To think there is a serious problem with the housing market in this country

[Kitchendisco21]

I was just about to buy my first home having spent 10 years saving a deposit. Thanks to the stupid help to buy intervention, the houses I was able to buy are now 50k more expensive so I am completely priced out. I am so utterly sick of it.

And no, I can’t move elsewhere/ get somewhere smaller/eat fewer avocados! I have been saving for a decade.

Aibu to be so fed up. I read last week that 98% of keyworkers couldn’t buy a home in the uk now. When will people actually wake up & see what a major problem there is? I am so angry.

@Angliski

The thing I hate the most is the way mortgage lenders assess affordability. If you’ve been paying rent for years ( likely at a higher rate than your repayments would be) why is that not sufficient evidence that you can keep up your payments and are low risk to lend to? Seems dreadfully unfair in my opinion.

If you can't save a deposit you will be unlikely to save for new roof, new kitchen and double glazing etc. Also if prices drop significantly then you are much more likely to just give the keys back to the bank and declare yourself bankrupt if you've put no money in.

If you are paying over the odds in rent, of course you can't save. Many people have posted about not being able to afford the rent on a property they own as they would be paying £500+ in rent as opposed to mortgage payments. If paying lower more manageable mortgage payments, that frees ip income to save for maintenance and repairs.

My sister has been saving for 15 years but because she's on her own is having a nightmare trying to find a bank that will lend to her because they're worried about mortgage repayments (she pays £1200 pm for her flat in rent so can definitely afford to repay a mortgage on a small house).

Meanwhile me and DH have owned our house for 10 years and we can't move up the ladder so are totally stuck in the house we moved into when we were a couple and we now have three kids. Space is tight and I'm getting really frustrated at not being able to afford somewhere else as were in a prime commuter area (and all the fuckers moving from London to here have made house prices go crazy) 🙄

Why is it when people say they can't afford a house or cannot get a mortgage for whatever reason, somebody comes along and says "I know, I bought my house 10 years ago and it's doubled in value".
Good for you but not want people want to hear.
We all know we should have bought years ago but who would've known how hard it would be.
I'm in regional NSW and moved out of Melbourne to be able to buy a house. Covid hit and then people realised they don't need to live in the city to work, so now we have a massive housing shortage and costs have skyrocketed.
Even worse this past month because we had floods and now hundreds of people are homeless and prob have to live in caravans or get a rental which affects the rental market too.
My rental is for sale and we may have to move again because we can't afford to buy it.
Very frustrating!

We need to tax capital gains on housing especially second homes - and penalise further with council tax hikes. Homes should not be profit making and that is the problem.

Many people have posted about not being able to afford the rent on a property they own as they would be paying £500+ in rent as opposed to mortgage payments. If paying lower more manageable mortgage payments, that frees ip income to save for maintenance and repairs

Interest rates are at rock bottom now. They might not always be. Rent on a particular property might be more expensive than a mortgage now (although £500 per month more expensive? I doubt that is the case for many places) but what about when interest rates rise?

That’s what lenders are worried about, and rightly so. The crash of the early 1990s was caused by interest rate increases. Are you sure that your mortgage will be cheaper than rent for the entire 25 year term? Unlikely.

Lending to people who can’t really afford to buy triggered the 2008 credit crunch. The banks really don’t want a repeat of that although arguably lending is returning to reckless levels.

me and DH have owned our house for 10 years and we can't move up the ladder so are totally stuck in the house we moved into when we were a couple and we now have three kids

Unless you’re living through high inflation or you are expecting your earnings to increase dramatically, there is no such thing as a ‘ladder’ in housing.

You pay your mortgage back over 25 years (or even more), by which time you’re usually 50+ and can’t take on another mortgage. Because you’ll be >75 by the time it is paid off!

If you’re already paying what is affordable on mortgage #1 - and let’s face it, most people tend to stretch themselves a bit - there’s no way you could move to a bigger house unless you start to earn much more or you are given a pile of cash. You are going to be in the same type of house unless one of those things happens. TV programmes still perpetuate the ‘housing ladder’ myth though.

