Have you noticed how the government are blaming our OAPs for contributing to the housing crisis? Not content with accusing them of being a drain on the national pension as everyone continues to live longer, they are also one of the main causes of the bed blocking problem we have in our hospitals and now they are being labelled as the house-blockers.
By staying in their home where they may have lived for decades, where they have invested time, money and love to create a place of warmth and happiness; they are being told it’s selfish to stay in their 3 or 4 bed house, that they should move out, downsize so another family can have their home instead.
The government are considering financial incentives including stamp duty concessions and help with moving costs.
Anything to get the geriatrics out, anything to divert attention away from the fact it is the government who have caused the problem by letting the financial world control our property market.
The housing crisis started in the 1990s when interest rates went through the roof and people were buying and selling property virtually overnight cashing in on the panic that ensued and as available properties became scarce, so the price went up. Then the bubble burst and people were left with enormous negative equity which meant they had to either stay put and wait until the price went up or sell at a huge loss.
Years on the prices have remained high and availability is still limited whilst wages have remained relatively low; the result is no one other than the high earners or first time buyers who are being given extra government help are able to get a mortgage.
That leaves a huge tranche of people like me who are stuck in the middle; our income is good but not good enough, we are not first time buyers so cannot access any of the special deals and because of the rent we are paying, we cannot build up enough of a deposit which needs to be around 10 or 15% of the amount being borrowed.
So assuming most families like us consist of two children and two adults, that means a three bedroom house preferably with parking and a garden is needed.
When I scanned through the property paper this week I found these:
- 3 bed detached £575,000
- 3 bed mid-terrace £365,000
- 3 bed chalet bungalow £399,950
- 3 bed bungalow £350,000
Then under the rental section these:
- 3 bed terraced £750/month
- 3 bed semi-detached cottage £800/month
- 3 bed rural semi-detached £995/month
A £300,000 mortgage will cost roughly £1,800/month and with a £30,000+ deposit needed it doesn’t take a genius to understand the problem we and thousands like us face as the cost of private rental continues to rise.
So whilst the government continue to look for their fall guy to excuse their irresponsible behaviour, property prices will continue to rise, rent will go up and the possibility of us owning our own home will move further away.
It is nothing to do with our elderly population house-blocking but everything to do with the ministers and financial houses not accepting there is a different housing landscape out there that needs new innovative solutions. There also needs to be a cap on what private landlords can charge and more importantly, the lending rules have to be changed so people like us who have been renting for over a decade despite the ups and downs of our own economic status, rent should be undeniable proof of our ability to pay a mortgage.
By changing the lending criteria the housing market will organically adjust allowing the thousands who are stuck in rented properties to buy and that will inevitably have a knock-on effect to the rest of the housing market without evicting one single OAP.
So forget about the blame game, just get on with adjusting the lending rules that need to recognise circumstances are different now, only then will we see a solution to the housing crisis.