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Written by rosalind renshaw

Housing minister Grant Shapps has urged lenders to offer ‘mates mortgages’ to help groups of friends buy a home together.

But Shapps’s suggestion, made at yesterday’s second first-time buyers summit, appears to have attracted little support.

The idea has attracted a flurry of comments online, such as ‘It can only end in tears’, ‘What happens when the mates fall out?’ and ‘The only thing needed is for house prices to fall’.

In fact, house prices actually rose in June, according to the Halifax this morning. It said house prices went up by 1.2%. Halifax housing economist Martin Ellis warned, however, of 'significant headwinds' which are expected to constrain demand further.

But Shapps said first-time buyers struggling to get on to the housing ladder need a ‘lifeline’.

He said that without urgent help from banks, a generation of young people would be locked out of the market.

In most parts of the country it is almost impossible for a young person with a full-time job to buy a home on their own unless they have parental help. Research from financial services firm LV suggested last week that by 2025, unassisted buyers will not be able to buy their first home until they have turned 40.

Someone in their twenties is currently likely to be earning £21,000 whereas the cost of the average home is now £163,049, according to the Halifax report this morning.

Shapps said: “If there are mates who are perfectly capable of paying monthly mortgage payments but are struggling to fund a deposit of their own, there should be straightforward options to unite with their friends and take the first step on to the housing ladder together.”

David Hollingworth, of the independent adviser London & Country, said the proposal was “absolutely full of risks”.

Mel Bien, of the mortgage broker Private Finance, said: “It is one thing to rent with friends, which is traumatic enough, let alone to get a mortgage with them.”

Most mortgage deals are restricted to couples or a pair of siblings. Britannia is one of a small number of lenders to offer a mortgage that allows friends to buy together.

Its Share to Buy scheme, launched in July 2004, takes into account the incomes of up to four people. But just 1,300 customers have signed up so far.

Comments

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    ...and there is YOUR attempt to get the 'last word'. How patheticly embarrassing. You talk down PeeBee, yet you are doing the exact thing you are trying to mock him for.

    People like you are funny to watch, it's just unfortunate that others will see your behaviour and conduct and tar all agents with your brush.

    Arrogant and contradicting, giving it the big'un - None of your posts have matched the intelligence or even relevance of a single PeeBee paragraph.

    • 12 July 2011 11:48 AM
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    That is so funny !

    You couldn't resist that last post..

    I knew I was right Pee Bee.

    Go on.... do another one, you need the last word or you won't be happy.

    • 09 July 2011 12:44 PM
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    Fun Boy Agent: Point proven, thank you.

    Sorry to widdle on your ickle firework - but no steam; no red face; no squirming and no 'Y'-fronts.

    Oh - and the word you seek is 'patroniSing', by the way. The dictionary you used to look up "relationship building" on my recommendation was obviously the AMERICAN English version. (Of course, you could claim it to be a simple typo - as is seen, typos are your speciality. I would suggest you try, if you have it in you, to make them less offensive to more sensitive readers please)

    NEXT TIME, look up "school playground stuff". And "irony" They will be found next to each other in this context.

    And of course, keep looking for the original target...

    • 09 July 2011 11:38 AM
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    Pee Bee, (supercilious git),

    Firstly, I am not your 'Pal'
    You use derogatory language in almost every post you put up. As well as being a supercilious git you also seem to have an extremely condescending manner, Let me povide that definition for you.

    you are acting in a way that betrays a feeling of patronizing superiority.

    Secondly, I have been in EA business through 3 recessions as well as boom times. So you got that wrong 'Pal' ....but I don't need to justify myself to you, I view you as an inconsequential idiot who makes personal attacks on various people on here if their view differs to yours. Your views, whilst noted, are in general so far from the target it is comedy central.

    In respect of relationship building, why don't you try toning down your personal attacks and try to keep your views on a slightly more generic vein. That way, if your posts apply to one particular individual that you have taken a dislike to for the day the entire episode does not degenerate into a slanging match.

    You..without doubt are the biggest supercilious git posting here.

    What is making laugh most of all is, I know you will come back and read this, steam will puff from your ears, you face will redden, you will squirm in your Y fronts, and then post a reply, you simply won't be able to resist it. It is your nature.

    School playground stuff Pee Bee, you must have the last word! I have seen that in your posts too.

    You silly insignificunt man (oops, typo)

    • 09 July 2011 09:35 AM
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    Fun Boy Agent: Supercilious? Me? Nah, pal - you got the wrong bloke.

    I'm just a regular Joe, sick to the back teeth of prats who firmly believe that they are the coyote's cojones - based on their 'successes' gained in a market where a badly dressed tailor's dummy couldn't fail.

    You state "Of course we build relationships over time". I would suggest you look up 'relationship building' in the dictionary.

    You will find it under 'R', by the way. I state this as you clearly haven't get a clue what it starts with...

