To be aghast at current house prices?!

[tiredoflooking]

I have been looking at houses for sale in the city we live for about 6 months now. We are a professional couple, we currently own a small city centre flat and have a good deposit saved. I can't find anything even vaguely affordable for us in a relatively decent area. I know there is a housing crisis but what is the story??! Who is able to afford these prices? Are house prices likely to fall? And are we to be flat bound forever or should we move out to the middle of nowhere (where it is only slightly more affordable?) I really dont know what to do anymore, should we just use the deposit to pay off some of our current mortgage and accept we will have to stay where we are? We are trying to conceive and I find constant searching through moving websites and the feeling of potential upheaval quite stressful. I find it really hard to believe that as a hardworking professional in my 30s a house is totally out of my reach!
I would love to hear other peoples thoughts/experiences

DS and family worked out they'd be 40 before having the deposit for a home and then by moving in with the in laws, for 10 years!
Their reasonable salaries would only buy them 50% of a suitable 2 bed semi for themselves and two DGDs.
We advanced his inheretance, so that they could have it for the deposit.
The dreadful housing situation is causing real concerns for a whole generation and beyond, whilst landlords make profits.

The government are funding old age care by forcing house sales, how will they do this when the generation don't have a home to sell? There will also be a glut of OAP's needing housing benefit and or sickness payments, how will they fund that?

We're looking at shared ownership. Full price two bed flats are about £450k, so with the mortgage and rent and charges it will cost us about £1,600 a month. I'm not sure if we're bonkers for even considering it but I feel so unsettled in our rented flat. Our landlord is also AWFUL and the state of the flat is getting me down.

I don't know what to do.

JT05 there was recently a newspaper headline saying a lot of mortgage companies weren't lending to first time buyers over 40 now! Admittedly i don't know the validity of that headline.

Shared ownership has to be the answer, but there just isn't enough of it. I don't even believe massive housing developments would help either as it just fills up with BTL (which the government are actively encouraging to solve the immediate issues).

The house prices have been built on the growth of ridiculous lending mortgages, but now they've (rightly) pulled the plug on that bonkers lending, the house prices are still high but the lending criteria have gone back to 15/20 years ago when they were sensible. The prices haven't dropped to match. Can you imagine the problems if the house values had halved, so i can see why the government have protected them, but this is the problem its caused.

JT05 there was recently a newspaper headline saying a lot of mortgage companies weren't lending to first time buyers over 40 now!

Yep. I can well believe it. I filled in one of those online mortgage calculator thingies recently and was refused anything. I'm on a professional salary in a secure industry but am over 40.

Dp, ds and I live in a tiny, damp flat, with no outside space. Ds won't invite friends over anymore because there is literally no room for them

We have no hope of buying even within miles of where we live (SE). And even the idea of buying elsewhere when ds moves out doesn't work because, you know, he is unlikely to be able to afford to!

I just want my own home for my family.

We live in the South East and have a lovely detached house in a beautiful village. But to be able to afford this, we a) had family help to raise a 20% deposit and b) we both commute to central London as local salaries just would not enable us to have this home. It's pretty insane. Our commuting cost is over £1.3k a month if we both go into the office daily (than God my DH works from home most of the time at the moment!), our mortgage £1.4k. These figures just don't stack up when compared to normal salaries, do they?!

Oh and I should add: my daily commute is 3hrs, DH's 4hrs.

It really is heart wrenching the people that say they want a "home". A home to decorate for their kids, to tend the garden, to feel you have roots and a stake. I'm in the same boat although am in a slightly more flexible position in that I can move to any area in a few years if necessary. In the next few years my DC will leave home, which is a slightly laughable word as in the past 7 years we haven't really had a "home" as such. Boxes not unpacked, furniture not bought as you don't know if it will fit the next place, no sense of permanency. It's horrible. The past few governments are to blame for this and it is one of the truly terrible things done to society. Our kids will barely be able to afford rent never mind a mortgage. My parents bought a 3 bed on on wage and a lowly wage at that. Impossible in the same area now.

I know what you mean!! I have just made an offer on a shared ownership 25% of a tiny 2 bed ex council house, £75000. It is bloody ridiculous at the moment

I feel that the problems began with Thatcherism. Thatcher brought in right to buy which reduced the numbers of council housing available, which in turn created a market for BTL meaning that there was less homes available to be purchased by owner occupiers.
Of course the current long term low interest rates have also pushed property prices up more as people can afford bigger mortgages.
The crazy 5x salary lending and 125% mortgages that existed at the start of the millennium didn't help either.

We just bought a 3 bed semi in A large North Essex town, £230,000. It took us 8 years to save a deposit. DH commutes into London but we couldn't live any closer than 1 hour away. Still, it has the best schools in the country, loads of shops and restaurants, close to countryside and Coast. So it can help to move out a bit.

Doesn't anybody think house prices will decrease onc the baby boomers and selling up for care costs etc? That's what I was thinking......it might ease it all a bit of not fix the problem

How to improve matters?

