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New Labour First Time Buyer Help Proposed
Comments
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The biggest problem the UK faces is the cost of housing
It is affordabilty rather than cost. And it is far from the biggest problem we have.
Those hoping for house prices to go down so FTBs can buy cheaper homes should be aware that lenders won't lend 95% on properties that might be worth only 80% in a few month's time.
There's no point having cheaper housing if FTB's can't get mortgages to buy them. If wishes come true and house prices fall, then FTB's are likely to find they need much larger deposits to buy cheaper properties.
One of the problems we have is that the last time property prices fell by a significant amount is so long ago that many people aren't aware (or have forgotten) of the consequences when that happens.
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wages need to go up to make housing more affordable. If prices aren’t allowed to fall, then pay needs to keep up with house prices
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It's a weird paradox that faith in house prices decreases once they have dropped to more affordable levels.
No reliance should be placed on the above! Absolutely none, do you hear?1 -
As an example, friends told us that their son and daughter in law "cannot sell their flat", even though they need a bigger place. Flat prices in London have been level for some years, so I assume the problem is that they can't sell the flat for enough to move on, rather than that the flat is unsaleable. So, they'll just have to manage with what they have, I guess.
The government has a problem, namely that they want more new properties built, but developers won't build unless they can sell. And, a general drop in prices causes developers even more issues, because they have stocks of unsold land/houses. So, allowing prices to fall, so as to stimulate demand that way, also means picking up the pieces from lots of insolvent developers, as the government needs developers to build the properties.
No reliance should be placed on the above! Absolutely none, do you hear?1 -
As an example, friends told us that their son and daughter in law "cannot sell their flat", even though they need a bigger place.
I think this problem will continue as what has been announced is only for new build homes.
The problems trying to sell 'second hand' flats is likely to continue.
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Sign of market failure. No way I'd encourage anyone to buy a new build, especially if it has any management fees.
A relative bought a new build flat on some sort of local buyer scheme, told him not to due to small print. We will see if it was a mistake when he comes to sell.
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I am not only looking at it from the vary narrow view of only considering FTB , the cost of housing effects practically everything in the UK as we all have to live somewhere , be that in owned , mortgaged , leased , private rented or social rented.
It effects lives starting in childhood , can effect what if any university someone goes to , what type of job and where they work, relationships and is probably not helping with our birth rate.
Do you realise that even for a large number of benefit claims the housing cost element dwarfs the rest of the claim , so expensive housing even has an adverse effect on government spending.
I am old enough to vividly remember the early 90's property crash and took advantage of it to buy my first property.
We already have people that cant sell the property they purchased under the last "help to bankrupt" scheme , the very last thing we need is more of the same , if someone can only fund 2.5% deposit they can not afford to buy. Anything that artificialy props up any part of the housing market will cause far more problems than it will solve.
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I am not only looking at it from the vary narrow view of only considering FTB , the cost of housing effects practically everything in the UK as we all have to live somewhere , be that in owned , mortgaged , leased , private rented or social rented.
I mentioned FTBs because that is the subject of the thread - but the same point applies to any buyer or remortgager who needs a mortgage or loan secured on the property in order to buy/keep it. Lenders get twitchy when the value of a property which acts as security starts heading downwards.
The issues you describe are real, and can't be lightly dismissed. But pushing people into negative equity is not the solution to anything.
It effects lives starting in childhood , can effect what if any university someone goes to , what type of job and where they work, relationships and is probably not helping with our birth rate.
Do you realise that even for a large number of benefit claims the housing cost element dwarfs the rest of the claim , so expensive housing even has an adverse effect on government spending.I worked in strategic planning for a local authority - so 'no', that isn't news to me. But one of the things I was involved in was dealing with the fallout from the 2008 crash and developers going bust or deciding not to proceed with schemes. The developers put a lot of cash into the public sector - from S106 contributions, CIL, new CT receipts, and taxes paid to central government. Which means…
Anything that artificialy props up any part of the housing market will cause far more problems than it will solve.
…not propping it up could create an altogether bigger problem. LA's are not going to meet their new homes targets if developers don't want to build.
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I agree that propping up the new build market is an excellent short term strategy for government. And, in the long term, any fallout will be some other government's problem. I’m not sure that I’d want to be a FTB pawn in this Realpolitik.
No reliance should be placed on the above! Absolutely none, do you hear?2 -
Average house prices increased to £293,000 (1.1%) in England, £215,000 (2.6%) in Wales, and £196,000 (2.3%) in Scotland, in the 12 months to July 2026
Inflation is currently 3.3% CPIH, so there has been a slight decline in real house prices.
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