    • 08 July 2011 23:31 PM
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    Whats this? not allowed to have fun anymore?

    • 08 July 2011 17:34 PM
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    Fun Boy - If your business operates in a similar style to your online demena, you are in big trouble.

    When I see people like you, the public have every right to grill estate agents for being stupid, arrogant and a waste of money. You spoli it for the good ones.

    • 08 July 2011 16:06 PM
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    Thanks for the long winded opinion. And thanks for the lesson in running my business. And thanks for the laugh it gave me.

    just one word sprang to mind, perhaps 2, lol

    supercilious (git)

    But thanks anyway

    • 08 July 2011 14:20 PM
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    Fun Boy Agent: Is this an Estate Agents Forum? If so - why no membership? No moderation (save when we tell the administrators when someone is being abusive...)? No chance to raise threads of ones' own?

    This is NOT a forum. It is a news collection and distribution site run primarily for those who are employed on the Estate Agency and related industries.

    There are NO locks on the entrance gates. Anyone can come in - and thanks to our constitution, ANYONE can comment (as long as it is legal and inoffensive, of course...).

    If the site owners/administrators did not want this to be the case, then they would control it differently.

    This week you have, you say, agreed sales to four FTB's. That is excellent. But does that happen EVERY week? What about this time three years ago? Ten, even?

    You (...we...) may not like what we read from the likes of rantnrave, Sibley's..., Mike Wilson etc - but at the end of the day they represent a sector of the population who are voicing an opinion.

    And if you don't listen, then you don't know what you are up against.

    Yes - you are running a business. A very successful one, I hope - but your business is dependent upon "the public" you seem to have a dislike of... unless they throw loads of money at you.

    If you need to meet fifty people in order to sell to one of them, then it is worth remembering that the other 49 know a hundred others or more each, and could possibly INCREASE the footfall through your door if you treat them well - but bet your life they will definitely DECREASE the footfall if you treat them badly!

    Just a thought...

    • 07 July 2011 16:44 PM
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    Yes back on topic ....its a stupid idea! Just ask anyone who has done it in the past!

    • 07 July 2011 16:02 PM
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    Back to the actual point (unusual for me) - Shapps the Stupid.

    @James

    Renting to sharers is a nightmare, trust me from my NBS experience, lending to friends as sharers is even worse. Just won't work - what happens if one wants or needs to move on?

    Finding someone to take over your tenancy for a while is bad enough. Finding someone to take over your mortgage ..............?

    Amazing thread this - I agree with Mike Wilson, Ray Evans and Peebee of course amongst others. Yet at times you all had differing views.

    Thank God base rate stayed the same today, long may that continue. Meanwhile as I have said before I wonder if life is ever going to be the same (as when and for which generation?) but for my money I stick with my view that it is at least a 10 year haul to get ourselves out of this mess - starting point being 2009 so 2.5 years in already.

    • 07 July 2011 15:46 PM
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    Posters?

    I thought Bill Stickers had beed prosecuted and was safely under lock and key now.

    Silly me ! Different posters... I get it !!

    • 07 July 2011 13:47 PM
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    FBA - I understand your point, I have been one who has climbed upon my high horse to defend the EA's and as a result come under a bit of abuse now and again....

    But I have to say I am finding it very interesting to hear the othersides opinion....not the one when they think WE have MADE people buy and borrow, but their reasons for why so many buyers are not stepping forward, lets be fair there are millions who possibly agree with the opinions of Rant and perhaps the more we learn from their opinions the more we can advise them in the future.

    I genuinly have no applicants on my list who say they will not buy and dont want to, because lIKE YOU SAY we would bin them....so this site does enable us sometimes to understand the odd fear and opinion, BUT yes ignore the ones who are just after a reaction.

    Biggest problem FBA is, as an EA site we will stuggle to avoid the topic of house prices! therefore the open forum will always debate this area, that said certain threads on here do wind me up when they end back at prices are too high, I cant buy and I hate EA's...but we know which posters they are.

    • 07 July 2011 13:34 PM
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    "serious note Rant, I think we are both right to suggest Financial Planning should be a key subject in schools, perhaps to replace a mandatory subject which offers little in life!"

    Now that I would wholeheartedly agree with.

    It's one thing for the banks to lend irresponsibly; it's another for debtors to borrow irresponsibly.

    Let's face it; a great many of the public (as evidenced by our lovely housing bubble) are financially illiterate and need saving from themselves. Be that education or more regulated lending; I don't care.

    FBA,

    Yes this maybe an EA forum but the wider economy plays a far more important role than just the four walls of your office.

    • 07 July 2011 13:08 PM
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    Sure Ric, buyers in the future, "one day men"....

    My point is, agency is a business, not a public service.

