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Bbc And First Time Buyers

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There is a big effort on behalf of all the VIs to scare the crap out of FTBs. This morning Declan was going on about how hard it was for graduates to get on the housing ladder. There was a guy from Scottish Widows saying that banks were designing new products to accomodate these struggling FTBs, i.e. lending multiples, interest only, 50 year mortgages, negative amoritisation i.e. becoming slaves to them for the rest of your life.

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There was a guy from Scottish Widows saying that banks were designing new products to accomodate these struggling FTBs, i.e. lending multiples, interest only, 50 year mortgages, negative amoritisation i.e. becoming slaves to them for the rest of your life.

The ONLY thing that will genuinely help is a house price crash. Funny that isn't mentioned as an option, eh?

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The comments from viewers did say prices needed to come down. One guy wrote in saying he was on k32 in London and there was no way he could afford a property. Declan said this salary was huge to most people, I found that a bit odd as tube drivers are on k35. All the same the fact that most graduates have so much debt that the diea of saving for a deposit is ludicrous will eventually have an effect, that and the fact that more people are going to university, and the demographics are showing a drop off in the 20-30s as the last of the baby boomers and their kids start moving into their forties. These will all impact on the long term viability of the price to earnings ratio staying as high as it is.

The VIs have seen the FTB species almost go extinct in the last year, and they are doing everything they can to get them back into the market. Obviously the 'autumn bounce' hasn't seen a flood of FTBers come back and they are desperate to see a late surge before the winter slow down, because if they don't prices will have to drop.

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The VIs have seen the FTB species almost go extinct in the last year, and they are doing everything they can to get them back into the market.

It is now time for all remaining FTBs who are reading this to simply say NO and let the housing market pyramid scheme collapse under it's own weight.

The housing market today is like an obese, drunken and staggering ex-gentleman, dribbling and falling over, soiling himself en route to the piss-sodden floor.

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the Press seem to be made up of money drunk property owners horrified that the good times may be coming to an end.

I looked at the costs of a £180,000 interest only mortgage.. mapped it against increasing interest rates and saw the cost spiral.

I then took my monthly take home, multiplied it my twelve and divided £180,000 by it.

It would equat to every penny I have coming in.. every penny... For a decade..

So before I consider paying the interest over the length of the loan..

The capital would only leave me with 15 years of money over the next 25.

and I am on a good respectable wage for the area.. (would like more)

People are doing this.

but there is no way on earth that it should be considered even remotly affordable.

there is low inflation and actually negative wage inflation.

Whatever happens now you must not consider any prices that we see as even slightly affordable.

almost five months of every year every penny I own would be required just to reapy capital.

and Interest would be £735 a month at 4.9%

so that is more then I earn

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the Press seem to be made up of money drunk property owners horrified that the good times may be coming to an end.

I looked at the costs of a £180,000 interest only mortgage.. mapped it against increasing interest rates and saw the cost spiral.

I then took my monthly take home, multiplied it my twelve and divided £180,000 by it.

It would equat to every penny I have coming in.. every penny... For a decade..

So before I consider paying the interest over the length of the loan..

The capital would only leave me with 15 years of money over the next 25.

and I am on a good respectable wage for the area.. (would like more)

People are doing this.

but there is no way on earth that it should be considered even remotly affordable.

there is low inflation and actually negative wage inflation.

Whatever happens now you must not consider any prices that we see as even slightly affordable.

almost five months of every year every penny I own would be required just to reapy capital.

and Interest would be £735 a month at 4.9%

so that is more then I earn

180,000 over 25 years is a capital payment of £600 a month add to it £735

£1335 a month.

I earn £1490 take home.

So interest only the way forward???

in a no to low inflation based economy..

You should go to prison for suggesting it.

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Declan said on his 7:25am slot that you could send your comments, I can't seem to find the link though, does anyone have this?

I couldn't find it either. I sent them an email calling for a FTBers strike (something I mention in another thread). Of course it will be read out on News 24 every 30 minutes for the rest of the day! Unless your comments meet the PC or VI police requirements they never get posted. You have to be a Muslim-hugging, gay-loving one-legged transexual asylum seeker to have an opinion that counts at the BBC. If you are white male and middle class you are scum of the earth.

Anyway, like I said, the only way to make this crash happen is to get it into the minds of FTBers that they can manipulate the market if they stand together. We don't need the press, we have email...how many contacts do you have? Just email everyone explaining that the market won't go up much, so what have they got to lose by not going near an estate agent for a year but if everyone does it we all gain.

Then tell them to email all their contacts. If just one in twenty forwarded, everyone would have received the email by the end of the month.

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There is a big effort on behalf of all the VIs to scare the crap out of FTBs. This morning Declan was going on about how hard it was for graduates to get on the housing ladder. There was a guy from Scottish Widows saying that banks were designing new products to accomodate these struggling FTBs, i.e. lending multiples, interest only, 50 year mortgages, negative amoritisation i.e. becoming slaves to them for the rest of your life.

