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For Many In Britain, Being A Homeowner Is A Fading Dream

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http://www.nytimes.com/2011/06/24/business/global/24rent.html?_r=1&ref=business

For a large number of young adults in Britain, homeownership has become increasingly difficult to achieve, viewed as a distant goal attainable only later in life, if at all.

That is a significant shift for a country where owning a home remains deeply rooted in the culture. Owners occupy a higher percentage of homes in Britain than in the United States, France or Germany.

But as the pain of government-imposed austerity sinks in, disposable income has shrunk and loan requirements have toughened, forcing more and more Britons into renting rather than buying.

The average age of first-time buyers is now 31, up from 28 five years ago, and the number of people renting has increased sharply, signs that the boom in homeownership that began under Margaret Thatcher’s government 30 years ago is starting to reverse.

Some economists are concerned that as more people are forced to wait to buy a home, the country’s wealth gap could widen, endangering the retirement prospects for a swelling group of young adults they call “generation rent.”

Charlotte Ashton, 30, has lived in rented accommodations ever since she left her parent’s home to attend university. She said she was happy sharing a five-bedroom house in the Shepherds Bush area of London with four other women but was saving for a down payment to buy her own home.

“I do believe in the fundamentals of owning bricks and mortar as security for the future, more than leaving my money in the banks at a low interest rate,” said Ms. Ashton, who works in public relations. “Unless you have a very well paid job and are willing to save every penny, it’s unfeasible to buy without the help of the bank of Mum and Dad.”

An interesting read.

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38 without parental help?

The interesting thing about age 38 is, whether those people could have bought at 25, which was 13 years ago. Is it just that the goal posts have kept moving, always just out of reach? In which case it must be quite a painful situation.

I do consider myself economically fortunate, though this linked to having made academic efforts earlier in life having come from a fairly lower middle class or working class family and then landing a good job at young age. I also look at my siblings and school friends, and believe to a degree that it demonstrate how the rich get richer or at least those that can lay their hands on decent money early enough get richer given time and an upward market.

I first bought aged 25, admittedly I had landed a good job- £45k basic and pulled in a £30k bonus in my first year. This got me on the ladder in early part of the last decade, from where I then saw a further £200k asset appreciation prior to buying my current house in 2009 after a period of STR. For someone on £20k, I'd effectively gained 10 years of their pre-tax salary on a tax free basis for doing bugger all. Of course there are people who have done even better, in general anyone I know over 40 who already had assets.

A lot of people think they have been clever making all this money and therefore deserve it. My personal view is that my generation, born mid 1970s, was the last generation who really had any real chance to benefit from HPI, but even then it did depend on whether you could get on board or not before the late 1990s or very early 2000s. As far as I can see, anyone who missed the boat then would have a huge distance to travel to afford a home

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The way things are going they won't be renting either, they will be staying at home with Mum and Dad for ever or house sharing.

The bills are rising much faster than wages ( which are falling ) never mind adding rent or mortgage in on top .

The only people buying houses from wages will be the top professionals, other's who are lucky enough to have rich parent's will join them so will those who inherit For everyone else there is going to be sweet fk all.

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The interesting thing about age 38 is, whether those people could have bought at 25, which was 13 years ago. Is it just that the goal posts have kept moving, always just out of reach? In which case it must be quite a painful situation.

It's an interesting question. I'm only a few years younger than that (38, not 25) and was half-heartedly looking around 2003. I hadn't managed to save up all that much by then though. In retrospect would I have been better off in the long run if I'd bought something pretty bottom-of-the-market then? I'm still not sure. I am sure that I wouldn't have been if I listened to the nagging that carried on until around 2007.

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I do wonder who is the youngest regular HpCer? I can't imagine anyone under 17 who is interested, daily, in politics, house prices, economics, monetary policy, propaganda, wealth, conspiracies, markets, targets of schadenfreude, and twig arrangements.

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It's an interesting question. I'm only a few years younger than that (38, not 25) and was half-heartedly looking around 2003. I hadn't managed to save up all that much by then though. In retrospect would I have been better off in the long run if I'd bought something pretty bottom-of-the-market then? I'm still not sure. I am sure that I wouldn't have been if I listened to the nagging that carried on until around 2007.

