First Time Buyers (what Are Those)

[US Citizen]

You said would happen years ago on here.Yet the bulls, trolls and VIs kept saying prices only ever go up. However they were right at least for a little while.

A first time buyer is usually aged between 18 - 45 years old and has an average income of £22,500 - £40,000. When LTV are around 85% of the property price and houses are still around £200,000 for anywhere decent. Its just not fisable.

So, we have a market with very few first time buyers and after the way they have been treated by the market the past few years, I dont blame them for not wanting to keep things going.

Accept this fact. The house you are in now, is the house you will be in for at least the next 5 years, maybe even longer.

[Guest_FaFa!_*]

You said would happen years ago on here.Yet the bulls, trolls and VIs kept saying prices only ever go up. However they were right at least for a little while.

A first time buyer is usually aged between 18 - 45 years old and has an average income of £22,500 - £40,000. When LTV are around 85% of the property price and houses are still around £200,000 for anywhere decent. Its just not fisable.

So, we have a market with very few first time buyers and after the way they have been treated by the market the past few years, I dont blame them for not wanting to keep things going.

Accept this fact. The house you are in now, is the house you will be in for at least the next 5 years, maybe even longer.

Hello!

I'm a FTB, early thirties. I am around the middle of your 22 to 40k range. Let me tell you a story

Recently one of the line managers in my office (2-3 years my senior) has put his house on the market, in order to move catchement areas for the benefit of his brood. He bought a 3 bed terrace (this is East Mids) circa 2001 for about 60-80k (according to nethouseprices) on an 100% repayment mortgage. It is on the market for 120k, he is hoping to get a house in the 150k range. Despite the fact he and the missus did not put a penny down for their FTB purchase, they appear to think that they will find a FTB in a better position than they were in 2001, able to put down a deposit and pay 50% to 100% of the price they did in the worse recession since the war.

He has had some people round (he was moaning the EA only got 2 viewings in 2 weeks a while back, I believe it is now up to 4 viewings in 4 weeks), but strangely no-one has put in an offer. He doesn't seem to understand why this is.

At what point should I enlighten him, and how should I do this? He is a decent and likeable chap, bar his lack of HPC acumen. I suspect he maybe stuck in his house for a while yet.

[US Citizen]

Hello!

I'm a FTB, early thirties. I am around the middle of your 22 to 40k range. Let me tell you a story

Recently one of the line managers in my office (2-3 years my senior) has put his house on the market, in order to move catchement areas for the benefit of his brood. He bought a 3 bed terrace (this is East Mids) circa 2001 for about 60-80k (according to nethouseprices) on an 100% repayment mortgage. It is on the market for 120k, he is hoping to get a house in the 150k range. Despite the fact he and the missus did not put a penny down for their FTB purchase, they appear to think that they will find a FTB in a better position than they were in 2001, able to put down a deposit and pay 50% to 100% of the price they did in the worse recession since the war.

He has had some people round (he was moaning the EA only got 2 viewings in 2 weeks a while back, I believe it is now up to 4 viewings in 4 weeks), but strangely no-one has put in an offer. He doesn't seem to understand why this is.

At what point should I enlighten him, and how should I do this? He is a decent and likeable chap, bar his lack of HPC acumen. I suspect he maybe stuck in his house for a while yet.

I wouldnt enlighten him. If he hasnt figured it out by now, he never will. He is certainly not alone in his predicament.

[Executive Sadman]

BTLers have replaced FTB'ers.

[US Citizen]

BTLers have replaced FTB'ers.

Things arnt working out too well for them either.

[Goat]

BTLers have replaced FTB'ers.

This was the story of the last couple of years of the boom - get rich quick merchants pedalling the property can only go up myth so that FTB's were outbid by eagar BTLers backed by reckless banks throwing money at anyone with a tin of magnolia paint and a pulse.

Now that the bubble's burst and BTL mortgages are almost impossible to get hold of the market will over time have to revert to a normal proportion of FTBers.

