Credit Crunch

Are you in the same position as Lynda and Steven? How should the IOM tackle house price problems? Tell us about your experiences and solutions.

Steve D
I live round the corner from Lynda and Steven (haven't met them yet!) on the Reayrt-y-Sheear estate and it is a nice wee development on the edge of Douglas however the build quality is frankly not great. Sure, it's not one of Dandara's "premium properties" but the woodwork is coming away in the hall and bathroom and there's damp in the latter after less than a year. Three windows aren't fitted correctly - one now won't open - and some of the external finishing is pretty shabby. My electric meter is in full view on the living room wall, as is the thermostat and the smoke alarm in the hall went off even if you made toast. Not in the hall, obviously. I know other folk have had dodgy windows, boilers, drains etc but this could of course just be teething problems you could get with any new property. Best of all though is the design flaw in all the flats. This, I'm told was not the builder's fault but the fault of an IOM govt penpusher: the bathroom and kitchen windows cannot open inwards as the taps get in the way! Seemingly said jobsworth wanted all the windows to be at the same height, just adding to the "Eastern-Bloc" styling..All that said, it's still a dream compared to the usual damp, draughty dodgy flat conversions that most service sector workers like me have to put up with. I should mention that in my flat anyway, the rooms are a good size and there's a nice garden space. I even have a view to die for, not a moss covered alleyway and of course have the luxury of 2 parking spaces. Ending on a positve note, I must thank DOLGE, especially Neil Callin, for their assistance in getting me out of the rental market and enabling me to settle on this great wee island (yes, sorry - I am a comeover) after 7 years of uncertainty. I was lucky to get a mortgage before the portcullis slammed down on 1st time buyers and the IOM government's assistance was essential in making this all happen.

Realist
It seems to be part of some peoples physcology that 'house prices will only go up'. This is plainly not the case and those who over extend their borrowing get caught out when recessions hit. The IOM cannot be excluded from the current global recession, unless we are not part of the same globe, and the speculatative bubble we have incurred in the last 15 years or so will come crashing in over here also. The IOM economy is ultra sensitive to factors outside of the Manx governments control and it is these that will paly their part in the bubble bursting. (VAT, OECD, Saint Obama etc)30 years ago you could not give a house away on the IOM, people should not forget that.

Siobhan Cain
Myself and my partner Steven bought our first home last year. At the time I was 20 and my parter 22. We seriously struggled to find a property, with finincial advisors telling us we will never be able to get a house at our age and that we should aspire to get a flat or apartment instead. We were annoyed because that was not what we wanted at all- we wanted a house!! We saved very,very hard for a very long year and a half, and eventually found the house we loved - we managed to get an offer accepted at £205k. You may think that's pricey but that's how much they are here!! We were not on the first time buyers list as the waiting list is tremendously long - and they are allegedly not built very well. We had our mortgage application refused by some of the big banks and so eventually we scrapped the financial advisors and went directly to our bank manager. We managed to secure a mortgage for £190k and we had saved the rest. We got our mortgage at an excellent fixed rate too. There were of course a lot of extra charges we were not aware of, ie suveyance and lawyers fees etc which we weren't expecting, but it was paid for and now we can say we own the house!! My advise to anyone thinking of buying their own place is, YES it is very expensive, but that's how much it is to buy property here, it will only go up and secondly, be determined - don't let anyone tell you what you 'cant do'. Steve and I moved in our home in April 2008 and have been living there for almost a year now. It has already gone up £20k in value, and ultimately we are very happy with our investment! We have never been happier!! :o)

