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Panorama Friday, 5 July, 2002, 18:22 GMT 19:22 UK
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I see many opinions of people who seem to be struggling to find a house. The comments of one (probable) landlord suggesting that the properties were simply better thanks to double glazing and central heating is preposterous. Anyone like myself who is interested in buying their first house can only look at the houses which do NOT have the aforementioned "luxuries". Even still in Rugby, a house without those two things would cost at least 75k. That would be a tiny terraced house in a crime ridden area where having secure windows is of utmost importance. Housing quality is worse than ever. Even if you were to buy a newly built house, the walls are so paper-thin and they are so poorly built makes you wonder why you're even trying to buy in the first place. I am renting at the moment, will continue to do so until some sort of tax is introduced for landlords and interest rates have risen slightly. Don't even get me started about the poor quality of the rental properties!!

In the late 80s there was a panorama programme taking about the boom in prices asking, "will it go on for ever?". Then there was another programme in the early 90s about the fall in prices asking "will in go on forever?". Now we have a programme discussing rising prices again, asking "will it go on forever?". This is just sensationalist journalism. Prices will fall in the next couple of years, make no mistake. It will happen when the buy-to-let brigade starts to panic from higher interest rates and when prices stop rising. They'll all sell in one go and the market will slump. If you can't afford to buy right now, be patient and then you'll be the one laughing at all those greedy investors who have lost a fortune. No boom lasts for ever and the sure sign of an imminent crash is when people start saying that it will last forever.
Matt Leese

I watched Panorama and felt shocked at what appears to be a "future population" versus "where to build more homes" problem. As a politician in my past life I have attended population debates and each area of the country is different e.g. towns where there are a lot of teenage pregnancies have more housing needs. Surely the rural community is not going to be put under threat with yet more commuter belt building. I wonder where the hazard waste is going to be put in years to come - I asked this question 10 years ago to Michael Heseltine and although there will never be a perfect answer - we are still not much further forward now! Beam me up Scottie?
Alexandra Wells

I was infuriated by the attitude of your low income earners from Norwich (joint incomes of £16K and £8K). They complained that they couldn't afford to buy a place for themselves. Your programme then showed them looking round a three bed semi, which was only marginally out of their price range. How about starting out on a one-bedroomed flat or studio like the rest of us? They think the world owes them a living.
Hilary Charlewood

The problem of not being able to afford a home in London is not only applicable to so-called key workers. It's all very well talking about special housing association schemes, in e.g. London, to provide key workers such as teachers with affordable housing. But what about the rest of us who don't happen to work in the public sector, earn higher than the average salary, and still can't afford to buy anything? This seems to be a group of people that have been completely overlooked by the media. Just because we don't work in the public sector, it does not mean that we can automatically afford to buy property in London. After all, are we not all "key workers" to some degree, in that we contribute to keeping these key workers in London by paying tax ...

This is a note aimed at those who earn above the average. As unpopular as it may seem a lot of people who could have afforded a house a few years ago, can't now because of their indecisiveness and lack of interest. Everyone knows that property is a national obsession and yet a vast amount of people don't even read the finance section of a newspaper or check out their local property paper every six months. They then wonder why they have found themselves on the receiving end of a nasty blow as is the situation now. It's only when it's all over the headlines that they take note. I bought my first house in 1994 when I was 21 and have moved about ever since. Houses didn't seem like they were going to rise in value much but seemed safer than pensions managed by somebody who got the job because of who their father knows. Most others of that age splashed out on a new BMW or such and now moan about living in a small flat! As an example. How many people do you know who have been "looking to buy" for the past couple of years but were waiting for the "right moment" ie the market to drop or waiting for a property to come along that they just weren't going to get for the money they had? All of those who had the nerve and took the plunge a year ago were probably nervous about whether their investment would devalue but took it any way. Those who didn't take the plunge seem to moan and pray for a crash, but isn't that just sour grapes as after all it's a gamble just like any other form of betting and as such never bet everything you have and more! If you had the foresight to monitor the housing situation and to try to understand the economy then this is your reward, so enjoy it. Spare a thought for those in their early twenties who were just too young and missed a golden opportunity. If it all crashes, I couldn't care, easy come easy go.
C Rose

Why is the UK property boom based on the perceived value of property different to the house price boom in Japan that preceded their recession?
A Torrance

It was always difficult to make cash out of buy-to-let, and the fact that rents have been dropping should send warning signals to all those involved. I expect to see more buy-to-let landlords offloading property as they realise that it's not the miracle investment they thought it was. This will obviously contribute to a drop in prices. Other things that can be done are much higher stamp duty on second homes, and stronger and better regulation (especially in terms of minimum standards) of the rental market - what about rent-controlled apartments? What about capping the rate of property price increases? If something radical is not done, there *will* be a sharp market correction ...

Like the Micro Flat designers, I'm living in London on quite a decent salary but struggling to get into the housing market. I'm currently living on a narrow boat and the Micro Flat concept strongly appeals - more spacious than my boat, plenty of room for 1-2 people. We need more backing - and local and national government pressure - to ensure this sort of development continues and becomes a reality.
Alan Moore

I do not own a home and I think that home ownership for me in this country (or certain parts of it) will be impossible to achieve. My plan is to save up money and then move abroad. This is the only chance I have of home ownership. I think it is a shame that I could never own a home in the country I have lived in all my life without winning the lottery or committing myself to a 25+ year mortgage.
Mr Calvey

Without state regulated investment in affordable housing as we had in the 60s, 70s and very early 80s, this situation will perpetuate. Thatcher once said "Council Houses are socialism in concrete". One can now see how without such socialism, everyone in society may suffer the breakdown of other social structures, through teachers', nurses' and other public servants' inability to afford a home.
Tim Rose

