You clearly aren't on a typical wage. The UK median household income is £31k, or lower at £27,590 if you look at 21-30 year olds alone. The majority of 21-30 year olds have a household income below £28000/year. The widely accepted 'sensible' salary:mortgage ratio is 3:1. The historical norm is 4:1. To buy a house in the majority of the UK with that income, you're looking at a 5:1 or 6:1 ratio or a very large deposit.
Cameron's housing plans
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You clearly aren't on a typical wage. The UK median household income is £31k, or lower at £27,590 if you look at 21-30 year olds alone. The majority of 21-30 year olds have a household income below £28000/year. The widely accepted 'sensible' salary:mortgage ratio is 3:1. The historical norm is 4:1. To buy a house in the majority of the UK with that income, you're looking at a 5:1 or 6:1 ratio or a very large deposit.
I don't understand what your problem is?
The mortgage doesn't stay at £250k forever so it depends when the hike happens. If the 4.5% happens early doors then yes it will be a considerable difference (~£600). Is it wise to be a home owner with a mortgage on the upper limit of your affordability? Of course not.
But ultimately, like I said before, a hike in rates just means tighter purse strings elsewhere. Part of being a home owner.
Don't want the risk of rates booming? Rent.
Soldato
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Grabs keys for boat, and sails off into the sunset.
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Calling them starter homes is going to lead to profiteering on the developers side because they can justify then making the smallest and cheapest flats/houses that they can get away with. "how else could they make properties so cheap" they will say. It realy asking for people to be ripped off when taking that approach. Anyway keep repeating myself, just ****es me off listening to the stupidity of government on the topic of housing. Just keep making the same mistakes over and over.
Yes have an affordable starter home starting at £400k Should be worth £150k but thanks to the government you can afford it
Yes have an affordable starter home starting at £400k Should be worth £150k but thanks to the government you can afford it
Clearly you can afford that mortgage at "normal" rates. The issue is there are tonnes of households that couldnt who have spent every bit of disposable income on their monthly mortage. If theirs go up £700 to £1000 a month they are going to be in deep trouble.
If that conincides with a price crash then it will be much worse than the last two housing market crashes.
The bubble will burst and thats a fact.
Even in the village i live the prices are a joke and nobody on local rural wages can afford a house. A one up one down tiny terraced house costs £100k in my village now. I bought my 4 bedroom house with 6 acres of land for £95k in 1999 in that same village.
Yes, i enjoy the fact my house is worth £500k now but I have the sense to see how terrible it is for the local community that house prices are so high and out of reach of most young people.
This results that they move away to other areas.
Already the stats arent great from where i live. I think we have the second highest average age of population and that is 56!
All that happens is that people retire and sell up from the cities or down south and move to North Yorkshire to retire and shove the house prices up.
My other next door neighbour is a retired accountant from London. He told me when he bought the property how happy he was to be paying £400k as his Kent house sold for £800k and his London pad for staying over sold for £650k so he was now mortgage free and a tidy sum left over in the bank.
That's a myth. We have plenty of space. A very small proportion of the UK is actually developed. Here's a great article that you should probably read:
http://www.bbc.co.uk/news/uk-18623096
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yeah £3.30 an hour now for under 18's. However, if its a good company, doing proper training then you have to look for the long term.
Yeah, you cant go out with your mates every night (or porbably not at all) and have to live with your parents but at least you have a career.
Or you choose a dead end retail job and enjoy yourself but that is all you will be on for the rest of your life.
Btw, we ignore the minimum and pay our under 18 apprentices £5 an hour as £3.30 is indeed a joke wage.
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Soldato
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Glad i live in Wales, or rather Swansea.... Stopped the right to buy and are currently building more council houses!! Rent or rather profit will be used to save public services. Hate i have for the tories is unreal! Whats worse is the middle to slightly upper class who honestly think they're looking after them haha!
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LOL, given that a rate increase will affect the BTL landlords mortgage repayments also, what do you think will happen to rents? The renters are paying off his mortgage after all.
You think landlords will be so kind as to start paying off their mortgages with their own money if rates rise? Heck, no. They'll increase rents to compensate.
Rents are linked to house prices and mortgages. Tell me it isn't so.
And of course renting comes with its own problems, which are legion, and for another thread.
My LL already increased the rent to compensate for the fact that she's losing some of her mortgage tax allowance. She increased it by more than her costs, but I guess we can't go paying an odd figure. Better to increase it to a nice round £50/month.
It's a shame I haven't quite got the deposit together for a house yet. That's £50/month less that I'll be saving, while prices climb by just under a grand a month average (meaning nearly another £100/month of savings is needed just to keep up, based on a 10% deposit target). I'm getting sorely tempted to just move back in with mum and dad.
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Find someone who is renting a property with no mortgage 
I don't understand what people's problems are. It's no secret. Saving for a house can be difficult. Then once on the ladder it can have its wobbles (rate increases/ redundancies/ etc).
