Prospective first-time buyers believe they will be able get on to the property ladder when they are 35 – 12 years older than first-time buyers in the 1960s.
But more than half (53%) of young adults currently not on the property ladder believe they will never be able to afford to buy a home. Half of 25 to 34-year-olds say they would need a windfall or a better paid job in order to be able to fund a deposit.
Research by Post Office Mortgages tracked the average age of first-time buyers since 1960, finding that those who bought their first home in the early 1960s were on average just 23.
Mike Cooke, Post Office head of mortgages, said: “Many would-be first-time buyers may have been put off trying to get on to the housing ladder by the size of deposits now needed.
“But there are very competitive options available for people who are keen to own their first home, and prospective buyers may not have to wait until they are 35 to take this step, with first-time buyers with the Post Office averaging 30 years old.
“In fact, so far this year, four in ten of our customers were first-time buyers, demonstrating that it’s possible for many to get on the ladder sooner than expected.”
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Comments
easy-yorks-guy: re your last sentence... I hope for your sake you are right.
I have a very close friend - Best Man at my wedding; Godfather to both our sons. We are more brothers than mates. Twelve years ago he was diagnosed with MS - a dreadful, cruel condition.
In the dozen years since, he has spent his life savings PLUS SOME on 'cures' for his illness. He has every new product that comes out delivered to his door, as has "nothing to lose - and everything to gain..." by trying this machine or that potion or this form of healing.
His condition has steadily deteriorated. He is confined now to a bed in a residential home. But he still hums the tune in blind faith that tomorrow he will walk again.
God - I wish he could be right.
PB: You will note that I asked if average sales values were around 10% lower than asking. I didn't state it as fact. It's bound to vary from EA to EA and from area to area.
If you're an EA, then what average are you seeing?
Any other estate agents want to share info from the frobtlube so to speak? If so, please state general area too :)
Personally, if I saw an ideal house for me in my area of choice I'd consider offering 20% less as that's where I think we'll be in 2 years time for the type of property I'm after - before prices start to rise again a few years later than that.
I'm already seeing flats reduced by 30% and better accomodation with lesser reductions.
I have norhing to lose by waiting to see and everything to gain.
CL - i warned you about encouraging him LOL. ;0)--< Affordability is so hard to measure, but one thing is for sure disposbale income is down.
Peebee - sorry I missed my point literally :0)
10% is the magic figure for one buyer.... but i assure you many are looking for much more... I dont think a crash is around the corner (stagnation for a couple of years for me) but many may do..
I know you disagree with the stats.....I have nothing better to go on Im afraid...but many agents are saying they are seeing offers of 20% below asking....some accepted.
Gosh! Thank you all (esp CL) - I will let you in on a secret one day but I am now off for a rest - back tomorrow.
@Raymondo
I don't think it was "decided" as such. It's just a way of saying that prices are linked to the amount of money available.
In terms of houses, if you can borrow 6 times earnings prices rise. If lending is restricted to 3 times earnings, prices fall.
Ray, I think its all about the mortgage affordability and income multipliers. Which begs the question of outgoings. Why is it that a couple with three kids can borrow the same amount as a couple earning the same wage with no children? I know there have been some lenders who look at that side of things but surely they all should? Especially for people already paying rent.
Don't worry about the age thing btw, the hubby is 8 years older than me!
Thinking about it, it's probably a Darwinian evolutionary thing. The species has evolved to live succesfully in a certain environment but that environment has suddenly changed. Those who addapt fastest will survive and prosper.
Sudden thought... (unusual).
Who of the HPCers decided that the price/value/worth of a product had to be in direct relation to earnings?
(CL I am quite old but lovely)
Shipside tells us that the average price of new instructions is currently about 30% higher than the average price of houses sold 3 months ago.
We assume that the basket of properties that are sold is pretty much the same from month to month. Ergo initial asking prices are 30% above final sale price.
Agents just can't help but over-price. It worked during the boom and any other way of winning instructions does not compute.
I blame it on the education system.
rant: Every month Mr Rightmove issues a press release with the average Asking Price of all "new instructions" on the site.
He then goes to lengths to show that these figures are poles apart from the current month's LAND REG statistics for SOLD properties (which, as we know, are up to 3 months historic...).