A decent, secure affordable home is a basic human need
It certainly is, but more and more want more than basic. They don't want the flat in a busy area. They want the nice 3 bedroom house with a nice garden. They want brand new kitchen and bathrooms, perfectly decorated bedrooms.

The reality is that this is a luxury and one that indeed, many won't be able to afford until their 30s or 40s, maybe even 50s.

You have to start somewhere and that often is with anything far from ones dream home, but safe and secure.

@dontdisturbmenow

A decent, secure affordable home is a basic human need It certainly is, but more and more want more than basic. They don't want the flat in a busy area. They want the nice 3 bedroom house with a nice garden. They want brand new kitchen and bathrooms, perfectly decorated bedrooms.

The reality is that this is a luxury and one that indeed, many won't be able to afford until their 30s or 40s, maybe even 50s.

You have to start somewhere and that often is with anything far from ones dream home, but safe and secure.

Yes, gone are the days when people brought the terraced houses that needed doing up. All the young ones in my office had 4 bed houses in nice areas due to help to buy schemes which set that precedent to everyone.

@Iamthewombat Of course it’s still a housing ladder. You build up equity in your current house by paying the mortgage, making overpayments, and house prices rising. Then you use that equity against a bigger house. Mortgage companies lend more of you have a bigger deposit. It’s what I and everyone I know is doing.

Houses are seen as an investment due in part to lack of tax on them , stamp duty is such small percentage and then paid on purchase, not on the potential thousands the previous owner made just by sitting on an asset. Why when capital gains tax ID paid on selling and making a profit is stamp duty paid by the buyer.The government then saw fit to remove (or lower) the only tax on these assets.It is no surprise house prices soared (to the detriment of lots of first time buyers as they then paid more despite the stamp duty holiday.

What we do to the young here (housing should be a home or an investment for those who frequently just happened to be born in the right decade) is disgusting.

NOT an investment (completely reverse of what I meant .

@Iamthewombat

Many people have posted about not being able to afford the rent on a property they own as they would be paying £500+ in rent as opposed to mortgage payments. If paying lower more manageable mortgage payments, that frees ip income to save for maintenance and repairs

Interest rates are at rock bottom now. They might not always be. Rent on a particular property might be more expensive than a mortgage now (although £500 per month more expensive? I doubt that is the case for many places) but what about when interest rates rise?

That’s what lenders are worried about, and rightly so. The crash of the early 1990s was caused by interest rate increases. Are you sure that your mortgage will be cheaper than rent for the entire 25 year term? Unlikely.

Lending to people who can’t really afford to buy triggered the 2008 credit crunch. The banks really don’t want a repeat of that although arguably lending is returning to reckless levels.

me and DH have owned our house for 10 years and we can't move up the ladder so are totally stuck in the house we moved into when we were a couple and we now have three kids

Unless you’re living through high inflation or you are expecting your earnings to increase dramatically, there is no such thing as a ‘ladder’ in housing.

You pay your mortgage back over 25 years (or even more), by which time you’re usually 50+ and can’t take on another mortgage. Because you’ll be >75 by the time it is paid off!

If you’re already paying what is affordable on mortgage #1 - and let’s face it, most people tend to stretch themselves a bit - there’s no way you could move to a bigger house unless you start to earn much more or you are given a pile of cash. You are going to be in the same type of house unless one of those things happens. TV programmes still perpetuate the ‘housing ladder’ myth though.

You can take out another mortgage at 50+ you’ll get a shorter term depending where you are in your 50’s. The term can only take until you’re 70.

@Fcuk38 I don’t see many terraces on the market that need doing up. In fact I went to view one late 2019 and it sold while I was driving to it. That wasn’t the only terrace that sold in the wait to view, one was overnight. Another I called as soon as it came on the market and was told to view that evening or it’d be gone, and it was. The houses that hang around are the done up ones. Plus with help to buy and 20% loan from the government which isn’t paid for the first five years it seems like a better deal. Sadly many of those homes come back on the market once they are five years old.

