Plenty Of Places For Ftbs In London

[MarkG]

which often take the average price as a benchmark and conclude that everyone on an average salary should be able to afford the average price on 3x or 3.5x mark-up.

Who's going to buy the average house if the average person can't?

[DonnieDarker]

I don't understand people saying it's impossible to buy a place in London. There are loads of flats on Rightmove at £100K, and with average London wages of £28900 (ONS 2005) then a mortgage of 3.5x salary is no problem.

The problem is FTBs wanting to move immediately into houses, not flats, and even then wanting more than 1 bedroom. It's a property ladder - you can't skip the bottom rung! I agree that an average FTB in London can't afford a 2-bed penthouse flat in Putney, but there a great swathes of affordable housing in E and SE postcodes. People have to be willing to live in a bad area, and ride on the gentirfication process.

I bought a horrible 1-bed ex-council flat in Elephant and Castle 7 years ago, for 3x salary at the time. It has been a challenge - we had to put bars on the windows after being burgled, and there were often police signs asking for witnesses to stabbings, shootings etc. However, we have now been able to move to a fantastic 3-bed semi with nice garden in South Bucks, and all our friends who were bleating the whole time 'Oh, I couldn't live in Elephant' now think we've won the lottery or something.

It's simple - to get a nice place takes time and sacrifices, and the instant gratification generation of 20 and 30 somethings don't want to make the effort.

Now this makes me angry...someone who was in a position to get in the market at a lucky time turning round 7 years later and accusing everyone else of being unrealistic. Muppet.

"The problem is FTBs wanting to move immediately into houses, not flats, and even then wanting more than 1 bedroom." Bullsh*t. I dont know any FTBs looking for a house. Bearing in mind a lot of us are thinking about the future we want a 2 bed flat...apologies for being so unrealistic!

It's a property ladder - you can't skip the bottom rung!

Very naive...and very wrong. I am skipping the bottom rung and going to the 2nd one...yuo dont want to be stuck in a 1 bed when the market crashes. Or if you have a kid...or want the possibility of renting a room.

I bought a horrible 1-bed ex-council flat in Elephant and Castle 7 years ago, for 3x salary at the time. It has been a challenge -

3 x your salary...what a CHALLENGE? What would the same flat cost now?!

You're a braggard, a tool and a wind-up.

[Magpie]

Fair play then. Please accept my apologies.

If prices do fall though, they will overshoot on the downside like they do on the boom.

Fair enough - I think the overshoot depends on how fast real prices fall - if it's like 89-94 then yes I'd expect an overshoot. If it's a slow grind downwards, maybe not. My gut feeling is that there are areas of the market that will fall back a long way (terraces up north, new-builds on brown-field sites...) and others that will fall slower or not at all. But it's all guesswork really...

[beenhearingthisforyears]

Now this makes me angry...someone who was in a position to get in the market at a lucky time turning round 7 years later and accusing everyone else of being unrealistic. Muppet.

"The problem is FTBs wanting to move immediately into houses, not flats, and even then wanting more than 1 bedroom." Bullsh*t. I dont know any FTBs looking for a house. Bearing in mind a lot of us are thinking about the future we want a 2 bed flat...apologies for being so unrealistic!

It's a property ladder - you can't skip the bottom rung!

Just before the last crash the big buzz as prices spiked in London was people buying studio flats i.e everything in one room! Don't know anyone who would touch them today, which i think proves that some FTB's are much more aware and financially astute. You state yourself that you are looking to jump straight to a 2 bed flat, which makes perfect sense. But that is your personal choice and for that you may have to wait for a crash or make sacrifices? But many people in London are happy? or should i say forced to buy a 1 bedroom as their 1st purchase.

Edited March 23, 2006 by beenhearingthisforyears

[Magpie]

Who's going to buy the average house if the average person can't?

Well the good points above about the ladder being broken need to be borne in mind here... but in normal circumstances if there was a housing ladder the average house would be bought by people who were either above average wage as FTBs, or more often by those moving on taking some equity from previous houses. A major part of the original housing ladder was about the equity people carried forwards, much easier to do this when the first house was bought young of course. Houses below the average would be bought by those on the average wage or slightly lower, and there would still be a proportion who couldn't afford anything at the lower end of the salary range. I think this all needs to be remembered when you try to work out what the "natural" state of the market is

...and that's even if the obsession with BTL hasn't skewed the market so that it ends up with a higher equilibrium point (I think the jury's still out on that - depends how BTLs respond to slight falls in prices)

I still think prices will fall, mind, just that the ratio of average wage to average house price isn't the most relevant way of guessing how far.

