enclaves" of privilege in London, there's always someone weighed down with poundland and primark bags taking a shortcut through the posh area to the council estate etc. (not dissing poundland or primark btw!)

And for the same reason, there are few true "enclaves" of grot as well

dannyboycey

London pretty much has it's own rules when it comes to the property market. There will always be a massive demand for high-end properties because, well, it's London!

Bargain_Rzl

dannyboycey wrote: »

London pretty much has it's own rules when it comes to the property market. There will always be a massive demand for high-end properties because, well, it's London!

There will always be a demand for most properties, not just high-end ones.

London also has a LARGE population of childless professional singles and couples (many of whom do end up leaving London when they want to start a family) so there is always a demand for studio, 1 and 2 bed flats rather than larger properties.

Also, unlike most of the UK, living in a flat in London is seen by many as a sustainable lifestyle for bringing up a young family, rather than something to be traded for a semi-detached house a few years down the line.

A_Fool_&_His_Borrowed_Mon

dannyboycey wrote: »

So what are you saying? If you had a 300k house and person A offered £300k and person B offered 200k, you'd sell it for the lowest price?

What I'm saying, is that people are buying things that they cant really afford (and are alternatively financing it through getting more & more debt).

You can buy an "Unaffordable" house, but for how long will you keep it?

Note that this applies to people buying at today's prices, not those who bought when houses were affordable. I.E. 5-8 years ago.