The Evening (lack of) Standard(s) goes ramping mad

[billybong]

6 hours ago, AvoidDebt said:

This won't be helping... 

• Mortgage market 'almost at pre-credit crunch best' claims broker

The number and range of mortgages being offered in the UK has almost returned to its pre-credit crunch level.

That’s the view of Matt Cassar, the managing director of the Finance Advice Centre, who says the market continues to defy pessimists concerned about the economy and Brexit.

Last year more first-time buyers took out mortgages than at any point over the past 10 years and the mortgage market began 2017 strongly with a total of £21.8 billion worth of mortgages taken out in January, up from £20.4 billion the month before.

Cassar says the strength of the market is helped by a diverse range of products including long-term fixed rate deals, mortgages specifically for students, for the over-55s, for buyers who need to borrow 90 per cent of the value of their new home, and also for people with adverse credit histories.

 

At the same time, new figures from the Intermediary Mortgage Lender’s Association showed that mortgage intermediaries, including Finance Advice Centre, experienced a 26 per cent increase in the numbers of inquiries in the last quarter of last year.

“We are almost back to the pre-credit crunch days in terms of the numbers of lenders and variety and amount of products available. There are some variations in mortgage activity when you look deeper but the overall picture - especially when you consider the downbeat predictions that have been issued over the past year - is extremely healthy” says Cassar

https://www.estateagenttoday.co.uk/breaking-news/2017/3/mortgage-market-almost-at-pre-credit-crunch-best-claims-broker

 

My highlight.

If that was true (considering the source it's a big if of course) then all the claims after the start of the credit crunch that everything had to be changed and the lack of regulation etc etc should never be allowed to happen again etc etc would of course just have been a total pack of playing for time lies.

They would have been total lies just like all the similar statements soon after the start of the 1980s/1990s crunch.   

Edited March 17, 2017 by billybong

[Little Frank]

10 hours ago, Venger said:

 

I have no debt and rent, within a level of affordability.  Not enslaved.  It is nothing whatsoever to do with enslavement in this market, for the buyer and owner side especially.   Patient and hoping for a housing market readustment in my area.

 

Your rent is less than the equivalent mortgage repayments on a 75% LTV for the same property? Assuming CPI at 2%, mortgage term of 30 years and rent paid for the remainder of your lifetime? 

Not a chance.

[Venger]

Quote

I have no debt and rent, within a level of affordability.  Not enslaved.  It is nothing whatsoever to do with enslavement in this market, for the buyer and owner side especially.   Patient and hoping for a housing market readustment in my area.

 

9 hours ago, Little Frank said:

Your rent is less than the equivalent mortgage repayments on a 75% LTV for the same property? Assuming CPI at 2%, mortgage term of 30 years and rent paid for the remainder of your lifetime? 

Not a chance.

Assume assume.

We pay rent at just under £900 per month rent to a landlord.  He owns a few properties.   He bought it for £158,000 in 2000.  (And I just followed up another of his similar properties which he bought for <£100K in 1999.)

It's difficult to assess market value for this particular property because so few sales in recent times.  It's on the outskirts.   £300,000 (on the low side to sell fast in this market) - £375K this market, due to where low inventory and buyers who have been eager to buy, for whatever reasons.  They know their own positions better than I do.   All I know is the prices they pay affect the wider market, and have pushed up all house prices.  

A bit further in, into the nicer parts, he could have bought a semi for £130K in a steadyish 2000-2001 market, which have been selling for over £400K in recent times.   So the LL probably overpaid at £158K in 2000 to secure what property he wanted (he owns other properties thereabouts) with a view of foreverHPI+++ and rents makes it all come good for him, as it has.

Property value say: £350,000 (I don't want to buy this place though, and can't help having a grudge/block from thought of buying from a BTLer).

Mortgage amount: £262500 (LTV 75%).  
Deposit: £87,500  (!!!)  Maybe I have it, maybe I don't.  I do have savings that didn't come easy.

I'm not going to scour the current mortgage market, but here's what Nationwide just offered up for above info (no fee products).

2 year fixed at 1.79% (SMR 3.74%)  = £942 monthly payment
5 year fixed at 2.39%  (SMR at 3.74)  = £1,022 monthly payment
10 year fixed at 3.29% (SMR at 3.74%) = £1,148 monthly payment

The rent we pay the landlord also covers allowing him to take the balance sheet risk of a house we believe to be overvalued and subject to values falling.  HPC.

Housing market runs on money.  Things can change.  Buyers and sellers set the values in the current market.      

Can you remind me of your view what your view of house prices are, and what future holds for house prices?

