Guest DisposableHeroes Posted March 20, 2006 Share Posted March 20, 2006 I don't get it... How the hell can you have a 2bed house at £130-£140. Who the hell can afford the mortgage on average salaries (especially in an insecure new job market). It makes me laugh when people get complicated and try and rationalise the situation. Its simple it doesn't add up. if you are a 1st time buyer and you get onto the market at 4x your salary or more. Think of the pressure to maintain the repayments for a generation who face:- 1. Unsecurity in jobs. 2. Material culture. 3. Historically low interest rate. 4. Any family commitments. It's like the internet bubble, it seemed to good to be true. When the sanity comes back its got to all go $i$ up. It just doesn't add up. Quote Link to comment Share on other sites More sharing options...
Europa Posted March 20, 2006 Share Posted March 20, 2006 I don't get it... How the hell can you have a 2bed house at £130-£140. Who the hell can afford the mortgage on average salaries (especially in an insecure new job market). It makes me laugh when people get complicated and try and rationalise the situation. Its simple it doesn't add up. if you are a 1st time buyer and you get onto the market at 4x your salary or more. Think of the pressure to maintain the repayments for a generation who face:- 1. Unsecurity in jobs. 2. Material culture. 3. Historically low interest rate. 4. Any family commitments. It's like the internet bubble, it seemed to good to be true. When the sanity comes back its got to all go $i$ up. It just doesn't add up. Welcome to our world Quote Link to comment Share on other sites More sharing options...
teddyboy Posted March 20, 2006 Share Posted March 20, 2006 I don't get it... How the hell can you have a 2bed house at £130-£140. Who the hell can afford the mortgage on average salaries (especially in an insecure new job market). It makes me laugh when people get complicated and try and rationalise the situation. Its simple it doesn't add up. if you are a 1st time buyer and you get onto the market at 4x your salary or more. Think of the pressure to maintain the repayments for a generation who face:- 1. Unsecurity in jobs. 2. Material culture. 3. Historically low interest rate. 4. Any family commitments. It's like the internet bubble, it seemed to good to be true. When the sanity comes back its got to all go $i$ up. It just doesn't add up. Now if only the rest of the country could see that???? WELCOME TO HPC!!! TB Quote Link to comment Share on other sites More sharing options...
Goat Posted March 20, 2006 Share Posted March 20, 2006 I don't get it... How the hell can you have a 2bed house at £130-£140. Who the hell can afford the mortgage on average salaries (especially in an insecure new job market). Neither do I; where can you get a 2 bed house for £130-£140. Around my area £130 is about starting price for a 1 bed flat. Quote Link to comment Share on other sites More sharing options...
BillyShears Posted March 20, 2006 Share Posted March 20, 2006 I don't get it... How the hell can you have a 2bed house at £130-£140. Who the hell can afford the mortgage on average salaries (especially in an insecure new job market). BTLers with significant income and a house they have already paid off can afford it. Imagine a person in their 40s or 50s who has paid off their own house, and has a good income. They can buy up a whole bunch of houses using their existing property as additional security, get in tenants who just about cover the mortgage, and sit back waiting for those house prices to double in the next five years. At least, that's their plan. Billy Shears Quote Link to comment Share on other sites More sharing options...
Its time to buy Posted March 20, 2006 Share Posted March 20, 2006 (edited) well some of my friends are taking out £120K mortgages and are on 18-24K (on their own with little parental help and smallish deposits) go figure - wont be seeing them out much on the weekends :angry: Edited March 20, 2006 by notanewmember Quote Link to comment Share on other sites More sharing options...
Realistbear Posted March 20, 2006 Share Posted March 20, 2006 A 100% accurate summary of the present position and why it will not last much longer. Welcome to HPC! Quote Link to comment Share on other sites More sharing options...
john_coller Posted March 20, 2006 Share Posted March 20, 2006 If you are going to use average salaries, you should use average house prices as well. The average house price is £160000. Quote Link to comment Share on other sites More sharing options...
