x
By using this website, you agree to our use of cookies to enhance your experience.

Young adults who make it on to the housing ladder are increasingly getting stuck on the first rung, with over half unable to fund their next deposit.

One in six home owners looking to trade up for the first time may have to ask their family for financial support to make the move.

The price difference between a typical first-time buyer property such as a flat, and a subsequent home such as a semi, is on average £41,000, and in Greater London nearly £98,000.

Over half (52%) of ‘second steppers’ believe they will not be able to afford the deposit for their next property. 

The additional capital needed by second steppers to trade up is an almost 200% increase on the £14,000 that was required to plug the gap ten years ago.

Two thirds of current first-time buyers are living in flats (43%) or terrace houses (25%) with an average value of a flat at £148,502. Over half hope their next move will be to a three-bedroom house. The average price for a semi-detached house stands at £189,312.

This means that those looking to make the move face a 27% premium just to trade up, before adding on the cost of moving or the fact that there may be an equity shortfall in their current property.

Stephen Noakes, mortgage director at Lloyds TSB, which did the research, said: “We already know that second steppers face a number of tough challenges, and in many ways have been the hardest hit by the subdued housing market, so it is unsurprising that they are struggling to fund the gap needed to trade up to their preferred second home.

“Parents have long been helping to fund their children’s first home, but many are now having to provide further support as they move up the ladder. This indicates that these customers still need attention and support.

“To achieve a sustainable housing market we need to see movement throughout the market.

“If second steppers get stuck on the first rung, movement at the bottom half of the ladder comes to a standstill.”

Comments

  • icon

    Economists always know what should happen based on what happen last time. Non economists, caught out last time, learn from their mistakes and do something different.
    Economists are always surprised by something.

    • 16 June 2012 17:09 PM
  • icon

    rantnrave on 2012-06-15 10:54:23 yep, writing was on the wall a long time ago. Looks like all the “economists” are surprised. Others that do know are making money.

    • 15 June 2012 15:09 PM
  • icon

    only 10 or so stories everr show. Mondays, Wednesdays and Fridays EAT has a new set of news that replaces the previous so stories such as this drop first of all into the top 30 stories then into the archive.

    Guess what Dave that isn't written down in a book so I can understand why you had not worked it out for yourself.

    I am sur you can find another stories to twist round to mention Japan and how we are all doomed.

    • 15 June 2012 11:08 AM
  • icon

    Latest trade balance data out today are some of the worst on record. Export led recovery cancelled.

    • 15 June 2012 10:54 AM
  • icon

    "also this is the highest post thread ever,despite their best efforts to hide it away "

    Nah - it would need to pass 140 comments for that award. One thread also attracted 10,000+ views.

    • 15 June 2012 09:46 AM
  • icon

    dave on 2012-06-15 08:17:35 Yep..saw a bit on Newsnight yesterday. I think US elections in November could be the true final nail in the coffin. If Mitt Romney wins, he will get rid of Bernanke, and then King will be out in 2013 – retiring. Well best to continue diversifying, and just be content in knowing we will be all worse off, life's too short.

    • 15 June 2012 08:22 AM
  • icon

    also this is the highest post thread ever,despite their best efforts to hide it away

    I understand some people have complained some posters have opinions different to 'the cause'

    • 15 June 2012 08:17 AM
  • icon

    effectively its money out of thin air

    whats more amazing is the public are paying to prop up the banks so they can lend to...err...the public

    looking at king last night,he looks like a worried man

    • 15 June 2012 08:14 AM
  • icon

    dave on 2012-06-15 07:25:44 yep, its looking like it will get ugly. Was wondering if you know how they intend to pay for the 140 billion? As I cant seem to find anything. Are they printing it via QE? Or is the government borrowing it?

    • 15 June 2012 08:09 AM
  • icon

    Chris, I am NOT German. I am British was born in Leeds. Printing money only devalues current stock. However input costs tend to increase due to inflation when a business wants to replenish their stock. In terms of debt devaluation, this is true to a certain extent, however you would need wage inflation to be better off. But if business is paying more to replenish its stock, wage increases may be difficult to get. Moreover, we have already had money printing and ZIRP, house prices are down from their 2007 peak, and the global problems make having an export lead recovery in the UK unlikely. Also looking at today's Euro against the pound, the Euro has devalued. In your way of thinking Eurozone is more competitive then the UK. Mortgage rates tend to be based on the LIBOR rates and NOT the BOE base rate, as countries default on their debt, banks would need to replenish their capital reserves, this in turn would increase borrowing rates. Since 2002 my investments have done better then property, its going to be a rocky road ahead, but crises can mean opportunity. So taking all this into account, I don’t think having a 25 year debt on what I perceive as an over priced asset is worth it as I think government meddling has only delayed the inevitable. The 1970's was interesting, and looking back at history Paul Volker increased interest rates in the US to flush out all that mall investment and bring inflation down, many believe this resulted in a recession, but also brought the US long term prosperity. I think this scenario could play out in the UK as government and BOE have less and less options. But this is only my view :-). Anyway COME ON ENGLAND!!!!

    • 15 June 2012 07:47 AM
  • icon

    unfortunately 75% of the economy is service sector so I doubt there will be an 'export led recovery'

    even this morning apocalyptic mervin king pumps 140 billion into banks...why?...bail out the people who are the economy

    this is going to end very badly imo

    • 15 June 2012 07:25 AM
  • icon

    Not sure why you think salaries rising is a given cert Chris. You may still be comfortable wearing flared trousers, but the rest of the world has moved on from the 1970s when rapid wage inflation followed rapid price inflation.

    Today, we have $100 prices for a barrel of oil to contend with. There are also over a billion workers in India and China clamouring to do the jobs of British workers.

    The idea of an export led recovery might have legs, except that less than 20% of the UK workforce is involved in producing stuff that we can actually flog to others overseas. The other 80% are in the service sector (like EAs) or pen-pushers in the public sector. The ongoing Euro crisis is likely to strengthen the Pound in the short-term too, thus hindering, not strengthening, British exports.

    • 15 June 2012 06:53 AM
  • icon

    @ Worker
    "My view on what will happen in the future, the BOE will print to try and keep the bubble going, until, they are forced to increase rates, if they don't increase rates the currency is worthless. Anybody who has debts will get burned and therefore we will see our industry, in the early stages, falter."

    You don't get it do you, but hardly surprising if you are German!! We all know their thoughts on printing money!

    Printing money lowers the value of the currency in circulation. This makes the Pound cheaper against other currencies and our exports more competetive. Selling and exporting abroad brings external wealth to these shores. China has been devaluing their currency for decades, which is why they are the worlds biggest exporter and why they have all the money.

    Infortunately printing money also causes inflation and anything we import becomes more expensive, but inflation is good for anyone with debts. Have a look at this historic inflation calculator: http://www.thisismoney.co.uk/money/bills/article-1633409/Historic-inflation-calculator-value-money-changed-1900.html

    Even with very low interest rates the value of money has halved over the last 20-years. Select 1992. £100k then is worth around £200k today!

    If inflation doubles what we have seen in the past because of Quantitive Easing (Printing money) and I owe £100k to the bank, my debt could be halved in a decade. Sure I still owe £100k, but the actual value of that £100k is half what it was and should be easier to pay off when salaries finally catch up.

    If an export lead recovery can take hold, money will come back into the country and things will improve, but right now Europe, our biggest export market is having a few problems of their own, so the UK needs to look elsewhere to for exports.

    Germany had hyper inflation after the second world war which meant that their money was worthless and they are scared that this will happen again. Things are different today, however as the world is a global market and the Eurozone needs liquidity and the ability to devalue it's currency. It won't do this, which is why the Greeks & Spanish can't become competative. They will ultimately leave the Euro and they can begin rebuilding their economies. Inflation and currency devaluation is a good thing right now for anyone in debt or trying to export.

