House Price Affordability

  oresome 20:47 29 Jul 2006

In the press today:

"Police, teachers, nurses and firemen cannot afford to buy property in most UK towns"

Why are the above groups always singled out for pity?

They receive average or better salaries and much better pensions than the majority of workers.

  Arthur Scrimshaw 20:59 29 Jul 2006

because the majority of the press have a lack of imagination and feel that most people have sympathy for that particular group. It's a lazy story which doesn't often explore the true nature of the problem.

  rdave13 21:01 29 Jul 2006

I totally agree with you. Wages around here are not much above £6 per hour unless you are a policeman, teacher...etc!

  Tim1964 21:13 29 Jul 2006

These 'Key workers' as they have been labelled supposedly deserve cheaper housing because they need to work nearer to us ordinary mortals.

I cannot afford to buy a home despite the fact that both my wife and I have full time jobs and my wages are good by most standards.

Those of us at my job (EDF Energy) are responsible for keeping the electricty flowing and the lights on and we often comment on the fact that if those key workers (teachers) didn't work for say, 2 weeks, would anyone notice. If my colleagues and I stopped working for 2 weeks I think someone may notice.

Come to think of it, aren't some key workers off for 7 weeks now? So they don't need to live near work as the're not there for 3 months of the year anyway.

  Sir Radfordin 22:12 29 Jul 2006

Is the theory not something along the lines of 'key workers' needing to be in all places rather than just specific places?

A business can choose where it locates and either uses the local workforce, commuters or migrant workers (be they internal or external to the UK). If a business has a staffing shortage because of high prices they can consider relocating to a more affordable area. That doesn't work for the sectors 'key workers' are employed in.

Not 100% valid as Tim1964 case shows - you can't just put an energy producer anywhere but there is more freedom than where you place a school, hospital etc.

  rdave13 22:29 29 Jul 2006

Again absolutely correct. Wages are paid for work done, so a two bedroomed house is good value at £98,000..and earning £6.00 or just over will allow you to buy that house?

Come on, there is something drastically wrong in today's society when an average, let alone below average, incom family can't afford to buy a house? The rich get richer and stuff the commoner...

  beynac 22:46 29 Jul 2006

The housing market is just that - a market. The rich do not buy first-time buyers' houses. If nobody could afford them, then they wouldn't sell and the price would come down.

Don't get me wrong. I'm not unsympathetic. It has always been difficult to get on the 'housing ladder' - I was 27 before I was able to buy my first house.

  Sir Radfordin 23:09 29 Jul 2006

There seems to be this strange notion that people have the right to own a house. As beynac says, the house market is a market and is subject to the economics of supply and demand.

Where I live (in a rented property) the demand has pushed prices beyond a level I can afford - or would choose to buy at. I have a choice - continue to rent or move somewhere cheaper. In the same way that when I buy anything I have a choice to spend more of less depending on other factors.

For society to function in the best posible way then perhaps controls on house prices do need to be in place. However there seems to be little to suggest that is the case at the moment.

  rdave13 23:22 29 Jul 2006

Again I must agree with you. Yet renting a property is now more dear than it is to mortgage. In my neck of the woods anyway.

Councils have been forced to sell off property cheaply to tennants so the only solution has to be private housing associations.

Once that happens the only people that can afford the rent are the unemployed or single parent families.

  oresome 10:09 30 Jul 2006

A few comments on the above posts.

I agree it's a market and houses wouldn't sell if there was no one able to buy. However a lot are being purchased by existing homeowners as buy to lets, pushing the market up.

No one wants development in their backyard. Unless it's easier to gain planning permission and build houses, demand will always outstrip supply.

Family breakups and fewer occupants per house put further strain on the supply and demand situation.

Regarding it always being difficult to get on the housing ladder, my first house was 3.5 times my salary at the time......early 1970's. Inflation was high by current standards and repayments soon effectively became less.

The same house today equates to 10 times my salary and with low inflation, the repayments would remain high.

I'm not advocating high inflation by the way, as I will soon be retiring and do not want my fixed income and savings to be eroded.

  spuds 11:14 30 Jul 2006

Regarding house affordability, I know a person who joined the increasing band of property investors. His company as a very good portfolio of properties, which were obtained from quick sale cash purchases. He either rents out or sells on, depending on the circumstances of each sale. The business is a great profit maker, and yearly returns exceed for more than what he could make, when he owned two knitwear factories employing nearly eighty people, at times of thrift.

When the properties are released as 'rent back', then in a number of cases, its the people who originaly owned the house who are 'renting back'. They cannot afford to own their property any longer.

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