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Our Relationship With Property Is Changing

Mar 12, 2008
The way British people buy and sell property throughout their lifetimes seems to be changing pretty quickly.

Two different pieces of research released in the last week have revealed significant changes taking place in the market. The first showed the traditional climb up the property ladder is changing for a lot of people. And the second revealed that half of people who currently rent a house don't believe they will ever be able to afford to buy one.

Taken together, they show revealing changes in our attitudes to property and way we are actually selling and buying homes.

The first piece of research was done by the Council of Mortgage Lenders. It found that the traditional housing life of British people is losing shape.

Traditionally Brits bought a home young, and then bought bigger and bigger properties as their family grew. When they moved into retirement, they then downsized to a smaller house.

But not now. The research showed that 15 per cent of people moving into private rented property used to be homeowners. And 10% of people now own a house which isn't their main home. That shows the increased popularity of owning a second home - sales have gone up 10% in the last ten years.

There's another new trend that's become more popular in the last few years. And that's people who are tenants as well as being landlords. They got on the property ladder early in life by getting a buy-to-let in a cheap area, as opposed to their own home. And then over time as they built up some equity they rented in more expensive areas, with a view to sell property down the line.

Meantime, the other piece of research was put together by CreditExpert. It found that half of people who are currently renting a house don't ever believe they will be able to afford to buy.

48% of renters don't think they will earn enough to buy their own property. In more expensive areas such as the south of England that figure rises to 55%.

The firm's quarterly personal credit index also found the feelings of negativity increase the older you get. 59% of people aged 35 to 54 don't think they will ever be able to buy, compared to just half of those aged 18 to 34.

This latest news follows earlier reports that people wanting their first ever home were starting to look abroad. A study by UK National Savings and Investments found that 84% of people aged 18 to 30 believe it's a more viable option to buy property in another country than it is here.

Certainly affordability continues to be an issue. Figures from the Council of Mortgage Lenders released earlier in the month showed first-time buyers had to contribute more than 20% of their income towards mortgage interest in December 2007. And that compares to 17.9% in December the year before.

The increase in interest rate payments was put down to successive base rate increases which happened up to July 2007.

Stamp duty is also worsening people's ability to get property for the first time. Only 40% of first time mortgages last year were for homes valued below the minimum threshold of 125,000. That compares to half of all starter mortgages the year before.

So what does the future have in store? Well, it seems even more change to the traditional British housing market. Experts at trade magazine BuyAssociation say the ease of buying in another country coupled with high prices here and decreased affordability make it likely this is going to happen more and more over the coming years.
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