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There are some interesting graphs in the latest Nationwide House Price release that look at affordability of houses regionally.
Nationwide looks at where in the regional income distribution a prospective purchaser would be to purchase a typical FTB property with a 20% deposit and a mortgage of 4x income.
The data is shown for 2016 and 2006
As the press release says
"There has been a marked divergence in house price growth across the UK in recent years, which has translated into a significant difference in affordability across the regions.
The differences are striking. In Scotland and the North of England, this ‘typical’ buyer would lie in the 30th income percentile, while in the South West they would be at the 75th percentile and above the 90th percentile in London (closest percentile with available data).
This picture has shifted over time. In particular, the dispersion or variation in affordability across regions has increased over the past ten years.
Affordability has improved in Scotland, the North, East Midlands and Northern Ireland over the past ten years. By contrast, in London and the South of England more people have found themselves priced out of the market or had to borrow a greater multiple of their income, though low interest rates have helped reduce monthly mortgage costs."
Full report here
This why the SE Bubble has to go Pop
The level playing field the govt talks about is only and issue in the SE
The rest of the UK doesn't have an affordability issue
its a south east issue
Unfortunately much of Govt policy is viewed through the prism of the SE magnified by London
It is the chattering classes that inspired S24 where their little darlings couldn't afford to buy near Mummy and Daddy having finished Uni!!
Of course they love their cheap Polish cleaner etc, but refuse to accept that open door immigration policy has anything to do with the property market.
The Southern sense of entitlement of the good things in life has been brought to a rapid halt as property was in the past simply part of the process of the Southern lifestyle
Well that property ownership aspiration has now been stopped unless the buyers are prepared to move away from where Mummy and Daddy are to a more affordable and usually necessarily a more run down area........it simply won't do.
An outrage after all the money spent on expensive education that they either have to move where the plebs are or rent near Mummy and Daddy for a fortune.
And it is those nasty little people buying up all the properties with mortgages they can't achieve because of MMR and Uni debt, the plebs have simply got above their station and need to be returned to their box whence they came from!
S24 will do that job very nicely thankyou!!
Spot On Again x
I think that's unkind Paul. People cannot help where they are born or who their family are. Our generation; yes that's mine and yours, had opportunities for free education and student grants that young people don't have today. They start life with massive debts and need to live where the work and opportunities are which is very often in the South East.
Your right but times have changed
No free education is just one thing that has gone in the last 30 years I could add a long list of support that my generation will not get so the young are no different from the older Generations have to look forward too
The problem is the Rest of the Country is being hammered because of the policy's of the SE and that's not fair
Two of my young friends have bought there first house in the NE both have student debt but they have done it and there will be thousands like them outside of the SE
We have more folk living out side of the SE so why should the majority suffer for the failings of the minority
The South East has had the best of the last 30 years while other areas have had a raw deal
Just look at the BRITX vote Its the first time in my life I have seen the result and it shows how regions out side of the UK have been forgotten
I am not Political But I can see UKIP sweeping across the Northern Regions as they push Labour out just like the SNP pushed Labour out of Scotland
The worm has turned and the SE will start and feel the impact of Financial and Social problems the North Has had for years
The worm has turned The average Brit Feels forgotten and has been sickened from the Jet Set MP,s who only think of the SE
Indeed economic realities change
Can you imagine what the ones prior to the baby boomers thought
You what to own your own house!?
Well we have had to rent as no way could we afford to buy.
Next generation everyone aspires to homeownership
Revised economic realities return us to pre-war circumstances.
Nobody has the right to expect economic circumstances to be the same all the time
Economic circumstances just like the weather change
As you always suggest, adapt and and adjust
Off course the neo liberal elite don't like it at all that their little darlings can no longer afford to be where they were brought up
That as they say is life, which some might say can be a bitch and then you die!!!
Populations have always had to move where they can afford
As you have discovered you have associates in this Generation that accept they have to move to cheaper areas to buy and just commute to work.
Commuting is the main way that generations have been able to afford to buy.
Generations have to accept they are entitled to nothing irrespective of what previous generations may have achieved.
As has been mentioned the SE commuting areas is where this new Generation Y will have to move to
They simply can't afford the smart parts of London
They will have to accept the commuting grind or be prepared to avoid that by paying lots of rent!!
I commuted all my working life and it took about 3 hrs per day!
Only the last 6 years of it did it take 8 minutes!
As you have suggested there is plenty of eminently affordable property.
It just isn't 2 miles from the centre of London!!/
It is this latest precocious generation which is causing merry hell for those who have invested wisely in property for example for the past 17 years
S24 is an expression of this disgruntled generation which see their sweeeties snatched away from them.
I say by what right do they think they should be able to devastate previous generations' careful investment planning having taken great risks with their capital
S24 is the result of their little tantrum at not having access to the sweeties other generations were just fortunate to have
It will do them no good and it certainly won't enable them to buy property near Mummy and Daddy!!
I also agree UKIP will wipe the floor with Labour and possibly Tory marginal seats especially with boundary changes
The neo liberal elite is due to get another kicking and it can't come too soon.
I don't think that's correct Paul. There is still a lot of mobility. I have more northern friends whose children have come to the south for work than friends in the south whose children live in London. I had a similar conversation with a Manchester friend recently. His children pay massive rents to live near their work in London whereas mine expect to have to live in cheaper places like Bedford and Stevenage and to travel into London to work like I did.
Surely it is choice over expectation.
As you suggest your associates have made different choices just like I did.
I chose not to pay rent to live near work
I bought further out and commuted.
I had no expectation that I was entitled to live in expensive areas
I accepted that 40 years ago, so why does this latest generation think they shouldn't be subject to the same pressures I was subject to 40 years ago!?
The facts are that LL do not and are not preventing FTB from buying property.
Yet this is the false premise that S24 is bring introduced on.
A big fat lie!
It is the restricted access to credit that has substantially caused the issues for FTB
The MMR is the prime cause of that.
from my own experience the folk who have made the biggest gains in property are Ex Council Tenants who bought at huge discounts
They took the bread from the working classes and hence we have a PRS
I am anything but a Socialist but selling council stock was a huge mistake
One of the last Houses I bought over two years ago I paid 75k from a deceased estate the property was bought from the council for I think £15000 in 1988
Nothing has ever been said about right to buy and they were the biggest gainers not Landlords
RTB has been a disaster
Govt failed to recognise that like it or not the lower orders will always need assistance including housing.
Such housing should be subsidised
It is a political choice that Govts over the past decades have determined was a wise use of Govt funds
Personally I have no real objection to providing social housing for the lower orders
They have to be housed so they they may as well by housed at far reduced HB costs than in the PRS
Either way Govt pays
It is far cheaper HB for social accommodation that the PRS
I believe there should be a massive buy back of property into HA
There would be many LL that would only be willing to sell their properties to councils at just below market value.
It would be far cheaper than TA costs!!
Like you I am far from a socialist; but sometimes one has to recognise that there are those who will never achieve and need to be helped for the sake of society.
This includes housing.
The only problem I have with social housing is it goes to the wrong people like immigrants.
They simply should NOT be allowed access to social housing.
Only BRITISH nationals or those who have served in the UK military wherever they have come from should be allowed access to social housing.