High hopes from housing.

360,000 young buyers trapped in first homes bought at property peak - with no chance of moving up

Around 360,000 of young people are ‘trapped’ in homes they bought when property prices peaked four years ago, an alarming report has warned.
Over the last four years, they have seen an average of £11,000 wiped off the value of the home, amid fears that house prices will continue to fall.
The report, from the banking giant HSBC, warns young people face ‘a near impossible’ task to move from their first home on to the second rung of the property ladder.
Trapped: Young people who bought homes in 2007 have seen the value of their house plummet by around £11,000
The worst-hit victims have been plunged into negative equity, which means their mortgage is bigger than the value of their home.

My bolds there, just to show the emotive language used to tell this little tale of woe.

The funny thing is, me and Mrs Bucko bought our first house four years ago but we are in no way trapped. We bought our house to turn it into a home, which we have been doing since we moved in. We didn't buy it to sell on in another four years.

We are not in negative equity, in fact if we are to believe our mortgage valuation of a year ago, we are actually in positive equity of about 20k. We don't believe that valuation because a property is only worth as much as someone is willing to pay for it, and in this climate I would say our equity is worth about half that.

Never the less, equity means nothing to us as we have no intentions of leaving that house in the near future. It's only small but for a couple with no kids it's fine, and it's in a good area. (There is even room to have a child if that horrendous notion ever took our fancy)

In 2007, the year that the credit crunch struck and property prices peaked, a typical first-time buyer bought a home for £162,423.
But today this property is worth only £151,061, a fall of £11,362.
To make matters worse, it estimates a typical young person would have to spend £208,675 to buy a home on the ‘second’ rung of the ladder.

Maybe that's where these first time buyers are going wrong. £162k for a first home? Ours cost less than half that for a garden fronted, two bed roomed, 1920's terrace house, overlooking a park and a river.

My friends who have two kids and very good jobs have recently bought their second home; a 250k house 4 bed house with lawns front and back and a double garage.

I know house prices vary up and down the country and living in the north probably means we pay a lot less. Not half the price though.

Experts fear Britain's housing crisis is forcing the young to delay important milestones, such as getting married and having children.
Many worry about having children when they are squeezed into a flat with no spare bedroom and no garden, but with too little money to make the move into a house.

If they cannot afford to make the move into a house from a flat then I would suggest they also cannot afford to take on the eighteen year commitment of having children.

It's not such a bad thing if these life changing and expensive milestones are being delayed in the current climate. Young people today (did I really just say that?) want everything now. It's not possible. Sometimes you have to wait a bit longer before you can afford the things in life you want.

Expecting your first house to appreciate in value enough to pay your next deposit after only four years is unreasonable. Hold onto it for a few years longer. Negative equity, if it's there will not last forever. Hold off on the 10k wedding and the five kids for a while, and with patience and a lot of hard work, everything will come together eventually.


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