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Estate Agent Today - Making Mortgage Finance More Readily Available To Credit-Worthy First-Time Buyers Should Be Top Of The List.

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oh dear:


A lifetime of renting? No thanks, say under-30s

Wednesday 2nd February 2011

Almost all young people under 30 want to make buying a home a top priority, and don’t want to settle for long-term renting.

The poll, of 2,465 consumers of all ages, blows wide open the theory that more and more will go the European way and choose to be tenants for lifestyle reasons.

People under 30 are more opposed than any other age group to ‘continental’ models of tenure in which families routinely rent for the duration of their adult lives.

Some 90% of 18 to 29-year-olds would not be happy if they had to live in rented accommodation for the rest of their working lives. A majority (64%) do not want to start a family while they are renting and 43% do not want to get married until they own their own home.

The poll, conducted independently for Barratt Homes, also suggests that tensions between different generations and long-term social problems will result if young people continue to be locked out of home ownership.

The study shows that 86% of under-30s identify home ownership as a key priority in life. For them, this is a more important life goal than job satisfaction (which attracted a 76% vote as a life priority).

According to the findings, almost two-thirds (65%) of people under 30 believe that they cannot afford to buy a home as big as the one which their parents lived in at the same age. This figure rises to 75% in the South-East.

Young adults also increasingly resent the housing wealth acquired by the over-40s. Some 44% of 18 to 29-year-olds describe the housing wealth which the generation over 40 has accumulated because of rising house prices as ‘unfair’.

A large majority across all age groups think the housing crisis will get worse rather than better: 61% agreed with the statement: ‘In 20 years’ time it will be even more difficult for people to get on the housing ladder than it is today.’

The Barratt HomeBuyers’ Panel is the second annual survey by the independent polling firm ComRes.

Mark Clare, chief executive of Barratt Developments, said: “The findings from this nationwide poll illustrate the extent of the housing crisis facing Britain and the depth of the public policy challenges we now have to tackle as a result.

“There is no silver bullet which will solve the problem overnight, but there are steps which can be taken.”

“Without doubt, making mortgage finance more readily available to credit-worthy first-time buyers should be top of the list. It cannot be right that people in their 30s with good jobs and good credit histories are having mortgage applications turned down.

“I am pleased the Government has rightly identified this as an urgent problem and is meeting the banks to assess what can be done.”

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my sentiments exactly. The baby boomer generation has brainwashed the youth of this country with property porn such as location, location.

Now, we want your houses. And we don't want to pay your comfortable gold plated final salary pensions whilst we slave away with no realistic idea of when we'll be able to retire.

There will be a revolt coming, and it won't be nice!

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God damn there are some right royal comments on there. Any HPC input after this?..........

“It is only the hedonistic lifestyle of the younger generation that is stoping them saving up a deposit. Percentage deposits have been increased in part because of the never ending Party. Affordability is the new yardstick for both Mortgages and Tenancies and that yardstick penalises those that are spending too much of their disposable income on having fun or simply do not have jobs to support their wants.

Cut up the credit cards, pay off the overdraft and save up like we all had to.”

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Have they started labelling HPCers as binge-drinking losers in the comments yet?

Not yet, but I'm hoping to be the first:

The UK median Household Income is one way of considering affordability.

The last time house prices followed their long term inflationary affordability as a proportion of household income was the mid 1990's.

It is clear that if prices fall to the same level of affordability relative to median household income earnings and interest rates, as they did in the mid-1990s, we are still looking at a 50% + fall, from 2007 peak prices.

Home ownership has remained pretty level since 1990.

An important difference between this bubble and the late-1980s bubble is that this time there are a lot more buy-to-let speculators. These people are highly leveraged (their debts are high relative to their assets) so small changes in asset prices make a big change to their situation.

As it becomes more difficult to borrow money, many of these people will find that they cannot refinance at affordable rates when their 'teaser' rates come to an end. The long term average Base rate is at 5%. When IR rise again these BTL Speculators should have to sell their properties or the bank should repossess.

