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Tuesday, 12 November, 2002, 12:11 GMT
Have you been priced out of the housing market?
The price of an average property has risen by over £15,000 in the last year, new figures have shown.
In the biggest increase in six years, according to the Land Registry survey, house prices rose 13.5% in the year to July. The average cost of a home in England and Wales jumped from £117,398 a year ago to the current price of £133,247. The Land Registry's figures provide the most comprehensive temperature check of current house prices. The survey found that prices rose in all major regions, but the sharpest increases occurred in East Anglia and the South West of England. Have you been priced out of the housing market? Can property prices continue to rise? What hope is there for first time buyers? How sharply have you seen property prices rise in your area? This debate is now closed. Read a selection of your comments below.
Your reaction
Here is an idea for all first time buyers on this
forum: All agree not to buy a property for 6 months. If we all do it then prices will drop pretty smartish.
All in favour say 'Aye'.
Brian, Edinburgh Scotland
I think the government should be deeply concerned by some of the comments made here by educated young professionals who see emigration as their only viable option.
I would add that single people are even more disadvantaged, many of whom cannot possibly afford to buy without a partner's second income.
It's not called a "property ladder" for nothing, so why do so many people expect to be able to skip the first rung? I started with a small 1 bed flat, and 3 years later I was earning more and had equity, and could afford a two bed house. People are too impatient!
I bought a house a year ago and it is already worth £30k more than I paid for it. I solved the problem of where to live by looking outside Reading - now I'm three miles down the road and the prices are the same for a two-bed semi as for a 1-bed flat. Three miles is nothing on a bicycle!
Steve B, Scotland
Just wait and see. It is only a matter of time before the bubble bursts. Those who can't understand it and overstretch themselves now deserve to regret it later.
Whilst the fundamentals of the housing market are still good (greater demand, shortage of supply), price growth in the double digits is simply not sustainable. Wages just can't keep track. Like all things, the market will adjust itself at some point - just pray you're not one of the unlucky ones to buy a property the day before the slump.
If you feel you have been priced out of the house market, count yourself lucky. This is a property bubble, and people who buy today will live to regret it.
Younger voters will remember your shoddy treatment of those trying to become first time buyers, Gordon!
This ought to be an excellent time for private family home construction. Instead of buying an existing house on this ridiculously overheated market, ask your local council to sell you some land, find an architect and a builder and get within a year a modern house that matches your exact specifications for far less than anything available on the market. All the government needs to do is to support private house construction with some guidance for first-time home builders and fast planning permissions.
Graham, UK
I live in a small university city in north Wales. There aren't many high paid jobs around here - average wage is £10k-12k. A two-up, two-down terraced house in my area has just sold for £95k within two days of going on the market! This is because rich parents of students are snapping up every house that goes on the market and cramming five or six students in them! The locals are being pushed out at every opportunity and there will be a real crisis if this doesn't get sorted soon!
I pay over £600 per month on rent. However, a bank would not let me have a mortgage with the same £600 repayments, which would be necessary to afford current prices. So, I am forced to rent. It's an undeniable and sad fact, that this and forthcoming generations will be dependent upon parental inheritance before they can own a home.
Jason, London, UK
Jason, that easy for you to say. Don't you think the reason why young first time buyers would like to by a two bedroom house/flat, maybe they thinking about the future in raising a family.
Elly, England
No-one seems to mention that while population numbers remain relatively static, one of the key drivers of demand for the housing market is family break-up. What is being done to address this issue?
I am old enough to know that history repeats itself and that if something goes up too fast or too high it is bound to come down with a crash. May I offer an alternative? Cyprus! For 150k you'll get a four-bed home with wood kitchen, granite floors and marble bathrooms, close to all amenities and the beach with the added bonus of constant sunshine radiating happiness! Bliss.
Not only have I been priced out of the housing market, I have also been denied the possibility of having a family as I cannot afford a place big enough to have children in.