Bullsh*t. I dont know any FTBs looking for a house. Bearing in mind a lot of us are thinking about the future we want a 2 bed flat...apologies for being so unrealistic!

Very naive...and very wrong. I am skipping the bottom rung and going to the 2nd one...yuo dont want to be stuck in a 1 bed when the market crashes. Or if you have a kid...or want the possibility of renting a room.

I can concur with that as someone who had a child in a one-bedroom flat hoping to be able to buy a 2-bed shortly but got stuck in the one-bed for a few years too long. Seemed OK when it was just me and my wife, but once we had a child in there we started to feel really crowded and trapped.

I think in the current state of the market you're doing absolutely the right thing to avoid anything less than 2-beds - if the OP had bought in the Elephant at current prices they might still be stuck there in 15 years time.

Incidentally Donnie, which bit of North London would you be interested in (in theory) - I saw a thread elsewhere, but can't remember if you gave the area?

Edited March 23, 2006 by Magpie

[DonnieDarker]

Just before the last crash the big buzz as prices spiked in London was people buying studio flats i.e everything in one room! Don't know anyone who would touch them today, which i think proves that some FTB's are much more aware and financially astute. You state yourself that you are looking to jump straight to a 2 bed flat, which makes perfect sense. But that is your personal choice and for that you may have to wait for a crash or make sacrifices? But many people in London are happy? or should i say forced to buy a 1 bedroom as their 1st purchase.

Sacrifaces yes. The sacrificace I have had to and will make is saving like a Scrooge for 3-4 years...being shrewd with money when I could have been living a credit-junky lifestyle like most 20-somethings.

I hate all this "I bought at the right time and you lot should jump onboard too" The OP GOT LUCKY. He won a lottery ticket and was in the right place at the right time. Congrats..but to have the gall to tell everyone else (who wasnt in a position) to buy 7 years ago is oafish in the extreme.

Three times his salary indeed!

Edited March 23, 2006 by DonnieDarker

[Goat]

People are getting married later. So, they are settling down later.

How many young people do you know who forgoe going out clubbing for saving up for a deposit?

How many do not own a mobile phone, an ipod etc.

Times have changed, expectations have changed. If you spend all your money on having fun then you won't afford a deposit. It's fairly simple really.

It's not a question of not being able to save up a deposit, many potential FTB's have plenty put aside already. The problem is that even with large deposits the average FTB is priced out of the market.

In the outer south east the average 2 bed flat costs about £160,000, even if you could put 25% (or £40,000) down then you would still need to earn over £30,000 p/a to buy.

Remember, a flat like this is supposed to be a first home until you can afford to move up the ladder. At £160,000 a flat like this is the beginning and end of the ladder for most people.

[Given Up]

It's down to choice.

You can either have a flash car, holidays abroad, sky, loads of expensive nights out, smoke, etc etc. or save up and buy a house or flat.

[Magpie]

It's down to choice.

You can either have a flash car, holidays abroad, sky, loads of expensive nights out, smoke, etc etc. or save up and buy a house or flat.

A bit unfair as it's not even a choice for some who simply can't afford to buy (and there's too many in that condition now). Or I suppose maybe they do have a choice - "You can either eat, buy clothes, have running water and electrity, or you can save up and buy a house or flat..."

I'm also sure at least some of those throwing their money around have concluded that there's no reasonable prospect of buying so have given up...

Edited March 23, 2006 by Magpie

[DonnieDarker]

In the outer south east the average 2 bed flat costs about £160,000, even if you could put 25% (or £40,000) down then you would still need to earn over £30,000 p/a to buy.

And once you start talking about that amount of deposit get ready for the 2nd circle of confusion:

1) That £40k saved has an emotional attachment to it...the years spent saving, investing, scrimping that you dont want to be devalued or pissed away.