{Although the FT recently reported that Several of the UK and Irish banks that received government bail-outs are offering to write off up to 25 per cent of a mortgage debt for professional landlords and developers. So we are not in a free market.

Why should those who do not own property have to pay for this?}

I believe Under 10% of the UK homeowning [owner occupier] population would be facing negative equity if a 50% housing crash occured

[There is just over £1 trillion in outstanding mortgage lending in the UK. Over £200 billion of that is BTL

Over 50% of 'UK Homeowners' own their property outright.

So Over 20% of outstanding Mortgage lending is BTL.

Under 10% of Outstanding Mortgage lending are 'Owner Occupier' Mortgages, or the FTB'ers etc, who got onto the ladder DURING Browns Fake Boom.

The other 20% of Owner Occupier mortgages are people who would not be facing neg equity if a 50% housing crash occured.

[These are the people who got onto the ladder BEFORE Browns fake boom]

When IR do increase, the BTL investor, should not be in the position of the owner occupier homeowner, [with negative equity but an affordable mortgage,] who can afford to hang on as long as he doesn’t lose his job, or move house.

The BTL speculators should have to lower their price to sell. [ But The bank bailouts have given the banks, an opportunity to engineer a soft bottom in the housing market. Thus propping up house prices, making sure FTB cannot afford their own]

So who exactly is the government supporting here?

Because its not 'Joe Bloggs, the average worker, who simply wants to be able to work for a house, a job and a family, is it?

When you consider the Vast Sums of toxic mortgage debt created by 'Liar Loan' Landlords, compared to the debt of owner occupier's.

The housing crash may manifest itself in a lack of volume initially.

But it should be quite rapid once it gets going.

A 60% reduction from peak prices is likely to occur.

As we will see an overshoot on the way down. [This should have happened already. It is simply a return to the long term average affordability of housing]

But it will only happen in a free market!

If you want to see FTB'ers return, stop stealing our money, via QE and IR etc to bail out people who should never have been allowed to borrow so much money, and bankers bonuses.

Stop supporting criminals, theft, greed, liar, fraudsters, and start supporting the average worker.

Why shouldnt we have the same chances as you homeowners did?

The Coalition should realise, we all know whats going on. Weve had 13 years of bullsh1t under Labour. We can smell it a mile away.

All you have to do is raise CGT/IR/Tax BTL/dereg planning/Build more social housing. Bring the price of land down etc etc.

Shared ownership has already failed under Labour and will fail under the Tories.

Ironically the best solution for Estate Agents would be a 60% crash. And therefore the 'younger' Estate Agents should be singing from the same hymn sheet as the average person, who is priced out of housing.

The Quicker you estate Agents accept the inevitable.

The better for you,the economy, and society as a whole.

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my sentiments exactly. The baby boomer generation has brainwashed the youth of this country with property porn such as location, location.

Now, we want your houses. And we don't want to pay your comfortable gold plated final salary pensions whilst we slave away with no realistic idea of when we'll be able to retire.

There will be a revolt coming, and it won't be nice!

Krusty is a gen Xer. So are all those losers on Location Location Location etc. Don't forget 87% of the banksters ripping you off were born AFTER 1960. The majority of your BTL spivs are in their 30's.

Gen Y should be very very cross with the 1960-70 generation. Very cross indeed.

Time moves quickly and the next generation is ready to blame YOU. :D


Generation X, commonly abbreviated to Gen X, is the generation born after the Western post-World War II baby boom ended. [1] While there is no universally agreed upon time frame, [2] the term generally includes people born in the 1960s and 70s, ending in the late 1970s to early 80s, usually not later than 1982.

Edited by Realistbear
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some of the EAs or BTLrs on that comments section are very very stereotypical

one of them, sounds like a property-millionaire ascribing everything he has to hard work - this is technically impossible without leveraged asset growth of course but he/she denies this!

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Now, we want your houses. And we don't want to pay your comfortable gold plated final salary pensions whilst we slave away with no realistic idea of when we'll be able to retire.

There will be a revolt coming, and it won't be nice!

I have a vision of Alex Crawford reporting from Eaton Place about pitched battles between the generations.