There could be more employment available in the north and midlands if the government were to offer some incentive to business to relocate there, eg tax advantages. This would surely ease the pressure on housing demand in the south and south east.
Jackie Burke

There are two possible answers to the "housing crisis". Reduce demand, by making it difficult to lend more than say 60% of the value of a house through a mortgage. Or, increase supply by releasing more land in the south-east for house building. Even if we build enough new homes to satisfy all the potential demand over the next thirty years, we would not build over more than about four percent of the land of the south-east. Talk of concreting over England is just hysterical nonsense dreamed up by people in organisations like the CPRE. An as for the people who moan on and on about developers building homes for PROFIT(?) what on earth do they imagine they would do it for? and why shouldn't they make a profit? After all it is tax on these profits, and others, that pays for public spending. These profits also make the stock market, and private pensions work (when they do work). Perhaps these people who are so opposed to profit would like to go and live in a society that is opposed to profits, like the Soviet Union - oops, sorry that collapsed, didn't it; well how about North Korea? Or perhaps profits aren't such a bad thing after all.
Mark Hanson

Given the fact that there are 24.7m dwellings in the UK (Source: Halifax Factbook/DLTR) and there are only projected to be 21.7m Households in 2006 (Source: Halifax Factbook/ONS). Can anyone explain where the 3m shortfall is and is 12% of the UK housing stock in the wrong place, badly maintained to be undesirable? Which would be a factor in allowing demand to outstrip supply and therefore generate the rapid inflation in house prices. Also if the CML are so worried about the rise in prices why don't the mortgage lenders move interest rates up en masse and provide "help" to the economy, instead of waiting for the BoE to put up interest rates and risk damaging the whole of the economy, or is this what they want? Reduced expenditure by business, increase in lay-offs, raised interest rates, increased mortgage and increased unsecured debt payments which will ultimately lead to increased defaults and ultimately assets which can be claimed at a fraction of cost. I realise there are fair trade issues with this but the move could be made and the necessary cooling applied to the economy before any regulatory bodies had "sprung" into action.
M Greenhouse

It is my long held view that the rise in property prices over the last two and a half decades remains unsustainable. In my opinion that we have now reached a situation where property prices are seriously affecting the nations ability to function competitively. I am a self-employed businessman and have owned and run a small retail outlet for nearly ten years. In this time I have developed a basic understanding of how the economy needs to function in order to sustain modest growth. As a tenant I, like many others in my position, have to pay rent for the property I lease and this directly affects many other overhead bills, which are linked to property price, rates, water rate etc. This means that in order to survive, our margins on the goods we sell have to remain as high as possible, especially where turnover is on the low side. Manufacturers however, face a far tougher situation and now find that their ability to compete is drastically reduced. The higher the price of property, the higher the mortgage or rent, in turn higher wages are needed to allow people to afford their own homes. Overheads continue to push businesses over the edge and with these level of overheads it is little wonder that those who can take their manufacturing abroad do so. The implications of high property prices are far-reaching and though I do not have the answer to this major problem it is something that the government needs to act on. However, higher interest rates are no longer a viable means of slowing property prices. The economy will not function at all with rates much above current levels. Besides the BoE, in a reply to me last week, said that their policy is not to take one sector alone when making decisions on rate rises.
Mr Ian Thompson

I thought this Panorama was the most poorly researched and presented I have ever seen - a collection of old reports stitched together with virtually no new analysis. What little new material there was, was so weak as to undermine the central theme. For example, a 31-year-old man still living with his parents complaining that he and his partner could not get onto the housing ladder. However, their income was sufficient to obtain an £80K mortgage which with a 10% deposit, and a willingness to do a little bit of work would be quite enough to buy somewhere modest in Norwich. Perhaps living with his parents is just too comfortable? The entire programme seemed to be a woolly liberal rant about the fact that in a competitive market not everybody gets what they want. Unfortunately, in a state controlled market, nobody gets what they want.

As a managing director of a property company I tuned into Panorama (as I often do) to watch the highly topical programme you screened yesterday. Why is it that when this highly emotive topic is discussed normal journalistic standards are jettisoned so lightly. A number of points: 1) I do believe that your programme (and you are not the only publication (eg FT) has allowed undue prominence to a spokesman for a mortgage provider - Charcol is a wholly owned subsidiary of Bradford & Bingley plc - a major lender in the market. This was not mentioned in his billing on the programme. 2) Almost your entire programme seemed to devoted to a study of anecdotal evidence suggesting that the purchasing power of low paid and public sector workers in the property market was declining - there was a sort of ancillary point which you fudged that if they stretched to buy at these levels they might get hurt if the market collapsed - however why not make a programme on the declining real purchasing power of such workers and label it as such. 3) You failed to address whether public or private sector rented accommodation was available to those people who are currently living with their parents or renting rooms. You presented their choice as "stay at home or buy a house" - in reality there are a number of options available. 4) You completely failed to address the market data that rents are falling in absolute terms, particularly London. 5) You failed to address the fact that some portion of house price inflation has been caused by (a) buy-to-let speculation, fuelled by lending practices (b) attempts by the government to remove their own housing responsibilities, eg planning requirements to create affordable housing and financial assistance to low paid public sector workers (c) restrictive planning requirements locally (you did, I admit, touch on this, but it was hardly rigorous analysis).

Might I suggest that a more informed analysis of the situation would also have focussed on the precariousness of the housing market based on the ballooning of housing related household debt, predominantly in the buy-to-let market. It is absurd that the banking market is strictly regulated by capital ratios etc. The result has been the shifting of leverage to the unregulated consumer - >£6bn this year so far. Lazy journalists are focussing on affordability indices eg house prices divided by income, ignoring the fact that as the percentage of investment properties within the pool rises the notional interest cover ie incomes divided by interest payable has plummeted on the investment property and the householder's principal residential mortgage. Why do journalists assess who should do what on this area? Interest rates are clearly a useless tool in this regards.

