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Bubble Lending Is Back

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Q1. My girlfriend and I are looking to buy our first house. We are both 30 and have saved £170,000 for a deposit and have another £30,000 to cover stamp duty and other buying costs. Our combined salary is £120,000, which is just above the average for London. We both have clean credit histories. We are interested in buying a detached property out of London around the £650,000 mark. Do you think a bank would lend us the near £500,000 we would need? James, London

Good to start with a typical FTBer :rolleyes: I think the average they claim for London is a bit high to say the least.

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Obviously, look carefully at the monthly payments to check you are comfortable with them and, if looking at a tracker product, what would happen if rates were to increase by 2% in the next two years.

:lol:

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"In general, lenders will lend about four times joint income, so a loan of around £480,000 looks realistic and some lenders, dependent on credit score, will be able to lend slightly more."

4 times joint....could be 8 times the single income when wifey has a sprog..

nice to see good, safe,sensible lending is back.

Course, the broker says they are only looking at LTV....this says to me they dont give a frack about repayment...just recovery.

EDIT

"there is a duty of care to inform them if you know there will be a considerable change in the very near future."

so a LIE, or FRAUD, or Non disclosure of a fact is now a duty of care.

This article seems to be a press release for the broker.

Edited by Bloo Loo

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Good to start with a typical FTBer :rolleyes: I think the average they claim for London is a bit high to say the least.

LOL

FFS £200k saved and they are 30 while both earning £60k a year . Yes typical FTB's NOT.

Why not advise them to buy a small place for the 200k and live the life of riley on their earnings. Actually if they moved out in to Essex a bit they could buy quite a good sized place for that kind of money.

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Very typical London 30 year olds with £170,000 in savings. You bump into ten a minute down the market.

Yes they must be the ones who come up and ask for a spare fag if you walk along smoking ( something that i notice is happening more and more often nowadays )

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LOL

FFS £200k saved and they are 30 while both earning £60k a year . Yes typical FTB's NOT.

Why not advise them to buy a small place for the 200k and live the life of riley on their earnings. Actually if they moved out in to Essex a bit they could buy quite a good sized place for that kind of money.

you mean, Sarfend?...or they could stay in East london...in...I.

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you mean, Sarfend?...or they could stay in East london...in...I.

Anywhere Essex ,

Furrock, Baslingdon, Rommford, Dagneingham, Wickfiid , they can take their pick for a touch more they could go to

Chelmessford, Brainntreee or Bretwoood.

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Anywhere Essex ,

Furrock, Baslingdon, Rommford, Dagneingham, Wickfiid , they can take their pick for a touch more they could go to

Chelmessford, Brainntreee or Bretwoood.

The first list of places you mention are ghettos. You wouldn't want to live there even you were mortgage free and the few desirable parts of those towns you won't get F all for £170k. Braintree is cheaper and has some nicer parts but much more of commute. £170k won't get much more than a 2 bed terrace in non ghetto parts of Brentwood or Chelmsford.

But if I was them yes I definitley move to Essex get a tiny mortgage and buy in one of the villages. Your disposable income would be immense at the expense of a bit of a commute.

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you mean, Sarfend?...or they could stay in East london...in...I.

Sarfend ain't cheap and you also have to be impartial to drunken pouts rampaging 9pm - 6am if your within walking distance of the high street.

Long commute too.

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The first list of places you mention are ghettos. You wouldn't want to live there even you were mortgage free and the few desirable parts of those towns you won't get F all for £170k. Braintree is cheaper and has some nicer parts but much more of commute. £170k won't get much more than a 2 bed terrace in non ghetto parts of Brentwood or Chelmsford.

But if I was them yes I definitley move to Essex get a tiny mortgage and buy in one of the villages. Your disposable income would be immense at the expense of a bit of a commute.

Lol

Well i live in Forrock , im mortgage free and that is why i moved here to enable me to be mortgage free. Have spoken to a few neighbours who did the same .

Yes the place would not be the first choice on our list if finance were no issue but non mortgage living won out over living in a better area with a mortgage. Not all of Forrock is a ghetto if you take your time and have a good look around North Grays for instance or Orsett are very nice . But people need to leave their prejudices behind and keep an open mind before they write off an area , then if they look about them they might find something of interest at an affordable cost.

Furrock is right on top of the M25 and the A13 which is now almost a motorway right up to town. The travelling is simple and cheap yet I have spoken to people priced out of East London who dissmiss the area without even looking . Don't get me wrong when I moved to here from a nice house in E16 I felt almost sick and could not even raise a smile when the estate agent handed me the keys . But no one gets everything.

They have also got £200k to spend not £170k if they buy for £200k they don't need £30k fees more like £2k fees.

Edited by miko

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Lol

Well i live in Forrock , im mortgage free and that is why i moved here to enable me to be mortgage free. Have spoken to a few neighbours who did the same .

Yes the place would not be the first choice on our list if finance were no issue but non mortgage living won out over living in a better area with a mortgage. Not all of Forrock is a ghetto if you take your time and have a good look around North Grays for instance or Orsett are very nice . But people need to leave their prejudices behind and keep an open mind before they write off an area , then if they look about them they might find something of interest at an affordable cost.

Furrock is right on top of the M25 and the A13 which is now almost a motorway right up to town. The travelling is simple and cheap yet I have spoken to people priced out of East London who dissmiss the area without even looking . Don't get me wrong when I moved to here from a nice house in E16 I felt almost sick and could not even raise a smile when the estate agent handed me the keys . But no one gets everything.

