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Can't Afford Or Dont Like What You Can Get For The Price

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When I was looking to purchase a 2 years ago I couldn get my head around how much the prices had increased (which as we know does happen sometimes to excess) I was looking at houses that if I could have easily have afforded 6 years ago but didnt belive that prices would rise and saw the investment as a risk.

Basically before buying I had o get real about what I could afford.

I get the feeling there are people on here (not everyone) who want a 5 bedroom detached house with land and at present cannot afford one. but who look back and think I could have had that 6 years ago.

If you genuinly cant afford to get onto the bottom rung I empathize the others have simply got ideas above their station as I had.

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When I was looking to purchase a 2 years ago I couldn get my head around how much the prices had increased (which as we know does happen sometimes to excess) I was looking at houses that if I could have easily have afforded 6 years ago but didnt belive that prices would rise and saw the investment as a risk.

Basically before buying I had o get real about what I could afford.

I get the feeling there are people on here (not everyone) who want a 5 bedroom detached house with land and at present cannot afford one. but who look back and think I could have had that 6 years ago.

Actually a 1-bed flat would be nice you prat....

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I get the feeling there are people on here (not everyone) who want a 5 bedroom detached house with land and at present cannot afford one. but who look back and think I could have had that 6 years ago.

As i saw someone post on here the other day;

"Professor of hindsight, student of foresight"

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I think you have missed the point somewhat.

Maybe I could have bought what I want 6 years ago.

And maybe I will be able to buy what I want in 3 years time.

Just maybe I shouldn't settle for less in-between times.

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Therfore as stated I empathize no need to be rude. (you are clearly not one of the people I was addressing)

I just really can't stand the 'get used to the prices' attitude the so many have. Everyone seems to perfectly happy to accept HPI at 25% for several years yet refuses to accept that house prices ever go down.

Why should we get used to the prices? Everyone getting used to the prices, particularly FTBs are commiting financial suicide. So much of their money will go simply on servicing mortgage debt with little hope of ever moving up the ladder to reasonable family sized home. And because of the amount of money used to service mortgage debt (money down the drain) there won't be money left over to save for things like pensions. And when this generation gets to retirement, there probably won't be any state pension.

It makes me really angry, a whole generation is being totally screwed.

Edited by munimula

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Therfore as stated I empathize no need to be rude. (you are clearly not one of the people I was addressing)

Sorry but you are wrong here. The average working person should be able to afford to buy in any market conditions, the house they current live in. When they can easily buy that house, house prices are too low, when (as at the moment) they cannot easily afford to buy the house they live in then they are too high as they are at the moment.

However, and this is the important bit, given time the market will rectify itself (as it always has and always will). It did in the mid 1970's, it did in 1990-3 and it is starting to do so now. All BTL and everything else has done is increase the size of the boom. The bust will still occur the question is how much of the magnification on the boom will be felt

Edited by eek

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the others have simply got ideas above their station as I had.

It's called aspirations..

Current prices are unfair on pretty much everyone, especially FTB'ers. People who just want a house to live in have to deal with a market that has been driven up to the edge of a cliff by speculators.

The people you speak of are either STR'ers or those who want to trade up. STR'ers have taken a risk (and why not!). Those wanting to trade up are facing a huge increase in mortgage, and may not be able to afford it. They have probably worked hard in paying off their mortgage, and getting promotions & pay rises - but all of this has been trounced by irrational house price inflation. Is that fair? No.

But thats life eh...

now ****** off you twit

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Guest Bart of Darkness
When I was looking to purchase a 2 years ago I couldn get my head around how much the prices had increased (which as we know does happen sometimes to excess) I was looking at houses that if I could have easily have afforded 6 years ago but didnt belive that prices would rise and saw the investment as a risk.

I couldn't afford to buy 6 years ago, risk wasn't an issue.

Funnily enough, although my income has more than tripled in the meantime, I find myself with hardly any more choice than before.

Since I'm happy enough where I am, I choose to get on with my life, concentrate on building up my business and if I want to buy, I'll buy my flat off the council.

