Browse content similar to The Great House Price Bubble?. Check below for episodes and series from the same categories and more!
Line | From | To | |
---|---|---|---|
Property prices are rising at their fastest rate for years. Estate | :00:00. | :00:08. | |
agents are kind of acting like bouncers. There were 156 confirmed | :00:09. | :00:13. | |
to come today and look round the property. We are finding there is a | :00:14. | :00:17. | |
real sense of urgency in the market, people wanting to buy a house and | :00:18. | :00:20. | |
get in and do it now. Many families are being priced out of the market | :00:21. | :00:25. | |
altogether. The goal posts of home ownership are going further and | :00:26. | :00:30. | |
further away. The Government's got a plan to help people on to the | :00:31. | :00:35. | |
housing ladder. I couldn't have bought the house without the Help To | :00:36. | :00:40. | |
Buy scheme, I would have had to wait a long time. So I know it's been | :00:41. | :00:43. | |
really useful and got me this house. But is it adding fuel to an already | :00:44. | :00:49. | |
overheating market? It's like pouring petrol over the car and | :00:50. | :00:53. | |
setting light to the whole thing. You might get a little heat in the | :00:54. | :00:56. | |
short-term but the end result is not actually what you wanted. And this | :00:57. | :01:00. | |
at a time when the effects of the last property crash are still being | :01:01. | :01:03. | |
felt. You have just lost your pension, your hopes, your dreams in | :01:04. | :01:08. | |
bricks and mortar. Tonight, Panorama asks: Are rising prices creating an | :01:09. | :01:13. | |
unsustainable property bubble? The British love their homes. And, | :01:14. | :01:30. | |
unlike some of our European neighbours, we love to own them. | :01:31. | :01:35. | |
Twelve years ago, home ownership peaked at around 70% of households. | :01:36. | :01:41. | |
Now it's falling. First-time buyers used to get an early start - eight | :01:42. | :01:45. | |
years ago two-thirds were under 30 and able to buy without any help. | :01:46. | :01:51. | |
But now, it's turning into a marathon. With only around a quarter | :01:52. | :01:57. | |
under 30 when they get the keys to their first home. Getting on the | :01:58. | :02:00. | |
housing ladder is becoming tougher and tougher. | :02:01. | :02:10. | |
You wouldn't know it, though, in the offices of estate agents. Hi, it's | :02:11. | :02:16. | |
Dean... More people work in property now than since records began 35 | :02:17. | :02:21. | |
years ago. And with the economy picking up, they're busier than | :02:22. | :02:24. | |
ever. 23-year-old Dean Leslie is surfing the waves of the latest | :02:25. | :02:31. | |
property boom. So, as you can see, the market's very busy at the | :02:32. | :02:34. | |
moment. Probably doing about twice as much as we were last year and we | :02:35. | :02:37. | |
are finding there is a real sense of urgency in the market, people | :02:38. | :02:41. | |
wanting to buy a house and get in and do it now. | :02:42. | :02:45. | |
This has led to frantic scenes in some parts of London. I am a | :02:46. | :02:51. | |
first-time buyer looking for a property in East London. I am about | :02:52. | :02:56. | |
to go and look at one here in Walthamstow, an open viewing. | :02:57. | :03:01. | |
31-year-old Jono Leyton, who runs his own digital marketing company, | :03:02. | :03:04. | |
has a combined income, with his wife, of ?70,000. Today, he's | :03:05. | :03:08. | |
joining the queue to view a 2-bedroom flat. The guide price is | :03:09. | :03:20. | |
?250,000. It's quite tight on space. It's really nice. But it's not huge. | :03:21. | :03:25. | |
But more worrying than that really is just the number of people that | :03:26. | :03:29. | |
are going to be putting offers in on it. I heard the estate agent said | :03:30. | :03:34. | |
there were 156 viewings today. 300 people viewed the flat in three | :03:35. | :03:37. | |
