Jump to content
House Price Crash Forum
TheCountOfNowhere

Anyone Who Has Owned A House For Ten Years...

Recommended Posts

Simple question, anyone out there who has owned a house for ten years +, could you afford to buy it now, say with a 10% deposit and a 6% APR mortgage ?

If not, why do you think younger people starting out on life will afford it, or should stretch/bankrupt themselves to try and buy it ?

Know anyone you can ask that question to ?

Edited by TheCountOfNowhere

Share this post


Link to post
Share on other sites

Simple question, anyone out there who has owned a house for ten years +, could you afford to buy it now ?

If not, why do you think younger people starting out on life will afford it, or should stretch/bankrupt themselves to try and buy it ?

Know anyoine you can ask that question to ?

OK, I'll bite. Bought house for £115k on 2.5x salary, now supposedly worth about £450k but I know that's bubble pricing. No, I couldn't afford to buy it now. But what makes you think someone in my position thinks FTBs should endebt themselves to buy my house? Quite an assumption you've made there. I expect the value of my house to drop dramatically into line with wages. I would advise FTBs not to take on huge debts but rather wait for the crash. I was lucky to buy in the last crash and my first time buy was actually a 3 bedroom house with room to extend - skipped the flats and starter homes because prices had fallen so much. I don't give a monkey's about my house falling in price, it's my family's home. HTH.

Edited by mikthe20

Share this post


Link to post
Share on other sites

OK, I'll bite. Bought house for £115k on 2.5x salary, now supposedly worth about £450k but I know that's bubble pricing. No, I couldn't afford to buy it now.

### That's a good measure of where teh housing market is in my opinion.

But what makes you think someone in my position thinks FTBs should endebt themselves to buy my house?

### I dont, it's just a general question to give people a measure of the ludicrous position the housing market is in.

Quite an assumption you've made there. I expect the value of my house to drop dramatically into line with wages. I would advise FTBs not to take on huge debts but rather wait for the crash.

### Very sensible...why aren't they though ?

I was lucky to buy in the last crash and my first time buy was actually a 3 bedroom house with room to extend - skipped the flats and starter homes because prices had fallen so much. I don't give a monkey's about my house falling in price, it's my family's home. HTH. 

### I only wish everyone else thought that way. If i hear...houses...investment....in the same sentence again I might crack. :lol::lol::lol::lol:

Share this post


Link to post
Share on other sites

Simple question, anyone out there who has owned a house for ten years +, could you afford to buy it now, say with a 10% deposit and a 6% APR mortgage ?

If not, why do you think younger people starting out on life will afford it, or should stretch/bankrupt themselves to try and buy it ?

Know anyone you can ask that question to ?

Why would you think anyone would care about that? You seem to want other people to feel guilty for something that is not their actual fault.

I dont know own a house, and am saving like mad towards one. But I dont see how this is anyones problem but mine.

Try taking responsibility for your own life, actions and consequences. You'll feel a lot happier about the future.

Share this post


Link to post
Share on other sites

Yes. Bought in 1994 (pits of the last crash) for £X, which was 5x then salary. Had a good deposit, so mortgage was closer to 3.5x. House is now (apparently) worth £6X. This would still be 5x salary, and assuming the same percentage deposit, my mortgage would still be about 3.5x salary. Two points:

- I'm under no illusion that I've been effing lucky in terms of career.

- I paid off the original mortgage in 3 years, did the whole "zero expenditure" thing until it was paid.

Is it overvalued now? Probably, but whenever a house in the street comes up, they sell in a flash, for asking price, so there are still people out there willing to buy.

Share this post


Link to post
Share on other sites

If i hear...houses...investment....in the same sentence again I might crack. :lol::lol::lol::lol:

I almost laughed aloud this week. I actually heard a guy at work saying about his house (the one he intends to buy), 'It's my pension, innit?'. He thinks he's got it 'sussed' and has let out his flat and bought a house to live in instead of living in the flat. Now he plans to sell the flat at a big profit, get the tenant to rent his house, while he uses the profit to buy another house for himself to live in. I can see two possible problems with that. It's kinda like BTL sideways.

