Middle class housing crisis

[JohnfromUK]

13 minutes ago, Mice! said:

I meant they shouldn't have over stretched to begin with, but the lower rates over recent years means people have looked at bigger houses in nicer areas.

You are right.  Interest rates have been incredibly low - and for several years.  They are still actually very low by historical standards compared to inflation.   I don't really know how much 'advice and warning' about future interest rates people have been given when arranging their mortgages?  I know that most 'serious' papers, and financial advice sites have been warning about rate rises all the time the rates have been low and people must allow for rises when working out what they can afford. 

Unfortunately, the Bank of England has been so poor in its predictions - not all the BofE's fault though a good part of the inflation we now see has its roots in quantitative easing (formerly known as printing money) as well as energy prices due to the Ukraine situation and other 'world' issues.

[12gauge82]

7 hours ago, Mice! said:

I disagree with that as well, most folk can and do put a roof over their heads. But I think a lot of people are in houses that are just too expensive,  they might be struggling living in a detached house in area Z but would be managing fine in a semi in area X.

The luxury items are definitely more affordable now than twenty years ago, but in a lot of cases they'll be getting bought on a card, not saved for or with spare cash.

I think it depends on the area, but the main point I was making is a man growing up several years ago could support his whole family on his sole wage, couples can't do that on two anymore and I believe to blame the young for that because they own a phone or TV costing a couple of hundred quid is missing the bigger picture. 

7 hours ago, Mungler said:

 

There are additional factors. Returning to the Ugandan Indian's as well as embracing education and entrepreneurial spirit they had tight family structures (good for a supply of labour and capital through pooled resources), low divorce rates and multi generational living where grandparents would look after children to free up parents to go to work.

From what I can see with my own eyes, if you have parents that actually give a monkeys, and who stay the distance, the children of those people will absolutely have the best start in life.

If you have no family, no wider support structure, no education, no portable skills and no money, that's a difficult hole to climb out of for sure. Indeed, fair play to Rupert for his life journey - he managed it.

Yes I see where your coming from now, although I think there's still the point that it's not really the middle classes fault that they have been born into a system that simply doesn't work for them anymore. 

6 minutes ago, JohnfromUK said:

You are right.  Interest rates have been incredibly low - and for several years.  They are still actually very low by historical standards compared to inflation.   I don't really know how much 'advice and warning' about future interest rates people have been given when arranging their mortgages?  I know that most 'serious' papers, and financial advice sites have been warning about rate rises all the time the rates have been low and people must allow for rises when working out what they can afford. 

Unfortunately, the Bank of England has been so poor in its predictions - not all the BofE's fault though a good part of the inflation we now see has its roots in quantitative easing (formerly known as printing money) as well as energy prices due to the Ukraine situation and other 'world' issues.

Don't forget, it's all brexit fault 😂

[team tractor]

7 hours ago, Mice! said:

That sounds like half the lads in work 😅

We worked it out to 80 a month . That’s best part of £1000 a year . Just the delivery charge . 

[Mice!]

19 minutes ago, team tractor said:

We worked it out to 80 a month . That’s best part of £1000 a year . Just the delivery charge . 

Some at work use the canteen every day, plus buy coffee,  then say their skint, the canteen is handy but if you say £4 for food, £2 ×? For coffee, plus maybe a bacon barm a couple of times a week, its like they can't add up, one lad did and I'm sure he worked out it was something £3-400 over a couple of months

[Lloyd90]

1 hour ago, Mice! said:

Some at work use the canteen every day, plus buy coffee,  then say their skint, the canteen is handy but if you say £4 for food, £2 ×? For coffee, plus maybe a bacon barm a couple of times a week, its like they can't add up, one lad did and I'm sure he worked out it was something £3-400 over a couple of months

It does all add up, but then again, people have to live relatively normal lives. 
 

I assessed a bloke before who had £700k+ in the bank and had a note on his fridge that said “frugality, extreme frugality”. 
 

