Housing Crisis What Crisis ?

[Butts]

Is the purported Housing Crisis largely a metropolitan problem that has been exaggerated to encompass the whole of the UK rather than London and the South East and a few other hotspots it actually exists within.

Are there areas of the Country where people in modestly paid occupations are still able to enter the market?

I believe the answer is yes based on anecdotal evidence from my own son.

He lives in the West Midlands with my ex-wife and has just purchased 2 Bedroom Flat with a separate Garage in Dudley for £76000. He works as a Postman earning around £10 per hour. He is only contracted to work 32 hours per week but managed to get a Mortgage from a mainstream lender which took account of the regular overtime he works,and at a reasonable rate.

He saved the deposit from his own income and utilised the Government Scheme where they paid a 25% Bonus to add to the amount he amassed. No bank of Mum and Dad required.

There must be thousands of other people in various areas of the UK doing the same. Property is still affordable in vast swathes of the Country. Why do we only ever hear about the oppressed prospective householders in London and the SE ?

Is the Housing Crisis a myth in most parts of the UK ?

 

[Busaholic]

Is the purported Housing Crisis largely a metropolitan problem that has been exaggerated to encompass the whole of the UK rather than London and the South East and a few other hotspots it actually exists within.

Are there areas of the Country where people in modestly paid occupations are still able to enter the market?

I believe the answer is yes based on anecdotal evidence from my own son.

He lives in the West Midlands with my ex-wife and has just purchased 2 Bedroom Flat with a separate Garage in Dudley for £76000. He works as a Postman earning around £10 per hour. He is only contracted to work 32 hours per week but managed to get a Mortgage from a mainstream lender which took account of the regular overtime he works,and at a reasonable rate.

He saved the deposit from his own income and utilised the Government Scheme where they paid a 25% Bonus to add to the amount he amassed. No bank of Mum and Dad required.

There must be thousands of other people in various areas of the UK doing the same. Property is still affordable in vast swathes of the Country. Why do we only ever hear about the oppressed prospective householders in London and the SE ?

Is the Housing Crisis a myth in most parts of the UK ?

Not in Cornwall, with the lowest wages in England overall but high house prices, partly (some say mainly) because of second-homers.

 

[Butts]

Not in Cornwall, with the lowest wages in England overall but high house prices, partly (some say mainly) because of second-homers.

Well in 2 seconds I found a flat for sale in Launceston for £59,000, presumeably there are people earning 20K there ?

 

[transmanche]

He saved the deposit from his own income and utilised the Government Scheme where they paid a 25% Bonus to add to the amount he amassed.

Property is still affordable in vast swathes of the Country.

It's clearly not 'affordable' if people require a government subsidy in order to be able to purchase a property.

 

[Butts]

It's clearly not 'affordable' if people require a government subsidy in order to be able to purchase a property.

He didn't require it, just a nice bonus. He needed a £3800 deposit which he saved in a year from a modest income.

 

[transmanche]

He didn't require it, just a nice bonus. He needed a £3800 deposit which he saved in a year from a modest income.

So taxpayers are funding the scheme unnecessarily? When the money could be put to better use paying for essential services, rather than throwing cash at people who don't need it?

 

[Busaholic]

Well in 2 seconds I found a flat for sale in Launceston for £59,000, presumeably there are people earning 20K there ?

And there are grade 1 listed mansions for sale for £1 - anyone can find the exceptions that come either with all sorts of conditions attached or are unsaleable for different reasons. In Cornwall there are properties built with Mundic block or are contaminated with radon, on which mortgages are not usually available. The average asking price for family property in mid and west Cornwall is not far short of £300,000.

 

[Butts]

So taxpayers are funding the scheme unnecessarily? When the money could be put to better use paying for essential services, rather than throwing cash at people who don't need it?

That may well be true, but I am trying to establish whether there are other areas of the UK where people on modest incomes are still able to enter the housing market not the merits of help schemes.
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And there are grade 1 listed mansions for sale for £1 - anyone can find the exceptions that come either with all sorts of conditions attached or are unsaleable for different reasons. In Cornwall there are properties built with Mundic block or are contaminated with radon, on which mortgages are not usually available. The average asking price for family property in mid and west Cornwall is not far short of £300,000.

This flat was in the Town Centre, I am not doubting the average price but just whether opportunities exist at the bottom of the ladder.

