Jump to content
House Price Crash Forum
redwing

Door Slammed On First-time Buyers

Recommended Posts

Snip from article

But the vast majority of first-time buyers aren't getting a sniff of lower repayments. The huge gap between those rates and what the typical homebuyer is having to pay has been laid bare by one of Britain's biggest mortgage brokers, which revealed that the most popular mortgage taken out by its customers last month was a five-year, fixed rate requiring a 10% deposit – but at a rate of 6.49%. Countrywide Mortgage Services, part of estate agency Countrywide, added the strongest demand among buyers was for home loans where people can borrow 90% of the property's value, despite the much higher interest rates on these products.

There's a very nice graph too that illustrates just how little mortgage rates have come down in the last two years [i.e. not a jot].

A first-time-buyerless recovery.

Share this post


Link to post
Share on other sites

It's hard to see how house prices are sustainable in the long run huge when deposits needed for loans to be affordable.

The other dilemma is that fix rates deals will soon start to be running out for many in the UK, will they find affordable finance?

Share this post


Link to post
Share on other sites
It's hard to see how house prices are sustainable in the long run huge when deposits needed for loans to be affordable.

The other dilemma is that fix rates deals will soon start to be running out for many in the UK, will they find affordable finance?

I enjoyed this nugget:

"Bank of Scotland both have a two-year tracker exclusively for first-time buyers where you pay 4.19% above the base rate until 31 October 2011 – ie, 4.69% at present."

4.19% above base! What happens if interest rates get back to their historical mean of around 5%? Your base rate tracker shoves you up to 9.19%.

I guess there are people out there buying this sort of thing who could be in for some very nasty shocks.

Share this post


Link to post
Share on other sites

The doors been slammed on first time buyers for years.

If the crash doesn't get going, and the government's attempts do push the house prices back up, the current FTB generation will soon have no interest in buying ever. Because they are rapidly reaching the point where they don't have enough years left to buy. It will just remain madness to even think of buying, when renting is cheaper, as is the case now.

I wonder who all the baby boomers are gonna sell to, in order to realise their "bricks and mortar" based pension fund?.

Share this post


Link to post
Share on other sites

aye been looking into it now myself. Round here we are still looking at over 300k for something worth owning in a falling market - ie something big enough to comfortably have 2 kids in an live in for the next decade.

Sadly to get a sensible apr, you need better than 25% deposit + tax and fees + moving costs - or around about £90k in cash to spend. Even then you are getting something that is only going to be 4%+boe base. It just doesn't add up. Currently you can borrow as much money at a better rate on a BOAT!

Share this post


Link to post
Share on other sites
The doors been slammed on first time buyers for years.

I wonder who all the baby boomers are gonna sell to, in order to realise their "bricks and mortar" based pension fund?.

Dunno. If they don't sell it soon, the government will take it off them and put them in a home.

How can anyone think paying 40% tax while putting 40% into a pension fund and paying off a 250,000 mortgage, while being on minimum wage (If your lucky) is sustainable is beyond me!

We all have to pay for the bankers greed, and I don't think our pound of flesh is going to cut it. :(

Share this post


Link to post
Share on other sites
Another thread way off beam.

Here read this and weep.

http://www.newsoftheworld.co.uk/news/51147...NEW-OWNERS.html

thats good news...another 42,000 overstretched borrowers...wonder how much the average mortgage has risen to this time..£150,000 from £139,000?

Share this post


Link to post
Share on other sites
there is no door for first time buyers. never has been.

just an evil govt shafting us up the aaasss with no lubrication and a fistfull of broken glass in a salty vinigery brine

There's always time for lubrication.

Share this post


Link to post
Share on other sites
Another thread way off beam.

Here read this and weep.

http://www.newsoftheworld.co.uk/news/51147...NEW-OWNERS.html

N.O.W. : "The encouraging numbers fuel hope that banks are finally turning on the borrowing taps and that the stomach-churning plunges in house prices are over."