Pat
The IOM government offers 2 purchase assistance schemes. Firstly, if your income is under a certain amount, you can recieve a tiered grant (depending on gross income) of up to £25k, which can be used to purchase a 1st time buyer house or government approved property on the open market. Some of the lenders on the island will take a grant as your deposit. The second scheme is a top-up loan, which can be up to 30% of the property purchase price, but this does have to be a government 1st time buyer property (e.g. Johnny Wattersons plot). The top-up loan is repayable with interest charged at 1% under base rate. This, along with the grant, if you qualify, can be used as a deposit, which some lenders are still accepting. The government take a 2nd charge behind the mortgage lender on the property, thus additional secured borrowing is more-or-less impossible. It is worthwhile having some savings though, to reduce the amount of mortgage required thus increasing the stake you hold in the property. The UK government do not offer any such schemes (to the best of my knowledge) to 1st time buyers so the IOM should count itself very lucky. House prices in the UK fell considerably last year, plunging many people into negative equity. House prices rose here, so this hasn't happened... yet. Interestingly, of the 1,900+ 1st time buyers who have taken top-up loans from the government, only a handful of loans are being repaid. Many haven't read the terms and conditions and possibly don't realise that if they move out of the 1st time buyers property and into a property on the open market, the top-up loan and grant all have to be repaid. They will no longer qualify as a 1st time buyer both as far as the government is concerned, or the banks, which have reduced their loan to value criteria for customers who have previously mortgaged a property.

K
Rent and mortgages cost money - that's life - many people think they can have it all and most can't. The FTB scheme is a good provision, but we need to realise it's unreasonable to expect to have everything handed to us on a plate.

Phil Kane
Good to hear people's actual experience. We need more of this and the Manx politicians need to listen

Charlotte Bruns
I found it really difficult to get onto the property ladder here in my home of the Isle of Man. I was put off the Government Aid scheme as I found myself restricted about what sort of apartment of flat I could buy. The Government sceme seems to favour the new builds which I didn't want to invest in. Some of them look like they could be derelict within the next 40 years. Because I wanted to chose my own house it has been a nightmare but I am glad to say I finally saved enough for a deposit on a small house. Having said that every penny of my salary is going into keeping it. Oh for a rich husband.

Common Sense
The housing problem will have entirely vanished by 2011. Houses are worth only what they cost to build and prices always dip to, or slightly below, this level in a recession - and we have just entered a huge recession. In the UK building costs are £46 to £84 per square foot. A good sized three bedroom house is around 1,000 sq foot so should cost between £46,000 and £84,000. That's where house prices will be in three years time.

Bill S
Compared with other jurisdictions the IOM govt first time buyer scheme is actually very generous and it does help people get started. Prices are high but in reality they have risen everywhere over the last few years and this is not a manx specific problem. It is hard for young people in the UK, Ireland and the other offshore islands. I think there is also a responsibility for parents and grandparents who have benefitted greatly from increases in their own wealth from property appreciation to assist their younger family. This happens in other cultures especially asian but they do have a lower divorce rate. Prices should reduce a bit over the next 12 months as the slowdown bites.

Stuart
I think the government first time buyer scheme should be removed entirely. It merely serves to provide a ceiling for developers slightly above which they set their house prices. The real issue in recent years has been buy to let. I think most Manx people would be shocked to realise how much property and land on the Island is owned by so few. Houses should be for people to live in and have a quality of life, not for others to squeeze every last penny out of another through rent or an enormous mortgage.

Anon
I Think its wrong that myself and my husband cant get a first time buyers mortgage due to the fact that we are both on our second marriage we have been told that because i had a house with my first husband but even through i didnt make any profit from it. yet my husband has never had a motgage, we are being told that we dont come under the critieria , if we were given a chance of a first time buyers we would be freeing a large council house up as we only have one child left at home and if people in the same situation as us were able to do the same then the council houses would be freed up for people with desprate needs

Graham
Good luck to steve and Lynda. It does get better as the years pass. My first mortgage was £39 per month on a wage of £19 per week (1973) used to have sleepless nights!

Tom
Have to agree with James - this island makes no provision for "key workers".IOM bus drivers are paid more than registered nurses, and hospital porters are paid the same amount without having to do the initial training or continuous studying to maintain their right to practice. I'm not sure I'll ever be in a position to buy my own house here and I'm beginning to wonder if it's worth staying in a place where the government so undervalues professional health-care workers. Yes, the Isle of Man is a beautiful place to live, but it is also a very expensive place, mismanaged by a very corrupt (mis)government!

