To think we will never be homeowners?

[GroundToAHalterNeck]

House prices are completely out of my reach now. DH and I are low earners due to life circumstances, no family support and a SN child requiring high levels of care.

We currently rent our home. I’ve been looking at options to buy but even the cheapest home in the cheapest areas would require a substantial deposit. Help To Buy and other government schemes also require a huge deposit we are unlikely to ever be able to save whilst paying rent too.

I met a friend for coffee this morning and she was explaining how they’re planning to upsize and how she will make a huge profit on their current home. It made me wonder how on earth first time buyers with no financial help would get on the property ladder in current times?

Is anyone else in the same position?

Tealights, I think we’re talking at cross purposes (or maybe you just like to disagree with people.) I don’t believe that NIMBYism is the sole reason which impedes the development of affordable housing, but I’ve worked for most of my career in policy, finance and development in the social housing sector, and it’s unarguably a significant impediment to developing affordable housing in the communities where its most needed. I’ve also explained above that, through said professional background, I know how incredibly difficult it is in London and other land-compromised and expensive parts of the country to create sustainable commercial development models which allow developers to access the commercial lending they need to develop.

There are a whole raft of high-level policy decisions – in planning, in banking, in how we create vertical and horizontal agreements which e.g. allow for certain criteria to be overlooked if the outcome is one of social benefit. You’ve touched on a couple of things, including redirecting money which currently pays housing benefit to guaranteed government loan schemes to developers who commit to building affordably – the cogs of which are already in motion. But when I find myself at a dinner party seated next to somebody who is saying “we just need to build more social housing!” as though it’s as easy as locating the nearest patch of available land and throwing some bricks at it, I can only roll my eyes.

There's no cross purposes. NIMBYs or not, there are many new housing developments in London (and elsewhere).

Almost none are genuinely affordable.

@lykkelaa The flats are likely to be in zone 2 right? my flat is worth £425k, it is not likely to get a large house in any home counties town.

www.rightmove.co.uk/properties/119396009#/floorplan?activePlan=1&channel=RES_BUY

This is more expensive than my flat and not much bigger than my flat (in many ways has less usable space due to staircase and 2 tiny bedrooms).Plus would have to spend lots on rail season tickets. Which is why I chose to stay in London. I find its the same with the next step up, 600k-750k budget in London would only be 500-600k outside London if you count in rail season tickets (never mind about the cost of the car which I wouldn't need in London zone 3) and you can't get that much for that, not enough to justify the rail fares and the commute either!

I was looking up the fuel poverty stats- www.theguardian.com/politics/2022/jan/30/handling-cost-of-living-crisis-key-to-tory-government-future-johnson-told
You are in fuel poverty if the cost of fuel is more than 10% of your income so it is an indication of local incomes. What I find interesting is that london boroughs have a far higher percentage of fuel poverty compared to leafy shires i.e. my London suburban constituency has 12% fuel poverty which is quite high compared to the 5% in fuel poverty in Beaconsfield in spite of the fact its much more expensive to buy a terraced house in my area than Beaconsfield. Its because the lifestyle in Beaconsfield is so much more expensive and the housing is less mixed. So in a way, moving to the home counties is a move that is generally done by richer people who probably can afford london housing, they just want something extremely comfortable.

Whether you spend 750k on a 2 bed flat in zone 2, a terraced in zone 4/5 or a large house in the home counties,that is personal taste/choice. Of course the 2 bed flat isn't really suitable for a family of 5 but that isn't really the crux of the housing crisis cos they do have the option to move if they really wanted a larger place. The issue is people who can't afford to buy a modest house/flat with 2/3 bedrooms anywhere within a sensible distance of their support network/workplace.

allow developers to access the commercial lending they need to develop.

Like I said yesterday, this is where we save the taxpayer money (longer term).

Instead of spending taxpayer money on schemes that push prices up higher - the generally unaffordable Help to buy, etc, the money should go on real affordable housing. Social housing.

