Foo Forum

I'll wager that house prices were not 8.6 times average earnings and that banks were not offering trans-generational mortgages.

Houses are a most unusual commodity in that they are the one thing that, even when bought second or third hand, pretty much everyone has to buy on credit.

Thus when demand starts to fall, because people can't borrow as much as they need, and this threatens to bring property prices back to an affordable level, all mortgage lenders have to do is find ways to extend more credit than they have to date and thousands of prospective buyers are once again in a position to generate demand.

This is what we've been seeing over the last couple of years: the explosion of interest-only mortgages, mortgages shared between friends, favourable rates for buy-to-letters etc.

Some people fell for the trap - they thought that if they didn't buy (even when they were asked to pay a princely sum for a wretched dwelling) then prices would keep going up and things would reach a stage where they would never be able to afford their own home.

Sadly, if they had been less dazzled by what the mortgage lenders were saying, they would have realised that if they didn't buy and lots of other people in a similar position didn't either, prices would not keep going up. In fact they would come down.

There aren't too many first-time-buyers left who think that they will have to buy quickly or else they will be priced out of the market.

In fact, it's going to be something of a waiting game from now on.

Who can wait the longest?

The seller who has to move because they are emigrating or being transferred to a new work location or who needs a bigger house because they are starting a family or because they are retiring and want to downsize?

Please describe what your first hovel was like? Was it a single room (bedsit, studio flat) with not even enough room for normal furniture? That is what I mean by hovel. I'm guessing you think I mean an old house or flat which needs a bit of TLC. I do not expect a mansion, but I do expect somewhere I can have a decent life.

If you cant afford to buy a decent property why not rent one or share one? Why must everyone own thier own property?

Why so? Are you a homeowner? If so, what did you buy first?

Almost all the people I know under 40 are all renting and sharing. (I can think of only two couples who are exceptions to this).

That's everyone I know up to the age of 40 except for four people who are renting and sharing. Everyone.

It's not because we can't afford to buy decent properties. It's because we can't afford to buy rubbish properties either. We can't afford to buy anything. (And I would suggest that, on average, university-educated professionals - as most of my friends are - see a higher annual income than most of the rest of the working population - so if we can't, most other workers definitely can't, whatever lies the mortgage lenders have fed them).

The only option for the last few years to anyone on an annual income resembling anything normal has been to club together with at least one other person and to mortgage themselves up to the hilt so they will have monthly repayments bordering on constant pain for the first 5-10 years of their mortgage. (And significant problems if either one ever gets made redundant).