    • 15 June 2012 01:03 AM
  • icon

    So there you have it folks.

    Dave "listens" to what he reads.

    It is the little voices in his head.

    Sometimes these little voices tell him to eat peanut butter sandwiches. It can be very unsettling for poor Dave.

    • 14 June 2012 17:18 PM
  • icon

    I listen to all views.....bull and bear

    • 14 June 2012 13:24 PM
  • icon

    if you want to cling on to any credibility you need to put a mile of distance between youself and Mr Hendry
    If Dave is the less looney face of Realising Reality or Peter Hendry you have just blown you cover.
    If its' not then follow the teachings of someone else, preferably someone who knows what they are on about.

    • 14 June 2012 13:10 PM
  • icon

    I thought peters thesis on china cities built with no people in them was very apt.

    when china crashes,subprime will look like a blip

    • 14 June 2012 12:32 PM
  • icon

    His technique for not answering questions is to ask a non-related question in return.

    The FTSE is a separate investment gamble and is the vehicle for robbing pensions and endowments. Why is it down 25%? so it can go back up again. There is no point having ever escalating stock values. The big money is made from selling at the top and staying out till the bottom.
    then riding the profit back up to the top again. The continual escalating market only gives a single payout whereas the boom crash boom crash market pays out on a regular basis.

    To further your reading Dave and give your argument for BTL Armageddon a bit of a leg up, go and have a read of LAT, by coincidence there is a story on there about the Achilles Heel of BTL.

    • 14 June 2012 12:20 PM
  • icon

    so why is the ftse100 over 25% less than it was 13 years ago?

    This belief that property is a one way bet is what has bought the world to its financial knees

    its a shame some people do not see the potential storm ahead

    there is nothing more that can be done to prop up property prices and they still fall

    • 14 June 2012 08:23 AM
  • icon

    A bloke, who has now made it clear he is not Gay and living a sad life in a bedsit, who has been alive less time than I have practical (and successful) experience of the UK property market agrees with a bloke who reads a lot and makes up theories about what has and will happen to the UK property market based on what he has read about Japan. All I can say is that makes two of you that are wrong.
    The have and have not society is re-establishing itself and the reason why Dave’s predictions will not come to pass is because the Haves - MP’s, Bankers, Solicitors, Accountants, et all and all of those with Property portfolios are in a position to look after themselves and their own interests.
    There is an Achilles Heal to the BTL industry but so far you chaps have not worked out what it is. Some portfolios could be “taken” but I suspect they will be nationalised rather than repossessed.
    The market is Chain Gap over extended and will stagnate until those that WANT to move up the ladder can agree deals with those on the rung above. There are greedy people, over mortgaged people and victims of circumstance but there are not enough of them to have an affect the over-all market. The Estate Agency industry will change in the next few years and there will be fewer Agencies simply because more properties will go into portfolios that once properly set up and managed as companies will not be at risk from the vagaries of Government or the market.

    • 14 June 2012 08:15 AM
  • icon

    Have been reading this forum for the past few days now...and for me Dave seems on the ball...I didn't want to say this before, but I invest money also. Land values only ever increase if you have industry to back it up. Look at the boom years, people could borrow crazy amounts because they have “secure” jobs..well that has gone now and the banks are scarred. My view on what will happen in the future, the BOE will print to try and keep the bubble going, until, they are forced to increase rates, if they don't increase rates the currency is worthless. Anybody who has debts will get burned and therefore we will see our industry, in the early stages, falter. Anyway my GF I German, and we spent a prudent night together watching the football :-)

    • 13 June 2012 23:56 PM
  • icon

    @ dave
    "when the fall 30-50% people will buy rather than rent"

    I thought I had answered this already! Currently there are many thousands of rental properties out there simply because homeowners could not sell for enough to repay their mortgages. They are in effect forced landlords. They will gladly sell up as soon as house prices start rising again. These property sales will increase the supply of properties available to the buying/selling market and reduce the stock in the rental supply market. A reduction of rental stock will maintain rental prices.

    If you think that every tenant in the UK will go out and buy their own home as soon as prices start to recover, you are sadly mistaken. It would be impossible anyway, because there simply isn't the number of properties available to buy in any case, even if the forced landlords decide to sell up. Furthermore, an increased demand in property sales, the likes of which you are suggesting will accelerate house prices so fast that many tenants hoping to buy, would be out priced and forced to stay in rented accommodation for much longer!!!

    Landlords were doing very nicely in 2007 before the crash when house sales were at record levels. If things did go back to everyone wanting to buy a property, what makes you think that landlords would get into trouble now? When the market began to crash, HPC people said "Wait for the BTL landlords to crash and burn" but it didn't happen (Except a few heavily leveraged greedy landlords) and now the same HPC people think that when the housing market recovers, those same landlords will crash and burn yet again. It won't happen, trust me. The BTL business model is sound in both directions of the housing market. :-)

    • 13 June 2012 22:24 PM
  • icon

    explained why prices will drop and if they do why lenders will invoke LTV clauses that will see them reposessing a exponentially larger number of properties with expoentially inreasing losses.

    Jusr because LTV clauses exist they are a tool not a solution.

    While anyone is meeting their interest payments on properties bought in 2007/2008 there has not been widespread repossesion, even though most of those properties bought with the last of the 100% -120% mortgages are now lower that the price at completion.

    • 13 June 2012 19:09 PM
  • icon

    there's only a demand for rented accommodation because houseprices are being propped up

    when the fall 30-50% people will buy rather than rent

    who will you rent to then?

    • 13 June 2012 18:40 PM
  • icon

    think that is going to happen Dave? BTL plugs a very big gap in the demand for rented accommodation neither colour govenment has the cash or the land to risk disturbing the status quo. The reluctance and pure skintness of the population to provide themselves a pension means that long term Government should be grateful to anyone who is still paying income tax throughout their traditional retirement years.

    • 13 June 2012 18:37 PM
  • icon

    lol!

    funny that hmg has taxed pensions to the hilt effectively destroying their value,but apparently they won't do the same with btl portfolios

    anyone who believes that is out of touch

    lots of love

    • 13 June 2012 18:24 PM
  • icon

    I shouldn't have to convince anyone that the economy is on life support and hmg is drowning in debt

    we all know that stuff Dave and if that is a precis of all the weeks and weeks of posting learn to be a bit clearer.

    The UK debt is 100% of Gordon Brown's making. Only part of the economy is on the brink, the smart folk realised what was going on and prepared for what was coming given every single decision and policy Brown came up with.

    If I have only £1 in my pocket I am £8000 better of than the average UK citizen. Blair and Brown encoraged and facilitated the debt over 12 odd years. No kid like being told there is no more pocket money for sweets so how does a population get used to having no more cheap credit for fake tan, pinot grigio or purple sprouting broccoli.

    Sadly for your theories Dave Property will turn out to be a pension that bankers cannot rob as they have investments and endowments and for that reason the smart money will keep control of its assets rather than chance it with a Moet swigging RRRRs

    • 13 June 2012 18:18 PM
  • icon

    There are two of us thinking roughly the same thiong about Dave.

    • 13 June 2012 18:04 PM
  • icon

    the thing that worries me most is that you might be something to do with Government either DCLG or working with or for Shapps. The confident stupidness of what you put is really concerning if you are.

    • 13 June 2012 18:03 PM
  • icon

    Hey, this Dave you talk to is Dave Camoron.

    Let him alone, he is just fishing you for ideas and sensible view points to use against me. For bait he uses obvious stupidity, and you lot keep responding.