 

[DarloRich]

That may well be true, but I am trying to establish whether there are other areas of the UK where people on modest incomes are still able to enter the housing market not the merits of help schemes.

Of course there are. The North east is one example.You can pick up a 2 bed terrace in a rougher part of Darlo for around £45k and £60k in a less rough area. You are looking at £35k in a rough area of Middlesbrough. The problem is the lack of employment to fund the purchase.

My house in Darlington was almost identical to my house in MK ( a 2 bed 19th century terrace). The one in MK was over 3 times as much to buy. This was the only one I could afford and it requires a full refurb. I can only afford it by being very frugal on spending and god forbid I should be out of work again! The house next door went for 5 times what my house in Darlington went for.

It is very difficult for someone to get onto the ladder here. Very difficult indeed without shared ownership or help to buy. I am not convinced that these schemes, in the long run, will be beneficial to the people forced into them. I bought my house without such schemes and it took 5 years to save up.

I would also point out the imbalance in housing types in the more popular areas:

In the former industrial areas in the north and midlands are line after kind of small terraced houses that are ideal for the first time buyer and for those starting out with families.In the more popular areas there tends to be larger houses for the more mature family. The starter home where i am is generally a small modern flat with an outrageous service charge and ground rent.

Rental properties are also commensurately higher with most people taking not a rent house but a rented room within a house. A room costs between £300 and £500 pcm while renting a house is about £1k

 

[Butts]

Of course there are. The North east is one example.You can pick up a 2 bed terrace in a rougher part of Darlo for around £45k and £60k in a less rough area. You are looking at £35k in a rough area of Middlesbrough. The problem is the lack of employment to fund the purchase.

My house in Darlington was almost identical to my house in MK ( a 2 bed 19th century terrace). The one in MK was over 3 times as much to buy. This was the only one I could afford and it requires a full refurb. I can only afford it by being very frugal on spending and god forbid I should be out of work again! The house next door went for 5 times what my house in Darlington went for.

It is very difficult for someone to get onto the ladder here. Very difficult indeed without shared ownership or help to buy. I am not convinced that these schemes, in the long run, will be beneficial to the people forced into them. I bought my house without such schemes and it took 5 years to save up.

So if you live in Darlington and have a job even on a modest income a respectable property is quite within your scope. In fact much more feasible than in your current location. That is my whole point notwithstanding the higher priced areas , vast areas of the UK are still accessible to first time buyers. In Darlington I suspect the average wage is over 20k per year for the majority who are in employment. Indeed anyone with a half decent job can enjoy a far higher standard of living than those in the South.

 

[DarloRich]

So if you live in Darlington and have a job even on a modest income a respectable property is quite within your scope. In fact much more feasible than in your current location. That is my whole point notwithstanding the higher priced areas , vast areas of the UK are still accessible to first time buyers. In Darlington I suspect the average wage is over 20k per year for the majority who are in employment. Indeed anyone with a half decent job can enjoy a far higher standard of living than those in the South.

maybe - although professional jobs are hard to come by and wages are lower. Those areas quoted are the rough end of town and I imagine many are buy to let investments rather than first time buyers. Prices have risen and rental costs mean saving is difficult. There also wont be much equity to transfer to your next house.

Obtaining the deposit and mortgage is the difficult part. The average UK salary is around £27/28k. The average weekly salary in Middlesbrough in 2014 was £430 per week. There will still be many ( a majority) for whom buying a house is an unrealistic expectation.

 

[Butts]

maybe - although professional jobs are hard to come by and wages are lower. Those areas quoted are the rough end of town and I imagine many are buy to let investments rather than first time buyers. Prices have risen and rental costs mean saving is difficult. There also wont be much equity to transfer to your next house.

Obtaining the deposit and mortgage is the difficult part. The average UK salary is around £27/28k. The average weekly salary in Middlesbrough in 2014 was £430 per week. There will still be many ( a majority) for whom buying a house is an unrealistic expectation.

You said yourself that a terrace property in a reasonable area could be had for 60K which is less than my son paid for his flat.

Professional job's are not part of the equation here - he is a Postman who presumeably get paid the same in Darlington as Dudley. He had no problem getting a Mortgage at a fair rate which took account of his overtime.

Don't get me wrong I'm not saying it's a realistic proposition in some areas of the UK but clearly must be in quite a few parts.

 

[Iskra]

I think the hardest part is getting a deposit together if you get stuck renting. Renting becomes something of a vicious cycle.

