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Home ownership at lowest level in 20 years

January 16, 2011

This  week we have read the article Home ownership at lowest level in 20 years published in The Guardian and we have compared the situation of housing in UK and in Spain. I think that, in general, the precariousness at work is the main reason for the fall of  home ownership.
Some years ago, when people had a permanent post, everybody could buy a house and ask the bank for a mortgage. But nowadays there are a lot of people with mortgage and without work.
I think that in Spain the market of lettings is not well structured and it is the reason why people prefer buy to let a house.

4 Comments leave one →
  1. Virginia_Perez permalink
    January 16, 2011 9:01 pm

    Here in Spain the price of letting is almost the same as the mortage that we would have to pay to buy a house, so many people think that for a little more you can own a house and that this can be a sort of an invesment. I think that this trend of buying houses instead of letting them will continue until the difference in payment is bigger.

    The other difference I found with the british is cultural. Spaniards tend to stay in one place trough their lives once they are stablished. British have a different mindset and change places to live more easily. So if you are going to stay in one place 50 or 60 years it would seem more logical to buy the house.

  2. amiralles permalink
    January 16, 2011 9:30 pm

    I think that the analysis for understanding the low numbers for home-ownership and the increasing of renting is very complicated and many factors must be studied, such as social changes and new economical politics. In addition to the precariousness at work, I think that the soaring prices of houses during last years have been the most important problem to take into account. During many centuries, price of houses has been around 4 o 5 times the average of the whole annual salary of an employed person. However, all of us find it easy to calculate how many years are needed for this: more than 10.

  3. Vicent permalink
    January 19, 2011 10:24 am

    The main points in this article are the two trends set to dominate 2011: a long-term fall in home ownership (as in Spain) and a resulting boom in the private rental market (different from Spain).

    The first trend is similar in UK and Spain because both countries are suffering the effects of a bubble’s outbreak in the ownership market. However, as far as I know, there isn’t a boom in the Spanish private rental market. On the contrary , this market is also declining in size and prices.

    Why this difference? Under my point of view the answer points out to the intensity of the economic crisis in Spain. On the one hand there’s the large number of redundancy people, circa 20 %. On the other hand there’s the long time needed to find a new job.

    It’s such a difficult situation that many young recently independent people are coming back to their parents’ house. Also many young redundancy couple with little babies are coming back to their parents house, as they can’t afford any payment because they have no income at all.

    We also must take into account another part on the demand side. I mean people from other countries who came to work in Spain while the bubble was growing up. Now that the bubble has burst , some immigrants are going back to their home countries.

    Finally I don’t want to finish without mentioning the declining incomes that many shops are suffering with the general fall of sales. Many shopkeepers say they are suffering a lot of loses and they can’t afford them for a long time, so they asking to negotiate for reduction with shop ownership.

    All in all this situation will long so far as the economic activity buck the trend

  4. Trini Sayas permalink
    January 19, 2011 10:02 pm

    Hi Vicent. I can see that you are quite informed about the real problem of the economic
    crash and because of the precauriosness at work peolple can not buy a house.

    But at this moment there is other option in market about home ownership and it is lease-purchase agreement, that really I don´t know what it means. Maybe you start letting the house with the qualified acceptance of buying it at the end, don´t you?

    The world recession concerns all people ones more than others, and in main it is time to save money, but is it the solution??

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