Great Britain: buying a flat has not been so difficult in the last 70 years
Over the last seven decades, buying your first apartment in Great Britain has not been as difficult as it is today, according to a study by a British organization of developers. The experiences of Polish buyers are similar.
High housing prices are not only keeping Poles awake at night. CNN describes a report by the British Association of Building Societies, which analyzed various financial aspects of purchasing real estate. According to analysts, over the last 70 years, buying your first apartment in the UK has never been as difficult as it is today.
Great Britain: the most difficult time to buy a flat
“Buyers of their first property face a double challenge: on the one hand, very high advance payments for the purchase, and on the other hand, expensive mortgage loans. Research from the Building Societies Association shows that in previous decades, buyers have complained about either high down payments or expensive loans, but never have they struggled with both costs to such an extent,” CNN reports.
The analysis in question shows that the average buyer of a first apartment must pay a down payment of approximately PLN 60,000. pounds, and in London even 144 thousand. pounds. “Without family support, this may not be possible,” notes CNN.
According to the British Statistics Office, average earnings in England and Wales have increased by 70% since 2002. At the same time, real estate prices increased by 174%.
“At the national level, houses were affordable on average until 2002, and then their prices began to rise faster than average earnings,” the statistical office concluded in one of its reports.
Mortgage rates in the UK have increased after the Bank of England raised interest rates. In the same period, most central banks or institutions responsible for implementing the state's monetary policy decided on this move (in Poland, the decision on the level of interest rates is made by the Monetary Policy Council). At the highest point, the reference rate in Great Britain was 6.85%. Currently it is 5.82 percent. Before the first increase, the reference rate was 2.29%.
“Apartment for starters” in Poland
The government in Poland decided to solve the problem of lack of housing availability by subsidizing loans. This is a continuation of actions taken by its predecessors. It is true that thanks to the “Safe Credit” apartments were bought by people who would not have been able to afford it without the subsidies, but at the same time real estate prices increased by at least 10%. It is difficult to call the program a success, because the prices of apartments are even more “out of reach” than the average buyer can afford, but the Ministry of Development, led by Krzysztof Hetman, wants to distribute loan subsidies in the second half of 2024.
We write about the assumptions for the new program below.