Just bought my first house: new build 3 bedroom semi in a reasonable area in Sheffield- £127,000. The mortgage payment is significantly cheaper than renting a one-bedroom flat was in Carnforth (because it's close to the lake district).

It's yet another postcode lottery.

 

[TheKnightWho]

I don't think I'll buy before I'm 30.

The average house price in Oxford is £400,000.

 

[deltic]

Outside London and the south east average average house price to earning ratios have been virtually unchanged since 2007 - although they remain above the long term average. Coupled with extremely low interest rates it means that housing is as affordable as it has been for some time.

London house prices on the other hand have gone through the roof and are completely unaffordable - average house to earning ratios being higher than they have ever been at around 10 times earnings.

 

[me123]

I think there is very much a housing crisis in London and the South East, but I'd agree that it's not as pronounced anywhere else.

At present I'm paying £525pcm for sole occupancy of a two bed house. Yet, when I look for a property in London, the cheapest flat I can find is £725 for one bed (and these are quite small and dingy apartments). To get the kind of place that I've got at the moment, you're looking at closer to £1000 (and that's in the outskirts of London - go more central and there are two bed flats going for up to £54,167pcm!)

Lots of places where I've been have been quite cheap areas to buy and let, and I can honestly say that there's not been a problem. I've looked at quite a lot of areas outwith London and, whilst there are variations, I wouldn't struggle to find a rental or even buy a flat in most areas - I am on a comfortable salary, but I'm not "rich". My biggest barrier to buying at the moment is my work moving me around the country at the drop of a hat.

I am single, so I think a lot of couples (even where both are on a lower salary than I am), would manage in a lot of areas to get onto the housing ladder. I wouldn't say that the housing crisis is a myth - prices have gone up throughout the country. But it's certainly not a really a major problem in lots of places, whereas it is quite severe in London and the South East.

 

[DynamicSpirit]

There are indeed certain areas where house prices are in the range that would for many people be considered affordable. Try this search (Rightmove search for houses in Burnley under £50K). I don't know the area so I can't vouch for how attractive or not the place is or how much work the houses need, but this search shows a sizable number of houses at or below around £30K.

Of course, that is of no help to you if your job/family/etc. is in London or Southampton or Milton Keynes or anywhere outside a rather small part of the NorthWest.

 

[Iskra]

There are indeed certain areas where house prices are in the range that would for many people be considered affordable. Try this search (Rightmove search for houses in Burnley under £50K). I don't know the area so I can't vouch for how attractive or not the place is or how much work the houses need, but this search shows a sizable number of houses at or below around £30K.

Of course, that is of no help to you if your job/family/etc. is in London or Southampton or Milton Keynes or anywhere outside a rather small part of the NorthWest.

I don't wish to offend any forum members, so all I'll say is; Houses in Burnley are that cheap for a reason.

 

[DarloRich]

I don't wish to offend any forum members, so all I'll say is; Houses in Burnley are that cheap for a reason.

exactly - same as Middlesbrough or Hartlepooh or Sunderland etc. Have a think why they are so cheap As you said previously the deposit while also renting is the main obstacle. Gone are the days of minimal deposit.
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I don't think I'll buy before I'm 30.

The average house price in Oxford is £400,000.

you will be older than 30. The average age of an FTB is now 35. if you are in Oxford is will simply say you only need one kidney!

 

[Johnuk123]

I don't wish to offend any forum members, so all I'll say is; Houses in Burnley are that cheap for a reason.

I don't see why stating the obvious should offend anybody, Burnley is a depressing place which you wouldn't choose to live in unless it was at gun point.

 

[DarloRich]

I don't see why stating the obvious should offend anybody, Burnley is a depressing place which you wouldn't choose to live in unless it was at gun point.

I see you have never been to Hartlepooh. Burnley would be like Sandbanks in comparison!

 

[Johnuk123]

I see you have never been to Hartlepooh. Burnley would be like Sandbanks in comparison!

Oh yes I have had the unfortunate experience of swiftly passing through the place and you're probably right in your assumption.

 

[Blamethrower]

Clearly no-one has ever owned and lived in a house in Morley

So my personal view is that there is no housing crisis whatsoever. If there was there would be millions sleeping on the streets, in shop windows etc etc. The fact is that a "crisis" sells newspapers and everyone in this country loves a good moan about housing.

Look at the people who complain about a housing crisis - mostly white, middle-class homeowners. The same people who complain most vehemently about racism (where it doesn't exist).

