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Digging For The Small Details In The Odpm Report

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Jeez that is what 8 times average salary? What is still alarming is that the average price paid for a home in England is £195,093. Another interesting point is the difference FTBs and owner occupiers pay is only 47K, hardly worth the effort to move up the proverbial ladder. For most to get something bigger and better in the same area they`d need to spend another 100-150K minimum. Strange times :unsure:

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Have you also noticed that since 2003 the average first time buyer price has gone up by 41k. If the relationship was linear, you'd expect the format owner occupier average price to have gone up by 64k (it started higher by 56%). However it's up by only 25k !

All of which points to what I suspected, the 'first time buyer' actually looks much more like an owner occupier, or otherwise put, there *are* no first time buyers without deposits or using money that came from the market itself (parents... MEW or otherwise)

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Have you also noticed that since 2003 the average first time buyer price has gone up by 41k. If the relationship was linear, you'd expect the format owner occupier average price to have gone up by 64k (it started higher by 56%). However it's up by only 25k !

All of which points to what I suspected, the 'first time buyer' actually looks much more like an owner occupier, or otherwise put, there *are* no first time buyers without deposits or using money that came from the market itself (parents... MEW or otherwise)

Good point/s.

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Very good points indeed. I may have another angle to these figures - cue anecdote:

A chum sold to rent with myself and another friend for a year (around April/May 04) and then decided to buy again just under a year later. He made a tidy £50K from the house sale, which - less one Audi - made for quite a nice deposit.

Anyway, when it came to arranging his mortgage he was classed as a first time buyer again. Being a little ignorant of the whole house buying/selling malarkey I asked whether this was unusual, given that he previously owned a home. Apparently such labelling was quite common (said chum works for a big mortgage provider, so I have to take his word for it).

At the time I didn’t really think much of it – he was buying a house with no property of his own to sell and wasn’t an investor. Why would the lender care if he owned a house before?

Now, however, with reports such as the OPDM stating typical prices for FTB properties are £150K+ I’m left wondering if these figures are being skewed (perhaps not deliberately) by STRs re-entering the market and being classed as FTBs in the process.

Can anyone shed any light on this or have I got completely the wrong end of the stick?

Kind regards,

Cheston

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I think this scenario is quite common - there are often more attractive mortgage deals, such as discounted rates, available only to ' first time buyers ' so as long as there is no related property sale there's not much to stop a purchaser declaring himself to be a FTB and getting a better deal.

This is worth considering when looking at data for numbers of FTB morgages approved ;)

Edited by martinipaul

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I think this scenario is quite common - there are often more attractive mortgage deals, such as discounted rates, available only to ' first time buyers ' so as long as there is no related property sale there's not much to stop a purchaser declaring himself to be a FTB and getting a better deal.

This is worth considering when looking at data for numbers of FTB morgages approved ;)

Quite agree. In this case he didn't want a FTB mortgage (when comparing the overall APRs I can see why - FTB mortgages don't seem quite as attractive once the "honeymoon" period is over <_< ).

But what I was wondering was whether the cash raised by STR, being largely more substantial than a FTBs deposit, is enabling larger properties to be bought under the all-important FTB umbrella which in turn skews the figures. I don't think every STR has sold to await a house price crash - I would argue a considerable number of STRs have sold to crystallise gains (and make it easier to buy their next place) or to check out an area before committing to a house purchase. When they re-enter the market and are being treated as a FTB again, surely this bumps up the average price paid by a FTB?

Just a thought. It would be interesting to read some other views on this, though.

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Quite agree. In this case he didn't want a FTB mortgage (when comparing the overall APRs I can see why - FTB mortgages don't seem quite as attractive once the "honeymoon" period is over <_< ).

But what I was wondering was whether the cash raised by STR, being largely more substantial than a FTBs deposit, is enabling larger properties to be bought under the all-important FTB umbrella which in turn skews the figures. I don't think every STR has sold to await a house price crash - I would argue a considerable number of STRs have sold to crystallise gains (and make it easier to buy their next place) or to check out an area before committing to a house purchase. When they re-enter the market and are being treated as a FTB again, surely this bumps up the average price paid by a FTB?

Just a thought. It would be interesting to read some other views on this, though.

Yes, again very good point, not only would the skewed FTB be able to purchase a much more expensive property due to having a substantial deposit, they would also get a far more favourable rate.

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Yes, again very good point, not only would the skewed FTB be able to purchase a much more expensive property due to having a substantial deposit, they would also get a far more favourable rate.

The CML have raised this point before, if you're not in a chain and aren't transfering a mortgage then what do they care if they cash came from industrious enterprise or from the sale of a previous property?

No doubt they don't rush to correct these figures either, it can overstate the figures by double in some cases.

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The CML have raised this point before, if you're not in a chain and aren't transfering a mortgage then what do they care if they cash came from industrious enterprise or from the sale of a previous property?

No doubt they don't rush to correct these figures either, it can overstate the figures by double in some cases.

Thanks for the link, BuyingBear. It makes for an interesting read. :)

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we have also been told that the average mortgage being taken out is for £130,000

Interest alone against that is £530 a month at normal mortgage costs.

and that contains no capital repayments..

so £700 a month..

or 50% of average take home..

and we all know haow far the average salaries are skewed..

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  • 301 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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