hours, according to the estate agent. Basically the estate agents | :03:38. | :03:45. | |
are kind of acting like bouncers, it's like one in, one out. It's | :03:46. | :03:49. | |
madness, it's like being at a nightclub. The average price of a | :03:50. | :03:56. | |
property in the UK hit a record high of ?247,000 in August. Nationally, | :03:57. | :04:01. | |
prices are rising by almost 4% a year. In London, prices are up more | :04:02. | :04:07. | |
than 8%, in part fuelled by foreign buyers. In the East Midlands they're | :04:08. | :04:13. | |
up 3.8%, in the North West 2.3%, and in the South West prices are up | :04:14. | :04:21. | |
2.6%. Only in Scotland are property prices falling. So how did | :04:22. | :04:26. | |
first-time buyer Jono get on in East London? It was open for viewing just | :04:27. | :04:32. | |
on one day, on the Saturday. It sold on the Monday. It was on a guide | :04:33. | :04:41. | |
price of ?250,000. It sold for ?320,000. Do you think that sort of | :04:42. | :04:44. | |
activity prices you out of the market? Whether it prices me out | :04:45. | :04:52. | |
completely... Yeah. It might do? It might well, yeah. Some property | :04:53. | :04:57. | |
prices are rising so fast, they're forcing people into a punishing | :04:58. | :05:02. | |
financial workout. Research by the charity Shelter, reveals that in | :05:03. | :05:05. | |
over half the country, 90% of homes suitable for a family are | :05:06. | :05:08. | |
unaffordable to those on an average income. In some areas we found there | :05:09. | :05:16. | |
is no properties available to an average family such as Brighton and | :05:17. | :05:20. | |
Cambridge. In other places such as West Somerset and York only 2% or 3% | :05:21. | :05:25. | |
are there homes that were available to people on an average wage. An | :05:26. | :05:30. | |
opinion poll for Panorama suggests that 46% of people think property | :05:31. | :05:35. | |
prices are too high in their area. It also suggests that 10%t more | :05:36. | :05:38. | |
people want prices to fall than rise. That's a reversal from last | :05:39. | :05:46. | |
year. Traditionally, people in the UK have borrowed between | :05:47. | :05:48. | |
three-and-a-half and four times their income to buy a home. And that | :05:49. | :05:56. | |
has been seen as a sensible amount to borrow. But today, across England | :05:57. | :06:00. | |
the ratio is almost double that, with the average home costing almost | :06:01. | :06:04. | |
seven times average income. In parts of London, it can range from ten to | :06:05. | :06:09. | |
23 times income. And that can make finding the money for a deposit | :06:10. | :06:15. | |
increasingly difficult. Most tellingly, if you look at the | :06:16. | :06:18. | |
typical deposit on a typical first-time buyer house, and compare | :06:19. | :06:21. | |
that to the average income of someone on a low to modest income, | :06:22. | :06:26. | |
about ?20,000. Saving for the deposit used to take about three | :06:27. | :06:31. | |
years in the 1980s, early 90s, today that figure is 22 years. In truth, | :06:32. | :06:35. | |
people aren't saving up for 22 years to buy a house. We are seeing fewer | :06:36. | :06:38. | |
people entering the market in the first place. But help is now at | :06:39. | :06:43. | |
hand. Last April, the Government launched a new initiative designed | :06:44. | :06:46. | |
to help those struggling to save a deposit to buy a new home. Any | :06:47. | :06:53. | |
growth inside that box, Chancellor? The scheme's called Help to Buy and | :06:54. | :06:57. | |
can be used to purchase properties worth up to ?600,000. We are going | :06:58. | :07:00. | |
to help families who want a mortgage for any home they're buying, old or | :07:01. | :07:04. | |
new, but who cannot begin to afford the kind of deposits being demanded | :07:05. | :07:09. | |
today. Since the financial crisis in 2008, banks have required far bigger | :07:10. | :07:22. | |
deposits. The Government hopes Help to Buy is the answer. Buyers of new | :07:23. | :07:26. | |