    Of course we build relationships over time. However, if a 'one day man' buyer wants to bore you with their thoughts on house prices past present and future and the venue they chose to bend your ear is in your local pub, a party or a BBQ, and your ear gets bent for hours on end, on and on and on and on about how Mr one day man thinks prices are to high today, ....I bet... you like me.... politely move on.

    More... If it is a buyer bending my ear I am totally disinterested, a potential vendor, yes, I will listen, advise, and even buy a pint. This is business.. Who agrees with me? or am I alone here?

    This is an EA forum, not house price forum

    • 07 July 2011 12:52 PM
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    Fun Boy, think of it as you know you have a buyer in the future even if prices dip! knowing someone will buy one day might not be so bad.........plus any money left in a will usually gets put into property anyway so it will come good in the end.

    Rant send the bill to the agent who said I was a disgrace to the industry...it still hurts...

    serious note Rant, I think we are both right to suggest Financial Planning should be a key subject in schools, perhaps to replace a mandatory subject which offers little in life!

    • 07 July 2011 12:22 PM
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    Make that 4 FTB getting on with it, just agreed another to a FTB @ £190k.

    Guess he wants to live in it and can afford it, I also guess he is not fussed if it goes up or down 5%. He got £10k off asking.

    Whooopie doo.....

    To my fellow EA's, I think we need to respect but sadly ignore those posters who have found us here on our EA site and bleat prices to us. We wont be selling to them soon, we need to move on and do business with those out there who are selling and buying.

    • 07 July 2011 12:21 PM
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    @rantnrave and Mike Wilson

    Although not necessarily agreeing with all that you say, I thank you for your comments.

    So, until the next time!

    ;0)

    • 07 July 2011 12:15 PM
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    FBA - Seems I can't win. Some EAs here are telling me I should be saving all I can, while others are telling me to go out and spend my money enjoying myself!

    • 07 July 2011 11:56 AM
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    Straw poll of 4 FTB on here who want to wait, or the 3 FTB's I just sold to since 1/7/11 who are getting on with it. ??

    I respect those who wish to wait it out, but please stop harping on about it.

    Rant, I sincerely hope you don't 'pop off' while you wait, you will never get to enjoy that money you worked so hard to save up.

    • 07 July 2011 11:51 AM
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    @Fun boy

    "Average salary £21,000 ?
    Couple, engaged maybe? Average x2 = £42,000
    2.5 x multiple £105,000 average borrowed
    3 x multiple £126,000 average borrowed

    Start at the bottom my friends, you can't buy a 3 bed semi. That's the way it was in the 80's and early 90's. "

    How would you envisage those people progressing up the ladder - assuming, one day, they'd like a couple of kids. Every rung on the ladder has to be financed with greater borrowing. So, if they borrow 6 times a single salary (3 x joint) to buy their first (persumably 1 bedroom (where I live it would, literally, not buy you a garage)) home, how much more would they need to borrow to move up, one day, to a 3 bed terrace or semi? An extra 100k? How is this to be financed? They are, after all, already on average wages. If one of them needs/wants to stay home with any children before the children are old enough to start school - I guess they had better save up enough money to pay the mortgage (at the lowest interest rates for generations - and the lowest base rate in 300 years) for 7 or 8 years.

    Sounds pretty unachievable / unsustainable to me.

    • 07 July 2011 11:45 AM
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    Thanks Ric.

    Where do we send the bill to for all the market research you've been getting from us ; )

    • 07 July 2011 11:30 AM
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    Morning Rant - I understand that and you have a valid reason for waiting based on your own opinion of the market. The fact is it always comes back to choices and I would agree to a large extent that it is the prices which are keeping many people back based on the assumption they will only go one way.

    We shall see what happens and in the meantime all have good debate. Strangely but in a good way I have learnt alot from listening or reading some of the comments from you and the others.......as it is rare anyone walks into my business to complain about house prices. onwards and upwards....or downwards some might wish! ;>)

    • 07 July 2011 11:28 AM
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    @Ray Evans

    "However, the next twelve months will see who is the more correct - or anywhere near"

    I agree with your sentiment, but not your timescale. This will take 20 years to play out.

    • 07 July 2011 11:14 AM
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    I'd agree with all of that Ric. Throw in some more personal financial lessons in school and get the credit card industry to tone down its marketing as well.

    Yes, the rising cost of living is an issue. However, I read recently that some of the most indebted people in the UK today are the over 55s, who have cruised the world through mortgage equity withdrawal etc.

    As an aside, I am in my mid 30s and have a very very substantial deposit saved. I could put a 40% deposit down on all but the most exclusive property in my area. I'm not going to though, because that money has been saved through years of careful budgeting and I want to use it wisely. In essence, I'm not looking for generous mortgage deals, I'm looking for value in the housing market and I just dont see it at the moment.

    The assumption is that if only FTBs could get a deposit together they would rush out to buy a house. That is true for some. There are many others out there in my position who have looked at current house prices, record low interest rates, rising numbers of repossessions, drawn out economic recovery etc and have decided to wait.