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If you can't afford a 1 bedroom flat, either get a studio or do something about increasing your income.

Do you realise how irritating this comment is?

I could get a 1-bed flat but I refuse to do so. I'm not taking on that kind of excessive mortgage debt just to pass the money up the chain so that some boomer at the top can f*ck off to spain.

I have some financial literacy unlike anyone buying today and can see how much worse off I will be in my lifetime if I buy at today's inflated prices. If prices don't come down, which is highly unlikely then I'll take my savings abroad. I am not going to be a mortgage slave, I can't think of anything worse than being tied to a mortgage.

Was talking to a friend at the weekend, he's had a payrise and mentioned starting to look for a house. Took 10 mins and I managed to completely put him off the idea. It doesn't take long to explain how much of a bad idea it is, he started by coming up with all the usual guff 'rent is a waste of money' etc. I shot everything down and he was literally dead against the idea in the end.

Edited by munimula

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If you can't afford a 1 bedroom flat, either get a studio or do something about increasing your income.

yes.

perhaps i can re-train in 50k a year java from my cardboard box.

i could get it wired for broadband and establish an MP3 downloader.

or juggle three jobs + taxi nights in order to get that dream bedsit or hostel.

mmm, quite right TTRTT, lets stop moaning and get working.......

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Guest Bart of Darkness
Do you realise how irritating this comment is?

He does, that's why he makes 'em.

He doesn't have anything better to do you see.

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If you genuinly cant afford to get onto the bottom rung I empathize the others have simply got ideas above their station as I had.

I just have no way of understanding the logic of this statement. Ideas above my station? Is wanting to buy a house at a REAL price rather than a ridiculous one having ideas above my station?

I CAN afford to buy a house. Your attitude just does not make sense to me. Why should I buy a two bedroom house now for £210k, when a three bedder will cost less £210k in 3-4 years time? HOUSES ARE OVERPRICED. WHY BUY SOMETHING THAT IS OVERPRICED?

If I wanted a car, but a Nissan Micra had shot up to £50,000 I wouldn't buy one, I'd take the train. But I guess you would take out a massive loan and buy it, as you don't have ideas 'above your station'.

Of course this only applies IF there is a crash. But I believe there will be one, and I'm putting my money where my mouth is.

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the problem i have is with value. maybe it comes from being a bear, but i won't part with a single penny unless i feel i'm getting value for it. this goes for a tin of beans, a new shirt or indeed a house. i have observed the housing market creep further and further out of my reach (the last time i could have realistically afforded a house was probably about 2000, and then i simply wasn't ready...) but there has been no intrinsic increase in value of any house in this country. developers have clearly tried to cash in on this by creating (in my opinion) a sub-bottom rung of new build flats and studios etc. but they too are out of my reach and, let's be honest, a pile of garbage which, as it doesn't stand on it's own land, you never actually own anyway!

my asprirations are modest - i would like to be able to afford a two up two down terraced house in the area of sheffield which miss starship was born in. i don't think that's an unreasonable demand, and five years ago we would have been able to afford it. now, since prices in that area have tripled, we're priced out. we could live in a less desirable area, but then the issue of value creeps in again; there is no value in an overpriced piece of crap on a sink estate where your car insurance is trebled and you'd be insane to let your kids out after dark. until realistic value returns to the housing market there is no point even contemplating purchasing. i wouldn't be able to live with myself if i bought something which didn't represent good value for money...

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Sorry but you are wrong here. The average working person should be able to afford to buy in any market conditions, the house they current live in. When they can easily buy that house, house prices are too low, when (as at the moment) they cannot easily afford to buy the house they live in then they are too high as they are at the moment.

However, and this is the important bit, given time the market will rectify itself (as it always has and always will). It did in the mid 1970's, it did in 1990-3 and it is starting to do so now. All BTL and everything else has done is increase the size of the boom. The bust will still occur the question is how much of the magnification on the boom will be felt

I applaud your sentiments, however, are we in danger of being over sentimental? Has the average working guy always been able to purchase his own property? I`m not being provocative here, just genuinely asking whether thats always been the case historically.

