The trouble is so many got used to 100%+ mortgages that the thought of saving for a deposit became old fashioned, you had to get on the "Property Ladder" before you got left behind.

I remember my parents having to rent for years to save up a deposit, this then showed the lenders you could budget and cope with the commitment of a mortgage, you certainly didn't get one in your early twenties.

What stops people saving today is the huge cost of renting, lack of housing stock has not only pushed house prices up to insane levels but has pushed rents up dramatically too. Investing in houses for both sale and rent can and will bring down both house prices and rents, impacting on the economy is several ways, a dramatic one would be forcing down the amount councils hand over to private landlords in housing benefit. The houses for rent don't have to be council houses either, pension schemes have huge investment pots that need a decent return, legislation for them to get into the private housing market shouldn't be too taxing.

Only building houses in the tens of thousands can really sort this problem, governments of either hue have been ignoring this crisis for far too long

Your first para is very true, my eldest is looking at renting in the short term but they are having to look at rents which are equivalent to mortgage repayments in order to do so, which then negates their ability to save for a deposit, its Catch 22, if I had the balls to do it and any sort of job security then I'd make enquiries about buying a second home with some of my equity as a deposit and renting it to them for the cost of my second mortgage - having a #2 daughter waiting to follow on behind gives some sort of long term stability to my plan

Your second para reflects what I mentioned some time back that when I first entered the job market the building scene was focused almost entirely on housebuilding, it was massive and when I think back I'm staggered that such huge scale housing (both private and public, both purchase and rental) could ever be funded, but it was, and in a period when we had an economy that was on its knees, the PM having to beg from the IMF, interest rates in the stratosphere (comparitively), power cuts and a three day week - it was afforded then and I haven't a clue how.

Well at the risk of repeating myself (yet again) on this subject (I really should save this in note format):

There are thousands of hectares of government-owned (local and national), that is suitable for building new homes. Rather than sell this land and receive a one-off boost to the exchequer, it would be far better to lease it at a peppercorn rent on a 99 year lease, to charitable institutions or housing associations. The total cost of a new house is approximately 60% land price + 40% materials and labour. So any rents charged should reflect this and not the prevailing market rents of other similar properties in the area. New, rented properties could then be offered at around 50% of the prevailing rate. Couple that with an introduction of commercial property taxes applied to all empty buildings and vacant land (LVT-Lite if you wish) and a great chunk of currently banked land assets would also suddenly appear on the market at less than speculative prices.

The money to build would come from pension funds and other institutional investors: these funds are always looking at long-term investments and this type of investment would offer the sort of security only usually seen in government bonds but at a far better rate of interest. Even if British investment funds were unwilling to invest, there would be no shortage of foreign funds willing to plough in the capital required to fund the projects. The knock-on effect of such a scheme would be to drive down rents in the adjacent private sector. There would have to be safeguards built in, such as covenants to prevent sub-letting, multiple tenancies and any future right-to-buy.

Further benefits would come from: increased direct employment in the actual construction and allied trades sectors. All these homes would need furnishing, so retail would receive a stimulus. The jobs created would benefit the exchequer through increased income tax, National Insurance and VAT receipts. The exchequer would further benefit from decreased housing benefit and tax credits. The people who inhabit these properties may find that they can now pay rent AND save for a mortgage deposit, should they wish to eventually own their own home.

Of course there will be losers: banks may see their assets shrink as property values reduce. Speculators who foolishly rushed into buy-to-let may find themselves paying more in mortgage repayments than they are receiving in rents. But after all, we're "all in this together" ain't we?

As a nation we need to shift from viewing a house as an investment and get back to viewing it as somewhere to live. You know, a home.

Gideon was on the telly this morning (yes folks, he was above ground, albeit a little pale, and deigning to be seen himself rather than sending some lobby-fodder nincompoop with no grasp of his brief).
He was saying how important it to build infrastructure as an investment in the future (jaw-dropper, who'd have thought of that? the man's a genius).

Unfortunately, he was talking about HS2 which will do nothing right now.

But ... is Gid moving stealthily to plan B do you think?

Not a chance.

Plan 'A' is driven by pure ideology and will be followed through until his final Autumn statement, when he will announce a return of the 10p tax rate and hope that plus the referendum (maybe) will be enough to fool the voters once more. The country could go to hell in a handbasket before then and he still will not change tack

I agree wholeheartedly with your comment about the real reasons for plan A... but plan A (as many of us predicted) is patently failing, even the tories are beginning to see that.
I reckon he will (too late) try and produce some cost-neutral infrastructure apparent growth-boost from his straw boater.

HS2, jam tomorrow?

Tomorrow?

I'll be pushing up daisies long before any HS2 train hits a northern city

This may sound strange to a government minister looking for a good news day on something that isn't going to exist until he is long since cold and dead in the earth, but I don't want to travel from Leeds to Birmingham 50 minutes faster than I can now (who would want to get to Birmingham faster ?).

The service as operated right now is fine, its far quicker than the car, costs about the same and is just about as convenient.

All I want is for more room on the bloody thing.

HS2 is just another grand headline grabbing plan that our inept, egotistical politicians of all parties are so fond of. It will do little to help the economy at a critical time and will no doubt drag the most indebted nation since Weimar Germany over the edge some time down the lime (as it were).

If they were serious about boosting the economy they'd put a modest part of the £32 billion into building quality council housing in the here and now. Within a year the economy would be picking up and within a couple booming. But ideology will prevent that (as it would for the modern Labour party).

With all that fish you eat, you might yet live to see it.

But not in Sheffield, as the route misses the city centre by 5 miles.
Apparently, it would cost too much and slow the train down too much if it actually went into the city.

When I heard that on the news, I thought I must have misheard.