[Closed] Are we all DOOOOOOOMED then?

@philconsequence simply save up a 20 or 30k deposit and buy yourself a tiny broomcupboard in an area where you'll probably wake up murdered in your bed every day? Live the dream! 😉

I'm sure it doesn't help seeing all these smug assholes in their 300k houses with tiny or no mortgages, due to lucking out and buying before the boom 🙁

But seriously it's a really bad situation, I genuinely feel for the younger generation, or anyone trying to buy their first property. Rents are high meaning saving for a deposit is very difficult, and the banks seem to change the rules all the time 🙁

Eeek ..... is that the fifth horseman of the apocalypse i see?

I think you're on the money about housing. Its all part of the increasing division of society. Those with capital already will colonise the property in entire (desirable) areas, renting out what they don't live in.

The rest of us plebs and peasants* will pay ever increasing rents to the new landed gentry, or skint yourself to buy some ex- council shit-hole in a war zone. And remember... another proposal of our present benign masters is to bring council/housing association rents up to private commercial levels. I'm sure that'll help matters a lot.

* who, for arguments sake, we'll now call anyone earning less than £50k a year

I'm very much trapped. Renting, no spare cash to save for a house, it's not looking good in that part of my life. But, I still have a job and I'm getting buy okay. Having my own home would be really nice, someday mayeb, but there's not much I can do right now. Oh, and having a naughty £20k loan isn't helping either!

randomjeremy - Member

I doubt there will be a house price crash as such, more of a correction.

What I think will likely happen is lots of people will lose their jobs and subsequently their homes, the banks will tighten up lending even further so that 200k house you couldn't afford at 5% interest rate and 20% deposit is now a 140k house you can't afford at a 9% interest rate and 40% deposit.

So who will buy the houses? Same answer as always, the rich assholes with loads of cash. There will be a surge in house prices again, created by cash-rich buyers picking at the carcasses of shattered family dreams, until a kind of equilibrium is reached.

What will happen to the rest of the people? I would say if you own a house now and keep your job, you'll probably be ok, unless you're overstretched already. Inflation and a rise in the base rate will push many over the edge. If you don't currently own a house, and you're not loaded, you'll probably be renting forever.

I hope I'm wrong though

i can see the future, i don't talk about it often, as it's more of a curse than a blessing.

you are correct in your prediction.

wil fixing this save all our woes?

[url= http://www.telegraph.co.uk/finance/economics/8778727/Britain-lost-35bn-in-uncollected-taxes-last-year.html ]http://www.telegraph.co.uk/finance/economics/8778727/Britain-lost-35bn-in-uncollected-taxes-last-year.html[/url]

I'm sure it doesn't help seeing all these smug assholes in their 300k houses with tiny or no mortgages, due to lucking out and buying before the boom

And the way my finances are now (and the fact banks will only lend to 'perfect' buyers) means I would be lucky if I could borrow the original £100k, never mind £220k.

Yes I was lucky, but I *did* live on bread and beans and lived in a mostly unheated house for the first two or three years of home ownership as I was completely and utterly broke. I certainly don't feel smug. Ohh, and I did it totally using my own money - no 'mummy and daddy' money (in fact I had to bail them out around that time due to still unexplained debts they had amassed).

Don't think that because someones house is worth £300k they're loaded, ex council houses round our way go for around that. The owner of said £300k house might have a bit of paper profit, but it's likely they'll want to move up to something bigger and the gap to that is almost as punitive as for first time buyers. The only people who win are those who are downsizing, and they're getting raped by low interest rates on their savings (or unearned house sale windfall).

House prices either need to come down (nominal falls) or wage inflation will be required (leading to real terms falls), but come down they must. It's just a question of how long it takes and what mechanism comes into play.

I agree in part with randomjeremy but don't think we'll revert to the landed gentry model. At some point houses will become more affordable and there will be credit available to those that need it and can afford it, in the meantime I can't imagine the rich assholes with loads of cash have enough to buy everything or would want to. In fact a lot of them, being 'canny buyers', have probably already 'snapped up a bargain' and will get burnt more than us plebs.

I should just caveat the above, when I'm talking about rich assholes I'm not talking about the uber rich 'old money' types. The only way they'll suffer is if the whole system falls apart and they wake up to find the butler gnawing on a leg rather than guarding the bone china.

But some of those people (me included) are stuck where we are too. Mine is a 2.5 bed end terrace worth around £300k and I owe about £100k on it. But to get the next (sensible) step up means a house of around £400k so that means a mortgage of around £220k (if I allow for fees etc).