Must be entertaining being proven constantly-correct (about HPI) about renting-vs-buying as others have been worrying and making up excuses for 'the mistakes of those mindless buyers overpaying... incapable of doing any research and analysis... they know not what they do when they buy.'  for well over a decade.  Vs raging HPI+++ galore year after year after year.   It half amuses me as well!    Still today, making up excuses for buyers as the 'didn't know what they were doing / victims of media' as on HPC in 2004.   

I run my own financial projections as a guide to my own position.  How I weigh things up going forward (risks) and in this market, choose to rent.  Can't do anything about those who have chosen (earn more / bomad / bigger appetite for debt and paradise view of future... whatever... and including the BTL Forever divisions too) to pay more and more for housing.  Many are on HPI forever side, and renting dead money, and 'what it is worth outright'.  Many BTLers have doubled down to capture Generation Rent Forever.  Market.   We all position.

Renters are in the market.  Buyers are in the market.  Owners who own outright / low level mortgages vs house valuation, are in the market.  BTLers in the market.

 

 

 

 

We can't have a market where there is no consequence for overpaying to extremes.  HPI++++ is not a good thing, and not in a market with so much BTL activity.

 

On 3/16/2017 at 8:19 PM, disenfranchised said:

Hannah (27) & Will (29) - art director and tech start up person...

1 bed flat in Deptford 

£25k down, £12k stamp duty £398k mortgage 

Couldn't afford spmewhere they wanted to live but chose Deptford for its "potential"

Now £600 a month better off than they were as renters

 

On 3/16/2017 at 11:14 PM, MARTINX9 said:

I see Hannah and Will saved £600 a month by moving from Fulham to Deptford.  Good for them - why rent somewhere nice when you can buy up and coming!

An art director and tech start up person too - should have no bother paying off the £400k mortgage.

For all we know one of them has rich parents who will pay down future debt with capital.  Or his IT venture will be huge success.  Their choice.

Edited March 18, 2017 by Venger

[Venger]

-

16 hours ago, StainlessSteelCat said:

I don't hold out much hope for a buyers strike because it requires rational action, and most people are not rational when it comes to houses and enough are doing OK out of it. It's not impossible. I don't think it's as difficult as universal suffrage. But it would require a highly motivated group of people. 

Quote

We must be as stealthy as rats in the wainscoting of their society. It was easier in the old days, of course, and society had more rats when the rules were looser, just as old wooden buildings have more rats than concrete buildings. But there are rats in the building now as well. Now that society is all ferrocrete and stainless steel there are fewer gaps in the joints. It takes a very smart rat indeed to find these openings. Only a stainless steel rat can be at home in this environment...

Stainless Steel because I have enjoyed the Rat's contrary take on the world including:

I think the gaps in our society are still quite large so it doesn't take a very smart rat to find them and nor do you need to be a criminal. 

Cat because cats win the internet. 

Look at the couple in the OP !!   

There's just no 'organised buyers strike possible'.   The HPIers are up for it to extremes.  

We've been on the buyer strike for years, against annual hpi+++ extremes.   Only the market can possibly chill the buyer side, by sliding down, and changing sentiment.   

Although much of the lending on the buying side over the last 5+ years has gone to the BTLers.

I no longer have the book (StainlessSteelRat)... but I do recall that passage.    

The law finally catches him, but he is given some options, and they put him on an assignment to catch another high level super intelligent criminal operator (with deep issues of her own).   IIRC decides not to try and find her, as the law-enforcement were expecting him to try and do, but sets a nicer lure for her..... to make her come to him.  Every one has their take on the market and incentives and risks.    

The lures are in the market, imo, and we each have to make our own choices.  

I believe I see extreme housing financialisation and prices, so I rent.  S24 PRA SDLT surcharge keeps me hopeful  The BTLers have doubled down, with huge debt.   Can't do anything for the very few younger buyers who have paid extreme prices.   It's not a matter of trying to stop the world for them, when they chose to pay price they paid, and in process keep wider values elevated or to new peaks.  Got 10s of millions of people in mind for generations coming through.

There are a few cat lovers on HPC.  

I had not realised that StainlessSteelRat story was first published in Astounding (Sci Fi) magazine, 1961, in a few parts.  

The young publisher (the boss... only something like 19 or 21 himself at the time) took Asimov for a tour of the Astounding publishing house (unforgettable smell of pulp) when he was 13.  Asimov had only turned up, daring to make his way across the city by himself, because he went to impatiently check why that month's issue was late hitting the stands.  They struck up a great friendship and the publisher inspired and guided him.  

On 2/16/2017 at 0:05 AM, Venger said:

The professor discussion got me to reach for one of my Isaac Asimov books - just for personal fun - to remind myself of something.