Eggs and sticks, therefore.
As far as I am concerned, ANY AGENCY or individual who purposefully 'values' properties at virtually fifty percent over true sales expectation should be closed down before it does any further damage.
But I would be massively surprised - as well as bitterly disappointed - if there would be a single case of this came to light...
thwack, thwack, thwack................
T Howard: "Your argument is exactly the type of bizarre double-speak that EA's favour so much"
Not me, sunshine - everything I say is self-taught.
Which part is, in your opinion, "bizarre double-speak"?
I am more than willing to endeavour to simplify the offending piece for you...
Isn't the difference between INITIAL asking prices and final sold prices something like 30%.
Then, after several price reductions, an offer comes in that is close to 10% below this lower price and is accepted.
That's how I understood these stats.
Unhappy...: "Let me try an explain most sellers think that if they put there house on the market at just above the market price it will leave 5 to 7.5% negotiation room below this to give that buyer a warm and fuzzy feel.."
AHHH - seven POINT five percent, not SEVENTY-FIVE, then, as you stated... NOW it makes a bit more sense! ;o)
"I am saying the buyers expectation is 20-25% below that asking price = buyers value or buyers affordability
Just look at the statistics between avge asking and avge sold prices."
You know from our previous debates that I am strongly refute these alleged statistics, Unhappy.
Please note, then, what 'east-yorks-guy' states on today's lead story: "There's no way I'm buying yet when prices are dropping unless I see a dream house at a realistic price. Average selling price is now what 10% below asking?"
TEN percent gap. Not the third that Mr Shipside crows about on a daily basis, whilst comparing eggs with sticks.
And e-y-g is an HPCer in the making - so hardly a PeeBee cronie!!
That's seriously delude fnarr fnarr.
I'll get my coat.
T Howard: "A fact is a fact, not a random piece of information provided by a person "with an agenda"."
Enlighten me, then, with an example of the "facts" to which you refer - and how these differ from what you claim to be "lies" by the Agents.
I'm sure I am not the only one interested...
@CL
Point taken. I thought a little humour might lighten up the tedious HPC v Boomer ding dong. You guys are so serious.
Country Lass - Dont encourage them LOL :0)
Peebee - I agree with most of what you said (are you surprised)
Let me try an explain most sellers think that if they put there house on the market at just above the market price it will leave 5 to 7.5% negotiation room below this to give that buyer a warm and fuzzy feel..
I am saying the buyers expectation is 20-25% below that asking price = buyers value or buyers affordability
Just look at the statistics between avge asking and avge sold prices. However I also think there are other ways to incentivise buyers and sellers to negotiate
Josh, then go back to playschool and let the grown-ups carry on without you.
Josh: Oh, dear - NOTHING could be further from the truth on BOTH of your posts (one of which has been reported and will I trust be disappearing...), you ridiculous, crude excuse for a human being.
Keep trying, though.
I am childish and immature
How much have you read of PeeBee's posts? On the site as a whole, not just this thread? He used to be an agent for many years so has plenty of experience of the industry.
Why did my name get put in there by the way? Random choice of people to insult? If you want to be taken seriously on here I would suggest growing up, and learning to debate properly not just cast aspersions and fling insults. It just makes you appear childish and immature.
and probably pulling frantically at his limp knob whenever Country Lass gives him some attention.
PeeBee wants it both ways and he's not even an EA. Just a nervous boomer watching his perceived wealth slip through his fingers as prices fall.
@peeBee Your argument is exactly the type of bizarre double-speak that EA's favour so much. I also think you need to look up the meaning of "FACTS". A fact is a fact, not a random piece of information provided by a person "with an agenda". (BTW, a fitting description of a EA if ever I heard one).
"Unless what they tell me, suits me, I don't believe it." So if it suits me, I believe it? Could I refer you back to my intial statement? This is going to be a long night...
Do estate agents realise they are doing themselves out of business?
The older first time buyers get the less transactions in house purchases they will make and the less commission estate agents will. get.
The reason first time buyers are getting older compared with the 60s is house prices are vastly inflated compared to then in comparison to salaries. Homes have become a speculative bubble and estate agents are over valuing to get business still despite the falls.