    Please stop this. If you give him enough information he might win another term by using your genuine viewpoints against me in real debate.

    Don't pander to the moron... Camoron

    • 13 June 2012 18:00 PM
  • icon

    I've been pointing out risks

    I've also been pointing out comparable historical outcomes

    lets face some facts here...interest rates were reduced to 0.5% because things are very very bad in fact alistair darling said if they hadn't done that the economy would have collapsed

    I shouldn't have to convince anyone that the economy is on life support and hmg is drowning in debt

    • 13 June 2012 17:53 PM
  • icon

    true enough but, keeping it topical, in the 60 years the Queen has been Queen what is to long term net effect of property prices given that we have been through all these economic difficlties at least once in that time?

    lets have the % increase in average property prices and also the % increase in UK population along with anything else you think is relevant.

    Even with the anonimity of posting names you know that we know what we are talking about and are qualified through examination and experience to discuss property and property prices. We don't know you or your experience but so far all you have posted is theory ,based mostly on Japan IE not the UK , and have failed to convince a single one of us that anything you have posted is correct.

    • 13 June 2012 17:47 PM
  • icon

    this is a discussion board for all views,my personal thoughts on life have no bearing on whether prices go up or down

    I'm just pointing out that historically all bubbles end badly and never plateau

    If you think differently history is against you

    • 13 June 2012 17:20 PM
  • icon

    Are you sure you mean MDT? Surely with the varied drivel dished up by Dave it ought to be MDJ (merde du jour)

    • 13 June 2012 16:54 PM
  • icon

    "my view of life is that anything can happen and does."

    will your world fall apart if prices go up instead of down?

    • 13 June 2012 16:46 PM
  • icon

    'dave': from recent posts...

    "its highly likely we will see 30-50% reductions from here"

    "in history ALL bubbles burst and this one will be no different"

    "my point is that it cannot continue"

    "uk property prices are set to fall off a cliff"

    REALLY?? Not a bad set of predictions (and CERTAINLY not an exhausted list...)

    You're obviously NOT the 'dave' whose last statement below was

    "my view of life is that anything can happen and does.

    you simply cannot know what tomorrow brings so its impossible to control circumstances"

    Make your mind up time, 'dave'.

    Your MDT is starting to creep up past your neck and you're gonna have to swallow some of it sometime...

    • 13 June 2012 16:16 PM
  • icon

    I would cash in....if you think this is the bottom of the market you are in for a surprise

    as for inflation...how do you know we don't have deflation

    prices in japan are still 40% less than 1991

    be debt free....then they can't get you

    • 13 June 2012 16:13 PM
  • icon

    Which is why I live for today and plan for the future.

    I would rather plan for my future so that when I get there I can enjoy it, and live life to the full now just in case.
    I have just spent a week in Scotland sailing along the Caledonian Canal from Fort William to Inverness. Living life to the full and doing what I enjoy.

    Selling my properties (At the bottom of the market) and putting £600k in the bank makes no sense at all. Hyper inflation could seriously devalue these savings making the money worthless, but left in property, as long as people need a roof over their heads, they will rent out and an index linked income will continue.

    Oh and as I own my own business, the remaining £182k of debt could be paid off within 3 or 4-years, which is not long to go before I am debt free. :-)

    Give it up Dave, this is a well thought out plan that if you were completely honest, you would do the same if you were in my shoes.

    • 13 June 2012 16:06 PM
  • icon

    my view of life is that anything can happen and does.

    you simply cannot know what tomorrow brings so its impossible to control circumstances

    which is why if I had 600k equity I would bail out be debt free(which you are not) and enjoy myself

    but this view is impossible for someone who believes you can control life to understand

    you may never collect your pension

    • 13 June 2012 15:24 PM
  • icon

    dave, I was debt free on my main home up until last year when we decided to sell our modern 4-bed house on a modern development and buy a 2500 sqr foot modern house in a non-estate village location on a quarter acre plot behind big electric gates. Now we have a £59k mortgage to repay on that. Actually I got it wrong earlier, the £182k mortgage debt we owe, includes our main home mortgage also. £124k is on the 4-BTL properties.

    Why sell the properties so that we are debt free? That doesn't make any sense at all. One of my BTL mortgages is now only 2% above base rate for the remaining term of the mortgage (C&G) so I'm only paying 2.5% interest. I am getting 3.15% interest in my online E-Saver account, so it pays to leave the mortgage running and save any spare money in the E-Saver account.

    You keep making these wild statements. Why does whatever the government has done make me lucky. If house prices had crashed to almost nothing, it means that buyers, for whatever reason, are not buying so they must be renting instead. This means that rents will be high and I would be making lots of money from rents.

    The value of my properties are not relevant. This is what you NEED to understand.

    • 13 June 2012 15:13 PM
  • icon

    but you haven't told us why you are not banking the money to be debt free?

    you may not live to 2013...why not bank the money now?

    I would also suggest you have been in part lucky that hmg bailed the housing market out otherwise you would be in trouble

    I'm debt free which means I'm well ahead of you and I don't need #600k in equity to enjoy whatever time I have left

    • 13 June 2012 14:49 PM
  • icon

    PS. that was me below by the way. Forgot to put my name in the box!! Doh

    • 13 June 2012 14:36 PM
  • icon

    @ dave
    "so you have 600k equity roughly but you are quite happy for this to fall by half? (if prices crashed)"

    Being self-employed, I bought these properties to give me a pension plan that I am in control of. I don't want someone in Whitehall telling me at what age I am allowed to retire, so selling the properties will not help me achieve this. I could have bought more than four, but then the risks are higher and what's the point when four is enough to live off. If you don't plan to sell them, ever, the value of the properties are not important.

    @ Happy
    "How does BTL benefit society in general?
    Do you have children?
    If you do...do you plan to give them each one of these houses to live in the future?"

    One thing I have learned in life is that society will not look out for me, I need to do that for myself and my family. I bought my first BTL property just before I left the RAF back in 1994, a long time before BTL became fashionable. BTL mortgages didn't even exist back then, they were called commercial loans. The idea was sound, it was legal and any moral considerations didn't factor into the plan! In fact the idea seemed to be welcomed at the time by society because the council waiting list was very long and suddenly this private property became available to tenants. The property was let the same day we completed and I went back to Germany to complete my tour. To this day, the property has only had 4-different tenants and has never been empty for a day!

    Mrs Thatcher sold off most of the countries council stock, so there is a shortfall in available rental accommodation. Private landlords are filling the gap.

    People should not consider BTL investors as part of the problem. They are just buying up some of the properties that should never have been sold by the government in the first place. Cheap credit and the idea that owning your own home has fuelled demand and this has pushed prices up. BTL property sales have only equated to a small percentage of overall sales, so it is normal buyers chasing fewer and few properties that has driven prices up, not BTL investors. They won't have helped matters though. Society needs to blame the banks for supplying cheap credit and the government for not creating sufficient housing to meet the demands of the population. BTL investors would not buy more property if the tenants had enough council houses to rent! Their would be little or no demand!

    I have two kids. One has just turned 18 and is off to Uni in September. I won't give any of my kids a house, because I need the income from them in order to retire. I will of course help them with a deposit so that they can buy their own house when the time is right.

    Rant says that I was lucky to have been born in the 60's, but I don't consider myself to be lucky. I was one of the trend setter's that worked BTL out for myself. It is others that jumped on the band waggon. Sure the opportunity had to be there in the first place, but if you can save for a deposit (As I did) you can still buy BTL properties. Prices are low again, tenants are plentifull and rents are high enough to cover the BTL mortgages. Little has changed.

    My first BTL house cost me £55,000. I have just sold a 2-bed semi bungalow for £75k and just put the phone down to a man who's mum is under offer on her house at £60k in the North West!! That's 1994 prices virtually with interest rates which are much less today than back then!