    • 07 July 2011 11:06 AM
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    Imagine having a logic of saving earlier in life, forget the talk of what you can save in a year....

    Schools and parents could perhaps start to teach that in life when you get past 18 there is a chance you might have to live somewhere other than at your parents!!

    I appreciate saving in one or two years is tough, but it appears many of the 38 year FTB's have not saved for a house from the start of their earliest years of employment (why should we save or they save I hear some say) well here is the reason to be able tobuy your own home when your older as waiting for your parents to pop off is not always the best plan.

    Imagine 18 years old, saving an amount of money each month which increases per year of month based on your earnings...how sensible savers would budget then perhaps just perhaps 38 year old FTB's would not be saying its not fair! Maybe even a government scheme where they add to the saving if not withdrawn after year 2 or 3 or whatever.

    I think the average age of a FTB is more because of the average lifestyle of an FTB rather than what they earn.

    Saving earlier, it is possible surely!! (please no comments of no jobs so cant save. No money cant buy, thats life what ever the price...too many also not taking the shitty jobs because of pride waiting for the exec job with the car and the bonus which will buy them the house within a year! dream world.....)

    • 07 July 2011 10:28 AM
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    Dont you lot have any work to do?

    • 07 July 2011 09:35 AM
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    With all respect Ray (and I don't want this to turn into a thread of childish insults - I credit you for always rising above that temptation), you strike me as someone who has been an outstanding EA over the years, especially to have survived and possibly thrived in the business as long as you say you have.

    Your passion for the subject of today's house price levels comes across in many of your posts - and I think that's great! By your own admission though, you're not one for facts and figures. It is my opinion, which others including EAs on other threads have picked up on, that your 'heart' for this subject is running ahead of your 'head'. I don't think you have grasped the full picture of what has happened to UK house prices over much of the last decade. I have politely asked you to explain your position, why you take the views you do, but you shy away from that on each occasion. I'll be honest here - I would have a lot more respect for your views if from time to time you tried to back them up with a few more details.

    I do make assumptions about other posters based on their comments, but I usually say I am doing that and ask them to correct me if I'm wrong. To date, I don't have too bad a track record in this area! You did post on a thread recently about young people who choose to spend frivolously rather than save for a deposit. You did quantify that with 'some', but I perceive that as making the same generalisations about a generation as you say I have done.

    With forums like this one, it is difficult to fully discuss issues that people have strong feelings about - much easier face to face in my opinion. In this case, we can't do that. However, if we did, rest assured that I'd happily shake you by the hand and get you a drink!

    • 07 July 2011 09:26 AM
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    @rantnrave

    The second and third paras of your last post show how little you really know when you make assumptions regarding life for previous generations. Over the last few weeks you have had some vallid points but your general opinions seem to reflect only what you want to read and hear yet you depict it as gospel. If this upsets you I am sorry but had to say it.

    • 07 July 2011 08:58 AM
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    FBA - you seem to be saying that the consequences of failing to meet rent payments are roughly equal or worse than failing to making mortgage repayments?

    Your posts happen to suggest that, like others here, you are a member of what is classed as the Boomer Generation? Correct me if I'm wrong, by all means.

    Folk in that generation do have a lot of experience of how things were not easy in their days either. Of course, the likelihood is that their partners didn't work back then, or if they did it was for some extra cash that wasn't necessary to make mortgage repayments. So, comparisons with the situation then and now is not really comparing like for like at all.

    Of course, I'm assuming that you have been following how much house prices have been rising over much of the last decade? I have to ask because we had someone debating these issues admit recently that they weren't aware...

    • 06 July 2011 19:26 PM
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    Just checked with our lettings manager..... And...

    Ah ha! thought I was right....

    If a couple renting found one lost their job and they could no longer afford the rent they would be evicted quick smart. In fact... they would be OUT quicker than falling into arears with a mortgage... So that's not an issue....really? is it Rant?

    What people must really be thinking is, "I wont live anywhere at all, in case I lose my job". That has to be it? How else could they commit to a 1 year lease or a 25 year mortgage. Either way, if you lose your job life will look pretty sh!!ty.

    In central London, yes prices are steep. Don't buy there.

    Again, if you can't afford to buy in Central London, simply don't buy there. Buy in the sticks and travel to work, like what folks did in the 30's. Did you know... that is how the suburbs came about... Salary in central London is higher, some people who work in London really can afford to buy in London, it's swings and roundabouts. Another alternative is...change job.

    Don't agents put train times to Victoria on their details anymore?

    Blimey... a trick I missed, I will get onto it right away. New campaign please ! Train journey times !!

    • 06 July 2011 17:51 PM
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    £126K? You can't even buy a car parking space for that in London!

    http://blogs.telegraph.co.uk/finance/ianmcowie/100010733/average-house-price-falls-below-cost-of-car-parking-space-in-london/

    I'd also question whether, given the current economic climate, it's wise to take on a mortgage on the basis that both partners will continue to remain in employment.

