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https://www.telegraph.co.uk/personal-banking/mortgages/generation-debt-why-first-time-buyers-wont-pay-mortgages-2062/ “Home ownership is a very British thing,” says Leon Ward, 31. “We live in a country where you’re told it’s the right thing to do.” Ward, a charity worker who recently bought a property by taking out a 35-year mortgage, is less certain. Loans taken out over longer terms like his have become an increasingly familiar sight since the financial crisis, and in particular over the last year as mortgage rates have soared. Stretching them out can ease the pressure on monthly payments, but means spending hundreds of thousands of pounds more on interest. For many young people, such mortgages represent the only way to get a foot on the housing ladder; one buyer says it allowed him to start a new life with his partner. But when it brings decades of debt and extra expense, is the dream of home ownership worth it? Chris Sykes, a mortgage broker, says longer mortgages have “definitely become more popular” among first-time buyers and homeowners remortgaging to ease monthly payments. According to think tank the Resolution Foundation, rising interest rates will swallow up another 8pc of young people’s income by the end of 2026. Not so long ago, a typical term was about 25 years; now it is between 30 and 35 years, with some as high as 40. Data from the Building Societies Association (BSA) shows that a tenth of first-time buyers – up two percentage points in a year – opt for mortgages of more than 35 years. That means someone buying a house in 2022 could be saddled with debt until 2062. More debt for longer This is a costly way of buying a home in the long run. Taking out a £350,000 mortgage at a rate of 5pc over 25 years would cost you £2,047 a month. Extending it to 35 years would save £280 a month, rising to £358 for a 40-year term. However, interest payments would set you back an extra £200,000 over 40 years compared to 25 years – equivalent to 56pc of the original mortgage. The debate over whether it’s better to buy, even if you are in debt for longer, is a fraught one. “House prices are house prices,” says the BSA’s Paul Broadhead. “You can either afford to get a mortgage and buy a house or you can’t. “Their immediate alternative would be being in the private rented sector where you’d be paying rent for a longer period than 30, 35 or 40 years. Nor have you got the security of tenure that you would have in terms of owning your own home.” Ward is relieved not to be renting, but his three-bedroom Victorian house in Cardiff brings other pressures. By his own account, the property was “dilapidated”, and renovation work running over-budget swallowed up any savings remaining from the deposit. “Some people would say I was daft to buy a house that needed a 35-year mortgage,” he admits. “Others would say it was the best thing to do because bricks and mortar always go up in price. “I’d be daft not to take it because the other option is that I could be renting and paying someone else’s mortgage. If the property price falls then I’m b-----ed, but we’ll just have to see.” Planning to overpay At just 20 years old, Jack O’Boyle is less concerned after buying a home in Rotherham, South Yorkshire. The sales executive admits his 35-year mortgage is “not perfect” but wanted to get settled with his partner as soon as possible. “We wanted to start the next bit of our lives together,” he says. Neither of them plan to let the mortgage run into the 2050s. “We’ll be paying it off sooner,” Mr O’Boyle says. “It’s everyone’s plan, I imagine, but with our current financial situation it’s going to be an option.” In some cases, longer mortgages can just be a way of getting your foot in the front door. If a better salary or bonus comes along, you can always overpay or remortgage to secure a shorter term. But as Sykes points out, this does not always turn out as planned. “The number of people that overpay is less than those that intend to,” he says. “When it comes to ‘do I go on a holiday with my bonus or do I overpay the mortgage?’ one is a bit more exciting than the other.” A longer mortgage can also push retirement further back. Sykes asks two questions when a client says they want a 40-year mortgage: “When do you plan to retire, and when can you feasibly work until?” Before getting a loan, a buyer would have to commit to working into their sixties and seventies if necessary. The young buyer’s dilemma For young people coming from university, a mortgage only piles on top of their existing mountain of debt. Around 1.5 million students leave every year with about £46,000 worth of unpaid loans each. Joe Mascari, a 23 year-old video producer, is shocked at how his life has changed in the two years since he graduated. Having once lived with a “fridge in the living room”, he now owns part of a property in Whitechapel, east London, with a colleague. There are two catches. One is that they only own about a third of the apartment. “Even when I own 35pc of the place it’s still 35pc of my place,” Mascari notes. The second is that they took out a 40-year mortgage in order to do so. “Ideally we wouldn’t want to but it was just affordability,” says Mascari. “We’ve weighed the benefits and the drawbacks, and I think we’ll still be making a profit if we sell after the five-year term of the fixed mortgage. So we’re going to take that bridge when it comes.” Longer mortgages are the only real alternative to renting, allowing young people to build up equity and create a life for themselves. But there is a price to pay – and those who cannot afford more favourable terms will be paying it into the middle of this century. Home ownership does not always mean security. “It’s a gamble, isn’t it?” says Ward, sighing. “We’ll just have to wait and see.”

https://www.telegraph.co.uk/property/house-prices/house-prices-fall-ahead-christmas-lull/?utm_content=telegraph&utm_medium=Social&utm_campaign=Echobox&utm_source=Twitter#Echobox=1636963794 "Drop in asking prices creating a 'window of opportunity' for buyers, estate agents say"

https://www.telegraph.co.uk/business/2021/06/01/house-price-crash-may-not-bad-thing/ A house price crash may not be such a bad thing Nearly spat my tea out.

