Younger people should be rewarded for lockdown via affordable housing

[Ordree]

As others have noted, young people (not just those in frontline roles) are making enormous sacrifices to protect others, mostly but not exclusively from much older age groups. They will be bequeathed a damaged planet, a ruined economy and they will have done further damage to their mental health by staying indoors for months on end. They are the ones paying older people's pensions when they won't have anything like the same financial security to look forward to themselves. Yes I know older people paid their elders pensions during their working lives, bit never has there been such an imbalance. As the economy is likely to be ruined short to medium term anyway, would it not be reasonable to start the biggest givernment-funded housebuilding programme ever, allow younger people who have just bought to write off negative equity losses against tax, and essentially redress some of the appalling imbalance between generations and classes?

@Xenia, the land registry aren’t the ones to advise. They only deal with registration etc. It’s the law society who are issuing guidance to conveyancing firms at this time.

www.lawsociety.org.uk/support-services/advice/articles/coronavirus-covid-19-and-residential-conveyancing-transactions/

Their advise was very delayed and left a lot of professionals in an awkward position. They’ve now advised not to proceed to exchange anything that hasn’t already.

We are trying to sell a property and it’s halted it, despite it being empty for months. Buyers are reluctant to proceed as they want to be sure their jobs are secure. We’re stuck as we can’t market it for rental either so it’s just say empty.

Agents shouldn’t be marketing even empty property, it’s not essential travel or work. Hence the wait

When people buy a house they no longer get easy credit! It’s a recipe for inflation if money is too readily available. House prices are hugely affected by supply and demand. Supply is driven partially by new building but demand is driven by money supply and in the longer term, population growth and divorce.

The reason why few students actually pay off the loans is that you have to be a high earned to do so. A city finance bod for example. A high flying city lawyer and similar. That doesn’t mean others do not earn more than they would have done without a decent degree from a good university. If they have bern to a RG university and studied STEM, they will be better off. Also don’t forget paying the grad tax depends on earning. People (mostly women) working part time won’t pay as much back.

Surely that undermines the whole argument of university being restrictively expensive and preventing people bettering themselves or being able to afford housing? If people don’t actually pay the loan back, it doesn’t matter how expensive it is?

Absolutely correct! The expensive part of university is where housing costs are higher than the loan and parents have to pay more than they bargained for. However the same happened in the previous generation when we had awards and grants based on parental income. My DH’s parents wouldn’t pay their assessed amount to him. They said it was wrong and wasn’t fair. They bought a new colour tv and caravan instead.

You have to think of the “loans” as a grad tax. The people who do well regarding income pay more. Nurses and teachers pay less. I think that’s reasonably fair and certainly allows people to access university education. When hardly anyone went, did we think that was great? Possibly not.

"Help to Buy" (which is no longer available as a way to save)

And there was me thinking that Help to Buy was designed to help people to buy their first ever house - you know, these young people on lower incomes who need somewhere to live which is where the thread first started. This "Easy Credit" was a scheme whereby you didn't have to pay as much tax on savings that were intended as part of a deposit, it was very restricted in scope and definitely did very little to artificially inflate house prices. Low interest rates are definitely a much higher factor than the Help to Buy scheme ever was, and in fact you suggest at 13:08 that cheap credit IS the reason. Can't have it both ways - is cheap credit the main reason or is Help to Buy the main reason?

As said above by Bubblesbuddy there is no easy credit any more anyway, if there was then we wouldn't have all the threads about how hard it is for younger people to get on the housing ladder as they would find it easy to get the mortgages; cheap maybe but not easy.

Ok there's a lot of "I think..." here so let's stick to the facts shall we?

"Help to Buy" is no longer available? What are you talking about? The ISA? I'm talking about the equity loan scheme that allows ANYONE (not just first time buyers) to buy a new build house with only a 5% deposit: www.helptobuy.gov.uk/equity-loan/equity-loans/

This is easy, cheap credit. This was designed to boost property asset prices when they were lagging in recovery from the 2008 crash. This has led to two things:

1. Housebuilders pricing new builds at the maximum threshold of this scheme and thereby getting record profits (al la Persimmon etc.) (www.bbc.co.uk/news/business-48610977)
2. An increase in ALL property prices (not just new build) making it harder for the very same people this scheme was designed for to buy houses. (In 1995, 19,000 and the median house price was £83,000, 4.4 times median income. By 2012-13, the median income in London had increased to £24,600 and the median London house price had increased to £300,000, 12.2 times median income, Source: Wikipedia)

As to the comment that said there's no easy credit available anymore (pre-covid-19 recession) - that's simply not true, the Help to Buy scheme is still open if you can now afford to scrape together the 5% required.

As to young people complaining they cannot get on the housing ladder, this isn't because of a lack of credit, this is because the current property prices are a much higher multiple of their current incomes and therefore it take a bigger hit in repaying this as % of take home pay and they are taking on greater debt (In London, 22.2% of take home pay spent on their mortgage in 1997 compared to 66.6% in 2008. Source: Bank of England Statistical Database and Nationwide House Price Survey)

Also, there was a comment on how interest were a more significant factor in house price growth than HTB. Look at this property price growth graph from Halifax and Nationwide: ichef.bbci.co.uk/news/624/cpsprodpb/9707/production/_106836683_houseprice-nc.png
Notice how despite interests being 0.5% since March 2009, the property growth rate did not rise up till 2013 when HTB was launched.