Alice
Things were always worse in your day eh Andy?

Andy
Whilst having sympathy with all young persons on the Island, including my own children, buying a house is now a thing that people need to identify as a priority and do without other things. A lot of young people today don't seem willing to make sacrifices. I know several young persons who drive nice cars, have nice holidays, go out every weekend then complain that they can't buy a property. I left school during high unemployment in the 1980's and had to fight 15 other people for my first job. The younger generation have no idea of unemployment. We have become a materialistic spend now, worry later society. Children should be educated from an early age to save towards their future. An 18 year old friend of the family has saved nearly £10,000 in 2 years (on a modest income) by making sacrifices. His priority has always been to buy his own property. Good luck to people like him who don't expect to be given a house on a plate. Your young couple featured missed out on cheaper house prices because they chose to leave the Island and travel the world. I know I am being flippant but the old saying 'you can't have your cake and eat it’ springs to mind.

Paula
Plenty of people do not have enough money left over at the end of the month, having paid £550 rent plus bills, food, travel to work etc. Does the person called Anon have their own house? I bet they do!

Mark
My wife and I were lucky to get a first time buyers apartment - 6 years after I joined the list!It is much better than renting, but as others have mentioned, the quality of the development leaves a lot to be desired - corners were cut, cheap materials were used, and little thought was given to how anybody would live there (e.g. the shower sprays across the bath, not along it; a standard oven and fridge/freezer were fractionally wider than the spaces left for them; standard lampshades wouldn't fit on the light fittings supplied).Having lived there for a few years, we feel that it is time to try to move on - there is no room in the apartment to start a family; as Lynda says in the article, having children and then trying to get a larger property seems like the wrong way around.Unfortunately, my wife is currently on a long-term temporary contract; the Government count her salary towards the allowance for support, but none of the banks will - so no support from the Government, and no support from the banks. Very much caught between a rock and a hard place, but unfortunately there is no possible chance that we can afford anything else under the current market conditions.We've managed to save a reasonably large nest-egg, so I'm cynically hoping for a large and painful recession that will bring Manx house prices back down to a reasonable level... or the only other option would be to try to emigrate, although this is our home where we were both brought up, and where all our friends and family are based.Drastic action is definitely warranted - maybe it's time for the development of a new town with affordable properties that are only available via the Government, based on specific qualifying criteria?

anon
Buying a house is a major investment - people have always struggled to do so and I don't see why people should expect to be able to snap their fingers and buy one instantly - without saving for a deposit or working their way up a pay ladder.It's no different now than it was in my parents days - a struggle.On £550 a month rent I don't see how two wages can't save some money every month.Make some sacrifices...

James Bassett
I'm afraid this is a very complex issue (certainly more so than the "Blame the come overs and the government" brigade seem to understand).It is market forces that have driven up the prices. Availability and demand. Yes, some of that demand has come from outside the Island. However, we need teachers and nurses and doctors and plumbers and all the other highly skilled workers that come to the Island and contribute so much. Why shouldn't they have somewhere to live too?There is also a lack of supply. The population of the Island is getting older. This means that, not only is it growing, but the larger family homes are not coming onto the market as many elderly couples continue to live in the 3/4 bedroom homes in which they bought up their families. In many cases, these houses were purchased for a pittance. My own grandparents bought a huge 3 bed house for £1,500 in '49 when the average wage was £750. That would be the equivalent of about £50,000 in today’s money - whereas you’d probably need nearer £300,000. I do sometimes wonder how pensioners found life so hard back then, when the cost of living was so small and why they can’t afford to look after themselves today – but that’s another matter I suppose.So we either have to reduce demand or increase supply. How do you reduce demand? Stop people coming over with vital skills the Island needs? Convince young people they don't need to buy? Hardly likely.So, short of turfing all the old people out of their large family homes the only solution is to build. But, if the government tries to do this, it gets held up in years of red-tape and NIMBY-ism.I always think it's funny when people in, for example quite recently Kirk Michael - argue that we don’t need new developments because "The village is big enough already". Really? When was it big enough? Just after they built YOUR house presumably? Why was it not big enough 50 years ago? Or 100 years ago?As I say, it's a complicated business, not helped by the NIMBY's who insist house prices should be lower, as long as nobody builds anything anywhere near them or anywhere "pretty".I certainly don't think, Karen, that the problem has been caused by the building of "all these luxury houses" (where are these, by the way?). If there are any first time buyers out there struggling to find a luxury house on which to spend their first million, my services are available for a very reasonable fee!