If that has been the case, as a measurement, I fear that this is a scenario never to be repeated. Av wage 22K, average house prices will never return to the level were someone on that wage can buy where he or she wants :(

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I'm sure a lot of STRs are people who needed to trade up but couldn't - due to prices but also the lack of available stock to choose from.

That has been my situation.

I sold a 1-bed flat in 2004 in London for £210k because my boyfriend had moved in with me and we really needed more room. We wanted to buy a 2-bed flat with either a balcony or garden at the time but the few that were available were generally over £400k. Another £200k seemed a lot for one extra bedroom and a bit of outside space.

So we rented a 2-bed flat with a balcony.

Funnily enough, when we move again, we don't even want to buy a 2-bed flat with a balcony any more. We'd be paying about £12k in stamp duty and maybe another £3k on a survey / legal fees / removal costs. £15k to move to what we have already....

Why shouldn't a couple in their 30's aspire to living in a house?

Even a 3-bed with a postage stamp garden? Incidentally, that would cost over £500k where we live, which implies transaction fees of at least £27k!

Stamp Duty has made "working your way up the ladder" even more expensive than it is already.

Edited by geranium

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Has the average working guy always been able to purchase his own property?

No. But why should we we expect any less than our parents? When my father could buy a four-bed house on a factory worker's salary while supporting five kids, why shouldn't I expect to do at least as well when earning twice the national average wage?

Av wage 22K, average house prices will never return to the level were someone on that wage can buy where he or she wants

So who _will_ be buying all those houses? Or will they just sit forever empty waiting for that mythical 'buyer' to come along and pay well over the odds for them?

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I'm sure a lot of STRs are people who needed to trade up but couldn't - due to prices but also the lack of available stock to choose from.

That has been my situation.

I sold a 1-bed flat in 2004 in London for £210k because my boyfriend had moved in with me and we really needed more room. We wanted to buy a 2-bed flat with either a balcony or garden at the time but the few that were available were generally over £400k. Another £200k seemed a lot for one extra bedroom and a bit of outside space.

So we rented a 2-bed flat with a balcony.

Funnily enough, when we move again, we don't even want to buy a 2-bed flat with a balcony any more. We'd be paying about £12k in stamp duty and maybe another £3k on a survey / legal fees / removal costs. £15k to move to what we have already....

Why shouldn't a couple in their 30's aspire to living in a house?

Even a 3-bed with a postage stamp garden? Incidentally, that would cost over £500k where we live, which implies transaction fees of at least £27k!

Stamp Duty has made "working your way up the ladder" even more expensive than it is already.

It is all about the area that you live in, though. You obviously live in a reasonably expensive part of London looking at those prices.

I live in a moderately expensive suburb of London, where you would pay about £175k for a one-bed flat, and £240k for a 2 bedder. It doesnt get much cheaper as you move a few miles further out, but that £240k-£250k will buy you a small house rather than the 2 bed flat.

My point is that I think that houses in many areas of London, not just the really expensive parts, have been unaffordable to the average 30 something buyer even before the current boom.

Take a 30 something couple with a slightly above average £80k income in 1998. A 2.5x joint mortgage and small deposit would have got them a £220k house. That would not have got them much in the best part of my area in those days, let alone an expensive part of London. Of course, high earners would have been able to afford something better, but then they still can.

This boom has compounded the problem, but I think it has been there for much longer in expensive areas.

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I applaud your sentiments, however, are we in danger of being over sentimental? Has the average working guy always been able to purchase his own property? I`m not being provocative here, just genuinely asking whether thats always been the case historically.

If that has been the case, as a measurement, I fear that this is a scenario never to be repeated. Av wage 22K, average house prices will never return to the level were someone on that wage can buy where he or she wants :(

Thats not what I am saying. Take you typical average houseowner and see if they could legally get a mortgage that would allow them to purchase the house they live in and whether they could afford the repayments on a repayment mortgage. For the average person this is not currently the case and hence the market is currently not perfect (and will, eventually, rectify itself until the statement becomes true and the average houseowner can afford to buy the house they live in.