BillyShears Posted March 20, 2006 Share Posted March 20, 2006 Neither do I; where can you get a 2 bed house for £130-£140. Around my area £130 is about starting price for a 1 bed flat. Assuming you weren't making a joke about the lack of "K"s on the price. In Leicester a 3bed semi in a dodgy area will start at about 90K. In slighlty better areas 130-140K is common. There are more expensive areas, but at least there are houses around. Billy Shears Quote Link to comment Share on other sites More sharing options...
Guest Winners and Losers Posted March 20, 2006 Share Posted March 20, 2006 I have calmed down on my posting lately. I am sick of trying to argue the inevitable. Prices will drop. I don't care how you try to wrap it up or analyse it. It is a done deal. Buying now is absolute insanity. They will only have themselves to blame. News from Australia is very active that there has been significant drops and that prices could fall another 10% this year. Take into account that Australia boomed earlier than the UK, all I can say is that (unless a miracle happens) this time next year the UK will be smiling on the other side of its face. Quote Link to comment Share on other sites More sharing options...
vicster Posted March 20, 2006 Share Posted March 20, 2006 (edited) How the hell can you have a 2bed house at £130-£140. Who the hell can afford the mortgage on average salaries (especially in an insecure new job market). Your parents MEW their overpriced house and give you a big deposit Edited March 20, 2006 by vicster Quote Link to comment Share on other sites More sharing options...
Zaranna Posted March 20, 2006 Share Posted March 20, 2006 (edited) BTLers with significant income and a house they have already paid off can afford it. Imagine a person in their 40s or 50s who has paid off their own house, and has a good income. They can buy up a whole bunch of houses using their existing property as additional security, get in tenants who just about cover the mortgage, and sit back waiting for those house prices to double in the next five years. At least, that's their plan. Billy Shears Yes - but sadly it may take 15-20 years before BTL-ers start to realise that their shiny effort-free "pensions" won't work quite as well as they'd hoped. At the moment it's like those "people in their 40s and 50s" you describe above are existing in a collective monetary delusion (and they, having seen a few economic cycles, should know better). At the moment they seem to think that they've discovered a kind of economic perpetual money machine (hooray - with no effort from me, someone else provided me with a pension free!) Unfortunately, this is as much of a delusion as a perpetual motion machine. In 20 years' time when they all have to either 1. sell up or 2. find tenants in order to "cash in" their "pension", the scale of the delusion will start to become chillingly, nastily clear. You can't cheat the market.... Edited March 20, 2006 by Zaranna Quote Link to comment Share on other sites More sharing options...
mercsl Posted March 20, 2006 Share Posted March 20, 2006 I don't get it... How the hell can you have a 2bed house at £130-£140. Who the hell can afford the mortgage on average salaries (especially in an insecure new job market). It makes me laugh when people get complicated and try and rationalise the situation. Its simple it doesn't add up. if you are a 1st time buyer and you get onto the market at 4x your salary or more. Think of the pressure to maintain the repayments for a generation who face:- 1. Unsecurity in jobs. 2. Material culture. 3. Historically low interest rate. 4. Any family commitments. It's like the internet bubble, it seemed to good to be true. When the sanity comes back its got to all go $i$ up. It just doesn't add up. What you complaining about, get a real nice garage in london for that . The buy to park mob made out like bandits Quote Link to comment Share on other sites More sharing options...
Goat Posted March 20, 2006 Share Posted March 20, 2006 Assuming you weren't making a joke about the lack of "K"s on the price. In Leicester a 3bed semi in a dodgy area will start at about 90K. In slighlty better areas 130-140K is common. There are more expensive areas, but at least there are houses around. Billy Shears No joke intended. Just trying to point out that in the south east a half decent 2 bed terraced starts at about £175,000; 3 bed semi (ex-council) starts at about £210,000. 4 bed detached + garden in desirable area, think in the region of £600,000 plus Quote Link to comment Share on other sites More sharing options...