No one knows

So much of it is about being able to buy at the right time, and so much is down to luck more than judgement . Anyone who bought in the mid 80's was laughing by 1990 even with 15% interest rates , but those buying a few years later 87/88/89 were in massive NE with unpayable mortgages ( knew many from my peer group ) .

Those who were a few years younger and were ready by the mid 90's never had it so good houses were at rock bottom, interest rates had dropped and wages had risen a lot at the start of the 90's , I could relate many stories of people who bought then and did really well. FTB's could jump over the small flat's and two bed houses going straight into the 3 bed semi. However I also knew a few ( again from my peer group ) who having been burnt once were to scared to take advantage at this time and missed the boat.

Unemployment , divorce , illness and other life changing circumstances can also hit at any time decimating peoples chances and ability to becoming a home owner.

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Some economists are concerned that as more people are forced to wait to buy a home, the country’s wealth gap could widen, endangering the retirement prospects for a swelling group of young adults boomers.”

Fixed.

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Very nearly bought a farmhouse for in 1998 for less that our gross joint income in 2010. Ah well.

Missed opportunity, but imagine how much it would suck the other way round (not that I believe deflation like that possible)

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My wait to get on the property ladder probably started around 2005, back then I had an amazing tool that gave me a huge lift and kept my morale high even when property prices were well out of my reach, it was HOPE.

Hope made all the bragging down the pub of those that owned homes much easier to handle, because in my head I was certain that the house of cards was going to fall. Hope made all the constant moving in grubby rented and flatshares all the more easier, I knew back then that the credit cruch was coming, people would have maxed themselves out on debt, unemployment would get worse, equity spent, and given enough rope the idiots that spent all of the noughties living like the Beckhams would suffer later on.

I had no doubts at all. mmmmm

I still feel there is worse to come, all the bad stuff I thought would happen has now happened. Fact is though, prices have fallen very little in my area. What do I feel about the future of house prices?... in the last few months I have only just reached this conclusion... I REALLY DO NOT KNOW .

It should of already happened by, and for the first time i am getting a little cheesed off and a lot older.

Please let it still happen

Amen

I've personally gone beyond the point of caring any more - I probably wont ever own a house, and its quite liberating. Although I fully understand those who do want to...

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The way things are going they won't be renting either, they will be staying at home with Mum and Dad for ever or house sharing.

The bills are rising much faster than wages ( which are falling ) never mind adding rent or mortgage in on top .

The only people buying houses from wages will be the top professionals, other's who are lucky enough to have rich parent's will join them so will those who inherit For everyone else there is going to be sweet fk all.

How will people sell houses then?

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The interesting thing about age 38 is, whether those people could have bought at 25, which was 13 years ago. Is it just that the goal posts have kept moving, always just out of reach? In which case it must be quite a painful situation.

I do consider myself economically fortunate, though this linked to having made academic efforts earlier in life having come from a fairly lower middle class or working class family and then landing a good job at young age. I also look at my siblings and school friends, and believe to a degree that it demonstrate how the rich get richer or at least those that can lay their hands on decent money early enough get richer given time and an upward market.

I first bought aged 25, admittedly I had landed a good job- £45k basic and pulled in a £30k bonus in my first year. This got me on the ladder in early part of the last decade, from where I then saw a further £200k asset appreciation prior to buying my current house in 2009 after a period of STR. For someone on £20k, I'd effectively gained 10 years of their pre-tax salary on a tax free basis for doing bugger all. Of course there are people who have done even better, in general anyone I know over 40 who already had assets.

A lot of people think they have been clever making all this money and therefore deserve it. My personal view is that my generation, born mid 1970s, was the last generation who really had any real chance to benefit from HPI, but even then it did depend on whether you could get on board or not before the late 1990s or very early 2000s. As far as I can see, anyone who missed the boat then would have a huge distance to travel to afford a home

Not really, volumes have collapsed, prices are not far behind?

"For many in Britain making money from being a "Homeowner" is a fading dream" :lol::lol:

Edited by dances with sheeple

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The interesting thing about age 38 is, whether those people could have bought at 25, which was 13 years ago. Is it just that the goal posts have kept moving, always just out of reach? In which case it must be quite a painful situation.

I do consider myself economically fortunate, though this linked to having made academic efforts earlier in life having come from a fairly lower middle class or working class family and then landing a good job at young age. I also look at my siblings and school friends, and believe to a degree that it demonstrate how the rich get richer or at least those that can lay their hands on decent money early enough get richer given time and an upward market.

