‘Race For Space’ Fuels 10.9 % Surge In UK House Prices

Younger house buyers are just as keen on building a new life in the country as they are to move to the bright lights of a big city as they react to the post-pandemic changes in working patterns and rapidly rising property prices. Prices rose on average by 1.8% in May, after a 2.3% rise in April, according to the figures, pushing the annual rate of increase up from 7.1% a month earlier. As a result, the average price of a house in Britain has hit a high of £242,832, up nearly £24,000 over the past 12 months. Read more on the Guardian website.

https://www.theguardian.com/money/2021/jun/01/race-for-space-fuels-surge-in-uk-property-prices

Young People With Deposits Still Cannot Buy Homes

About 40% of young adults cannot afford to buy one of the cheapest homes in their area even with a 10% deposit, according to a new research. The Institute for Fiscal Studies said house prices in England have risen by 173% over two decades. But average pay for 25-34 year-olds has grown by just 19% over the same period. In 1996, 93% of those with a deposit who borrowed four and a half times their salary could purchase a home but that fell to 61% in 2016. The IFS also said that higher rental costs - up from an average £140 a week to £200 a week in England - have "reduced the purchasing power of young adults' incomes" and made it harder to save for a deposit. Read more on the BBC website.

https://www.bbc.co.uk/news/business-45776289

Give Britain’s Young Homebuyers State Loans For Deposits

Young people struggling to buy their first home should be offered loans by the government to help them pay the deposit, according to a new report which warns that reduced home ownership and the recent surge in private renting is damaging family life. The idea has been put forward by the Housing and Finance Institute (HFI). As with the current system of student loans, the HFI suggests the loans could be repaid as a proportion of salary once the recipient has reached a certain income threshold. Alternatively the money could be repaid under a simple repayment arrangement, although at a low interest rate and over a long term. Read more on the Guardian website.

https://www.theguardian.com/society/2018/jul/29/housing-renting-mortgages-loans-home-ownership-first-time-buyers

The Housing Market Is Too Big To Fail!

As British taxpayers discovered to their cost during the financial crisis, big banks were simply too big to fail. The banks are no longer the biggest domestic threat facing the UK economy, that dubious honour now belongs to the housing market. At the start of this year UK homes were worth £5.75 trillion in total, around 2.7 times GDP, according to Savills. The UK property sector is too big to fail and the regulators are partly to blame, because their easy money policies have ramped up house prices to today's crazy levels. The property market is now a Ponzi scheme. It can only be kept going by sucking in new blood at the bottom, and banks are happily obliging by opening up a new front in the mortgage price war, with a blitz of cheap deals aimed at young buyers borrowing 95% of their property's value. Precisely the ones who are most vulnerable to a crash. Read more on Yahoo News.