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Guardian headline writers – get help, please, soon.

House prices are crumbling – and so is Britain’s faith in property ownership
John Harris

Millions can’t afford to buy and millions more can’t afford their rent. What happened to the dream of decent, affordable homes?

House prices are declining. That’s the solution to the millions can’t afford to buy. You do get this, yes? Prices go down, more people can afford? Every £1k off house prices makes them cheaper? By, umm, £1k?

14 thoughts on “Blimey”

  1. Hmmm.. Dunno about the UK, but over here house prices have, as well, declined. From Insanely Priced to merely Bloody Expensive.

    You’d think that would enable people to afford to buy more, but no… As soon as interest rates stopped being “negative”, the rules for getting mortgages were tightened up to “prevent people from overborrowing”..

    So over here peeps are still in the situation where they are deemed able on base of income to cough up €2100-3000/month in rent, but cannot get a €750-1000/month mortgage because they “do not earn enough”/”do not have enough income stability”…

    The system is rotten as hell in multiple places..

  2. @Grikath

    Anecdatum from UK: since the 2008 crash I’ve never been offered more than 3.5x salary, even at 50% loan-to-value; in the last 12 months this has fallen to 3x.

  3. @Chester

    Yes, system. Mortgages have the heavy hand of government regulation all over them; rental affordability is entirely at the landlord’s risk (in that it’s pretty much impossible to kick someone out for not paying rent, so you make darn sure they can)

  4. On Moneybox at the weekend was the classic line:
    Rental demand is still high despite high rents.

  5. The Meissen Bison

    Prices go down, more people can afford?

    That only holds for cash buyers; for everyone else you need to allow for the increased cost and uncertain availability of credit.

  6. I posted some comments about Net Zero in which I expressed incredulity at the stupidity of people. Which, in fact, shows how stupid I am…

  7. John Harriss’s take away line is state housing, only this time done right. As he is a reasonably honest commentator, he might consider that even when state housing is done right to the point of looking like this, we still encounter the following telling observation: The potential financial gain from the value of the flats became so important to the nation’s citizens that it was used as a political tool, with the ruling People’s Action Party in the 1980s announcing that it would prioritize maintenance of estates in constituencies that elected a PAP member. The party has never lost a general election..

  8. @Chester yes, system..

    ymmv in other places, but over here the banks and insurers that form the “private” mortgage lender companies/subsidiaries have the State directly or indirectly as shareholder. So do the various pension funds backing them.

    This is outside of the State defining “safe levels” of lending to those mortgage companies on top of various targets the pension funds and banks must comply with, on top of the EU guff, after the last banking wobble.
    Or the fact that the cash-on-hand you need to cover for various costs and taxes are not allowed to be rolled into the mortgage, but are treated as Private Capital by the taxman, and taxed until your eyes bleed.

    So yes… System… What else would you call it? Politely, at least….

  9. Is there any evidence that builders are having trouble moving completed houses, or that they are dragging out construction? If not, then the UK hasn’t fallen out of love with property.

  10. A factor which is unmentioned here is the power of the mortgage provider’s surveyor to affect house prices. When he says it’s overpriced you can’t get a mortgage except at a lower-than-asking figure no matter how willing or keen you are to buy. I suspect it’s a way mortgage providers throttle demand. If so it is they who exacerbate price movements up or down.

  11. The Meissen Bison

    rhoda – in the mortgage lenders’ Loan to Value calculations my guess would be that there is a distinction being made between value and price.

  12. Guardian headline writers – get help, please, soon.
    And the rest of the chip wrappers, broadcast media etc? There’s been exactly the same in the Torygraph. Petrol prices down-good. House prices down- end of civilisation as we know it.

  13. @Grikath,

    Nothing changes. I couldn’t get a mortgage in 1969 because (allegedly) I couldn’t afford the repayments that would have been a lot less than the rent I had to pay on the same sort of flat that I was renting.

    Home ownership, in the sense of a mortgage paid off before you retire, means that you will be a lot better off as there won’t be ‘rent’ to pay out of the pension. Renters, on the other hand, may be getting ‘benefits’ so they don’t worry about their rent as they aren’t actually paying it. But, moving those folks into their own homes could save on the cost of those benefits.

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