That's just life?
Yes everyone would love cheap houses and rock bottom mortgage repayments, and for life to be all so easy. But we live in the real world.
Want cheap housing? Go up north or go to Wales / Scotland.
Want a higher paid job? Come to London. But put up with the housing demand and inflated prices.
I don't understand what people's problems are. It's no secret. Saving for a house can be difficult. Then once on the ladder it can have its wobbles (rate increases/ redundancies/ etc).
That's just life?
Yes everyone would love cheap houses and rock bottom mortgage repayments, and for life to be all so easy. But we live in the real world.
Want cheap housing? Go up north or go to Wales / Scotland.
Want a higher paid job? Come to London. But put up with the housing demand and inflated prices.
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She's only doing the "smart" thing. Why shouldn't she take as much of your money as she can help herself to? Wouldn't you do that in her situation?
/BTL mindset
My problem is your assertion that houses are 'affordable' - which for a lot of people they aren't, and for some they are and that's at a stretch - with the interest rate being held at an artificial low.
People are having to buy at the limit of their affordability now, there isn't a choice, but have been lulled into a false sense of security with long term negligible interest rates and ever increasing house prices
The house bubble will burst again at some point, the interest rate will go up at some point and then there will be a lot of repossessions and misery for a lot of people.
But instead of tackling the issue this (and previous) governments policies only help to maintain and inflate the housing bubble as that is where a lot of the faux wealth of this country is held atm.
That's my problem.
Find someone who is renting a property with no mortgage
I don't understand what people's problems are. It's no secret. Saving for a house can be difficult. Then once on the ladder it can have its wobbles (rate increases/ redundancies/ etc).
That's just life?
Yes everyone would love cheap houses and rock bottom mortgage repayments, and for life to be all so easy. But we live in the real world.
You make it sound like it's a process that acts completely independently of Governmental/Fiscal/Monetary policy
It doesn't...it can be directly influenced by all of the above to change it's course one way or another
Find someone who is renting a property with no mortgage
I don't understand what people's problems are. It's no secret. Saving for a house can be difficult. Then once on the ladder it can have its wobbles (rate increases/ redundancies/ etc).
That's just life?
Yes everyone would love cheap houses and rock bottom mortgage repayments, and for life to be all so easy. But we live in the real world.
You really don't have any real answers, do you. Just a blind belief that the system we have is sustainable, and in some perverse way people get what they deserve.
If other BTL landlords with mortgages put their rents up, then why wouldn't everybody else follow suit? Thus the "market rate" becomes the new, higher price. For everybody. Nobody wants to be charging below "market rate". If you're looking for charity, don't look at BTL landlords
Find someone who is renting a property with no mortgage
I don't understand what people's problems are. It's no secret. Saving for a house can be difficult. Then once on the ladder it can have its wobbles (rate increases/ redundancies/ etc).
That's just life?
Yes everyone would love cheap houses and rock bottom mortgage repayments, and for life to be all so easy. But we live in the real world.
Problem is it doesnt have to be this way. No way should house prices have been allowed to rise to such a multiple of income. The average now is above 5. Even in the 80s and 90s it was only 3.6 times average income.
Before the last major house crash 55% of people income was spent on mortages. We are only at 35% atm but thats because of cheap mortgages, not because of peoples incomes.
The crash will come, its just a question of when and its going to be nasty.
We can go round in circles all day.
My views differ from yours due to recent experiences. I was able to save enough for a house. Then I had to compete against huge demand for houses. So in my experience houses are obtainable and by a fair amount of people.
Is it easy? No. Are they expensive? Yes. Nothing is going to change anytime soon.
As for a crash, I can't see one on the horizon. I'm not entirely convinced we are even in a bubble. At least not compared to the last one. Might be a market correction in the short term.. But crash? I just can't see it. That's my view however.
My views differ from yours due to recent experiences. I was able to save enough for a house. Then I had to compete against huge demand for houses. So in my experience houses are obtainable and by a fair amount of people.
Is it easy? No. Are they expensive? Yes. Nothing is going to change anytime soon.
As for a crash, I can't see one on the horizon. I'm not entirely convinced we are even in a bubble. At least not compared to the last one. Might be a market correction in the short term.. But crash? I just can't see it. That's my view however.
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it used to be easier yes. i used to have a mortgage but had to sell up for xyz reasons. i earn almost twice as much now yet cannot afford another mortgage because of the rise in housing prices (certainly down south).
i agree, it will come, its just a matter of time. The problem is the world economy is still screwed and everyone is too scared to raise interest rates, meanwhile banks suck up all the liquidity to rebalance their finances. So it could be many years before interest rates get anywhere near the long term average (5% - which i would consider low).
The housing crisis is a problem that can be solved. It's not an easy problem but neither is it impossible.
Putting up with it and saying that it's 'just life' isn't the right attitude, IMO.