Some more unintended consequences of rampant house price inflation. The government and journalists must be getting an inkling by now that booming prices have some downsides too (sarcasm intended): Stamp duty revenues plunge as housing market freezes https://www.telegraph.co.uk/business/2018/06/23/stamp-duty-revenues-plunge-housing-market-freezes/#comments

In today's Telegraph: https://www.telegraph.co.uk/personal-banking/mortgages/time-comeback-mortgage-lenders-return-interest-only/?li_source=LI&li_medium=li-recommendation-widget

'Our new Bovis home is falling apart and our warranty is worthless' http://www.telegraph.co.uk/property/uk/new-bovis-home-falling-apart-warranty-worthless/

House prices to stay high forever, predicts ex-Bank of England guru http://www.telegraph.co.uk/business/2017/06/28/house-prices-stay-high-forever-predicts-ex-bank-england-guru/ A century ago only around 10pc of the UK population owned their own homes, so further falls from today’s levels would not be without precedent. Well there we go, the expert must be right, close the forum and let's find something else to moan about.

Hurrah for reckless lending. Bring back the 125% mortgage and let's get this market cooking on gas! HPI drivel from the Telegraph below http://www.telegraph.co.uk/business/2016/09/10/resilient-housing-market-prompts-banks-to-keep-95pc-mortgages-fo/

http://www.telegraph.co.uk/news/2016/08/19/help-to-buy-isa-scandal-500000-first-time-buyers-told-scheme-can/ Oh dear.

Bearishness from The Telegraph? Mapped: how buy-to-let will lose money in 91pc of regions by 2021

From the Drivelgraph, who you would think would have a high incidence of BTLers in its readership.... http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/12007601/The-buy-to-let-mortgage-trap-that-guarantees-you-lose-money.html

Going to keep a copy of this to see if this pans out as predicted. Some interesting comments too, especially about the confidence of predicting the future: http://www.telegraph.co.uk/finance/property/11977163/Which-London-boroughs-will-see-the-biggest-house-price-rises-by-2020.html

Just noticed this. http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11931468/10000-buy-to-let-investors-confess-to-50m-of-unpaid-tax.html

http://www.telegraph.co.uk/finance/property/11700282/Mapped-How-much-has-your-house-price-moved-in-10-years.html Inflation adjusted prices over ten years aren't as high as I'd have thought for 90% of the country...

"Buy-to-let returns beat all other mainstream investments " http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11520110/Buy-to-let-returns-beat-all-other-mainstream-investments.html Heres his client list - http://www.wriglesworth.com/clients/clients Including our old friend Stuart Law of Assetz Tractor production is up again comrades !!

Seems to be saying that the news is now decided by corporations paying for advertising. Makes you wonder what else is going on, VI BTL etc, be careful what you believe.

The Equity markets seem to think so with the DAX at all time highs. Telegraph today http://www.telegraph.co.uk/finance/economics/11354996/Francois-Hollande-European-Central-Bank-will-start-QE-on-Thursday.html

House price growth stagnates as UK buyers "low ball" greedy vendors The embeded article comments will be interesting on this one I should think: http://www.telegraph.co.uk/finance/personalfinance/houseprices/11332217/Deluded-sellers-and-sky-high-house-prices-have-stalled-the-property-market.html

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11179073/Buy-to-let-boom-one-in-five-homes-now-owned-by-landlords.html Release the bats.

Apologies if already posted. http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11310826/Rent-controls-would-spell-disaster-for-thousands-of-buy-to-let-investors.html Putting aside for a moment the rights and wrongs of rent controls in general, it's interesting how they have entered into the realm of acceptable discussion over the past few months. One might conclude that the ground is being prepared for them. A couple of things that jump out at me about the article: Civitas has proposed a fairly mild form of rent control. Capping rent rises to the inflation rate. How does that work in a deflationary environment? Also, this would obviously be meaningless unless it was made more difficult to evict tenants every 6-12 months, so rent controls of any sort would have to coincide with significant reform of tenancy law. The author focusses on interest rate rises, it seems rather unlikely that rates will rise any time soon unless there is some unforeseen economic event. Also, the notion that rents will naturally rise when interest rates rise is clearly a fallacy. They didn't fall when interest rates fell, so why the assumption that they are directly correlated?

http://www.telegraph.co.uk/finance/economics/11322680/Europes-bond-yields-fall-to-lowest-since-the-Black-Death.html

telegraph article here...

Just how built up is England? Enter the name of a town or city in the search box in the map above, or zoom in to find out where the highest proportion of land is used to provide England’s homes. Where can we find the room to build the 300,000 homes a year economists say we need?

Nigel Wilson says plan for levy on £2m homes is 'poor economics' that will reduce supply of property http://www.telegraph.co.uk/news/politics/labour/11191479/Labours-mansion-tax-will-create-housing-shortage-for-young-says-Legal-and-General-boss.html They don't like it up 'em. There are so many vested interest opinions stated as truths in that article it's unbelievable, but my favourite quote is this. It's strange when money obtained by sitting on your backside and adding no value the economy for 20 years is described as being 'justice'. Kinda sums up what's wrong with our economy, don't you think? The rant drones on and finishes with an unrelated couple of paragraphs about UKIP's chances in the Rochester and Stood by-election. I'm sure the average Ukipper is really sympathetic of the Kensington and Chelsea elite and the injustice stalking their unearned property gains.

http://www.telegraph.co.uk/finance/economics/11173422/House-prices-Now-is-the-right-time-to-buy-that-home.html Good bit of ramping by the Telegraph. Let's get the property market rising again before the next election. Of course, it's beyond anyone in the establishment to examine whether an economy where there's a "right" and "wrong" time to buy a home is in fact completely dysfunctional, and whether reducing a basic need - adequate shelter - to an act of financial speculation is a fundamental failure of the economy work for those who create value within it. It even suggests you move to Hove (which I'm sure is lovely) not because you might want to live there, but purely because it is somewhere you can buy a modest family home in the South East for the bargain price of £500k. But don't think about it too hard. Just get that 5x mortgage, now, before you miss the boat.