Housing help needed right now

Aug 10 2008 by Ken Oxley, Sunday Sun

I MAY not be in the full flush of youth any more, but there are advantages to being a cynical old curmudgeon.

The most obvious that springs to mind is that I don’t have to scrimp and save in the forlorn hope of one day getting a foot on the property ladder.

House prices may have fallen slightly over the last year, but they still have a long way to go before they’re anywhere near realistic.

With 100 per cent mortgages becoming increasingly rare, today’s first-time buyers face a monumental task to raise a deposit.

That’s because the average house price 10 years ago was three-an-a-half times the average annual income . . . now it’s seven times higher.

And even though property is cheaper in the North, you’ll still pay around £140,000 on average.

With most lenders now refusing to offer anything more than 90 per cent of a property’s value, that means most young couples — many in low-paid jobs — need to save around £14,000.

The catch, of course, is that by the time they’ve done that — which could take several years — the price has shot up again.

Way back when I was a first-time buyer, raising a deposit of just over £1000 for my first property — a four-bedroom flat costing just £13,000 — was relatively easy.

Today’s would-be home owners have a grim choice . . . they either face years of “all work and no play” as they get their deposit together or resign themselves to lining the pockets of a landlord. Government action to ease their burden is long overdue. The apparent glimmer of hope offered this week — when dithering Alistair Darling indicated that he might be about to sanction a “stamp duty holiday” — might get the stagnant market moving again.

But with stamp duty only kicking in at £125,000, it would be of little benefit to first-time buyers coming in at the bottom end of the market.

So what’s to be done? Frankly, I don’t have all the answers, but I do know that we owe it to future generations to bridge the gap between the property haves and have-nots.

If that means building more low-cost housing on greenfield sites — as unpopular as that will be among environmentalists — then so be it.

And surely more can be done to reduce the need for large deposits and hefty repayments, at least in the early stages of home ownership.

In the South, much has been made of the use of shared equity schemes to help key workers get onto the property ladder.

Could such schemes be made more widely available?

As far as I can tell, none of the leading political parties has come up with a sure-fire way of solving this problem.

But the longer it’s left on the back-burner, the more divided our society becomes.