BillyShears Posted March 20, 2006 Share Posted March 20, 2006 Yes - but sadly it may take 15-20 years before BTL-ers start to realise that their shiny effort-free "pensions" won't work quite as well as they'd hoped. At the moment it's like those "people in their 40s and 50s" you describe above are existing in a collective monetary delusion (and they, having seen a few economic cycles, should know better). At the moment they seem to think that they've discovered a kind of economic perpetual money machine (hooray - with no effort from me, someone else provided me with a pension free!) Unfortunately, this is as much of a delusion as a perpetual motion machine. In 20 years' time when they all have to either 1. sell up or 2. find tenants in order to "cash in" their "pension", the scale of the delusion will start to become chillingly, nastily clear. I'm not sure that I agree that people will take 20 years time to work out that BTL won't work. They need tenants now, and will acutely notice any shortfall, voids, and they'll certainly notice tenants who have to be evicted. They'll notice agents making lots of money out of them for little work. Their only consolation will be capital gains. If they don't eventuate, they'll work out what is happening fairly quick. Billy Shears No joke intended. Just trying to point out that in the south east a half decent 2 bed terraced starts at about £175,000; 3 bed semi (ex-council) starts at about £210,000. 4 bed detached + garden in desirable area, think in the region of £600,000 plus That's why I left the south east. Billy Shears Quote Link to comment Share on other sites More sharing options...
Zaranna Posted March 20, 2006 Share Posted March 20, 2006 (edited) I'm not sure that I agree that people will take 20 years time to work out that BTL won't work. They need tenants now, and will acutely notice any shortfall, voids, and they'll certainly notice tenants who have to be evicted. They'll notice agents making lots of money out of them for little work. Their only consolation will be capital gains. If they don't eventuate, they'll work out what is happening fairly quick. Billy Shears That's why I left the south east. Billy Shears I think those who are highly-leveraged will notice it pretty quick - and those will tend to be the younger investors (30s, early 40s). But for those who have invested capital, who are happy to take short-term hits in favour of the perceived long-term pension gain, or those who are "in it for the long term" it will take a while for it to hit. IMO if we avoid a big HPC the crunch in 15-20 years' time will be catastrophic (those who were depending on a property pension suddenly will start to panic). Obviously as a priced out FTB (and as a social scientist/economist) I am hoping that the crunch is sooner, sharper (and thus easier to recover from in economic terms than a long, slow, nasty, unstoppable decline, which is what we face in 15-20 years' time if we don't have a pretty sharp correction now). On this last point: is it just me who is baffled that so many people don't see that it's better for our economy, and the country, to have a short sharp shock now than a long deathly crunch later? My parents' friends bleat on about how evil it is to hope for a HPC. I think it's evil not to (you are thus wishing a long, slow stagnation on the whole country, and its economic future). Whereas a short recession/HPC is simply part of a market and economic cycle that their generation must have seen a few times before. It amazes me that they think that we can cheat our way out of the inevitable downturn (Not to mention that there are economic opportunities and upsides to a quick recession every so often, in economic terms - though not, I think, in social terms.) Edited March 20, 2006 by Zaranna Quote Link to comment Share on other sites More sharing options...
apom Posted March 20, 2006 Share Posted March 20, 2006 I don't get it... How the hell can you have a 2bed house at £130-£140. Who the hell can afford the mortgage on average salaries (especially in an insecure new job market). It makes me laugh when people get complicated and try and rationalise the situation. Its simple it doesn't add up. if you are a 1st time buyer and you get onto the market at 4x your salary or more. Think of the pressure to maintain the repayments for a generation who face:- 1. Unsecurity in jobs. 2. Material culture. 3. Historically low interest rate. 4. Any family commitments. It's like the internet bubble, it seemed to good to be true. When the sanity comes back its got to all go $i$ up. It just doesn't add up. when it seems too good to be true it usually is.. When under careful inspection it seems horribly buggered.. Chances are you only know the half of it.. its much much worse Quote Link to comment Share on other sites More sharing options...
