Tuesday, Mar 02, 2010
Nothing to do with the price of a house though (part 2)
Mortgagestrategy: 80% of under 30s need help to buy a home
The Council of Mortgage Lenders estimates 80% of all under 30s now need financial help from a parent or relative to get on to the housing ladder. The figure nudged up to 45% pre-credit crunch, but has now almost doubled. The CML says the overall effect is that for those in the formerly typical first-time age bracket of 25-34, the likelihood of buying at the moment is around half its level of a decade ago.
Posted by jack c @ 03:37 PM (1239 views) Add Comment
12 Comments
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1. estrader said...
But the good news is that house prices are going up..*LOL*
What a waste of everything the CML is.
2. mark wadsworth said...
The Home-Owner-Ists first try to eat their young, then they choke on them, and then they both go down together, taking us with them.
It's still not clear to me who is supposed to benefit from Home-Owner-Ism, apart from politicians who see it as a good medium term way of winning elections and bankers who sell each other RMBSs (the 'banks' themselves, i.e. the shareholders, clearly do NOT benefit).
Looking back, I'm starting to like John Major more and more, a brief interlude between the Thatcher Home-Owner-Ist era and the New Labour Home-Owner-Ist era.
3. need-a-crash said...
I'm going to attempt to defend Thatcher. This idea that if you sell-off council houses there won't be anything for the next generation of poor people, which is often used to attack her policy of giving poor people a greater stake in society... Surely if all house prices did was track wage inflation the next generation of poor people would simply be able to buy whatever Thatcher's generation of poor people could afford ie. those same council houses.
Surely the problem is too much mortgage lending? Arguably this did get out of control in the late 80's but to nothing like the extent it has under Labour?
In many ways Mark, I like your 'home-owner-ist' slogan but let's be honest we're all wonna be home owners on this site so doesn't that make us hypocrits? I don't have a problem with people aspiring to home ownership and Thatcher enabled poor people to aspire to that as well, which was surely one of her more egalitarian policies?
Surely we are campaigning not against home-ownership but massive hpi, which is a cheap, short-term trick that any government (in collusion with the banks) could play and that is to simply allow too much money to be lent to people to ramp up house prices and create an illusion of wealth. The illusion becoming apparent the moment the next generation realise they are priced out of the market.
4. greenshootsandleaves said...
mw@2 (03:59) 'It's still not clear to me who is supposed to benefit from Home-Owner-Ism, apart from politicians who see it as a good medium term way of winning elections'
Especially since Homeownerism can flourish on little more than 1/3 of the vote!
5. mark wadsworth said...
NAC - please remember that Home-Owner-Ists do NOT want a wide spread of homeownership. That is exactly what they don't want.
People like me want a wide spread of homeownership (not just for me, for everybody but the poorest, for whom a secure social tenancy is a pretty good alternative), and low and stable house prices.
Achieving this is dead easy - we just go back the the 1950s and 1960s, build more houses (including social houses), have stricter lending ratios and reintroduce Domestic Rates and Schedule A taxation (or even better, a progressive property tax like in Northern Ireland or even better Land Value Tax). Keeping house prices low would have the wonderful knock on effect of keeping banks down to size.
It ain't rocket science.
6. mrflibble said...
@2. mark wadsworth...
The Home-Owner-Ists first try to eat their young, then they choke on them, and then they both go down together, taking us with them.
Priceless - it does seem that way doesn't it?
7. greenshootsandleaves said...
need-a-crash@3 'Surely if all house prices did was track wage inflation the next generation of poor people would simply be able to buy whatever Thatcher's generation of poor people could afford ie. those same council houses'
You have left out the impact of the BTL investor, which soon puts those council houses out of the reach of FTBs unless they're prepared to borrow crazy multiples of their annual income.
8. tenyearstogetmymoneyback said...
Simple. Offer them 10 times salry mortgages and the problem is solved :-)
I remember back in 1989 when all the young people at work were complaining that they couldn't afford houses
and the company arranged a special deal with a building society to allow 4 times salry mortgages. The lucky
ones were those who didn't take it up and bought better houses for 3 x salary in 1995.
Greenshoots. As various charts show buy to let lending was minimal under both Thatcher and Major.
The first time I saw it advertised was 1999 just after I had reduced my exposure to property down to zero.
9. bluebeach said...
The country is finished............what sane child wants to live in this shite hole soup concocted by Head Chef Darling an co
10. Alfredo said...
Yeah but 80% of people over 60 have several properties, so everything is sweet isnt it?
Unfortunately our pollys arent capable of looking into the future at what they are creating, they just want to deal with the now.
11. greenshootsandleaves said...
tenyears@8 'As various charts show buy to let lending was minimal under both Thatcher and Major.
The first time I saw it advertised was 1999 just after I had reduced my exposure to property down to zero'
Cash-rich investors did not, of course, have to wait until the late 1990s before entering the BTL market. Many did so as soon as they saw that a change in Government policy had made private letting a much more attractive proposition. This happened under Thatcher and was greeted by the popping of many a champagne cork. Can't seem to get away from bubbles, can we?
12. alan_540 said...
@8 tenyears... and 50yr mortgage terms, simples!