...  in 1951 promoted to Assistant Professor of biochemistry - professional status added to his doctorate. 

Then was reminded of this on another page.   He finished writing Ad Astra on December 21, 1938 - later changed to Trends by editor.  9th story submitted Astounding Science Fiction. [The best Sci-Fi magazine]

 (1938)...the first story I wrote for which I remember even after all this time the exact circumstances of the initiating inspiration..  That fall, I applied and received a National Youth Administration job designed to help me through college.  I received fifteen dollars a month in return for a few hours of typing.... for a sociologist who was writing a book on the subject of social resistance to technological innovation.  This included everything from the resistance of the early Mesopotamian priesthood to the dissemination of the knowledge of reading and writing among the general population, down to objections to the airplane by those who said heavier-than-air flight was impossible.  

Naturally it occurred to me that a story might be written in which social resistance to space flight might play a small part.   ...For the first time, Campbell did more than simply send a rejection.  On December 29, I received a letter asking me to come in for a conference to discuss the story in detail.  [...]  It turned out what he liked in the story was the social resistance to space flight.   [...]revise to meet editorial specifications. [...]It was my first sale to Campbell after seven months of trying and eight consecutive rejections. - Isaac Asimov

This change.  The social resistance to house prices falling (becoming better value), as a societally good thing, can change.  It might require to be forced, but as some embrace HPI+++, they may be forced to stomach HPC, to allow others some fairness in the market.

[Blod]

8 hours ago, Venger said:

This change.  The social resistance to house prices falling (becoming better value), as a societally good thing, can change.  It might require to be forced, but as some embrace HPI+++, they may be forced to stomach HPC, to allow others some fairness in the market.

Interestingly it the young parents who ask 'where will my children be able afford to live?'. Those with kids in secondary school seem less likely to be questioning. The young couple who bought a ONE bed flat in Deptford at the edge of their affordability envelope with both work really can't have a family. They have neither the room nore funds. In a few years biology will force them to reconsider and it will be the woman in the relationship that this will be most apparent to. They either accept childlessness or move out.

That scenario increasingly plays out all over London/SE. The masses are picking up on that and are not happy. I recently experienced this in my family.

[GreenDevil]

@venger, now do the same calc for LL that bought in 1999.

Then do the same calc at a normalised base rate of say 5%, and say 6,99% to the customer.

There is your reason why btl arent selling. 

Blame the bankers and the ZIRP BS.

[disenfranchised]

I was in Deptford recently. It struck me it was a bit of a dump. A few bits around the middle looked like this boarded up scene I just grabbed off street view.  I recognise this view as being roughly infront of a Travelodge which is right next to the Deptford Bridge DLR and advertises itself as "Greenwich" but is just as close to Lewisham.

£423k + £12k stamp duty for a 1 bed flat here.

Insane

Edited March 18, 2017 by disenfranchised

[billybong]

21 minutes ago, disenfranchised said:

I was in Deptford recently. It struck me it was a bit of a dump. A few bits around the middle looked like this boarded up scene I just grabbed off street view.  I recognise this view as being roughly infront of a Travelodge which is right next to the Deptford Bridge DLR and advertises itself as "Greenwich" but is just as close to Lewisham.

£423k + £12k stamp duty for a 1 bed flat here.

Insane

 

It looks not that unlike photos of the end of a street in Beirut - turn the corner and see the real damage .  Patched up but still war zone - no pedestrians.

 

[renting til I die]

On 16/03/2017 at 8:37 PM, Ah-so said:

But they had been renting in Putney and swapped it for the delights of Deptford. No wonder they saved £600 pm

Yep, something I always point out when I am told how much I can save by buying! Got to compare apples with apples!

Also on their £600 pm saving.... not for 20 months (almost 2 years!) they won't. Their just had to stump up £12k in stamp duty! Let's not think about that being dead money though!

.. cough, plus any maintenance costs ...

.. cough, cough, should have added that they also lose any income from the £25k deposit ...

Edited March 18, 2017 by renting til I die
Added to

[renting til I die]

On 16/03/2017 at 8:27 PM, One-percent said:

Feck me, I think we need to stand back and consider this^

in what parallel universe is it sensible for a young couple to take on this level of debt?  Totally removed from reality.  It is hard to imagine what would happen if the asset on which this was borrowed suddenly became 'worth' a lot less. A multitude of lifetimes to pay this off.

feck me.  Madness  

In a world of ZIRP! 40 year mortgages, totally sustainable unless you start calculating the compound interest at higher rates! 

[Venger]

5 hours ago, GreenDevil said:

@venger, now do the same calc for LL that bought in 1999.

Then do the same calc at a normalised base rate of say 5%, and say 6,99% to the customer.

