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100,000 First-Time Buyers Kept Off Property Ladder

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At least 100,000 first-time buyers who have no help from the ‘bank of mum and dad’ were unable to enter the housing market last year, as the number of low deposit mortgages slumped to a record low.

In 2009 there were only 28,000 loans to first-time buyers at 90 per cent or more - where buyers had to find a 10 per cent deposit or less - down from 245,000 in 2006¹. And numbers of younger first-time buyers able to buy a home without help with a deposit fell by 100,000 per year between 2006 and 2009².

The UK Housing Review published by the Chartered Institute of Housing (CIH) has been collating and analysing UK housing market data for nearly twenty years, tracking market trends over decades. The new edition, published on 21 January, highlights the jump in the size of deposit needed to get on the housing ladder. First-time buyers needed a 30 per cent deposit on average in 2009 in order to purchase a home, higher than at any time since 1970³. According to co-author Professor Steve Wilcox this makes the collapse in the availability of low-deposit mortgages the largest single barrier to home ownership.

Richard Capie, CIH Deputy Chief Executive, said: “Deposits are now at a 40 year high and prospects for first time buyers look bleak. The deposit barrier has become a mountain that more and more potential home owners simply can’t climb without help from mum and dad. While we don’t want to return to the days of 110% mortgages and irresponsible lending, it is clear that the pendulum has swung too far in the other direction. This report shows that more work needs to be done to set out new rules which will enable responsible lending to households who can afford to sustain a mortgage. It also shows that we need to make sure that other tenures, such as the private rented sector, provide a better alternative for the increasing numbers of people who will simply be unable to buy a home in future.”

http://www.cih.org/news/view.php?id=1346

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At least 100,000 first-time buyers who have no help from the ‘bank of mum and dad’ were unable to enter the housing market last year, as the number of low deposit mortgages slumped to a record low.

In 2009 there were only 28,000 loans to first-time buyers at 90 per cent or more - where buyers had to find a 10 per cent deposit or less - down from 245,000 in 2006¹. And numbers of younger first-time buyers able to buy a home without help with a deposit fell by 100,000 per year between 2006 and 2009².

Form an orderly queue to join the window smashers and fire extinguisher wavers.

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In 2009 there were only 28,000 loans to first-time buyers at 90 per cent or more - where buyers had to find a 10 per cent deposit or less - down from 245,000 in 2006¹.

89% drop in first time buyers - OUCH !

That will be the same for 2010 and 2011.. that can't do much for entry level housing.

Don't worry, house prices went up last year <_<

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I didn't read it all as I got angry after a few lines.

I think it should have read '100,000 FTBs kept off the housing ladder because evil banks won't lend more than they can afford!'

Or better '100,000 FTBs kept off housing ladder by stupidly high prices!'

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I didn't read it all as I got angry after a few lines.

I think it should have read '100,000 FTBs kept off the housing ladder because evil banks won't lend more than they can afford!'

It did:

"According to co-author Professor Steve Wilcox this makes the collapse in the availability of low-deposit mortgages the largest single barrier to home ownership."

Or better '100,000 FTBs kept off housing ladder by stupidly high prices!'

I know, why is it so hard for them to grasp that? Why are so many people wittering on about LTV levels and deposits and not the slightest bit interested in the actual amount being borrowed? It's ridiculous. Why is anyone even the slightest bit interested in looking at deposit amounts and interest rates and so on while the actual prices are so stupid? Once prices are sensible only then will I be interested in mortgage costs and availability. At present it's like me worrying about how to fund my own trip to the moon.

It does talk about the bank of mum and dad, though. Personally speaking that's a real problem. I keep having to tell my parents that I don't want them to "help me out", that I refuse to be part of the problem etc. Unfortunately the result of going against the herd is that you get trampled. I just hope I'm merely lying there bruised and sore after the herd has galloped off the cliff.

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At least 100,000 first-time buyers who have no help from the ‘bank of mum and dad’

Golly, what a surprise.

Does that include 37-year-old FTBs? People of an age to have bought in the 1990s in HPC-utopia (how come they were priced out at age 25 too)? They'll be kicking themselves for missing out on the opportunity of a 100%+ mortgage in 2006.

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.... Why is anyone even the slightest bit interested in looking at deposit amounts and interest rates and so on while the actual prices are so stupid? ...

Because they assume prices will rise in the medium term and therefore you need to get in now before that happens. With HPI running at 10% for example, it doesn't matter what you pay in time you will have made a profit. That has been the pattern for 30 years (with the odd dip now and then - we've had that its over). That's the mainstream viewpoint. That's why people want to buy.

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Bank of mum and dad. Yet again we hear this.

WHAT ABOUT THOSE OF US WITHOUT A MUM OR DAD BANK? My parents divorced when i was a kid, consequently they're barely surviving financially themselves! I'm helping them out!!

These fu**ing media/EA/Journos/RICS/mortgage lenders are total scum.

Edited by worst time buyer

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Bank of mum and dad. Yet again we hear this.

WHAT ABOUT THOSE OF US WITHOUT A MUM OR DAD BANK? My parents divorced when i was a kid, consequently they're barely surviving themselves financially! I'm helping them out!!

These fu**ing media/EA/Journos/RICS/mortgage lenders are total scum.

