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AskFrank

More Unaffordable For Ftbs Than A Couple Of Years Ago...

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Is it me or are properties really a lot more unaffordable for FTBs now than in the past 10 years?

Only 1 in 10 FTBs have at least a 10% deposit, hence 9 in 10 can't get a mortgage. Property prices have come down, but does it really make any difference to a FTB when they STILL cannot afford a basic home because of a lack of deposit.

It's reasonable to expect a FTB to save something for a property, however in todays market a 10% deposit generally equates to at least £20k - that could be a years wages (before tax) for a lot of FTBs.

I read that there is a real risk, more so now, than ever before of our society being split into renters and landlords.

Where is it all going?

From a worried FTB.

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It is really tough out their for FTBs. It is taking much longer for people to get on the ladder as you have to save for much longer before you can buy. Plus if you have to rent while you save it can be very tough.

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Just remember: Until and UNLESS FTB's start coming into the "market" - there is no "market". Therefore there is no "market price" - therefore there is [virtually] no selling/buying at the lower/entry level of the "market" - which is, proportionately, the biggest part of the market... THUS - the market is dead. Or nearly dead. No market, no profits for the Property VI's.

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Just remember: Until and UNLESS FTB's start coming into the "market" - there is no "market". Therefore there is no "market price" - therefore there is [virtually] no selling/buying at the lower/entry level of the "market" - which is, proportionately, the biggest part of the market... THUS - the market is dead. Or nearly dead. No market, no profits for the Property VI's.

Sorry Eric, the market has changed.

What happens now is that the Government take your money and give it to the bankers, who spend it on houses that they rent out to you.

The solution of course is for the Government to take more money from you and provide less services.

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i think its all relative, if i had to i could save 10k a year.. i would have to sacrifice everything to do that but it could be done.. as it is i saved 6k last year, and that added to the other savings i have from the last 10 years of not wastefully spending. yet i still enjoyed several holidays abroad and don't exactly live like a pauper.

i don't earn a massive wage, i just don't spend it unnecessarily.. make my own lunches, don't buy clothes unless i actually need them, and i cut back on the things i could do without (buying cds, going to gigs, eating out), i just select the things i want to do most... the problem at the moment with the last decade of easy credit is there is a generation of FTBers who have no desire to save because it seems too much effort.

i think banks should always require a 10% deposit as a minimum, to save it shows you can manage your money, people seem to think they can have whatever they want without having to work for it or even pay for it. even when i earned 13k a year i managed to save 3k, and if house prices were still even remotely linked to sensible earnings it wouldn't take that long to save a deposit even at that level, just a bit of effort.

Edited by dandandan

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Where is it all going?

Simple really.

Average FTB house prices will go back to just over 3x aveage FTB salaries; for the south east say £25,000 x 3 + £15,000 saved deposit = £90,000, rather than £150,000.

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i think its all relative, if i had to i could save 10k a year.. i would have to sacrifice everything to do that but it could be done.. as it is i saved 6k last year, and that added to the other savings i have from the last 10 years of not wastefully spending. yet i still enjoyed several holidays abroad and don't exactly live like a pauper.

i don't earn a massive wage, i just don't spend it unnecessarily.. make my own lunches, don't buy clothes unless i actually need them, and i cut back on the things i could do without (buying cds, going to gigs, eating out), i just select the things i want to do most... the problem at the moment with the last decade of easy credit is there is a generation of FTBers who have no desire to save because it seems too much effort.

i think banks should always require a 10% deposit as a minimum, to save it shows you can manage your money, people seem to think they can have whatever they want without having to work for it or even pay for it. even when i earned 13k a year i managed to save 3k, and if house prices were still even remotely linked to sensible earnings it wouldn't take that long to save a deposit even at that level, just a bit of effort.

May I ask what "not a massive wage" is roughly?

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i think banks should always require a 10% deposit as a minimum, to save it shows you can manage your money, people seem to think they can have whatever they want without having to work for it or even pay for it. even when i earned 13k a year i managed to save 3k, and if house prices were still even remotely linked to sensible earnings it wouldn't take that long to save a deposit even at that level, just a bit of effort.

Even requiring just a 10% deposit we could avoided many of the difficulties we (as a country) are having just now.