    • 13 June 2012 14:35 PM
  • icon

    Chris - Well done congratulations on your astute investments that benefits you as an individual and I do mean that.
    But
    How does BTL benefit society in general?
    Do you have children?
    If you do...do you plan to give them each one of these houses to live in the future?

    • 13 June 2012 13:46 PM
  • icon

    so you have 600k equity roughly but you are quite happy for this to fall by half?(if prices crashed)

    then you still owe banks 182k

    I'd bail out and owe banks nothing and spend the money you only live once...you could die tomorrow

    its only money if you sell

    repayment could spiral to 2000k a month,then with tenant gaps you could be in trouble

    • 13 June 2012 13:39 PM
  • icon

    @ dave

    "uk property prices are set to fall off a cliff,interest rates can only go up and btl landlords are going to be hit from all sides including rental occupation gaps"

    Not me mate, I own 72.5% of my 4-BTL properties with mortgages accounting for only 27.5%. House prices can do what they want, it's only a paper loss or gain as they are not for-sale.

    As for rents, I could afford to slash my rents below half what I currently receive and still make lots of profit! I am in no way leveraged and in no danger at all.

    Tenants are paying off my mortgages and subsidising my portfolio/ pension. I'd be a mug to sell these properties while prices are low and actually the idea of getting them paid off and retiring before I reach 50, sounds much more appealing.

    The house price crash people that have been proclaiming BTL disaster for years and this simply hasn't happened, nor will it. House prices are falling because people aren't buying for whatever reason, so they rent instead. This is why rents have increased. When buyers start buying again, rents may need to come down slightly, but what will happen is that the forced landlord will be able to sell again removing the supply of rental stock from the market, which in turn will maintain rental prices.

    Your idea that interest rate rises will kill the BTL market is flawed as rate rises will also stifle first time buyers, so buyers will need to stay in rental and compete for rental stock. Greater demand for rental stock will increase rental prices, thus covering any increase in mortgage payments through an increase in interest rates.

    My current outstanding mortgage debt is £182,000 spread across 4-BTL properties. A 1% increase in interest rates will cost me £151 a month, which could easiliy be absorbed by my tenants with a £37.75 monthly increase in their rents or I just take a hit on my monthly profit.

    Oh dear, no sign of a disaster as far as I'm concerned, but a 1% increase in interest rates would kill the current fragile market completely, so it's not going to happen for some time to come.

    • 13 June 2012 12:50 PM
  • icon

    Possibly aimed at me:

    @02:03:40? on 2012-06-13 07:39:20
    "I can understand a lonely, miser, couped up in bedsit posting on here once he had counted his wad"

    If aimed at me, apologies if not, but its a good comment. However better to be a lonely miser counting ones wad and be free, then work like crazy for some banker, and being afraid to tell the boss where to go because you are working for a bank and scared if you can't pay your mortgage. Anyway I think myself and my GF will leave the UK.

    • 13 June 2012 08:36 AM
  • icon

    lol

    uk property prices are set to fall off a cliff,interest rates can only go up and btl landlords are going to be hit from all sides including rental occupation gaps

    only a blinkered foll cannot see this

    • 13 June 2012 08:35 AM
  • icon

    "if prices fall and interest rates rise people with a btl portfolio are in big trouble"

    wrong!
    if rents fall and interest rates rise people with a btl portfolio are in big trouble... but

    For a btl landlord to start to worry rents need to drop to 25% of their current levels or interest rates need to go up to 5.5%.

    No mortgage lender will invoke a ltv clause while the interest is being paid!

    Prices at the FTB/BTL end of the market will not be the ones to fall it is the over extended chain gap prices which will be affected. That is what this story is all about.

    • 13 June 2012 07:47 AM
  • icon

    I can understand a lonely, miser, couped up in bedsit posting on here once he had counted his wad, but Chris, what on earth were you doing posting on EAT at that time of the morning?

    @ Nederlandse kerel. EAT is geen dating service of plaats om nieuwe vrienden te ontmoeten. We hoeven niet te weten hoe oud je bent en niet schelen hoeveel geld je hebt, maar je bedanken voor een Europees perspectief

    • 13 June 2012 07:39 AM
  • icon

    the madness of men!

    btl is not a win win...if prices fall and interest rates rise people with a btl portfolio are in big trouble

    your comments are what people said in the dotcom boom

    you just can't lose!

    • 13 June 2012 07:39 AM
  • icon

    @ dave

    "as prices fall people will buy rather than rent and deposit request fall also,btl will collapse as the rental market is sidelined as insecure and not fit for purpose"

    BTL investors benefit from both sides of a house price bubble or property crash and it is very hard for them to fail.

    When property values are rising, they benefit from capital growth, but at the same time, they need to ensure there is sufficient remaining rental demand to keep their properties let. If there is sufficient rental demand including immigration, the BTL investor can keep his rents high and is also benefitting from capital growth, but if rental demand starts falling (Because tenants are buying instead), it is a time to look after tenants, freeze or reduce rents to keep the properties occupied, even if it means just breaking even! At least the property value is rising, so it's still a good investment.

    When property prices collapse as they have been over the last 4 or 5-years, rental demand tends to be high, so rental prices can rise. Any lost of capital is a paper loss anyway and only felt if the properties are sold, so BTL investors just sit tight and rake in the money from the tenants. They might even take advantage of the cheaper house prices and buy more BTL propeties is they have the equitly/ savings to raise more mortgage finance.

    I'm not seeing BTL investors selling properties right now, but I am seeing them buy more properties! Should tenants start buying again, house prices will rise and landlords need to be careful initially, but if they do decide to sell later, they should make money from their increased value properties. I can't see them losing out though!

    • 13 June 2012 02:03 AM
  • icon

    £300 in an HMO? Its easy to rent at 300gbp per month so long as your willing to be flexible.

    Nice! £250K in the bank? let's hope that is in 3 banks just in case Economy-worrier Dave is right.

    Rather then banks I thihk you should spread it to different financial institutions. I have moved my money away form a dutch bank also, as their compensation scheme seems to pay out in euros...and with devlauation...

    • 12 June 2012 22:09 PM
  • icon

    Sounds like an ideal life... for you.
    £300 in an HMO? Nice! £250K in the bank? let's hope that is in 3 banks just in case Economy-worrier Dave is right.

    • 12 June 2012 21:49 PM
  • icon

    I rent at 300 GBP per month, am on above average income. Could buy a 200k-250k house without mortgage, but don't think I will buy in the UK. Renting has enabled me to save this amount, and my bills are included in the rent – as I live in a HMO. I have to look at future prospects in the UK, and they don't look good. Renting however keeps me mobile if I need to relocate for my work. I don't think renting is dead money and my LL is a good LL, hasn’t increased my rent and I pay on time. BTW I am 29 years old.

    • 12 June 2012 21:36 PM
  • icon

    Hello Peebee- i think you are getting some answers.....I too believe that property is less affordable than it should be for the majority but i do not wish for a crash. Do you not believe there a people who own property outright but still believe a crash is what is needed for the greater good..I know of at least one.

    Rent Gone
    1. Why do you assume he is paying rent? ahh i see he isnt.
    2. Why if he is do you consider paying rent as pouring it down the drain...if they can rent...share get by whatever and buy a property in much less time and less total cost than paying off a say 25 year mortgage.....they have been been savvy no?

