Parents gave their children £2 billion last year to help them with housing costs says the charity Shelter.

And, it says, this amount will keep rising.

But there is a limit to how far into their own finances parents can go and the bank of Mum & Dad is now stretched to the limit.

Not only that, but what about those who do not have access to funds in this way.

As Shelter says, this situation is just not sustainable.

Shelter blames this on a massive housing shortage [1] because as a country we have failed to build enough new homes over the years. The charity says we need 250,000 new homes a year just to meet demand but we are currently only building half that amount therefore building up problems for the future.

Even during the boom years when money was hosepiped in the mega-billions into the housing market we did not build enough. The money just went on increasing the perceived value of the stock we had.

This of course affects not only those who would like to buy a home it also increases costs for those that rent.

And the longer this goes on the more that living in your own house, whether it be owning or renting, will be seen as a luxury. We will see more people crammed into smaller homes and more people sharing – just like the third world where the very rich own everything and the rest scratch around for what they can get. Also bear in mind the supply and demand aspect, as the demand for smaller homes goes up then guess what, so will their prices.

But this is not just a supply and demand issue. Whilst banks and building societies can lend against high multiples of wages (and joint wages) at high loan to values (LTV) house prices will stay elevated to soak up the available money.

There is also the issue of forced sales. If someone wants to sell but doesn't need to then they will only sell when they get their price. But what of those who get into difficulty? They would normally be subject to pressure to sell. But as Deloitte pointed out in 2012 lenders have made great use of forbearance strategies [2] during this recession (under pressure from government). This prevents forced sales at any price that can be obtained, which would help force prices down.

The problem that government and banks have is that building more homes, restricting lending and taking repossession action more quickly would drive house prices down leaving many current mortgage holders in negative equity whilst putting the banks at risk. There is also the issue of keeping homeowners (voters) 'happy' that they are living in a 'growing investment' – the 'my home is my pension' school of thought. Well it will be as they will probably have to sell it to fund their retirement anyway (if they can afford the smaller house they would still require – see above).

When oh when are the people of the UK going to start treating houses as places to live instead of as an inflation busting investment vehicle?

Why is it that we moan if the price of anything goes up, except houses? Why is the concept of inflation beating house prices is always peddled as a boon by politicians and press alike?

Tell that to your children as they share your home with you until they are in their forties.

[1] http://england.shelter.org.uk/campaigns/building_more_affordable_homes/the_bank_of_mum_and_dad/why_are_we_campaigning

[2] www.deloitte.com/assets/Dcom-UnitedKingdom/Local%20Assets/Documents/Industries/Financial%20Services/uk-fs-loan-forebearance.pdf

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