Now all we seem to be getting is people in the media saying how unfair it is now that lenders now need a deposit, where in reality it created a far more stable situation for our economy.

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May I ask what "not a massive wage" is roughly?

currently 24k, this is in central london. and im late 20s

*edit: spellings

Edited by dandandan

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Even requiring just a 10% deposit we could avoided many of the difficulties we (as a country) are having just now.

Now all we seem to be getting is people in the media saying how unfair it is now that lenders now need a deposit, where in reality it created a far more stable situation for our economy.

Precisely Lulu.

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i think its all relative, if i had to i could save 10k a year.. i would have to sacrifice everything to do that but it could be done.. as it is i saved 6k last year.
currently 24k, this is in central london. and im late 20s

Ok, £24,000 gross equals roughly £18,000 net so after savings your getting by in London on approximately £1,000 PCM, I'd love to know how you do that.

Rough estimates of living costs.

Rent (shared house, including bills) say £600 leaves you £400 for food/transport/clothing and everything else.

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Ok, £24,000 gross equals roughly £18,000 net so after savings your getting by in London on approximately £1,000 PCM, I'd love to know how you do that.

Rough estimates of living costs.

Rent (shared house, including bills) say £600 leaves you £400 for food/transport/clothing and everything else.

£600! You are having a laugh surely?

This is the problem. If you are renting like moi, it's incredibly hard to get your foot on the ladder because it's not cheap to rent despite what some people think. It would be cheaper to buy, than rent but without that huge deposit money is going down the drain!

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Ok, £24,000 gross equals roughly £18,000 net so after savings your getting by in London on approximately £1,000 PCM, I'd love to know how you do that.

Rough estimates of living costs.

Rent (shared house, including bills) say £600 leaves you £400 for food/transport/clothing and everything else.

my rent is pretty cheap, mainly due to lots of hunting and then getting a reduction this year. its a 2bed flat in zone 2 sharing with my girlfriend and a mate, 35mins door to door from work in the west end. reasonable area, there are worse :blink:

after tax i get about 1500pcm, so save 500

rent including bills is 450, transport is 100, food 150. payg phone 5... i ususally spend no more than 100 going out, so that leaves about 200 to go on holidays/presents etc, if i spend more going out one month i spend less the next, but i really dont find it that difficult.

if i had to i could ride instead of get the tube, not use my phone, and halve the food, aswell as rent somewhere cheaper

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Ok, £24,000 gross equals roughly £18,000 net so after savings your getting by in London on approximately £1,000 PCM, I'd love to know how you do that.

Rough estimates of living costs.

Rent (shared house, including bills) say £600 leaves you £400 for food/transport/clothing and everything else.

I managed on £8.5k net. But that was in western suburbs - and I couldn't save anything. If you only earn £12k or whatever for a good chunk of your working life, its going to be very difficult to put aside given the South East costs.

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£600! You are having a laugh surely?

This is the problem. If you are renting like moi, it's incredibly hard to get your foot on the ladder because it's not cheap to rent despite what some people think. It would be cheaper to buy, than rent but without that huge deposit money is going down the drain!

It isn't a huge deposit, and money isn't going down the drain as you would be paying interest which would amount to atleast the same as your rent. Furthermore, the amount of capital you would have to repay would be greater than for previous generations which means that when you come to moving up the ladder in a few years time you would find that you hadn't paid that much back in percentage terms, and hence what you could afford moving upwards would be less than you hoped.

Giving FTBers mortgages without a deposit is really just storing up longer term problems.

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One of the problems we face as ftbs, is that it's taken us so long to save the deposit we are now 32 and 30 yrs old. So now we aren't what i would traditionally call FTBs because a flat, which was typically a first home for a twentysomething ftb, will not accommodate our growing family.

I think this will be a common problem. My parents did the ladder thing. Married early twenties bought a flat, then a maisonette (mum got preggers), then a small house (I was born), then a big house (my sister was born). My husband and I, on the other had to contend with such hpi that saving a deposit large enough to buy anything means now we are in a position to buy the goalposts have moved. We need the small house straight away as ftbs, and in Berkshire they are VERY VERY expensive. We are stuffed unless someone dies, which is not nice. :(

Edited for spelling

Edited by Jessica Rabbit

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One of the problems we face as ftbs, is that it's taken us so long to save the deposit we are now 32 and 30 yrs old. So now we aren't what i would traditionally call FTBs because a flat, which was typically a first home for a twentysomething ftb, will not accommodate our growing family.