There is your reason why btl arent selling. 

Blame the bankers and the ZIRP BS.

Think I see what you're angling at, GreenDevil, on a £85K - £100K mortgage.

Still have hope the market will run out of buyers, and force some long-wave BTLers/HPIers to accept lower prices.

I can try and look through 'what it is worth' today, and see, 'what it will sell for' at some future point. 

Here in 'the north' I witnessed two of examples of that happening with houses that were inherited in 2012, but too few transactions to impact on wider values.   Sold for fair prices, when demand side had dampened down just a little.  BTLers were taking a pause... cooler BTLer activity in 2011-12.   Two inheritors of two houses just wanted 'the cash' and two of them cut and cut and then accepted fair prices from FTBs.   Although nicer houses were still transacting at steady high prices.  (Which is one reason I like the idea of a higher probate fee).  

That was just before HTB announced, which for me the speculators took as meaning Gov supports house prices, and went on a big BTLer double-down over the next few years).

One of my fav articles (FT).

Quote

FT article: Affordability Backwards (2014)

.....the initial interest payment on a £100,000 repayment loan at a 15 per cent interest rate is the same as that for a £300,000 loan at 2 per cent.

Quote

HPC member 'Bear Hug': Becomes more interesting when capital repayments are considered.

£15k wipes out 15% of £100k loan and only 2% of £300K.  

Or very roughly, doubling payments compared to interest-only will clear your debt in 6 years at 15% or 50 years at 2%!

---

Yet I can't get away from vast sums to repay on a £200K+ mortgage, and other risks with debt going forward.   I personally can't take on £250,000 of debt, at other side of 40, and when I look at the profiles of all the interest to be repaid, even at low interest rates... I choose to rent.

If it were upto an older owner I know of -(retired, and admittedly very intelligent and worked top level throughout his career... but still enjoying a 4-5 bed house worth in valued in the £800K-£1m range which he bought for way way less many years ago, and having an entirely different market perspective)- he would have us buy at £185K townhouse in an area which edges right onto a big tip (and where crime rates are higher), or £220K-£250K semi-D around that way.   

I personally do not want to do that.  It's an option, but I don't want to.  

Not when I have belief the nicer area £300K-£375K houses could be bought (from BTLers and other HPIers) at somewhere around £250K or less, at some future point (and even that quite an ask on my side as a buyer).  We position as we position.

Everything counts at buying for better value, personally.  Have the option to move somewhere that bit more affordable, but don't see why I should retreat and surrender to that yet, when so many older owners sat pretty, and where there has been so much BTL activity for years, including a dancing-rage of BTL activity since 2013, and house prices surging higher.   

It is all a bit depressing to look back on, but the calculations are still as critically important to me (now more so than in 2012), and the market can still readjust.  It's not just about 'taking the leap'.   

Constantly wrong HPCers (myself included)... as we all still focus on 'the victim buyers' at ever higher prices.  I no longer track Hale but should imagine HPI up 15%-30% since 2012 for those nicer terraces.  £550K-£650K.

Quote

HPCer (2012):  Well, based on the loan value for standard SVR mortgage I've just looked at on my Banks website, you would actually be looking at £400k interest on a £400k loan over the next 25 years (that's if interest rates stay as low as they currently are - which I don't think anyone believes will happen.)

Now, look at some of the daft £450k terraced houses in Hale we've been discussing on the Hale & Alty thread. I can easily see those dropping by at least 10-20% in value over the next 5 years; maybe much more. But even at just over a 10% fall and no rises in interest rates, that's your £50k deposit gone (plus the loss of the interest it could have earned in an ISA/etc..) And in the first 5 years of mortgage payments, at £2.6-2.7k per month? Well, you've only paid off £26k of your house. But remember the interest on the loan? That's cost you another £121k in just the first 5 years. So, after 5 years, you are ~£180k down on a £450k house - if interest rates don't go up at all and your house only drops in value by about 12%. The reality is likely to be something much more severe, IMHO - a 30% fall in prices and interest rates at just 2% higher than today gives a loss of over £300k on a £450k house in just five years. And what have you got for that £180k-£300k of investment? Just £26k worth of equity in a house (and minus all your other costs for 5 years - moving costs, stamp duty, maintenance, etc., you don't even have that!)

So that, to me at least, is what is so frightening about buying in the current market. Not a single young person under the age of 35 I speak to can afford to buy at current prices. And for those that do, the doubling and trebling of houses prices needed to wipe out the enormous amount of interest they'd paid in the first 5-10 years of ownership is just not going to happen. Scary stuff indeed.

(SVR 6.37% ?)

----

Not quite 3 times currently, but still big numbers, when taking on big debt.

