It depends where you are in the UK.
If you work in London you buy a one bed, when you move you sell it and buy outright in other areas of the UK.
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
It depends where you are in the UK.
If you work in London you buy a one bed, when you move you sell it and buy outright in other areas of the UK.
Chinese, pension funds, banks and now even retail companies are moving in.
It's their new source of revenue, rent it out get a fixed yearly increasing income stream, benefit form capital appreciation of the property, reduce risk.
I really see in the future companies renting out their properties to workers possibly under salary sacrifice ( financial reasons).
Properties are now seeing as a good source of income stream for these large companies.
This is why it is important to stop foreign investment into personal housing. It going to destroy home ownership.
IHT combined with companies will kill off homeownership in the future.
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I just thought I'd point out that you can't really put much weight in average sold prices from the large websites like Zoopla or Rightmove, they're incredibly warped and only a tiny sample size.
It's still far from perfect but as far as I'm aware, the best indication of actual transaction prices is the Land Registry, which puts the average UK house price at nearly £71,000 less than Zoopla's and only around £40,000 more than the average FTB price.
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Well, anytime i politician displays such hubris as "Ive stopped boom & bust" its always going to come back and haunt them
My apologies then as it didn't come over like that to me.
I don't need to be more effusive do I.
I think that's enough effusiveness for one day!
That's great but like you say yourself you don't want settle for a "1st home", so whilst you were a FTB you had elevated expectations and hence bought a house for more than the average house price. So my point is if FTB are wanting better homes than FTB from prior years then that's going to naturally compound any housing market issues. If someone wants your house in Wales at £340k as an FTB then they have set their sights high. There's nothing wrong with that but I don't think we can solely blame market conditions for a nice house costing more money than a not-so-nice house.
Looking back now I wish we had done something similar. We bought our first house for slightly below the national average. It was an OK house size wise but had some issues that needed sorting like damp, a quirky layout and was in a slightly dodgy area. We ended up moving less than 2.5 years later. Probably we rushed into it too quickly due to wanting to live together so basically bought the first house we liked. Then again I wasn't earning much money in those days, the house cost like 10x my income.
I'm in a relatively cheap area. My 3 bed detached was 260k. So I have less option to move for a cheaper house.
I'm specifically citing Zoopla because that's what 413x (the poster I was responding to originally) was using. He stated earlier in the thread that Zoopla puts his house at £340k. So I'm basically saying Zoopla says his house is worth £340k and Zoopla says FTB average price is £240k. Ergo I'm challenging the statement about his house being a struggle for FTB, I'm saying that's surely not that surprising, because his home is better than average and my personal opinion is that it is quite ambitious for FTB to be targeting above-average homes such has his 3 bedroom detached.
But sure if we want to broaden the net, if someone can find more sources showing FTB average as being higher than overall average, please provide them.
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You could get a house for 10x your income??
I didn't know the multiplier was so much less now!
My point is It's 260 to 340 in 3 years. It's not that it's a "2nd house" it's that houses, in general, have gone up so much.
So that first house form 180 has gone up to. 240 or something.
The same principle applies that the very same house has a much higher debt for the same deposit, obviously a much higher mortgage due to rates, and likely your existing rental is taking more of your wage so it's hard to "out save" the rises.
Its brutal out there for FTB.
FTBs are literally being priced out. Because if this rate continues, you wouldn't be able to afford anything. We all know supply of starter homes isn't keeping up with demand... So prices go Up.
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I bought with my gf who earned more than me at the time. We had a reasonable deposit (about 27%) and borrowed just over 3x joint income iirc. Could have borrowed more, up to 4.5x I think(?) but I was quite risk averse.
I understand, and that makes sense.
I'm not saying I disagree with the overall gist of your argument, I just wanted to point out that the large disparity you highlighted isn't present when we use more reliable data.
I think the fact that the FTB average is only £40,000 less than the overall average, is at least somewhat supportive of the idea the today's FTB's might be at different stages in their lives from a family & size requirement perspective than previous generations.
