Q: Hello. Is there anywhere else in the world where the housing market has been so expensive that nobody can afford to buy? Everyone talks about theoretical FTBs may never get the chance to buy something again, but there is no evidence that this has happened elsewhere in the world? . Just a thought I wander what the final outcome would be (100 years mortgages etc. .) .
FYI: I am a FTB myself, or atleast would like to be!
Renting from the bank, as I/O mortgages are, is perhaps not such a silly idea, we might in the next 25 years get massive wage inflation meaning that that £300k house you bought is now worth £15 in real terms. But as a bank, I would love the idea that you pay me for 25 years, look after my house, do all the maintenance, perhaps upgrade it a bit, at the end of which I get to take it all from you. Ok, I suppose we split the profits. Assuming they've learned from previous mis-selling scandals.
What if, shockingly, your parents don't want you living with them til you're 30?
Or, more to the point, what if you have aspirations beyond minimum wage?
If you drop out of school at 16 you'll find an aweful lot of doors aren't open to you.
The people who ought to be able to afford to buy their own home are surely the people that keep their head down, work hard, go to uni etc? Not the people that leave with GCSEs and stick their name on a council list?
Housing has risen dramatically in price in much of the world over the past 10 years. In Australia and New Zealand, FTBs are being driven out of the market, in France and Spain prices have doubled and in the US prices have risen rapidly (and are now dropping quite quickly too). There was an article in The Economist about a year ago that claimed that house prices in the past few years had doubled or more in markets from Botswana to the Faroe Islands, driven by cheap and available credit.
It's called the interest only mortgage. So when someone tell you that the the property bubble in Japan was so bad they had to introduce 3 generation morgages, tell them that we've already gone past that point!
I want to be able to stay in the same home for longer than 6 months so what choice? We both work so are ineligible for social landlord rental. If we stopped paying the mortgage tomorrow it would be 9 months before evicted, our rolling AST gave us 2 months of tenure. Houses should be homes not investment vehicles and a huge problem is the lack of tenure and security and stake in society young FTBers face.
You may not get the chance to buy, but you may well get the chance to rent the house you would have bought off your local buy-to-let hobby landlord, but only for 6 months and after that he'll switch you to 2 months notice.
People say this but fail to qualify that elsewhere people don't have the choice and especially in continental europe private renting (social housing is impossible in my area unless you have the largest range of problems going) is not substandard – landlords are professional investment companies like pension funds, stuff gets fixed, you can decorate etc, and you have security of TENURE. People are obsessed with owning because if they rent privately it is the only route to tenure longer than 6 months and people want homes and stability.
I think there are lots of examples, contemporary and historical where the distribution of property has meant your average FTB can't buy property and rents. People are housed just can't buy their own. Think tenant workers on victorian estates, mine/factory owners etc. Except now it's amatuer BTL-man rather than t'mill owner.
Relatively our market is income/cost cheap compared to many and credit is loose and cheap.
But it was much much worse than here – at one point the Imperial Palace in the centre of Tokyo was supposedly worth more than all the property in California.
The Palace does have quite big grounds, but not quite that big