In conclusion a lot of people are frightened to ask the (literally) £64bn question(s) - is the housing market about to collapse, if so will it be general or limited to the buy-to-let market and who will be the casualties? A lot of people (including Ray Boulger and the other lenders) have a lot to protect here so don't expect to get the answer from them!
Mike Toogood

The "Boom" appears to be solely based upon consumer confidence. With no "real" industry, how will the country cope with a collapse in the housing sector?
Stephen Hewlett

Are there any steps the government can take to stop the boom/bust in housing? There must now be thousands of first-time buyers who have no hope of affording a house. Also what is the government's opinion of 50 year mortgages ?
Angie Major

Currently the buy-to-let brigade are allowed to write-off mortgage payments against rental income for tax purposes, meaning that they will never redeem early and effectively get a nice second home for the price of one deposit. I say the Inland Revenue should scrap this rule or cap the mortgage amount that can be written-off against rental income to a %age of the mortgage/mortgage outstanding. This would prevent the massive number of buy-to-let bandwagon jumpers as they wouldn't have the tax handout. There also needs to be a modification of the CGT rules regarding second homes (which can easily be circumvented) and possibly a "greed tax" on people owning multiple homes. I'm not against people trying to get ahead but you cannot allow the shortage of housing stock to be manipulated in this way - massive house-price inflation is to no-one's advantage.

There seem to be so many problems facing the housing market at present that it seems inevitable that some form of crash happens in the near future. First-time buyers are being priced out of the market, not just in the south of the country. Those that are stepping on the property ladder are precariously balancing their incomes against interest rate rises which must be upon us soon. We are told on a virtually daily basis that the economic growth in the UK in no way supports the rates being as low as they are. Having been financially crippled in the last housing crash I can only sympathise with those who will experience the same fate this time around. The market is driven by greed from all parties. I would be in a very different situation now had property continued to rise through the nineties and people today are being tempted by the same feelings and ambitions. The only winners in all of this will be (as ever) the lenders and estate agents whose irresponsible approach to both lending and price inflation is part of the root problem. It baffles me how we the people of this country have put up with so much for so long.
Graham Charman

It seems to me that if you did nothing then the housing market would cool by itself. The general rule of supply and demand fuels the massive price increases. With no change to interest rates or any other factors you would eventually price buyers out of the market thus removing the demand. This would immediately bring the prices back down and so the cycle would start again. The only way I can see of removing the cycle is by building vast numbers of new "cheap" houses to remove demand for higher priced houses. The only thing I can see an increase in interest rates would do is further damage an already fragile economy. People who have stretched themselves would suddenly find themselves in a very dangerous situation and disposable income which is currently keeping the economy going would suddenly disappear.
Matthew Blanshard

The housing market is made up of many small housing markets that reflect the local economy. For instance, an area with high unemployment will have more elastic house pricing than those areas of prosperity. A property slump is therefore likely to start and finish within a poorer area. House pricing is largely determined by demand, not by the rate at which properties come onto the market, so that even within affluent areas, different streets (ie those with river views) might attract more buyers than those near busy roads. There are so many factors that determine house values, though areas with poor social and business infrastructures are particularly vulnerable to a slump. Transport links, environmental and historical issues will also play a part in the rise and fall of property value. I believe there is not going to be a national fall, but rather a number of local ones. Any falls are likely to be fairly short-lived, as workers are more likely to travel some distance for their work.
Dan Benham

I've just sold my flat in Bracknell for £105,000 having bought four years ago for just £54,000. I'm now going to rent for the next year or so, and I'm hoping the market will suffer a reverse in that time to enable me to make the next step on the ladder because I just can't afford to move up anymore. I simply can't see how prices can go up any further when the vast majority of first time buyers have no hope of buying at the moment.

The government has failed yet again. There are a number of simple steps they could and should have taken. Firstly, second homes should be taxed at a much higher rate. Secondly the mortgage companies should be "encouraged" to reduce the load amounts from 4x salary back to 3.75 or 3.5x salary. Thirdly mortgages should not be allowed to extend beyond 25 years - this will prevent trouble later down the line. And lastly we need more houses, so build them on brownfield sites, don't let any developer tell you that these don¿t exist!! I live in London and there are plenty of areas which could be redeveloped.

Isn't a fundamental shift in people's aspirations to home owning now maybe required? Maybe we should follow the continent and focus more on the rented sector. Is there such a difference in forking out money to a landlord as opposed to a mortgage lender? The government isn't going to do a jot about the situation as there is too much vested interest in keeping the financial institutions happy. Also, re: building on the greenbelt, go round the capital and look at the amount of empty homes - it's scandalous.
T Gregory

House prices are not what's important - it's affordability. As long as the rest of the economy requires low interest rates people's mortgage payments will remain low. As soon as this changes, other things could change very rapidly.
David Chamberlain

Cure the sick patient (London and SE) but leave the rest of us alone!!

Niall Donnelly
In my experience, house price inflation has been moderate in Northern Ireland for the past number of years. I think I speak for a lot of people outside of London when I argue that any an interest rate is a dose of medicine that we could do without. Cure the sick patient (London and SE) but leave the rest of us alone!!
Niall Donnelly
Newry, Co. Down

It must be remembered that house prices are not a force of nature - they are controlled by people. People who want to sell their houses for as much money as they can get - aided by estate agents who want as big a cut as they can get. If someone wants to sell their house, their first question is, "What can I get for it?" They want maximum money rather than a fair price. House sellers need a conscience. They need to realise the consequences of selling their house for a massive profit. If they don't really need all that extra money, then be nice to some first-time buyers and sell for a little less! "Market forces" is just an excuse for greedy people who want as much as they can possibly get. Does high demand really mean that only the wealthiest people should get what they want?
Oxfordshire, UK