    • 12 June 2012 21:04 PM
  • icon

    you are right in one point that forced sellers dictate this market..they have been bailed out presently though apparently 12% are in some sort of forebearance

    however,people with btl portfolios have contracts stating a certain amount of equity needs to be present.......without that they can force sales or reduction of loan amounts

    • 12 June 2012 20:28 PM
  • icon

    "you do not know the financial situation of all the HPCer's."
    ...and Crashers do not know the financial situation of the homowners on whom the crash is reliant.
    The average interest element on the average property is £154 pcm. That average property rents out at £700 pcm.
    Please explain why the average homeowner is less capable of keeping up mortgage interest payments even if the base rate rise take the interest payments up to £700 pcm.

    This crash that you have been predicting since 2008 is reliant on widespread repossession or a shift in homeowner attitude towards their home.
    Negative equity does not come into the equation until one is forced to sell so that is a red herring in your argument.

    As for the perception of the majority of Crashers who post here on obsessive level, that is the picture they have painted of themselves and their circumstances.

    • 12 June 2012 20:21 PM
  • icon

    @Rent gone

    1) Paying rent is paying a landlord to borrow their house.
    2) Interest charges, on a mortgage, is the rent you pay borrowing money for a house.

    In both cases, you are either "throwing money down the drain" or paying for a service.

    In a rising/falling market, you can make/loss money via (2). In a rising/falling market, you can lose/make (by not losing money) via (1).

    Speculate how you want, or just choose a method of accommodation that suits your needs at your time of life.

    • 12 June 2012 18:20 PM
  • icon

    banks should be allowed to fail....why should taxpayers have to bailout reckless failures?

    they've even put two fingers up by paying themselves bonuses with our money based on total failure

    • 12 June 2012 17:57 PM
  • icon

    I don't pay rent, just normal household bills. I don't live with my parents either (before that little accusation comes my way)

    • 12 June 2012 17:47 PM
  • icon

    yes...TAUGHT A LESSON

    pensioners have had bank shares decimated and pensions and savings hit through no fault of their own

    The reckless have been bailed out because things were SO bad

    Thia situation must change and will

    @porkies

    noidea what you are talking about...try to argue the point not the person

    • 12 June 2012 17:35 PM
  • icon

    "I also think the reckless have been bailed out at the expense of the prudent(me) and should be taught a lesson"

    'TAUGHT A LESSON'?

    Oh, dear, 'dave'. I think you badly need this spelled out for you -

    Previous credibility - zero.

    Current rating based on the above comment alone - the scale simply doesn't go that low.

    Maybe you should go on 'holiday' from posting for a while. Come back, change your name - and while you are at it, your point of view.

    • 12 June 2012 17:27 PM
  • icon

    Sir Gaz, have you considered the rent you pour down the drain, are you happy to buy the landlords house for him?

    • 12 June 2012 17:27 PM
  • icon

    @PeeBee,
    I can only comment on my own situation, I have a deposit fund that would pay off any of my friends mortgages, So i suppose I am in a position to buy even without stretching to idiotic multiples of income on a mortgage.
    I still don't want to buy because I don't percieve the market at the moment to be good or even fair value. My own view admittedly, but given that I am in the position to be saving at a greater rate than I believe property could or even might increase I see no reason to be hasty, if prices stay where they are or even increase a little I'll be able to buy cash in about 18 months or so and will avoid a mortgage altogether.

    • 12 June 2012 17:21 PM
  • icon

    Dave one post "I own for cash" but previous post "Used Low % rate" Lie by all means but remember them!

    • 12 June 2012 17:21 PM
  • icon

    I own a property cash,I post about houseprices because I would like my kids to afford one

    I also believe that a society is jusdged on how it treats our old and young...we treat ours like crap

    our kids will be the ones to grow the economy and we are stopping them partaking in society by propping up the biggest bubble in uk history

    I also think the reckless have been bailed out at the expense of the prudent(me) and should be taught a lesson

    • 12 June 2012 17:08 PM
  • icon

    Happy Chappy: ""You HPC folk have got your minds in a real knot because you can not afford, practically or mentally to buy the property you WANT". No this is a perception you have built up, you do not know the financial situation of all the HPCer's."

    Hmmm... let me ask you this. What do you believe the motivation is of 'yer average' HPCer, who posts on this site?

    In MY humble opinion, they are looking for either:
    1. To buy a home that for financial reasons they currently cannot afford;
    2. The home that they COULD buy today to be available to them tomorrow at a cheaper price; or
    3. A better (more valuable/bigger/better area) home to be made affordable to them tomorrow than the one they could buy today.

    Perhaps some of our more intelligent HPC-minded posters would care to tell this anonymous dullard - and therefore enlighten the rest of the brigade - just how wrong he is on the above count...

    • 12 June 2012 16:53 PM
  • icon

    These 'second steppers' are clearly the final entrants into our great pyramid scheme. They'll be overtaken by future FTBs who didn't participate in the first place.

    The closer to peak prices ('07) they paid the worse it'll be for them. Sure, they'll be stuck there until incomes catch up and debt paid down but a house is for living in right? That's what everyone keeps telling me so it's no problem surely.

    • 12 June 2012 16:41 PM
  • icon

    =========================================
    I know house prices won't drop to 2000 levesl as we earn more now,
    =======================================

    assuming you don't lose your job

    not everyones salary has increased in fact many have decreased

    just because you earn more DOESN'T mean prices won't go down

    • 12 June 2012 16:26 PM
  • icon

    Its simple maths. FTB buys average house in 2000 for £80k. Sells 6 yrs later £160k assuming he's repaid a bit equity £100k. During 6 yrs now earns more so can borrow a lot more so budget £250k+. However, FTB in 2006 bought for £160k 6 yrs later house worth £160k paid off a bit (longer term if not IO) and wages will have stagnated for at least 4 of 6 years. STB budget this time probably only £180k max. I know this is true as I bought 05 and have a lot of friends who bought in 06. I know house prices won't drop to 2000 levesl as we earn more now, however, pricing a 4bed at £100k more than a 3bed is unsustainable.

    • 12 June 2012 16:08 PM
  • icon

    The headline for this article should have been: 'first time buyers would have been better off renting'. That's the truth.

    Anybody who buys now with a large mortgage is guaranteed to be trapped for at least the next decade. You'd better like that rabbit hutch....

    • 12 June 2012 16:00 PM
  • icon

    I am not a hpce'r but i find there arguments are presented with more intelligence and thought than some of the responses from the anonymous brigade. (careful EA today may be required to reveal your personal information if requested in future) :0)

    "You HPC folk have got your minds in a real knot because you can not afford, practically or mentally to buy the property you WANT". No this is a perception you have built up, you do not know the financial situation of all the HPCer's.

    @@ A crashers....perhaps....just like it is working in a declining market as well eh!

    • 12 June 2012 15:32 PM
  • icon

    I'm working on ways to disrupt space time by exposing dark matter and converting it to dark energy

    after all we're simply a recent species made of particles and matter from the big bang

    we're born then die after being a slave to money

    • 12 June 2012 15:13 PM
  • icon

    It must be a real pisser being you! so smart yet unable to change the world.

    • 12 June 2012 14:41 PM
  • icon

    "I believe we will need bailing out in th uk"

    Let's hope there's actually some money left in the international bailout pot by that time...

    "radio 4 wasn't the more lighthearted listening but then again it is far far more educational than any book."

    If you're looking to get an understanding of the current economic crisis, you've not made the best choice there. The BBC's Economics Editor, Stephanie Flanders, dated Ed Balls and Ed Miliband at different times when she was younger. That tells you all you need to know about the BBC's supposed political neutrality. Ms Flanders also took until 2009 to report that the UK was in a debt crisis. A greater apologist for New Labour's failed economic policies you wont find.

    The BBC's capital-centric view on its reporting is also plain to see. When told of the big relocation, many BBC staff were probably stunned to learn that Manchester wasn't a suburb of London.