Stop believing everything you read and ignore the rich, white, middle-class numpties who are pretending to care about the down-trodden to make up for the fact they've shat on so many in order to make their fortune.

And relax

 

[DarloRich]

May I assume you already own a house and are not 21 and fresh out of university. For those people owning a house is increasingly, perhaps impossibly, difficult, no matter where you live. Saving for the deposit required to obtain your own mortgage whilst paying anothers mortgage via your rent is rather difficult and maddening!

I would also debate that is a crisis of homelessness in the UK - homeless numbers are rising

 

[Butts]

May I assume you already own a house and are not 21 and fresh out of university. For those people owning a house is increasingly, perhaps impossibly, difficult, no matter where you live. Saving for the deposit required to obtain your own mortgage whilst paying anothers mortgage via your rent is rather difficult and maddening!

I would also debate that is a crisis of homelessness in the UK - homeless numbers are rising

The key to being young and owning a property is living at home while you save the deposit (just like people used to decades ago). Why do you keep bringing graduates into the equation ? Anyone in a half decent job can afford a house in vast swathes of the Country.

 

[NSEFAN]

May I assume you already own a house and are not 21 and fresh out of university. For those people owning a house is increasingly, perhaps impossibly, difficult, no matter where you live. Saving for the deposit required to obtain your own mortgage whilst paying anothers mortgage via your rent is rather difficult and maddening!

Indeed. It is even more infuriating that a mortgage can often be cheaper than renting, but only if you can magic up tens of thousands of pounds for the deposit, and already have about 40 years of immaculate credit history to satisfy the bank that you'll be able to pay up. :roll:

 

[WestCoast]

The key to being young and owning a property is living at home while you save the deposit (just like people used to decades ago). Why do you keep bringing graduates into the equation ? Anyone in a half decent job can afford a house in vast swathes of the Country.

That assumes that as a graduate you can get appropriate employment within a reasonable distance of home, not easy if you live in certain places as already discussed. I couldn't and therefore have to rent elsewhere. The forces of metropolisation at work really, pulling people to the cities or wealthier regions for work.

 

[DarloRich]

The key to being young and owning a property is living at home while you save the deposit (just like people used to decades ago). Why do you keep bringing graduates into the equation ? Anyone in a half decent job can afford a house in vast swathes of the Country.

and you keep missing the essential point - there are few "decent" jobs in many areas of the country! Even then the UK average wage is around £27k. Taking living costs into account ( especially with a family to support) you aren't left with much change to put towards your deposit.

With jobs in many areas being less secure than previously there are also problems in proving to a mortgage company you have the earning capacity, history and potential to service the debt. Coupled with the more detailed questioning on your existing personal debt ( student loans, credit, how many haircuts you have a year etc) & stress testing obtaining mortgage finance is harder than ever. Loans are now limited, generally, to 3 times salary with a 20% deposit.

Living at home is also becoming more difficult as parents want to down size to release the equity in thier homes to act as thier pension. That also assumes there is a "decent" job just down the road. More likely you will have to move to where the work is. I mention graduates as they are the people most likely to want to buy for the first time, hopefully obtain of one of the "decent" jobs you refer to and have the ability to save. Once you are on the ladder ( assuming you keep your job) you are part of the system and outside of this "crisis".

I do wonder if there is a disconnect between the older posters who have already bought and the realities of life for many younger people trying to buy.

 

[Domh245]

For those insisting that there isn't a crisis, what do you make of this news story?

One in three families are a month's pay from losing homes, says study

Shelter finds that 37% of working families in England could not cover housing costs for more than a month in event of job loss

 

[Dave1987]

I would suggest there is a massive housing crisis in this country. We had warm words from Mr Cameron when he was PM saying how his Government was going to build more houses to bring down prices. But of course this never materialised. I think as a country we built around a third of what is actually required just to keep up with the needs of the country, let alone getting a surplus to bring down prices. If prices stay as they are with demand way outstripping and people mortgaging themselves to within an inch of ruin then another 2008 crash is almost inevitable. Most young people cannot even dream of owning their own home in their 20's. Government schemes to boost people deposits, guarantee mortgages and offer part ownership are all good and well but they don't address the problem that prices are so high that most just cannot afford. The only way to lower prices is to ensure supply outstrips demand. And I do not believe the current Government has any intention on letting house prices come down so doubt they will do much to increase building apart from warm words.