[Caveat Mortgagor]

Despite the fact he and the missus did not put a penny down for their FTB purchase, they appear to think that they will find a FTB in a better position than they were in 2001, able to put down a deposit and pay 50% to 100% of the price they did in the worse recession since the war.

At what point should I enlighten him, and how should I do this? He is a decent and likeable chap, bar his lack of HPC acumen. I suspect he maybe stuck in his house for a while yet.

Dont tell him. If its overpiced he misses out on the dying embers of the last chance to sell before the next leg down. If he is consumed by greed and wants what you have stated above - let him toast.

I recognise you say he isnt inherently bad, nor are most people selling houses, but they are deluded by greed. The sooner owning a home is seen as a priveledge rather than an easy income / investment the better.

For sentiment to change it needs a few good eggs to get burned. And lets face it, your mate put feck all in, if he loses 20-30k by chasing the market down he will still be ahead, but will no doubt have a different perspective of the housing market.

[Guest_FaFa!_*]

Dont tell him. If its overpiced he misses out on the dying embers of the last chance to sell before the next leg down. If he is consumed by greed and wants what you have stated above - let him toast.

I recognise you say he isnt inherently bad, nor are most people selling houses, but they are deluded by greed. The sooner owning a home is seen as a priveledge rather than an easy income / investment the better.

For sentiment to change it needs a few good eggs to get burned. And lets face it, your mate put feck all in, if he loses 20-30k by chasing the market down he will still be ahead, but will no doubt have a different perspective of the housing market.

He isn't going to lose anything - he has 8 years of equity. I don't think he'll get burned and I don't think he'd be bothered if the house price falls as long as the 150k falls as well. It's not a greed thing, to my mind. He doesn't want the overvalued equity, so much as needs the overvalued equity to get the larger house.

His problem is that he wants to move for schooling, which to my mind is reasonable, idiotic Labour policies aside.

The problem is that even if he recognises his house is overvalued, the 150k place is also overvalued. He won't want to discount until he sees the 150k places coming down too. This, to my mind, isn't entirely unreasonable given what is at stake which is his family's future. Unfortunately someone has to blink first, which I think is the problem we are seeing at the moment. No-one is blinking, therefore no-one is selling.

[US Citizen]

He isn't going to lose anything - he has 8 years of equity. I don't think he'll get burned and I don't think he'd be bothered if the house price falls as long as the 150k falls as well. It's not a greed thing, to my mind. He doesn't want the overvalued equity, so much as needs the overvalued equity to get the larger house.

His problem is that he wants to move for schooling, which to my mind is reasonable, idiotic Labour policies aside.

The problem is that even if he recognises his house is overvalued, the 150k place is also overvalued. He won't want to discount until he sees the 150k places coming down too. This, to my mind, isn't entirely unreasonable given what is at stake which is his family's future. Unfortunately someone has to blink first, which I think is the problem we are seeing at the moment. No-one is blinking, therefore no-one is selling.

Spot on post.

[US Citizen]

I remember back in 2004, I wanted to buy a new build. I was told the seller was an investor who had bought it off plan for £85,000 and was selling it for £125,000. We offered the full asking price, but he kept refusing saying he now wanted £140,000.

So the lazy b4stard wanted £55,000 earnings for having his name on a piece of paper at the land registry.

How can you possibly feel sorry for people like this. The greed has been intergrated in to British life so much, people are thinking they are entitled to make vast sums of money for owning a home.

Over the months and years, you will here this phrase time and time again.

I offer you £xx,xxx take it now or tomorrow I will offer half price.

[Sonic the Hedge Fund]

The problem is that even if he recognises his house is overvalued, the 150k place is also overvalued. He won't want to discount until he sees the 150k places coming down too. This, to my mind, isn't entirely unreasonable given what is at stake which is his family's future. Unfortunately someone has to blink first, which I think is the problem we are seeing at the moment. No-one is blinking, therefore no-one is selling.

It's a stand-off ATM

But if prices do start to fall again, then we will see panic.