    • 12 June 2012 14:09 PM
  • icon

    people forget you can be bankrupted for just 750 pounds

    if you have equity,creditors will often simply make a petition fo bankruptcy effectively forcing the sale of your assets including property

    even if you have 20k debt but your income dries up,you are in trouble

    • 12 June 2012 13:33 PM
  • icon

    I won't be affected and nor will the majority of folk who have used low interest rates to reduce their exposure to lenders.

    the thing is too many people used low interest rates to borrow more because short term they could. It is them that have created this situation and it is them that are going to suffer.
    Sadly it will be Cameron and Osbourne who get the blame rather than Bliar and Brown (Sic)

    • 12 June 2012 13:16 PM
  • icon

    and Dave wants to be taken seriously, hah just see is nonsense about Japan! Try shouting Dave that’s what other ignorants do when talking to foreigners not understanding them!

    • 12 June 2012 13:02 PM
  • icon

    Welcome to malcontents corner!

    The thing is Mr Green with envy. This whole affair has been coming at at since the mid 90's and only accelerated once interest rates were slashed. The time to be smart was back then.

    radio 4 wasn't the more lighthearted listening but then again it is far far more educational than any book.

    • 12 June 2012 12:56 PM
  • icon

    "You can come on here daily and spout what you like, you will not talk the market down to levels you are comfortable with.

    The rest of the country is getting on and making the best of low inflation rates, rising unemployment , high fuel prices, TOWIE, Big Brother, EURO2012 and the Olympics"

    .........and getting use to a submerging and declining economy for decades which will impact on house prices. The far east will crush us like gnat. The tables are turning and our stupid little debt ridden country living in a state of denial and illusion that has nothing to offer will be trampled into the mud.

    • 12 June 2012 11:59 AM
  • icon

    you at start off talking about 'people' but actually you are talking about yourself

    YOU won't be affected by falling prices according to you

    that doesn't mean alot of people won't be affected

    asset prices fueled by excess credit are causing countries like Spain to have to be bailed out

    thats pretty serious to the people of spain and no doubt to uk citizens with interests in spain....I believe we will need bailing out in th uk

    • 12 June 2012 11:39 AM
  • icon

    why do you think I need to read more Dave?What do you think that will achieve? Falling prices only affect a very small proportion of the population but that is the bit you have missed. My house can drop to nothing and I will not affect me in the slightest, it won't make my bills any smaller and it won't reduce my wealth compared to yours. In fact the only people who need worry about it are those that will benefit from my Last will and Testament. If it is worth nothing when it is passed to them so what ? they have a zero value asset that will earn them an income

    I don't need to read a book to know what I need to do today and there isn't a book written that will tell me what is going to happen tomorrow. The point of reading is?

    • 12 June 2012 11:35 AM
  • icon

    I would point out that we are in a global financial crisis because falling of property prices around the world

    perhaps you should read a bit more

    falling prices affect banks,people and countries

    • 12 June 2012 11:14 AM
  • icon

    Given how much reading you have done have you not noticed that in percentage terms very very few people are affected by prices rises or price falls, it is only those that have to sell for whatever reason, against their wishes that have any concerns whether prices are up or down.

    It is the affordability of the shelter over ones head that is all that really matters.

    You HPC folk have got your minds in a real knot because you can not afford, practically or mentally to buy the property you WANT.

    You can come on here daily and spout what you like, you will not talk the market down to levels you are comfortable with.

    The rest of the country is getting on and making the best of low inflation rates, rising unemployment , high fuel prices, TOWIE, Big Brother, EURO2012 and the Olympics

    No-one gives a hoot whether you are right or wrong Dave, but you are painting yourself as someone who is doing a lot of reading but not really understanding what it all means.

    • 12 June 2012 11:02 AM
  • icon

    exactly...throughout the world there has always been strong demand to own a house....the stumbling block is always being able to get a mortgage/credit

    in all historic cases I have looked at ,when credit tightens prices fall

    • 12 June 2012 09:24 AM
  • icon

    PbroAgent "Obviously you've not heard of supply and demand then Dave "

    I ask have you heard of cheap credit and loose lending PbroAgent? I would argue that the big rises in house prices in the last decade were a result of such low interest rates and irresponsible lending rather than supply and demand. After all it is the principle reasons these banks are failing across the world and need bailouts.

    Now if its all about supply and demand then prices will rise but if I am right with higher mortgage rates and tighter credit coming prices will fall.

    • 11 June 2012 17:54 PM
  • icon

    the current situation is nothing to do with supply and demand...its all to do with being artificially propped up

    however,its actually supply of credit that controls houseprices and that will eventually be the catalyst for big falls

    in japan some central tokyo property fell 90-99% and properties now are still 40% less than 1991 and they had zero rates and QE

    In fact the dotcom boom and housing bubble in US was a direct result of borrowing money from japan(carry trade) at near zero to lend out(supply of credit)

    • 11 June 2012 16:37 PM
  • icon

    "and my point is that it cannot continue......you cannot have prices stabalising because less people can buy"

    Tosh! You can equally say that you cannot have prices falling because less people can sell.

    "it makes no sense in economics whatsoever"

    Obviously you've not heard of supply and demand then Dave - as vendors find they can't afford to sell, there is a corresponding reduction in supply which when linked to a similar reduction in demand has kept prices stable.

    And do you know what? As HPCers finally begin to realise that the great Nirvana they are hoping for isn't coming (or heaven forbid has already happened and they didn't notice it) they will slowly and very very quietly start to buy houses - no doubt with a whole armory of excuses lined up. This could even do the unthinkable and INCREASE demand, doing what do you think to prices? Come on Dave, even Brit can get this one.

    "as prices fall 30-50% even with zero interest rates btl investors will become forced sellers and ftbs will buy their liquidated portfolios"

    Why will BTLs become forced sellers. Rents are high because FTBs are renting instead of buying, mortgage rates are low and look set to stay so. You like Japan - Why don't you tell us what happened to interest rates there?

    "It will be self generating spiral down which will last 20 years ad bankrupt anyone over exposed to property with mortgage"

    I doubt it, attitudes will change over the next decade no doubt - but anyone who wants to own a house will have to learn to save a little rather than spending on consumable goods and international holidays twice a year and anyone wanting to upsize will also learn to save a bit more in order to pay for the bigger deposit.

    • 11 June 2012 15:23 PM
  • icon

    and my point is that it cannot continue......you cannot have prices stabalising because less people can buy

    it makes no sense in economics whatsoever

    as prices fall 30-50% even with zero interest rates btl investors will become forced sellers and ftbs will buy their liquidated portfolios

    It will be self generating spiral down which will last 20 years ad bankrupt anyone over exposed to property with mortgage

    • 11 June 2012 14:35 PM
  • icon

    and my point is that it cannot continue......you cannot have prices stabalising because less people can buy

    it makes no sense in economics whatsoever

    as prices fall 30-50% even with zero interest rates btl investors will become forced sellers and ftbs will buy their liquidated portfolios

    It will be self generating spiral down which will last 20 years ad bankrupt anyone over exposed to property with mortgage

    • 11 June 2012 14:35 PM
  • icon

    @dave

    You're cutting and pasting today even more than Rant does ;o)

    "as prices fall people will buy rather than rent"

    You just don't get it do you? Prices HAVE fallen and fewer people can afford to move so fewer people are selling - which is having an UPWARD pressure on prices so therefore over the last 12-18 months equilibrium has been more or less restored.

    I completely agree with AC with the addition of needing a bit of wage inflation as well as having price inflation.