The problem is, whether by luck or judgement, you're on the property ladder, someone 10 years behind you is probably looking up at a house 2 rungs below yours and still struggling to get a mortgage.

Its all part of the increasing division of society. Those with capital already will colonise the property in entire (desirable) areas, renting out what they don't live in.

in the words of the great Eric Morecambe.......... I resemble that remark

But I didn't end up in this position - like most I'd guess - by design
I bought a house when they were a lot cheaper in 1981 and I've moved once in 1991 to where I am now
We've since inherited 2 more properties, we rent 1 and we sold the other
Not sure, other than giving them away and never buying a house in the first place, what else we could have done.

[i] If you don't currently own a house, and you're not loaded, you'll probably be renting forever[/i]

I'm 20, this sucks. I could save like mad, and probably get in the next few years about 20,000 together, but I'm not certain I'd get a mortgage anyway. we're sort of relying on GF's parents (loaded) to help out, which is lucky for us, but I dunno about some of my friends.

well uplink, we've already established that i'm a nice chap, i'd be happy to accept one of your houses... in fact i'd probably deliver a tin of quality street to your door as a way of saying thank you 8)

no bank of mum and dad here, been saving for the past 9 years for a deposit, those savings have had to be eaten into everytime i've had to move etc. no loans, no CC debt as i only use it for the odd bit of fuel and shopping therefore paid in full every month.

biggest problem mrsconsequence and I have is our jobs... we both earn a wage that means we can pay off our bills every month, but she works in a prison thats going to be privatised and is only on a 1 year contract. and my job is dependent too many factors, all of which arent looking good. no security means no confidence in buying as we could both be out of a job next month.

our landlord lives in a house worth well over a million and spends his days playing golf.

well uplink, we've already established that i'm a nice chap, i'd be happy to accept one of your houses

I only have one that I live in and a quarter share in an apartment in London, so not quite the Duke of Westminster I probably made myself sound 🙂

our landlord lives in a house worth well over a million [s]and spends his days playing golf[/s]which he works damn hard for and is there by merit so deserves everything they get

dont worry, i've decided i'm going to get barnsleymitch to adopt me. then we can set up a father and (adopted) son crack forensic psych squad, riding around the countryside saving old men from crazy type people 🙂

then when we've made enough money we'll build our own shutter island with a drawbridge.

i'm no lefty scum, always been right handed 😆

he told me he bought at the right time and played the property game... acknowledged he was lucky to be in his position which was good of him! didnt reduce our rent even though i hand delivered a christmas card to him, what a monster!

The problem is, whether by luck or judgement, you're on the property ladder, someone 10 years behind you is probably looking up at a house 2 rungs below yours and still struggling to get a mortgage.

And as said much more previously, I wouldn't stand a chance of being able to afford the first home I bought if I was a first time buyer now and it really isn't right that people can't afford it. I sometimes wonder how anyone, other than those with windfalls/rich parents etc, can afford to be a first time buyer now.

mister fantalion, let me reassure you there are hard working younguns out there 🙂

i've been saving for 9 years now, always gone for the cheapest rent in the area providing i can still get to work on time. the job i currently have is the first time since the age of 13 i've only had one job, always had 2 or 3 jobs at once up until now to the detriment of my health and relationships (only got one job now cos i want to spend time with my loved ones and i desperately needed a sleep pattern!.

i've saved every single month since i left home at 18 to go and live in nurses accomodation round the back of basingstoke general hospital cos it worked out cheaper than renting at home (parents made me pay rent form the age of 16 as i was working 2 jobs anyway)

for 3 years now i've been renting a house where we haven't been able to afford to have the heating on each winter, vistors have had to get used to bringing extra layers and borrowing a quilt to sit under. luckily landlords jsut had a new heating system put in so we should be able to afford to have heating on this year 😀

always houseshared even when i've been earning enough to afford not to, this way i've been able to keep saving for a deposit. no money from parents and no fall back plan of being able to go live with either of them if it all went wrong. never ever borrowed money from them, no inheritance apart from a completely unexpected small amount from my gran when she died earlier this year. No inheritance or property coming my way when parents pass on either so i've always known i need to look after myself and have my own back-up plans.

currently got enough in savings for a deposit on a small house, but not a house anywhere near where me and mrsconsequence work. recruitment freezes all over and we both work with vulnerable adults, an area going through more and more cuts so we're just lucky to have jobs and be able to cover our bills as far as we see it at the moment.

like you did, some of us are working hard, saving hard and making sacrifices 🙂

uplink - it wasn't a criticism fella. Just a statement. I think the divide is as much about age as it is about class, or anything of that nature. You will have bought your first house when the housing market was more accessible.