[seenoevil]

I agree with the poster who stated it was "A stand off"

I AM a FTB.

Nothing coming on, and what is on or coming on is to expensive.

Im awaiting, or standing off if you will as there is no other option. Well. the options open to me are limited and a fools path.

[US Citizen]

I agree with the poster who stated it was "A stand off"

I AM a FTB.

Nothing coming on, and what is on or coming on is to expensive.

Im awaiting, or standing off if you will as there is no other option. Well. the options open to me are limited and a fools path.

A good move in my opinion. Your not losing anything by not buying now. How gutted would you be if you did buy and this time next year prices collasped and it was a complete buyers free for all. You have the purchasing power, let them come to you, not the other way around. Which btw, is what some sellers are realising isnt going to happen.

[Cygnus Alpha]

I remember back in 2004, I wanted to buy a new build. I was told the seller was an investor who had bought it off plan for £85,000 and was selling it for £125,000. We offered the full asking price, but he kept refusing saying he now wanted £140,000.

So the lazy b4stard wanted £55,000 earnings for having his name on a piece of paper at the land registry.

How can you possibly feel sorry for people like this. The greed has been intergrated in to British life so much, people are thinking they are entitled to make vast sums of money for owning a home.

Over the months and years, you will here this phrase time and time again.

I offer you £xx,xxx take it now or tomorrow I will offer half price.

First of all, his name isn't on the land registry. All the flipper has done is paid a 10% deposit to the developer and agreed to buy it for £85,000. Doesn't need stamp duty or even proper conveyancing.

The flipper is a risk taker and yes he could make £50k off you but if house prices went down he would suffer a loss. Obviously in such a scenario, the flipper would not run to the papers with a sob story about how the developer was going to sue them.

[TylerDurden]

A good move in my opinion. Your not losing anything by not buying now. How gutted would you be if you did buy and this time next year prices collasped and it was a complete buyers free for all. You have the purchasing power, let them come to you, not the other way around. Which btw, is what some sellers are realising isnt going to happen.

A buyers free for all? wouldnt that just whack prices back up.

This whole thread is nonesense, evryone claiming the reasons nothing is selling, when actually anything half decent is flying off the shelves.

Dont get me wrong, im really hoping for a more hpc between now and xmas, and hopefully we'll get it, but your all going on like its happening now. its not fellas. its not fallen for about 3 months.

[Pearshape]

Ive been in housing for over twenty years, and i can tell you without any shadow of doubt, there will be no recovery until first time buyers come back to the market, so either earnings go up or house prices fall.

Any housebuilder will tell you that.

Is there a graph somewhere which shows the number of first time buyers in relation to the market that gos back the last 30 years or so???

[Bloo Loo]

He isn't going to lose anything - he has 8 years of equity. snip

Do enlighten....what is 8 years of equity?

where does it come from? is it real? can you spend it?

[workingnomad]

There is no need for FTBs anymore, we have BTLs. They are the new FTBs and the single biggest reason why there has been no real crash!

How many more times!

[Bloo Loo]

There is no need for FTBs anymore, we have BTLs. They are the new FTBs and the single biggest reason why there has been no real crash!

How many more times!

where are the BTLS? How many more times...they need 40% down and a rental to cover.

[The Realist]

He isn't going to lose anything - he has 8 years of equity. I don't think he'll get burned and I don't think he'd be bothered if the house price falls as long as the 150k falls as well. It's not a greed thing, to my mind. He doesn't want the overvalued equity, so much as needs the overvalued equity to get the larger house.

His problem is that he wants to move for schooling, which to my mind is reasonable, idiotic Labour policies aside.

The problem is that even if he recognises his house is overvalued, the 150k place is also overvalued. He won't want to discount until he sees the 150k places coming down too. This, to my mind, isn't entirely unreasonable given what is at stake which is his family's future. Unfortunately someone has to blink first, which I think is the problem we are seeing at the moment. No-one is blinking, therefore no-one is selling.