Quote

 

HPCer (2012): I stick to the Lionel Ritchie rule, the once, twice, three times a lady rule. Its a rule of thumb rather than an article of faith so you'll have to excuse the broad generalisation.

Borrow £10,000 (once) results in a typical repayment of £20,000 (twice) which for a typical basic rate taxpayer means earning £30,000 (three times). Or, to put it in plainer terms, an additional £10,000 offered is equivalent to a years work at average salary and even better offer £10,000 less and you could retire a year earlier. Instead we fixate on lending multiples at gross earnings which neglects tax and interest.

On the savings point, its rather futile isn't it? Saving (an extra) £400 severely cramps the lifestyle of a genuine typical Brit. Not the £500k+ prospective housholders on these boards admittedly. But for that sacrifice you end up with an extra £5000 in savings which is laughable in respect to housing costs. You wonder why you bother. I've got a savings target for the next FY of £800+ per month. Not going to get anywhere near it but you have to try. Even so, if successful, it would only amount to £10,000 which is only marginally less laughable. More rules of thumb but if you're earning around £40,000 you would be lucky to see £30,000 in your hand each year. That £10,000 that isn't going to go very far in house terms and it is a massive chunk of those earnings. When you start having dependents it becomes harder and harder. And where would the British e-CON-omy (h/t erranta) be if people started deferring the consumption of 20%+ of their earnings? I know we're not really the target of the dirty hoarder missives but still its hard to bear. As a prole it seems the cards are being stacked even further against me.

On the interest front, i think the critical level is when you can start offsetting your interest against your rent. For me that is around the £40,000 level when you can start earning £100 a month. When you can get to there you really are taking the fight to buyng over renting. But that £40,000 is hard to get to as noted above and doesn't get you much house when you're mid 30s, peak earning with 2 kids, does it? Its crazy. Now, i can afford to take a little gamble that this isn't a new paradigm as i/we have discipline necessary to make things work whilst waiting and (by association) assets off the table, so to speak. We all have to deal with the consequences of our decisions.

 

 

[Venger]

--

Quote

This change.  The social resistance to house prices falling (becoming better value), as a societally good thing, can change.  It might require to be forced, but as some embrace HPI+++, they may be forced to stomach HPC, to allow others some fairness in the market.

 

8 hours ago, Blod said:

Interestingly it the young parents who ask 'where will my children be able afford to live?'. Those with kids in secondary school seem less likely to be questioning. The young couple who bought a ONE bed flat in Deptford at the edge of their affordability envelope with both work really can't have a family. They have neither the room nore funds. In a few years biology will force them to reconsider and it will be the woman in the relationship that this will be most apparent to. They either accept childlessness or move out.

That scenario increasingly plays out all over London/SE. The masses are picking up on that and are not happy. I recently experienced this in my family.

I am not sure I understand that.  

Are they not asking that question for themselves, against their own position with house prices?  

On reading this (below), from another recent thread, the first thing I did was dig for more info, and was pleased to see childcare/nursery vouchers (KiddiVouchers etc) won't be affected by other changes to salary sacrifice.

On 3/15/2017 at 7:30 PM, Hullabaloo82 said:

Meanwhile the binning of salary sacrifice on benefits in kind for paye mugs (one of the few tax breaks available to salaried workers) passes unnoticed. The direct link between the budget and the increase in council tax also seems to have passed people by.

Many young parents on the rent side of things, against these house prices, from my perspective.   Parents with young children at nursery.  

Our situation is flexible (thankfully), and so we are often asked by mid 30s relatives (renting from BTLer, and both working.. £35K-£50K incomes) to look after their two young children as well.

Although quite a few owners too.  (Mix of renters and owners at the NCT).   Inheritance, bomad, and others through paying these prices, involved at mid/senior level in work to pay the mortgages that have taken to lay claim to properties at these prices. 

One 37-40 couple we know somehow bought a £300K house (probably worth £400K in this market now), were telling us of their BTL vision, just a few months ago, with no idea about S24.   Market.

The couple who the newspaper is claiming bought a 1 bed place at that price, made their own choice.  For me they are complicit in societally destructive housing financialistion.   If it's real, and if they meet challenging circumstances in the future (wanting children and unhappy with their high debt and 1 bedroom choice), selling for a loss, or even bankruptcy isn't the end of the world.  It was for them to consider what they need in the future from housing, and they chose to pay that much for a 1 bed place.  I refuse to have them as any defence to allowing market to ease down from these levels, which is causing misery for so many other renters/renting families who refuse to be complict (as much as possible... can't sofa surf and avoid rent).

