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The Sunday Times - David Smith

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http://www.timesonline.co.uk/tol/life_and_...icle4389783.ece

I was talking to somebody in the housing business the other day who was bemoaning the fact that their children, now young adults, did not think much of the idea of home ownership. Why tie yourself to a big mortgage when there are better ways to spend your money? Why get lumbered with years of housing maintenance and having nothing more exciting to do than getting the windows done? The old argument that paying rent is dead money left them unconvinced.

It may be an odd question to ask, particularly in the Home section, but is home ownership still an aspiration? And, if it is, will it remain so after the current slump has run its course?

The conventional view is that high house prices have been responsible for the drop in the number of first-time buyers in recent years. If that were the case, they should be celebrating the fact that prices are now falling - even though any benefits have been largely cancelled out by the squeeze on mortgage availability.

Yet a report by a group of housing-market experts, published by the Joseph Rowntree Foundation, suggests that the decline in the number of first-time buyers cannot be blamed on high prices alone. The report, “Housing market recessions and sustainable home ownership”, says that it appears instead “to be a function of the increased levels of student debt, people entering marriage later and starting families later, and lifestyle attractions of ‘spending now’, in addition to the well-documented affordability issues”.

Remortgages are at twice the level of new loans, keeping the lenders in business, meaning first-time buyers suffer

Home ownership, which rose strongly during the 1980s, in part because of Margaret Thatcher’s right-to-buy legislation, and continued increasing in the 1990s, has reached a plateau at about 70% in recent years, and even slipped slightly below that level. Only 44% of 18-to 25-year-olds favour home ownership, compared with 75% of the over55s. They may grow into it, or it could be that a sea change is occurring.

Certainly, the government target of increasing home-ownership levels to 75% or 80% look unattainable. Research from the Department for Communities and Local Government suggests that any increase from present levels would need to be concentrated among single-person and “financially marginal and more vulnerable” households. As the recent sub-prime experience in America has demonstrated, that is not necessarily a sensible aspiration. For some people, renting is indeed the best option.

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That seems very accurate.. most people around my age (21) have absolutely zero interest in owning a property, or they haven't thought about it as a serious option for them.

We're not rich, we've got a pile of government-made debt in the form of student loans, and if you gave us £100k tommorow, we'd spend it on having the time of our lives, not on some grotty 3-bed semi in an obscure part of Cheshire.

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That seems very accurate.. most people around my age (21) have absolutely zero interest in owning a property, or they haven't thought about it as a serious option for them.

We're not rich, we've got a pile of government-made debt in the form of student loans, and if you gave us £100k tommorow, we'd spend it on having the time of our lives, not on some grotty 3-bed semi in an obscure part of Cheshire.

I think this is another of those long term cultural inflection points.

Basically the current early 20s generation have seen their slightly older counterparts priced out or forced to overstretch themselves and now we have the blood letting. This will put off the next generation of FTBs who are also still struggling with student loans and other debt.

I can see a 25 year market depression from here.

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That seems very accurate.. most people around my age (21) have absolutely zero interest in owning a property, or they haven't thought about it as a serious option for them.

We're not rich, we've got a pile of government-made debt in the form of student loans, and if you gave us £100k tommorow, we'd spend it on having the time of our lives, not on some grotty 3-bed semi in an obscure part of Cheshire.

I think this is another of those long term cultural inflection points.

Basically the current early 20s generation have seen their slightly older counterparts priced out or forced to overstretch themselves and now we have the blood letting. This will put off the next generation of FTBs who are also still struggling with student loans and other debt.

I can see a 25 year market depression from here.

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I think this is another of those long term cultural inflection points.

Basically the current early 20s generation have seen their slightly older counterparts priced out or forced to overstretch themselves and now we have the blood letting. This will put off the next generation of FTBs who are also still struggling with student loans and other debt.

I can see a 25 year market depression from here.

Oh yes, Mr 'Economist' slowly but surely starts to change the flavour of his articles, until he will swear black is white and he saw the crash coming before anyone else; he knows the score. These pundits are a waste of f**king time and David Smith is the worst of the lot (Kaletsky coming close behind). Arrogant, self-regarding fathead who has been WRONG WRONG WRONG. I can't stand the sh1thead, because he gets paid to spout his b0llocks, and people automatically believe it because it is in a Sunday paper.