Separately, regulations need to be tweaked. We don't want another subprime crisis but we do need to see some relaxation on lender affordability criteria. As many pp have said, they struggled to get or were turned down by mortgage lenders due to income requirements - despite years of paying rents higher than the amount that the mortgage payment would be.

The costs to the taxpayer of funding social housing developments (and buying back, as suggested by a pp) would in the long term be worth it.

The taxpayer currently spends billions and billions and billions on the direct and indirect costs of the public health housing and homelessness emergency.

The fuel poverty being higher in London is because, despite the headlines about 'London centric' and the narrative of Londoners being rich, the fact is that London has some of the worst deprivation in the country.

PP on here who own in London do not have the same experience as millions of Londoners. Many are in squalid badly maintained rentals (social and private) or crappy HMOs or outright homeless.

I can't remember if I posted this article by Omar Khan on here yesterday or another thread but it's very good so worth reposting.

citymonitor.ai/government/why-aren-t-working-class-people-living-cities-also-left-behind-4694

@onlychildhamster z2/3 & sold for 650-850k depending upon size & locale.

I'm in z2/3 but I have a car though. Vast majority of my neighbours do.

My point was they found moving up the ladder difficult as a similar sq ft house would be double.

@Tealightsandd I agree with much of that article, lots of people crow about the diversity of London but there certainly don't mean socio-economic diversity & I would argue there is more division in general. certainly in my area, I was lucky that my immigrant parents did well & helped me onto the ladder

@lykeelaa yes many of my neighbours do have cars too, but it is easy to live without one. In the Home Counties, its different and so you have to factor in the cost of a car no matter what (even during an inflation spike like the kind we are living through now!).

Hasn't moving up the ladder in the same area always been difficult. My MIL bought her 1 bed flat for 70k, sold at 45k (house price crash in the 1990s ) and bought her current 3 bed house for 100k in 1997. Z3 north London. the jump would probably be less if she moved to z5 but she didn't want to do that! It was also double in those times; just that now the amounts are much much larger...

@lykeelaa well you are more likely to encounter poor people in London than living in the shires. Surely that makes you more empathetic? You are also more likely to encounter extreme wealth. I like that, i don't want to live a blinkered existence where everyone else is of the same socio-economic background as myself. Its a very narrow and empty existence and it isn't 'real'.

We had no help from parents etc but are fortunate we both saved from a young age. I worked tonnes of shifts in a really shit job alongside full time work in a houseshare to save some money- I realise this isn't possible for all so it's not meant as a omg work hard and it'll be fine post. We then bought a house that wasn't in the best location or in the best nick but is fine, and we have slowly been doing it up on a budget. We could make £££ by selling but realistically it's pointless as somewhere new would also be more expensive at the moment, and we are happy enough here. It is crap though and something needs to change.

I agree onlychildhamster all diversity is good. Including mixed incomes. But there should be no place anywhere for the desperate poverty suffered by so many Londoners. Nobody should be homeless or stuck in the miserable (impossible to WFH from) substandard, sometimes even dangerous, rented flats and HMOs that so blight London (and increasingly elsewhere).

But, that aside, I do agree with you about the benefits of a genuinely diverse area. From what you say, Singapore seem to have got a pretty good set-up. I'd happily see similar here.

I'm in the North, could stretch to 80k on a deposit but still that's not enough for anything half decent.

My parents kindly let me live at home rent free until I was 23, I saved up a big deposit that way and bought a shared ownership flat. That then increased in value and let me and my then partner buy a house. Nowadays prices have increased so much it looks nigh on impossible to get on the ladder. I worry about my children managing to buy.

I think Tony Blair brought in a great scheme- we bought a 1 bed flat under it when our son was born (we subsequently sold it and haven’t owned again) — wish we had kept it . This was DIYSO ( do it yourself shared ownership) — basically shared ownership but on the open market — so not all new builds. We did a 50% in crouch end and housing association owned the other 50% . Any profit was split after allowing for any improvements. I think it would be a good idea to look at 25% shares with insurance companies/pension funds/ housing associations owing the other 75% — no current property owners allowed to buy, no non nationals, no ‘investors’ etc, no buy to let—

@Notonetojudge

House prices may have been lower but when I had my first mortgage on a studio flat in the 80s the interest rate was 15%, although I could get a 100% mortgage. The cheapest ever 10year mortgage has just been released I think.