Edited March 18, 2017 by Venger

[Venger]

On 3/16/2017 at 8:19 PM, disenfranchised said:

A few choice bits:

Hannah (27) & Will (29) - art director and tech start up person...

1 bed flat in Deptford 

£25k down, £12k stamp duty £398k mortgage 

Couldn't afford spmewhere they wanted to live but chose Deptford for its "potential"

Now £600 a month better off than they were as renters

------------------

 

On 3/16/2017 at 8:37 PM, Ah-so said:

But they had been renting in Putney and swapped it for the delights of Deptford. No wonder they saved £600 pm

 

I woke up from a sort of half-nightmare about this story (something I am used to during all the 'buying victim' with foreverHPI+++ years, although back at the start the cries of innocence would have been for someone paying £250K), needing to get confirmation it had some substance.  I stand by my previous posts.

Quote

-------------------------

Deptford: Great transport links

Before they became homeowners Hannah and Will were renting a flat in Parsons Green – at a cost of £1,500pcm. Thanks to low interest rates the mortgage on their one bedroom flat in Greenland Place, Deptford - a Barratt London development which they moved into last November - is £600pcm cheaper. They paid £423,000 for the flat, using a deposit of £25,000.

This hefty saving means that Hannah Quick, 27, and Will Alexander, 29, have considerably more disposable income now than they have been used to, especially since they had to save hard to raise their deposit. “We didn’t go on holiday for two years, we took packed lunches to work every day, we didn’t buy new clothes,” said Will, 29. “We were just really disciplined.”

Savers: Hannah and Will didn't go on holiday for two years to save for their deposit

Of course their deposit was not their only moving cost – they also had to raise £12,000 to pay off their Stamp Duty bill. As first time buyers they felt they needed some help with the financial side of things and so, on the recommendation of a friend, they went to a mortgage advisor who guided them to a two year fixed rate mortgage at 1.69 per cent with Santander.

The flat itself they chose more for the potential of Deptford and for its great transport links. Will works for a tech start-up and Hannah is an art director – unsurprisingly they spend a lot of time in Shoreditch. 

“We couldn’t afford to live somewhere we really wanted so we got somewhere we could get there really easily,” said Will. So far the couple haven’t had much of a chance to explore Deptford – they’ve only been in situ a couple of months – but are looking forward to finding out more about the area and to the new bars and restaurants which are starting to open around them. 

They hope that as the area develops so their flat will increase in value. “We are expecting to live here about three years and then, hopefully, get somewhere a bit bigger,” said Will. 

http://www.homesandproperty.co.uk/property-news/buying/where-to-live-in-zone-2-popular-areas-for-firsttime-buyers-in-london-north-and-south-of-the-river-a108921.html

Adult housing market participants.   Some gulp and recoil at prices and choose to rent for their families.  

Others embrace and buy, hoping for moar HPI, setting higher wider house prices for renters.  

Being young (30) and 'only knowing HPI' has nothing to do with it, when I know couples same age who rent against house prices they believe way too expensive and subject to future better value emerging.  Everyone can take a position about £400,000 debt for a 1 bed flat, and run some projections and numbers, and think what their position would be like to 'trade up' even if they got the hpi they hope for.  Especially minds in tech.

Surely stamp duty and other costs (legals) add up to near enough 10 months nicer-place rent, from that 3 year ambition of hope for more HPI on this 1 bed flat.

I choose my side, and they are sides.  Just can't help it if younger couples got themselves this deeply involved with their thinking and hopes for HPI.... and nothing is certain after years of only seeing the mad-gainz continue.   Such buyers must be limited in number, in event of HPC,  compared to millions of renters who would get some relief (in HPC) against the wider BTL/older owners who can take some ego HPC. 

Edited March 19, 2017 by Venger

[Venger]

 

22 minutes ago, Venger said:

......one bedroom flat in Greenland Place, Deptford - a Barratt London development which they moved into last November - is £600pcm cheaper. They paid £423,000 for the flat, using a deposit of £25,000.

 

Quote

 

Greenland Place SE8
SHARE
1 & 2 bedroom apartments currently available
From £421,000 to £825,000
Gross rental yield: 3.50% - 4.70%

Greenland Place offers 580 homes, a mix of studios, one, two and three-bedroom apartments. Located between Canada Water and Deptford, it is only a nine-minute walk to Surrey Quays Overground station.

https://www.barratthomes.co.uk/new-homes/greater-london/h645101-greenland-place/

 

Postcode, for sale:  http://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=POSTCODE^763942

Get HPC'd, Parsons Green.  And RPC Parsons Green too.

[AvoidDebt]

they went to a mortgage advisor who guided them to a two year fixed rate mortgage at 1.69 per cent with Santander.