Yes some parts of Orsett are ok I have a friend from Chafford Hundred which it's awful! Personally I prefer North Essex nicer and cheaper IMO. I live in Wickford currently which has ok areas and terrible areas its not too bad as long as you stay out of the high street at night and keep away from the pikeys but I wouldn't want to live here long term. If I had the money to be mortgage free say £160k I'd take a small mortgage and buy in one of Essex's villages. Essex has some Beautiful country villages and £250k would get a modest house in one. But my budget doesn't stretch that far yet unfortunatly. At least not without a mortgage that I would consider too risky. (although the banks wouldnt!)

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Anywhere Essex ,

Furrock, Baslingdon, Rommford, Dagneingham, Wickfiid , they can take their pick for a touch more they could go to

Chelmessford, Brainntreee or Bretwoood.

Depends where in town they work, but frankly even at 200k they're not going to get anything near enough to a station to make it worth while and even then they're looking a serious commute that'll cost a few k each a year anyway.

I have friends in Chelmsford who are moving back into town (Bow) because the price differentials aren't worth the commute anymore.

As for Brentwood, it's almost as bad a Romford now with the good old random acts of violence, so unless you're talking real money, no chance.

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Until the 4 and 5 x lending stops at least part of this train of a house market will continue. The fact is, mortgage multiples like this are responsible for the prices we have seen. If they were not allowed, then prices would be lower. Frankly that is a simple fact which is being ignored in government at their peril.

The lenders of 4 and 5 x income are not allowing for the fact that, you will only need to return to 9-10% mortgages (common place in the 80's and early 90's) and absolutely none of these people could sustain their mortgage payments. With capital repayments on top it is impossible.

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Depends where in town they work, but frankly even at 200k they're not going to get anything near enough to a station to make it worth while and even then they're looking a serious commute that'll cost a few k each a year anyway.

I have friends in Chelmsford who are moving back into town (Bow) because the price differentials aren't worth the commute anymore.

As for Brentwood, it's almost as bad a Romford now with the good old random acts of violence, so unless you're talking real money, no chance.

Plus Brentwood thinks it's a London suburb so prices are

some of the most expensive on Essex after only Epping/ongar area probably.

Edited by Pent Up

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Plus Brentwood thinks it's a London suburb so prices are

some of the most expensive on Essex after only Epping/ongar area probably.

Brentwood is just nuts.

The cost makes no sense at all, I lived just off the highstreet about 8 – 9 years ago, and it was a bit rough then, but it's shocking now.

Mate took a beating a few months ago, for no real other than wrong place wrong time.

And a 2 bed mid terrace 250k.

Wonderful.

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Haven't read the article but is there any warning to them to think about how much mortgage is serviceable if one stops work/goes part-time to have kids? Or if they both continue full time, to factor in childcare costs , which seem to run into hundreds a week for good full day nurseries.

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Unbelievable.

His advice to the 25 year old with £6k savings and an £18k salary was to ask the 'bank of mum and dad' for money and review the situation in a year when the market may have 'improved'. And no words of warning whatsoever for the person who wants to withdraw equity from their own home to get into buy-to-let...

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This does depend on an afford ability calculation as well, which takes into account your monthly earnings and outgoings

A mortgage broker with the grammatical skills of a child. Run to the hills. If he/she can't even string a correct sentence together when being 'free-advertised' in a national medium then when can they? How do these people keep their [non-]jobs? Makes my blood boil.

Aidanapword

edit: for highlight

Edited by Aidan Ap Word

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A mortgage broker with the grammatical skills of a child. Run to the hills. If he/she can't even string a correct sentence together when being 'free-advertised' in a national medium then when can they? How do these people keep their [non-]jobs? Makes my blood boil.

Aidanapword

edit: for highlight

...could be the BBC editors ...the trendy lefties with BTLs ....

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Lol

Well i live in Forrock , im mortgage free and that is why i moved here to enable me to be mortgage free. Have spoken to a few neighbours who did the same .

Yes the place would not be the first choice on our list if finance were no issue but non mortgage living won out over living in a better area with a mortgage. Not all of Forrock is a ghetto if you take your time and have a good look around North Grays for instance or Orsett are very nice . But people need to leave their prejudices behind and keep an open mind before they write off an area , then if they look about them they might find something of interest at an affordable cost.

Furrock is right on top of the M25 and the A13 which is now almost a motorway right up to town. The travelling is simple and cheap yet I have spoken to people priced out of East London who dissmiss the area without even looking . Don't get me wrong when I moved to here from a nice house in E16 I felt almost sick and could not even raise a smile when the estate agent handed me the keys . But no one gets everything.

They have also got £200k to spend not £170k if they buy for £200k they don't need £30k fees more like £2k fees.

I nearly bought in a place called South Ockendon which is not far from there.

£120k for a nice 2 bedroom flat in a green area, 5 minutes away from the train station.

30 minute commute into London Fenchurch street right in the city. Reasonably priced train fare too.

As you say, not the best place in the world but the opportunity to live their mortgage free rather than paying > £1000 a month to rent some hell hole in London is very appealing.

I also looked at flats in the £80k range in Ockendon. At that level, the area was descending into ghetto, but the flats were very large and well built. All things told, I'd still rather live in that area than pay what some people pay to rent in a better or more central area.

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The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent, professional advice for your own particular situation.

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"In general, lenders will lend about four times joint income, so a loan of around £480,000 looks realistic and some lenders, dependent on credit score, will be able to lend slightly more."

4 times joint....could be 8 times the single income when wifey has a sprog..

Maybe we'll start to see "child free mortgages" where the couple have to prove they have been sterilised to qualify for joint salaries multiples. It'll be worth it to avoid the deprivation of renting a home.

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  • 309 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%



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