Come to think of it, it would actually be quite interesting to see those two datasets drawn out over time.
Wait, has anyone actually claimed that FTB average is higher than overall average? Surely that would be an incredibly odd thing to expect to see in the data would it not?
Which means the shock is yet to hit....
It will all collapse at some point. The current trend of house prices rises is hilariously unsustainable in the long term.
The maths just aren't there. I worked out that if my house went up in the same multiple as my parent's did in 20 years, it would be worth £2.5 million in 15 years (for a smallish 3 bed detached). Unless the average UK salary is near £500,000 by then, i think the economy might hit a bit of a dead end....
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Said everyone in the 80s, 90s, 00s, 10s, 20s and yet here we are. They only go one way over time. What makes you think this would change? There is too much invested in the housing market for it to collapse as we know it. Gradual changes to try to "help" people get on, will likely still happen under some other named scheme, but overall, they will keep rising over time.
Those talking about average house prices. They are AVERAGE, across a very varied UK market. if the average is 250k... so what? Nobody is going to buy a house near them and go "oh no, it's 50k over the national average, maybe I shouldn't". They are what they are based on the area and as we've talked about before, people can't easily just move 100 miles away from everything they have/know to cherry pick cheap spots in the UK. They tend to be cheap for a reason.
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Because it is all utterly unsustainable. The global economy is a pyramid scheme.
The only ones who will be able to afford homes will be companies.
Most people will lose inherit homes because of IHT.
But it's been sustainable for 40 odd years. What's to say we don't keep going another 40 like this. Yes with blips and down/up turns along the way like now being down. If you happen to think there will come a date when the bubble will officially burst, let's have it then?
Oh i totally think the can will be continually kicked down the road for probably a while yet. However, it is quite simple mathematics that display that the current house price situation just will not work.
If it carries on this way, people will just not be able to buy a home, whilst property continually will get snapped up by the massively wealthy. We are on the way to just having most of the housing owned by the rich few, just like how everything ends up with capitalism.
You do realise we are just playing a very long and complicated game of monopoly right?
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Not in so many words, but they are using the argument that FTB aren't buying 1 bedroom flats any more and are in their 30s with kids, needing to spend over £400k on their first home etc in response to my suggestion that FTB spending above overall average is ambitious. Sure there might be some FTB spending over average (especially in London/SE) but they are the ones at the top of the food chain with good jobs or a wedge of cash from somewhere, for the typical FTB (in Wales which is the place in question here), I just think it's not happening, and I believe the data will support that in terms of FTB average being below overall average. That's why in parallel I'm asking about who is dragging down the overall average if the FTBs are buying expensive properties, there has to someone else buying the cheap stuff for that to be true.
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Where I live, first time buyers indeed often have to spend more than national average typically yes. Family just moved in near me, first time buyers as it has taken them this long to save. 2 kids so 4 total. Bought a 3 bed moddest end of terrace house. 420k. I can see a (rough) 2 bed for sale for £280,000. I don't live in a posh area, just a South East town 50 miles out from London. This is reality.
What you defined as "ambitious" is just people trying to live. The alternative is to keep renting for life, which people will obviously - rightly so - do anything to try to get out of that trap, even if it means stretching with everything to get on the ladder. I don't think we should blame people for that or label it "ambitious". It's survival and trying to better ones life.
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It's in Wales though, not the SE of England. As I said in that post I acknowledge that there are some specific areas of the country where FTB will pay above average. I also have a view, that I know isn't the most palatable (because if people grow up in an area, they feel an attachment and almost a divine right to be able to own property there) that sometimes the reality is that if you live in an expensive part of the country and don't have a good job, you just have to accept the choices of not buying / buying somewhere crap / moving. I'd like to live nearer London (whilst remaining the right side for family and friends) but it's too expensive for the type of home I'd want and I'm not even an FTB, I just have to suck it up.
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