We're hoping to buy end of this year. I've been looking on rightmove again recently and while there was plenty in budget about 4 or 5 months ago, now there isn't. I'm hoping it's the stamp duty holiday and prices might level out a bit but I'm not convinced. We are considering moving to be near extended family in the north west, not lots cheaper as still quite a desirable area, but better. We can get a house that needs work for a reasonable price and turnkey for budget whereas here a shitty bungalow that needs extensive work is top end of budget.

However this means moving kids schools and being 400 miles from our friends and it's quite a difficult and scary decision. Makes me angry when people say "Well move to a cheaper area". It's moving your whole life.

The rise in prices is insane. People gain £90k equity in 5 years literally just living in a house and then act like it's their financial savvy and frugal living that enables them to buy a nicer, bigger property.

Rent in my area for a family home was £650ish four years ago, its now minimum £1k in crappy areas. How is that sustainable or fair? I'm joy earning £350 a month more.

@shlthappens

Help to buy is the only reason we are on the property ladder. We paid a £12.5k deposit (5%) the help to buy equity loan was 20% and then we got a mortgage for the 75% remaining. We got a really good rate mortgage because it was 75% LTV so we are now overpaying the mortgage to build up equity and then we will remortgage in 5 years to pay off help to buy and it will of served it's purpose. If you get it with no plan to repay it then sure, it isn't great, but it has its uses. It has pushed prices up, so it's admittedly not perfect, but it is still a means to get on the ladder and more people should take advantage of it if they want to get out of the rent trap.

I’m another who has hugely benefited from help to buy. DH and i managed to save up for a deposit on a £230k property (one we can stay in permanently rather than a starter home) across two years while renting privately with no help from family (not something I’d have accepted even if it were on offer, but it wasn’t). We were on decent wages, probably £60-70k household income. Without help to buy we’d still be renting. I’m very grateful for the scheme.

Of course it’s still a housing ladder. You build up equity in your current house by paying the mortgage, making overpayments, and house prices rising. Then you use that equity against a bigger house.

Where do I start with this? Do you get that rising prices mean that bigger houses cost more and that the gulf between the house you are in and the house you want to buy widens? In order to move up you have to borrow a lot more, and you start again at the beginning of a 25 year (or more) mortgage term. You can’t borrow a lot more unless you earn much more.

Mortgage companies lend more of you have a bigger deposit. It’s what I and everyone I know is doing

They will only lend much more if you earn much more. You really have swallowed the myth, haven’t you? Still, we know where the next crash is coming from now.

You can take out another mortgage at 50+ you’ll get a shorter term depending where you are in your 50’s. The term can only take until you’re 70.

Who wants to be paying a mortgage in their late sixties? Madness. Plus the same principle applies: unless you are sure that at 50 you are going to be earning much more, how could you afford to buy somewhere bigger?

@Chihuahuacat you are right, I did some sums on our mortgage. We have about 230k left at 33 years 2% is about £800 a month.

If the interest rates jumped upto 15% it’s about £3000 😬

@Iamthewombat

Of course it’s still a housing ladder. You build up equity in your current house by paying the mortgage, making overpayments, and house prices rising. Then you use that equity against a bigger house.

Where do I start with this? Do you get that rising prices mean that bigger houses cost more and that the gulf between the house you are in and the house you want to buy widens? In order to move up you have to borrow a lot more, and you start again at the beginning of a 25 year (or more) mortgage term. You can’t borrow a lot more unless you earn much more.

Mortgage companies lend more of you have a bigger deposit. It’s what I and everyone I know is doing

They will only lend much more if you earn much more. You really have swallowed the myth, haven’t you? Still, we know where the next crash is coming from now.

You can take out another mortgage at 50+ you’ll get a shorter term depending where you are in your 50’s. The term can only take until you’re 70.

Who wants to be paying a mortgage in their late sixties? Madness. Plus the same principle applies: unless you are sure that at 50 you are going to be earning much more, how could you afford to buy somewhere bigger?

I don't get why you keep saying it doesn't work like this when for myself and many others it does and it is our experience.

