Tonight | Episodes | I need a house

I need a house

Published: Friday, 5 October 2007, 10:12AM

The housing boom may finally be peaking but inflated prices mean many buyers still can’t get a foot on the property ladder. Tonight’s Jonathan Maitland reports on the latest tactics being deployed by first-time buyers to out-manoeuvre Britain’s out-of-control property market.

“It’s incredibly frustrating. I just want a small house, it’s not a lot to ask for and you’d think it would be quite easy and there would be people willing to help but you just find there isn’t and you just can’t do it.”

Meet Louise Barker. At age 30, she is still living with her mother.

Louise worked abroad for several years and returned to Blackpool only to find herself priced out of the property market.

A year-long search has proved fruitless. As a sales supervisor at Blackpool Pleasure Beach, she doesn’t earn enough to be able to get a substantial mortgage.

With interest rates on the rise and experts warning that the average house price in England could hit £300,000 in the next five years, her future prospects look grim.

In I Need A House, Tonight with Trevor McDonald takes on the task of helping Louise solve the property puzzle now vexing thousands of Britons and comes up with some unusual answers from co-buying and government loan schemes to reverse auctions, houseboats and buying abroad.

On their first port of call, television property expert Michael Holmes takes Louise to a house selling for £86,000 that would be stretching her budget to the absolute maximum and still needs some work.

Louise tells Tonight: “…I’m stretching myself for that price. I’d worry a bit about what I have to spend on redecorating. Even if I do do it myself I’ve still got to think about what is going to be spent on the house.”

In any event, Louise is not impressed with the fact that the property is located so close to the street.
The right location, however, is likely to be far more expensive. With that in mind, more and more Britons are considering co-buying. Holmes takes Louise to a house that is worth around twice what she could afford to see if she would give co-buying a try.

“It’s a good idea. I think to start off with though I really do want a place of my own,” says Louise. “I don’t really want to have to share, if I wanted to share a space I could just stay where I am at the moment, and as much as I want to get on the property ladder it would kind of defeat the object.”

But Stephan Michaels, who runs a website specialising in this market, says that co-buying doesn’t have to involve living with a flatmate.

He explains: “Some people are looking at the co-buying concept as a business arrangement. These people typically find it really useful to co-purchase a property with someone else who's going to live in the property and essentially manage it and run the property for them. In that scenario, they'd rent out the second bedroom that would be the investors bedroom and that rent should cover their mortgage repayments.”

Other Britons, like Alastair Archbold and Zoe Templeton from Birkhamsted, are opting to buy a home overseas as an investment and renting in the UK.

Alastair tells Tonight: “The cost of property, really, around here is astronomical so we’re struggling to sort of get onto the property market in South East England. We just thought the opportunity is there to sort of go to France, move abroad, and you can pick up houses there for so much cheaper.”

He continues: “You’re on the property ladder there, you have sort of got a foot on the rung and even though you stay here and rent, you’ve got a long-term investment there that you can rent out as well.”

And then there are the Londoners that are taking that one step further and actually commuting to their jobs from France. Tonight follows Jeff and Debbie Perkins, who have decided to leave their home in Colchester to live in Normandy.

Jeff, who is a policeman, now commutes to his job and lives in a crash pad in Pimlico while in London. They bought their French house virtually outright and the money they’ve saved not repaying a mortgage means that Debbie doesn’t have to work any more. Jeff has the opportunity to take early retirement next year and may stay in France permanently.

Another quirky way to beat the system is buying a house through a reverse auction. It’s slightly complicated and involves quite a bit of luck. But essentially househunters pay £3 to bid on a property and the one with the lowest offer wins. The trick is the bid can’t be the same as anyone else.

Holmes, however, takes Louise to another property in Blackpool on the market for £80,000 that is less of a gamble that she could afford using a government initiative called the Open Market Homebuy.

There are two types available but in this case the government gives a loan of up to 12.5% of the value of the property and the lender also gives a 12.5% loan. When Louise sells the property, she would have to give back 25% of the selling price. But there are restrictions on the areas and people who are eligible.

As an amusement park employee and contributor to the local economy, will Louise be eligible for this extra help to get on the property ladder? And will any of Tonight’s suggestions bring her closer to finding her dream home?