Who doesn't own a property?

Status
Not open for further replies.
We have some good friends that were FTB fairly recently, one family moved in this year (aged 42/40/9), another family bought I guess age 37/32 from memory but that was just a 1.5 bed maisonette, they only bought a family home last year aged 41/36/2).

Bar said:
That must have been introduced since the last time I looked - all the banks / building societys had moved to an affordability assessment as opposed to a pure salary multiplier.
Click to expand...
That may be so but I expect that affordability assessment will include an income multiplier in the majority of cases. This is logical as it seems pretty impossible to determine affordability without considering income.
 
HangTime said:
We have some good friends that were FTB fairly recently, one family moved in this year (aged 42/40/9), another family bought I guess age 37/32 from memory but that was just a 1.5 bed maisonette, they only bought a family home last year aged 41/36/2).
Click to expand...
As far as I'm aware, I was the youngest male homeowner (age 29) on my street when we bought our current house 10 years ago. As far as I know, I'm still the youngest male homeowner on my street now.

It's actually a bit disheartening that it's become so unaffordable - the path I trod from a modest start is closed. Our house was £280k, which we bought with a 90% £250k mortgage on combined ~£56k salaries. Its worth £450k and You'd need £90k salary to buy on a 90% mortgage now. It's no wonder only people in their late 40s or older have bought here recently.
 
You have to wonder how people are buying for the first time! looking at the ONS report, only 12/331 regions are listed as 4.75 or less.

The help to buy scheme seems to be propping up the ftb market for the most part, how long can that last.

Around me the ons is ~9-10 with little to no help to buy properties available unless your ok with a quarter of a million pound flat. Even with a huge house building initiative going on.
 
It's all about timing!
We were lucky and bought our first house in July 2005 (I was 26) - just before prices went ridiculous and then crashed in 2008. Had we waited just 1 year we would have struggled getting on the ladder !.
 
I was living abroad for my 30s....really enjoying life renting, but I knew I had to buy a property before I hit 40. The main reason I left Germany and came back to the UK because buying property in Germany is a big commitment and with Brexit.....blergh.

Anyway, bought my modest terraced house in a very desirable rural area in the midlands six months before my 40th. No kids.

Not stretching your finances makes life so much less stressful. Every month I work I could afford to not work for 4.
 
LizardKing said:
You have to wonder how people are buying for the first time! looking at the ONS report, only 12/331 regions are listed as 4.75 or less.

The help to buy scheme seems to be propping up the ftb market for the most part, how long can that last.

Around me the ons is ~9-10 with little to no help to buy properties available unless your ok with a quarter of a million pound flat. Even with a huge house building initiative going on.
Click to expand...
Tbh I've found the opposite here with FTB schemes etc. It sets a ceiling rather than a target; as the next logical properties are priced exponentially higher.
 
LizardKing said:
You have to wonder how people are buying for the first time! looking at the ONS report, only 12/331 regions are listed as 4.75 or less.
Click to expand...

Be interesting to see the numbers on how many FTB buy alone vs with a partner, as 4.75x average is only relevant if you're buying alone..


EDIT: found this:
https://www.mortgagesolutions.co.uk...ut-deposit-and-affordability-concerns-remain/
The average income for both solo first-time buyers and joint first-time buyers have risen to £50,800 and £70,600 respectively. This is up from £45,900 for solo first-time buyers and £63,800 for joint first-time buyers in 2019.
Click to expand...
 
bought mine at 34 just at the start of the pandemic for that extra drama factor. Had to move about an hour away from where i did live just to make it more affordable. It's not great but i'm single on a lowish wage and my mortgage isn't stupidly high just had to save for a good few years to get that damn deposit
 
SDK^ said:
It's all about timing!
We were lucky and bought our first house in July 2005 (I was 26) - just before prices went ridiculous and then crashed in 2008. Had we waited just 1 year we would have struggled getting on the ladder !.
Click to expand...
Yeah, we bought August 2016 and sold December 2018. It actually lost value, I doubt there are many FTB who sell a house for less than they bought it for.
That sounds pretty bad but when upgrading in theory it means the cost to move is actually reduced because the house you are buying should have fallen by more in price assuming it was impacted proportionally.
 
Never have. Never been earning enough to save even a couple of hundred a month to put a deposit together. Parents own their house though so will inherit that although they're both still going strong!
 
What was our multiplier?
4.5 in the end as a couple.
Max was about 4.7 in the end


For those debating waiting for a crash.