If you look at what you have to be earning now to service the mortgage on an 'average' property, plus the deposit you'll have to save (all while still paying increased rents of course), then Thatchers dream of a 'home-owning democracy' is well and truly over. Unless something very very drastic happens

I admire you i really do, but , ther emust be limits. I call this the Carerra line

fury for me, kraken for the lady 😳

uplink - it wasn't a criticism fella. Just a statement. I think the divide is as much about age as it is about class, or anything of that nature. You will have bought your first house when the housing market was more accessible.

Never took it as criticism and you're right it is age, the first time I was eligible to vote in a general election was on that black day in May 79 - and yes, her home ownership drive hooked everyone
It had to, all the good council houses were bought up and there wasn't the amount of private rentals around

I'd still swap every last bit of what I own to be 21 again though 🙂 - any takers?

like you did, some of us are working hard, saving hard and making sacrifices

What you said made me remember more about when I first went through it - I worked full time and had a bar job working Monday, Wednesday and Friday or Saturday nights plus Sunday lunch and all bank holidays as well as freelance design work - sometimes working through the night in order to save for my deposit. I was in a 'fortunate' position to be able to stay at my mum and dad's at the time (I never felt I HAD to move out) so my housekeeping payment to them was much less than if I was paying rent.

So perhaps if I worked that hard now I could still afford it, I don't know!!!

So what do you think then? I've started reading the financial pages of late and it would seem that we are all in fact ****ed.

There is a saying along the lines of when the tide goes out, you can see who was swimming with no trunks on.

Basically many institutions are going to fail big time, but that is because they had systemic failure built in to them right from the start.

Then we can get on with building a fairer and more sustainable and resilient society and institutions.

What surprises me is that people talk about these high prices as if they're the norm. Everyone in their own homes already are saying they're lucky, and that's true, but I think the more important point is that those that are trying to buy are currently seen as unlucky.

These prices won't last forever - never mind the myriad global financial problems, you simply cannot have an economy as dependent on house prices as ours is with a housing industry that is not moving. Volumes are at an all time low, everybody agrees that we 'need to get the market moving again' and screams blue murder because 'the banks aint lending', well they are lending, they're just lending to stricter (read more sensible) levels.

If people cannot borrow enough money to buy a house at current price levels then that price needs to drop to a level that people can borrow at, it's market forces innit. Either those prices will drop nominally as they did up to 2009, or we'll get a 70s style inflationary boom where wages spiral up but house prices stay the same. They may not appear to drop in that case but the pound in your pocket will be worth much less (£50 for a load of bread, imagine how much an XTR rear mech will cost!).

Bottom line is prices are still in bubble territory, which was driven by a frenzy of loose credit. That credit is no longer available which means prices cannot be sustained so must drop to a more normal level.

Don't worry young'uns, it'll be reet. In a few years time those that have stretched themselves to get on the ladder recently may well be telling you how lucky you are that you couldn't buy. It happened in the 80s/90s and it can easily happen again.

Or I could be wrong and yes, you're (we're) ****ed, but I hope not.

depends tbh two sides [small island housing shortage mortgages generally cheaper than renting [ oop north anyway[

Or once the mortgage is too far above the national average no one can enter the market so it slumps

May reduce but not hugely as you can still buty a house and rent it and make money - oop north anyway so given that they will stay high.
Tbh I blame thatcher for removing social housing from the nations stock of housing- poor folk used to have somewhere affordable to live

I bought because even if after 25 years it is worth 12 p it will still work out cheaper than renting for the same period

I completely agree, I was just trying to make the point that I don't feel smug having the home I do - I was fortunate, yes, but I am certainly not smug - just relieved. And at the time, as said above, I made massive lifestyle changes in order to do it.

And as said much more previously, I wouldn't stand a chance of being able to afford the first home I bought if I was a first time buyer now and it really isn't right that people can't afford it. I sometimes wonder how anyone, other than those with windfalls/rich parents etc, can afford to be a first time buyer now.

Sory, wasn't having a go and intending to make you go on the defensive, just using you to ilustrate a point.