build properties can get a loan for 20% of the purchase price direct | :07:27. | :07:29. | |
from Government, or, in other words, direct from the taxpayer. They only | :07:30. | :07:34. | |
have to dip their hand into their own pocket for 5% of the purchase | :07:35. | :07:38. | |
price. They then go to the mortgage lender with a 25% deposit and bingo, | :07:39. | :07:42. | |
they get their mortgage, and their home. The writing on the top says | :07:43. | :07:54. | |
the Gruffalo, what's that... Toni Stott is a primary school teacher in | :07:55. | :07:58. | |
Oldham. She's the type of person Help to Buy is aimed at. Earning | :07:59. | :08:01. | |
around ?30,000 - just above the national average - 25-year-old Toni | :08:02. | :08:07. | |
has always been keen to buy a house. She's used Help to Buy to fight her | :08:08. | :08:16. | |
way onto the housing ladder. Thanks to the scheme Toni bought her | :08:17. | :08:19. | |
new 3-bedroomed home two months ago with just a 5% deposit. What was it | :08:20. | :08:28. | |
like when you came first to have a look at the house before you bought | :08:29. | :08:32. | |
it? There was only one house left of this style that I got. There was me | :08:33. | :08:36. | |
and one other girl looking round. I remember saying to the lady, she | :08:37. | :08:38. | |
can't have it, it's going to be mine! She's like OK, we will sort it | :08:39. | :08:43. | |
out. It looks a lovely house, are you going to show me around? Do the | :08:44. | :08:47. | |
grand tour, you lead and I will follow. We will start with upstairs. | :08:48. | :08:57. | |
It cost ?125,000. Without Help to Buy it would have taken her years to | :08:58. | :09:01. | |
save for a deposit. This is the bathroom. Green accessories at the | :09:02. | :09:06. | |
minute, but I think we are going to be that to a nice bright pink. | :09:07. | :09:12. | |
Nothing that a trip to the local DIY store can't fix. Home-owners | :09:13. | :09:16. | |
spending here boost the economy. What's more, increased construction | :09:17. | :09:21. | |
leads to more employment. Shall we go with that one? That one? Yeah. | :09:22. | :09:27. | |
There's no doubt that making a new home - with a little help from your | :09:28. | :09:34. | |
friends - is exciting. And there was light! Fantastic. | :09:35. | :09:39. | |
Let's go and do the others. Do you get the sense that everyone's | :09:40. | :09:43. | |
snapping them up? Yeah, they seem to have gone up quite quickly and gone | :09:44. | :09:47. | |
quickly. Could you have bought the house without Help To Buy? No, it's | :09:48. | :09:51. | |
been really helpful for me. I would have had to wait a long time for it | :09:52. | :09:55. | |
to happen. It's been really useful and got me this house. So far, more | :09:56. | :10:01. | |
than 12,000 people have taken advantage of this phase of Help to | :10:02. | :10:06. | |
Buy. But will it kick-start the construction industry as the | :10:07. | :10:10. | |
Government hopes? It's estimated that 240,000 new homes will have to | :10:11. | :10:14. | |
be built in England every year for 20 years to satisfy the need for | :10:15. | :10:21. | |
housing. What we have had to do during the economic downturn is slow | :10:22. | :10:25. | |
down in lots of cases the pace of build because we've not got enough | :10:26. | :10:28. | |
customers able to access the mortgage market to buy our | :10:29. | :10:31. | |
properties. As those customers are able to access the mortgage market, | :10:32. | :10:35. | |
through Help To Buy, through funding for lending, through a general | :10:36. | :10:42. | |
thawing in the lending criteria, then we are increasing the rate of | :10:43. | :10:48. | |
build as fast as we can to meet that demand. | :10:49. | :10:52. | |
There are signs that Help To Buy is having an impact. There's been a 6% | :10:53. | :10:55. | |
rise in the number of new homes being built since the scheme was | :10:56. | :10:58. | |
