If property is so affordable why is the rate of home ownership collapsing?

Because the deposit needed is so high,You can have a good job paying well but still not be able to put down enough to buy a house.

Saying that houses are "more affordable" since 2007 is not the same as saying they are cheaper... is it...

What happens when interest rates rise? The UK doesn't have fixed rate mortgages, does it?

rubbish

check the CML website, 83% buyers over the past year have taken fixed rates

It was a serious question for me, I don't live in Britain. I was under the impression, obviously incorrect, that there weren't many fixed rate mortgages there. Good for you that you can get them.

They've been trying to get folks in the USA where I live to take variable rate loans. Anyone who does is really taking a chance, as assuming the economy ever DOES recover, I would think that interest rates will have to rise meteorically.

".......because wages were expected to start increasing again in 2015..."

Good luck with that!

Over stretching at the limit of low interest rates is super risky, if a small interest rate rise pushes you over the edge then good luck.

Was ever thus - I remember living on rice and vegetables for some considerable time in 1990 ish courtesy of Maggie's interest rate policies - I believe my mortgage got to 16%. Hang on in, grit teeth, cut coat according to cloth. You have to take a lifetime view not a short term one.

Or you could have just got a better paying job and paid off the house, this isn't possible for most when actual house prices are the highest they've ever been in pretty much all Southern England.

House prices in some places at all time high - interest rates incredibly low. At least now you pay off some capital - I had a £300k mortgage then and at the end of the first year I'd paid off 7p having paid 16% interest.

No worries house prices will keep going up. I bet this was the instruction given to David Cameron by Lord Chelsea, who is among London’s largest hereditary landowners at shared table in dinner party.

About time we got rid of the feudal freehold system its 2014 and not 1014.

Get millions out of leasehold misery, inflated bills, inflated insurance, inflated renewals, inflated management fees and illegal bill demands.

Funny how you are so thick you think that people are losers for wanting property to be affordable for the masses and for the government to get rid of its socialist policies such as QE, 0.5% interest rates, Help to Buy 1 and 2, Funding for Lending and the 26 billion housing Benefit Bill .

See winner its financially retarded folk like yourself who need this socialism to keep you head above water, yet you think of yourself as a cut above.

No go outside that bridge is calling you.

So as well as being suicidal you aren't bright enough to come up with a decent response.

Jump Felix Jump.

Excellent news especially for my younger son and his wife, who live near London. Okay then, dive in, buy a house, borrow up, (go on then - gear up and gear up), yippee and er, wait until interest rates rise. Even a slow rise will hurt like hell...... or wait until the many chickens clucking in the run come home to roost due to the real state of the UK economy and then buy as prices drop. Deflation is coming...... whoopee.

Estate agent's desperate attempt to maintain bubble prices.

What they don't say is if rates go up 2%, prices will fall 20% to maintain the same level of affordability.

Daughter & boyfriend just buying first house. Not rich but can easily afford though mortgage raising is a painfully slow process
Simple rules - save hard and build the deposit, , get mortgage offer "in principle" to show you have the ability to buy, don't buy new, be prepared to add value by "building the nest", select properties carefully in good locations and be prepared to walk away - if you are FTB be hard faced and negotiate from 25% below asking price until you find an acceptable property seller who wants you cash, expect to agree 15 - 20 % below asking.
Asking prices are irrelevant, cah and the ability to complete without a chain is a deal maker.

it doesn't quite work like that. they are not the only buyers in the country. if you end up getting someone to sell you a property that much below asking it's because it was overvalued and nobody else would buy it.
I don't think the strength of their poker faced negotiations will matter.
let's hope your daughter doesn't often get nuggets of wisdom like that or her fella will think you're a clown who likes to give it billy big potatoes.

It may not work like that, but for them it has! Or you can be naive and pay the over inflated asking prices that some maintain their property is worth then wonder why you are in negative equity in 12 months, or be gulible and knock a couple of grand off, or be foolish and buy a new rabbit hutch, donating you cash to a developer.
As with all assets, they are only worth what someone will pay at a point in time.
Just glad there are plently other succers out there leaving the great opportunities for those with the sense to negotiate.
Give me those potatoes billy - you can go hungry!

Can i buy your house at 25% off the would be asking price?

Yep, sure can if you have cash and can complete in 4 weeks. Now let me dream up an asking price that will get me the price I want and lure you in.

After he's bumped the asking price up to 130% of valuation, sure.

Which is effectively what help to buy 1 and 2 have done.

As Help to Buy affects only 3% of transactions
http://tinyurl.com/pxyf3cz
that's probably nonsense.

This is good news for all of those younger people who felt they had missed the boat. I have a number of younger colleagues in their late 20s and early 30s who all earn very good money but constantly complain they can't buy a home. It seems they can if they are prepared to cut back on the numerous £1,000-plus weekends they spend in places like Ibiza every year.

No matter what happens with the rise of UKIP and the shift from a pro-unlimited immigration to a controlled-immigration political agenda, I expect there will be a few years yet of large numbers of young workers migrating from the EU to London, so property prices will continue to climb in the near term... With the availability of cheap mortgages now's a good time to buy!

Yes this is terrific news, and if interest rates shoot up in 5 years time due to a run on the pound at the end of their fix they can get evicted, thatll be character building for them.

The best time to buy a house is when interest rates are very high and not when they're at a 300 year low and allegedly rising.

why is it a good idea to buy when rates are high? surely it's a good idea to buy when they are low but be confident you can afford a large increase. unless you like giving money away, of course.

Absolutely right! Get a good deal on a mortgage now secured for 5-10 years. Motgage the minimum amount you can and overpay as much as possible each month. Negotiate like hell and only buy where you feel there is a reasonable safety margin.
Dont blow your cash on holidays and flash cars for a few years then sit back and gloat when the Johnny come lately brigade are whinging about the cost of mortgages and houses in a few years.

Because houses are cheaper when interest rates are high and they are at their most expensive when they are low and when banks have endless amounts of credit to sell.

I really shouldnt have to spell this out to someone who can dress themselves.

Ask yourself why, if young people are all frittering away their money on foreign holidays and brand-new iPhones, are house prices so high and continuing to rise? Who is buying all these houses at these prices?

Sure, buy-to-let landlords are snapping up many of them, but if all these young 'uns have spent all their money on booze and gadgets, how are they able to extract such handsome rental returns from them?

Of course, the only way houses will become genuinely more affordable in the longer term is if house prices fall, and fall significantly. That's what we want, isn't it?

The government has many levers at its disposal to effectively lower house prices, and could use them, if it wanted to. Suffice to say, enabling higher levels of mortgage borrowing is not one of them.

House prices track affordability: if prices go up, it means more people are able to afford them. If they couldn't, they would go back down.

When interest rates fall, the affordability of mortgage repayments increases, and so house prices go up accordingly.

In 2008 interest rates, and thus mortgage repayments, were higher. But then houses were cheaper. And to keep their repayments down, people would have paid bigger deposits.

If people are currently paying smaller repayments on a larger portion of a more expensive house, then they must be doing it over a much longer term.

So, while monthly affordability may be better, young people are paying over an awful lot more money to the bank in the long run. Or, to put it another way, they must continue to rent their house from the bank for longer.

Obviously banks benefit hugely from this state of affairs, and selling owners are able to realize greater windfall gains. If I didn't know better, I'd say our system was designed to favour banks, landlords and older homeowners, at the expense of younger people...

http://www.telegraph.co.uk/...