With the average price paid by first-time buyers now more than £150,000, few
young people can rely on their salary alone to get a foot on the housing
ladder. For most, the only way of squaring the circle is by extracting cash
from long-suffering parents or signing up for one of the growing number of
shared-ownership schemes.
Not Joshua Jackson, 22. He is having an online whip-round instead. The
boarding-school-educated graduate of Brunel University, London, has set up a
website, Fingerscrossed property.blogspot.com, on which he is urging people
to send him contributions to buy a home.
His aim is to raise £280,000 — enough, he believes, to acquire a two-bed house
in Battersea, southwest London. “It sounds ridiculous, and I am expecting
most people to shun the idea,” says Jackson, who rents a comfortable home
with two friends in Belsize Park, in the northwest of the capital. “But all
I’m asking is for people to donate whatever they can afford, whether it is
£1 or £100, until I’ve got enough to buy a house.”
Concerned not to be labelled a lazy money-grabber, Jackson, who is currently
“taking a break from employment”, has added a sweetener to the deal: he says
he will give the most generous benefactor the money he earns from renting
out the second bedroom for a year. He reckons that should come to about
£5,400.
Jackson is not alone in trying his luck on the internet. Others are doing the
same, partly inspired by the example of Alex Tew, a 21-year-old from
Wiltshire, who hit the headlines 18 months ago when he raised $1m by selling
$1 advertising slots, pixel by pixel, on his website, the Million Dollar
Homepage.
In the past few months, two almost-identical rival websites have sprung up
applying the same concept to saving money for a house.
The first, Buymeahouse.com, was launched by Bippon Kalia, 33, who rents with
his wife, Lisa, and their three-year-old son, Aryan, in Hounslow, west
London. “If I work day in, day out, I might just about be able to afford a
house by the time I’m 45,” says Kalia, who runs a home-security business.
“I’m not prepared to be part of that rat race.”
Instead, he has come up with what he calls a “multipronged” approach to
funding his first property. As well as the website, he plans to help
pensioners convert their homes into flats and take a cut of the profits they
get from renting out the extra units.
Bizarrely, Kalia has also registered a company called Sky Banners, to sell
advertising space on the roof of the house he rents, which lies on
Heathrow’s flight path. “Airport billboards make a packet. I can hang a
sheet on my roof and make some money out of all those thousands of people
flying over it every day.” His total takings so far: £2,000-£3,000.
Not inclined to fund Kalia, either? Then what about Terry Turner, 23, who has
set up a rival site, Buymeahouseinstead.com. Turner, who still lives with
his parents in Essex and shares a bedroom with his younger brother, is also
selling advertising space on his site and claims to have raised more than
£2,000 so far.
“Every pixel I sell is a brick towards my new home,” he says. In return, he is
offering to beam the logo of the company that buys the most online bricks
onto the front of his new home with a cinema projector. “My family thinks
I’m mad,” he laughs. “And there might be a few angry people at the local
council, but arguments are good — they bring publicity.”
Such schemes are, in part, little more than a high-tech version of the
requests for financial assistance that have long featured in Private Eye,
the satirical magazine. Yet they also symbolise the growing desperation of
people trying to buy their first home, highlighted by figures released last
week by the Department for Communities and Local Government. These show the
average price paid by a first-time buyer reached a new high of £156,031 in
February — up from £141,233 a year ago. The age at which people make their
first property purchase, meanwhile, continues to rise. The average age of
the first-time buyer is now 33, according to Halifax.
“Anecdotally, we have noticed that, as house prices increase, first-time
buyers are becoming increasingly creative in their attempts to step onto the
property ladder,” says Phil Jenks, the head of mortgages at the bank. “In
reality, if you’re looking to buy your first home, you should try and put
some savings aside and seek appropriate advice. There are other options
available.”
For those determined to pay their own way, the only solution is to take out a
bigger mortgage: some companies are now prepared to offer as much as 125% of
the property’s value.
Sarah Warwick, 25, a magazine editor, who lives in Ealing, west London, is
trying to buy a house with a friend. She plans to take out a mortgage of
nearly 100%. She realises the dangers of getting into such debt, but says
she has little choice. “There’s a feeling of panic among the people you talk
to about it — suddenly, everyone wants to get on the ladder before we get
totally priced out,” she says. “It doesn’t seem to matter that we can’t
really afford what we’re buying, in the way our parents would have thought
about it. Actual money doesn’t seem to come into it any more.”
Yet about 17,000 properties in Britain were repossessed last year — up 65%
from 2005. This figure looks set to rise, if, as expected, the Bank of
England increases interest rates again, pushing up mortgage bills.
With this in mind, perhaps setting up an online begging bowl isn’t such a bad
idea, after all.
Facing the facts for first-time buyers
- The average house price rose to £194,400 last month, according to Halifax —
more than eight times national average earnings
- In February, the number of loans to first-time buyers dropped to its lowest
level for two years, says the Council of Mortgage Lenders. First-time buyers
borrowed on average a record high of 3.31 times income
- Many first-time buyers are looking abroad to get on the property ladder.
Conti Financial Services, an overseas mortgage specialist, says inquiries
are on the rise in eastern Europe, Turkey and northern France
- Key workers (nurses, teachers, firemen) cannot afford to buy their own home
in 70% of UK towns and cities, according to Halifax
- In a battle for their business, CoOp Bank is offering 1% cashback with a
mortgage to first-time buyers
