Young unable to buy as rents soar

andybenw

As everyone discusses the benefits of renting vs buying lets not forget.

Once the mortgage has been payed off the property owner is living rent and mortgage free. Some would see this as essential for a decent retirement.

The earlier you buy, the earlier the mortgage gets paid, and the earlier the mortgage is paid the more years of rent/mortgage free living.

PasturesNew

This is how you get a skills shortage.... when your pool of available workers are only those who already live in the area, or who can afford to move to the area. You end up with only 10% of capable people even being within commuting distance...... and 90% of capable people saying "I can't afford to move there".

CKhalvashi

PasturesNew wrote: »

This is how you get a skills shortage.... when your pool of available workers are only those who already live in the area, or who can afford to move to the area. You end up with only 10% of capable people even being within commuting distance...... and 90% of capable people saying "I can't afford to move there".

On the other side, our average wage in the office is IEO £60k now, mainly to counteract this.

Similar jobs are going (on average) at around £45k elsewhere in the country in our industry outside of London.

PasturesNew

CKhalvashi wrote: »

On the other side, our average wage in the office is IEO £60k now, mainly to counteract this.

Similar jobs are going (on average) at around £45k elsewhere in the country in our industry outside of London.

Not many industries can afford to just up the pay though - and, if they could/did, house prices would rise

Rather than more pay, why not take the 1800s to 1960s approach: build housing for your staff, rented to them more cheaply than the open market. You used to see a lot of that back then. Factory owners building villages and streets. Even schools and the police used to have police houses and teacher houses to enable staff to live "on site".

The village road I lived in (possibly even my parents' house) was built by the local factory to be sold affordably to workers in the 1920s/1930s.

CKhalvashi

PasturesNew wrote: »

Not many industries can afford to just up the pay though - and, if they could/did, house prices would rise

Rather than more pay, why not take the 1800s to 1960s approach: build housing for your staff, rented to them more cheaply than the open market. You used to see a lot of that back then. Factory owners building villages and streets. Even schools and the police used to have police houses and teacher houses to enable staff to live "on site".

The village road I lived in (possibly even my parents' house) was built by the local factory to be sold affordably to workers in the 1920s/1930s.

Because with land prices, that's £20m I simply don't have, and the maximum the bank are willing to lend us at all is about a quarter of that (according to the most recent statements I've seen, which will be May's)

My house used to belong to a school (we bought it from the people that bought it from the County Council) and there's another one in the same position (unlived in for 20+ years apparently) on the same road.

They won't sell that one until a planning application has gone through, which will take (IMO) another 10+ years.

It's an utter waste if you ask me, but there we are.

silvercar

AndyGuil wrote: »

Rent in the capital is very expensive too. I have found that rents are higher than mortgages in London.

A lot of graduates are finding themselves priced out of the decent rental market, even on relatively decent graduate salaries.

The only way to afford to live in commuting distance is either to live far out and face a lot of time and money on commuting or to live in student- style housing nearer to the centre.

N1AK

Graham_Devon wrote: »

And that's a nonsensical argument in itself, assuming that if you rent, you will rent for life, and if you buy, you buy once.

Think a little deeper. You would have to rent for life, unless you then decided to buy. If you did that then you'd have all the costs of buying at the increased cost & the downside of additional rental costs for the period prior to buying.

You're wrong, and I'm pretty sure that if you took the time to take a step back and consider it more widely you'd be able to see that yourself, but you're too busy defending your previous assertion.

IronWolf

This is the rental yield history in Central London. Safe to say the HPI going on there is not just based on supply/demand issues.



Same thing in other posh areas like Chelsea



You can also see some areas where the recent price increases have caused yields to plummet to now sub 4%, here's Bermondsey

Percy1983

Still can't see any evidence of mortgage rationing...

So what is the reason rents are rising? I think I know the answer but like to see the excuses first to verify my answer.

AndyGuil

silvercar wrote: »

A lot of graduates are finding themselves priced out of the decent rental market, even on relatively decent graduate salaries.

The only way to afford to live in commuting distance is either to live far out and face a lot of time and money on commuting or to live in student- style housing nearer to the centre.

Unfortunately this has always been the case. Nothing wrong with commuting and living within means is best. Aspire to live where you want to and as we see in many of these areas there are people of all kinds. I don't think most graduates expect to walk out of uni and straight into a prime London spot.