Share this post


Link to post
Share on other sites

An interesting question?   I guess you mean allowing for say 10% deposit, with says 3.5 times joint salary, rather than actual savings.

I paid £750k for my house, though it was at the bottom of the 2009 market, and all other valuations point to £900k ish, which is what it had been sold for in 2008 (note it was part-exchanged by a developer so they could sell a new build, hence why I got it cheap).

Now my current basic salary is £85k, and  I also get commission and shares of  about £45k which I'll count at 1x for mortgage purposes.

My wife earns £78k, but  she gets no bonuses.

So   3.5 x  (£85k +£78k) + £45k  = £615k

So, I guess if I had a 10% deposit of £75k    that would mean I could buy a house of £690k, so yes, I'd be short by about £60k on the £750k valuation if I only met the basic criteria for a 90% mortgage. Obviously the £900k valuation would be £210k out of reach.

Quite a revealing exercise! So no I couldn't afford my current house.

In terms of closing the gap, that occurred because of my previous 2 property purchases, the first in 2000 and sold in 2002 left me with about £55k of equity and the second bought in 2002 produced a priced increase of £130k, plus I'd paid down the mortgage and had additional savings, so I left that house with £300k of equity in 2007.

Currently paying what is a fairly big mortgage  (£450k remaining) down as quickly as possible.  We should get a bit of a boost soon as we are due to come into about £100k in 12 months.

 

Share this post


Link to post
Share on other sites

There is no way we could afford our current house, bought in 2000 moved in 2006 for family reasons. There is no way we could have afforded the 2006 house as FTB. Totally out of our price range.

House prices had gone out of control.

Share this post


Link to post
Share on other sites

If I went back to working full time my house would still cost about 4.5 times my salary. Too much to borrow in my view. Best I could do in my town for 3.5 times salary and a 10% deposit would be a two up two down terrace. My full time salary is double the average wage in this area. Only a moron or a Labour chancellor of the exchequer could think this a healthy situation.

Share this post


Link to post
Share on other sites

Yes. Bought in 1994 (pits of the last crash) for £X, which was 5x then salary. Had a good deposit, so mortgage was closer to 3.5x. House is now (apparently) worth £6X. This would still be 5x salary, and assuming the same percentage deposit, my mortgage would still be about 3.5x salary. Two points:

- I'm under no illusion that I've been effing lucky in terms of career.

- I paid off the original mortgage in 3 years, did the whole "zero expenditure" thing until it was paid.

Is it overvalued now? Probably, but whenever a house in the street comes up, they sell in a flash, for asking price, so there are still people out there willing to buy.

But that's the point. You say you could still afford it now, but that's based on you salary today. after 16 years of salary rises, and/or increases in you work experience, work skills etc.

Your increased "employability" if you will.

The real question should be:

Could you afford your house today based on the salary you could realistically earn in a job based on your skill, experience and qualifications back in 1994?

Is your industry even taking on young people (like you in 1994) at the moment? is another question to ask.

Edited by worst time buyer

Share this post


Link to post
Share on other sites

If I went back to working full time my house would still cost about 4.5 times my salary. Too much to borrow in my view. Best I could do in my town for 3.5 times salary and a 10% deposit would be a two up two down terrace. My full time salary is double the average wage in this area. Only a moron or a Labour chancellor of the exchequer could think this a healthy situation.

I think you've repeated yourself there :lol:

Share this post


Link to post
Share on other sites

To validate the question we would also have to ask people who bought houses 20 years ago if they would have been able to buy them 10 years later (prices and mortgage rates taken into account)

Share this post


Link to post
Share on other sites

There is no way we could afford our current house, bought in 2000 moved in 2006 for family reasons. There is no way we could have afforded the 2006 house as FTB. Totally out of our price range.