I am lucky enough to live in the north of England, earn a good wage and was able to comfortably afford to buy a five-bed roomed barn conversion this year. I have great sympathy with people who are struggling to afford to buy the property they would like but could we drop the "fat cat" abuse which seems to be targeted at anyone who happens to find themselves in a comfortable financial situation?
Darrel, UK
The current housing situation is absolutely ridiculous. I am renting a one bedroom flat in Devon for £425 per month and it's nothing special. However, my salary will not allow me to spend the same amount on a mortgage because I do not earn enough according to the banks! If the current market does not rectify itself and start cooling, then I will be looking to move abroad in the next few years where the housing is cheaper and this country will lose a tax paying worker.
The situation is crazy but it is by no means clear that there will be a collapse. The government needs to introduce rent controls, encourage the compulsory purchase and renovation of unused properties, remove the right to buy (or extend it to the private sector), punitively tax income received from renting out properties that the landlord does not live in and raise stamp duty and capital gains tax for second homes.
Andy, Nottinghamshire, UK
My husband and I bought our two-bed house three years ago, just before the prices went completely mad. As our house is quite small I often wish we could afford something bigger. After reading some of the sad stories on this page I have been given food for thought. Rather than want more than I've got I will now feel that I am lucky for having a home of my own at all - whatever the size!
Kate, UK
Let's look at this another way. It's a great opportunity to regenerate the north and the Midlands. The problem up to now is uneven distribution. With investment in better transport links (i.e. rail), all the country can become prosperous, not just the south east. Companies and skilled people will have to spread out more and use all the country, not just the easy option of London and the M4 corridor. Either that or they pay for it in wages to their employees and suffer a lower standard of living
I was very very lucky as I bought my house just over four years ago. I bought a year or two earlier than I had intended as I could see the prices beginning to rise again. If I'd waited I'd never have been able to afford it. What I want now is for the market to crash so the gap between my home and the next rung of the ladder is small enough for me to climb up.
Andy, UK
I panicked in 1988 and bought possibly the most expensive three-bed terrace in Norwich. The market tanked in 1989 and I was looking at a £20k loss. I should complete on the sale of this house next week showing a £30k profit. It's time to sell not to buy. I am not getting burnt twice.
Parents pay off their own mortgages and then take out ones for their children. Ask anyone who has recently bought their first house and they will have had financial support from their parents. Just like education, when it comes to housing we are two nations, people with solvent generous parents and people without. It costs parents nothing to guarantee a child's mortgage so house prices will escalate without limit.
I don't know if the foregoing is a safe approach in all circumstances - but for those with a reliable income who still can't afford to climb on the property ladder, it might be worth exploring.
I was lucky, my grandparents foresaw this house price problem 10 years ago and left their houses to their grandchildren rather than their children. This has allowed my siblings and I to get into the housing market. The passing on of family houses is going to be the only way in which young people can get on the housing market. Parents and grandparents are going to have to help out their children.
The number of DIY and television programs that teach you how to be a full time property speculator must be having some kind of impact on house prices. Television telling you how to get rich through property will do nothing to promote sensible house prices. We're just going to sit tight, wait and hope that prices get more sensible.
I am afraid that we are going to see more and more of the skilled individuals and university graduates in this country leaving to live in a place where it is possible to buy a house for the first time. I am 25 and a skilled technology worker, but I will be leaving to move to Canada, where though the pay is slightly lower, the quality of living is much higher, and I will be able to afford a 3 or 4 bedroom house. This country will drive out its future, and find itself in 20 years time a country of retirees with no working population.
Chris Larkin, UK
In many European countries buying a property is not a major issue. Renting is the norm for the majority. The landlord and tenant take the responsibly of renting far more seriously than in England. The laws are much better defined and administration of the deposit etc. far better organised than imaginable by the UK's standards. Renting provides several advantages; moving location is dependant on a notice period, no maintenance and lower rental payments than mortgage payments. Of course with the difference saved you can make investments in other things rather than in bricks.