    There was an excellent point made yesterday that if the average age of today's FTB is 38, then they probably aren't going to be looking for a one or two bed apartment.

    • 06 July 2011 17:33 PM
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    @ Fun Boy Agent

    Crikey!

    Someone who basically agrees with my own thinking.

    Remeber : Choices - spend or save for the deposit.

    • 06 July 2011 17:24 PM
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    Average salary £21,000 ?
    Couple, engaged maybe? Average x2 = £42,000
    2.5 x multiple £105,000 average borrowed
    3 x multiple £126,000 average borrowed

    Start at the bottom my friends, you can't buy a 3 bed semi. That's the way it was in the 80's and early 90's.

    Get over it.

    You can't jump into the market at a mid level and not expect to have to pay for it.

    • 06 July 2011 17:16 PM
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    Oh come on, rant!

    'Melinda' is just you in a syrup - innit?

    Be honest - I'm known to go under the name 'PhoeeBee' at weekends as well... ;o)

    • 06 July 2011 17:14 PM
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    To make a change, here's someone else's view on the 'usual subject'. Well written piece in my opinion:



    Why A House Price Crash Would Be A 'Good' Thing

    http://www.huffingtonpost.co.uk/melinda-rogers/why-a-house-price-crash-w_b_889620.html

    • 06 July 2011 16:57 PM
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    @Mike /wilson - et al

    This "Headline" discussion/comments is following the normal "to & fro" of the last month or two. It is becoming repetitive in the extreme and many are posting their very personal experiences or wishes.

    However, the next twelve months will see who is the more correct - or anywhere near ;0).

    (Does anyone do any actual work?)

    • 06 July 2011 16:29 PM
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    FTB Dan "I appreciate this might seem like an impossibility to many, but if inflation keeps putting your cost of living up, if taxes stay high, and if interest rates increase the mortgage then people whom already have little to no deposable income will just fold under their many debts. "

    ...that's what you hope for, isn't it. Then you will turn up knocking on the door with a suitcase of your belongings and a pokcet full of £50 notes, ready to make an 'offer'.

    I think the idea of a potential share with rant is worth consideration.

    • 06 July 2011 15:38 PM
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    @James

    "Mortgage tax relief would help along with a higher stamp duty threshold."

    Why should people who borrow money to buy a house get tax relief on the interest - or are you recommending that people should get tax relief on their rent too?

    • 06 July 2011 15:32 PM
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    @Ray Evans

    ""..House prices are AT LEAST 50% too high..."

    House prices have fallen by that amount in N Ireland, Eire, parts of America and parts of Spain. I would not be so sure we are immune. We are as heavily indebted as any of them. So far the housing market has been protected - by QE, Special Liquidity schemes and the lowest bank base rate since the dawn of time. It won't go on forever.

    "The post by Tony at 10:10:33 this morning is valid - builders will not build without a profit and a shortage of property could be on the horizon?."

    NOTHING got built in my area between about 1991 and 1996. Housing sites were boarded up and left half constructed. Near me the oversite for a block of flats was put in and left. 5 years later it was demolished and a number of Charles Church detached houses put up. During this period - of almost literally no house building - the market fell significantly.

    "I defend the right for you to have your dramatic opinions ( I have some myself) but you must be realistic?"

    I am being realistic., People who thing the market is just marking time and is going to magically recover as even more debt is created might as well bark at the moon. It is not going to happen until a good amount of the current debt has been paid down.

    "P.S. The over reaction of the moneylenders is still a major problem - and I do not recommend the excesses of the past."
    The moneylenders have completely UNDER reacted. All they have done is paid lip service to rebuilding their balance sheets - desperate to avoid the housing market (against which much of their loans are secured) falling. For them it is a balancing act. No overreaction at all.

    • 06 July 2011 15:26 PM
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    @PeeBee

    "Come on, Mike - yes it is a financial nightmare for young 'uns to buy - but it ain't stopping the world spinning like you would have people believe..."

    You're in the North East if I remember correctly? For anyone in certain areas - earning whatever is average money for that region - things are bad but, as you say, not stopping the world from spinning.

    For young people living anywhere south of line drawn from (say) Bristol to Norwich - it is, in many ways, a stop the world spinning experience. The average age of a FTB is, we are told, 38! People are putting off having children to their early 40s - because they can't afford to buy a house and don't want to risk bringing up children in a succession of short hold tenancies where you are at the absolute whim of a landlord.

    So, sure, you can get on with things. I hope your youngest son doesn't get slung out of house during his wife's next pregnancy. Let's face it - they won't have any say over it. Let's hope he doesn't find himself moved on because the landlord fancies selling up causing him to move out of catchment for the school his eldest is at - just as his youngest is due to apply for a place. Etc. etc. etc.