launched. But critics question whether Government intervention in | :10:59. | :11:01. | |
the housing market will do more harm than good. I think Help To Buy is | :11:02. | :11:04. | |
really the wrong solution to the problem. We have a very clear | :11:05. | :11:06. | |
problem which everybody recognises, which is that house prices in | :11:07. | :11:09. | |
Britain are too high. Now there are two solutions to that problem. One | :11:10. | :11:12. | |
is to help people borrow a great deal more money than they can afford | :11:13. | :11:15. | |
to borrow to pay prices that are too high. The second solution is to | :11:16. | :11:18. | |
allow prices to come down to a level at which people can afford to buy | :11:19. | :11:22. | |
them without taking on undue levels of debt. Now if I were in charge, I | :11:23. | :11:25. | |
would say that the second solution would be a significantly kinder | :11:26. | :11:32. | |
solution than the first. In Yorkshire, the north-east, in | :11:33. | :11:35. | |
Scotland, house prices have moved very little or in some cases have | :11:36. | :11:38. | |
gone backwards and that's reflecting where wages are and what money | :11:39. | :11:41. | |
people have to spend. The Government avenues got a responsibility to | :11:42. | :11:44. | |
address the housing market right across the country, not just in | :11:45. | :11:49. | |
active areas like London. There is something very odd about | :11:50. | :11:53. | |
the current property price boom. Taking account of inflation property | :11:54. | :11:56. | |
prices are rising at the same time as wages are falling. Over the last | :11:57. | :12:03. | |
four years, real wages have fallen to the level they were a decade ago. | :12:04. | :12:07. | |
That's partly because basic costs have rocketed - food's up 17%, | :12:08. | :12:10. | |
energy prices up 23%, transport costs are up 38%. That's creating a | :12:11. | :12:19. | |
punishing gap in many people's finances. | :12:20. | :12:27. | |
Abi Reilly is a special needs school teacher living in Reading with her | :12:28. | :12:29. | |
husband Chris and two children, five-year-old Daniel and | :12:30. | :12:37. | |
four-month-old Elsie. They rent a terraced house but would like to | :12:38. | :12:43. | |
own. Do you feel that home ownership is a realistic goal? No, it feels | :12:44. | :12:49. | |
too far away. Too far away. Pay for the average worker stays the same, | :12:50. | :12:53. | |
well, teacher's salary has certainly been frozen. My husband's salary has | :12:54. | :12:58. | |
probably gone down. How can we save for a deposit when our rents are | :12:59. | :13:02. | |
going up? Energy is going up. Everything is going up. Wages stay | :13:03. | :13:06. | |
the same. House prices go up. Mathematically it doesn't work. Abi | :13:07. | :13:12. | |
and Chris have moved 13 times in the last ten years. They're among the | :13:13. | :13:15. | |
8.5 million people renting privately in England today - more than at any | :13:16. | :13:23. | |
stage since the 1970s. More than half want to own a home but can't | :13:24. | :13:28. | |
afford to. It's wanting to put down roots with the family in a | :13:29. | :13:32. | |
community. Where we live now, we absolutely love. We've got a very | :13:33. | :13:36. | |
good school for Daniel. I want to be able to know that I can stay in that | :13:37. | :13:40. | |
area and bring my children up there, but really, even if I am a really | :13:41. | :13:44. | |
good tenant, if my landlord wants his house back, he gets his house | :13:45. | :13:48. | |
back. The Help to Buy scheme is meant to | :13:49. | :13:52. | |
open doors to families like the Reillys, but for Abi the maths still | :13:53. | :13:56. | |
doesn't work. I've looked into it and you still need 5% of a deposit. | :13:57. | :14:02. | |
Well, 5% of a value of a house in Reading that we would need is still | :14:03. | :14:07. | |
unachievable. How long would it take you to save a 5% deposit? By the | :14:08. | :14:11. | |
