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jb5000

£200K Studio On A £20K Salary? Mumsnet Gold-- Merged

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I know these threads come and go with predictable comic timing, but this is a particular favourite:

http://www.mumsnet.com/Talk/am_i_being_unreasonable/2308704-to-tell-my-friend-I-think-shes-making-a-huge-mistake-buying-an-ex-council-studio-flat-for-200k-on-the-outskirts-of-London-at-35-when-she-doesnt-earn-much

35 year old on £20k p.a. has bought a £200k studio flat. Her friend is concerned that she's setting herself up for a collapse but she is soon shouted down by the Mumsnet Swiss Guard. Nobody seems worried that a first time buyer is purchasing a property at 10x their income.

Within a few posts you've got the classics of 'Property Ladder', 'London property only ever goes up' and how it's the 'best investment going' at the moment.

Can't wait to see how these threads go when the inevitable happens.

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Clearly isolated from reality as they've developed their own language.

I had to look up YABU.

'You are being unreasonable'.

Seems as soon as someone puts something reasonable about house prices, the property freaks jump on them shouting 'YABU'.

TABM

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You can't go wrong with bricks and mortar, whatever you pay for property it will worth more than you paid for it when you sell because the price you paid becomes the the new market value plus 10% a year inflation :rolleyes:.

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My wife was caught with Daily |Mail mental fever and started to panic a few weeks ago.

She was crying at saying how we were being priced out of the market and we'd never get a family home etc.

She was blaming me for not buying. Even said london was different !!!

A few google searchse and some facts later and she saw the madness of it all and the fact London was falling and she seemed a bit more at ease.

What's the point of paying double for a house that in a s**t area and needs £100K spending on it.

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I only read the first page of replies, but even that is a real eye opener.

The most amazing thing to me is how many of them seem to believe that because this woman is an estate agent, she must know what she's talking about. Never mind, we'll probably get to see her living in a Mondeo and working as a club DJ after the bust, like that bloke back in 2008.

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I only read the first page of replies, but even that is a real eye opener.

The most amazing thing to me is how many of them seem to believe that because this woman is an estate agent, she must know what she's talking about. Never mind, we'll probably get to see her living in a Mondeo and working as a club DJ after the bust, like that bloke back in 2008.

With that logic, Carney must know what he's doing and Osborne really has saved us.

meanwhile, in Northampton, estate agents are listing 3 bed house in mediocre areas for 75K more than they COULDNT sell them for 18 months ago.

Edited by TheCountOfNowhere

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With that logic, Carney must know what he's doing and Osborne really has saved us.

Seriously though, if you posted that I think most of them would believe it. The almost 100% "YABU" replies show just how big of a bubble it is - all those posters are little more than shoeshine boys.

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From the comments:

At the moment she can get a 2 % mortgage fixed for two years. It is cheaper for her to have a studio flat than to rent a room. It is also a better quality of life. Even if she has a repayment mortgage it is cheaper than renting.

Even if?

Even if?

You do understand that paying the money back is not optional, don't you? And that if you choose IO, you still need some sort of vehicle to repay the capital? No, I guess you probably don't realise that. I expect you're plan is to repay the capital out of the vast equity you expect to build up over 20-25 years, and then you'll magically downsize to a slightly smaller house that for some reason hasn't risen in value at all, at the same time as yours went stratospheric. You probably expect to be also able to afford to gift your children a deposit for their own houses as well, out of what's left after you've replaced the car and gone on a world cruise.

And these are the people convincing the OP that she is being unreasonable.

Bravo ladies, bravo.

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What I can't get over is how ubiquitous this kind of chat is, not only on the Internet but in real life too. Uninformed, totally financially innumerate, massaging egos to make up for mediocre careers and other life goals, just a completely valueless way to think about life. It will be a surprise to these people when the long deferred HPC arrives after the election and all their assumptions will be proved wrong. But even that won't change their minds: they will blame the politicians, or the bankers, or something else, anything other than the idea that they might be wrong.

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These 2% 2 year deals are nothing more than teaser rates as most revert back to a SVR of 4-5% at the end of term
The banks are now making their money from the renewal fees @ 1-2k every two years

Quote

At the moment she can get a 2 % mortgage fixed for two years. It is cheaper for her to have a studio flat than to rent a room. It is also a better quality of life. Even if she has a repayment mortgage it is cheaper than renting.

Even if?

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35 year old estate agent living in a shared house earning £20k, living the London property dream!!

The people on this site are clearly insane not to want this!!

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If you ever spend time listening to the Mumsnet crowd outside the school gates you'd realize why the likes of EAs and bankers get away with it.

There's certain type of person who will believe what their told as long as comes from a "professional".

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If you ever spend time listening to the Mumsnet crowd outside the school gates you'd realize why the likes of EAs and bankers get away with it.

There's certain type of person who will believe what their told as long as comes from a "professional".

That thread is like in the office where I work. I get told most days by a small crowd of 'well meaning' buffoons that I must buy a house now, any house! As house prices are ready to soar and never come back.............

Splendid. Crash can't be too far off now then.

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If she is only earning £20,000 and needs to borrow £140,000, I would be very doubtful than many lenders would grant a x7 loan to income ratio.

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