Is that product still on the market? I tried these numbers in go compare (398k mortgage, 30 years, 423k property) and cheapest mortgage was following, 20 repayment products and 0 interest only. 

Monthly Payments:£1,820.69
Initial Rate:3.65% then 4.94%
Initial Period:3 years
Lender Fees:£370

On Santander website cheapest was.. 

Maximum loan to value

95%

Initial rate

3.74%

Differential to Bank of England base rate (currently 0.25%)

3.49%

Then changing to Santander's Standard Variable Rate

4.49%

The overall cost for comparison is (APR)

4.5%

Product fee

£0

Additional benefits

Free Valuation

Early repayment charge (ERC)

No ERC.

Monthly cost

£1,841

All for the hassle and grief to 'own' one of these. 

[AvoidDebt]

According to this article the below 2 per cent deals are only available at 40pc deposit. 

http://www.telegraph.co.uk/personal-banking/mortgages/best-fixed-rate-mortgages-two-three-five-and-10-years/

I'm surprised you can even borrow that much, has to be the help-to-sell scheme or some other daft prop

Looking at the floor plan, that balcony might come in handy, just sayin...

[Venger]

1 hour ago, AvoidDebt said:

All for the hassle and grief to 'own' one of these. 

Thanks.

*Sigh*

Reminds me of some other HPC thoughts I banked into memory, although WTH do I know.... the offplanner at the time probably sat on her mad-gainz right now, vs mug rent-forever-losers, as others choose to pay more and more, and push up wider values.  The quest to protect the HPI, and force others into hardship who refused to be complict in extreme house prices and actual HPI worshipping.

Quote

 

Off-Plan Dreaming 2013
Started by Venger, August 3, 2013

Quote

She is also confident that it will be a sound financial investment. "I think in the next few years we will see property prices rise and we will get the benefits," she says.

 

 

On 11/11/2013 at 7:07 AM, bomberbrown said:

£200k and the sofas are in the kitchen? Idiots!! They haven't bought a two bedroomed flat, they've still bought a one bedroomed flat and what should have been a living room has been marketed as a second bedroom under the guise of 'open plan living'.

 

On 11/14/2013 at 10:37 PM, MattW said:

I flipping hate open plan kitchen/living rooms too. The trend for 'open plan living' has given developers carte blanche to squeeze more out of a tiny area. I would rather have a 1950s/60s flat with proper rooms, ample cupboard space and decent sized windows.

 

On 8/3/2013 at 10:54 AM, ingermany said:

One of the most nauseating features of the 2008-9 "crash" was the sight of the Prime Minister making solemn statements about the need to spare no effort to assist the victims of the tragedy (that started in America). As if a 10% correction in house prices was on a par with an overwhelming natural disaster. Of course, as it turned out the reaction of the state eclipsed any historical reaction to any natural catastrophe of days gone by. Only the post WW2 Marshall Plan was bigger in scale than the rescue plan for overstretched house buyers.

Agaist this background, one can see that buying off plan is again seen as a one way bet.

[Ah-so]

3 hours ago, AvoidDebt said:

they went to a mortgage advisor who guided them to a two year fixed rate mortgage at 1.69 per cent with Santander.

Is that product still on the market? I tried these numbers in go compare (398k mortgage, 30 years, 423k property) and cheapest mortgage was following, 20 repayment products and 0 interest only. 

Monthly Payments:£1,820.69
Initial Rate:3.65% then 4.94%
Initial Period:3 years
Lender Fees:£370

On Santander website cheapest was.. 

Maximum loan to value

95%

Initial rate

3.74%

Differential to Bank of England base rate (currently 0.25%)

3.49%

Then changing to Santander's Standard Variable Rate

4.49%

The overall cost for comparison is (APR)

4.5%

Product fee

£0

Additional benefits

Free Valuation

Early repayment charge (ERC)

No ERC.

Monthly cost

£1,841

All for the hassle and grief to 'own' one of these. 

I'm surprised that they only managed to fit one bathroom into that flat. In this era, any one-bed flat needs at least 2 bathrooms. 

Anyway, it is an ideal flat for those without possessions or friends. 

[Mikhail Liebenstein]

On 16/03/2017 at 8:19 PM, disenfranchised said:

A few choice bits:

Hannah (27) & Will (29) - art director and tech start up person...

1 bed flat in Deptford 

£25k down, £12k stamp duty £398k mortgage 

Couldn't afford spmewhere they wanted to live but chose Deptford for its "potential"

Now £600 a month better off than they were as renters

------------------

That 1 bed hobbit cottage in Chelsea made £714k - 20% over asking

-----------------

"Gazumping is back in central London revival" (headline)

Brexit bargains

Short of stock in the 3 to 5 million range

Boom in the Burbs

 

Etc...