time we'd saved up the children would be grown up, put it that way. | :14:12. | :14:18. | |
About 20 years probably. Abi and Chris together earn around ?38,000 a | :14:19. | :14:23. | |
year. Even if they could find the deposit, using Help To Buy, they'd | :14:24. | :14:28. | |
have ?175,000 to spend. The only property we could show them within | :14:29. | :14:32. | |
their budget and where they want to live is a one-bedroom flat for about | :14:33. | :14:39. | |
?130,000. Here it is. Shall we have a look? Let's go and have a look. | :14:40. | :14:46. | |
You first. You have to do a little bit of a | :14:47. | :14:49. | |
dance here, because this is the shower room. No bath, I'm afraid. | :14:50. | :14:57. | |
OK. That's going to be an issue with the baby. That's the toilet. This | :14:58. | :15:02. | |
is, I'd say the master bedroom, but it really is the bedroom. This is | :15:03. | :15:06. | |
it. All four of you would have to sleep here. A bit depressing. I | :15:07. | :15:12. | |
would love to own a home but it would need to be a home that can | :15:13. | :15:17. | |
accommodate us. Which this can't. No, and as we have discussed it's | :15:18. | :15:22. | |
the price range. So Help to Buy's no help to Abi, because what's suitable | :15:23. | :15:26. | |
in her area is too expensive. She's left with no option but to continue | :15:27. | :15:32. | |
renting. What we are seeing is the largest number of families ever in | :15:33. | :15:36. | |
the private represented sector shall - rented sector, paying effectively | :15:37. | :15:43. | |
dead money for properties that they've only got six months. We are | :15:44. | :15:48. | |
also seeing a group of families stuck in properties that they can't | :15:49. | :15:52. | |
afford to get out of and may have two or three children and can't | :15:53. | :15:55. | |
afford to get a bigger property and are struggling to keep their | :15:56. | :15:58. | |
families going in those circumstances. So whether renting or | :15:59. | :16:02. | |
owning, how much do we spend on keeping a roof over our heads? Our | :16:03. | :16:05. | |
survey suggests that of those who don't own a property outright 31% | :16:06. | :16:09. | |
are spending more than a third of their disposable income on housing. | :16:10. | :16:12. | |
But according to organisations like Shelter, spending more than 35% of | :16:13. | :16:15. | |
disposable income on rent or mortgages can leave people unable to | :16:16. | :16:27. | |
afford other basic needs. The situation has certainly reached | :16:28. | :16:29. | |
crisis point for single dad Chris Whatley. We have pizza for tea, | :16:30. | :16:41. | |
darling, yeah. He lives in a council flat in Salisbury with his | :16:42. | :16:44. | |
15-year-old daughter who stays with him at weekends and 20-year-old son. | :16:45. | :16:51. | |
Some chips, I think. A bit of salad, as well. Chris works full-time in a | :16:52. | :16:57. | |
job that pays about ?850 a month after tax, well below the national | :16:58. | :17:02. | |
average. He doesn't receive any benefits, other than the council | :17:03. | :17:11. | |
flat he lives in. Hi, Chris. Hi. I am Adam, nice to see you. Under half | :17:12. | :17:17. | |
my wages goes on my rent, you know, and then you've got your council tax | :17:18. | :17:20. | |
to pay. And that's before you do anything else, you know, that's | :17:21. | :17:25. | |
before you put a tin of beans in the cupboard, you know, you've got half | :17:26. | :17:31. | |
your wages are gone already. Have you got enough for food for the | :17:32. | :17:36. | |
family? Some weeks, no, in a nutshell. This time of the month, | :17:37. | :17:42. | |
another two weeks before I get my pay again and the cupboard can be | :17:43. | :17:46. | |
empty. How difficult is that for you? Well, for me, I can deal with | :17:47. | :17:52. | |
it, you know, but sort of for the kids, I am sure it's not, you know, | :17:53. | :17:59. | |
the best deal, is it really? After Chris has paid his rent, council | :18:00. | :18:02. | |