I first bought aged 25, admittedly I had landed a good job- £45k basic and pulled in a £30k bonus in my first year. This got me on the ladder in early part of the last decade, from where I then saw a further £200k asset appreciation prior to buying my current house in 2009 after a period of STR. For someone on £20k, I'd effectively gained 10 years of their pre-tax salary on a tax free basis for doing bugger all. Of course there are people who have done even better, in general anyone I know over 40 who already had assets.

A lot of people think they have been clever making all this money and therefore deserve it. My personal view is that my generation, born mid 1970s, was the last generation who really had any real chance to benefit from HPI, but even then it did depend on whether you could get on board or not before the late 1990s or very early 2000s. As far as I can see, anyone who missed the boat then would have a huge distance to travel to afford a home

How lovely to read this from someone who was born a bit earlier. I was born in 1977 and didn't get a good paying job until I was around 26. I'm now well inside the top 5% of salaried workers and I could buy a dump and put my wife and 2 kids in it but I think I'll rent for a bit then leave the UK.

It's so unusual to see someone who has gained form this mess who understands how they got there. Most people 40+ don't understand that when prices are not rising and rising there is no ladder. They fail to understand that when prices stagnate compound interest means you can never catch up.

A real mess. I look forward to taking the very big wedge of tax I pay and taking it all abroad, thus speeding up the collapse of the UK boomer mess.

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also to factor in is the stagnation in wages and opportunities that occurred in the private sector during the noughties, wit the promotion opportunities afforded people 10 years earlier being denied to the post boomers (funnily enough the late baby boomers in the same offices seemed very content to stay in their middle management positions without moving) - tho I understand some of this is reversing now

Edited by Si1

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There is already a "generational" divide between my friendship group from University. Those of us who met our partners at Uni and bought houses relatively young (at 23/24) were able to buy in the early 2000's when houses were reasonable-ish.

For example one of my best friends and I both ended up moving with our girlfriends to Cambridge and both bought houses after a couple of years of renting.

We'd both need the market to fall by about 40% to go back to the purchase prices of our houses plus the low interest rates have allowed us both to pretty much own outright.

Other friends who have only recently met people or are single will be faced (without a proper crash) with either paying out £800 a month or so in rent (rising annually) or borrowing £250k (£400k of post tax income) and paying it all off to be in the same financial position.

Doesn't see very fair.

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There is already a "generational" divide between my friendship group from University. Those of us who met our partners at Uni and bought houses relatively young (at 23/24) were able to buy in the early 2000's when houses were reasonable-ish.

For example one of my best friends and I both ended up moving with our girlfriends to Cambridge and both bought houses after a couple of years of renting.

We'd both need the market to fall by about 40% to go back to the purchase prices of our houses plus the low interest rates have allowed us both to pretty much own outright.

Other friends who have only recently met people or are single will be faced (without a proper crash) with either paying out £800 a month or so in rent (rising annually) or borrowing £250k (£400k of post tax income) and paying it all off to be in the same financial position.

Doesn't see very fair.

Problem with that is you will only be able to sell at 2000ish prices? You bought before the bubble took off, you didn`t magically "lock anything in" to your property, it is only worth what someone will/can pay?

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Problem with that is you will only be able to sell at 2000ish prices? You bought before the bubble took off, you didn`t magically "lock anything in" to your property, it is only worth what someone will/can pay?

True, and I look forward to a housing crash, however everyone has to live somewhere and owning a house outright "saves" me about £900 a month over renting*

* I appreciate opportunity cost of the capital locked up and the costs of ownership etc etc

I also see no evidence around me of a housing crash, property is still selling for pretty much peak levels and fairly quickly in central Cambridge albeit in lower volumes.

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So, for many a homeowner in Britain, selling their house is a fading dream? No-one's told the vendors round me who are piling into the market at the moment.

Maybe it will be back to the good old days when you bought a property to live in, not to make money on or invest in.....I remember very well around early to mid 80s when property was stagnant, and interest rates were very high..... BOE BASE INTEREST RATE 11% to 13% plus the lenders margin on top.....you couldn't give the places away.....people were fearful of buying that is if they could buy....large deposits were also required of 10%......can you imagine that today? ;)

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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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