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Why Cant i afford to buy a house


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2 minutes ago, iamnumerate said:

Obviously that is true

However this

In 2001 the rent was a lot more than the mortgage

I see it as affordability hasn't changed much is people pay interest only they extend the term for 30 or more years......cheaper homes, high interest rates and paying extra to repay quicker when income increases and interest rates keep on falling sees a smaller debt gets repaid many years sooner.......?

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1 minute ago, winkie said:

I see it as affordability hasn't changed much is people pay interest only they extend the term for 30 or more years......cheaper homes, high interest rates and paying extra to repay quicker when income increases and interest rates keep on falling sees a smaller debt gets repaid many years sooner.......?

So you think it is as easy to buy now as in the past? 

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9 hours ago, onlooker said:

But it is illogical. If prices rose as interest rates fell, because people could borrow more and service the loans, then affordability has not changed. Yet the thread title says that affordability is worse. This can only be because demand is up for any given level of affordability. Demand is up because the population has grown.

Yes, population puts pressure on demand.

But affordability requires two things:

  1. to be able to service the loan
  2. to be able to stump up the deposit in order to get the interest rates that make the loan affordable.

As prices rise so does the deposit required (low mortgage payments are irrelevant until you actually have a mortgage).

Seems short sighted to dismiss one reason for the heat in the crisis (ZIRP) just because you think a different reason for this heat in the crisis is more important.

Even if it isn't.

Bear in mind: several other economies have over-heating property markets but they have varying levels of population pressure (especially from outside their economies). But the ZIRP is pretty common.

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4 minutes ago, iamnumerate said:

So you think it is as easy to buy now as in the past? 

Are you asking if I think it is easier today?......no as fast as the interest rates fell the prices of homes rose they rose far higher than both inflation and earnings.....much larger deposits required from savings having to be saved from income that did not rise inline with HPI....add to that higher rents meaning saving is a lot  harder.....easy credit means people have more debt available to buy.....having more debt to buy pushes prices ever higher......not everyone has access to easy low interest rate credit.

Today it is much harder to buy using your own wage, own savings.......more dependency on family or other 'so called help' with the larger deposits required to buy the same property......years ago could buy with own savings from earnings that paid higher interest rates.......work no longer pays.?

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29 minutes ago, Aidan Ap Word said:

Yes, population puts pressure on demand.

But affordability requires two things:

  1. to be able to service the loan
  2. to be able to stump up the deposit in order to get the interest rates that make the loan affordable.

As prices rise so does the deposit required (low mortgage payments are irrelevant until you actually have a mortgage).

Seems short sighted to dismiss one reason for the heat in the crisis (ZIRP) just because you think a different reason for this heat in the crisis is more important.

Even if it isn't.

Bear in mind: several other economies have over-heating property markets but they have varying levels of population pressure (especially from outside their economies). But the ZIRP is pretty common.

I may be stretching a point, but houses are being sold for roughly what is being asked, so by definition they are affordable. If you can't buy as much house as you used to be able to, that is because there is extra demand. I haven't noticed those 700,000 sleeping on the streets.

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10 hours ago, onlooker said:

But it is illogical. If prices rose as interest rates fell, because people could borrow more and service the loans, then affordability has not changed. Yet the thread title says that affordability is worse. This can only be because demand is up for any given level of affordability. Demand is up because the population has grown.

Not illogical at all. You cannot (until the creation of help-to-buy) borrow your deposit. As House prices the rise, the amount needed to be saved for your deposit had skyrocketed. 

In London, without help-to-buy, you’re talking best part of £100k. Good luck with that if you’re earning £45kpa and paying £1500 per month rent.

unaffordable deposits are the whole reason U.K. gov magicked up help-to-buy. It’s sub-prime lending in all but name. Underwritten by the U.K. taxpayer. It’s f***** criminal!

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23 minutes ago, SOLZHENITSYN said:

Not illogical at all. You cannot (until the creation of help-to-buy) borrow your deposit. As House prices the rise, the amount needed to be saved for your deposit had skyrocketed. 