Anoying thing is, I have just enough money for deposit and to probably get a mortgage. The problem is, do I buy the house and spend the next 10 years paying the mortgage off, only to find its then worth peanuts or is worth the same by I'm taking my earnings home in a wheelbarrow (banks will colapse, along with the BACS system obviously). Or do I keep renting, which is OK in the short term as the rent's are still comparable to intrest rates + mortgage fees.

Anoying thing is, I have just enough money for deposit and to probably get a mortgage. The problem is, do I buy the house and spend the next 10 years paying the mortgage off, only to find its then worth peanuts or is worth the same by I'm taking my earnings home in a wheelbarrow (banks will colapse, along with the BACS system obviously). Or do I keep renting, which is OK in the short term as the rent's are still comparable to intrest rates + mortgage fees.

small island housing shortage

Lots of people say that the UK has a housing shortage but what is it that shows this?

It's a common myth. What it means is that there's a shortage of council type housing for the needy and vulnerable. The type of housing we have in this country is slightly out of balance. There's no actual housing shortage - how many people do you see actually living on the streets? Not many that's for sure and those that do are usually there not because of an accommodation shortage but because of far deeper issues.

Apparently there are almost a million properties standing empty in the country right now, and that's not including second homes. There's plenty of property for sale too - just at present most of it not priced to sell.

Trouble is there's just not much demand for property at today's prices. Who in their right mind would sell themselves into a lifetime of debt and mortgage slavery just to own some tiny shoebox house in suburbia? Fine when property prices are going up, but at the moment when at best things are stagnating?

You can bet your bottom dollar that if the demand was there (demand = people with the money actually in a position to buy) then the housebuilders would be building like there was no tomorrow. As it is though they sit on those vast plots of land they have bought and do very little. No point building houses that will not sell is there?

Also to all those who say that house prices can never go down because:

'We live on a small & crowded island and there's only a finite number of houses'

Absolute rubbish. Just look at what happened to house prices in Japan a few years back. 70-90% falls in values. And Japan has a much higher population density than the UK with even less land to go round.

House prices can DEFINATELY fall in the UK, and they are still above long term averages, so you could argue we are overdue a proper correction. But, it is a big rise in unemployment and a spike in interest rates that will trigger it, otherwise we could certainly bump along at current prices for years. Anyone think rates are going up? Unemployment could get worse if the private sector cant pick up the slack but not a disaster coming I dont honestly think.

I dont mean to be flippant but if owning a property is the biggest aim you have then move somewhere more affordable. Americans move homes every 3yrs, Germans pretty much all rent.

You can bet your bottom dollar that if the demand was there (demand = people with the money actually in a position to buy) then the housebuilders would be building like there was no tomorrow. As it is though they sit on those vast plots of land they have bought and do very little. No point building houses that will not sell is there?

the problem for the housebuilders is they paid too much for their landbanks (funded by the silly prices they were getting for their houses as newbuilds were always overvalued) so that if they build now the margins are no longer so cozy. even the dubious shared ownership/rent-buy schemes aren't going to dig them out of that hole.
they are now partly in negative equity of their own making

article in the independent

This stagnation is why the huge numbers of homes promised won't actually be built. As a result of restrictions placed on development in the past 20 years, the market has been dominated by half a dozen developers who make their money from high profit margins on the sale of a limited number of homes; builders such as Barratt, Persimmon, Bovis, Redrow, Taylor Wimpey and Berkeley Homes.

When prices were rising, the model worked by developers buying land and waiting for prices to go up. Now the music has stopped, house prices are flat, and developers are left with planning permission sufficient for nearly 300,000 units – but on land bought at the top of the market. Until prices rise, they can't realise their assets. The business model developers have relied on for decades is broken.

There is another problem. In a market where land was scarce, developers became fixated by rising land costs financed by squeezing every last drop of profit from each unit. As Harry Rich, the head of Riba, the architecture industry body, said last week: "Thousands of shameful shoe-box homes are being churned out all over the country."

House prices can DEFINATELY fall in the UK

I will potentially lose this view...
[img] [/img]

Should've rented...

Start a blizzard of objections, nay, start a NIMBY group!

start a NIMBY group

The FTSE is currently down 197 points, it could be another crashlet...

that's a fine view ..hope you don't lose it

that's a fine view ..hope you don't lose it

But the annoying thing for me is that we will now struggle to sell (which we were considering for next year) for anything like the value we could have got for it a month ago.

Arse biscuits.