He bought the exact same items from the shop every single week and had his weekly food shop down to about £10.

Just ate the same thing every night. 

[JohnfromUK]

1 minute ago, Lloyd90 said:

people have to live relatively normal lives

The trouble is, for some spending right to the limit of (or even beyond) their means has become 'normal life'.

[team tractor]

8 minutes ago, Lloyd90 said:

It does all add up, but then again, people have to live relatively normal lives. 
 

I assessed a bloke before who had £700k+ in the bank and had a note on his fridge that said “frugality, extreme frugality”. 
 

He bought the exact same items from the shop every single week and had his weekly food shop down to about £10.

Just ate the same thing every night. 

I take a salad or sandwiches tho dude . 
my lads at work spend £40 a week in the local shop on lunches . I spend £10 . 
If you go back to the 60,70,80s it was normal to take a sandwich to work and an apple .

To be honest we are a generation of fattys that eat lazy food . Eating healthy is cheaper 

chocolate is my weakness 🙈

[bluesj]

On 23/11/2022 at 20:21, 1Ab said:

I am currently caught up in this housing mess. I have saved money since I was 16 and have a considerable sum saved up more than 10% deposit on a 3 bed house however salaries have been stagnant for the last 10 years so the loan value I can get as a single bread winner means I cannot get a mortgage to cover the purchase of a house. 

All I can get is a small flat and this is not feasible with a family of 5. 

I have made peace with the fact that I will probably never buy a house and that I will pay the silly rent landlords ask these days. 

In terms of offsetting the cost of rent with not having to do maintenance it's a double edged sword. The landlord never looses, from experience I have learned if I dont raise maintenance issues  the landlords put up the rent in small increments the second you start asking them to do maintenance they increase the rent by allot they make their money back.

The bank tells me they think I can't afford a 750 a month mortgage. Yet I have been paying 1000 plus rent for the last 5 years. What can you do.

I think the only way to solve this issue would be to get the government to instate a rental cap. 

 

You could be one of the winners in all this if prices crash.

[Mice!]

49 minutes ago, Lloyd90 said:

It does all add up, but then again, people have to live relatively normal lives. 

Of course they do, but it's a lot cheaper to make lunches, I buy pretty much the same things for work each week, but not for a tenner!

53 minutes ago, Lloyd90 said:

assessed a bloke before who had £700k+ in the bank and had a note on his fridge that said “frugality, extreme frugality”. 

Just makes no sense, probably hasn't put the heating on yet either.

40 minutes ago, team tractor said:

take a salad or sandwiches tho dude . 
my lads at work spend £40 a week in the local shop on lunches . I spend £10 . 

I can understand when it's young lads living at home, but when people have bills, kids etc it's nuts.

[team tractor]

47 minutes ago, Mice! said:

Of course they do, but it's a lot cheaper to make lunches, I buy pretty much the same things for work each week, but not for a tenner!

Just makes no sense, probably hasn't put the heating on yet either.

I can understand when it's young lads living at home, but when people have bills, kids etc it's nuts.

My neighbour (take away boy 😂) told me he’s spending £600 a month on lunches and takeaway. He lives with his parents *** 😂. 
 

[armsid]

When i left school at 16 i started as an apprentice at Morris Engines in Coventry went to college day release and 1 evening got my City and Guilds as engineer worked at Jaguar on Maintenance During this time many firms closed we had joined the Common Market engineering colleges in Coventry closed down and lots of school leavers from a city built on manufacturing had no jobs and all the Gov said go into higher education earn £30k plus after you qualify so the higher degree colleges churned out graduates for these high wage jobs and house prices went up as those people that worked in factories sold up and moved to where the work was These vacant houses were let to the student explosion in Coventry and they have not fallen meaning 2 wages and in some cases topped up with UC is the only way they can live and afford a house oh for the old days 2x your wage would buy a house not any more