    As you rightly say, I was brougnt up in a council house - and if your lad was in a council house that would be great - because he'd have security of tenure and he could paint the walls the colour he fancied. But because we live in a world where social housing is (virtually) either no longer available - or is on sink estates you wouldn't wish on your worst enemy - people need the security of their own roof over their head more than ever before.

    If my eldest moves back out into private rented accommodation and then announces he is going to have children with his girlfriend ... well I will really worry about how he will get on. It might be alright for a year or two - but it's not a great long term plan.

    • 06 July 2011 15:18 PM
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    BiffaBeau: Sorry - but I believe you are off the target by a county mile. Despite your 25 years as an Agent (which has to say something about your understanding of the housing market, and your ability to survive in many different markets...), I think that you are barking completely up the wrong tree. Or just barking.

    When Stamp Duty threshold was increased in 1984 by the lovely Nigel Lawson (or is it his daughter that's lovely...?) from £25,000 to £30,000, it was feared that you would NEVER be able to breech that figure with certain house type prices. WRONG! - in fact, only the next year the average house price inflated over the tax threshold. By the time it was next increased - to £60k - the average price was already over that figure. Now it is £125k - and again, those who say it will kill the market are proven WRONG!

    The requirement of a buyer to pay Stamp Duty has never in my experience caused the loss of a sale or purchase. It is merely factored in to the buyer's financial calculations - the more SDLT payable; the less the offer for the property (or the more of the buyers' money paid over...).

    You state that SD payments are at an all-time low. I don't think so. Maybe since 2000, yes - but certainly not ALL-TIME! Do the sums... 650000 transactions at an average of £160k sale price = LOADSAMONEY!! The tax payable on that is phenomenal! And before you state the obvious, those at the lower end that do not attract SD are compensated by those above £250k that attract 3% or more...

    With regard to your 'communists' comment - Stamp Duty was first introduced in 1694 and extended to property sales in 1808. Which communists from these periods are you referring to, Sir?

    Stamp Duty Land Tax IS unfair - I will grant you that. EVERY property should be liable. One rate - 1% or thereabouts across the board.

    Then, NO-ONE can complain it is unfair, unexpected, unaffordable, or anything else - can they? ;o)

    • 06 July 2011 14:59 PM
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    Northern Ireland: A lot of this caused by massive speculative overbuilding. Not the same in UK

    • 06 July 2011 14:56 PM
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    Prices in Northern Ireland are reported to already be down by 50% since their 2007 peak.

    • 06 July 2011 14:46 PM
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    I suppose the point is that prices always tend to revert to their long run average, which is something like 3.5x. Given that we are currently at 5.5% that suggests a 40% fall to return to the average, but bubbles tend to overshoot on the way down to, so 50% is very feasible.

    On the other hand real wages could rise 40%, or maybe prices could just stay high forever with nothing to support them, but that is probably just la-la-land thinking.

    I appreciate this might seem like an impossibility to many, but if inflation keeps putting your cost of living up, if taxes stay high, and if interest rates increase the mortgage then people whom already have little to no deposable income will just fold under their many debts.

    • 06 July 2011 14:22 PM
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    @Mike Wilson

    "..House prices are AT LEAST 50% too high..."

    Come on!

    The post by Tony at 10:10:33 this morning is valid - builders will not build without a profit and a shortage of property could be on the horizon?.

    I defend the right for you to have your dramatic opinions ( I have some myself) but you must be realistic?

    P.S. The over reaction of the moneylenders is still a major problem - and I do not recommend the excesses of the past.

    • 06 July 2011 13:33 PM
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    This is a great idea, perhaps Mike, Rant and FTB Dan should all chip in together and buy a £125k one bedder somewhere! ;>)

    be nice now guys...it was just a though!

    • 06 July 2011 13:23 PM
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    Mike Wilson: "HOUSE PRICES ARE AT LEAST 50% too high - for young people to have any realistic chance of buying their own home and ever having a family and some sort of half decent life."

    My parents brought six kids into the world and raised three of them to maturity in a council house. If I remember rightly, yours did similar with at least your goodself.

    My youngest son and his missus is in rented and has a four year old of his own - and they plan for more. The oldest and his good lady also expect to start a family in rented property.

    No complaints from ANY of them.

    Come on, Mike - yes it is a financial nightmare for young 'uns to buy - but it ain't stopping the world spinning like you would have people believe...

    • 06 July 2011 13:08 PM
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    Bless him Shapps; these days i'm not sure if he is actually just another VI shill or just incredibly, incredibly stupid.

    So this is the best that the second laughable FTB summit could come up with (from which FTBs were excluded, natch)?

    Bravo, gotta keep that debt bubble inflated somehow.

    • 06 July 2011 11:50 AM
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    @ Alex

    You miss the point. The stamp duty for people higher up the chain is deterring people from selling.