What's really stomach-churning at the moment is watching this irrational temporary rise in the housing market going on month after month, knowing that it's going to end in tears for so many people. If the plunge had been allowed to continue, then first-time buyers would at least have a chance to step onto the ladder. That may be a good thing or a bad thing depending on your point of view, but at least they would have the chance to make a choice.

This faux-recovery is just going to prolong the agony for most people.

Stop trying to manipulate the situation, Gordon/Alistair, and let the correction take place so we can return to 'normalilty' a bit sooner.

(whatever normality is ... :P )

Share this post


Link to post
Share on other sites
Another thread way off beam.

Here read this and weep.

http://www.newsoftheworld.co.uk/news/51147...NEW-OWNERS.html

:lol::lol:

I read it. No weeping. Just a profound sadness for the uneducated & greedy masses. (not neccessarily the same people)

They quote fantastic mortgage deals (rates quoted) with NO detail on deposit required.

Mortgage approvals have DOUBLED since a record low. What they don't say is if they doubled again, they might be close to the long term average.

Sibbers, I haven't posted for a while, just been reading bollix from people like you. It's good to have a balanced arguement, but lets be honest.....

This is the only quote on the comments section after the article

'Well done Gordon Brown for rescuing the country from the worldwide economic recession, which has hit many other countries far harder than it has us here in the UK'

By Keith Price. Posted September 20 2009 at 3:06 AM.

I want some of what Keith is taking, or should we call him Sibbers??

:angry:

Share this post


Link to post
Share on other sites
Another thread way off beam.

Here read this and weep.

http://www.newsoftheworld.co.uk/news/51147...NEW-OWNERS.html

Until now first-time buyers have been frozen out of the market because banks demanded huge deposits and charged through the roof for home loans. And millions of people were refused mortgages because of minor blips in their credit history.

But banks are finally untying the purse strings and a fierce price war is knocking down mortgage rates.

HSBC unveiled its cheapest ever mortgage earlier this month, with an interest rate of just 1.99 per cent. Last week rivals reacted by slashing rates, with Halifax launching a 2.99 per cent two-year fixed rate and Woolwich offering a 1.98 per cent tracker.

No information to support the first time buyer comment. The HSBC mortgage requires a 40% deposit. But then you knew that didn't you.

Share this post


Link to post
Share on other sites
I enjoyed this nugget:

"Bank of Scotland both have a two-year tracker exclusively for first-time buyers where you pay 4.19% above the base rate until 31 October 2011 – ie, 4.69% at present."

4.19% above base! What happens if interest rates get back to their historical mean of around 5%? Your base rate tracker shoves you up to 9.19%.

I guess there are people out there buying this sort of thing who could be in for some very nasty shocks.

I've just been doing some sums, the average interest rate since June 1997 is 4.84%. However the average interest rate since 1975 is 8.43%. If the interest rates were to go up to 8%, which may happen to avoid a collapse in the bond market then people would be in a lot of trouble.

Share this post


Link to post
Share on other sites
I've just been doing some sums, the average interest rate since June 1997 is 4.84%. However the average interest rate since 1975 is 8.43%. If the interest rates were to go up to 8%, which may happen to avoid a collapse in the bond market then people would be in a lot of trouble.

Exactly. There is a hidden danger in low interest rates if people are going to be persuaded by their mortgage broker "Look! Your monthly payments are affordable." On a base rate + 4% tracker, a rise in base rates to 2.5% takes your interest from 4.5% to 6.5%. That's a 44% increase in your interest payments.

To get your interest payments to double (a 100% increase) it will only take base rates getting back to a more normal 5%. That should be scaring people taking out tracker mortgages.

Perhaps that's why there's a bit of a swing iirc back towards fixed rates for new mortgages.

Share this post


Link to post
Share on other sites
The doors been slammed on first time buyers for years.

