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Thunderbird 900

Young Buyers Trapped In New Homes

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Well we could argue about how much 2 people on 25K can save..........only to find their house has lost another 15K.

I did say 'average' salaries. Two people on average salaries each will earn more than 25K combined.

Yes they may well find that by the time they have saved the 10k that they have lost another 15K of equity, etc. Thats why I said these people need to sell NOW.

The combined expectational attitudes of 'property only ever goes up' and unwillingness to accept personal errors and face up to losses is going to be a socially lethal mix for many.

Edited by anonguest

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I did say 'average' salaries. Two people on average salaries each will earn more than 25K combined.

Yes they may well find that by the time they have saved the 10k that they have lost another 15K of equity, etc. Thats why I said these people need to sell NOW.

The combined expectational attitudes of 'property only ever goes up' and unwillingness to accept personal errors and face up to losses is going to be a socially lethal mix for many.

Aye. Dinner parties ruined countrywide.

That is, if anyone can still afford to entertain.

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"Report warns getting on second rung of ladder will be an 'impossible task'"

Except for those who bothered to educate themselves about the largest financial decision they will ever take, such as the people keeping their powder dry and who read this site. These people will skip the first rung, and quite possibly the second, jumping straight into family homes in many cases. And all because they took the time out, they stopped and asked 'does this make sense' and they waited.

The government and the BoE will move heaven and earth to thwart their first home purchase, but they have economic gravity on their side, and one day that will win.

Either way a ridiculous proportion of children born in the 2003-201x period will be born to unsuitable mothers on welfare in free housing, but thats down to the governments we all keep voting in. When these kids grow up (physically) the British decline will be complete.

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They'll have to make 'sacrifices' - I repeat the word SACRIFICE.

So they'll have to move somewhere cheaper? Put up with longer commuting times? Get a job elsewhere?

They made a bad mistake and paid too much for their home pure and simple. The sooner they come to terms with it the better for all. I didnt say crytallising their losses wouldnt be painful - but in the very long term they will be better off for it. How doe sthe old adage go? "No gain without pain"?

£10,000 for two average income earners is NOT a huge amount. So no takeaways for a year, a very very cheap holiday, quit the booze, fags, no new clothes for a year, pick a cheaper mobile phone contract, etc etc etc.

They don't HAVE TO do anything, so they are a smaller house than they'd like big deal, people who buy next, their younger brothers and sisters "might" end up in a bigger house than them for now, but really so what ???

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This all sounds frightful. How do the poor dears cope?

TRAPPED!

I guess they've been reduced to calling out for pizzas and takeaways. Thank goodness for modern telecommunications! Surely they must know a locksmith who could help, or can't they just google one? S'pose not! Let this be a lesson to all first time buyers : before you buy, do the sensible thing and invest in a jemmy!

Let's hope all you FTBs detained in monetary confinement find your way out soon. In the meantime a little music. Now sing along : "I'm trapped, like a fool I'm in a cage I can't get out.."

Edited by Sledgehead

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on a 25 year mortgauge @ 5% (probably fairly typical for a ftb) you'd pay off a smidge under 10% over the first 4 years. So if they bought with a 90% mortgauge then they can probably walk away, but if they bought with a 100% mortgauge then they're probably stuck for now..

Regarding paying it off - depends on the cirumstances. Lets say our couple got a 4x joint mortgauge of 100k. That means their individual income is just £12,500 a year, or around £900/month. Saving 10k on that kinda salery would take a *long* time, so in effect they would be trapped.

I was a ftb 4 years ago, with a multiplier somewhere around 4.5x and 90% ltv, but used low interest rates, pay rises, work done to the house, and luck (Brighton is within 5% of it's peak) to mean I'm now comfortably on a 70%ltv and 2.5x multiplier, with significant equity in the house. I don't plan on selling any time soon, but its easy to see how someome could make that decision in 2008 (to buy). I came on here for a look around and everyone had been saying prices were due to crash for the previous 5 years. Granted in 2008 things did turn south, but the site sounded like a stuck record (as it does today, to some extent)..

Edited by 5lab

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Trapped?

So the door is locked and they can't get out?

If they were sensible when they bought

- bought within their means

- bought a sensible size place not a 1 bedroom goblin cave

- realised exactly what it was they were taking on...

then they should be fine.

You mean people aren't responsible for their own decisions?

(Someone somewhere has a sig that says something like: buying a house is much bigger than buying an ipod...)

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