Current housing minister Kit Malthouse has delivered a damning verdict on the market.
He told delegates at the Conservative party conference: “Something has gone wrong when your kids have to wait for you to die before they can get on the property ladder.”
He was speaking at a break-out panel hosted by online mortgage broker Trussle and independent think tank Bright Blue.
Other panellists included deputy London mayor James Murray who said that 80% of newly built homes in London are affordable to only 8% of the city’s renters.
Trussle founder and CEO Ishaan Malhi said that many young people struggle to get on the housing ladder.
He said: “Some people can afford the actual mortgage payments, but it’ll take them an average of 19 years to save up the deposit.
“Everyone should be able to dream of owning a home. But with homes increasingly unaffordable and mortgages not easily accessible, home ownership is becoming more difficult for the current generation.
“Both the Government and the industry need to address this today.”
Comments (8)
This problem has been brewing up for the past 40 years or so – successive governments have failed to organise house – building on a sufficient scale and now we have the perfect storm. Not enough homes so prices are high, building constraints mean insufficient properties get through the planning stage, high cost of labour (maybe worse after Brexit?) is deterring builders, and then there’s the need to find a deposit! Infrastructure has been allowed to stagnate, meaning that even if a developer builds an 800 house estate, local schools, doctors and roads can’t cope. Glad I’m not in my early 20s any longer!!
Maybe people see what they want to see. When I think about my family and friends, most aged between 29 and 38, all have bought a house, even the cheap ones. Prices range from £120k to £240k with most buying a home for about £170k and none of the parents are dead. Several 10% deposits came from mums and dads I’m positive about that. I live in the midlands, so maybe different for London. If anything, I would have to conclude that houses here have never been so affordable. There must be some robust data on this somewhere? Are my family and friends really so unique?
Quite right!
Two facts are always overlooked in the housing hysteria.
1. Many parts of the country are affordable, its not all about London. Exactly 50% of all UK postcodes are cheaper or more affordable than they were 10 years ago. (BBC and others). Your midlands prices look like something from the 1950s to us Southerners. And the North…! My word! If you can’t afford 40k for a 3-bed terrace then nobody can help you.
2. FTBs are not out in the cold, are actually at their highest level since the credit crunch, and more than doubled in 8 years from 168,000 transactions in 2010 to 368,000 in the year to date. A large chunk of this gain was prior to the tax changes for landlords, proving that FTBs are on a natural recovery curve since the crunch that has little or nothing to do with landlord activity.
Some people can’t afford houses, some can’t afford them in certain areas, but is it a real problem or more a sense of entitlement and blame?
Well i live in Luton where house prices are extortionate considering the state of the town where a 3 bed house is going to cost £300k which is cheapest you’ll find. Housing prices are ****** whether people like it or not which is why most of my friends (between ages 25-30) can’t afford the move out. As the article says making the monthly isn’t an issue but stumping up 20-30k for a deposit is just absurd.
I don’t want to be critical of Mr Malthouse but there are lots of people of his generation and his parents generation who never bought a house irrespective of whether their parents were dead or alive.
Do all generation rent not own homes, no! Do all baby boomers own homes? no!
The housing crisis isn’t a generational thing it is the unintended consequence of low interest rates. We have an economic crisis that is causing a housing crisis.
After all the broken promises of endowment mortgages my generation have learned not to trust the financial services industry. Because it became obvious that endowment policies wouldn’t pay off the interest only mortgage we had and we all risked repossession rather than the promised lump sum of spendies all faith and credibility of financial institutions evaporated.
A cut in interest rates allowed a lot of people to pay off their mortgages and avoid repossession or extending their mortgage beyond 25 years.
For their next trick the financial institutions then started on our pensions. 1% doesn’t sound like a high fee for them to charge but on policies that are growing by 2% pension firms were getting as much benefit from our pension pots as us but they didn’t have to wait to spend 25% of it.
What have a lot of people of my generation did because we have no faith in the financial institutions, because interest rates are so low and access to our money is restricted? We have made other pension provision. We have invested in or inherited property that yields 6 or 7 times a good building society rate and enjoys capital growth as well.
Restricting supply and cheap borrowing only has one effect on assets, it drives up their value so reinforcing the stability and security of the investment.
The dilemma is how we get from necessary low interest rates to higher interest rates without causing the inevitable consequences, Instead of sub prime lending being the issue that caused the 2008 crisis, prime lending could be the cause of the next one.
The way our country is governed is broken. If it was a business it would be nearing closure.
The problem is Politicians running anything, mostly they are in fact serving themselves and aren’t driven to actually deliver meaningful change.
It’s simply a game to cling onto the Chalice of Power through each election…… (you get the idea, I have no time for any of them!).
Instead of merely issuing a statement Kit, put some workable proposals on the table. Action speaks Louder than Words!
But did he actually propose a solution??? Or did he just bang on about we will do something about it? Did he confirm that government policies like Right to Buy and Help to Buy are one of the main causes for the increase in house prices?
Whilst governments are funded by certain developers policy will never change as propping up the price of new homes is most important to them
‘Current housing minister Kit Malthouse has delivered a damning verdict on the market.’
A housing minister stayed in post long enough to deliver a damning verdict on the market? Amazing.