    • 11 June 2012 14:12 PM
  • icon

    its quite clear that this situation cannot and will not continue

    houseprices are falling dramatically in most areas of the country and its highly likely we will see 30-50% reductions from here

    in history ALL bubbles burst and this one will be no different

    ftbs are the future of the country and the growers of the economy

    as prices fall people will buy rather than rent and deposit request fall also,btl will collapse as the rental market is sidelined as insecure and not fit for purpose

    • 11 June 2012 13:12 PM
  • icon

    its quite clear that this situation cannot and will not continue

    houseprices are falling dramatically in most areas of the country and its highly likely we will see 30-50% reductions from here

    in history ALL bubbles burst and this one will be no different

    ftbs are the future of the country and the growers of the economy

    as prices fall people will buy rather than rent and deposit request fall also,btl will collapse as the rental market is sidelined as insecure and not fit for purpose

    • 11 June 2012 13:12 PM
  • icon

    Oh Twit1234, you are so clever with your new word........someone please make him feel good and discuss it, he keeps using it an no one bites.

    • 11 June 2012 12:58 PM
  • icon

    What ever you say the economic situation will get worse, wages frozen, inflation high, mortgage rates rising and students coming out of uni with huge debt.

    People can't afford to jump into this property ponzi scheme anymore. The first time sellers have been left holding the can, the music has stopped. They either reduce their price to sell or get trapped.

    I would say you would get more commission by getting them to price realistically to sell then overpricing and not selling.

    Its nothing but a ponzi scheme.

    • 11 June 2012 12:21 PM
  • icon

    Copied Below: Boomer Jeremy Paxman's article written late last year: 'I am part of the most selfish generation in history and we should be ashamed of our legacy.'

    http://www.dailymail.co.uk/news/article-2055497/JEREMY-PAXMAN-Baby-Boomers-selfish-generation-history.html
    ----------------------------------------------------------------

    As it’s revealed today’s young will be 25 per cent worse off than their parents, the Newsnight presenter says he and his fellow Baby-Boomers have bequeathed little worth celebrating...

    A few years ago, an American author wrote a book about the men and women who endured the Depression and then fought in World War II. He testified to their courage, vision and resilience by calling his book The Greatest Generation.

    If anyone attempted to name their children — those born between about 1945 and 1965 — the so-called Baby-Boomers, they might consider calling them The Worst Generation.

    It is now received wisdom that today’s young people may be the first generation in modern history to expect to be poorer than their parents.

    Earlier this month, a report suggested the young will be 25 per cent worse off than their parents when they reach the age of 65 — the so-called ‘baby bust’ generation, having accumulated £400,000 less by the time they retire.

    This may not be entirely their parents’ fault. But we should certainly take a good share of the blame.

    A kinder author would perhaps choose a title like The Luckiest Generation for us Baby-Boomers. But how you handle good fortune is surely just as important as how you deal with adversity.

    I belong to the Boomer generation — a fact I feel increasingly uncomfortable about. No wonder we thought we had it all. Compared to those who came before, we did.

    Those born at the end of the World War I spent their adolescence in the Depression and by their early 20s could expect to be wearing a military uniform and risking their lives.

    As the Care Quality Commission report has revealed, some of the last survivors are lying in filthy hospital beds surrounded by uneaten food. The Greatest Generation might also be called the Unlucky Generation.

    By contrast, if you were born after World War II, you spent most of your adolescence enjoying the freedoms of the Sixties, were never obliged to serve in the Forces, could expect a more-or-less constantly improving standard of living and, as a consequence, never forsook many of the habits of teenagerdom.

    The Baby-Boomers will not go gentle into that good night: just look at the British couple, Lesley Norris and Bruce Scott, who had to be rescued in the Brazilian jungle last month after their camper van ran off the road on a ‘retiree’s’ gap year. In many ways, they stand for all the rest of us.

    In contrast, consider the children (and grandchildren) of this fortunate age group.

    Almost a million young people between 16 and 24 today have no work — for the jobs many might have expected to fill have been exported to China, India or Vietnam. Those who do find employment will enjoy none of the pension expectations of their parents.

    Yes, it’s true, they do not face the apocalyptic anxieties of the Cold War. But those concerns have been replaced by the possibility of looming conflicts over energy, water, migration or religion. And let’s not mention what the Luckiest Generation have done to the environment we all share.

    It is not just that the Boomers were the first generation in recent history to grow older while never having to fight in a war. We were also the happy inhabitants of a consumer wonderland in which everyone seemed to be getting constantly richer.

    ‘Let us be frank,’ said patrician Harold Macmillan, in July 1957, ‘most of our people have never had it so good.’

    He was right.

    We have lived in a world in which medical science made such strides that we could confidently expect to outlive our parents — and be in better health.

    Holidays grew in length and were ever further away: a couple of weeks at some blustery British seaside resort was replaced by the confident expectation of sunshine in southern Europe and then all over the world.

    We had machines to wash our clothes and crockery, owned our own houses and our parents bequeathed us a National Health Service so we might all look forward to free treatment with ever-improving drugs.

    The Baby-Boomers could expect to find — and afford — somewhere to live, for it was the building boom which made Harold Macmillan’s reputation.

    Those of us lucky enough to go to university could take it for granted that the state would tax the Unlucky Generation that came before to pay our fees and demand nothing from us in return.

    Ours was truly the first cohort in history which could call itself both healthy and wealthy.

    Not that we really admitted to our wealth. As our possessions grew, so did our expectations, to the point where luxuries became essentials.

    Our grandparents aspired to mangles and meat-safes. For us, the conviction grew that we were deprived if we didn’t have freezers and flatscreen TVs.

    These were not merely items it would be nice to have, but to which we had a right. The sense of entitlement made ideas of duty to some collective entity the preserve of fools in old-style hats and coats.

    We had become not merely the luckiest but also the most selfish generation in history.

    Our parents made-do-and-mended through the austerity years. But when fundamentalist murderers flew planes into the Twin Towers, what did that Lucky Generation luminary George Bush advise Americans to do? Go shopping.

    ‘Get down to Disney World in Florida,’ he said ‘Take your families and enjoy life, the way we want it to be enjoyed.’

    Our parents had Clement Attlee, perhaps the greatest Prime Minister of the 20th century, who died leaving an estate worth £7,000. We have Tony Blair, the multimillionaire messiah.

    The overwhelming characteristic of this generation — my generation — became its self-absorption.

    The government elected in 1945 under the leadership of Major Attlee laboured to build the new Jerusalem in Britain, a crusade for the greater good which would slay the five giants of Want, Disease, Squalor, Ignorance and Idleness.

    The children of the new Jerusalem had more personal ambitions.

    ‘Their parents and elder brothers and sisters had battled for healthcare, for education, for full employment and economic security,’ writes the author Francis Beckett, one of the early products of the plateglass principality of Keele University.

    ‘The Baby-Boomers fought for, and won, the right to wear their hair long and enjoy sex.’

    Opinion surveys show surprising numbers of this solipsistic generation still consider themselves — absurdly — ‘anti-establishment’ and ‘less trusting of those in authority’.

    The truth is, the Lucky Generation are in authority and have been for years now.

    Between us, we have been on the first binge known to science in which the hangover was inherited by our children. Take the example of housing. The soaring cost of putting a roof over your head is surely one of the most unattractive — and pernicious — characteristics of the past 40 years. And yet for decades the media have reported a rise in house prices as being somehow a cause for celebration and a fall as a bad thing.

    But the consequence of this obsession — and the borrowing that made it possible — was to destroy the relationship between property prices and wages: housing is now so far beyond the reach of many young people that significant numbers doubt whether they will ever be able to buy decent accommodation.

    The only explanation for the nation’s obsession with property prices is the Baby-Boomers’ smug conviction that, having entered the market, the only thing they need to do to become wealthy is to sit on their backsides.

    And who can blame them?