PS. This is an excellent video by Ray Dalio that shows the role credit plays in an economy and how it inflates asset prices, credit cycles etc. if you're interested: www.economicprinciples.org/

That’s not what a recent report says about help to buy. The max loan is £240,000 and you need a 5% deposit. The loan is for max 40%. The big sting is the repayment after 5 years which is higher than a mortgage. There is also the question of having the mortgage for the 55%. The report says these buyers are more likely to have negative equity due to having to buy more expensive new property. It’s a double edge sword. 1/4 million people have done it and if there is steady growth in property prices it can work well. At other times it’s an expensive disaster. It’s not cheap in the longer run. At the moment anyone should be very wary of contemplating this.

I live in an expensive city (not London)

Lets say a single young person gets a teaching job, salary starts at £24,373. They save real hard, putting their money into an ISA. Lets say they manage to save £4000 a year + the government gives you a free £1000 a year on top + interest. After 2 years you have £10,000 saved min.

I genuinely looked up right move for properties for sale in my city and see a nice looking 1 bed flat for sale at £65,000.

I genuinely put those details into a mortgage comparison site and HSBC would for that salary with that deposit give someone a repayment mortgage to purchase it for £220 a month, over 25 years.

Boom you are on the housing ladder.

Alternatively keep saving for 5 years = £25,000+ meet another teacher who does the same, combined savings of £50,000+ and their salaries have increased to £33,010 each (so could have saved more).

Right move 3 bed house in my city with garden & driveway £165,000 Halifax mortgage £466.

Boom you are on the housing ladder with a family sized house and affordable mortgage repayments.

So I say its a lie that hard working young people cant get a house (if they really want), after saving hard for 2-5 years. You are still in your twenties and plenty of time and space to have a family.

So this whole thread is redundant because its just not true. Plus who knew the government already rewards young people saving for a house with up to £1000 a year. And I didn't even get into any of the other schemes to help first time buyers or things people can do to increase their income.

You know, I personally feel the Torys have benefited their elderly core voters to the detriment of the young. If the young want change, they need to vote. They don't vote in the same numbers.

@ZombieFan And in the 5 years you are waiting for prince charming to turn up and become your co purchaser, where are you living and how much are you spending on rent ?
It's called a ladder because you both hop on it individually spend 5 years chipping away at the capital and then by the time the 3 bedroom house is required you should have 50% deposit to put down.

@ZombieFan Yes, since 3 bed houses in your town cost £165k, all the young people in the UK are a bunch of lying snowflakes for not being able to afford housing. They should just work harder and not waste money on luxuries.

@Binswangers Exactly! Government policies are written to win votes.

Oh and @ZombieFan, if you really think a city where a 3 bed house sells for £165k is an “expensive” city, you really need to get out more.

@ChrissieKeller61, obviously you didn't read my post because it clearly states a SINGLE person can save and buy a flat after 2 years.
As a 'young' person many can stay at home low or rent free, house share, lodge, live in a van or god forbid rent a bedsit (approx £400pcm on right move) All affordable on a £24,373 wage whilst still saving for ONLY 2 years to buy their own place.

People manage on NMW which is £17,000 a good 7k lower

all the young people in the UK are a bunch of lying snowflakes for not being able to afford housing I never said 'all' I am alluding to a few on MN 😆

plainsailing01 I never said that was the average price of a house in my city, its obviously in the 'budget' range. But I looked at several cities in the UK on right move and they ALL have some properties in the 'budget' range.

Now I have proved the government already rewards 'young' people saving to buy a house & that it is possible for 'young' people to get on the property ladder the protestations seems to have changed.
Its now "I dont want to spend 2-5 years saving, I want a house now and I dont want one of your budget ones I want a luxury 4 bed detached house with en-suite bathrooms" 😘

Even in London I can see one bed flat shares to rent for that price and below.

Young people don’t stay at home after graduating though do they? Some do but lots don’t. Who wants to go home after being free at university? Not that many!

No flats near me for £65,000! £250,000 for a tiny tiny house. Teachers in cheap housing areas do well and can afford something at £65,000. That’s a very cheap location though. If they leave home and pay rent, saving is difficult. You are seriously not aware of prices for large areas of the country!

Who wants to go home after being free at university?

That’s a choice. If they can’t afford to and want to buy a house then who’s problem is that but their own. 🤦‍♀️

For heavens sake! They go where the jobs are!!! What would be the point in going back to a long dead mining village for example? This is descending into total rubbish!

Umm cheaper cities have decent jobs as well.

"Nearly a million more young adults now live with parents – Number has risen from 2.4 million to 3.4 million in 20 years" 2019. So it seems quite a lot do.

I checked out "The UK's top 10 most expensive cities for property" and Rightmove has 1 bed properties for sale at the same ball park price as the example I gave. If they were so rare I wold expect them to be sold before they even reach the market. 🤐

If their really is a a problem I guess young people must be turning their noses up at these properties. I dont remember being that choosy when I was that age. Maybe they are not that bothered at getting on the 'ladder'?

Chrissie, we had to buy in the 80s as a couple on 2 full time professional salaries here in outer London (zone 5) before babies. My parents had to work for about 10 years on 2 professional salaries and put off babies all that time in the 1950s. My father's parents who bought - my father was born when his father was 49 as he had to put off marriage until he could afford a family. I am not sure hings are too different - buy before you breed, marry someone with a professional full time salary and don't marry them if they only want to work full time. Then you maximise your chances of buying a house.

..and same for my child - bought before they bred, with husband before babies came and with 2 full time professional salaries.....

Affordable housing is a basic need that should be met anyway. It’s a disgrace of this country that our housing situation is so bad

So single people should never be able to buy a house?