[oowee]

5 minutes ago, armsid said:

When i left school at 16 i started as an apprentice at Morris Engines in Coventry went to college day release and 1 evening got my City and Guilds as engineer worked at Jaguar on Maintenance During this time many firms closed we had joined the Common Market engineering colleges in Coventry closed down and lots of school leavers from a city built on manufacturing had no jobs and all the Gov said go into higher education earn £30k plus after you qualify so the higher degree colleges churned out graduates for these high wage jobs and house prices went up as those people that worked in factories sold up and moved to where the work was These vacant houses were let to the student explosion in Coventry and they have not fallen meaning 2 wages and in some cases topped up with UC is the only way they can live and afford a house oh for the old days 2x your wage would buy a house not any more

 The closure of the engineering colleges in Coventry has little to do with the common market more a matter of market trends. The UK failed to export its car making advantage trying to keep production in the UK. Loosing out on the benefits of globalisation the local (UK) manufacturers lost out in scale, design, pricing and quality and were displaced by US, Japan etc. 

My family were kicked off the farm is Stratford by the mayor of London under the enclosure and land reform acts and sent to Coventry. They set up as weavers and had other members of the family indentured as virtual slaves. Eventually becoming clock makers, bike makers and the car makers. Very few of them could buy a house even if they could find one for sale.

I bought my first house in Coventry at £23k in 1982 we were both earning and the house then was more than 2 x earnings. 

These things come and go we have yet to get to lifetime mortgages but as the population tops out and the economy declines property should get more affordable. The big driver currently is new household formations (divorce and long life) . Either way we could get ourselves out of the problem simply building more social housing.

[Mice!]

36 minutes ago, oowee said:

Either way we could get ourselves out of the problem simply building more social housing.

But define social housing??

[oowee]

12 minutes ago, Mice! said:

But define social housing??

Filling gaps in the free market. Affordable. Available. Pepper potted. Tenure blind. 

[12gauge82]

5 hours ago, oowee said:

 The closure of the engineering colleges in Coventry has little to do with the common market more a matter of market trends. The UK failed to export its car making advantage trying to keep production in the UK. Loosing out on the benefits of globalisation the local (UK) manufacturers lost out in scale, design, pricing and quality and were displaced by US, Japan etc. 

My family were kicked off the farm is Stratford by the mayor of London under the enclosure and land reform acts and sent to Coventry. They set up as weavers and had other members of the family indentured as virtual slaves. Eventually becoming clock makers, bike makers and the car makers. Very few of them could buy a house even if they could find one for sale.

I bought my first house in Coventry at £23k in 1982 we were both earning and the house then was more than 2 x earnings. 

These things come and go we have yet to get to lifetime mortgages but as the population tops out and the economy declines property should get more affordable. The big driver currently is new household formations (divorce and long life) . Either way we could get ourselves out of the problem simply building more social housing.

Nope it's very relevant up and down the length of the UK, joining the EU killed uk manufacturing as we were basically allocated the services sector, predominantly low pay low skill. Luckily we managed to hang on to financial although Germany and France have tried for years to muscle in on it and although good for UK economy, its not much good if your an ex manufacturing employee who now has no job anymore. 

[Mice!]

9 hours ago, oowee said:

Filling gaps in the free market. Affordable. Available. Pepper potted. Tenure blind. 

I've no idea what pepper potted and tenure blind mean, I was expecting you to say loads of council houses. 

But who builds them, where are they going? I ask because affordable and available don't seem to go hand in hand with housing.

[12gauge82]

42 minutes ago, Mice! said:

I've no idea what pepper potted and tenure blind mean, I was expecting you to say loads of council houses. 

But who builds them, where are they going? I ask because affordable and available don't seem to go hand in hand with housing.

Quite right and it was not being helped by our eu memberships free movement or our current illegal immigration situation. House prices are being driven largely by supply and demand, more people equals higher house prices. 

