Richard Baum

Last week I finally sold my “luxury” apartment, after trying to remove the gigantic millstone from around my neck for the better part of the last year.

Unfortunately that didn’t mark the end of my dalliances in the property market, as I had to go house-hunting over the weekend, stumbling from awful house to awful house thinking that I would have to consign myself to decades of back-breaking penury just to buy one of the crumbling and horrifically furnished shacks put before me.

To be fair, there were some nice ones. But the choice tended to be small-and-nice or big-and-yuck. And the new houses in particular appeared to have been developed with the car-less dwarf in mind.  

I had always been a comfortable distance away from the housing market horror that engulfs the nation at the moment until now. I had wandered past estate agent’s windows seeing increasingly lengthy price-tags with only a vacant shrug and a sigh. I had barely blinked when people lucky enough to have been born before the late 1970s told me how they’d bought their palatial residence for about thirteen pounds only to see it increase in value by forty-thousand times over the past five years.

But now has come the nasty business of actually having to purchase a house myself. And the depressing fact is that houses, even in the Manchester suburbs, are simply out of the reach of most young people.

If I lived alone, I could probably afford to live in a tiny city centre flat, or a bigger one out of town. But, having experienced these developments (and now that I haven’t got one of them to sell), let me say that they are genuinely horrific places to live. The rooms are tiny, the bathrooms don’t have windows, and the fixtures and fittings aren’t fixed or fitted with anything approaching adequacy. The communal areas are dumping grounds, the management companies act like third-world governments, and whilst brochures boast of “concierge services,” you’re more likely to get a guy with a big key-chain working 9-5, and screw you if anything breaks at the weekend.

And if you’re lucky enough to get a parking space, the car parks are patrolled by the biggest bunch of money-grabbing sharks the world has ever known. Where I had mine, a minor violation (such as the wrong space or incorrectly displayed permit) would result in clamping and a £350 fine. £350! To park outside your own flat!

Horrible, horrible things those flats are. And yet there’s millions of them! Manchester’s “Green Quarter,” which should be more accurately re-named “Flat Quarter,” is home to about 1,000 of these things in four or five brand new tower blocks. And they’re selling for hundreds of thousands of pounds! Who is buying them? And why oh why oh why?

Where are these people going to go when they have kids? Or spouses? Or more stuff than can fit in one room? Because I can’t see these flats, with their scuffed communal carpets and fading first-day grandeur, holding value.

We might be lucky. We have a bit of money saved and can probably put a deposit down on somewhere nice-ish. But I simply don’t know how single people my age, or people on lower incomes, or who live anywhere even moderately more pricy than Manchester, will ever afford a house without their parents helping or dying.

And it’s difficult to see how anything can change without causing more problems. If house prices in general come down, then anyone who’s bought recently suffers. If the market stagnates and we wait for wages to catch up, we’ll be waiting years and this whole generation will miss out on home-buying into their middle-age.

Shared-ownership is one idea, and I know people who’ve tried it out. But often there’s rent to be paid on the bit you don’t own, which makes repayment even more difficult. You pay a mortgage on 60% and then rent on the last 40%. And there are some home-buy schemes with slightly better terms - taking a separate loan out on a part of your home and only paying back that bit later on. They are good examples of mortgage lenders and housing associations working together with a good outcome at the end.

But these days so many young people fall into the trap of paying thousands to a management company or rental landlord rubbing his hands together, cackling wildly and flashing his gold tooth at you.

What about involving the housebuilders or the government themselves in non-rental shared ownership? Allowing first time buyers onto the ladder at virtually cost price, and then imposing a sell-on clause whereby the profit missed out on first time round (plus a bit more) is paid back when the house is sold?

So rather than a house costing £100k to build being sold for £150k, it’s sold for £110k, and when it’s sold on ten years later at full market value of, say £165k, the housebuilder gets all of the £40k it missed out on, plus 75% of the £15k profit? The young person has ten years of equity in his house, and the rest of the profit to re-invest.

I don’t know if this is practical, but it’s an idea and it means that young people get a foot on the ladder, whilst housebuilders keep an interest in the property as its value rises.

I am back on the hunt tonight. I wonder what I’ll find…

Rick