Whilst I strongly feel that something needs to be done to curb the growth in the market, surely hiking up the interest rate is not the answer. Is this not just a short term fix, which will create a myriad of other problems both within the housing sector and within the wider economy? Like many people, I find it particularly worrying that after a long struggle to get onto the property ladder, I am now faced with the fear of punishing growth in my mortgage repayments, and the possibility of being plunged into negative equity. Perhaps optimistically, I hope that there will be attempts to address this problem at root. Many of the comments so far have touched on these underlying factors: desire for multiple home ownership, buy-to-let, and buy-for-profit. Surely until these driving forces are adequately addressed, the problems with the housing market will continue unresolved, undoubtedly to the detriment of those in genuine search of a home.
First-time buyer

The air of hopelessness about rising house prices is quite unnecessary. The problem is one of policy. In the eighties the loan markets were amalgamated, and the separation of home buying and refurbishment loans from all others was broken down. This was done for example by abolishing regulation Q, by breaking down the Building Society Mutuals, and by allowing banks into the house-loan market. The resulting reduction in rate constraints and restrictions on loan availability have ended in chaos. Treating lending for all purposes as one, regardless of time and use differences, has unleashed excessive funding of relatively safe loans (as they were thought) by bankers and a general upward drift in rates on the specious grounds that money was being diverted from the most speculative and so most lucrative high-rate uses. At the same time a boom and bust cycle resulted. But money is lent into existence, not a fixed quantity diverted from elsewhere. To control house prices is easy: restore former housing policy. For example, separate lending for housing entirely from the banks - it might be necessary, with the reduction of mutuals, to set up new ones or establish a Public Housing Loan Fund. Introduce large down-payment deposits for high value houses as a matter of compulsion ( say 15% to start with). Limit the consideration of more than one income; release land cheaply by public acquisition if necessary to prevent speculative looting of areas suitable for low-price housing. Reintroduce an upward limit on the rate for funding house-purchase on deposits less than £100,000 - it is a safe loan, after all, and useful for long-term security. Persuade Local Authorities to regard the purchase of second homes or homes to let as a "change of use" under the planning laws, and forbid it. Put punitive local taxes on houses left empty for more than five months a year (and shorten that period if non-residency persists). Start to ask serious questions as to why a country with a declining population such as ours needs all these new houses - and check that the demand is real. Why should single-nesters wanting greenfield sites borrow money that manufacturing needs? Alter the use of social housing, ending its drift to becoming a sort of extra-mural section for the prison service, and for mental health asylums. End its use as a resort for reckless copulators - let alternative provision be made and social housing used to encourage stable families on low incomes. Reintroduce the ideas of police housing, housing for teachers on school grounds, the re-establishment nurses' homes and so on. Encourage (tax grants?) firms to provide housing for their employees as part of their employment policy (one recalls the building of industrial towns on that very principal) - but with garden city ideals in mind rather than mining and smoke-stack back-to-backs. And so on. A huge range of policy possibilities are to hand. Why were none discussed? Why was the single interest-rate-fits-all-uses arguments not challenged? Why was the notion of a Manufacturing Bank along with a new Housing Bank not floated? We don't need to be overawed by risk-based financial wanglers, you know!
M. Parsons
Newton Abbot

A Mardell has hit the nail on the head when he/she says that people are buying property because they can't rely on pensions - the government should take serious note.

I struggled to buy a house as a single first time buyer nearly three years ago. I was earning an average wage and as a consequence of there being very little housing for single people available the prices were high. Because of this my only hope of getting a foot on the ladder was to move further away to an area I did not know and buy one of the ex-MOD houses that were shown in the programme last night. The demand was clear as there were over 200 people queuing for 150 houses and that was three years ago! Thank heavens for these type of deals as I would not have stood a chance and my purchase has now stood me in very good stead to sell and purchase elsewhere in a location of my choosing. I felt horrified watching the programme at what prices people were prepared to pay. The health worker that paid over £100,000 for a grotty, tiny one-bedroom flat was appalling. As long as people are prepared to cough up at any cost and for any old rubbish the market will remain a seller's one! Perhaps if more people had their heads screwed on and just said "no" to such extortion the market would become a sensible one once more.
Becky Gowen

Why do you give a platform almost exclusively to the property and mortgage lending industry when looking at the UK housing industry, when arguably they are the two main reasons why the UK property market is in the precarious situation it is. It is hardly likely old Ray Boulger is going to support the line that "excessive and irresponsible credit policies have created one of the most dangerous asset price bubbles in the UK in recent memory"
Mike Toogood

It is no easier to up from a two bed house to a three bed, as the price gap grows wider by the week. Take into the factor that we agreed a price on a property, and as soon as our house was sold three weeks latter our vendor increased the property price by 10%. I also do not see why so-called essential workers in London should be given hand outs by the government, when others on lower wages are not helped.
B Baxter

House prices are the scandal of our time

D Jordan
House prices are the scandal of our time, perpetuated by successive governments failing to address population growth and the weakness of UK industry. The press are also to blame as they/you lead us to believe that house prices are somehow a good thing - which it is clearly not. Why did Panorama not mention that the national deficit is almost always the same as the amount borrowed for housing and other debt? Why did you not mention the ongoing numbers given on immigration? All the time you shrink from these issues, you widen the gap between the haves and have nots. It can eventually lead to revolution and it is the young who are being left behind in this case. I see house prices as a gross obscenity of greed, corruption and vast numbers of pompous people getting very rich for doing no work at all. Whilst you tinker around with issues that are not the prime cause, you are making vast numbers of good honest young people live in abject misery and poverty in the extreme. This whole housing scam and the support you give it just make me want to throw up.
D Jordan