[oowee]

2 hours ago, 12gauge82 said:

Quite right and it was not being helped by our eu memberships free movement or our current illegal immigration situation. House prices are being driven largely by supply and demand, more people equals higher house prices. 

More households (household formations) is the largest driver, not the same as more people. Lots of people living alone (divorce, single nesters, longer lived residents)  has changed the demand type.

3 hours ago, Mice! said:

I've no idea what pepper potted and tenure blind mean, I was expecting you to say loads of council houses. 

But who builds them, where are they going? I ask because affordable and available don't seem to go hand in hand with housing.

Pepper potting is avoiding ghettos you mix social hosing amongst other housing. Kids share schools rather than large council estates with all the kids going to the same school. Helps kids from low income backgrounds by getting them into schools with more affluent families. 

Tenure blind is where its not possible to identify a rental from a shared ownership from a freehold purchase. It removes stigma and encourages shared sense of community. 

Who builds them? The private sector will stop at market supply point meeting demand. Their model relies upon ever rising prices. So Govt must step in with private sector to build them. Where? There is the rub as no one wants them by them. We must abandon green belt, as it destroys green land, and build on the urban edges. 

Edited November 26, 2022 by oowee

[12gauge82]

56 minutes ago, oowee said:

More households (household formations) is the largest driver, not the same as more people. Lots of people living alone (divorce, single nesters, longer lived residents)  has changed the demand type.

Pepper potting is avoiding ghettos you mix social hosing amongst other housing. Kids share schools rather than large council estates with all the kids going to the same school. Helps kids from low income backgrounds by getting them into schools with more affluent families. 

Tenure blind is where its not possible to identify a rental from a shared ownership from a freehold purchase. It removes stigma and encourages shared sense of community. 

Who builds them? The private sector will stop at market supply point meeting demand. Their model relies upon ever rising prices. So Govt must step in with private sector to build them. Where? There is the rub as no one wants them by them. We must abandon green belt, as it destroys green land, and build on the urban edges. 

Your telling me that the amount of immigration to the UK has had little/no affect on rising House prices because it undoubtedly has. I'm not jumping on a sound bite and am more than happy to look at the situation in a matter of fact way, I've always said there have been some benefits to migration, but keeping house prices down is definitely not one of them. 

[oowee]

25 minutes ago, 12gauge82 said:

Your telling me that the amount of immigration to the UK has had little/no affect on rising House prices because it undoubtedly has. I'm not jumping on a sound bite and am more than happy to look at the situation in a matter of fact way, I've always said there have been some benefits to migration, but keeping house prices down is definitely not one of them. 

I dont have the data so cannot definitively comment on the overall impact. As a percentage of social housing I would imagine the impact to be significant. As an impact on house prices I would imagine it to be negligible. When I worked for Homes and Community Agency, now Homes England, the impact of new household formations was over 50% of demand. You can imagine that just extending life expectancy has a huge impact on housing supply. 

[12gauge82]

7 minutes ago, oowee said:

I dont have the data so cannot definitively comment on the overall impact. As a percentage of social housing I would imagine the impact to be significant. As an impact on house prices I would imagine it to be negligible. When I worked for Homes and Community Agency, now Homes England, the impact of new household formations was over 50% of demand. You can imagine that just extending life expectancy has a huge impact on housing supply. 

Surely social housing has an impact on prices as if there were not the need for social housing, the resulting glut of property would end up in private ownership or relieve housing pressure elsewhere. Unless there's a majority who are literally homeless on the streets of course? 

[oowee]

46 minutes ago, 12gauge82 said:

Surely social housing has an impact on prices as if there were not the need for social housing, the resulting glut of property would end up in private ownership or relieve housing pressure elsewhere. Unless there's a majority who are literally homeless on the streets of course? 