Goat Posted March 20, 2006 Share Posted March 20, 2006 I'm not sure that I agree that people will take 20 years time to work out that BTL won't work. They need tenants now, and will acutely notice any shortfall, voids, and they'll certainly notice tenants who have to be evicted. They'll notice agents making lots of money out of them for little work. Their only consolation will be capital gains. If they don't eventuate, they'll work out what is happening fairly quick. Exactly the point i've been making for some time. BTLers are loosing money at the moment, they are only willing to do this whilst they see prices going up. Once BTLers see prices stagnating or going down there will be no new money coming into the housing market and BTLers will head for the door. With no new money coming in and floods of ex-BTL on the market which way do you think prices go? Quote Link to comment Share on other sites More sharing options...
BillyShears Posted March 20, 2006 Share Posted March 20, 2006 I have calmed down on my posting lately. I am sick of trying to argue the inevitable. Prices will drop. I don't care how you try to wrap it up or analyse it. It is a done deal. Buying now is absolute insanity. They will only have themselves to blame. News from Australia is very active that there has been significant drops and that prices could fall another 10% this year. Take into account that Australia boomed earlier than the UK, all I can say is that (unless a miracle happens) this time next year the UK will be smiling on the other side of its face. There is a problem with arguing the property market, in that people's perceptions have dislocated from reality to such a degree that if you argue, you end up arguing about some situation that has no real relationship to the real world. The bubble has occurred because people believe all this tosh. While arguing about fundamentals is entertaining and sometimes educational, the only real strategy is to wait until people realise what fools they have been. Billy Shears Quote Link to comment Share on other sites More sharing options...
DonnieDarker Posted March 20, 2006 Share Posted March 20, 2006 Pertinent comment there. The conclusion I've come to is that the situation is criminal for a lot of FTBs but like-it-or-not a lot of foloks have made A LOT of cash out of this boom HENCE: lots of parents mewing/giving kids deposits people getting into BTL even if the sums dont add up / offsetting the risk against profits they've made. Quote Link to comment Share on other sites More sharing options...
Elizabeth Posted March 20, 2006 Share Posted March 20, 2006 Neither do I; where can you get a 2 bed house for £130-£140. Around my area £130 is about starting price for a 1 bed flat. LUXURY! Round my area £150 is the starting price for a one bedroom flat on a dodgy housing estate. If their hasn't been a murder for a while try more like £180. Quote Link to comment Share on other sites More sharing options...
ryanjw Posted March 20, 2006 Share Posted March 20, 2006 In my town of Warrington in the Northwest you can get a decent 2 bed terrace for 85k. Even cheaper in St Helens nearby. Quote Link to comment Share on other sites More sharing options...
North London Rent Girl Posted March 20, 2006 Share Posted March 20, 2006 Your parents MEW their overpriced house and give you a big deposit The number of people doing that - I don't know how they can live with themselves, risking their parents' money. I suppose if your parents are really soundly wealthy then they're safe but even then - where's their self-respect? Quote Link to comment Share on other sites More sharing options...
othello Posted March 20, 2006 Share Posted March 20, 2006 You don't get it because you've bothered to think about it! Quote Link to comment Share on other sites More sharing options...
BillyShears Posted March 20, 2006 Share Posted March 20, 2006 The number of people doing that - I don't know how they can live with themselves, risking their parents' money. I suppose if your parents are really soundly wealthy then they're safe but even then - where's their self-respect? Trouble is, most of these people probably don't think that they're risking their parents' money. And even if they do, the parents probably believe that taking the risk is the only way their children will ever get on the """property ladder""". Because, property only ever goes up .... Billy Shears Quote Link to comment Share on other sites More sharing options...
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