+1

Even if they did have the cash, I love my parents too much to squander their earnings.

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Bank of mum and dad. Yet again we hear this.

WHAT ABOUT THOSE OF US WITHOUT A MUM OR DAD BANK? My parents divorced when i was a kid, consequently they're barely surviving financially themselves! I'm helping them out!!

These fu**ing media/EA/Journos/RICS/mortgage lenders are total scum.

Im sure they continue to roll this term out so it becomes socially accepted.

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Of course bank of mum and dad have money to lend, they only need to mew on their own properties inflated price, and at there interest rates, the cost of that is a snip!

Ra Ra Bank of Mum and Dad. Lets hear it for the saviour of hpi

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Short term, a change to big deposits will stop younger first time buyers getting a foot on the housing ladder.

Over time though, sellers will have to adjust their expectations over the selling price downwards. Lower prices will mean that houses once again become affordable to the FTB. Better still, as the capital outlay is lower, they will find that what they buy is far more affordable over the long term.

The losers in this exchange are the bankers who wont be able to crank up their bonuses, the housebuilders to an extent who cannot sell their property for as much, but perhaps most of all, existing landowners, who will see the value of their land fall from where it would have been if there is planning permission on it.

Owners of banks, will be better off, as higher deposits mean much lower default rates, which decimate profits at best, and lay entire countries low at worst.

Cant see much long term harm in this move to a larger deposit.

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Short term, a change to big deposits will stop younger first time buyers getting a foot on the housing ladder.

Over time though, sellers will have to adjust their expectations over the selling price downwards. Lower prices will mean that houses once again become affordable to the FTB. Better still, as the capital outlay is lower, they will find that what they buy is far more affordable over the long term.

The losers in this exchange are the bankers who wont be able to crank up their bonuses, the housebuilders to an extent who cannot sell their property for as much, but perhaps most of all, existing landowners, who will see the value of their land fall from where it would have been if there is planning permission on it.

Owners of banks, will be better off, as higher deposits mean much lower default rates, which decimate profits at best, and lay entire countries low at worst.

Cant see much long term harm in this move to a larger deposit.

Home buy schemes will be reintroduced.....thats what all this bleating is all about.

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Of course bank of mum and dad have money to lend, they only need to mew on their own properties inflated price, and at there interest rates, the cost of that is a snip!

Ra Ra Bank of Mum and Dad. Lets hear it for the saviour of hpi

...mums and dads do not have the money to lend...asset rich income/cash poor....you require an income to pay a mortgage via equity withdrawal........many can't downsize they are living in pokey places as it is, the market price may say it is worth £200k it might as well be worth £50k for what it is worth to them. ;)

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The Parasites have sucked the hosts dry, and are now complaining.

Instead of exterminating the parasites, the government have pledged the next generation of hosts to the bloodsuckers.

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Anyone else feel there is a changing resentment from economist and bankers?

When the market began to slow it was put down to FTB's with too high expectations of what they should be able to buy.

Now it seems to be selfish mum and dad wont re-mortgage to keep the bubble inflated.

My parents are retired and I am pretty sure they don't have 40k under the mattress. Selfish buggers should go into a home, sell their house and give me a huge deposit. lol

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Anyone else feel there is a changing resentment from economist and bankers?

When the market began to slow it was put down to FTB's with too high expectations of what they should be able to buy.

Now it seems to be selfish mum and dad wont re-mortgage to keep the bubble inflated.

My parents are retired and I am pretty sure they don't have 40k under the mattress. Selfish buggers should go into a home, sell their house and give me a huge deposit. lol

If there has been a change in 'blame' it seems to be landing at the feet of banks for refusing to lend as generously as they were. Case of closing gate after horse bolted. The banks are to blame, but for lending more a few years than they were at the turn of the century. They've decided that strategy was a bad move and are reverting to a model that didn't push them to (and us) to the brink of ruin.

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Absolutely ridiculous that the media appears to be pushing a massive contribution from parents as the social norm for house buying.

How about you point out that lower prices would help FTBs get on the ladder much better? No, you call for ever larger loans and ever larger subsidies from the older generation to feed grossly inflated asking prices.

Personally, I doubt that BoMaD is in any better shape than most of the real banks in the financial system. Just like the real thing, much of their wealth was based on borrowing against overvalued property assets.

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Winkie. This is exactly why the numbers of ftb have disappeared. The bom own cash machine has run out of cash.

All this BOM&D is hardly the reliable fuel of HPI we all fear, there is only so much "wealth" you can steal from the past to pay for things in the future ;)

Unless of course you own a DeLorean with a flux capacitor.... :o

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All this BOM&D is hardly the reliable fuel of HPI we all fear, there is only so much "wealth" you can steal from the past to pay for things in the future ;)

Unless of course you own a DeLorean with a flux capacitor.... :o

Use that capacitor too much, and you will completely fluxxed.

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A (possibly) interesting take on the BOM&D thing that I've just thought of.

There's been criticism of one generation making themselves wealthy at the expense of the next, but the whole idea of BOM&D means that a good chunk of that goes back in the other direction - so arguably less of a shift in many cases than is often made out, just the means are roundabout. So no net wealth change, other than that introduced by the inefficiency of this arrangement (more money in transit giving the banks more of a chance to help themselves to some as it passes by them).

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  • 284 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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