 

What are they going to do when they want to trade up?

His mortgage is bigger than mine, and I'm in 3500 sq foot 4 bed. Seriously £400k plus for a one bed, they should only be £60k.

 

I wonder what they earn? Wouldn't have thought it was much over £80k gross combined.

Edited March 19, 2017 by Mikhail Liebenstein

[AvoidDebt]

10 minutes ago, Mikhail Liebenstein said:

What are they going to do when they want to trade up?

Pray for some Malaysian millionaire to turn up?

Seriously, the numbers are BS. I'm expecting to see these two pop up in a future case study of help to buy scandals.

[Venger]

7 minutes ago, AvoidDebt said:

Pray for some Malaysian millionaire to turn up?

Seriously, the numbers are BS. I'm expecting to see these two pop up in a future case study of help to buy scandals.

The numbers are BS...?   I followed up your findings about their mortgage rate and I too find it difficult to believe, although it seems Santander were offering that rate for 40% deposit.  Maybe some bomad came into it but not mentioned in story?   The buying prices in this market look real enough, and easily confirmed.

Hope not.  Can do without the victim-squad going all-out again to protect the HPI, as the main theme priority, to protect the HPI..... and that is if we ever get any HPC.

 

Quote

One of the most nauseating features of the 2008-9 "crash" was the sight of the Prime Minister making solemn statements about the need to spare no effort to assist the victims of the tragedy (that started in America). As if a 10% correction in house prices was on a par with an overwhelming natural disaster.

Anyway maybe the tech start-up will pay off big.  Their choice.   Market.   And @StainlessSteelCat.... a buyers strike?  The HPIers are different thinkers.  

Want to read and see the renters - the majority of younger people carrying it for real - getting an opportunity with real HPC.

Not making any judgment but they aren't married?  So maybe more doing without to save for that, unless they expect moar HPI to pay for it when they look to sell as per their 3 year plan.

[MattW]

Save for golden job opportunities that may come their way, I doubt this couple will be able to make the move to a larger 2 or 3 br property. Good luck raising a child in that cupboardless 1 br flat (if that's the long term plan)!

[65243]

7 hours ago, AvoidDebt said:

 

All for the hassle and grief to 'own' one of these. 

I notice that all the floor plans at that development are very coy about mentioning any dimensions. They've managed to make the living area look reasonably comfortable, with room for a sofa at least. But if you compare that sofa with items of fixed size, you'll see it's not much bigger than the sink-plus-draining-board. It's basically a spacious armchair. And you'd be sitting about three feet away from an eighteen inch telly.

Edited March 19, 2017 by 65243

[AvoidDebt]

4 hours ago, Venger said:

I followed up your findings about their mortgage rate and I too find it difficult to believe

It's London help to buy on steroids. For his sake I hope his start-up is the one out of ten that actually makes it!

[Venger]

Possibly so AvoidDebt, but that's not how it appears in online version of article that came out on Friday (thread start Thursday)..  'two year fixed rate mortgage at 1.69 per cent.'   Not sure how they financed it, but got to accept they paid that price.

It is such HTB involved and likely calcs as you set out behind this guy's purchase at the same place, with 'disciplined budgeting' (like a hero) and family assitance, bought offplan, and has not 'lost out'.  

03 February 2016 https://www.barratthomes.co.uk/new-homes/london/news/latest-news/waterside-living-is-within-reach-for-first-time-buyers/

I owe one HPCer some step-back from a thread from some time ago where we had a difference of opinion.  I very much doubted anyone would take London HTB 40%.   Thought it just a gimmick in Budget 2015* to blindside HPIers (all of them, including those minded that way on the outright owner side) into believing Gov still there to protect and nurture the blessed HPI, and distract from Section24, to prevent any tilt in the market to sell and cash in, and thus set path to lower prices.   (Or was HTB 40% announced in Autumn Statement 2015 with SDLT surcharge... regardless, the same thing for my theory).  And that 40% HTB, with these sort of asking prices would be enough to see HPIers on the buyer side fall back.  Obviously not.

Although it could still turn that way.  

These buyers are adults, and my family and friends on renting side have their own position to be concerned about vs foreverHPI and years of 'worrying about HPIers', against the 'certainty' of a HPC that never comes... just more HPI.   Own concerns and fears, despite holding firm to never paying extreme prices, or taking on excessive debt, while paying up to the landlords.

The article doesn't claim it's his own tech startup, and the money is still flowing.   On first search to find this story the previous article was P-Bricks directors (and a wife) cashing in £24m of their holdings, and how last month they raised around £50m through a share placing to launch in the US.

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Good points @65243

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