2) The financial rewards attached to those savings. For those FTBS with large deposits...those amounts earn you interest and makes the decision to buy muddy. Can my money work harder for me?

With extra money comes extra responsibility...scary but empowering at the same time.

[Goat]

It's down to choice.

You can either have a flash car, holidays abroad, sky, loads of expensive nights out, smoke, etc etc. or save up and buy a house or flat.

No it isn't. I earn above average wage, don't smoke, don't have a flash car don't go out much, don't have any children to support, have over £10,000 savings and still can't afford to buy.

Even if I could buy (probably could get a studio flat - as a 30 year old professional man) there would be virtually no chance of me moving up the ladder given that the next step is over £250,000.

It's not a matter of choice, it's the simple fact that prices have doubled in five years.

[Given Up]

A bit unfair as it's not even a choice for some who simply can't afford to buy (and there's too many in that condition now). Or I suppose maybe they do have a choice - "You can either eat, buy clothes, have running water and electrity, or you can save up and buy a house or flat..."

I'm also sure at least some of those throwing their money around have concluded that there's no reasonable prospect of buying so have given up...

I know what you mean and it is wrong to generalise.

However, in my opinion there is a far higher expectation amongst younger people about property nowadays. If you watch any of those property progs where they repaint and move furniture, all the buyers come back and say "ooh isn't it nice now" and it really isn't rocket science to turn a dingy place into a bright new place. We have always done our own decorating, and fitted in kitchens and done loads of work as we couldn't afford somewhere all done for us.

No it isn't. I earn above average wage, don't smoke, don't have a flash car don't go out much, don't have any children to support, have over £10,000 savings and still can't afford to buy.

Even if I could buy (probably could get a studio flat - as a 30 year old professional man) there would be virtually no chance of me moving up the ladder given that the next step is over £250,000.

It's not a matter of choice, it's the simple fact that prices have doubled in five years.

Could you have bought 5 years ago?

[DonnieDarker]

No it isn't. I earn above average wage, don't smoke, don't have a flash car don't go out much, don't have any children to support, have over £10,000 savings and still can't afford to buy.

Even if I could buy (probably could get a studio flat - as a 30 year old professional man) there would be virtually no chance of me moving up the ladder given that the next step is over £250,000.

It's not a matter of choice, it's the simple fact that prices have doubled in five years.

Got me thinking that the HPBoom is a bit of an economic conspiracy to force people to 'couple up'.

Get hitched or go gay...that's the choice facing single FTBs....

[Goat]

Got me thinking that the HPBoom is a bit of an economic conspiracy to force people to 'couple up'.

Get hitched or go gay...that's the choice facing single FTBs....

Actually I think going gay's the only option. If you get hitched then in a couple of years kids come along and bankrupt you.

Perhaps this suggests the venue for the next HPC pub meet - the Blue Oyster Bar!

[pyewackitt]

It's down to choice.

You can either have a flash car, holidays abroad, sky, loads of expensive nights out, smoke, etc etc. or save up and buy a house or flat.

Ermmm - I'm late twenties, earn about london average and have about 10% of the average UK property price in savings.

I've also paid back all my debts.

Things I dont do:

1) Go out more than once a week

2) Go on holiday (last one was 2003)

3) Waste money on a car

4) Waste money on SKY - I have Freeview box (Xmas pressie)

5) Smoke too much - I've cut down to under ten a day now and switched to roll-ups instead of ciggies

My friends wonder why I don't have a life, won't go out to birthdays in expensive clubs, don't join them on exotic holidays, don't spend rent on a room big enough for a double bed (my rent is under £90 a week which is low for central london) etc.

I am being as f*%*%g tight as I possibly can be and because of that I'm debt free with a Masters level education.

But I can't afford anything other than the most dire of flats anywhere within a half hours journey to work and I'm not prepared to accept that because I know I am in a good financial position and if I keep saving I'll have options - even if i don't have a life.

The point is that for MOST people - even if you don't have:

a flash car, holidays abroad, sky, loads of expensive nights out, smoke, etc

You STILL cannot afford to buy anything but a one bed ex-council flat in E17.

Its not an either/or choice - its a reality that the vast majority cannot afford to buy property any more... they know that which is why they rent and buy little things and holidays to keep themselves happy.