Whether the average working person can afford to buy or not is not the issue here. The fact is that the average person cannot at the moment buy the house they currently live in or create a scenerio in which they could buy the house they currently live in. When this is the case the market really has only one direction to go.

As for whether the average person can I think the answer is maybe. Assuming they were working and credit worthy you could easily buy something in 1996-8 without much difficulty prior to that social housing meant that buying was a matter of how will your bank liked you and how much you wanted to buy.

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Stamp Duty has made "working your way up the ladder" even more expensive than it is already.

Stamp duty revenue 96/97 - £675m

Stamp duty revenue 04/05 - £5.5b

And under a Labour govt!!

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This thread caught my eye because the title summed me up totally, until earlier this week.

Im a FTB who has just had an offer accepted on a 3bed semi with garage and gardens (the kind of house I really wanted but never thought I would get)

Im in south wales, and just as I was giving up hope, I saw a fairly 'cheap' house on an estate agents website.

After a viewing the estate agent told me the house was going cheap as Persimmon now owned it (the current occupiers had just part-exd it on a new Persimmon build) and they just wanted to shift it on to get their books sorted for Christmas. Where I came in with an offer to complete within 3 weeks.

Fingers crossed as im at the paperwork stage at the moment. But my point is, I thought I was going to end up with a 2 bed mid link and now I have what I really wanted.

My advice might be to ring up new build companies (bovis/persimmon etc etc etc!) and see if they have any part-ex houses to clear, as this way the houses are realistically priced (as persimmon have no emotional attachement and also have already made a %60 profit on the new build).

Ger

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If you can't afford a 1 bedroom flat, either get a studio or do something about increasing your income.

Hi TTRTR,

AhHa! What, you mean actually pay for all this insanity? You mean, someone actually going out and earning real money from real jobs by providing real services and business? Instead of sitting on your derriere and expecting a falling economy and credit card borrowing to support already hyper-inflated house prices? Now that is the crux of it. Someowhere along the line, someone really have to come up with the money. FTB's were sold down the river by Gordon Brown when he went off to the printing presses with BTL and the promise of SIPPS, illusionary money. Anyone with even a baisc understanding of economics, and a reading of the particulalry speculative nature of the UK housing market and it's ten tear crash-cycle profile could see it.

Consumer debt 1.2 trillion debt and not falling. Repocessions and bancuptcies on the rise. People struggling with debt, trade and fical deficits out of control - Gordon has no solution to it, CBI, OECD and IMF all commentating that in the absense of a miracle, he has 12-24 months before he has to start raising interests rates and cutting public sector spending. He has no choice, we signed the Maastricht treaty and committed to the economic stability pact. He has to balance his trade and fiscal defecits or leave the EU. The clock is ticking. And sterling is falling, making things worse. Let me remind you as well, the last crash was not caused by the big interest rate spike in late 1992. The market crash was well underway before that, those untrustworthy Halifax and Nationwide indices were already falling before then. It was the governments attempt to prop up sterling under a weakening economy and compliance with the ERM that caused speculators to attack the pound, spiking rates. With the current government and private debt levels, a weak pound is not an option, Gordon will raise as soon as the pound gets weaker. The debt levels have snookered the economy, higher pound and interest rates will further depress the economy, weaker pound and interests rates will put him in breach of Euro Economic Zone rules, which he already breaking bigtime and escalate the cost of debt. Let's see. Goes back to what I say, real economy requires real people making real money. Not BTL and MeW. Always has,always will. At the moment we are at the top of a housing bubble. Down it's coming, then the whole process will start again in a few years time.

And another reguard pincer movement happening now. The crazy situation of interest only mortgages and

6-7-8 income multiple borrowing is coming to a close. The Financial Services Authority (FSA) is close to completing its commision this week on prudent bank lending, mortgage salary fraud and mortgage broker practices. It is widely anticipated that they are to hit hard on the practice, to require banks to rigously check multiples and maintain long-term lending mutliples. Banks have already starting raising their bad debt provisions and tightening lending criteria in advance. The market bubble partly rose on fraudulent mortgage approvals, now that's gone, how do you see people raising those funds? They won't. The market will correct to the new position.