tax, energy bills and other monthly expenses he's left with ?40 a week | :18:03. | :18:09. | |
for food. That's around ?6 a day to cover all three meals. | :18:10. | :18:18. | |
So what about the meat here, can you afford that? Once in a blue moon I | :18:19. | :18:23. | |
can afford something like that, yeah. But ?6, sometimes that's all I | :18:24. | :18:28. | |
have to spend in a day. I could buy that, you know, but... There would | :18:29. | :18:32. | |
be nothing else? Not much going with it, know what I mean. | :18:33. | :18:40. | |
Looking at getting a couple of pizzas now... I don't like feeding | :18:41. | :18:45. | |
my kids rubbish, but sometimes I have no choice. Budget chips. | :18:46. | :18:52. | |
Earlier this year, Chris hit a financial brick wall. The only way | :18:53. | :18:56. | |
to feed his family was to accept free food from a charity. I got | :18:57. | :19:01. | |
introduced to the Trussell Trust, they gave me a food bank ticket, | :19:02. | :19:10. | |
which at the time was... Was it tough going to the food bank? | :19:11. | :19:17. | |
Um, mixed emotions, I suppose. I accepted it with the sort of grace | :19:18. | :19:24. | |
that it was given to me, you know. But, slightly embarrassing, I would | :19:25. | :19:28. | |
say, that's how it felt more than anything, you know. Does it get busy | :19:29. | :19:33. | |
in here? Yeah, I think it does. It was when I was here last, yeah. The | :19:34. | :19:37. | |
Trussell Trust run 400 food banks nationwide. Since April, they've | :19:38. | :19:40. | |
handed out emergency food supplies to over 350,000 people - triple the | :19:41. | :19:43. | |
number they helped in the same period last year. They estimate half | :19:44. | :19:52. | |
of the people they help are working. How significant is the housing | :19:53. | :19:57. | |
problem affecting your clients? Well, it's quite clear to us on an | :19:58. | :20:03. | |
anecdotal basis, meeting clients that many are choorsing between | :20:04. | :20:06. | |
paying -- choosing between paying the represent or eat -- paying the | :20:07. | :20:10. | |
rent or eating or paying the mortgage or have a repossession | :20:11. | :20:14. | |
order come in and eating and that's are the realities of today. Here you | :20:15. | :20:24. | |
go, my baby girl. I would like to be able to do more for my family than I | :20:25. | :20:32. | |
am able to. And years of not being able to do that kind of grinds you | :20:33. | :20:43. | |
down in the end. So, with some people being stretched to financial | :20:44. | :20:46. | |
breaking point, why are we seeing rising property prices? The answer, | :20:47. | :20:52. | |
at least in part, lies in the decisions taken inside that | :20:53. | :20:57. | |
building. The Bank of England has kept interest rates at their lowest | :20:58. | :21:01. | |
level for over 300 years. And that means that it has never been cheaper | :21:02. | :21:06. | |
to borrow money. With the added incentive provided by the | :21:07. | :21:08. | |
Government's Help to Buy scheme, you can see why demand for housing has | :21:09. | :21:15. | |
been rising. But borrowing is not going to be this cheap forever. The | :21:16. | :21:20. | |
market predicts the bank rate will eventually rise nine-fold from 0.5% | :21:21. | :21:30. | |
to 4.5%. Remember Toni Stott in Oldham who | :21:31. | :21:34. | |
bought her first home using Help to Buy? She's fixed her repayments for | :21:35. | :21:39. | |
three years. Are you aware that interest rates | :21:40. | :21:45. | |
have really never been this low? No. Not for hundreds of years. No! You | :21:46. | :21:50. | |
are not aware that this is a really unusual situation? No. Toni's | :21:51. | :21:55. | |
probably got plenty of room for manoeuvre with her mortgage | :21:56. | :22:00. | |
payments, should rates rise. But 600,000 households are now thought | :22:01. | :22:03. | |
to be in debt peril - that's spending more than half of their | :22:04. | :22:06. | |
disposable income on debt repayments. If the bank rate does | :22:07. | :22:14. | |
