Is a £450,000 home affordable?
21st January 2016 | posted in News
I watched with interest a recent debate at Prime Minister’s Questions between David Cameron and Jeremy Corbyn.
Corbyn pointed out to Cameron that the current Housing Bill going through Parliament will offer affordable starter homes for first-time buyers which are not remotely affordable for the vast majority of British people.
When you look at he Bill, these supposedly affordable homes would be too expensive for average earners in most of the country, while only those earning salaries of over £76,957 would be able to buy homes built under the scheme in London costing an incredible £450,000.
Pardon me for asking, but when, in anyone’s book, can £450,000 be regarded as affordable?
Don’t get me wrong I know house prices in London are astronomical but even if you halved this amount for other towns and cities, by no means is even £225,000 remotely affordable and, realistically, these sort of prices would only possibly be available in the North.
It also makes we wonder whether we have learned anything from the 2007 crash, which was partly due to people no longer being able to repay their mortgages. If more people are going to start buying homes but have to find deposits for £450,000 properties, surely there is a risk of history repeating itself?
I’ve touched on this in previous blogs but the real problem is that consecutive Governments have not done enough to build new homes. In 1970 378,000 new homes were completed and by 2014 that figure had fallen to 141,000.
It comes down to simple supply and demand. House prices go up when there are less homes on the market and they go down when there are more available.
So, let’s focus on building more homes and in the meantime have a look at how we can really make homes affordable.