Rose
I think the government should look at some of the properties on the market and help out 1st time buyers to buy them too, like your little two bed terrace houses( that use to be 1st time buyers house 15yrs ago), therefore keeping the waiting list down, not having to cram so many small houses that 1st time buyers will grow out of all too quick and build some better biger houses for people that want to move up the ladder and need help.

Andrew Halpin, Douglas
Let's have more of these articles please BBC. I want to hear more of what locals have got to say on thse matters. Well done! Thank you!

Lucy H
I wouldn't like to live in a first time buyer house. They seem badly built. It seems that the developers are getting away with murder, saying: give us more land and we promise we'll put a few, cheap first time buyer houses alongside our luxury detached ones. it's all a scam for them to get more land and make more money. And the government is going along with it.

Peta-Lynn Hames
First of all I'd like to congratulate the BBC on allowing real people to have a voice on this kind of matter. It is so much better than some dry newspaper article on the same subject. Secondly, I would like to ask the Isle of Man government what their plans are to provide decent housing? In the old days, thye would provide council houses but I don't see any of these being built. Will any of the government bother to respond to this article? Or are they too scared?

PJ Hatton, St Albans
I sympathise with this couple. When I was looking for a house with my wife in the 1950's, it was hard but you knew that if you worked hard and saved hard, eventually you would get your nest egg. There is no question of this, in this situation. Young Manx people are working hard - but with nothing to show for their hard work. What is the IOM government going to do about it? This first time buyers scheme obviously takes too long. It is cruel to offer people a discount if they can find a property under a certain ammount when those properties blatently do not exist.

Peter
If there was a way to stop all the buy to let sharks snapping up all the properties there would be more left for the first time buyers. People who own more than one property should be made to pay additional taxes.

Mark
Its easy to criticize wealthy comeovers for buying up IOM property, but at the end of the day the government relies on their tax money to fund health, education, and welfare for Manx people on the island. The Manx share with the English the fondness of a good moan!

Simon P.
Maybe there could be one set of house prices for Manx people and one set if you want to come to the island and buy a property.

Karen Watterson
This is what the so called Underground movement on the Island was warning us about in the 1980's. It is disgraceful that the government have allowed house prices to rise this high so that ordinary Manx people are priced-out of the market. Solution? Stop building all these luxury houses and encouraging millionaires to come over here. Start looking after the natives!

Lesley
This is typical of so many people on the island. Lots of them aren't necessariy young either. There are loads of people in low paid jobs who will never be able to afford their own hom.

Alex Bridle
I was in exactly the same position as these 2 people. As an average wage earner on the Isle of Man it is completely impossible to buy locally. It wasn't until I got together with my boyfriend (who had a deposit saved in the bank) that I was able to consider finding a house of my own. I think it is appauling that the IOM doesn't help the youngsters get a foot on the ladder. The only help I was offered was very conditional. Firstly as a first time buyer you are expected to want to live in a new build house which is not what I wanted. I wanted to buy a traditional manx house. The new houses in my opinion are of a very dubious quality and in the one I was shown around I could hear the neighbours drawing their curtains. I'm not sure what the walls are made of but it can't be much thicker than A4 copy. If you haven't bought years ago yyou are not going to get anything of a decent standard.

Bill
Many young people can understand the problems Lynda and Steven have had. Some of the problem is due to people from the UK buying an IOM property as a second home for the asking price in cash and pushing up the property prices. They dont even live in the property for the most of the year!!! The IOM government should look after the locals better. Its wrong that people who have lived here all their life are pushed out by others who couldnt care less about the IOM.