rise as predicted to around 4% it's believed more than a million | :22:15. | :22:17. | |
families could fall into serious debt. It's all about how much of | :22:18. | :22:23. | |
your income are you allocating to repayments and anything above half | :22:24. | :22:27. | |
is considered to be a warning sign for over indebtedness and the | :22:28. | :22:31. | |
position at the moment is we have about 600,000 families in that | :22:32. | :22:34. | |
position. In the future as and when interest rates start to rise that | :22:35. | :22:37. | |
number is likely to go up and if income growth doesn't kick back in, | :22:38. | :22:40. | |
in the way we might hope it does, we might be looking at a doubling, 1.2 | :22:41. | :22:48. | |
million, or even higher. Right now, the very low bank rate is | :22:49. | :22:52. | |
helping many of us keep up our mortgages repayments. And that's | :22:53. | :22:54. | |
helped push repossession figures down. But you need look no further | :22:55. | :22:58. | |
than Northern Ireland to see what happens when people can no longer | :22:59. | :23:02. | |
afford to pay inflated property prices. When the property bubble | :23:03. | :23:06. | |
burst here it had devastating consequences. Property prices more | :23:07. | :23:12. | |
or less doubled between the years 2005 and 2008 and then quickly | :23:13. | :23:16. | |
halved in value. Now repossessions have become a major issue. | :23:17. | :23:23. | |
This is Londonderry. Before the crash Northern Ireland had | :23:24. | :23:25. | |
experienced one of the greatest property price rises in recent | :23:26. | :23:32. | |
history. Brian bought his house in Derry during the boom for ?140,000 | :23:33. | :23:40. | |
and then remortgaged. In the boom times what did it feel like? Aha kid | :23:41. | :23:45. | |
in a sweetie shop. You know, there's loads of beautiful properties. | :23:46. | :23:48. | |
There's a load of mortgage men saying here, yeah, I can lend you | :23:49. | :23:53. | |
money. The bubble burst five years ago. Thousands faced bankruptcy, | :23:54. | :23:56. | |
including Brian. And the pain is still being felt. | :23:57. | :24:03. | |
This is the little cul-de-sac you used to live in? Yeah. As the | :24:04. | :24:10. | |
economy collapsed, Brian lost his job in IT and fell behind on his | :24:11. | :24:15. | |
mortgage. It's an embarrassment. You can't make this payment and you do | :24:16. | :24:19. | |
want to make it, you can't. From that point, that's when the pressure | :24:20. | :24:23. | |
starts because you're struggling to make that payment, you know, and the | :24:24. | :24:26. | |
next one's coming up. You are trying to get two up at that point and it | :24:27. | :24:39. | |
spirals out of control. Brian's house was repossessed last year. The | :24:40. | :24:47. | |
key was put under a flowerpot at the door, basically. I turned and left | :24:48. | :24:55. | |
and a van full of my possessions. He says the bank sold his house for far | :24:56. | :24:59. | |
less than he bought it. He's still in debt. In essence, you borrowed | :25:00. | :25:06. | |
too much? Yeah. Should they have lent me such a high loan to value? | :25:07. | :25:11. | |
No Was I glad to get that money at the time? Yes. Should you have taken | :25:12. | :25:17. | |
it? No, but that's hindsight. The paralysed property market created a | :25:18. | :25:19. | |
vicious after-effect that reverberated across Northern | :25:20. | :25:23. | |
Ireland. It's had lasting damage to the construction industry, to | :25:24. | :25:26. | |
individuals who are sitting in negative equity and today we are in | :25:27. | :25:29. | |
a environment where people are extremely cautious about the | :25:30. | :25:32. | |
property market even though prices now look reasonable given the state | :25:33. | :25:35. | |
of the economy. So that should suggest there's lessons that can be | :25:36. | :25:39. | |
learnt for that for other regions, particularly those outside of London | :25:40. | :25:42. | |