- Pye

Edited March 23, 2006 by pyewackitt

[Goat]

Could you have bought 5 years ago?

Nope, income & savings wouldn't have supported it.

Also, I have to disagree with you regarding expectations of FTB's. Why is it wrong for the higher earners of our generation to question whether living in a 1 bed flat surrounded by DHSS claimants is fair reward for years of hard work?

Edit: Also, what does it matter if I could buy 5 years ago? It's not as if I can go back to 2001.

Edited March 23, 2006 by Young Goat

[OzzMosiz]

Actually I think going gay's the only option. If you get hitched then in a couple of years kids come along and bankrupt you.

Perhaps this suggests the venue for the next HPC pub meet - the Blue Oyster Bar!

Someones been watching too much Police Academy 2!!!

[munimula]

You're a braggard, a tool and a wind-up.

Well said.

And once you start talking about that amount of deposit get ready for the 2nd circle of confusion:

1) That £40k saved has an emotional attachment to it...the years spent saving, investing, scrimping that you dont want to be devalued or pissed away.

Yep and as I've said before those working hard to save up money are unlikely to be buying now. The only FTBs buying now are those getting handouts from mummy and daddy and those that are opting for 100% IO mortgages on many multiples of their salary.

[HPCheese]

It's down to choice.

You can either have a flash car, holidays abroad, sky, loads of expensive nights out, smoke, etc etc. or save up and buy a house or flat.

According to the 'official' definition, Given Up is a troll.

http://en.wikipedia.org/wiki/Internet_trol...-seeking_trolls

Intentionally posting an outrageous argument, deliberately constructed around a fundamental but obfuscated flaw or error. Often the poster will become defensive when the argument is refuted, and may continue the thread through the use of further flawed arguments; this is referred to as "feeding" the troll.

Also, the title of this thread's a bit confusing.

Plenty Of Places For Ftbs In London

It's not boomers that are the problem, it's unrealistic FTBs

What is this "problem" that FTBers are the cause of? High house prices, falling house prices, low transaction numbers, EA's having too much free time on their hands...? Waste of server space IMO.

[Magpie]

I know what you mean and it is wrong to generalise.

However, in my opinion there is a far higher expectation amongst younger people about property nowadays. If you watch any of those property progs where they repaint and move furniture, all the buyers come back and say "ooh isn't it nice now" and it really isn't rocket science to turn a dingy place into a bright new place. We have always done our own decorating, and fitted in kitchens and done loads of work as we couldn't afford somewhere all done for us.

You may have a point - I think part of the allure of new-builds for younger people is the shiny new kitchens and fancy floors and tiles - all of which is just surface. The place we're buying is battered, but £100K cheaper than new builds a couple of miles down the road. It's a lot of work to get all the woodchip off, fix the walls and floor up to look OK, and make it look decent - but we're doing it ourselves (with the four-year-old happily playing amongst the wreckage...) We do have to buy a cheap new bathroom as the one there is a relic, but beyond that we are accepting that for our budget we have to buy somewhere rough and fix it up ourselves. But even to buy that we need a fair deposit and a well above average salary - I'm lucky to have the choice (and may yet live to regret it...), but for some it's not even an option.

[MarkG]

You can either have a flash car, holidays abroad, sky, loads of expensive nights out, smoke, etc etc. or save up and buy a house or flat.

Garbage.

You really think that Joe Average can afford to save 200k to buy an average house just by cutting back on non-essentials?

And why would they, when house prices were increasing by 30+k a year? You'd need to save more than the pre-tax average wage each year simply to keep up with price inflation.

The simple reality is that house prices are too damn high: and if the young generation _aren't_ saving for a deposit because there's no way they can afford to buy anything decent anyway, then the crash is going to be far, far worse than it otherwise could have been.

[LivingTheDream-JustLikeLeedsUtd]

OK, first post on here guys, so please be gentle!

Trying to lump FTBs into one homogenous group really isn't very helpful.

There are some (proabably a lot actually) FTBs who are genuinely priced out of the market.

There are some that there are schemes in place for. My friends £200k flat in Balham was sold to a twenty something teacher with a Key Worker Loan.