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If you didn`t sell your property in 2007 you have LOST, HPI party is over. Young people and HPC`ers just need to sit back and wait. Houses are the least of the worries young people will have in their lives. The worry about houses is for the idiots (especially the overleveraged idiots) who thought a pile of bricks would provide for them in old age (many of the media and politicians are in this category) Don`t believe the roaring of a dying beast, there is no more "wealth" to be created from houses.

Edited by dances with sheeple
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A BTL'er's view:

You said: (The UK median Household Income is one way of considering affordability.)

No it's not, the two are not linked in the way that it once was! What you haven't factored in is globalisation and the price of goods relitive to you income! It's not about income, it's about affordability on it's own, period!

Look at the price of a TV compared to what it was 30-years ago, look at the price of a car compared to what is was only 20-years ago, look at how low interest rates are to where they were in the 90's.

The banks have had their fingers burnt with money backed securities and have now lost their route to obtaining cheap money. The cheap money has run out and now they are limping along, barely solvent.

What makes me laugh is the house price crash brigade were telling buyers to wait, a chrash will be along soon enough when the bubble eventually busts. Okay, when it eventually happened, a decade later as it goes, they were eventually right, but for those that took their advice and didn't buy, they are equally stuffed now aren't they! The doom mongers thought that people would just wait for prices to fall on their own and everything else like the banks, would be the same, ever willing to lend money, but they were wrong bigstyle.

I bought two Buy-To-Lets in September 2007, the very peak of the property bubble. Am I sad that I bought and that my two properties are worth £20k less? (Each) No and here's why. Obtaining BTL mortgages was simple & cheap with no setup fees, inerest rates fell so that my profits increased, demand increased and my rents have risen and yesterday I put one of them back on Rightmove because the tenant now needs a bigger house following the birth of another child and in 24-hours, I have received 8-enquiries/ possible tenants. All but one is under 30-years old.

Okay, I have made a paper loss, but as I im not selling, I have lost nothing and I am still making £500 per month on each property! Not bad when I only put £5k deposit into each one. Tell me where I can make £12k a year from an investment of £10k these days!

Even if tenants dry up as they are all out buying, as long as the house prices are shooting up again, I will be gaining equity even if they are stood empty, as long as I can cover the mortgages, that is. It's very hard to lose if you own the right property!

Okay, my daughter is doing her A-levels and she is going to find it hard to get onto the ladder over the next few years, but there isn't a god given right to buying your own home and she may be forced to rent for most of her life. It works for the Dutch, French or Germans, so why not her?

As the government can't house everyone, the banks don't want to take risks with first time buyers and tiny deposits, maybe the government should lift capital gains tax on BTL, banks lower the interest rates on BTL mortgages so that they are in line with residental mortgages and perhaps this recovery can be led by BTL investors expanding their portfolios. After all, that is where all the spare money is. Lets move this country towards the mainland European model, where people rent for the first 20 or 30-years of their life and think about buying later when they are more established in their jobs with big deposits behind them!

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Only if his rental doesnt cover his repayments...if it does then he is fine!


margin calls come in all shapes and sizes, true rental cashflow is one cause, but maintenance and basic LTV violations are killers too. Not to mention capital opportunity cost against all those other assets that are starting to trump property quite badly

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he-heh - it's getting quite nasty on the comment section, now.

The usual, tired bullish arguments...and slagging off HPCers.

You can smell the fear.

stupid too - this phrase is supposed to be a retort to allegations that it is a bubble:

Go and do your homework and you will find the UK average Rental yield is 4.9% more than enough to pyramid their portfolios.

I likle that verb tho' 'to pyramid' (ie to leverage very heavily). I can just see a 50 year old spiv EA in a badly fitting Moss Bros suit rolling that one off...

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Oh the EAs are biting over there.

I wouldn't mind if they could have a reasoned debate about the impact of economic fundamentals but their brains really are in a bubble! It is quite comical that all of those EAs posts non seems to register any logic outside the assumptions cherished during the norms of a bubble market.

Really quite amazing.

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