Don't ever forget: this c0ck-jockey was banging on and on about there being no crash, right up to the end. A charlatan.

Edit: a very good poster on here once posted an email exchange he had with David Smith about the housing market before it became apparent that it was crashing; Smith was arrogant and dismissive of the guy. PLEEEASE if you are that person, post that exchange again - I am sure it would be most illuminating.

Edited by marko

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Smith, Kaletsky, Ashworth, Millard. The four most deluded commentators in the British print media.

Which paper do they all write for?

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I think this is another of those long term cultural inflection points.

Basically the current early 20s generation have seen their slightly older counterparts priced out or forced to overstretch themselves and now we have the blood letting. This will put off the next generation of FTBs who are also still struggling with student loans and other debt.

I can see a 25 year market depression from here.

I've been saying this for a while. When we get to the stage where folk-wisdom says housing is a way of losing money. Then there will be a generation that fall out of love with it.

In some sense, the trend to interest only mortgages as a way of getting larger mortgages was a big step in this direction. Someone taking on an interest only mortgage is effectively just renting the money to buy the property, with no big difference (other than the hassle) from renting from a landlord who has rented the money.

I know that many took on interest only with the intention of starting repayments in future, but without galloping wage inflation that idea was a non starter.

No, I can see a shift away from housing. I also think it will be good news for UK manufacturing industry because, firstly, banks will have to put deposit money to productive (ie manufacturing) use if they want to pay interest to their depositors, and secondly, because it will increase job mobility. I am sure a major part of the skills crisis is how difficult it is to get skilled workers to move (because their existing home ownership provides a huge barrier).

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Smith, Kaletsky, Ashworth, Millard. The four most deluded commentators in the British print media.

Which paper do they all write for?

Is it the Sunday Sport?... I mean, they were the first to report the discovery of a double decker on the moon!

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Interesting acronym in bold.

You are right,... MASK, this seems to be what they want to achieve, Mask the truth from the sheeple.

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MASK would be an anagram

They are a SKAM (sic)

And the Times and NuLab have been in a tight embrace for years now, advocating policies that enrich the pigmen of the banking and corporate world. Selling the fraudulent idea to the rest of us that these policies were good for the rest of us. They weren't. It was a scam

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MASK would be an anagram

They are a SKAM (sic)

And the Times and NuLab have been in a tight embrace for years now, advocating policies that enrich the pigmen of the banking and corporate world. Selling the fraudulent idea to the rest of us that these policies were good for the rest of us. They weren't. It was a scam

HEY, I have every right to change the order of the accused if I want.

I thought the change in order added and extended the "out of box" thinking posed by Mr Durch.

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MASK would be an anagram

They are a SKAM (sic)

And the Times and NuLab have been in a tight embrace for years now, advocating policies that enrich the pigmen of the banking and corporate world. Selling the fraudulent idea to the rest of us that these policies were good for the rest of us. They weren't. It was a scam

Think a bit higher than that. Think Murdoch.

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Yet a report by a group of housing-market experts, published by the Joseph Rowntree Foundation, suggests that the decline in the number of first-time buyers cannot be blamed on high prices alone. The report, “Housing market recessions and sustainable home ownership”, says that it appears instead “to be a function of the increased levels of student debt, people entering marriage later and starting families later, and lifestyle attractions of ‘spending now’, in addition to the well-documented affordability issues”.

Remortgages are at twice the level of new loans, keeping the lenders in business, meaning first-time buyers suffer

Home ownership, which rose strongly during the 1980s, in part because of Margaret Thatcher’s right-to-buy legislation, and continued increasing in the 1990s, has reached a plateau at about 70% in recent years, and even slipped slightly below that level. Only 44% of 18-to 25-year-olds favour home ownership, compared with 75% of the over55s. They may grow into it, or it could be that a sea change is occurring.

Certainly, the government target of increasing home-ownership levels to 75% or 80% look unattainable. Research from the Department for Communities and Local Government suggests that any increase from present levels would need to be concentrated among single-person and “financially marginal and more vulnerable” households. As the recent sub-prime experience in America has demonstrated, that is not necessarily a sensible aspiration. For some people, renting is indeed the best option.

Great piece and the fact is, what you can't have its best not to aspire to. It only causes heart-ache and frustration. Maybe young people are just being emotionally healthy and looking to what they can have. The affluent home owner killing their own affluence with greed.

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  • 396 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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