Are earnings too low / living costs getting too high??

Houses aren't more unaffordable for first-home buyers, but they are riskier
Tone1979 said:
myself and my partner earn £130k combined. If we were to buy a house in London we wouldn't be able to do the things we want to do. So we moved out of London and still work in London. It works for us.
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Genuinely interested how well that works for a couple that both work in London. My girlfriend's friends up north are always just telling us to "move out of London" every time the subject of house prices comes up in conversation. But the reality is, if you're both working in London it's either throw dead money at rent, or throw dead money at the train companies. I'd much rather throw my money away to a landlord where I actually get a "service" compared to killing myself commuting 1hr+ each way. Season tickets these days are hideously expensive.

Altaz said:
There was a release on a new development in Zone 4 last Friday, people had been camping outside the sales office since Tuesday. This was for 1/2 bedroom flats £350K+, as long as the demand is there, a major crash is unlikely anytime soon.
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I read this article yesterday; Houses aren't more unaffordable for first-home buyers, but they are riskier. Not sure I agree with the first part of the headline (it's from Aus) but it's true about the interest rate. With Brexit and everything ploughing on there seems a real risk of interest rates rising. For all those that desperately bought overpriced first-time flats, a 1-2% interest rate rise will kill them. There could be a very real crash if millions of people can't afford their mortgages!

EDIT:
antijoke said:
Yeah I don't get that too either, I also have no idea how people are paying the rental prices that people are asking.
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Probably something to do with the fact that people have no choice :(
 
antijoke said:
Yeah I don't get that too either, I also have no idea how people are paying the rental prices that people are asking.
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it's a no choice kinda thing :o :) our current house hold income for me and my gf is 65k + but our rent alone is 1300/month and total house bills etc is around 1700/month with council tax, energy, water etc. That's before food etc comes in. Just the bare min.

House prices in the area around 370-400k for a 2 bed terraced and 500k+ for anything detached or semi.

I could move further south but rent prices decrease by 200 or so a month so it's very little saving that will quickly go on travel to london.

it's a hell tbh! :)
 
Spook187 said:
I still can't get my head around the prices in the south for a basic house, look at what you get up here for that sort of money, move away it's as simple as that.

http://www.primelocation.com/for-sa...07d4c82b594a8a2a7662370e1#RHEvO1ufo4csz4Zp.97

http://www.primelocation.com/for-sa...07d4c82b594a8a2a7662370e1#Hy0e08cMhPleKeFg.97


http://www.primelocation.com/for-sa...8e4c541487d88d1d8a2a1a802#x0IjluGAdmlDsBZG.97
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rubbish! who would want to live in a house like that..

this is the dream -; http://www.rightmove.co.uk/property-for-sale/property-58397494.html

my life long goal.. :| :D
 
Altaz said:
There was a release on a new development in Zone 4 last Friday, people had been camping outside the sales office since Tuesday. This was for 1/2 bedroom flats £350K+, as long as the demand is there, a major crash is unlikely anytime soon.
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The demand is only as high as that because people are now seeing it as a way to make money quickly. It's not a true demand compared to the value of the house as something with objective worth. Yes something is worth what people are willing to pay for it, but prices going up like this is basically the definition of a bubble is it not? It's like the big bitcoin crash, prices rose ridiculously fast, simply on an escalation basis. People bought it because it was going up. Which puts everything in a very fragile position. Dot Com bubble, same thing.
 
Scam said:
Genuinely interested how well that works for a couple that both work in London. My girlfriend's friends up north are always just telling us to "move out of London" every time the subject of house prices comes up in conversation. But the reality is, if you're both working in London it's either throw dead money at rent, or throw dead money at the train companies. I'd much rather throw my money away to a landlord where I actually get a "service" compared to killing myself commuting 1hr+ each way. Season tickets these days are hideously expensive.
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I have been commuting into London for the last 6 years now, while it is expensive (£4600 per year this year which includes a zone 1-6 travel card) we both have been happy to do so. We bought a 3 bed house with a drive and garden for well under 300k and with our 10% deposit it means our mortgage is £1k per month. Until recently we were both going into London daily which means that combined we were spending another £9k on traveling into the office. If we were to buy a property of a similar size in London, near where we work it would cost us well over a million which would could not afford.