    Less people selling = less stock.

    Less stock keeps prices high.

    I know that it is a nice political ideal to tax the rich, but in this instance it has ramifications for all.

    You have to look at the bigger picture.

    • 06 July 2011 11:30 AM
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    BiffaBeau - i'm not quite sure I agree with the complete abolishment of stamp duty. We are a small island with a growing population, so there is limited land for building on. However, for peoples first residential home (i.e. the one they are going to be living in), I agree 100%. Double stamp duty on £1m+ properties and holiday homes.

    Clamp down on slumlords as well. Some low quality inner city properties remain empty for long periods despite the high demand.

    • 06 July 2011 11:07 AM
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    Its basic stuff really...when I purchased my 1st property 20+ years ago I had a 95% mortgage and my income - when multiplied by 3, was sufficient to service the mortgage. I continued to buy and sell and as there was not Stamp Duty and as it was easy to access funds this was an easy and sensible thing to do. Even when my mortgage went up to 12% it was still affordable. The problem is property prices, especially in London, are so high that it is just impossible to organise decent finance. If prices fell and lenders changed their lending criteria then things may change...but cant see this happening.
    On a presonal level I know many people who, by the time they were in their late 20`s had completely paid of their mortgages on their houses! This was because they lived in Yorkshioe and their homes had only cost 30K to start with. They were always laughing at me for having such a large mortgage....I for one felt very jealous of them!

    • 06 July 2011 10:48 AM
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    Most of my friends bought with a mate or girlfriend in the mid 80's - seemed to work for them, even if they split up. It's not a new idea at all. Mortgage tax relief would help along with a higher stamp duty threshold.

    • 06 July 2011 10:19 AM
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    I'd question whether house prices are overvalued when you see how expensive it is to build a new house. With build costs at £1000/m2, S106 taxes at £25,000 per property in my area, affordable houses required at a rate of 40% on all sites over 5 properties, and with new houses forced to build to "zero carbon" standard from 2016 whilst existing houses don't have to do anything to meet carbon reduction targets, the cost of building new properties is ludicrous.

    I did a valuation on a site recently with good potential for 6 houses, and once the developer had given away 2 "affordable" houses to a housing association, paid the S106 and given himself a 20% profit on gross sales (required by the banks to get a development loan), the likely selling prices for the houses at current prices meant the residual value of the land was about £50,000. Of course the landowner was never going to sell for that sort of money, so the development was taxed into extinction.

    • 06 July 2011 10:10 AM
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    *Scrap Stamp Duty*

    Abolish this tax across the board.

    Stamp duty was used as a #raid from the communists that were running this Country as a punishment for the disgusting people who wanted to own their own property.

    It's time for this anti-home-ownership to stop.

    The Goverment won't be so badly hit, as stamp duty revenues are at an all time low anyway.

    Better they waive the lost stamp duty revenue and collect instead the VAT from estate agents and on the stuff people buy when they move. It might even save some more home stores from closing.

    We need an open transitional market again, we need home owners and aspiring home owners to be free of this 'stealth' tax.

    Do this and then, leave......... the market to find it's own level.

    More people will decide to sell and move, which could increase stock and allow property to settle down to a sensible pricing level.

    I have suggested this to Mr Shapps direct. But guess what, no reply. What do I know, I am only an estate agent of 25+ years.

    Simples

    • 06 July 2011 10:06 AM
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    @Ant

    "It's time for the banks to start putting some faith in the market by accepting smaller deposits."

    Put faith in the market? What on earth does that mean? The only way 'the market' can function as you want it to is with ever increasing debt. And the banks have to provide it. And (in the final analysis - fractional reserve banking notwithstanding) savers have to give them the money to lend. Many savers have already withdrawn their cash from the banks and bought houses with it.

    "Reduce the cost of buying, generate interest & demand and moderate the rise of property prices."

    Moderate what rise in property prices? Do you mean - 'moderate the fall in property prices'? (Why not reduce the cost of selling too (how about agency fees of 0.5%).

    ... 'generate demand' ... what on earth does that mean? There is infinite demand for property. Always has been, always will be. People need houses and always want nicer houses than the one they've got.

    Demand, now and always, is SATISFIED BY THE ENDLESS PROVISION OF INCREASED DEBT. The ONLY way the property market can go up is if more debt is created. Haven't we all, collectively, already got enough debt to last us the next 50 years. Don't forget, by the end of this parliament, you will owe your share of about a TRILLION pounds borrowed, ON YOUR BEHALF, by our esteemed leaders.

    Don't forget, every day we pay £120 million in interest. And it's going up all the time.

    Still, stuff it. Let's just get the printing presses rolling again and get it over with. Hyperinflation must be answer eh?