We bought our forst for 260 in Feb 2020 and I was worried

A) it was overpriced (offers over)
B) covid was kicking off. I was SURE this was going to take prices down

What I didn't in any way expect was the gov to prop it all up!

Fast forward and house is (on paper) worth 315 and would be unobtainable now to us. Even with much better salaries.

If I had pulled out I'd be sat here now gutted. Can't get anything with a garden even big as ours for anywhere near the price we paid.

I'd advise not waiting for a crash! Might never come
 
413x said:
.
I'd advise not waiting for a crash! Might never come
Click to expand...

I was much the same when I bought in the beginning of 2018, I thought house prices were overinflated then after 8 years of continual rises and a price correction was just around the corner.

The fact is house price rises don't really benefit anyone, unless you've got more than one home and are using it as an investment. For everybody else it just makes moving more costly and the government/banks take more money off us in taxes and interest, so easy to see why they prop it all up.
 
The government are running scared of rising interest rates and a housing market crash. So many people are leveraged up to their eyeballs that even an interest rate rise to ‘only’ 5% to try and control inflation (which will likely fail due to corporate greed overriding any attempt to do so) could potentially put millions into default being unable to pay their mortgage. Repossessions will rise, the lack of social housing will become an even bigger issue than it is now and houses could potentially remain unsold for months and months.
 
MissChief said:
So many people are leveraged up to their eyeballs that even an interest rate rise to ‘only’ 5% to try and control inflation (which will likely fail due to corporate greed overriding any attempt to do so) could potentially put millions into default being unable to pay their mortgage.
Click to expand...

I thought the affordability lending criteria that the banks brought in after the collapse of Northern Rock was supposed to prevent the very thing you are talking about?

I would have thought an increase in interest rates to at least 4% would be factored in to any affordability, as that's around where the current standard variable rate lies.
 
norm said:
I thought the affordability lending criteria that the banks brought in after the collapse of Northern Rock was supposed to prevent the very thing you are talking about?

I would have thought an increase in interest rates to at least 4% would be factored in to any affordability, as that's around where the current standard variable rate lies.
Click to expand...

I have a feeling that the affordability criteria might actually make house buying even more unaffordable to FTB. If we got stuck on a 4% interest rate then we are *never* going to be able to afford to move house. I can comfortably cover my own costs on this house but not anything bigger so it would mean less housing coming onto the market and even more competition for those houses that do become available.
 
Yeah I also feel that 5 percent base rate would break the housing market. Especially for FTB withing covid time.

You'd also get the house price drop so all that negative equity. Recipe for disaster.

Aren't they (weren't they?) thinking of increasing the lending limits too?
Anything to keep prices rising.
 
I don't think rate rises will have that big of an impact on the market overall IMO.

For big property (£1m+), most folk I imagine will have been banking equity along the way or bought early/before the bubble. The stock market has been booming. People haven't been spending where they typically would. I imagine some of these mega properties are at 20-30% LTV versus what people imagine based on the news.

In a cruel twist of fate, the less well off people being forced out of the market is ideal as it drives rents up (I mean, where are they going to live, right?) and landlord yields begin to make sense again, so they get desperate to hoover up what little property does come available.
 
norm said:
I thought the affordability lending criteria that the banks brought in after the collapse of Northern Rock was supposed to prevent the very thing you are talking about?

I would have thought an increase in interest rates to at least 4% would be factored in to any affordability, as that's around where the current standard variable rate lies.
Click to expand...

The current affordability stress test is SVR + 3% and funnily enough, now the BOE are actually putting up rates, they are looking at relaxing that rule!

https://www.thisismoney.co.uk/money...gland-relax-mortgage-affordability-tests.html

Despite concerns the rules are stopping people being able to buy, these affordability stress tests mean just 6 per cent of people had to take a smaller mortgage than they otherwise would have, according to the Bank of England. This equates to roughly 30,000 mortgages a year.

Although the loan-to-income rules will likely remain the same, the stress testing could be relaxed, meaning repayments could become based on the market's expected interest rate changes over the next five years or a 1 per cent increase on today's rate - whichever is higher.
Click to expand...

I guess they are worried more people will be refused mortgages, can't be having that can we!

Nicholas Mendes, mortgage technical manager at John Charcoal said: 'The scrapping of current rules would be welcome by homeowners and brokers alike as this would be a boost for the market given the ever-increasing property prices.

'This will give homeowners, at least in the short term, the ability to borrow more.'
Click to expand...

Which will fuel the house price rises even more...
 
Status
Not open for further replies.
Back
Top Bottom