Social housing will have an impact on sold prices as it reduces the profit of developers who have to provide some of it so it would impact at the margins. Given that social housing is a small part of the mix and of that the proportion of social housing that goes to migrants is even smaller and the largest part of demand is new household formations then the overall impact of migrant demand to houses could be assumed to be negligible.  

Far and away the biggest impact on prices will be material costs, mortgage costs, relationship between supply and demand. Only if the equation slips in favour of price (demand) supply will increase. Homes England goes to extraordinary lengths (Penalty's and claw back) to press builders to build therefore increasing supply and holding down prices. Developers will employ their own tactics (Weather, labour and material shortages) to ensure that supply is suppressed to maintain margins.  

Working for Prescott we had a scheme for a £60k house. We built thousands but they had to be sold at market value as it is illegal for the public sector to sell for less. They went from £160k to £220k making a super profit, unfortunately our bonus did not have a profit element. 😢

[Mice!]

3 hours ago, oowee said:

Pepper potting is avoiding ghettos you mix social hosing amongst other housing. Kids share schools rather than large council estates with all the kids going to the same school. Helps kids from low income backgrounds by getting them into schools with more affluent families. 

Tenure blind is where its not possible to identify a rental from a shared ownership from a freehold purchase. It removes stigma and encourages shared sense of community. 

Who builds them? The private sector will stop at market supply point meeting demand. Their model relies upon ever rising prices. So Govt must step in with private sector to build them. Where? There is the rub as no one wants them by them. We must abandon green belt, as it destroys green land, and build on the urban edges. 

I don't see how most of that is possible,  there were thousands of new houses and apartments built nearby, with affordable housing incorporated,  they look different but similar style,  you can't just put social housing into existing estates.

Not all council estates end up like Ghetos, it's more dependent on who's living in them, what amenities there are etc.

I think they should be building on brown field  sites, that's what they did here.

53 minutes ago, oowee said:

Working for Prescott we had a scheme for a £60k house. We built thousands but they had to be sold at market value as it is illegal for the public sector to sell for less. They went from £160k to £220k making a super profit, unfortunately our bonus did not have a profit element. 😢

And there's the problem,  houses that we're planned to be cheaper aren't so aren't available to those who need them.

[12gauge82]

1 hour ago, oowee said:

Social housing will have an impact on sold prices as it reduces the profit of developers who have to provide some of it so it would impact at the margins. Given that social housing is a small part of the mix and of that the proportion of social housing that goes to migrants is even smaller and the largest part of demand is new household formations then the overall impact of migrant demand to houses could be assumed to be negligible.  

Far and away the biggest impact on prices will be material costs, mortgage costs, relationship between supply and demand. Only if the equation slips in favour of price (demand) supply will increase. Homes England goes to extraordinary lengths (Penalty's and claw back) to press builders to build therefore increasing supply and holding down prices. Developers will employ their own tactics (Weather, labour and material shortages) to ensure that supply is suppressed to maintain margins.  

Working for Prescott we had a scheme for a £60k house. We built thousands but they had to be sold at market value as it is illegal for the public sector to sell for less. They went from £160k to £220k making a super profit, unfortunately our bonus did not have a profit element. 😢

Thank you for taking the time with that detailed reply. 

[team tractor]

2 hours ago, Mice! said:

I don't see how most of that is possible,  there were thousands of new houses and apartments built nearby, with affordable housing incorporated,  they look different but similar style,  you can't just put social housing into existing estates.

Not all council estates end up like Ghetos, it's more dependent on who's living in them, what amenities there are etc.

I think they should be building on brown field  sites, that's what they did here.

And there's the problem,  houses that we're planned to be cheaper aren't so aren't available to those who need them.

Every new estate has to have social housing to get the planning now . It’s been massive news in the papers dude . 
you spend £400,000 on a house but next door is basically council .

my last girlfriend has the right to buy her 3 bed brand new house worth £230,000 for £50,000 in 5 years . It was a lovely house