From yesterday's Evening Standard:
Ninety per cent of couples under 40 with children in London cannot afford to get on the housing ladder*, it emerged today. Analysis by a government housing advisory body found that as an average figure across the capital only 10 per cent of young families could afford to buy a suitable home... The figure of 10 per cent in London compares with 21.4 per cent in the South-West and 23.8 per cent for the South-East...
Typical first-time buyers have seen average deposits soar from 16 per cent of annual income in 2000 to 64 per cent last year. In addition, affordability has got worse as mortgage lenders reduced the loan-to-value ratios — the amount borrowed in relation to the value of a property.
The study by the National Housing and Planning Advice Unit concludes: “During the past decade there has been a deterioration in the affordability of home ownership.”
I wonder, is this enough for the Home-Owner-Ists, or would they like prices to rise the stage where only five per cent can afford a home? What is their end-game? At least this puts paid to the idea that Home-Owner-Ism is about 'encouraging homeownership', as it quite clearly isn't - unlike my policies which clearly are.
* The irony being of course that most people, by definition, can afford to rent. So what the Home-Owner-Ists appear to want is a situation where only the wealthiest can afford to buy properties, but will then get a miserable rental yield from it. What's the point of that then?
Put On Your Big Boy Pants, Maybe?
4 hours ago
4 comments:
I love the way they say, "In addition, affordability has got worse as mortgage lenders reduced the loan-to-value ratios"
It's not "in addition" at all - it's the reason for the increase in deposits!
Since there's a shortage of homes (in the sense that more people want to buy them than there are homes available) prices can be expected to rise in line with "affordability" which basically means household incomes and interest rates.
Which means the Home-Owner-Ists are likely to be disappointed over the next few years...
AC, that was clumsy wording indeed, but I reproduced it as written.
If your maths is correct (and I believe it is) then prices would have to halve. The question is, do we want a Japan-style twenty year gradual slide or a short sharp crash and then get on with things (like under John Major)?
I wonder, is this enough for the Home-Owner-Ists, or would they like prices to rise the stage where only five per cent can afford a home?I wonder, is this enough for the Home-Owner-Ists, or would they like prices to rise the stage where only five per cent can afford a home?
I suspect there are significant numbers who'd keep cheering it on until no-one could afford a home, at which point the proposals to deal with the situation would be equity loans, shared equity, cheap loans to first time buyers and other similar schemes which attempt to deal with an unaffordable housing market by pumping more money into it, pushing up prices even further.
Sightly different story in the north but then again, there are no jobs and lower pay.
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