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Two Housing Ladders

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I propose that the housing ladder as it used to exist is now something we shall never see again.

Instead we have threeseperate property ladders:

Ladder 1: Small studio - semi detached in an average area. This is the best that the majority of the population will ever be able to afford. I detest pretty much all the property on this ladder 1. The property is too small and generally undesirable and your neighbours are likely to include a fair amount of chavs with more expensive cars than you as they bought on HP. Nobody leaves this ladder once on it and thus the top of this ladder is strongly affected by the bottom. This part of the ladder should crash hard.

Ladder 2: Detached houses in average areas - semidetached/detached in good areas. House prices in this group are extremely high and only affordable to the top 5% of earners in the country (i.e. you need to earn at least 60k per year). People who buy into ladder 1 as first time buyers were likely never get the hot air balloon needed to get them up the gap to ladder 2. Ladder 2 is therefor now unaffected by ladder 1. Many people who bought in this ladder are on tracker mortgages, with good salaries, and will probably never sell unless they can get close to their asking prices. Ladder 2 is likely to hold its price range well and possibly continue to increase.

Ladder 3: The very top end of the market which is now affected by the lower ladders at all as it is bought up by millionaires with very small mortgages.

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Ladder 2-mainly middle aged,loosing their jobs,divorcing,dying etc re- locating abroad.

This market relies on people buying into the dream.without that,market collapses.

BS

I don't have the figures to back this up but I would guess that those in ladder 2 are less likely to fall on hard times than those on ladder 1.

People will aways be desperate to get into ladder 2 only because ladder 1 is so depressingly awful (from their point of view - most ladder oners are blissfully happy with their little patch - e.g. a neighbour said to me yesterday that leicester is the best place on the planet. No it's a shithole!)

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Don't know Leicester,but,will take your word for it!

It would be interesting to know how much Stamp duty the Government are loosing out on at the moment?

BS

Dude, it's losing not loosing. I don't normally take issue but you got it wrong twice in your last two posts.

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...BS

aye, a reet crock of sh1t.

if 'category 2' is only affordable to the top 5% of earners then, by definition, it can only be as big as 5% of the population before so very long. the bottom 95% of housing stock has plenty of very nice stuff in it.

Edited by the flying pig

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aye, a reet crock of sh1t.

if 'category 2' is only affordable to the top 5% of earners then, by definition, it can only be as big as 5% of the population before so very long. the bottom 95% of housing stock has plenty of very nice stuff in it.

House price drop will come from the top....four fifths of the way up...the very top will support itself. ;)

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I've said for some time that the luxury property market locally (SW England) seems to have been booming relentlessly, whereas the rest of the market has remained flat.

This is a symptom of what we've been told is happening - the rich are getting richer and the poor are getting poorer. Those in the middle are being separated, with most being dragged down, with a few being pulled up.

Symptomatic of the new Britain is the way a student who received a serious brain injury after being hit on the head by a police truncheon receives less press coverage than a broken window on a royal limo. The old class system is making a come-back and we've hardly even noticed.

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I sort of agree. The market is segmented according to price elasticity, with the bottom most sector being roughly Giffen Goods and the "super-prime", as EAs calls while creaming their pants, being Vebeln Goods, the rest having an elasticity 0<x<1. Yeah, but what falls into which category you ask - I'll leave that as a homework question for you!

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I propose that the housing ladder as it used to exist is now something we shall never see again.

Instead we have threeseperate property ladders:

Ladder 1: Small studio - semi detached in an average area. This is the best that the majority of the population will ever be able to afford. I detest pretty much all the property on this ladder 1. The property is too small and generally undesirable and your neighbours are likely to include a fair amount of chavs with more expensive cars than you as they bought on HP. Nobody leaves this ladder once on it and thus the top of this ladder is strongly affected by the bottom. This part of the ladder should crash hard.