Interesting comments from one lady on the Panorama programme, who states that if wages continue to increase alongside house prices then current house price rises are not worrying. In 1997 I bought a two-bedroomed flat in the south west for £35,000. My wage at the time was 10k. Last month I sold my flat for £109,000 and interestingly enough the wage for the job I used to work has increased by only 5 percent whereas my property has obviously rocketed well beyond the means of anyone currently working the same job as I had when I bought this property. I currently work in London and think I will be renting for sometime. Wage increases are laughably well below those increases seen in the housing markets. Together with housing costs and all the overheads owning a property incurs I now consider renting a more viable option.
South west

My wife and I are currently trying to get a mortgage/loan to buy our council house, as we do not need more than £20,000. No one is interested unless they can hike up the interest rate. Where are the politicians when the working class are being ripped off? (Yes I do believe that we are still a society dominated by greedy people (the haves) that feed from those who create the wealth (the have nots - the working classes)and they have the money to decide who to lend to so ultimately they decide who gets to own a property and who doesn¿t.
D K Chadwick

Panorama raised the questions but made little attempt to analyse the cause of the phenomenal rise in prices. Who is funding first time buyers? Without bottom-end support for funds the bubble cannot continue to grow. Nationwide and Halifax this week only fuelled more rises with their reports. What we need is analysis not recounting the events as they happen.
Paul Miller

The problem with the housing market is rooted in the fact that the government will not address the central issues which are causing this boom which are: 1. The lack of supply of suitable properties, especially flats, which are snapped up by buy-to-let investors as soon as they come on to the market, leading to price increases. A special tax should be imposed on buy-to-let investors to provide a disincentive. 2. The huge amounts of debt which banks and building societies are flinging at prospective purchasers as a result of more acute profit motives arising from recent stock exchange listings means that people are always playing catch-up. This issue of new debt should be controlled and should be a strict multiple of income. Woe betide people with large mortgages when interest rates rise. A 1 per cent rise from 4 per cent is a whopping 25 percent increase!
Philip Smalley
St. Albans

Having been through the last housing boom and bust I remain to be convinced that there is a UK housing shortage. I remember in the mid 90s that you could not sell houses, even in the London commuter belt. One statistic I heard is that 1 in 3 houses in London is buy-to-let - this could go some way towards explaining a shortage, and also give a pointer to when the crash will come... just watch the rental rates
Mike Newton

If you limit the buying-to-let market to one property per investor and tax him/her heavily it will surely ease things for first-time buyers. People seem to be panic-buying because of future investment and pensions schemes looking less than rosy. Buying a home is the only way to ensure some financial security. The prospect of buying a house for me isn't the same experience as it was for my parents. I could probably just afford a one bedroom property in an "up and coming" area. My parents bought a large two bedroom flat in Muswell Hill through the GLC in 1974 for £2,000. That same flat is now worth £350,000. If this trend continues, all UK inner cities will be housed with middle class childless couples. (Just like it is in Edinburgh). This silly housing market is effectively killing off communities and driving people into unsustainable debt. Until (if) it all eases I'm forced to rent, paying off somebody else's mortgage.

Is there a government who has real plans to address this issue without rhetoric?

Ching Man
I would like the government to tell me how are they going to provide housing for people earning the national average wage or less, especially for those of us who live in the south-east. A job used to be a job for life, but now we are all contractors! - reduced job security, lower wages, and higher house prices. Is there a government who has real plans to address this issue without rhetoric?
Ching Man

It's a plot! The landed classes have conned the homeless and poor that the UK is built over, which simply isn't the case. The rich keep their rolling vistas and swampy and the poor chain themselves down holes for the cause! The rest of us sit in traffic jams on the way back to shoe box sized flats and homes that the Victorians would have turned their noses up. Lets start building good housing with some space and the roads and the infrastructure to serve them. The idea that we need new "starter" housing is nuts - we've tons of tiny houses already. We need to get rich people out of the houses that were built for the not so well off. I say lets build our way out of this. We could even have a tax on new building to have huge new forests and nature reserves then everyone is happy.
Haywards Heath

There is a simple solution to this. Give strong incentives to firms to move further away from the south-east. This will encourage building away from the green belt, open up areas of cheaper housing and ease traffic congestion.

I congratulate Panorama on showing the crisis first-time buyers are having in trying to get on the housing ladder. Unfortunately things will not change. It is quite disgusting that no government spokesperson could comment on your programme. I live in London and the price of a one-bedroom flat is at least £100,000, which means you would have to earn at least £25,000 to buy that property, and all I hear is that Nurses & Fireman etc are key workers. What about all the retail staff and the people who keep our city clean? Who is going to help them afford a property? This problem is destroying communities - how can it be right that, come adulthood, you may have to leave your roots where you grew up so that you can buy your first home? The media should put more sustained pressure on the government to try and resolve this problem. One thing they could do is stop homeowners owning more than two homes.

Part of the inflated housing market blame lies firmly at the feet of investors who "buy to let". I suggest increasing stamp duty for people buying property of which they will not live in, discouraging investor buyers and helping first-time buyers.
Neil Dallaway

The current housing market growth is unsustainable. For it to continue to grow one of two factors have to be in place. 1) Wages need to increase in line with house prices. I don't know about anyone else, but my wages certainly aren't increasing by 20%+ a year; or 2) Building Societies have to be willing to lend much higher amounts than they have done in the past or be willing to lend for longer. The worrying thing is, the second factor already seems to be in place. We've already heard about 50 year mortgages and I know of someone in London that has just agreed a mortgage for SEVEN times his salary. The Building Societies may argue that they will only lend young professionals that kind of money. That argument is flawed. Only a small percentage of accountants, lawyers etc. will ever see a salary that can comfortably sustain that level of borrowing. And as for 50 year mortgages, does anyone seriously want to be still paying off their mortgage when they are in their 80s? Have people forgotten about the current pensions crisis? People's pensions are not designed to finance massive loans. They are designed to kick in once all the big capital items have been paid off and the only major expense is the annual holiday to Eastbourne. What we will see is the essential services being priced out of cities and first-time buyers being unable to break into the market at all. This fact will precipitate a crash. First-time buyers are the key to the market. If there is no-one buying the houses at the bottom the chain collapses leaving everyone where they already are. It is no good the government giving interest-free loans to an extremely small percentage of teachers, police, firemen etc. All this does is fuel the market some more. The government has to step in and instruct the Bank of England to raise interest rates. Only when those fools that have signed up for the mortgages seven times their salaries begin to understand that they will be hard pressed to take even a 1% rise in the interest rates will people come to their senses and stop looking at the housing market as a way to make some money. Then we will see normality return.
Gary Parker

Why as a nation are we so obsessed with owning property? There is so much more to life that 'trapping' yourself and your income to four brick walls. People should appreciate that there is so much more to life.