    In 1968, when the first of the Baby-Boomers were beginning to think about settling down, 425,000 homes were built in Britain. Last year, the total was just over 100,000 — fewer than in any year since 1923. With figures like that, of course, the cost of putting a roof over your head rises.

    Lucky Generation investors who followed the advice of property-porn television and got into buy-to-let schemes developed another way of taking money from the young and securing it for the old.

    Young people look at the out-of-reach property ladder from a swamp of debt, because by the Nineties, the former student leaders of the Lucky Generation had made their way into the Labour Cabinet.

    As president of that characteristically Boomer outfit, the National Union of Students, Charles Clarke — a beneficiary of free higher education — demanded ‘adequate’ grants for students.

    As Education Secretary in the Noughties, he introduced top-up fees. Given control of the Treasury, the Boomers flogged public assets and frittered away the bounty provided by North Sea oil.

    Governments of some previous generations may have been colourless. But they would at least have had the wit to see through promises of Free Money, like the Private Finance Initiative (the scheme under which private companies build projects such as schools and hospitals then lease them back to the state) and similar bits of chicanery, which recent governments so delightedly embraced. As the Conservative David ‘Two Brains’ Willetts put it in the days before he became a minister in the current administration: ‘The charge is the Boomers have been guilty of a monumental failure to protect the interests of future generations.’

    The recent disclosure that nearly one million young people are unemployed reveals how difficult it will be for many students to pay off the debts with which we have saddled them.

    For those with rich mummies and daddies, the way into tax-paying employment is that familiar feature of the early 21st century — taking jobs as the willing, unpaid office dogsbody or intern.

    For the less fortunate, a life beckons of short-term contracts with a much less comfortable dotage than their parents would ever have entertained.

    You might ask why governments don’t try somehow to even out this great fiscal imbalance between older and younger. The answer is if it comes to an outright fight for state resources between generations, the Luckiest Generation has an ultimate deterrent. Unlike many young people, they vote — and their numbers in an ageing country are huge. So, the Baby-Boomers are Those Who Must Be Obeyed.

    I have, by contrast, lost count of the number of young people who say that recent experience — especially the Lib Dems’ volte face on tuition fees — has convinced them never to vote again.

    The Luckiest Generation will be around for a long while yet, strumming their guitars and enjoying their concessionary fares, ensuring young people keep working to pay their pensions, outraged at demands they cash in their property wealth to fund their future in care homes, consuming the vast — and increasing — quantities of National Health Service funds necessary for geriatric medication (half the NHS budget is spent caring for old people).

    They have already persuaded the Government to make it impossible for employers to get rid of them just because they reach the age of 65, while also ensuring that many Boomers will be able to claim their pension two or three years earlier than anyone entering the workforce now.

    Getting on for a million of this generation have taken themselves off to live in parts of continental Europe where they think the weather is kinder and the fags and booze are cheaper.

    In southern Spain or rural France they watch Sky television, demand the assistance of British consuls paid for by their hard-working offspring and are begged by the big parties to register for postal votes.

    Thousands more enjoy a healthier old age than they had any right to expect jetting around the world on holidays of one sort or another.

    You can hardly blame them for thinking the world belongs to them. It really does.

    Their children and grandchildren, meanwhile, have been sent out into a plundered world, shackled by debt, unable to contemplate early home ownership or starting a family.

    And then the Luckiest Generation tut at the level of anti-social behaviour they claim to see.

    It strikes me as more of a wonder the streets aren’t full of demonstrators demanding compulsory euthanasia.

    • 11 June 2012 11:59 AM
  • icon

    "the baby boomers have stripped the world of its wealth"

    I would love to hear and explanation of that statement!

    • 11 June 2012 11:36 AM
  • icon

    its quite clear that this situation cannot and will not continue

    houseprices are falling dramatically in most areas of the country and its highly likely we will see 30-50% reductions from here

    in history ALL bubbles burst and this one will be no different

    ftbs are the future of the country and the growers of the economy

    as prices fall people will buy rather than rent and deposit request fall also,btl will collapse as the rental market is sidelined as insecure and not fit for purpose

    • 11 June 2012 11:33 AM
  • icon

    its quite clear that this situation cannot and will not continue

    houseprices are falling dramatically in most areas of the country and its highly likely we will see 30-50% reductions from here

    in history ALL bubbles burst and this one will be no different

    ftbs are the future of the country and the growers of the economy

    as prices fall people will buy rather than rent and deposit request fall also,btl will collapse as the rental market is sidelined as insecure and not fit for purpose

    • 11 June 2012 11:33 AM
  • icon

    OMG - Not this bloody debate again with Brit!

    • 11 June 2012 11:29 AM
  • icon

    Agreed, the only way to sort this out is to ride the storm.

    We need to keep house prices static so there is no negative equity and allow inflation to change values.

    Also people need to lower their expectations a touch - the baby boomers have stripped the world of its wealth - what was normal before can no longer be guaranteed to every member of society.

    We need to give everyone time to save more money and allow the banks more time to recapitalise so that they can reduce minimum deposit requirements.

    Eventually this will all shake itself out of the system, but it has taken 5 years to get here and we are less than a quarter the way through.

    Pity the children for the sins of their fathers.

    • 11 June 2012 11:02 AM
  • icon

    His ignorance is not just confined to Estate Agency Peebee! Brit has been told for the last umpteen months that property prices are determined by supply and demand and while there remains demand for BTL properties and First time properties which is confirmed by this story, then demand outpaces supply, the bottom market prices will not fall.

    Explanation for Brit. if FTS can't buy their next property their property is not available for the next wave of BTL or FTB

    Brit and the other HPC'er s are probably going to be the last group to catch on to what is really happening in the market. Too many agents are actually pulling the market down in their area to increase sales volumes and commission flow. It isn't good business, it isn't the right but it is happening just to keep some agents in business.

    Brit would do well to understand his local market, understand his local agents and buy what he can while he can.

    • 11 June 2012 10:51 AM
  • icon

    @Brit

    The solution for 2nd time buyers is I'm afraid the opposite of what you said. If property values fall further as you've suggested, these 2TBs will have to not only find the deposit they already can't find, but also the equity your great idea has just lost them. Simply put they just won't sell (or will ask more for their houses)

    For example: Assuming a 2TB owns a house worth £100k and has little to no equity and wants to buy one for £200k he will, with a 90% LTV deal need £20k deposit, but if you HTCers only give him 90k for his house he'll be a further £10k in the hole and means he will have to increase his deposit by a further 50% to £30k

    I'm afraid the only way to help all of the bottom of the market is to freeze prices and persuade buyers that there will be no more large gains or falls.

    • 11 June 2012 10:41 AM
  • icon

    Brit1234 - "Lower prices... will increase sales giving estate agents more commission."

    You don't have to push your ignorance of the Estate Agency business into the middle of the floor - we all know it's there already.

    'More commission' will only be earned by an increase in sales. A 25% reduction in prices (assuming commission rates stay at the same %age) requires a 33% increase in completed sales to make the same commission - but in order to make these extra sales, costs will rise, therefore profits will drop. To break even in your "solution" scenario, you are looking at well over a 40% increase in sales.

    So... work harder, spend more - earn nothing extra.

    You gonna campaign to turkeys next for them to welcome Christmas with open wings?

    • 11 June 2012 10:16 AM
  • icon

    @Brit1234 on 2012-06-11 09:28:08

    What, in your view, is a 'normal' level?
    To include increasing agents commission should not be any part of the theory would seem to show a certain bias.

    • 11 June 2012 10:10 AM
  • icon

    The solution is to allow house prices to fall to normal levels rather than prop up the bubble. Lower prices equals shorter steps on the ladder and will increase sales giving estate agents more commission.

    • 11 June 2012 09:28 AM
MovePal MovePal MovePal