If the crash doesn't get going, and the government's attempts do push the house prices back up, the current FTB generation will soon have no interest in buying ever. Because they are rapidly reaching the point where they don't have enough years left to buy. It will just remain madness to even think of buying, when renting is cheaper, as is the case now.

I wonder who all the baby boomers are gonna sell to, in order to realise their "bricks and mortar" based pension fund?.

If you are right then we are witnessing the creation of a new class division; the propertied and the unpropertied. And to move from the lower to the higher class will be next to impossible.

Share this post


Link to post
Share on other sites
If you are right then we are witnessing the creation of a new class division; the propertied and the unpropertied. And to move from the lower to the higher class will be next to impossible.

works well in germany...more renters mean more voters will want and demand better tenure.

Share this post


Link to post
Share on other sites
If you are right then we are witnessing the creation of a new class division; the propertied and the unpropertied. And to move from the lower to the higher class will be next to impossible.

You had me there for a minute. I got mixed up on which out of propertied and unpropertied was higher class.

The way I see it...

Propertied class stuck in homes with negative equity paying huge sums on the mortgages sold to them in the naughties.

Unpropertied. Able to chase down the right job, move easily, paying less for their home than mortgage holders, saving by putting money aside.

It will be the propertied class who will find it hardest to move from their lower position to the higher position of us renters. Because the move will necessitate them realising their losses. A very painful thing to do.

I know that I am better off now than I was in 2005 when I was a property-owning mortgage payer.

That's what I like to call class.

Share this post


Link to post
Share on other sites
I wonder who all the baby boomers are gonna sell to, in order to realise their "bricks and mortar" based pension fund?.

i have actually mentioned this to some members of that generation. especially those in their late fifties. firstly they have no idea what i mean. and when i explain to them they are not interested and ignore the arguments.

it is hard for them ,they have only known property values to go up their entire life. the idea that the value of property will fall as we become a poorer country is beyond their comprehention.

Share this post


Link to post
Share on other sites
Another thread way off beam.

Here read this and weep.

http://www.newsoftheworld.co.uk/news/51147...NEW-OWNERS.html

I'm not familiar with the 'News Of The World' publication. I assume, as you have chosen to cite it, that it is a double-blind peer reviewed series of financial and economic articles? - Not a worthless, ill informed rag that is essentially a mouth piece for the highest paying vested interest to brainwash and confuse idiots?

Or at least a well respected journal to which well educated, informed commentators contribute balanced, well researched articles. - Not a series of thrown together, sound-bite based headlines designed to encourage / discourage those incapable of understanding somewhat complicated issues to do / not do something, based upon that weeks whim of a megalomaniac editor / owner.

Maybe I should just look it up on Wikipedia?

Edited by daniel stallion

Share this post


Link to post
Share on other sites
I enjoyed this nugget:

"Bank of Scotland both have a two-year tracker exclusively for first-time buyers where you pay 4.19% above the base rate until 31 October 2011 – ie, 4.69% at present."

4.19% above base! What happens if interest rates get back to their historical mean of around 5%? Your base rate tracker shoves you up to 9.19%.

I guess there are people out there buying this sort of thing who could be in for some very nasty shocks.

Funnily enough: had a chat with a mate last night about his mortgage / house.

He bought last March (against my advice) and he is already looking at what happens when he needs to re-mortgage next spring.

He is already in NE and is talking about having to throw another 10k or so into the pot when he re-mortgages otherwise he will be crippled by the repayments.

Recovery? Not on your nelly. A couple of small-ish interest rate increases will be enough to push many over the edge.

Share this post


Link to post
Share on other sites

No 1st time buyers = No HPI.

People are staying put, stuck and are not moving unless they have to, no benefit in moving, the costs out weigh the benefits and anyway many are not in a position where they can move.

Static markets, low turnover costs tax revenue....Why move? Why buy?

Time to take stock, repay and regenerate. ;)

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   285 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.