The very expectation that every good English man or woman has to buy a house makes this whole housing issue a very British one within Europe in my view. Our Continental cousins seem quite happy renting property and my experience from the major cities is of much higher concentrations of apartments than in the UK. Affordable housing is in vogue in order to provide low cost housing but the reality is that it is the cost of the land that is increasing so dramatically not the cost of building property - building lower quality property is really only tinkering at the margins. Supply needs to increase but we need to think about how we design property and develop alternative market structures: 1) More apartments rather than houses. 2) Fiscal incentives for people to convert large properties to apartments when they no longer need the space. 3) Encourage the private rental sector to develop and strengthen tenants' rights in the process. 4)Ensure that any parking facilities are underground to reduce the impact of new developments.
Lee Glendon

Most of the comments are from people who have lost out in the house price boom. I have several friends who have done very well from it and it was their risk to develop their properties, so it's due reward for them. For myself, and many others not on the ladder, it might mean the end of living in this country. I am self-employed, but will not pay the amounts that are being asked for really awful properties. I plan to leave this country which has sold its soul to liberalism and pressure groups to create the factors now in place. I'm off to South Africa - 75k for a mansion next to a lake...
M Coupland

Wise up! Most of the comments on this discussion page could have come from Karl Marx himself. How stupid to suggest, as some do, that people in the UK should only be allowed to own one property and that single people should be discouraged from owning large houses. Last time I looked we lived in a free market democracy with all the benefits that brings for people of all income levels. People who earn large salaries usually work for it while those on lower incomes usually don't. I totally agree that provision should be made for key workers particularly in areas such as London - however why should the tax payer subsidise other low income earners just so they can live in a smart part of town? Get real, there are still plenty of cheap properties in and around London - albeit in rough areas. But let's face it, beggars can't be choosers.
Paul Robinson

The biggest problem is the property law that does not recognise the common-hold like in the continent. If people are able to own a flat forever, more people would be willing to buy flats and builders would build apartment blocks, which are more space efficient than houses. I live in a former council estate with 22/24 one bedroom houses. In the same space, we could have thirty or more 2 bedroom + apartments. Apartments do not have to be ugly nor high rise.
Alex p

once there are no teachers/nurses/firemen/bin men left in London property prices will fall.

A Toth
I don't see any solution to the housing problem in this country, and I think it's just going to get worse and worse. Britain will soon become a 2-tier society, homeowners and non-homeowners. Personally I've had enough and I am going to emigrate. I don't want to, but there's no other solution as far as I can see.
B Roberts

The government is wrong to intervene for "key workers" in London. Let the market do its work - once there are no teachers/nurses/firemen/bin men left in London property prices will fall.
A Toth

Our land was "given" to a property developer on the understanding that 25% "affordable housing" would be built. The average income around the area is £15,000. The developer claimed, at a Local Public Inquiry in July 2000, that the properties would be sold for approx. £60,000. They are being sold at an average of £102,000. I think the government is complicit in the housing scam by having too lax rules for developers.
R Hazelton

I think that some of the blame should be levelled at the lenders for offering such high lending at a time when we all know that the market is looking shaky. Indeed, they even alerted the government to the situation last week. Should interest rates rise and/or an increase in unemployment, then we will see a return to the days of people being unable to pay their mortgages, an increase in repossessions and so the beginning of a downturn in values. The number of buy-to-lets chasing too few tenants will also speed this process along. This will at least allow some people to get a foot on the ladder as they snap up cheap deals as the lenders offload their unwanted repossessions. As to us lucky ones who've made huge profits, then do what I've done, which is to sell and move to a cheaper area and get rid of the mortgage once and for all.
P Bouch
Hove - but not for much longer

Working as a graduate of 5 years as an IT Project Manager earning £25k, I find it soul-destroying to see house prices soaring ever higher and the types of homes available diminishing. In order to get on the property ladder I have put in offers however I am finding that starter homes are being sold within 1-2 hours of going on the market. Because of this situation I am now actively looking at moving abroad to achieve an affordable lifestyle, such as Norway!
South Staffordshire

This recent programme was yet another example of a poor quality, "dumbed-down" broadcast. It was very superficial and the totally irrelevant background "music" was really irksome. The programme was on the academic level of the Sun and about as education as a jeans advert. Dreadful. As to comments regarding the issues. We have one basic choice - we either cover our land in concrete or we think about reducing our population and living in higher density units.
Adrian Carter

How come the lenders are so wildly inaccurate?

In January 2002 the BBC reported the Nationwide as saying "the property market is expected to cool in 2002, with house price inflation dropping to just 6%": there would be no boom. Now they say house price inflation is to be 20%: there will be no bust. 1) Why should we believe the Nationwide (or the Halifax who are just as inaccurate)? 2) How come the lenders are so wildly inaccurate anyway? Is there a bias? Surely not.

I think that the government should do more to help people out. Seeing those people trying to find home in Norwich and getting no help is bad. It should not just be London it should be all across the United Kingdom.

