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Housing guru demolishes Shelter 'scaremongering' on first time buyers

Respected housing analyst Kate Faulkner is accusing campaigning charity Shelter of ignoring key facts and scaremongering about the alleged difficulties of first time buyers to get on the housing ladder.

Faulkner - a prominent market commentator whose Designs On Property consultancy works with agents and runs a consumer service called Propertycheckists.co.uk - says Shelter’s argument “doesn’t add up at all.”

According to Shelter’s recent report, by 2020 first-time buyers will apparently need an average salary of £64,000 to buy a home, up from £52,000 today. They will also apparently require a typical deposit of £46,000 for a £270,000 first home. 

However, Faulkner takes the charity to task on a range of issues:

- firstly she says many areas have typical first time buyer properties that are far less than the £270,000 suggested by Shelter. Faulkner cites two- and three-bed homes in Nottingham currently on sale for around £60,000 to £70,000;

- secondly she says the apparent deposit of £46,000, is based on the assumption that first-time buyers are, on average, paying deposits of 17 per cent. “But they don’t have to do this; most of them could, if they wished, buy a house with a five per cent deposit” says Faulkner;

- she then says Shelter omits to take into account inflation which means that by 2020 the predicted house price rise built in to the charity’s assumptions may be little more than the cost of living increase;

- “the data also ignores the fact that many cities are still seeing property prices 10 per cent to 25 per cent lower than they were in 2007/8 when the credit crunch hit. In Liverpool and Bradford, if prices grow by 23 per cent to 2020, that actually means they will have taken nearly 15 years to recover to the prices seen prior to the credit crunch” says Faulkner.

Faulkner says that instead of scaring first time buyers, there is a responsibility to give them the most accurate information available.

Using Council of Mortgage Lenders and LSL Property Services data, she concludes that London first time buyers can purchase with an average salary of £60,000 - a salary of £30,000 each for a couple or for sharing friends.

“Go to Wales and the average income halves to £30,000 and it’s pretty much the same for Scotland and Northern Ireland. That means two people needing £15,000 salary each” she says.

Faulker says she is “truly shocked” at the absence of information on various Help To Buy initiatives contained in the Shelter report. 

“I’m afraid Shelter’s conclusion of these stats just doesn’t add up at all in my view. The only reason they would be ‘doomed’ is because the report would scare them into thinking they could never buy” she says.

You can see Faulkner’s full critique here.

  • Terence Dicks

    Good sense Kate.

  • icon

    The problem is whether this sort of analysis is getting in front of the right people? Everyone in this industry knows Shelter talk a load of cobblers, but are those that don't sill having the wool pulled over their eyes?

  • Don Holmes

    Great comment Kate it's about time the PRS recruited some serious and high profile support to challenge the kicking it is getting from all quarters, so having someone of Kate's Calabria gat involved.

  • Brit Sixteen Sixty Four

    Kate Faulkner is speaking rubbish. In much of the country the housing bubble is far bigger than 2007 she seems to be ignoring the London and the South. She mentions schemes like help to buy that is tax payers money going straight to builders to vastly inflate their house prices, it is morally wrong.House prices in London are 8-12 times average salaries for the area, it is totally unaffordable.

    Thankfully the housing bubble is gaining momentum in London at collapsing. 2016 is the new 2008.

  • Maybe Bee B

    It's interesting to see Shelter 'supporters' completely ignoring the facts and statistics and instead taking the usual irrational approach.

    Kate's comments are based on pure statistics and to confuse the truth behind the numbers with whether the facts are morally 'right or wrong' is disingenuous to say the least

  • Property  Guru

    You can clearly see right and wrong views in both comments, however I’m with Kate, while she is analytical, at least her comments are national FACTS, these are relevant rather than fact that get you use to get in the lime light “again”. Shelter whilst a fantastic charity also forgets the fact it needs to grow fact on. “housing and homeless” they should get their own facts and figures. Shelter needs limelight to get donations etc, Shelter should give more on topic rather than gaining stories from alleged buying difficulties. Shelter please tell us more about the real people and the help you give and the help we all need to give. If you can’t get on the ladder, then you pick a house you can afford. For as long as people get on the ladder at the high prices they will keep the prices up. Supply and demand then North and South.
    Do North facts – Then do South facts. New facts that’s for sure. London is a whole new world of its own compared to North in many ways. Maybe our government should get out a little while. (dig)
    Let’s all stop looking at being MINI politicians we all can’t fix it all in a day. Let’s donate £50 to shelter then look life.
    Just an opinion.

  • icon

    I wouldn't give a penny to shelter! They are a self serving political movement who clearly have an anarchic agenda.

    As Kate Faulkner has pointed out there are plenty of first time buyer properties available at affordable prices even for couples on the minimum wage all over the country. If people can't afford to buy in London then move!

    There are too many people in this country who keep on bleating that life is not fair and always demand something for nothing.

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