To begin with take pp away from local councils to break NIMBY.

The two of us want to downsize from our large 4 bed det. to a small village property. We will be cash buyers looking for a small 3 bed. But the village we want to go to is very popular with young families. We feel guilty that we can buy at asking prices, pushing out young families who will possibly need to make an offer.
Where we currently live is very popular and if we stay we are just two living in a large family house that a family would love.

it is not actually all the fault of the 'greedy landlords' although I know you would all like it to be.

too many people for the available housing, certainly in the crowded bottom right-hand corner. No, that doesn't mean it is all the fault of the immigrants; why not come and work here when it pays loads more than your home country does? Plenty of our forebears did the same.

investment skewed to the bottom right hand corner of the country

not enough incentives for more work to be moved away from the crowded bits (although there is plenty of work 'in the middle of nowhere' if you can cope without a tube train).

London problems: foreign investors doing 'buy to leave empty' (now what kid of crazy system is set up to make that worthwhile?), stupid city salaries for doing nothing productive at all, which in turn drive up house prices in the area. No idea how this is fixed, but as long as we value money-movers over creators it will continue.

selling off council houses also a bad idea. Who bought them BTW? We need more of these because councils and housing associations can provide accommodation at a lower price, and (theoretically) will always do it properly. (In practice HAs can be as bad at fixes as bad landlords, but venting bile at HAs isn't fashionable on mumsnet)

and many others. Expecting roneik any minute...

JT05 Please don't encourage the time-to-downsize brigade who feel aggrieved because people whose DCs have grown up don't move. A room which used to be a child's bedroom but is now a study, book-room, hobby-room, occasional guest-room, is not "unoccupied" or "unused" - it is just being used differently.

It's madness isn't it?

My DSS and his GF moved in with us for nearly two years and built up a sizeable deposit. They were looking to buy a small 2 bed house mid way between us and her parents near Deal in Kent. Between the two of them could afford a mortgage.

Now following relationship breakdown, he on his own and there's no way he can afford to buy even a studio flat where we live. We live in a very ordinary London Borough, part of Surrey. With what he earns he could afford the repayments - it's the getting the mortgage he is going to have trouble with. Is he going to have to rent forever.

Neither are we in a position to help him out as have DD and DS to complete their education etc first. Plus if you do it for one, you have to do for all.

As an aside. I bought a 1bed in SW11 back in 1991 for £32600. Yesterday we were looking on Zoopla and it was up for £270000 last summer. To quote Cher: if I could turn back time....

In 1989 DH and I moved from the SE to the NW thinking that it was the right move for us and that property prices were unsustainable there. Shows how much we know as twenty five years later they are still climbing, despite the odd dips.

However, while I have sympathy for those who can't get good homes, the SE can't have it all ways round, there is an element of "you pays your money, you takes your choice" in where you live. Unfortunately any measures to help those who can't get on the ladder will also benefit those who are raking it in through rising prices at the expense of the rest of the country so I don't know what the solution is

It wasn't the 'right to buy' that had the biggest effect on property prices, but the 1988 Assured Shorthold Tenancy Act that pretty much overnight turned properties into very strong investments. Tenants previously had protection via permanent tenancy with strict rent reviews and a cap on rent increases. Pay the rent and you could never be evicted. As a result of the 1988 Act prices were set by the open market with landlords having the right to evict a tenant at no less than two yearly intervals. The whole property market became deregulated and, after time, more fluid. Rents increased pretty much 300% per cent or more, over a relatively short period.

As assets, residential houses are currently at very values compared to yields and a correction will come either if interest rates and inflation move back to previous norms, or there are capital outflows from the UK. A lot of capital from overseas (EU and Far East mainly) has been parked in London, Manchester, Bath/Bristol/NE Somerset on a temporary basis. It is not difficult to foresee a 'perfect storm' of events happening in the future (but not tomorrow) that could combine into a structural correction;

1. NPPF and relaxed planning policy
2. Increased interest rates and inflationary effects
3. Capital outflows as foreign investment is repatriated

I saw a house recently which was marketed as a project I.e. it needed completely regutting and a brand new roof. It also needed new Windows and the chimney rebuilding, it was on for the 'bargain price' of £500,000 according to thé agent.
I would want a complete house ready to move in for half a million ffs.

It's mental. Who can afford to buy a wreck for half a million?

Ron has been banned specialsubject

Bowlersarm who or what is Ron? I can't find any trace of it or him (or her, but I doubt that) in this thread except in your post. Typo?

Andrew, roneik is a poster known for his desire for a house price crash and very very ranty and rude about it. Specialsubject mentioned him in her post. His posts still stand I think, if you do a search.

I dont know that roneik fella but i do hope the housing market crashes so i can afford to buy!

I feel for you southerners. Must be difficult. I live in a busy town with great transport links, 20 mins from 2 major cities and you can buy a three bed terraced for £85k, a 3 bed semi for £120k and a four bed from about £180k. Wrong isn't it.