Friday, Feb 16, 2007
First time buyers to be hit hardest?
Firstrung: First time buyers still at low levels
How the NAEA can continue to suggest that interest rate rises will "hit first time buyers hardest" is still a mystery to the Firstrung team. First time buyers either have, or are in the process of obtaining, the smallest mortgages available. Sound logic would therefore suggest that they are far less likely to feel exposed to the current doldrums in house prices and increasing mortgage rates than, for example, an owner occupier with a 400K mortgage sweating on how best to protect that illusory 50% equitable value...
Posted by converted lurker @ 02:05 PM (169 views) Add Comment
4 Comments
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1. Dugmug said...
FTBs tend to be younger, at the beginning of their careers, and so on lower incomes, right? And they're seeking a mortgage equivalent to up to 5 times their salary nowadays, compared to existing mortgage holders that borrowed only 3 times their salary just a few years ago (because house prices were cheaper of course, but also because they weren't even allowed 5 times multiples back then), right? And yet these dudes at Firstrung reckon the affordability of monthly mortgage payments, as dictated by interest rate levels, won't have more effect on the FTBs than anyone else??!!? I don't get the Firstrung website's angle/bias in the housing market debate - sometimes they seem to be right on the money about how mad it is, then other times they seem to be more like First Dung!
2. Dugmug said...
Sorry, being dumb, I've worked it out now. Firstrung like to slag off estate agents and BTL "investors" in order seem to be on the same side as all the first time buyers out there, but they have to slag off any suggestions that there's a problem even considering being a first time buyer and taking on that huge mortgage right now, because their site advertises loads of mortgage products! Took a while to spot the vested interest there - I'll try to do better, apologies again.
3. converted lurker said...
It's simple really son, even for you =;¬) who would you rather be, a first time buyer with a potential mortgage of 100K, or an owner occupier whose 'played houses' now living in (what they think) is a 600K house with a 350K mortgage with other debts coming out of your ears? If I was an FTB thinking about buying I'd be feeling pretty smug at the moment as I watch certain aspects of this crazy market unfold over the next year or two..The comment was in specifc relation to the NAEA's comments that FTBs are suffering most due to the recent interest rate rises which is nonsense, they're not. Recent ftbs (those over the last 2 years) have on average 110K mortgages fixed for 5 years at an average 4.7% ....now carry on as you were and get back to the paranoid rantings
4. Dugmug said...
To get a £350k mortgage, even at 5 times income, you're earning £70k+ per year. Who are these people? They certainly don't represent the "average homeowner" in my world, paranoia or not - the average wage in this country is £30k.