Where I live now, colleagues say that their children will never afford a house because the prices are so high and wages low, but again, when I was buying, everyone expected to start with the smallest flat, then sell and move up. Took a few years and some equity to get to a house.
In many ways I think people expect too much, too early on. Not saying this is you, OP, but you have to start small when you’re first earning.

Oh this old tripe again.

I think Tony Blair brought in a great scheme

He certainly did....for himself and his family. They've made millions out of property - and (legally) avoid a good amount of tax on them (see Pandora papers).

Blair is a big reason why we have today's public health housing and homelessness emergency.

He didn't end Right to Buy - it wasn't too late to repair a lot of the damage in 1997, and also by then the misery and suffering it caused couldn't possibly be ignored.

He significantly increased demand but simultaneously massively reduced access.

He very enthusiastically pimped Buy To Let to any old Tom, Dick, and Harry - which began the out of control prices situation we see today. Investors snapped up multiple properties, pricing out FTBs.

As for those too ill or disabled to work? Well we all know about his war on the disabled.

His support for freedom of movement wouldn't have been a problem....had he funded the necessary additional infrastructure and housing that several million extra people would require. He could have done that - but he was more interested in exploiting cheap labour (UK born and migrant alike) and getting votes off slum landlords.

Yes, same here. We ay £1795 for a 3 bed semi. It's a good size and excellent location though but after all bills we can't save much. I would probably have saved enough for a deposit at retirement age! So 35 years to go and then wouldn't be able to get a mortgage. I have come to terms with it now

I'm 41 and me and DH are moving out of our rented property to move in with his parents this weekend just so we can save for a deposit on a house. God knows how long we'll be there for but it's the only way we can do it. I did buy a house back in 2007 with my ex DH but that was on an interest only mortgage so didn't make any money from the sale of that house so back to square one

Affordable housing just get bought for buy to let though, and so the cycle goes on.
The market needs regulation the same way as any other essential human utility.
People should be able to offer one house for rental at market rent. More than 1 up to 5 only at HA rents. More than that and you need to chose renters off the housing waiting list.

@Didioverstep

Yes, same here. We ay £1795 for a 3 bed semi. It's a good size and excellent location though but after all bills we can't save much. I would probably have saved enough for a deposit at retirement age! So 35 years to go and then wouldn't be able to get a mortgage. I have come to terms with it now

You are paying over £21,000 a year to pay someone else’s mortgage. In 35 years you will have paid at least £754,000 - and that’s assuming no rent increase (and that you don’t get kicked out).It seems ludicrous you won’t have anything to show for it. I can’t believe you can be paying out all that money yet no one will give you a mortgage. What would the mortgage be on a similar house?

Yes it is crazy. I moved out at 18 as I couldn't stay at home. So been renting since then. Life happened so bigger house needed etc. But it's just not possible to save unless high earner and lower rent. In my area a mortgage for similar property would be about 1400 a month. Which I think is good. But unfortunately we wouldn't get a mortgage this size. As even though we pay the rent. Based on our income we would only qualify for about 200k. Yet we can afford this rent. But they never take that into consideration. I don't understand how it works! And can't save anyway. I am now save so that I have enough for a deposit and a few months rent should there be an emergency and we need to move. But if that happens we will have no savings again. I out a But aside a mo th but only recently been able to do it. It's still not enough though but better than nothing

I save in premium bonds as we know we won't be able to get a mortgage so no point doing an isa. At least there's a miniscule chance of having a win! However unlikely.

I don't see why stamp duty for second homes/holiday homes can't be 10%. And use the money to build new places.
And why should children of locals be forced into distant new builds because all the central older houses have been flogged off to airbnb owners?