that bear more similarity to the particular case here in Northern | :25:43. | :25:44. | |
Ireland. But are those lessons being learnt | :25:45. | :25:48. | |
in the rest of the UK? Five years ago, the global credit crunch was | :25:49. | :25:51. | |
sparked off by a sub-prime housing crisis. Money was lent to low-income | :25:52. | :25:55. | |
borrowers to get mortgages they otherwise couldn't afford. Could | :25:56. | :26:00. | |
that be happening again as Help to Buy relaxes lending to those on low | :26:01. | :26:08. | |
to middle incomes? I think Help To Buy is making the situation worse. | :26:09. | :26:11. | |
It's like pouring petrol over the car and settingings light to the | :26:12. | :26:16. | |
whole thing. You might get a little heat in the short-term but the end | :26:17. | :26:19. | |
result is not actually what you wanted. The end result of Help To | :26:20. | :26:23. | |
Buy is higher prices and that's not actually what we wanted. We have | :26:24. | :26:26. | |
seen nothing yet to suggest there is anything going anywhere near a | :26:27. | :26:30. | |
bubble at this moment in time. We have seen a lot of activity in | :26:31. | :26:33. | |
London. There is some movement now, there is some confidence across the | :26:34. | :26:37. | |
country but a long way to go - I think we are only at 60% of | :26:38. | :26:40. | |
transactions that we were prior to 2008. | :26:41. | :26:44. | |
There's a second phase of Help to Buy where the Government partially | :26:45. | :26:47. | |
guarantees lenders offering 95% mortgages. So far, 2,000 have been | :26:48. | :26:53. | |
approved. But Help to Buy has drawn criticism from both the political | :26:54. | :26:58. | |
left and right. I think Help To Buy is the wrong answer to the right | :26:59. | :27:01. | |
question. The real question here is how do we support the millions of | :27:02. | :27:07. | |
families currently on waiting lists for housing who are hoping to get an | :27:08. | :27:12. | |
affordable home, whether to buy or to rent and are being offered a | :27:13. | :27:17. | |
scheme that could seat them put into unsustainable levels of debt, taking | :27:18. | :27:21. | |
on mortgages they simply can't afford to repay? We are looking at | :27:22. | :27:27. | |
essentially a political scheme to buy votes. This is I think something | :27:28. | :27:30. | |
that almost everybody who's interested in policy and interested | :27:31. | :27:33. | |
in making the housing market more sensible and more affordable is | :27:34. | :27:36. | |
opposing and really I haven't actually met anybody who isn't | :27:37. | :27:39. | |
involved in politics who thinks this is a good idea. The open people who | :27:40. | :27:45. | |
seem -- the only people who seem to support this are politicians and | :27:46. | :27:48. | |
people building the housing themselves. The only people who | :27:49. | :27:52. | |
support it are the people who make money out of it. I think that's a | :27:53. | :27:56. | |
cynical response. Tell me one who supports it. The customers out there | :27:57. | :28:01. | |
They're involved. You are missing that bit out, you are saying this is | :28:02. | :28:05. | |
all about profit. This is not just about profit. This is about people | :28:06. | :28:09. | |
getting on to the housing market. We won't know for some time what the | :28:10. | :28:14. | |
full impact of Help to Buy will be. But for now many predict that | :28:15. | :28:17. | |
property prices will continue to rise. As house prices increase, | :28:18. | :28:21. | |
wages remain the same and the cost of living generally rocketing, the | :28:22. | :28:26. | |
goal posts of home ownership are just going further and further and | :28:27. | :28:31. | |
further away. For Abi, and the thousands like her, only a fall in | :28:32. | :28:35. | |
property prices - back in line with average earnings - will help realize | :28:36. | :28:39. | |
their dream of one day, owning their own home. | :28:40. | :28:49. |