I think this will be a common problem. My parents did the ladder thing. Married early twenties bought a flat, then a maisonette (mum got preggers), then a small house (I was born), then a big house (my sister was born). My husband and I, on the other had to contend with such hpi that saving a deposit large enough to buy anything means now we are in a position to buy the goalposts have moved. We need the small house straight away as ftbs, and in Berkshire they are VERY VERY expensive. We are stuffed unless someone dies, which is not nice. :(

Edited for spelling

Must it be Berkshire?

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Well husband is in I.T so most jobs are on the M4 corridor so Berkshire is best, but having got so disillusioned with the deluded estate agents (valued our tiny 2 bed mid-terrace west of Reading we rent at £365k to £400k in Jan 09 :blink: ), we are looking at Wiltshire, South Oxfordhsire, and North Hants...All seem pretty pricey though, unless you want to bring your children up in the ghettos of Swindon or Reading that is.

Edited to show full delusion of EAs.

Edited by Jessica Rabbit

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One of the problems we face as ftbs, is that it's taken us so long to save the deposit we are now 32 and 30 yrs old. So now we aren't what i would traditionally call FTBs because a flat, which was typically a first home for a twentysomething ftb, will not accommodate our growing family.

I think this will be a common problem. My parents did the ladder thing. Married early twenties bought a flat, then a maisonette (mum got preggers), then a small house (I was born), then a big house (my sister was born). My husband and I, on the other had to contend with such hpi that saving a deposit large enough to buy anything means now we are in a position to buy the goalposts have moved. We need the small house straight away as ftbs, and in Berkshire they are VERY VERY expensive. We are stuffed unless someone dies, which is not nice. :(

Edited for spelling

Just out of interest how much could you reasonably afford to borrow?

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It isn't a huge deposit, and money isn't going down the drain as you would be paying interest which would amount to atleast the same as your rent. Furthermore, the amount of capital you would have to repay would be greater than for previous generations which means that when you come to moving up the ladder in a few years time you would find that you hadn't paid that much back in percentage terms, and hence what you could afford moving upwards would be less than you hoped.

Giving FTBers mortgages without a deposit is really just storing up longer term problems.

Actually you are wrong there. It would now be cheaper for me to buy than to rent, even considering the interest. I would be paying less interest than I am currently paying for my rent!

I never said anything about not having a deposit. But comparing the costs of a house and the minimum deposit required still, is very hard for most FTBs. Remember only 1/10 FTBs have the minimum deposit, so don't tell me 10% isn't much! I take it you don't live in the South East.

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One of the problems we face as ftbs, is that it's taken us so long to save the deposit we are now 32 and 30 yrs old. So now we aren't what i would traditionally call FTBs because a flat, which was typically a first home for a twentysomething ftb, will not accommodate our growing family.

I think this will be a common problem. My parents did the ladder thing. Married early twenties bought a flat, then a maisonette (mum got preggers), then a small house (I was born), then a big house (my sister was born). My husband and I, on the other had to contend with such hpi that saving a deposit large enough to buy anything means now we are in a position to buy the goalposts have moved. We need the small house straight away as ftbs, and in Berkshire they are VERY VERY expensive. We are stuffed unless someone dies, which is not nice. :(

Edited for spelling

That's the sad thing about all this. It's not through lack of trying for many FTBs. The sensible ones have saved yet still get the rough end of the stick!

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The frustrating thing is my husband earns really good money. Way way above national average, but our two bed terrace we rent at £365k lowest valuation is still 6 times his salary! So they won't lend (not that we'd buy it at that price - £200k maybe).

So we is stuffed. Paying some poncy oiks' mortgage (I'm generalising, he is), who mew'd to buy more and more houses, now partly paid for by us. Great.

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So we is stuffed. Paying some poncy oiks' mortgage (I'm generalising, he is), who mew'd to buy more and more houses, now partly paid for by us. Great.

I dont quite understand the drama. You are only 'stuffed' if you believe house prices are now at the bottom. If you don't believe that - and I don't - you are in a good position. You'll be saving yourself thousands in 12 months or so time and the landlord of your property will be begging you to buy it off him.

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