House prices had gone out of control.

Am I reading that right? For such a committed HPCer, I'm surprised you own your own place IRRO!

Share this post


Link to post
Share on other sites

To validate the question we would also have to ask people who bought houses 20 years ago if they would have been able to buy them 10 years later (prices and mortgage rates taken into account)

what?

Share this post


Link to post
Share on other sites

Simple question, anyone out there who has owned a house for ten years +, could you afford to buy it now, say with a 10% deposit and a 6% APR mortgage ?

If not, why do you think younger people starting out on life will afford it, or should stretch/bankrupt themselves to try and buy it ?

Know anyone you can ask that question to ?

Bought in 1999 for 148k ,unmodernised terrace. Modernised ones were going for `170k, Probably would get 420K for it now. Could I buy it for that? Definitely not.

My long established neighbours do pretty ordinary jobs teachers, clerks etc. Btw not one house sold in last 2 years.

Share this post


Link to post
Share on other sites
But that's the point. You say you could still afford it now, but that's based on you salary today. after 16 years of salary rises, and/or increases in you work experience, work skills etc.

Your increased "employability" if you will.

Well, I massively overbought, for a variety of reasons. That house was actually the sort of house I would buy today. As a single bloke I was rattling around in it, as a family of 4, it is perfect. Could I have bought it at today's price on my 1995 salary? No.

Is your industry even taking on young people (like you in 1994) at the moment? is another question to ask.

Literally can't get them through the door fast enough at the moment.

Share this post


Link to post
Share on other sites

bought in 1991 for £37k

sold in 2001 for £51k

so around a 35% increase in a decade(1)

valuation now a decade later is around £130k

thats around 150% in a decade (2)

I know I was limited to 3x income and stretched to the max to buy then

well it was my wifes wage as a newly qualified nurse that it was secured on

today it would take her 5.2 x income to purchase again

and thats after rising a few grades and 20 yrs service

back then it was all about how much we could borrow

just to get a home of our own

now its about how much debt we would saddle ourselves with

and if interest rates rise could we cope

If we ever buy again it will probably be for cash only

Share this post


Link to post
Share on other sites

I bought in 1995 and sold in 2005 to rent and wait for the crash before buying again. Yes I could afford to buy it again today.

But I bought my first house in about 1981 or 1982 when I was a couple of years out of university, it was a three bedroomed end terrace for £10,750, a bit less than 2x my £5,500 income. If I was just starting out in the same career today there's no way I could afford that same property. It's now about £200k and I think the job I was in then now pays about £30k for a recent graduate.

Share this post


Link to post
Share on other sites

I can see where the OP is going with this. I did not buy a house 10+ years ago, and I often hear people talk about their houses with the tag line 'I couldn't afford it now'. I viewed a house and asked about the neighbours (one was a single hairdresser), no doubt there are some hairdressers that earn a lot of money, but both my wife and I earn good money (not as much as some on this thread with their 1/2 million 'valued' homes) and we just think these houses are not worth the money. We need as an economy to return to some semblance of reality, a meritocracy, where house prices are based on earnings and value added.

Accomodation should be about needs and worth, not based on when you were born. Loosen planning restrictions and let people build the houses they need. I fear my generation will have completely missed out on buying family houses as the only way they will become affordable is by prices (real not nominal) being gradually erroded by inflation, this will take another 5-10 years, giving a priced out period of a complete mortgage term.

The only way to guarantee a nominal house price crash is if I were to buy a house.

Share this post


Link to post
Share on other sites

An interesting question? I guess you mean allowing for say 10% deposit, with says 3.5 times joint salary, rather than actual savings.

I paid £750k for my house, though it was at the bottom of the 2009 market, and all other valuations point to £900k ish, which is what it had been sold for in 2008 (note it was part-exchanged by a developer so they could sell a new build, hence why I got it cheap).