I have recently bought a 2 bedroom flat on the outskirts of London for £190,000. The monthly mortgage payments themselves are not a concern, however raising the deposit was a challenge. Without the help from mine and my wife's parents to raise the necessary funds, it would have been impossible. With the cost of living in this country being so high and the government heavily taxing middle income individuals it is impossible to save. We earn £80,000 between us and it is still a struggle, God knows how difficult it would be for those earning less!!
Thomas Sheridan, UK
Thirty years ago my parents were able to buy, on my Dad's salary as a schoolteacher, a detached house in north-west London. I am a well-paid lawyer and I can afford a small flat in a not-totally-grotty part of London (no separate kitchen though and a tiny bathroom). Well, in fact I can't because someone came along and outbid me in cash. Inherit my parents' house you say? Well, the government will help themselves to half of it and call it Inheritance Tax plus it may all disappear first on nursing bills since the "cradle to grave" national insurance won't cover them despite all those contributions over the years. All in all, a pretty tricky snooker to get out of.
Perhaps some people should consider moving further north, where I live the average house price is just 60k and for 250k you can get a luxury 5 bed roomed detached property in a suburban village with it's own grounds etc. There are also plenty of jobs and we are crying out to get new people up here to live...
I am an average Londoner on an average salary (£18,000 pa). There is no way I nor people of my age (30) can afford a mortgage in London without lying through our back teeth. So that is what we do - and when the redundancies come, and I believe they are on their way, then it'll be just like 1993 all over again - anyone for a cheap semi?
Richard, UK
Pretty soon, South East England will be devoid of public service workers, as no one will be able to afford to live there. How long will this ridiculous scenario be allowed to go on?
The present boom is largely due to everyone's lack of confidence in private pensions. We, and many of my colleagues in our 50s, have recently bought second homes (which we are not renting out) entirely to provide future retirement income, rather than throwing more money away in pension schemes.
The government needs to penalise through taxation people who own second, third, etc properties.
With not enough homes to go round, the pressure is going to be on the state (i.e. - us, the taxpayers) to house those unable to house themselves, while the fat cats keep getting richer.
Yes, we're locked out - not just now, but possibly
forever. Last year, buying a house looked like a scary challenge. Now, it's totally off the agenda. We're not poor; we're a professional married couple. We're still living with my parents, while we work hard to get more qualifications, in order to be able to leave this absurd country and seek out a far higher quality of life elsewhere.
Ian C, UK
My partner and I are in our 30s, both work in medical research. Between us we earn £50K, but in the town where we live, there isn't a single property below £200K (not counting one-bed flats for £175K). We have not been able to get on the housing ladder before now due to work commitments abroad. With an average wage something will have to give at some point. We cannot go on like this - there must be many more hard working people out there in the same situation. Stop the wealthy making money out of a basic human requirement - a place to live and call home.
I earn nearly £30K a year in Cambridge, above the average wage. Here you cannot buy anything under £150K, and the situation isn't much better, sometimes worse, in the leafy Cambridgeshire villages. Even if my salary was enough to get a mortgage, I'd be crazy to take one out because a two point rise in interest rates would wipe me out. Rents are just as bad, with landlords constantly raising rents in this area. What really bothers me is my old age. I cannot afford to put the required percentage of my income into a pension, neither can I get on the property ladder; the two things needed to secure a decent old age. I see my only hope as emigration.
I hope that house prices do continue to rise, so that when they inevitably crash the greedy property sellers can deal with their consequences. The situation is ridiculous, especially as a young person. The average student is already £10,000 in debt (on average) after graduating, and now cannot afford to get a mortgage. Something needs to be done.
Yes, absolutely. It's sad to say it, but my only chance of getting on the housing ladder is waiting to inherit the family home as anything that would have been deemed affordable has been snapped up by somebody else to rent as a second home. The government needs to put more focus on homes for young professionals - new houses built now are typically 3-4 bedroom luxury ones that have absolutely no relevance to my lifestyle.
Scotland too is affected by this over-pricing. Parts of Edinburgh, because of the Parliament, and Glasgow are off-limits to all but the biggest earners. People are over-stretching themselves to get on the property ladder, and it's just not sustainable. Have we forgotten the lessons of the 1980s?
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