Price right and you will get more sales, price right and people will upgrade more often. It isn't rocket science.
T Howard: If this is your genuine experience, and you are not simply a bitter and twisted individual who amuses him/herself by trying to perpetuate misconceptions, then I would sincerely suggest you are associating with the wrong Estate Agents.
Another observation. You state: " Understand that unless proven by independent FACTS, everything they tell you is a lie."
NO-ONE who provides information is "independent". They ALL have an agenda. You clearly mean "Unless what they tell me, suits me, I don't believe it."
BIG difference... I suggest you review your "simple rule".
Unhappy Chappy:
Do we agree that a buyer will only pay a certain amount for what they want?
That in THIS market, they will pay less than they would in a better market?
That whatever price a property is marketed for, a buyer will generally aim to secure it for less?
That SOME buyers will feel all warm and tingly if they carve a thick slice off an asking price because they think they have 'bagged a bargain' - even if they have, in fact, simply paid "the right price"?
If YES to all of the above, then what I said in my previous post is 100% correct and logical.
WHICH, by the way, is more than I can say for "...also the expectation of most sellers is 5-75% below asking price, which nomally some distance from
1. buyers value
2. buyers afforadability
Please explain what you mean... you have lost me completely!
I have one simple rule when dealing with Estate Agents. Understand that unless proven by independent FACTS, everything they tell you is a lie.
The problem is that spurious claims are so rife in the industry that most EA's would not even acknowledge a lie as a "lie".
RnR - Well, older men do have an appeal....
CL - Based on comments from both of you before in other threads, I think Ray is likely old enough to be your father's age...
It's going to be a tough 5 years (minimum) of real terms wage falls and real terms house price falls. This is the Governments stated objective.
@ Raymondo
Just doing my bit sweetie, just doing my bit!
x
Thanks to you as well Unhappy Chappy, its nice to see some people understand the concept of 'debate' and can do it without resorting to insults etc. Just because we have different views doesn't mean we can't discuss them. That being said I REALLY hope you're wrong about a tough couple of years, but it's certainly not going to get easier anytime soon.
Good luck to you too!
Now, now Bob. You have forgotten to toe the party line.
It'll be a particularly cold, wet and/or sunny winter that keeps buyers away. Followed by a particularly cold, wet and/or sunny spring. Then the Olympics. Then people going on holiday.
@Country Lass
Yes - joking! (black humour?) Wouldn't really wish you that.. Thanks for the xx, made my day!
Country Lass- Thanks for the debate.....i think EA's have a much tougher couple of years ahead.....I hope you do well and wish you all the best.
Now Peebee - "If the property is priced in the market to sell - maybe even a tad over in order to leave negotiating room to a figure that both parties are happy with - then there is no problem."
- There is a problem Im afraid because first of all if its a tad over it is not priced to sell, also the expectation of most sellers is 5-75% below asking price, which nomally some distance from
1. buyers value
2. buyers afforadability.
Let's be blunt, the summer is almost over so, at best, we have September left for sales before the market shuts down for winter.
Will September be buoyant enough to make up for lower or virtually no spring and summer sales for many estate agents?
How many estate agents on here are already trying to talk vendors' asking prices down? Are you even bothering? What is the response from vendors?
Looks like being a very long winter.
I can't give one of each for every example, that's true. I have had allof those scenarios happen though, and more often than I would have suspected looking from the outside.
Every vendor, property and scenario is different, and all of our 200+ vendors are aware that we are not going to guarantee them a timescale to sell in. At the moment we are advising many of our clients to look at Offers Over prices. Seems to be working.
One property we had (put on by someone who left our office shortly after I hasten to add) came on massiveley over-priced, and took, well, a long time to sell, but we sold it and found them something new.
rant: "Here's an alternative scenario though - a vendor who bought their house 15 years ago, has cruised around the world through Mortgage Equity Withdrawal and now expects someone else to rescue them from their debts. Why should any buyer come to their aid?"
To a point, I couldn't agree with you more, mate.
HOWEVER, your argument relies on the vendor now expecting over the odds. If the property is priced in the market to sell - maybe even a tad over in order to leave negotiating room to a figure that both parties are happy with - then there is no problem.
Is there?