Ladder 2: Detached houses in average areas - semidetached/detached in good areas. House prices in this group are extremely high and only affordable to the top 5% of earners in the country (i.e. you need to earn at least 60k per year). People who buy into ladder 1 as first time buyers were likely never get the hot air balloon needed to get them up the gap to ladder 2. Ladder 2 is therefor now unaffected by ladder 1. Many people who bought in this ladder are on tracker mortgages, with good salaries, and will probably never sell unless they can get close to their asking prices. Ladder 2 is likely to hold its price range well and possibly continue to increase.

Ladder 3: The very top end of the market which is now affected by the lower ladders at all as it is bought up by millionaires with very small mortgages.

Very good summary. I think ladder 2 is where most people on HPC would like to be and are piffed that these are the people "who never had it so good". We pay for their low interest mortgage and it's just too nuts to think about.

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I think this is a fair appraisal too. I know a little but about jumping from rung 2 to rung 3. There are a few ways of doing it. Own your own successful business. Buy a rung 2 house in the right place, with land and double its size. Have a rich granny die. Write a pop song that gets played round the world. Win the lottery. Make a few clever moves in a rising market. People do all these things. Very few people get from rung 2 to rung 3 by knuckling down and being good citiziens, a few do but they work bloody hard.

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I think this is a fair appraisal too. I know a little but about jumping from rung 2 to rung 3. There are a few ways of doing it. Own your own successful business. Buy a rung 2 house in the right place, with land and double its size. Have a rich granny die. Write a pop song that gets played round the world. Win the lottery. Make a few clever moves in a rising market. People do all these things. Very few people get from rung 2 to rung 3 by knuckling down and being good citiziens, a few do but they work bloody hard.

Many many more would not want to jump from 2 to 3......when you are contented with 2 why spoil it with 3. ;)

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That's a low-house-price scenario you outline. An optimistic scenario, where you can get a better house by hard work and earning good money.

It would be politically very hard to achieve against a status quo where your inheritance determines your housing, and income has sod all to do with it.

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Dude, it's losing not loosing. I don't normally take issue but you got it wrong twice in your last two posts.

Man, you corrected his English but you called him 'dude' .

friggin hell

Edited by i wanna house

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I propose that the housing ladder as it used to exist is now something we shall never see again.

Instead we have threeseperate property ladders:

Ladder 1: Small studio - semi detached in an average area. This is the best that the majority of the population will ever be able to afford. I detest pretty much all the property on this ladder 1. The property is too small and generally undesirable and your neighbours are likely to include a fair amount of chavs with more expensive cars than you as they bought on HP. Nobody leaves this ladder once on it and thus the top of this ladder is strongly affected by the bottom. This part of the ladder should crash hard.

Ladder 2: Detached houses in average areas - semidetached/detached in good areas. House prices in this group are extremely high and only affordable to the top 5% of earners in the country (i.e. you need to earn at least 60k per year). People who buy into ladder 1 as first time buyers were likely never get the hot air balloon needed to get them up the gap to ladder 2. Ladder 2 is therefor now unaffected by ladder 1. Many people who bought in this ladder are on tracker mortgages, with good salaries, and will probably never sell unless they can get close to their asking prices. Ladder 2 is likely to hold its price range well and possibly continue to increase.

Ladder 3: The very top end of the market which is now affected by the lower ladders at all as it is bought up by millionaires with very small mortgages.

Interesting synopsis. But what about those who buy into Ladder 2 as FTBers?

I also don't see how only 5% of people can get a nice house.

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My agreement with the scenario given comes entirely from experience of the 80s crash. Despite assurances from the media and friends that house prices were falling exponentially, six years of looking in ladder two with a substantial deposit failed to reveal a single bargain.

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But there are exceptions to the rule.

Its perfectly possible to buy a flat on ladder 1 in a rough part of London only to see the area gentrify and property prices rise.

You then sell the flat and buy a property in a cheaper part of the country and you have enough cash to buy a semi in the nicest part of the town you move to thus getting on ladder 2

I know a few people who have done just that

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  • 277 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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