Reply to: oh dear: Rent-a-room scheme gives first-time buyers a leg up

[tim123]

So were you 26 years old when you first owned a property?

If you were then it was probably in the 1980's (or earlier?!) when housing was more affordable. Seem to remember twenty years ago it was very common for a 23/24 year old on average wages to buy property, even in Greater London. Now the average 1st time buyer age is somewhere around 35 yo and rising! The generation in their 20's now have effectively been f****d by this government

No, I was 25 before I could first afford to move into a property where I didn't have to share.

It just happens to co-incide with buying a house. By then, I was a contractor on something equivilent to 40pph today.

In the SE, it was as hard for a single on a normal wage to buy a house then, as it is today (****ing impossible). Though unlike today, buying was cheaper than renting.

And much though I dislike much of what the current government are doing, I don't attribute any of the blame for house prices to them.

tim

[Hart-floot]

This shortage of houses lark is a fallacy.

Do you see people sleeping on the streets (apart from a few who who, strangely, seem to chose to do so).

The simple fact is that these people don't earn enough money to live on their own (as I didn't when I was 18, 19, 20, 21, 22, 23, 24 or 25), and counting them into some total number of people "without an owned house of their own" to justify a need for more houses is silly.

tim

So were you 26 years old when you first owned a property?

If you were then it was probably in the 1980's (or earlier?!) when housing was more affordable. Seem to remember twenty years ago it was very common for a 23/24 year old on average wages to buy property, even in Greater London. Now the average 1st time buyer age is somewhere around 35 yo and rising! The generation in their 20's now have effectively been f****d by this government

[tim123]

I agree with the rest of your post, but not this bit. Supply and demand are economic factors. There is a shortage of supply for would-be buyers because:

* Buy-to-let has expanded incredibly in the past 10 years

* People are living longer

* People are preferring to live in smaller family units (average 3 people per dwelling 20 years ago down to 2.3 today)

* Population increase, which was insignificant for years until 6 or 7 years ago

Building new houses cannot keep up with the demands, mostly because people are pushing back against Prescott's Grand Plans for concreting over great swathes of the countryside.

This shortage of houses lark is a fallacy.

Do you see people sleeping on the streets (apart from a few who who, strangely, seem to chose to do so).

Nope, they are all living somewere, so there must be enough houses for them.

It's irrelevent that there aren't enough for them to buy, because buying is a desire not a need, and their need is demonstrably satified by what is available.

They may be living in shared accomodation, but that is mainly because it is all that they can afford, not because there are no houses for them to buy. There is a (IMHO stupid) socialist view that having to live in shared accomodation equates with some form of second class living that should be abolished.

But I don't agree with it. I fail to see any reason why the rest of society should contribute (aka pay extra tax) to providing a sole-occupancy property for every unqualified 18 year old stacking shelves in the supermarket taking home 150 quid a week.

The simple fact is that these people don't earn enough money to live on their own (as I didn't when I was 18, 19, 20, 21, 22, 23, 24 or 25), and counting them into some total number of people "without an owned house of their own" to justify a need for more houses is silly.

tim

[AtW]

Speculation driven by greed accounts for 80% of price raises - everything else is just used to justify high valuations in hope they will stand, which of course they won't.

[wendigo100]

Wot, all this happened in the last 5 years during which house prices doubled?

That is illogical.

Firstly, you ignored the substantial increases in BTL and population.

Secondly, just because an issue started longer ago than five years (living longer and tendency toward smaller households) does not preclude it from making the problem increasingly worse today.

[AtW]

* People are living longer
* People are preferring to live in smaller family units (average 3 people per dwelling 20 years ago down to 2.3 today)
* Population increase, which was insignificant

Wot, all this happened in the last 5 years during which house prices doubled?

All these fundamental things work over a long period of time and can explain 3-4% increase (just over inflation) in house prices, but there is no way they explain or justify ridiculous 20-30% inflation: only bubbles behave in such a way (until they pop).

Better buy headphones - when this bubble burts the shockwave will make people bleed from ears.

[wendigo100]

I said before on this board (I think), all that is currently holding up house prices is the seemingly never ending chase for even higher house prices, there being no fundamental economic reason for it.

I agree with the rest of your post, but not this bit. Supply and demand are economic factors. There is a shortage of supply for would-be buyers because:

* Buy-to-let has expanded incredibly in the past 10 years

* People are living longer

* People are preferring to live in smaller family units (average 3 people per dwelling 20 years ago down to 2.3 today)

* Population increase, which was insignificant for years until 6 or 7 years ago

Building new houses cannot keep up with the demands, mostly because people are pushing back against Prescott's Grand Plans for concreting over great swathes of the countryside.

[DimPrawn]

I'm thinking of entering the mortgage market with a new product.

Infinite term - you just keep paying forever (like renting)
Infinite multiple - I'll lend whatever you need, no need for any stable income
Infinite groups - share with as many family members, friends, lovers, strangers, pets, aliens as you like.

I'm going to call it the triple infinity mortgage.

Watch this space....

[sasguru]

Anyway this is good news for you atw. There will be a wider range of rooms for you to rent

[tim123]

The problem is that you cannot undo it by, say, legislating a sensible limit on mortgage borrowing (e.g. 3 times salary), because that would dry up all new buyers at current prices and the market would collapse.

IMHO all that's happening is delaying the enivitable. I said before on this board (I think), all that is currently holding up house prices is the seemingly never ending chase for even higher house prices, there being no fundamental economic reason for it.

So, as soon as this increase stops, many people will want to get off the ladder and the market will crash. There just cannot be a soft landing, with house prices remaining high but static, in this scenario. There are only buyers at the current level because they believe that prices are going up.

Anyone for a tulip bulb.

tim

[mcquiggd]

Personally, I think interest rates should be set every wednesday and saturday.

[threaded]

Hmm, I do hope they remind these prospective purchasers to get a council inspection and license to run a HIMO, do the fire precautions (well they're going to let out the spare rooms, that'd be the loft then, so they'll need a fire-escape installing, at least, and oh, I'm sure the government will ensure they get planning persmission for that), and finally remember to take out the correct insurances...

Fools and their money, you've gotta laugh ...

[VectraMan]

The BBC could replace the National Lottery drivel on a saturday... this month, it could be you who has their house repossessed...

Mr & Mrs X bought their house in November 2006. "I can't believe it!", said a tearful Mrs X, "We thought five times our combined salary plus an allowance for renting out a room might be stretching it, but the people on CUK assured us that house prices always rise and we couldn't lose".

"Now we're ruined", said Mr X, "and our children are having to eat gruel."

A treasury spokesman said "La la la. We're not listening. Everything's great."

[mcquiggd]

Yep, make it a nice round 10% up or down... that would make people think....

The BBC could replace the National Lottery drivel on a saturday... this month, it could be you who has their house repossessed...

[VectraMan]

That's what interest rates are for - they should have risen to at least 7% a few years ago: but of course Brown was smart enough to have "independent" BoE, but he actually appoints people there - NL would not have liked to have high rates, plus having such high rates would have prevented the plebs from feeling rich and borrowing more "cheap" debt to buy plasma TVs, holidays etc.

I wish they'd stop arsing about doing 1/4% every 3 months. Because it has little or no effect, barely makes the news, and everybody assumes it will go back down again soon.

All this assumes there's a pleantiful supply of renters. It's slightly ironic that they're making buying more affordable, so taking people out of renting, on the basis that there'll be an increase in tenants to fill the increased availability of rooms to rent.