A lot of the people who read this website are too young to worry about issues like house prices and land ownership, but you’ll get there one day. When you are young you kind of assume that you will be in a similar position to your parents – I did anyway. I thought I would get old find a nice job and buy a house. Well that never happened. I moan about the first two too much anyway so now I guess it’s time to moan about houses. This has an effect on a lot of you anyway without you realising it – if you ride trails then you will know the problems involved with trying to get some land to put them on.
Bascially at the moment houses are seriously over prices. A guide for what you should/could get a mortgage on your house for is roughly 3.5 times your salary. The average salary in the UK at the moment is about £24,000 (I don’t earn this). However, this still puts even the most basic studio flat out of reach of most people (you need 100,000+). This is really annoying.
What has happened in recent years is that the cost of houses has risen very quickly making them way bigger than salaries. This means that if you want to buy a house you have to take out a huge mortgage and work really hard to pay it off. This is not fun, and if you are relying on two salaries it means that you can’t have kids or the bank will come and take your house away. This is why less and less people are buying houses now – not because they don’t want to buy because they can’t
This rise in house prices has also caused a huse rise in land prices which means that if you want to buy a small section of woodland to put some jumps on you are looking at paying hugely inflated prices.
This has meant that I have spent a lot of time thinking about ways to get a house without paying ridiculous prices. Gypsies get away with just parking their caravan in a field and they get left alone, but who wants to live in a caravan. I have heard of some people who live in huts at the trails. That sounds like lots of fun in the summer, but in the winter it would be miserable, and you would still need a job to get some money to buy food.
The other problem is you can’t just buy some land and build a house becasue you need planning permission. To get land which you could get planning permission on is about 100 times more expensive than other land and actually makes up a large part of the cost of a house.
So this means that a lot of people are stuck and there are no first time buyers. This has led a lot of people predicting a stagnation of the market or a soft landing.
This is all lies. The market is heading towards a crash and everyone knows it, they are just too scared to say so in the media becasue it will make it happen quicker and all people with houses will suddenly find that they are worth less.
Here’s a reason to not believe anything the banks say. This article was writtin in 1999.
The Halifax said it believed the sudden rise was a one-off. Economist Martin Ellis said: “We are not looking at the beginning of a property boom as seen in the 1980s, but now is a good time to buy a house as mortgage rates are competitive and there are plenty of discounts to be found.”
Well that turned out not to be true. This is the beginning of the boom.
I like pictures. If you don’t believe me look at this graph:
The house price boom is a global phenomenon and is the biggest economic boom in history. The bigger they are the harder they fall.
More interesting graphs.
By the way, did you know mortgage means “death grip”.