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Originally Posted by Busman747
If you are fortunate enough to own a house and think you are rich because you have seen a 50% rise in its value, think again! Mathewm MAY have bought his house for say £60.000 and it MAY be worth £120.000 now, but if he sells, what can he buy? Another house in the same street which has also gone up in value?
In the south, we have lived with this problem for a number of years. I have 4 adult daughters and only one has been able to purchase! (A 2 bed terraced cottage and their mortgage is massive) The other three are renting at an average cost of £550-00 per month! If you search around, you may find a bedsit for around £80.000 or an ex council 3 bed house on an estate for £150.000
Unless the market crashes, Accie people will be facing a similar fate in a few years time along with the rest of the country! My message to all you teenagers out there is to do your research and find out what is happening to the rest of the country especially the south.
Wages WILL go up, but nowhere near fast enough to compensate for increased house prices!
I believe it was Willow that said they had gone into estate agents to be told that the cheaper houses were being bought up by investors, I found the same thing. I was looking for a cheap house to buy when I came up north and was advised to camp outside the estate agents office (tongue in cheek) as everything under £35.000 was being snapped up by the proffesionals sometimes before the house went in their window!
I decided to rent and friends down south find it unbelievable that I can rent a lovely house for well under £300-00 per month!!
I have been told that in most european countries, it is rare to purchase a house and renting is the norm....... can any one confirm that?
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Sorry Busman I have seen the house market on the continent in a different light.
You assessment of the situation is astute, and partly hits the nail on the head. That's in the UK.
In Germany, the situation is similar, but different. (OK that's a conflict but correct). House prices are high, and have been high for the last 20 years. Most people rent, but over the last 15 years more and more are buying their own property. The reason is simple; the Government gives a helping hand for first-time buyers, but only if the property is new! (THis system ends next year---Government cuts...well you heard that one before)
This has the effect that more and more building work is created, thereby fuelling the economy to a large degree. In the cities this is OK in the short term. But house prices in thise cities has increased (not as much as in the UK, but between 40-50% in 10 years).
However, in the country or in small towns the system doesn't have the same effect! And normally a first-time buyer has to rent and then save for up to 15 years or more to afford to buy their own property.
One overriding factor in the house market in Germany, is the problem of a mortgage. Oh how I wish it was as simple as in the UK! Before you can buy you must have had a "Bausparkasse" (Building Society) for at least 10 years. This should be for at least 40% of the house price. You then take out 1 or more 10 year fix-term loans, and buy a bank guarantee of repayment!! You can then buy the house, but your payback is about 1% of the capital sum, and that means that the 10 year loans last (Renewed at current rates) for about 50 years or more!! So most people in the country buy a large house and then share the mortgage with their children when they get married and need somewhere to live. One good effect of this, is that families stay close together. Normally Grandma looks after the kids etc., whilst the daughter or daughter-in-law goes to work, but everything remains in the family.
Naturally, Germany has the problem of a working population that is not willing to move to find work. So somebody looses all the time.
Another little quirk that stunned me when I bought my house in Bavaria, was that as soon as I bought the property, I got a demanding letter from the local tax office - telling me that within 1 week I had to show them evidence of where I had got the capital from to buy the house or I would be fined 10.000 EUROS. NICE ONE....
By and large...house prices will never go down, and always creep (or currently leap) up.
I bought my furst house in Boston (Lincs) for £9,000, and sold it 10 years later for £40,000. It's now worth £156,000. A four time increase every 10 years or so!
By the way, It's much worse in Italy, maybe Jo (in Bolzano, N. Italy) can give us the rundown. Don't ask about Sweden!!