First Time Buyers Are Screwed.

A recent report outlines the challenges faced by first-time buyers and proposes some potential solutions to the problem.

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The reports:

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Timestamps
00:00 - Since 2002
00:36 - Barriers
01:26 - How expensive?
04:16 - Regional data
05:00 - The broken ladder
06:38 - Sponsor
07:35 - How to fix this

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[declanmcardle]

“Can’t buy a cheap flat white”. That’s the Costa living crisis…

[versaceviper]

The problem with new homes is that when they’re built, they’re marketed with premium prices. New builds aren’t worth the prices that are assigned to them.

[markukblackmore]

I think this country has really not thought through the social impacts of the broken housing market. So many young and not so young people are deferring having kids. It’s going to cause big demographic issues in the future.

[ratttttyyy]

What also makes it expensive is when your sale falls through on the date of exchange and you lose £3k in fees and have to start all over again.

[keegantimmermans]

It also doesnt help that affordable housing schemes have so many hoops to jump through. As a single dad on a good salary in the south east I am told that I am classed as unaffordable for shared ownership because the repayments combined with my fixed costs (childcare) cannot exceed 45% of my take home pay, but I can "afford" a rental property that works out significantly higher than the same repayment figure.

[LongbranchOlivetti]

Now imagine try buying your first house on your own. Single person tax is a real thing.

[rusl]

Anything that allows people to borrow more money (like the first suggestion) like all the previous schemes done by the tories, will drive up prices further. This is basically kicking the can down the road AND fascilitating wealth flow from poorer to richer people.

We need to fix supply. We also need to fix inequality, more and more property is owned by the wealthy people.

[Annie]

I grew up in an area of Miami that is mostly made up of * middle-class Cuban Americans where just five years ago a house would cost 250-350k for the most part.
Now the cheapest one goes for 600k. Forget working class being able to afford them. A professional lawyer, engineer, etc. would now struggle to buy a home in that same neighborhood. Something needs to change and it will change.

[stewillo]

Bought a house in 2007 at 19 years old thinking I'd made it. The crash in 2008 crippled me. I moved 130 miles north for work in 2014. I rented my house out and rented a house for me, my wife, and two children. In 2016 I had to sell that house and had to take out a 15k loan to pay off the negative equity. Trying to rent a house for a family of four (including a disabled child which statistically costs the same as three-four children) so technically a 6-7 person family and trying to save a deposit as well has crippled me. I only got back on the property ladder just over two years ago after working 72 hours a week for 6 years straight.
As it was a physical job I'm now permanently injured so had to change job again and then we got battered with the interest rate increase, that hit us massively again. I'm now 37 and in a worse position with property than I was at 19 years old. I can't believe how every financial decision has gone so wrong. I've never owned a credit card, only ever been abroad 5 times for no longer than a week, own a 14 year old Skoda and have not been able to afford to carry out the work on my home to enjoy living in it. It's hand to mouth every single month.

[mrdanieljamesuk]

As a 26 year old living in Berkshire (South East) I'm currently in the process of completing on my first property with my partner, a 2 bedroom flat. The main thing that got us over the finish line was utilising our Lifetime ISA, which I feel a majority of people my age don't actually utilise as much as they should. Some still have the HelpToBuy ISA capped to £250, 000 purchases outside London, and £450, 000 in London. They put in a pound in when Martin Lewis told them to, and they have contributed into it since, because there was a sense of urgency, In my opinion what lacks the most in our society is Financial Education, and learning how money works; emergency fund, tax etc. Majority of it is behavioural, and that's taught by parent's and family members, well those fortunate enough to. So thank you Damian for sharing your videos, and I think we can all do our bit also to stop making finance a taboo subject and encourage to share information we learn with one another.

[nathangreen]

Saw the notification and instantly felt sick. The situation for us youngsters wanting to get into property is not looking good 😥

[shadowthif]

That’s a depressing topic and not even addressing the massive issue that is leasehold.