Perhaps i could go on typing and smelling I mean spelling 101 as well ! :0)
For every example you give of a property sitting on the market at a stupid price i can give you a) a vendor who cannot afford to sell below that price,
you should be establishing why can they not afford to sell at that price? Becuase if you dont think its worth it and they cant sell at a lower price you should refuse the instruction.
b) a property that came on at ambitious price and sold
I could show you a whole lot more that have come on at an ambitioius price and not sold and particularly not to FTB's
c) a property that comes on at a fair price that the market then drives the price up further than we dreamed possible.
I am willing to bet my house against your business you cant give me an example of this for eveyone i give you that hasnt soldll!
"No-one knows the future. You say how can I tell a property will sell at that, I say how can you say it WON'T? In my office we try and price realistically, and we have walked away before now, but we do sometimes take places that we feel are after a bit too much if we believe we can sell them. "
I have told 15 people this year that there house will not sell in 14 weeks at the price they marketed it at i have been 100% correct. How many of those that you thought were priced to high did you actually sell?
Is there a training course estate agency 101??????
@Raymondo - please tell me you're joking? I'm already married, and the sense of humour leaves a lot to be desired, even if I wasn't!
xx
Good agents have ALWAYS suggested an asking price between 5-10% over what they would advise their client to be the minimum they should accept - all things being equal. (anyone who does not understand this does not know the way things work)
@Big Cheese and Country Lass
May I have an invite to the wedding? ;0)
For every example you give of a property sitting on the market at a stupid price i can give you a) a vendor who cannot afford to sell below that price, b) a property that came on at ambitious price and sold c) a property that comes on at a fair price that the market then drives the price up further than we dreamed possible.
No-one knows the future. You say how can I tell a property will sell at that, I say how can you say it WON'T? In my office we try and price realistically, and we have walked away before now, but we do sometimes take places that we feel are after a bit too much if we believe we can sell them.
Looks for Peebee coming over the hill In his shining armour on his horse ;0)
CL -
"you are confident that a buyer will be found at around the £200k mark and you want to try it at that price for a while. It's not beyond the realms of possibility for a buyer to come along with that amount to spend."
REALLY What makes you confident of this, have you checked average wages in the area, banks not lending, disposable incomes being very low, rmapant infation except in wages, job losses
"So as the Agent, what is the 'right' course of action here? Do you need somone to tell you what it is?????
Because the action you propose Suck it and see will result in an unsold house on the market for a long time costing you or your boss money!
Latest entry in the Agents Diary seems relevant to this discussion:
http://agentsdiary.blogspot.com/2011/08/bad-medicine-tuesday.html
@Country Lass
I think that you should call me a delusional fool and slap me in the face. It's a waste of your time otherwise and, no matter what you say in the contract, I'm sure I'll be moody when you subsequantly suggest I chip 20 grands off the asking price.
Also, by that time, it'll have been on the martket for ages, everybody will know I'm a delusional boomer (see RnR post below) and won't want to get involved with me anyway.
ok, I take the bit about brains and manners back. Thanks for giving me your mental age dear.
Well done, you have more brains (and manners) than some Vendors I have dealt with.
So, carrying this scenario on, you need to move within the next 12 months and you are confident that a buyer will be found at around the £200k mark and you want to try it at that price for a while. It's not beyond the realms of possibility for a buyer to come along with that amount to spend. So. As the Agent, what is the 'right' course of action here? To call you a delusional fool and give a competitor the chance to sell it, or agree to give you the chance to get what you want, within certain contract requirements?
@PeeBee
Strip me to the bone? I guees she can if she likes fnarr fnarr.
Seriously though. She just admitted to over-pricing because it's what vendors want to hear. Even though transactons are falling through the floor. That's not intelligent.
@Country Lass
Would I be happy? No but if that's the situation then that's the situation. I'd thank you for your honest assesment and decide not to sell. Much better than you telling me it's worth £225k and wasting everybodys time.
That's 40% down YoY!
I totally understand CL's other points about criticising EAs who are, at the end of the day, trying to earn a living.
Here's an alternative scenario though - a vendor who bought their house 15 years ago, has cruised around the world through Mortgage Equity Withdrawal and now expects someone else to rescue them from their debts. Why should any buyer come to their aid?