It does infuriate me that they're pedding 50 year mortgages, many (if not most) FTBers are over 30 now, how can we service a 50 year mortgage (or even a 30 year one)? Also, how much more would this cost in interest payments over this longer period?

IO mortgages are a waste of time, you may as well rent (as effectively that's what you're doing), at least when you rent you don't have to do maintainance on the property.

It all smacks of desperation, 6-7 years ago, these suggestions would have been laughed at. The problem is that no one seems able to look at this sensibly, not one of these 'solutions' involves HP drops and they don't seem to address the fact that most, in the longterm, will cost the FTBer more money, while making the present home owners feel richer (they won't actually be any richer though). The only people set to gain are the Goverment (Stamp duty), the Mortgage lenders and the EA's.

Edited by laughing_goat

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I have a question:

Why should we pay soo much for a house? Simple answer please, not interested in how such a bank will lend me 10 times salary etc. I haven't seen wages rise at all. The same 25k jobs were available in the 90s.

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In my sector, pharmaceuticals, I think wages have gone up. I stepped out of the job market for a year to write a novel. I thought my CV looked a bit crap because of it so I didn't make my expectations too high, but I receieved an offer recently 2k over what I'd actually asked the company for, and 3k over my last sales job! I could comfortably afford to buy a two bed flat (even in Brighton), but I'm not going to, it's too risky and it's much cheaper to rent. Also I want to see how the property market shakes down and either move somewhere else in the country with my company if prices don't fall here and do in somewhere like Wales where I can get the same salary, or go overseas if the prices stay high here.

Edited by large

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Why should we pay soo much for a house?

The simple answer is we shouldn't.

However, over pricing has been sold to us, through demand (there is always some mug with Daddies money willing to pay more for it) and the 'fact' (open to opinion) that in the long term, HP's always go up, so eventually the place will be worth more than you paid for it. Even if all this were true that to me is no reason to pay more for a property.

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I have a question:

Why should we pay soo much for a house? Simple answer please, not interested in how such a bank will lend me 10 times salary etc. I haven't seen wages rise at all. The same 25k jobs were available in the 90s.

To keep bank profits up.

The lenders have lent themselves up a blind alley. They know it, we know it and they can think of nothing to get out of this situation other than scare tactics more reckless lending to get others to join the ponzi scheme.

Edited by OnlyMe

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The ONLY thing that will genuinely help is a house price crash. Funny that isn't mentioned as an option, eh?

Actually one of the letters Declan read out was 'the only thing that will help the situation is a fall in prices' though the word crash wasn't used, it was a nod in the right direction. Declan did look like he was forcing the words out on that one a bit though!

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when all this is over, people will look back on this period with terrible shame...

to think what idiots we were to buy houses at such prices!

and thus, the new orthodoxy will be born.

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Maybe one of the issues is that (& again I don't have hard facts - just thoughts) young people used to live at home (with parents) before they moved out into their own place. Now, with so many more people going to uni, they move out to uni and then rent somewhere rather than going bavk home.

if you pay rent to a 3rd party - that is dead money to you. If you live at home, you can save up a deposit from the differnce in what parents charge & a 3rd party..

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In my sector, pharmaceuticals, I think wages have gone up. I stepped out of the job market for a year to write a novel. I thought my CV looked a bit crap because of it so I didn't make my expectations too high, but I receieved an offer recently 2k over what I'd actually asked the company for, and 3k over my last sales job! I could comfortably afford to buy a two bed flat (even in Brighton), but I'm not going to, it's too risky and it's much cheaper to rent. Also I want to see how the property market shakes down and either move somewhere else in the country with my company if prices don't fall here and do in somewhere like Wales where I can get the same salary, or go overseas if the prices stay high here.

I would not count on Wales having cheap prices yet. I live in SE Wales and the prices are comparible to where I work in SE England (West Sussex).

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Best thing that young people can currently do is rent. Who wants to be saddled with a huge debt working your whole life for a crappy 1 bed flat..NO thank you.

Renting is getting increasingly affordable. My mum who is a staunch believer in getting on to the property ladder and has sleepless nights that I will forever be without a real home of my own recently tried to convince me that my boyfriend and I would be better off buying a place in London than 'throwing money away' renting.....Until....she did her sums. Then she couldn't believe that in reality anyone who had bought one of the flats that we will be renting and is renting it out- as a landlord would not be making a profit but a LOSS.....These are new builds by the way.

Who knows with rents going down and being more and more negotiable, how long until we get like Germany and France and don't care about owning homes at all if rent gets really cheap?

I think some young first time buyers just get caught up in the British make up of wanting to buy a house despite the OBVIOUS lack of financial sense that this currently makes.

