Commercial Insurance Articles
Home buying: is the dream slipping away for this generation of buyers?
28 Sep 2011
Ever since the recession gripped Britain a number of years ago, much has been said of the effect on job levels across the country, economic growth and the shutting up of shops. Very little seems to have been mentioned of the struggling generation who are trying and failing to get themselves on the property ladder.
Not only does this have a drastic effect on areas of the British economy, but it also puts into perspective what a grim human effect the recession has had.
The National Housing Federation only recently made a rather troubling prediction that the 72.5 per cent of the population who own or live with the owner of their abode in 2001 will slump to just 63.8 per cent by the time we reach 2021. It does seem however that the recession can't be completely to blame; at least that's what figures from Oxford Economic Forecasting and the National Housing Federation show.
Between them, they compiled figures which revealed that by 2012, London, for the first time in decades, will have fewer owner-occupiers than tenants. The generation which were promised 'homes for all' can instead only look forward to an era of high-priced rents and housing instability, partly due to a lack of housing and partly due to a lack of finance across the board.
The study also discovered that mortgages are going to continue to be kept as the luxury of those increasingly rare first-time buyers who happen to be blessed with deposits of many tens of thousands of pounds. This return towards renting is already believed to be well underway, particularly among the young who simply don't have the access to mortgages which can be put down to secure homes.
Referring to David Cameron's perceived let down of those looking to buy property, Ed Howker recently wrote in the Guardian: "Mr Cameron faces the prospect that there will be even fewer of those “lucky few” at the end of his first term than when he began. Underlying these headlines are some truly disturbing trends. House-building rates stand at their lowest level since the 1920s."
The fact that young buyers, who have grown accustomed to the idea of growing up, moving out and buying a house, will now need to get to grips with the idea that may very well not happen for either them or their children for a while.
Mr Howker added: "The older generation, who made small fortunes as their properties rose, look on with sadness as their children can’t begin to live independent lives. So they, in turn, have begun to drain their retirement funds, sell their houses, and do whatever possible to give their children a decent start in life. But these noble acts simply mean that only those who can rely on rich parents can own a home."
Young people may grow accustomed to certain trends and how they affect their lives, they may realise that property-owning just isn't realistic and that they should just sit tight in their rented accommodation and wait. They might. If they do, it seems unlikely that they will do so en masse, simply because even rental prices are rocketing so high that should they continue, many may turn to council property or staying to live with parents or other family
All in all, it does leave a bad taste in the mouth when first-time buyers are simply unable to get a foot on the ladder and it could have cause drastic ripples on the property market.
It does seem however, that there may be some slight glimmers of hope in the property market. A number of affordable housing developments are popping up across the country where developers are finding that they can still make money without charging unattainable fees for property. Essex is one of the places where these developments keep appearing, the region is one of the few affordable property spots in the south of England where prices for houses are traditionally higher than other parts of the country.
One development weighs in at a massive £1 billion and is set to create 2,000 homes, while a further 2,000 homes are to be created in Colchester. This means that despite the number of homes being built nationwide being at its lowest level since the 1920s, the number of major Essex developments in the pipeline is extremely encouraging.
Barry Hayes, sales manager at Essex estate agent Boydens, told the Colchester Gazette that the UK housing market had been stable for around the past 18 months with plenty of new houses becoming available to sell.
Mr Hayes said: "They are building a massive number of new homes in this area. So when they are talking about the relationship between the population and the number of homes built, they’re talking more on a national basis."
"Mortgages are more readily available than they have been for first-time buyers, and there are some good deals out there. There's also a steady supply of properties for sale and they’re mainly houses, but flats are still difficult to sell."
It is also good news for property owners looking to make a profit, despite some saying that it could be potentially at the expense of future generations and the market at large. However, business is business and property owners renting to tenants are simply using the market to their advantage.
As well, providing they don't charge extortionate rates and take advantage of those looking for places to live, landlords still provide a good service. They allow people, sometimes with families, with places to live and on the whole do a good job at doing so. The ones that don't usually tend to get found out.
So, while that may be little comfort to the younger generation of potential first-time buyers, it could be worse as they still have a place to live and at least certain parts of the property market is performing well. They may just have to sit tight in their rented flats to see if home buying becomes any more affordable in the near future.
