Don't be suckered into buying property

Harvey Jones thinks the UK property market is a desperate old hag living off its glory years while demanding an unseemly price for its favours.

As a long-time property owner, I've always had a strong paternal concern for the fate of first-time buyers.

Friends who missed the opportunity to buy property when it was still affordable ended up buying rubbish flats in dodgy areas at unmentionable prices - if they could afford to buy at all.

I benefited disproportionately by getting in early, and would have been £200,000 better off if I hadn't listened to my girlfriend.

The great property bubble created a grotesque chasm between winners and losers, which is why I gleefully cried I want a house price crash! when the credit crunch first appeared.

And that is why I have been hailing the Buy-to-let apocalypse and claiming that struggling Buy-to-let investors are getting what they deserve.

Because I feel for all you property virgins, hovering nervously on the fringes of a still over-priced housing market, wondering dare I, should I, can I? 

Right now, I believe you shouldn't, because although the recession has made property a bit cheaper, it isn't cheap enough.

It still costs too much!

The average first-time buyer property has fallen slightly since the start of the year, by nearly £6,000 to £154,205. But with finance tight, that still leaves the average first-timer needing a £55,700 deposit to be eligible for the best mortgage deals.

That is down from £66,900 in January, but still absolutely outrageous. When I bought my first flat in south-east London back in 1997, my deposit was just £10,000 on a property valued at £87,000.

The typical first-time buyer property now costs 4.8 times the income of the average buyer, down from 5.3 a year ago, according to figures from FindaProperty.com. But that is still above its long-term average of around four times income.

In short, property is still expensive. That's why more than half of all first-time buyers can only make that step with help from the Bank of Mom and Dad, the lender of last resort.

And that ain't right either.

You always remember the first time...

Buying your first home should be a special moment. You don't want to pop your property cherry in a dingy ex-local authority flat with a squalid past and suspicious stains on the walls.

Nor do you want your first experience to be so traumatic that you never quite get over the shock.

When you first commit yourself to a property, it should be something you really, really love, with soft lighting and a comfy bedroom, and you should want to stay together for years.

The opposite of what happened to my friend Casey, who plighted her property troth in a ground floor studio in Shepherd's Bush, within sniffing distance of the communal wheelie bins and easy reach of burglars, and has regretted her decision ever since.

Home and buyer should also be financially compatible, so you don't end up squandering your salary on the mortgage.

Don't get used and abused

My advice to would-be first-time buyers is this: Shun the property market. Snub it. It's a desperate old hag living off its glory years while demanding an unseemly price for its favours. Ignore the wiles of estate agents, desperate to maintain their immoral earnings.

You're young, you've got your future ahead of you, don't be lured into some squalid back street or crumbling tenement block, hold on for something much better.

In the long run, the property market needs you more than you need the property market. So start saving. Build your deposit. Take your time. Watch property prices wither and shrink, and then pounce.

Property is going down

Don't mortgage yourself to the hilt just to maintain the illusion that the UK's ropey old housing stock is among the most valuable in the world.

Those days are now over, and good riddance. You've adjusted to the new reality, where rising taxes, falling state spending and soaring education costs means that, financially speaking, It's rubbish to be young.

So has the rest of the economy. Look at the collapsing pound. It knows the game is up. So does the job market. Even the soggy old Lib Dems are openly talking about "savage" cuts to state spending. House prices will fall again, only the property market remains in denial. Don't contribute to this self-serving illusion.

The living dead

Even though I'm a homeowner, I don't believe I am arguing against my own interests. If property prices did fall across the board, it wouldn't make any practical difference to me. I'm happy where I live now, but if I wanted to trade up, my next property would also be cheaper.

More realistic prices would make the property market sustainable, which would be better for me in the longer run as well.

Like vampires, the housing market needs the fresh blood of property virgins. Don't be suckered in just yet, or you'll get it in the neck, especially if inflation and interest rates start rising.

The property market doesn't deserve you - yet. You can do a lot better, and if you can be a bit patient, you probably will.

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