I now work at home 3 days a week so didn't buy a yearly card this year.

For me, living outside of London is key to me being as happy as I can be. I can do my hobby after work, going for a pint is cheaper, the restaurants are cheaper. We even have an allotment now which sounds dreary but means we grow our own veg.

I totally get people want to live in London and I can see why but for us, living on the coast and having to travel to work is totally worth the extra travel costs. I just couldn't justify spending £400k + for a 1 bed flat with little or no outdoor space but I understand other are happy with that.
 
Tone1979 said:
I have been commuting into London for the last 6 years now, while it is expensive (£4600 per year this year which includes a zone 1-6 travel card) we both have been happy to do so. We bought a 3 bed house with a drive and garden for well under 300k and with our 10% deposit it means our mortgage is £1k per month. Until recently we were both going into London daily which means that combined we were spending another £9k on traveling into the office. If we were to buy a property of a similar size in London, near where we work it would cost us well over a million which would could not afford.

I now work at home 3 days a week so didn't buy a yearly card this year.

For me, living outside of London is key to me being as happy as I can be. I can do my hobby after work, going for a pint is cheaper, the restaurants are cheaper. We even have an allotment now which sounds dreary but means we grow our own veg.

I totally get people want to live in London and I can see why but for us, living on the coast and having to travel to work is totally worth the extra travel costs. I just couldn't justify spending £400k + for a 1 bed flat with little or no outdoor space but I understand other are happy with that.
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how do you have time to do your hobbies when you are probably taking over 3 hours of your time per day traveling back and forth to work?

assuming it takes an hour and a half each way....
 
dl8860 said:
The demand is only as high as that because people are now seeing it as a way to make money quickly. It's not a true demand compared to the value of the house as something with objective worth. <snip>
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Totally agree. This is why I get arsey with all the BTL'ers. They're all part of the problem. You watch Location x3 and it's cringeworthy. Idiots buying a 600k house with their number one priority on how they're going to make money from it. It's mad. There was one on last night with a young couple with a toddler and all the guy was talking about was how to make money on it. Even Kirsty had to shut him up and tell him to get a bit of perspective and buy a damn house for his family to live in.

The sooner we kill BTL dead, the bubble will stop inflating. Once the bubble stops inflating the super-prime investors (the ones that leave them empty because they earn money anyway) will dump them too. They won't buy assets in a risky market. Add to that an interest rate rise and all the defaults that will come with that, and whoosh the market pops.

jonneymendoza said:
how do you have time to do your hobbies when you are probably taking over 3 hours of your time per day traveling back and forth to work?
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Because he "works from home" 3 days a week ;) So in fairness, it's not a good answer to my (genuine) question at all. Having 1 half of a couple commuting for 2 days a week is not a good example for how the financials actually work out compared to living in London.
 
Even WFH doesn't always help.

When I eventually move further out, I'll be able to wrangle 2 days WFH a week.

Great, only to get decent discounts on travel, you need annual season tickets, so I would be "paying" for my non-travel days any way. If I just purchased the travel on the days I need it, the overall price would be no different from the season ticket, and it is more faff.

Hence why a car, even with the associated costs, becomes the most viable option.
 
antijoke said:
Yeah I don't get that too either, I also have no idea how people are paying the rental prices that people are asking.
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Whilst I'm not paying London rent, I'm in the bizarre position where I can comfortably afford to rent somewhere nice, and yet I wouldn't be able to buy where I live because I wouldn't qualify for the mortgage even though the repayments would be comfortably less than the rent I'm paying! I've no idea how that works.

I can afford to rent somewhere nice but not afford to buy somewhere nice, so it's a no-brainer.
 
Altaz said:
There was a release on a new development in Zone 4 last Friday, people had been camping outside the sales office since Tuesday. This was for 1/2 bedroom flats £350K+, as long as the demand is there, a major crash is unlikely anytime soon.
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All it takes is an interest rate rise.
 
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