    • 06 July 2011 10:03 AM
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    @Secret Agent

    "Instead, why not just increase the percentage people can borrow, reducing the need to have a large deposit? "

    Because that is what got us into this mess in the first place.

    As we stand here on the top of the mountain - with average house price at £160k and the average young person earning 21k - we have to face one, simple fact.

    HOUSE PRICES ARE AT LEAST 50% too high - for young people to have any realistic chance of buying their own home and ever having a family and some sort of half decent life.

    Because the housing market is so over-valued (and, do not labour under the illusion that the bankers that got us into this mess are unaware of this fact) - the banks know that the most likely thing that will happen to house prices is that they will fall.

    If they marked their mortgage books to market many lenders are bankrupt and the slightest whiff of trouble in the banking system again and the bank runs will be instantaneous.

    So, more 'relaxed' lending is not going to happen - probably for 20 years or more.

    • 06 July 2011 09:54 AM
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    'secret agent' i couldn't agree with you more.

    It's time for the banks to start putting some faith in the market by accepting smaller deposits. Reduce the cost of buying, generate interest & demand and moderate the rise of property prices.

    Seems to me that whilst the government allows the financial industry to lick it's wounds by hoarding stock piles of cash, the housing market will continue to struggle.

    • 06 July 2011 09:43 AM
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    Stop it, just stop it.

    Leave it alone.

    Put the property market down and walk away from the law.

    Why try and find another stupid way to muck things up (and ruin friendships if you ask me).

    I have sold properties for "friends who bought together" before and it has never been pretty.

    Imagine a divorce, just a little bit worse, and with two testosterony guys duking it out using an estate agent as a punch bag.

    Earnt my fee that time!

    • 06 July 2011 09:39 AM
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    Extraordinary that the first instinct of so many politicians is to address the symptoms and not consider the diseases. If the housing minister actually wants to be useful he should be doing several things.
    1. Streamline the planning process so the assumption is new housing can be build, and planning officers can object only in exceptional circumstances, i.e. reverse the burden of proof.
    2. Substantially prune building regulations, at the moment they serve only to frustrate developers. Push up cost and delays, and even introduce nonsensical situations where people cannot renovate existing buildings with like-for-like work.
    3. Stop propping up prices with insane housing benefits, £500 per week is still too much and is a scandal when the average taxpayer gets only a fraction of that.
    4. Stop propping up prices with artificial interest rates that are robbing savers and causing inflation that hammers the low earners.
    5. Stop propping up prices with mortgage assistance.
    6. Stop propping up prices by leaning on banks not to repossess.

    So in summary the problem is not a lack of government intervention. The problem is too much government intervention already.

    P.S I see my wide-eyed and slightly desperate cloner is posting under my name again (first post on page) , just ignore as usual until it gets removed.

    • 06 July 2011 09:39 AM
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    Another idea to show how unfamiliar the Government is with the property market and buyer behaviour.

    If you suddenly empower a market sector to buy property, prices will rise with demand.

    Instead, why not just increase the percentage people can borrow, reducing the need to have a large deposit?

    When we looked back, the people who were in negative equity after the last recession, recovered when the prices rise and if you have a repayment mortgage, the sooner you buy the earlier in life you click of the years of repayments and move towards 100% home ownership.

    If the cost of buying and slling were not so high, then it might make sense to buy with some friends, but if you sell after a two or three years how will you recover the high costs of stamp duty, legal and agent's fees unless the market is rising rapidly?

    If people are struggling to buy now, what will happen if/when interestrates rise substantially? And to the people who have struggled to buy now and their mortgage repayments go up?

    Unless prices rise, buying could be a mug's game with the threat of future rising rates.

    What do you think?

    • 06 July 2011 09:20 AM
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    And we have them running the country! Must have got this idea from a 7 year old.

    No wonder we are in deep manure and the bankers (did I spell that right or should there be a W at the front of that word?) are back on top with their obscene bonus schemes untouched.

    Shapps - get a life and go get a proper job you gormless narrow minded good for nothing dimwit.

    • 06 July 2011 08:57 AM
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    Dear Grant

    Other than ending HIPs and the occasional first time buyer summit that results in 0 (or worse than nothing as the above shows) what have you actually done while housing minister? Do you and your boss operate 360-degree appraisal process?

    I have a suggestion on a new mortgage type. With prisons being too busy, could a first time buyer buy a 2-bed property and turn one into a cell. They can then house upto 2 prisoners in their property. The govt would pay them a subsidy (if cost per prisoner is £37k per annum - could also result in a saving for the govt) that the banks would take towards the deposit or monthly payments. The owner is a guaranteed tenant and solves 2-problems in a oner.

    Perhaps one for your next summit.

    • 06 July 2011 08:45 AM
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    When Ministers say daft things like that it makes you realise the vast gulf between the civil service and the world outside whitehall. The scary thing is that he ever thought it was a good idea in the first place.

    • 06 July 2011 08:18 AM
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