Here's what Rightmove looks like to a lot of FTBs and young people:
http://www.freeimagehosting.net/514b5
@PeeBee, Thanks! ;-D
Big Cheese: As if it wasn't enough baring your own stupidity for all to see, you now allow Country Lass to strip you to the bone.
She is proof that a good Agent can buy a pr@t like you with one hand and sell you with the other.
Don't attempt to mess with matters you don't understand - and intelligence you clearly can't match...
Most properties are put on (by good Agents anyway, I'll freely admit there are bad ones out there) at as close to a realistic price as we can get the vendor to agree to. Many Vendors have an inflated sense of what their property is worth, and we have to manage those expectations and get the best price we can. If that means trying them at a slightly higher price than we would prefer for a few weeks, then so be it. Put it in the contract that it must be reduced to £x within one month.
As much as many Agents would like to pile properties on really low and sell loads of them, people tend to forget that these are peoples homes and lives we are dealing with. We advise, help and console at various points throughout the process. Imagine I turned up at your house and told you that although you paid £200k for it a year ago and have spent a further £15k on it, due to the affordability of current buyers it has to be marketed at £120k.
Would you be happy to do that?
To be fair, considering their job is to sell houses and by over-pricing they are failing to do this (transactions down another 10% in the last year) and contributing to sales mysteriously going "wrong" then they're not very good at their job.
I guess that's the point of recessions though. To weed out the poor performers.
Try telling some of our clients that we're "getting in everybodys way".
Chances are you have never seen what happens when a sale goes wrong, and the amount of chasing and effort it takes to get it back on track.
And I have plenty of guts, thank you, I also has enough decency and morals not to wish people out of a job.
@Country Lass
Hell? Don't make me laugh. If you are a so-called proffesional you should have the guts to tell it like it is.
@big cheese
Try shadowing an estate agent and valuer one of these days. Then you may possible know what the hell you're talking about.
Who wants to buy into a falling market anyway? If I were them I'd give it a good 5 years. Simply sit tight, save and wait for a few more agents to go bust.
They may then learn that prices need to fall and giving unrealistic asking prices does nobody any good. Not them, not the venor who wants to move, not the buyer who wants to move.
In fact how 'tarded are these EA's? They're just getting in everybodys way.
"Half of 25 to 34-year-olds..."
So clearly the survey didn't speak to non-home owners over the age of 35 who might now struggle to buy a house when they are 35 unless they manage to bend the laws of physics first.
Headline is very misleading....however I think the attitude towards home ownership is changing.
@ rantnrave
"Does any of this affect the price of bread?" is an old "saying" a generalisation of what affects the majority of people in the land, it is not meant to be specific. ;>).
I'd imagine it's of some importance to those who earn that bread through the buying and selling of property...
Does any of this affect the price of bread?
It would be more interesting and newsworthy if it did!
There are:
Lies
Damned lies
and
Statistics
53% of which are made up on the spot.
Aren't we just in the awkward period before the 'yoof' have become accustomed to the new order.
I'm old enough that I knew I had to save up a deposit (and demonstrate to a building society that I was disciplined enough to do so) and so started doing that when I started work.
The current generation have been caught out by growing up in a system where only minimal deposits were required but are finding they now need to produce the same sort of percentage deposit as folk used to.
Whether the days of minimal deposits will return, I've no idea - though anyone who says that history can't repeat itself is going to be hard-pressed for evidence.
"But more than half (53%) of young adults currently not on the property ladder believe they will never be able to afford to buy a home."
It would also be interesting to know what proportion of young adults are already on the property ladder and aren't therefore included in this data, because it's not much of a shock that half of all people who couldn't afford to buy a house in the last decade still can't afford to buy a house.
Just say NO to negativity!
F B A,
It means even media aimed at property professionals favour sensationally negative headlines.
Would be good to find out what percentage of "property professionals" have never heard of EAT.
If
"Half of 25 to 34-year-olds say they would need a windfall or a better paid job in order to be able to fund a deposit."
Does this mean that the other half don't?
And if
"half (53%) of young adults currently not on the property ladder believe they will never be able to afford to buy a home."
Does this mean 47% are looking to get on the proprty ladder at some stage?