A very good summary of the issues facing house owners who wish to sell and buy again at the moment (and probably in the past as well).

In his position one option would be to sell for the best price he can get and rent. When he then finds the house he wants he would be in a stronger position to negotiate a discount on the house he wants. There are obviously risks, the vendor may still refuse to reduce the price and/or house prices could rise during the period he is renting.

Also the vendor of the 150,000 house may be facing the same problem. He may reduce his price if the he was assured that the vendor of the house he wants would do the same. All very complicated.

The housing market has always been difficult because house vendors and purchasers can have such different motives. Some need to sell/buy and some will sell/buy if the price is right. In Australia estate agents sometimes use the phrase 'committed vendor' in advertisements. This is meant to imply that the vendor really is serious about selling. I'm not sure that it means that they will discount though. I've always wondered what the absence of this phrase in an advertisement implies about a vendor's motives - vendor does not really want to sell?

[i wanna house]

I agree with the poster who stated it was "A stand off"

I AM a FTB.

Nothing coming on, and what is on or coming on is to expensive.

Im awaiting, or standing off if you will as there is no other option. Well. the options open to me are limited and a fools path.

my situation too.

i wish rents would fall too as we could do with a bigger place for the next addition to the family....

[Mr Punter]

I know someone who does BTL student houses. In the HPI years he could buy, "improve", then remortgage, taking out his initial stake. I a fairly short period he bought a lot of properties. Post credit crunch he had been able to raise funding for deposits from individuals in return for 10% interest.

He makes a very good return on the properties but is now approaching the stage where asking prices and funding costs and availability mean that he will stop buying anything other than proper bargains, and they are in short supply. I cannot see a way that people like this will fill the FTB gap.

[itsdave]

where are the BTLS? How many more times...they need 40% down and a rental to cover.

That's true, but there are still people willing to "invest" in property.

I put my flat on the market the other week. Within 7 days I'd had 5 viewings and a mini-bidding war between a FTB and a BTL landlord. I accepted an offer at slightly above asking price (14% less than 2007 peak) to the FTB (I hope he can get the mortgage and that his mortgage valuation goes ok!).

It's a lovely little flat, and I think I priced it realistically, but nevertheless I was shocked at the level of interest and very surprised that there were still "investment buyers" out there, because the BTL mortgage rates seem to be somewhere between 6% and 7%.

The FTB is borrowing his £30k deposit from the Bank of Mum and Dad, who are re-mortgaging their own home to raise the cash.

I can't explain it. The world has gone mad.

I'm going to take my £60K equity out and wait a good while (couple of years) to see what happens. The flat's I'd like to buy are over £200k, and I'm just not prepared (in my late thirties) to get into the level of debt needed to buy one.

Madness.

Edited September 14, 2009 by itsdave

[Bloo Loo]

I know someone who does BTL student houses. In the HPI years he could buy, "improve", then remortgage, taking out his initial stake. I a fairly short period he bought a lot of properties. Post credit crunch he had been able to raise funding for deposits from individuals in return for 10% interest.

He makes a very good return on the properties but is now approaching the stage where asking prices and funding costs and availability mean that he will stop buying anything other than proper bargains, and they are in short supply. I cannot see a way that people like this will fill the FTB gap.

what...pay back his own money with another loan....clever these people.

[The Realist]

where are the BTLS? How many more times...they need 40% down and a rental to cover.

Obviously they need a rental to cover but that has always been the case.

This is just speculation but IF the BTLs are supporting the market they could be 'professional BTLs' as opposed to 'amateur BTLs). By this I mean that the former category treat BTL as a proper business and have cash, existing equity or other sources of funding that provides the required deposit or even all of the purchase cost.

I've always suspected that if property prices fell significantly (not a description of the current fall, I think) that before many FTBs could/would buy the professional BTLs would buy the properties first. This especially applies to the typical property that a FTB would buy as it would be relatively cheap and have the potential for a good return on the investment.

By the way, I'm not and never have been a BTL, so no vested interest in this.