Much of our housing stock is old and many of our residential areas look like a disorganised, bodged-up mess. A systematic redevelopment of existing residential areas should be where we start. Not invasion of more green spaces. At the moment we are in danger of creating highly priced slums in some areas and executive boxes minus a sense of community in others. Supply is short but we need to think long-term to cool prices and get back to sensible borrowing.
David Coldrick

Until such time as the government grabs the initiative and actively encourages businesses to relocate North of Watford we will continue to lose our Green & Pleasant land under a concrete jungle. For pity's sake DO SOMETHING!
R Hazelton

I don't think there will be a crash. Firstly, demand is outstripping supply in a big way. A recent report suggests 400,000 too few houses in the UK by 2020! Secondly, I think we will see small, bi-monthly, 1/4% increases in interest rates. This should lead to a slow down in the market, rather than a crash. Previous crashes have come on the back of huge interest rate hikes. One would hope that this government and the Bank of England look at history and don't make the same mistake of the 80s.
Salisbury, UK

First time buyers have always had to struggle to get on the housing ladder in the south. A fundamental change in attitude is all that is required is to get on board the big ship "Property". Go for 35-50 year interest only mortgages initially. When your circumstances improve you can then consider paying off the capital. In that interim period any equity increase is yours! You're on the ladder.
Bill Millett

Earlier this evening I watched a low quality television programme about a family who wanted to buy a second home for themselves in Bath for up to £500,000. They were looking at big homes, suitable for a large family. When they were not living there, the house would stand empty. Britain is too small an island to allow people with such a lack of social insight to allow for a large scale "second home" culture. Heavy stamp duty taxes need to be applied to people who have the financial clout to exacerbate the housing shortage in such a manner.
Craig Thompson

I am a lone parent. I was working for NHS (in a professional job) - now starting university soon. By the time I've finished uni I will be entitled to buy my two-bedroomed council house (which I've had for one year) for £21,000(houses on this nice estate are being sold for £40,000-£56,000). I feel so lucky compared to those people on the programme who will be probably struggling for ever more. Move up North! I don't want to struggle having a large mortgage - I want to enjoy life as well!
Preston, Lancashire

Low interest rates have fanned the flames of buy to let investors but it was the pension fiasco that ignited the fire.

A Mardell
Property prices increase when the property market is active. As ever greater numbers of people are given the opportunity to move up the ladder, from smaller to larger properties, the market activity increases. If house sales at the bottom rung move slowly then there is little knock on effect and house prices remain stable across the board. Buy-to-let is always most active at the low end of the market, so it is this which has recently ignited and driven house buying frenzies. As the numbers of people wishing to buy and sell increase, the house prices go up. The question that should be asked is "what has driven so many small investors to jump on the buy to let bandwagon?" A very significant contributing factor is the previous and current governments failed drive to encourage us all to have private pensions. Thanks to the government's (past and present) incompetence and the pension industry's greed, the pension industry has failed miserably to provide what was promised both by the industry and the government. Consequently, people have taken their future into their own hands and turned to property investment as an alternative to pensions. Low interest rates have fanned the flames of buy to let investors but it was the pension fiasco that ignited the fire.
A Mardell

It's no better in Norway. A little wooden house will easily set you back between £200,000 and £350,000 - and it's getting dearer by the week! Your only alternative is to go and live in the middle of nowhere, where the housing is cheaper... which may work well if your better half does not object to the plan...
Christopher Briggs
Bergen, Norway

I have now had enough and am now trying to emigrate to the USA where my skills will be recognised and rewarded enough for me to buy a place to live.

R Henderson
I am one of the people priced out of the Property market. A couple of months ago I contacted a housing association to find out about getting help and the woman on the other end of the phone laughed at me saying I did not count as I was not a nurse or teacher. I basically do science for a company which apparently means I do not count as a key worker in London. I have now had enough and am now trying to emigrate to the USA where my skills will be recognised and rewarded enough for me to buy a place to live. What is the point of working hard and staying in the UK if I cannot even buy a flat to live in?
R Henderson

Once again, a Panorama programme on housing increases, albeit in prices which engender any number of excuses for house builders to seek to build on sites of THEIR choice and with profit. Their god seems to have bypassed the huge influence that government policy or rather the LACK of it - over immigration into Britain during the last few decades - has exerted on housing demand. At one stage it was the great "unmentionable" and even your own programme denied its influence in a reply to a letter from me a few years ago. It is quite understandable, of course, that it would be seen as extremely uncomfortable to stand up and admit that it is GOVERNMENT that is contributing to the massive house-building programme via a lack of control in a number of areas, eg totals of persons (incoming) needing accommodation; and estate agents' influence on a hugely important SOCIAL aspect of our life. This also applies to house-builders, in the pursuit of profit. England's green and pleasant land is now AT RISK from political failure to "get a grip" where it matters. The country's population is being swollen from elsewhere even faster than house building/prices but the two are inextricably linked.
Mark Newberry

Funny I thought to see someone in London paying more in rent than what I and a lot of low income people earn. £1,300 pounds to rent a flat - I could have fallen over. North and south are like two separate countries!! I earn £8,528 after deductions p.a. Paying £2,704 p.a. rent. Leaving £5,824 p.a. to live on. Ask anyone south of Leicester if they could manage on that!! Houses for some are only a dream. So are better wages as is the chance of winning the lottery etc. I am happy enough to have reasonable health, to keep on dreaming!! :-) There are people in the world in dire need of food which we could ALL help with trying to resolve first.
Ellesmere Port

