Well in theory right now, if you were to make contributions of £200 a month into a stocks and shares Isa, (i.e. put aside earnings of £2,400 p.a.) and aimed for a realistic yearly return of 4pc after fees, you’d reach your goal of £40,000 in nine years.
If your partner did the same, this could be £80,000.
In addition, if house prices were to fall over the same period, you could suddenly find yourself well poised and ready to buy a comfortable place to start owner occupation in.
Unfortunately, there are quite a few ‘ifs’ in this scenario right now!
The main obstacle to achieving this is house prices themselves which, even at the lower end of the house-ownership spectrum, are out of reach for a large number of hopeful owner occupiers. This obstacle could however be removed using relatively straightforward improvements in the way that residential properties are marketed.
The present ‘government’ idea of trying to get prices to reduce is by building many more housing units.
Unfortunately, this idea is fundamentally flawed. The reason is that the effect of doing it would be marginal on price. Why?
Because unless upwards of 10% of the total number of currently built homes were to be constructed, little or no effect on house-prices themselves would be felt.
If you do the maths it becomes clear that it would be impossible to build enough, even over a full ten-year stretch. You would be talking about building in excess of ten times the number of new units currently being built each and every year for at least the next ten years!
By deduction, instead of attempting to do the impossible it would be better to look at the current methods of marketing all residential properties and change that. This is the one thing that is highly inefficient, old fashioned and in need of wholesale improvement. It is the key to achieving the desired result – greater owner-occupation.
Reform the way privately owned residential properties or houses are bought and sold by making the process open, fair, and efficient. This is the key.
Doing this would bring the prices of starter homes back within the reach of first-time buyers and they would no longer have to borrow the eye-watering amounts currently stopping the majority of those whom wish to become owner-occupiers.
To find out how this could be done, please go to:
The House Price Virtuoso Solution: Full details of our proposals for properly reforming all housing markets in England and Wales.
Posted by: Peter Hendry, Housing Valuation Consultant.
Author of:– The House Price Virtuoso Solution