I have a friend who has just bought a 2 bed flat in south London with her boyfriend for 380k (they thought they were getting a bargain as the full developer asking price was 420k)...The developer was also offering 20k deposit if people completed before Christmas....I wonder why they are offering deals like that, could it be that they fear that the cat will be out of the bag in the new year and that full news of a recession will greet us (I reckon).

My friend and her partner probably have a joint income of 70k but had 80k saved up. Even so, in the next few years, job security is no sure thing, if one loses their job, maintaining high salary levels is no sure thing either.....and keeping those INTEREST ONLY (doh doh doh) payments up is not going to be easy.

Yvonne

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Maybe one of the issues is that (& again I don't have hard facts - just thoughts) young people used to live at home (with parents) before they moved out into their own place. Now, with so many more people going to uni, they move out to uni and then rent somewhere rather than going bavk home.

if you pay rent to a 3rd party - that is dead money to you. If you live at home, you can save up a deposit from the differnce in what parents charge & a 3rd party..

I can see what you're trying to say, but in most cases that isn't an option. When I left uni, I had to move to London to get a job (I come from North Wales), with no family close by (and student debt) my only option was to rent. This is the case for 90%+ of Graduates I work with, if they want a job they must move to a big city (usually London).

I know you are going to suggest I should have got a 100% mortgage, but I don't believe you could have got one from a reputable lender in 1995 (when I moved to London).

Just thinl, only 10 years ago the idea of getting a 100% mortgage was seen as stupid, now it's the norm.

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Maybe one of the issues is that (& again I don't have hard facts - just thoughts) young people used to live at home (with parents) before they moved out into their own place. Now, with so many more people going to uni, they move out to uni and then rent somewhere rather than going bavk home.

if you pay rent to a 3rd party - that is dead money to you. If you live at home, you can save up a deposit from the differnce in what parents charge & a 3rd party..

My experience (and my husband works at a uni) is exactly the opposite. Loads more students are going to universities near home and not moving into halls, but staying at home with Mum and Dad. This follows to a certain extent the American model (where everyone has to pay), where many students go to their local state universities rather than away to university, because it's cheaper and they can also often live at home.

I went away to university (shamefully now over 10 years ago!) but my brother (5 years later) went to our local uni and commuted from home. He ended up with less debt as a result, and that was in the days when student debt was much lower. The smart students will do at least their first degrees near home if they can.

p.s. this might also affect the student rental sector in the long term...

Edited by Pedro

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My experience (and my husband works at a uni) is exactly the opposite. Loads more students are going to universities near home and not moving into halls, but staying at home with Mum and Dad. This follows to a certain extent the American model (where everyone has to pay), where many students go to their local state universities rather than away to university, because it's cheaper and they can also often live at home.

I went away to university (shamefully now over 10 years ago!) but my brother (5 years later) went to our local uni and commuted from home. He ended up with less debt as a result, and that was in the days when student debt was much lower. The smart students will do at least their first degrees near home if they can.

p.s. this might also affect the student rental sector in the long term...

Do they then stay at home? or rent somewhere when they graduate?

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Do they then stay at home? or rent somewhere when they graduate?

No idea, I'm afraid. It would be interesting to see if people staying at home for uni affects where they look for jobs after the fact. It probably depends on the job opportunities where their parents live. My brother did live at home for a while doing a series of pretty horrible local jobs, then did a second degree at the same uni, still lived at home then too, and eventually moved up to London for a job (although is actively now looking for a job near home so he can move back in with Mum and Dad - he currently lives in a studio flat in central London which is possibly smaller than his room at home, and I think he finds the prospect of free meals quite appealing too!).

p.s. probably also worth mentioning that my husband (admittedly few years younger than I!) actually moved back into home whilst finishing his last year of uni (university about 20 miles away), even though he'd lived out for the 1st two years. He then continued to live at home, and his parents converted their basement into a self contained flat. We even lived there for a short while after getting married (his parents are great, and we had a separate entrance - it wasn't bad at all) and his sister and her partner are now living there!

Edited by Pedro

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if you pay rent to a 3rd party - that is dead money to you. If you live at home, you can save up a deposit from the differnce in what parents charge & a 3rd party..

Maybe so, but i'm 32 and don't think (even if it was a viable option transport wise) I want to live with my parents :)

Still, LL, the rent vs buy argument makes financial sense at the moment. The talk of 'dead money' is a bit of a poor term. I live in central london, pay rent equivalent to about 1/2 the cost of buying the same flat, and can put away enough cash to ensure in terms of capital gains i'm not losing out, as equities outperform housing long term (this is on a 25 year picture). This seems to be an increasingly plausible scenario with house prices at the level they are currently. It'll reverse as and when prices fall / wages rise / inflation erodes capital gains but I won't buy until it makes financial sense.

Oh, FWIW, I was apalled at your treatement by some of the posters in your first thread. Some members of this forum are getting embarassingly bitter because the HPC is not materialising to their convenience.

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  • 302 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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