There are also some who have unreasonable expectations of what they "should" be able to afford. Yes prices have risen incredibly recently, but the average 25 year old has never been able to afford a two bed apartment in Chelsea.

There are also some who fall into the category that could afford to make the leap, but implicitly by their actions choose not to. A couple of big nights out in London a week, including modest food and a taxi home will easily account for £200 a week for some it will be more like £200 a night, a flash car £300+ odd a month. Holidays, a couple of grand, and that's if they don't decide to do a fashionable 6 month round the world trip. A couple of years and a Reasonable deposit for a Reasonable place isn't that fanciful, but it does require a change of lifestyle for these people

For some people being able to buy a house is a choice, and some it isn't.

I do think in recent times people are sadly less prepared to "make do and mend". The whole country is image obsessed and it's not healthy. When I first moved to London 8 years ago I was told it wasn't really "the done thing" to bring a packed lunch to work.

When my parents bought their first flat, they had garden sunbeds that they sat on in the evening, then slept on at night. It didn't last long, but some sacrifices were made to make the first move. I don't see one of my FTB friends doing this now. It's more a case of: My TV will do for now, but I'll be getting a plasma soon. But that's just my friends. And that's me generalising I guess!

[Given Up]

OK, first post on here guys, so please be gentle!

Trying to lump FTBs into one homogenous group really isn't very helpful.

There are some (proabably a lot actually) FTBs who are genuinely priced out of the market.

There are some that there are schemes in place for. My friends £200k flat in Balham was sold to a twenty something teacher with a Key Worker Loan.

There are also some who have unreasonable expectations of what they "should" be able to afford. Yes prices have risen incredibly recently, but the average 25 year old has never been able to afford a two bed apartment in Chelsea.

There are also some who fall into the category that could afford to make the leap, but implicitly by their actions choose not to. A couple of big nights out in London a week, including modest food and a taxi home will easily account for £200 a week for some it will be more like £200 a night, a flash car £300+ odd a month. Holidays, a couple of grand, and that's if they don't decide to do a fashionable 6 month round the world trip. A couple of years and a Reasonable deposit for a Reasonable place isn't that fanciful, but it does require a change of lifestyle for these people

For some people being able to buy a house is a choice, and some it isn't.

I do think in recent times people are sadly less prepared to "make do and mend". The whole country is image obsessed and it's not healthy. When I first moved to London 8 years ago I was told it wasn't really "the done thing" to bring a packed lunch to work.

When my parents bought their first flat, they had garden sunbeds that they sat on in the evening, then slept on at night. It didn't last long, but some sacrifices were made to make the first move. I don't see one of my FTB friends doing this now. It's more a case of: My TV will do for now, but I'll be getting a plasma soon. But that's just my friends. And that's me generalising I guess!

Brilliant post. Completely right - it was totallly wrong of me to generalise & I apologise.

Welcome

[Goat]

When my parents bought their first house it cost £20,000 vs approx £5,000 income. 3 beds, garden etc.

Today the same place would cost in excess of £250,000 vs equivalent £35,000 income. The second house that cost £90,000 in 1985 (vs £30,000 income) would now cost in excess of £500,000, the third one £235,000 in 1997, now over £600,000.

Don't tell me about sacrifices to get on the ladder. Sleeping on sunbeds etc for a few weeks or forsaking holidays is not the same as taking on a mortgage on a studio flat that will take most of the rest of your life to pay off. Its not the same ballpark, its not the same league, its not even the same goddamned sport!

[RichM]

Don't tell me about sacrifices to get on the ladder. Sleeping on sunbeds etc for a few weeks or forsaking holidays is not the same as taking on a mortgage on a studio flat that will take most of the rest of your life to pay off. Its not the same ballpark, its not the same league, its not even the same goddamned sport!

Exactly, and pretty much a similar case for me and my parents.

Here's the problem - people can buy, but they will never move up the ladder. They are only buying a one-bed for their retirement. That it is. Twenty somethings will never be able to afford what once was called a "home".

The only way "up" the ladder is for wages to rise, which would be follwed by IR increases, making your present place unaffordable. The other way to move up the ladder is for prices to fall, in which case you're screwed again as you're NE. Either way you're stuck. The ladder is screwed. People don't understand the frailties of the low IR "era".