Now my current basic salary is £85k, and I also get commission and shares of about £45k which I'll count at 1x for mortgage purposes.

My wife earns £78k, but she gets no bonuses.

So 3.5 x (£85k +£78k) + £45k = £615k

So, I guess if I had a 10% deposit of £75k that would mean I could buy a house of £690k, so yes, I'd be short by about £60k on the £750k valuation if I only met the basic criteria for a 90% mortgage. Obviously the £900k valuation would be £210k out of reach.

Quite a revealing exercise! So no I couldn't afford my current house.

In terms of closing the gap, that occurred because of my previous 2 property purchases, the first in 2000 and sold in 2002 left me with about £55k of equity and the second bought in 2002 produced a priced increase of £130k, plus I'd paid down the mortgage and had additional savings, so I left that house with £300k of equity in 2007.

Currently paying what is a fairly big mortgage (£450k remaining) down as quickly as possible. We should get a bit of a boost soon as we are due to come into about £100k in 12 months.]

As 90% earn less than £50K, you are a fairly unusual case, especially with a wife on such a good salary too.

The question on this page is a good one. Almost invariably, if you put people back to their 10% deposit from houses bought 10-15 years ago and ASKED IF THEY COULD BUY IT NOW ON THAT BASIS, about 80% of folk will say NO, it's too much on my income!

Edited by plummet expert

Share this post


Link to post
Share on other sites

Simple question, anyone out there who has owned a house for ten years +, could you afford to buy it now, say with a 10% deposit and a 6% APR mortgage ?

If not, why do you think younger people starting out on life will afford it, or should stretch/bankrupt themselves to try and buy it ?

Know anyone you can ask that question to ?

I put down 20% when I bought my first house. Why do you think it's impossible to save, you just have to make sacrafices.

Some parts of the country housing is still affordable you can buy a semi in the midlands for less than 140,000 for example.

The biggest problem now is falling income and job security. You need a stable job and in this climate that's not likely.

Share this post


Link to post
Share on other sites

An interesting question? I guess you mean allowing for say 10% deposit, with says 3.5 times joint salary, rather than actual savings.

I paid £750k for my house, though it was at the bottom of the 2009 market, and all other valuations point to £900k ish, which is what it had been sold for in 2008 (note it was part-exchanged by a developer so they could sell a new build, hence why I got it cheap).

Now my current basic salary is £85k, and I also get commission and shares of about £45k which I'll count at 1x for mortgage purposes.

My wife earns £78k, but she gets no bonuses.

So 3.5 x (£85k +£78k) + £45k = £615k

So, I guess if I had a 10% deposit of £75k that would mean I could buy a house of £690k, so yes, I'd be short by about £60k on the £750k valuation if I only met the basic criteria for a 90% mortgage. Obviously the £900k valuation would be £210k out of reach.

Quite a revealing exercise! So no I couldn't afford my current house.

In terms of closing the gap, that occurred because of my previous 2 property purchases, the first in 2000 and sold in 2002 left me with about £55k of equity and the second bought in 2002 produced a priced increase of £130k, plus I'd paid down the mortgage and had additional savings, so I left that house with £300k of equity in 2007.

Currently paying what is a fairly big mortgage (£450k remaining) down as quickly as possible. We should get a bit of a boost soon as we are due to come into about £100k in 12 months.

And you have the nerve to blame boomers for pushing up house prices.

Edited by campervanman

Share this post


Link to post
Share on other sites

Bought my first house in 1998 for 74k and I guess it would sell for around 250k now. When I bought it I took out a mortgage for 80% which was roughly 4 times my salary back then. If I now took out an 80% mortgage on its current market value then it would also be about 4 times my current salary. The difference of course is that I am now older than the average FTB so my current salary is not representative of a FTB any more. On the other hand my monthly interest payments on the 200k mortgage I currently have happen to be about the same as those on my 60k mortgage back in 1998.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

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.