[jakeartis]

Brought my first home last year in the East Midlands for £130k with 10% down as a deposit. The house had been neglected and the old boiler was last installed 24 years and the plaster was falling off the walls. The total renovation is projected to cost £50k. This was the only realistic home I could afford in a decent area.

[stuartfitch]

There are areas that are cheaper though.

Take for example someone looking for property in London or Bristol, they are on £70k gross per year but struggle to find anywhere they can afford despite holding down a professional job. Even a small flat can be £500k+.

Yet where I live you can easily buy a terraced house for £70k or a three bedroom semi detached house for £120k so if you are on a £30k like myself, then you can easily afford to buy a house. I bought mine on a single person mortgage and it's not like I even have a professional job.

Though I acknowledge that there is a big overall housing shortage, a big factor is location. If all the professional, high paid jobs were not concentrated in just a few UK cities and were spread more evenly across the whole country, then the population would naturally spread out more. Then many of the houses around where I live that are empty would be taken up.

People say, build more, that's OK but in some areas like my hometown that makes no sense when they can't even sell the ones that exist already but are sat empty.

It is another consequence of the regional wealth gaps that exist in this country where there are not only wages that are lower but also a lack of investment and poor infrastructure, lack of decent jobs etc. The sad fact is there are young people in my hometown like my neice who are going to university, getting a degree, then moving away from the town to a city in search of the better jobs which is only adding to housing problems in those cities whilst in my own town I would say the population is probably going down and the average age is getting older.

One day there will be no young people left in my town and all there will be is a town full of pensioners. The local businesses already can't find any staff.

All this is adding towards creating housing hotspots in certain cities.

[ruffey]

The government needing to have a "review" of anything is ridiculous. The last review got us inflationary policies such as Help to Buy, which drew a circle around a group of buyers who had money in their pockets to pay to play at the time, and screwed anyone who would've wanted a go in the following years. The suggested solutions were common sense, but an easy win is to tax the assets of the super-rich. That would trigger a sell off, bring down taxes on working people, who could use their increased disposable income to buy the increased supply on the market.

[willhobbs]

@DamienTalksMoney I work for a Building Society and will be at the BSA conference next week discussing ways we can innovate to help solve this issue. Your video though as always was a beautifully articulate and accessible summary of the issue and the report. Thank you for continuing to highlight important issues in such a well produced manner

[latristessdurera]

My friend was looking at a shared ownership scheme in south London/affordable housing. She was denied a chance as they said she’d need to earn over 65k a year to qualify. This is modern Britain where key workers can’t afford affordable housing but the rich can own multiple houses and houses are left empty by overseas investors.

[teamfusion]

Conveyancing fees are an absolute con and I believe these need to have a validity period for certain elements. You could be so close to the purchasing a house, and for whatever reason it could fall through after you've paid conveyancing fees. Joe Bloggs and his avocado toast could rock up a month later, and pay for a conveyancing fees, and some of the searches Jo and his avocado are paying for, have just been undertaken a few weeks earlier. A validity certificate should be issued by the land registry to the property seller / agent excluding some searches as the search has just been undertaken.

Just my ramblings on yet another fab video!

[grantbeerling]

1970's land value as a proportion of the house purchase was about 5%, now 70% (North East) to 300+% (South East). Its land values as a commodity further gaining value post-1996 (buy-to-let law change) as buy-to-let has meant that the <9% Private Rental Sector (PRS) has risen to +21% of the market share, which is why potential owner-occupiers can't buy. The amount of property in the country per capita has not changed since the 1970s, what has changed, is the PRS ratio, thus a percentage of people who own 2+ properties, therefore stopping young people from even having an opportunity to buy. There is no property shortage it is an availability problem in a commodified market that further fuels land values.

Quote; Winston Churchill 1909;
"It is quite true that land monopoly is not the only monopoly which exists, but it is by far the greatest of monopolies - it is a perpetual monopoly, and it is the mother of all other forms of monopoly".

[sophieq]

bought our 1st home back in 2019. I was 30 and my husband was 38. We were already considered late in buying, I feel sickened to all of those who want to get on the ladder and keep being left behind