Do you get that a house price rise of 10% doesn't actually mean all house prices have risen at exactly 10%? Round my way smaller houses have risen faster than the larger houses, meaning the gap between the two has lessened because of house price rises.

Mortgage companies do lend more if you have a bigger deposit. That is a fact. Of course they're not going to lend 6 x of whatever but the little bit extra they will give is often enough to bridge the gap.

It's no point you saying none of this happens as it obviously does, because it's how we have just bought our next house and how our friends are buying their next houses. Just because it's not your experience doesn't mean it's not anyone elses.

There also won't be a crash. For a crash to happen there has to be more supply than demand. Houses are selling fast despite high prices. The hundreds of new builds they are building in my area are flying off the market as soon as they are put on, there is so much demand. There is demand at these prices and people can afford them.

Do you get that a house price rise of 10% doesn't actually mean all house prices have risen at exactly 10%? Round my way smaller houses have risen faster than the larger houses, meaning the gap between the two has lessened because of house price rises.

That might be your experience in your local market but that’s unusual.

Mortgage companies do lend more if you have a bigger deposit. That is a fact.

Who said it wasn’t? I said that you’d still need to borrow more. Here is a simple example.

You buy a house for £200k with a £20k deposit, borrowing £180k. Over 5 years you pay off £10k of capital (interest on repayment mortgages is front loaded). The value increases by 20% to £240k. Your equity is £70k (£240k less the remaining £170k you owe).

The house you would like to move to was £400k five years ago when you bought your £200k house. You now have £70k equity for a deposit. That £400k house now costs £480k: 20% increase in value. You’ll need to borrow £410k to buy it and you start again at the beginning of a new mortgage term.

Even if that bigger house had only gone up 10% it now costs £440k and you need to borrow £370k. Much more, despite a bigger deposit. Who’s going to lend you loads more if your income hasn’t changed?

Of course they're not going to lend 6 x of whatever but the little bit extra they will give is often enough to bridge the gap.

It’s not a little bit extra, though, is it? See the example.

It's no point you saying none of this happens as it obviously does, because it's how we have just bought our next house and how our friends are buying their next houses. Just because it's not your experience doesn't mean it's not anyone elses.

The maths don’t lie. Whilst you are merrily taking on more debt and tying yourselves to longer mortgage terms (shedloads more interest) whilst kidding yourselves that you are ‘moving up the ladder’, you could be saving into a pension.

@MissBattleaxe

*Why is it so different from any other time- ordinary people have often struggled to buy a house?

Is it snowkflake moaning?*

In the 60s, 70s and early 80s, the cost of a house as a percentage of income was usually around x 2.5 annual income. A man on 4 or 5k a year could buy a house on one wage. Today, the cost of living is proportionately much steeper and totally out of sync with wage rises.

It's definitely not snowflake moaning.

Nonetheless, in my experience, everyone seemed to be much less well off in the '70s and' 80s than they do today. Standards of living were generally lower.

There also won't be a crash. For a crash to happen there has to be more supply than demand. Houses are selling fast despite high prices. The hundreds of new builds they are building in my area are flying off the market as soon as they are put on, there is so much demand. There is demand at these prices and people can afford them.

Ok, keep telling yourself that.

Crashes are precipitated by economic changes. Oversupply is a side effect, not the cause. New builds flying off the market propped up by government schemes, you say? Demand even at high prices when incomes are stagnating and the only way for interest rates is up? What could possibly go wrong?

I'm reading on today's BBC news website that Robert Jenrick has said that "hundreds of thousands" of Hong Kong citizens expected to move to the UK will be helped to access housing, schools and jobs.
I'm wondering what peoples' views are on this, given the very strong opinions regarding housing expressed on this thread so far?
This is genuinely meant to be an open question, not a loaded one.
(Tried but failed to include the actual article as a file).

Since we nicked Hong Kong in 1842 and used it to enrich Britain I think it would be pretty maungy to stop Hong Kong citizens moving to Britain to escape anti-democracy policies, don’t you? They will work and pay tax. Welcome them in, I say.