ILikeBigBoobs Posted April 17, 2006 Share Posted April 17, 2006 Frustration for the excluded By Jim Pickard in London Published: Financial Times April 17 2006 03:00 | Last updated: April 17 2006 03:00 Ajay Ahuja bought his first house with a £500 ($875, €720) deposit when he was a "party-loving" accountancy trainee at the age of 24. Now, the 34-year-old "Essex boy" is the proud landlord of 150 properties across the UK with a market value of about £10m. "Now I get up in the morning whenever I want, which is usually 11am," he says. "Every day is a Saturday." On the other side of the country, artist Emma Callahan lives in state housing in Bath, a city best known for its Roman hot pools. Ms Callahan, 27, says she has given up on the idea of being an owner-occupier, given that prices in Bath are four times what they were in 1995. "When I think about how much money I make, which is hardly anything, I can't ever see myself buying my own property - unless prices crash or I inherit a fortune from a long-lost relative," she says. In 1997, when the Labour party came to power in the UK, Gordon Brown, the new chancellor of the exchequer, pledged to narrow the gulf between rich and poor that "disfigure our society". Achieving this goal has proven tricky, given that Labour came to power at the start of a property boom that has driven average prices upwards by 180 per cent. Those who owned their homes in the early days of the boom are lucky. Tens of thousands have remortgaged and used the surplus cash as deposits on second or third "investment properties" - or, in the case of Mr Ahuja, vast portfolios. For those who did not manage to get their foot on the "property ladder" several years ago, it seems a Herculean task. This is most apparent for those living off state aid or on the minimum wage, who are now the target of numerous government housing initiatives. But it is also true of many affluent, white-collar workers who - in previous generations - could have bought a home with ease. "I want to buy a house because rent is dead money. It is frustrating when you are paying a level of rent that could be paying off a mortgage," says Alexandra Durnford, a 30-year-old marketing executive from London. "But it is quite a daunting prospect when you put your income into a mortgage calculator and you figure out that all you can afford is something small in Luton [a small industrial town an hour north of London]." This is a familiar dilemma for professionals in Spain, Italy, the US and across the developed world. Andy Black, a financial adviser living in Perth, Australia, says he plans to build his own home outside the city suburbs because prices are so "crazy". The same frustration is felt by 30-year-old consultant Sarah Martin, who cannot afford to buy in New York in spite of earning more than $100,000 (€83,000, £57,000). Ms Martin, who is single, says she has browsed internet sites for real estate but a one-bedroom flat in a decent area costs about $600,000. For now, she says, she is waiting for the "bubble" to burst. Indeed, the idea that renting is "dead money" is increasingly questionable in many cities around the world, given that rents have barely risen during the great property boom. In San Francisco, for example, annual ownership costs are 68 per cent higher than renting - even with an interest-only mortgage. More and more US citizens are moving away from fixed-rate mortgages to variable, interest-only - and even "reverse amortisation" products, where the level of debt owed increases - in a bid to keep their costs down. Despite this financial wizardry, prices are still out of the reach of many. Ms Martin says she would rather rent in a good part of Manhattan than own and take "a one-hour commute on the subway". At the other end of the spectrum, meanwhile, landlords are becoming ever more ambitious, with some moving into commercial property or buying up homes overseas. Private money has flooded into Dubai, the Mediterranean, eastern Europe and ever further afield. A company selling homes in Ulan Bator, Mongolia, where only 4 per cent of roads are paved, attracted plenty of attention at the MIPIM property festival in Cannes last month. Property fever has started to abate in some countries, such as the UK, the Netherlands and Australia. And some areas are experiencing the hangover that comes with a price meltdown. This month, middle-class homeowners in Shanghai held demonstrations because they were appalled that their homes had fallen in value by up to 40 per cent in a year. Post-communist countries may not be the only ones to learn the hard way this lesson in the vagaries of markets. Quote Link to comment Share on other sites More sharing options...
Bear Goggles Posted April 17, 2006 Share Posted April 17, 2006 Not him again. This Ajay bloke was in the Guardian a couple of years ago. Apparently he specialises in DSS lettings in places like Hull. A good strategy I'm sure, our tax money funding his lifestyle - the archetypal parasitic landlord. It just highlights what happens when you fail to provide social housing I suppose. The government can bang on about shared ownership for low income families, but the real solution in the end is probably common ownership. Quote Link to comment Share on other sites More sharing options...
iLegallyBlonde Posted April 17, 2006 Share Posted April 17, 2006 Well i'm sorry Emma but Art is a hobby not a career, she needs to reconsider her options, she probably won't be able to buy ever. Quote Link to comment Share on other sites More sharing options...
The Undertaker Posted April 17, 2006 Share Posted April 17, 2006 Or how about ending housing benefit? Quote Link to comment Share on other sites More sharing options...
eurows Posted April 17, 2006 Share Posted April 17, 2006 He will be getting up earlier when interest rates go up and he sh1ts the bed. Quote Link to comment Share on other sites More sharing options...
Bear Goggles Posted April 17, 2006 Share Posted April 17, 2006 Well i'm sorry Emma but Art is a hobby not a career, she needs to reconsider her options, she probably won't be able to buy ever. LOL I thought that, what a pair of losers. Parasitic dole harvester and airy fairy 'artist'. Sounds like they both need learn how to do something productive. Quote Link to comment Share on other sites More sharing options...
RobertPaulson Posted April 17, 2006 Share Posted April 17, 2006 Well i'm sorry Emma but Art is a hobby not a career, she needs to reconsider her options, she probably won't be able to buy ever. tell that to tracy emin Quote Link to comment Share on other sites More sharing options...
Ethel Posted April 17, 2006 Share Posted April 17, 2006 He will be getting up earlier when interest rates go up and he sh1ts the bed. Eeewwwww! Quote Link to comment Share on other sites More sharing options...
thunderbird900 Posted April 17, 2006 Share Posted April 17, 2006 Dr Bubb, you used to be in the Byrds? Quote Link to comment Share on other sites More sharing options...
A Fool & His Borrowed Money Posted April 17, 2006 Share Posted April 17, 2006 " I want to buy a house because rent is dead money, says Alexandra Durnford Classic! Quote Link to comment Share on other sites More sharing options...
iLegallyBlonde Posted April 17, 2006 Share Posted April 17, 2006 tell that to tracy emin I will when I see her ..... the fact is I like kicking a ball around in the back garden but I can appreciate that I shall not be earning very much money from doing so and a real job is also required. Quote Link to comment Share on other sites More sharing options...
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