Unstable Property Ladder

I have recently had conversations about home ownership and mortgages. All it has really served me with is helping me realise just how much of a swindle it really all is.

Slate Roof Tiles, photo by josep plans

Someone older than myself bought a house in the late 90s in Scotland which cost on the order of £50k, give or take a few grand either way. After several decades of ownership, with 2 billpayers involved, they finally managed to pay off their mortgage.

If I wanted to buy a house, in the same neighbourhood, I expected the price would have gone up since then. You’d think things would have gone up by the amount of inflation, right? I thought so. Calculating it, that comes to about £85k adjusting for inflation, give or take a few thousand either way. A little under double the cost. That’s quite the hike, but that’s what inflation is.

Now what about actually buying a house in the current market? No way am I going to get near these values. Looking at the local markets, offers start at about £150k. To be in with a chance of getting a house, I’d be lucky if I could get a similar deal for under £200k. That’s about 4 times as much as the original house and more than double what would be expected accounting for inflation.

My whole life I’ve seen news reports, government announcements, “adults” (am I an adult now? I guess so… doesn’t really feel like it), and more telling of the joys and bountiful gifts that being on the property ladder will bring you. But looking at it from the outside, I know exactly how I’d describe it.

It’s a ladder where someone has come along and sawn off the bottom few rungs. Everyone already on the ladder is fine and can climb up reaping the benefits at every stage, whenever they want to move up. But the people at the bottom, who need to get on it, are totally scuppered.

Where I live in Scotland there is a massive market for people who want to buy homes, do them up, and then flip them to make a profit. At the expense of raising the house prices. There’s a huge market for buying up homes and then renting them back out to people, so they can never own their own. This just seems like such a waste, to me.

A home shouldn’t be an investment. It shouldn’t be something scarce. You shouldn’t be gatekept from it. It shouldn’t be so obscenely monetised. Even if I could find someone to co-mortgage with, there’s a very real possibility that I won’t ever be able to pay off a mortgage in full, unlike previous generations that I know. Because that initial step that winners tout as being one of the big important purchases in a growing adult’s life is, to put it bluntly, a lie. If you were lucky to own a house back when houses were more affordable, you’re doing pretty well for yourself, and can cash in on that apparent rise in value. But nowadays, the bottom end of the property ladder is daunting.

I don’t think this would even be solved by building new homes, either. Because even if the government, or (shudder) investors, build new homes (on what land? Scotland is not big, and there’s only so much wild land we can take without adding to environmental pressures), there is still the army of landlords and profiteering house flippers that are able to jump in and out-bid any potential new buyers that have no existing capital assets to shore up their bids.

The property ladder has had its bottom rungs cut off. But there are only so many rungs you can remove before the ladder itself begins to wobble, and eventually collapse in on itself. If and when that ever happens, I will permit myself an excess of glee as I watch it all crumble, from my comfortable cardboard box.

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  1. Exactly how I feel in my area. You can only get a house now if someone you love dies. That’s it. Your only option is to inherit a house that someone already bought when people still could.

    In 1995, a typical terraced house in my town cost the same price as a brand-new Vauxhall Cavalier / Opel Vectra. In 2021 that same house now costs about the same as a brand-new Ferrari F8, Portofino, or Roma.

    I think a few things are pushing-up prices and artificially-inflating them. Firstly, anything that further-increases buying-power will drive-up prices. This includes people already on the property-ladder helping-out their younger relatives, various shared-ownership or help-to-buy schemes, etc. As soon as someone pays more for a type of house, they are all suddenly “worth” that much. The first-time buyers then need yet more help to get on the ladder, which subsequently pushes the price up further. The market is clearly broken because the average wage can’t buy you the average house in the UK, even with a mortgage. In a fair and just system, the average house would cost approximately as much as someone on the average wage could reasonably be expected to save up in cash, in a reasonable time period, say a few years. And the average first-time buyer would also still be able to get a basic, poky little terraced house for the same price as a car.

