In the past two weeks, I’ve read at least three articles in the London commuter papers with headlines like ‘Buying in a Bubble’ or ‘How to beat the Bubble.’ House prices are picking up and that’s not a good thing. Interests rates are artificially low and when they rise many on George Osbourne’s ‘Help to Buy’ scheme may well be caught out (unless they factored this inevitable rise into their financial plans).
Low interest rates mean more [less responsible] borrowing which pushes house prices artificially high – it also means that saving for a deposit is significantly harder unless you’re very well paid. The ‘Help to Buy’ scheme is a shocking government policy which politely glosses over the fact that house are too expensive. The reason houses are too expensive is because of a lack of supply. So rather than tackling the real issue – a lack of supply in the housing market – this government has instigated a policy of cheap government loans. It defies belief. Talk about taking about skirting around the issue…
There’s also the issue of the ‘Bedroom Tax’ which, as has been recently clarified by the courts, is not a tax. I understand the intentions of the policy – wanting to property to be used more effectively. However, I have a great deal of empathy with the complaints of individuals who rely on social housing and would like to move to a smaller flat but can’t because there are no smaller flats to move too. There are so few one bedroom council flats/houses. This leads back to the same problem as formerly mentioned – lack of housing supply.
Unless land is abundantly freed up for both private and government development – my generation is in for a great deal of misery. I do not understand why the government is just hanging on to land in prime areas preventing it from being developed upon. It makes no sense.
I am 25 years old and I have no idea where I will be living in five years time. A home of my own may be a dream out of my reach. Renting is expensive and I’d like to save for a deposit but the Bank of England seems hell bent on inflating my savings away. It’s enough to make anyone want to buy gold and stash it under the bed… But you need your own bed to do that!