Even the Nationwide - who I would not trust anymore than the Property Guru - have indicated price falls for next year. Since they basically pick and choose a small number of properties they wish to include in each survey, that is never publically or independtly monitored (they could say what they like! Who would know any different?), I reckon they know what is really happening now. They know the game is up, that they will have alot of angry people on their hands if they continued with same old rhetoric anymore.

Listen,in the long run,it's all for the best. You know, like when you keep spending crazily and the overdraft gets out of control? You consolidate for a while, clear things up, get back onto an even keel. Really, it's for the best. otherwise there will be alot of FTB's later down the line in deep,deep negative equity, adding to the repocession rates, the banks selling off their properties for a fraction of the costs and leaving them with the debts still to clear for the rest of their lives, credit history destroyed. It's happened plenty of times before in the UK, it's happening in other parts of the world now. Buyer beware!

Boomer

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When I was looking to purchase a 2 years ago I couldn get my head around how much the prices had increased (which as we know does happen sometimes to excess) I was looking at houses that if I could have easily have afforded 6 years ago but didnt belive that prices would rise and saw the investment as a risk.

Basically before buying I had o get real about what I could afford.

I get the feeling there are people on here (not everyone) who want a 5 bedroom detached house with land and at present cannot afford one. but who look back and think I could have had that 6 years ago.

If you genuinly cant afford to get onto the bottom rung I empathize the others have simply got ideas above their station as I had.

Homeowner,

There is always some truth in this argument - people often want more than they can afford, some even feel they deserve it (and this does seem to be a disease our youth particularly suffers from today).

However, that said, the bigger issue is that houses have just become outrageously more expensive. I don't think this is healthy.

For example, six years ago an average salary might have bought an average property.

Today, with the house-price-to-incomes ratio SO much higher you need to earn one-and-a-half times the average salary to afford the average property.

The average person six years ago might have WANTED a better than average house (the same as today the average person might WANT a better than average house) but at least they could get an AVERAGE house then unlike today. Today an average person who WANTS a better than average house is supposed to just take a significantly worse than average property and get on with it.

I believe this is unsustainable. My "old economy" view is that house prices ultimately are tied to what our incomes will allow us to pay. At present easy debt (and people's willingness to assume high levels of debt) along with some unrealistic assumptions about future interest rates, inflation, wage growth, rental growth and house price growth have driven prices to silly levels.

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It is all about the area that you live in, though. You obviously live in a reasonably expensive part of London looking at those prices.

I live in a moderately expensive suburb of London, where you would pay about £175k for a one-bed flat, and £240k for a 2 bedder. It doesnt get much cheaper as you move a few miles further out, but that £240k-£250k will buy you a small house rather than the 2 bed flat.

My point is that I think that houses in many areas of London, not just the really expensive parts, have been unaffordable to the average 30 something buyer even before the current boom.

Take a 30 something couple with a slightly above average £80k income in 1998. A 2.5x joint mortgage and small deposit would have got them a £220k house. That would not have got them much in the best part of my area in those days, let alone an expensive part of London. Of course, high earners would have been able to afford something better, but then they still can.

This boom has compounded the problem, but I think it has been there for much longer in expensive areas.

I don't think it really makes any difference where you live. If you want to live not too far from where you work, you will have trouble buying or trading up wherever you are. House prices are high multiples of income everywhere. It's not the absolute level of prices that is the issue, it's prices compared to rents and salaries.

The only solution is to earn in one place (a high salary place like the City) and then move to a less expensive area. And Commute.

However, I am not prepared to commute long distances, partly because I have to be at my desk at 6.45am. Equally, I would not want to live in a very inexpensive area as I don't wish to be mugged on the way to the bus-stop in the dark on my own at 6am-6.30am (or do muggers sleep in?).

Edited by geranium

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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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