    The main thing in my town is that all the babyboomers who bought flats in the East-end of London decades ago for next-to-nothing are selling them for several million, coming “ap norf” and using it to buy-up all this “proppa-‘ay” that’s so cheap up here. They pay well over-the-odds for a “do-er upper”, pricing out young families from the market who just want somewhere with a little garden for their kid. They demolish it and cram 10 claustrophobic gardenless boxes on the site, and sell each one for hundreds of thousands more than the original house. Or they pay over-the-odds for a beautiful old cottage, then rip out all the character and history, pave-over the garden, and turn it into a bland, boring glass-and-chrome soulless monstrosity, and put it back on the market for 6 times what they paid for it. Who in their right mind would want to live in either of those?

    I think a lot of the problem is calling it a “property” not a “home”. The very concept of a house being a “property” to have value-added to it and then be traded for profit, is utterly perverted. A house is primarily supposed to be a home.

    It took previous generations their whole working lives to pay off mortgages on houses they bought for 20 or 40 grand. How on Earth can house prices be so high, and how in their right mind decides to lend such vast amounts of money to people who aren’t earning super-tax levels of income?

  2. About the time Elon Musk and Jeff Bezos have all the money, leave Earth and colonize Mars (plus maybe one or two other “local” planets), in other words, within the next 30 years, or so, an incredible device called a “Replicator” (available in an infinite range of sizes, colours, voltages, and speeds), will mysteriously appear in the desert rocks, just outside Utah.

    This device will copy and reproduce, at one end, whatever you shove in at the other, using little more to fuel it than the atoms it sucks in from the surrounding atmosphere. So, after we realize we can’t sell ’em, as the Replicator can replicate itself, we’ve pointlessly created an infinite supply of spare parts (old habits die hard), and everyone on earth has got their own “knock-off” version, we finally replicate one big enough to shove in one of Elon’s old empty California gaffs.

    Which is just another reason why — even though, by then, we will have done away with banks, cars, planes and heavy industry, and many other forms of work — everyone left on earth will be wearing designer spacesuits with one of those little hydrogen jet-packs on the back.

    As long as you keep your spacesuit on, you’ll be able to go anywhere on the planet and have any design of evolutionary engineered and eco-friendly manufactured house you want, and it will cost you nothing, nada, zilch. The problem is you won’t have anywhere to put it.

    Due to population growth (which we can do something about), the land where you’d like to live (which you can’t, because they’re not making it any more), has all been used up by the human infestation of its host planet. By then, anywhere nice on the Earth will have been rendered about as “liveable” as a student HMO in Bladerunner.

    The problem is not wages, nor the cost of living. Its not even inflation.

    The problem is us!

  3. For many years i believed as you do… that the whole home ownership principle was just a “Shell Game” to line the pockets of realtors.
    After 45 years of work we finally decided to buy in a smaller city as my pension and a mortgage just wouldn’t work in Toronto.
    Long story short, I now have little savings left and we rent an apartment. My illness didn’t help matters but other factors made it impossible to keep the house aside for the fact that I am totally unable to keep up a property and can’t afford the luxury paying someone to do it for me.
    We did get a good return on the sale but the expenses on that return drowned almost all profits we should have made to make a reasonable comfortable life for ourselves.
    I know Toronto or the city i bought in are not Scotland… but it seems that way with regards to what is happening to housing. Every second TV show seems to be about buying, renovating and selling houses at a huge profit. And you have found out just who that cuts out of the buyers market.
    You can only make it in that game if you are a realtor or a contractor; where you have some advantage either about what’s happening in the market or can get building supplies and labour on the cheap.
    The problem is greed. The only winners, realtors, contractors and of course the lawyers.
    Just my $0.02 worth, though we don’t use the penny here anymore.

  4. Just to add to my comment above, the latest news here is that the ***Average*** house price in Canada (https://wowa.ca/reports/canada-housing-market) is 715,000 $CAD (£ 420,000 ±).
    Of course these figures are boosted by extremely high prices in the environs of Toronto (800,000 +), Vancouver (780,000 +) and Montreal but still I live in a small city in the middle of nowhere and one can’t get anything for less than 450,000 $CAD (£ 265,000 ±) even going outside my little city limits.


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