Are house prices in the UK beyond the limits of most first time buyers?

Question

I feel sorry for first time buyers trying to buy this first house in the Uk today,i bought mine outright in 1997 for £52000 (it a 3 bed semi) it now worth £165000 .
What can be done to make house prices more affordable to first time buyers?

Answer 1

I also feel very sorry for first time buyers. I live in a village in the Yorkshire Dales and about half the cottages here are holiday cottages. They stand empty for 70% of the year. The young people round here have no chance of getting on the ladder. The local authority keeps talking about building affordable housing. We'll wait and see

Answer 2

I think house prices are well beyond the limits of first time buyers. I know that when I decide to swap renting for a place of my own, I would not feel comfortable borrowing 5, 6 or even 7 times my annual salary. Have to say that with the availabilty, globally, of the internet I would personally consider going abroad - supporting an economy which is seemingly more in need of help.

As for what can be done about it, I think tighter controls on second house buyers could work. Schemes like having the government buy half the house are not attractive propositions IMHO.

Answer 3

Defiantly! Our first house was 98000.00 We had to find a 10% deposit so our mortgage was 88000.00. The mortgage company then charged us 8%interest on that so we were paying 700.00 on an interest only mortgage for 88000.00! Criminal. Then we decided we couldn't afford to stay there any longer than a year so they charged us 7500.00 in redemption penalties. The house we are in now is worth more but there was literally nothing else we liked in our price range so my mom and dad had to come in with us on our mortgage so we could buy this house. This is an increasingly common situation for first time buyers. There was talk about the Government subsidising houses built specifically for first time buyers which would be a good start to solving the problem.

Answer 4

It is just beyond many people for a first time buyers, only possible with two people earning good money, otherwise forget it.

Prices within reason should not be allowed to rise at such a rate, why can't they rise with inflation, 2/3 percent a year? Should that not be capped at rate of inflation each year or maybe just above it? Perhaps for a decided period of time house prices should be partially frozen to let people catch up? Tax breaks for first time only buyers? New affordable housing, strictly just for first time buyers with sensible return values over a longer period of time than the mainstream housing market? Everybody can't be kept happy, but surely something should be done to make it a bit fairer for first time buyers?

Answer 5

Prices, of course, are grossly inflated, but we could still get a severe correction, and that wouldn't be a bad thing. House price inflation has been unprecedented in recent years, mainly driven by a low interest rate policy, and endless amounts of available mortgage funds from the far east, together with fearless, if not reckless, borrowing. House prices now represent an asset bubble, but have served this Government well by allowing people to borrow and spend on consumer goods, giving the impression that all is well with the economy.

We should remember that houses are not productive assets, and are a poor home for this scale of lending, when it is clearly leading to over valuations.

The Government could have continued to operate a low interest rate policy for the wider economy, if it considered that the right thing to do. However, what it also needed to recognise was that this would create runaway house price inflation. This could have been dealt with by legislating to control the lending multiples that lenders were allowed to give to each borrower. This has been done in the past. The mistake they made, was in trying to use interest rate policy to control two disparate things, which, in fact, needed seperate control measures. By having to keep rates low for the wider economy, they created a by product, house price inflation.

So, the horse as bolted, and it would now be inappropriate to control lending multiples, as it would cause an immediate, and massive crash. They will have to raise interest rates, because this seems to be the only available option. The only other thing that could control prices, and it is certainly possible, is an imminent recession.

Answer 6

Same thing here in USA wages/income do NOT compensate for mortgages! The scam undermined by corporations over the past few years was to get the housing market to inflate the prices by any means "Sucker" buyers into paying to much. Put an end to home ownership & create a cycle of people coming and going. Few survive many forclose with bankruptcy! Mortgage companies end up with the property to victimize once again the next sucker with a high enough credit score! Fleecing & Victimizing people as a statistic and making a numbers game out of it benifiting corporations! By the way your home does not yeild $165k until you complete the closing procedure & actually bag that profit! Claiming & getting the speculation NOT the same!

Answer 7

ist time buyers are now in a no win situation, there is just no way that a single person can afford a house & even as a couple its a struggle. One thing that is causing this is the problems with pensions etc which in many cases are not giving the desired results and people are buying property as a safer option & everyone is suddenly a property developer, thus creating a shortage of lower end affordable property. I bought my first house in 1972for £3500 ( which was a struggle, believe me! ) and sold it about 2 years later for £5100 ...an increase of nearly 50% so even way back then the increase was dramatic

Answer 8

Most definitely.

When my ex and I bought our house in Cardiff in 1996 we paid £52,000 for it (a 2 bed semi). We split up a few years later, I was given a small sum (my ex remained in the house and remortaged to buy me out) and I set up home with my new partner - we rented as we couldn't get a mortgage at the time and I hadn't got anywhere near enough from my divorce settlement to pay cash for a place!!!

We're on a very low income and when we decided to buy a home last year we were shocked to find that small houses like the one I'd had with my ex were now going for about £150,000!! Way out of our price range as the most we could borrow on our imcome was £80,000.

Th eonly way we could buy was to move up into the ex-mining villages of the South Wales Valleys - (ie the places that people usually want to move OUT of) - there we found a 3 bed victorian terrace (a bit dilapidated) for £72,000. People always ask us why we moved out of Cardiff into the Valleys likes its a mad thing to do. We just say "Well have you seen house prices in Cardiff????!!" We have to spend a fortune commuting into Cardiff for work and social events but its the only way we can be free of being ripped off by Private landlords (rent is way more than mortgage payments)

Five years ago these houses in the valleys were going for £10,000!! If they were still at that rate I could have paid cash for that!!! We had to get a mortgage to pay £72,000 though and we nearly lost the house through repossession last year.

And for the person who says "make do with the good ole council" - have you tried gettign a council house lately!? you'd have more chance of "a hand job off the Pope" to use my other half's fave, crude expression!! The Council told us we would be classes as "intentionally homeless" if we lost our home to repossession and left homeless with a newborn baby!!!

At some point people are going to have to lower house prices because people are going to stop buying. At this rate people will not be able to afford these huge prices, the housing market will begin to stagnate and people will be forced to drop prices.

Answer 9

It sounds like sheer insanity to erect a development on suited of a public sewer, yet stranger issues have got here approximately. in spite of the undeniable fact that, the loan lender is familiar with there's no difficulty in spite of the undeniable fact that it needs you to insure against it - a guard. The coverage organisation is familiar with there's no difficulty it extremely is why the cost is minimum - all earnings. Pay the single-off cost and finished the deal - and all of us's happy - even me and that i do no longer stay there.

Answer 10

How about we all hatch a plan to rob a bank, or just imbezzle (Love that word lol) a shed load of dosh and buy a nice big ole house.

I'm making do with the good ole council.

When I'm rich from my vain attempts an Entrepreneur lifestyle I'll get back to you all. ;-)