I am earning £12,000 a year. How am I supposed to be able to even think of buying a house, when the "average" house price in the city is over (approx.) £60,000? There is no way I could get a mortgage to cover that on my present wage. The most I could earn in my job is £15,000. So even if I stay in my present employment for another 3-4 years, there is no hope of ever buying a house, unless there is a drastic cut in house prices. Ex-naval houses in the city with 1-2 bedrooms, are being sold for £110,000 and Victorian terraced houses with three bedrooms for £91,000. I think that the government needs to address the problem in some way. There was talk of building pre-fabs to try to cover the need for low cost housing. I think this would help a little, but ultimately would not solve the problem. I feel that house prices should be fixed at an amount somehow, only to rise if substantial changes are made, and only to rise by the money spent, maybe add inflation too. As I don't see how a house price should be allowed to rise by 10-20% in a year, when nothing has changed.
S Proctor

One of the problems seems to be people's expectations of having everything now rather than taking what you can afford and moving on in time. I also resent government hand-outs to so-called key workers who all get paid more than me from the first day they work, in the process increasing prices as you pointed out. You also did not explain what happens to "affordable" housing on new sites. I assume those lucky enough to have this subsidy then sell on at a big profit for themselves.

What about current students who will be hit with a triple whammy: student debts for half their working lives; no possibility of making money in the property market; and no final salary pension schemes

D Teagle
It is not surprising the government will not put forward a spokesperson to comment on the housing crisis. It is abdicating its responsibility for this matter. It is not only nurses and teachers who cannot get onto the property ladder in London there are even lawyers and doctors in that position. It is time the government started building council properties once more. The problem is that there is little short-term political advantage in this proposal. Those interest groups which argue that this move would damage the property market are correct. But that is a simply a price that will have to be paid. What about current students who will be hit with a triple whammy: student debts for half their working lives; no possibility of making money in the property market; and no final salary pension schemes. The combination of these three problems will cause significant problems of life-long poverty for many people formerly thought to be middle-class. These problems are not so far advanced that they cannot be reversed. But soon they will be. The government simply has no option but to build social housing on a massive scale. However, it has frequently demonstrated that it only takes responsibility where there is short-term political gain. How bad do things have to get before this government finally faces its responsibilities to the electorate?
D Teagle

I looked into a mortgage in 1990 when rates were high. For my salary I would have £100 a month to live on and £60 was for the Poll Tax. I have resigned myself to not having a home of my own. If I was able to afford a mortgage, what would I do if the interest rates doubled? I would loose my house as the government would say I made myself intentionally homeless. In 10-15 years time the government of the day will have a greater problem then now with more people unable to buy a home. It was a big mistake to cut the council homes and sell them off some people lives have been made a misery by being forced to buy a house just to live.
Mr I Taylor

it is those who cannot afford to buy a home who pay the mortgages of those who can afford to rent one out

C Reid
For me, house prices are a justice issue. Over my years as a tenant, I have become angry at the fact that it is those who cannot afford to buy a home who pay the mortgages of those who can afford to rent one out. On the other hand, of course, I have always been glad when there are plenty of properties to rent, to at least keep prices down. So I'm not sure that preventiices down. So I'm not sure that preventing individuals from buying properties to rent is the answer. If there IS to be government intervention, it should come in the form of urban regeneration and decentralisation from London...
C Reid

Raising interest rates will hurt people who are mortgaged. If you want to curtail the house prices to keep in step with earnings make a rule that lenders can only lend three times a borrower's salary plus one times their partner's. This will hold down the first-time buyers' prices to earnings and the rest of the market will keep in step.
Robert Cooksley
Alveston near Bristol

I wanted to comment on the fact that no-one mentioned the huge amounts of people still being able to come into this country and live here - perhaps what is needed to be addressed is the fact that we are allowing too many people into this country and the population is overtaking the amount of properties we have to live in!
Julie Bailey
Brinsley, Nottingham

Part of the problem is that many people are taking on mortgages that they cannot afford in the long-term, especially if interest rates were to rise, partly out of fear that if they hold off buying, it will be even more unaffordable in the future.
John Wilkinson

Interesting programme on house prices. This is the reason for my family and I to leave this green land of ours. Prices are a joke and the fat cats laugh at us mugs - charging crazy prices for just bricks and mortar. As you reported estate agents are on the increase and are we surprised? Hell no. We in Hull are getting ready to sell our four bedroom home, at a real price of less than £100,000. We feel that this is worth the asking price. To hell with what the estate agents say, we know that this house is a bargain for real people. We hope that we can help, yes help a family by selling our home to them. Hey don't misunderstand, I'm not giving away my home, but a reasonable price for a reasonable job is what I happen to believe in. My husband is a builder and works on houses to rent in the Hull area for a landlord who happens to care for his tenants, who also maintains his properties to a good standard and charges a fair rent.
Jan Windass

Some time ago I wrote to several MPs with the idea that if you limit the amount you can borrow to twice the main wage and increase the deposit and separate the mortgage interest rate from the main banking rate this would allow government to control house prices and also limit the number of credit cards and control their interest rates. This would control high street spending.
David Oattes

The boom in the housing market will crash, and it will be the ordinary working class family that will suffer. The prices quoted in the programme for some properties are well below the affordable prices for many people. On this issue there seems to be no north south divide. Homeowners who bought their property many years ago and have not moved are the winners, as they have seen their property increase in value. The many losers are the homeowner who has moved and has been caught in the past housing market crashes. The answer to this problem is to build more affordable property in all regions, giving everybody the chance to own their own home. Nobody wants to see our valuable countryside being lost, but this is the only way this problem in the long term is going to be solved. Very interesting no member of the government was prepared to talk to you on this subject. Too many difficult questions I wonder?
Steve Fuller
(city) Brighton&Hove

One of the worst and most cheaply produced insights by Panorama I have ever seen. No insights or graphs of critical ratios such as average earnings to house prices, consumer debt, unemployment, stock price indices etc. No world comparisons of the warning signs of the Hong Kong or Japan property crashes. No real mention of the effect of cap rate mortgages which are much more common than 10 years ago. Just

The Housing Ladder


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