In London, without help-to-buy, you’re talking best part of £100k. Good luck with that if you’re earning £45kpa and paying £1500 per month rent.

unaffordable deposits are the whole reason U.K. gov magicked up help-to-buy. It’s sub-prime lending in all but name. Underwritten by the U.K. taxpayer. It’s f***** criminal!

You need a deposit of £100k in London?

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16 minutes ago, onlooker said:

You need a deposit of £100k in London?

Pretty close:

The average deposit paid by London-based first-time buyers has also gone up 62 per cent since 2013 and is now £92,833, the lender revealed.

 

https://www.google.co.uk/amp/s/www.independent.co.uk/news/business/news/uk-house-prices-first-time-buyers-london-average-deposit-mortgage-a8363736.html%3famp

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20 minutes ago, onlooker said:

You need a deposit of £100k in London?

Should add. Banks will lend you a max of 4.5x income (less regular living expenses).

the rest has to be made up by your deposit. Rising prices without rising wages widens the gap, which means anountbyou need to put down up front (deposit) increases. This is the gap that HTB was designed to plug. It’s sub-prime lending and the governments way of circumventing the affordability criteria defined by their very own Bank of England / Financial Stability Authority. It’s a complete joke. 

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8 hours ago, TryingToWin said:

----

https://www.bbc.co.uk/news/uk-politics-eu-referendum-36271390

The official net migration figures are over 2million every 5 years. The houses built are less than 700,000 every 5 years. an extra 1.3million people competing for housing every 5 years.

The unofficial NI numbers add an extra 1.2million NI numbers every 5 years.

3.3million People competing for 700,000 Houses .. EVERY 5 Years

Since the financial crash 6.6million extra people competing for 1.4million homes.

---------

You are forgetting that sometimes more than 1 person lives in the same house.

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12 hours ago, dugsbody said:

This is probably completely wrong.

Nope 100% right.The band is now pulled so tight it will revert back to mean and past.Cost of money drives house prices in an economy where population/demand is growing and the US long bond decides where everyones rates are over the longer term.Rates will be way over 5% by 2025,probably over 7% and maybe even 10%.I doubt house prices will be this high again inflation adjusted in my lifetime.Buying a southern house this year or over the last couple will prove a terrible investment.Life changing bad for people without the means to cut the debt quickly.

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12 hours ago, durhamborn said:

Nope 100% right.The band is now pulled so tight it will revert back to mean and past.Cost of money drives house prices in an economy where population/demand is growing and the US long bond decides where everyones rates are over the longer term.Rates will be way over 5% by 2025,probably over 7% and maybe even 10%.I doubt house prices will be this high again inflation adjusted in my lifetime.Buying a southern house this year or over the last couple will prove a terrible investment.Life changing bad for people without the means to cut the debt quickly.

Not sure if interest rates will be that high. We won't see pound crashing to that level to trigger massive rate rises. Even those who bought for £600k in Langley, Twickenham, Maidenhead, Pinner still seeing their house pricesgoing up since june 2016. I bought last year in kent and it has gone up by £25k. Bucks, Kent, Essex still I'm seeing prices going up. In midlands its not that faster growth. In NE, Even in sunderland, hartlepool,  prices are still going up albeit slowly. Not sure its worth waiting till 2025 for those in their 20s and 30s. In 2025, 2018 would look rosier just like 2007 looks better than 2018 now.

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On ‎16‎/‎10‎/‎2018 at 20:12, Habeas Domus said:

You are forgetting that sometimes more than 1 person lives in the same house.

Yea they are called HMOs and studio flats and they used to be for students to get a feel for living away from mum and dad. Not for filling full of Romanians or couples working 2 jobs just to pay the rent on a single room.

The immigration system and welfare system are the problem. The young people have been totally demoralised into voting against their own personal interests. its crazy.

Costa coffee used to be full of college kids who wanted part time work. Now its full of EU citizens. all the entry level and unskilled part time jobs our kids used to do are now being done by adults who are happy to do it because its double he wages "back home"

chaos

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