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Guest Baffled_by_it_all

First Time Buyer's Situation

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Guest Baffled_by_it_all

After reading some bull comments to FTB's on here I was jsut wondering what the situation is with most FTB's using the site.

The prevailing idea seems to be that we haven't bought because we've 'missed the boat' and can't afford to.

Personally, I'm not priced out of the market. I could afford to buy (and already had a mortgage sorted) but I'm not comfortable with what I'd be getting for my money at the moment and the long-term debt I'd be taking on at what common sense feels like is the top of the market.

I'm just interested what the balance of sentiment is for some other FTB's, priced out or staying out? Either way it's bad for the market. But when people start actively staying out surely that's a really bad sign.

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At a pinch I could afford to buy a scuzzy flat in a scuzzy area of Bristol, but I choose not to as it's poor value for money. I worry about the risk of negative equity. I am also not prepared to extend myself beyond 3.5 x my wage, despite the fact that with my job security the banks would probably fall over themselves to offer more to me. As mentioned my income doesn't get me very far here. When I think that I am on a reasonable wage and I can't afford to buy somewhere half decent, I worry how everyone else is managing to afford these places.

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The advice I would give is don't take on a large debt. 4x's you gross salary plus partners is enough.

Also, expect to be able to buy the average place for your income. What I mean by that is if your on £100k a year, you can easily afford a new build flat, but with that income you should be able to afford a detached in a reasonable area.

If people still want to buy, go ahead. This site is probably the only site giving the other side of the arguments. And... don't say you weren't warned!

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Me 2... 5x mortgage on 50k just for a grotty 2 bed flat is not worthwhile.

As for moving out of london - well sure, if theres a decent place with decent transport options ok, but these are the ones that are massively overpriced imho.

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Saving for a deposit for when the time is right - could get something shite at a stretch, but why pay £200k for something that was going for £60k less than a decade ago? Not really thinking "oh i've missed the boat so i'm refusing to sail" more thinking "you've got to be a mug to think the place you are selling is worth 3 times what you paid for it!".

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250k would buy you a reasonable 2 bed IMO but that is to digress...

...my sit is this:

I'm not priced out of buying "somewhere". Could afford to get a 2 bed flat but I do feel priced out of the housing ladder.

This is where the distinction lies for a lot of FTBs here.

We can afford to buy a flat but consider it terrible value for money and when we consider the housing ladder we cannot see how we are going to be able to take the step up later.

I am buying next year regardless.

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We can afford to buy a flat but consider it terrible value for money and when we consider the housing ladder we cannot see how we are going to be able to take the step up later.

I am buying next year regardless.

Your first sentence makes complete sense. The second one is odd, given the first. Care to explain why you are definitely buying next year (outside pressure?)

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After reading some bull comments to FTB's on here I was jsut wondering what the situation is with most FTB's using the site.

The prevailing idea seems to be that we haven't bought because we've 'missed the boat' and can't afford to.

Personally, I'm not priced out of the market. I could afford to buy (and already had a mortgage sorted) but I'm not comfortable with what I'd be getting for my money at the moment and the long-term debt I'd be taking on at what common sense feels like is the top of the market.

I'm just interested what the balance of sentiment is for some other FTB's, priced out or staying out? Either way it's bad for the market. But when people start actively staying out surely that's a really bad sign.

I could easily afford a sh*t flat in a particularly scummy part of the city that I live in but as I value my wallet and the wheels on my car I choose not to live there no matter how "up and coming" the area is.

At the moment, reasonable one bedroom flats in my part of the city would be a bit of a stretch. Unfortunalty as it was one of the areas on Krusty and Phils top ten then that is probably me totally scuppered for the time being. So I am saving like a whatsit and currently lodging in a family home which whilst not ideal, is far cheaper that it would ever cost me to buy somewhere - long term I will probably try to move somewhere a bit cheaper.

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I may have missed the boat before this particular bout of rampant house price inflation, but there is another one in the harbour now that does not look sea worthy, nobody seems to know where it is going and the tickets are too expensive. Still I see others desperate to board this boat of unknown destination before it sets sail, which is imminent.

Could I afford to board? Maybe, but I could only afford to go in the hold and have no access to the life rafts. I would not feel safe so I'll wait for the next one.

Bluechutes

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I'm not priced out of buying "somewhere". Could afford to get a 2 bed flat but I do feel priced out of the housing ladder.

This is where the distinction lies for a lot of FTBs here.

We can afford to buy a flat but consider it terrible value for money and when we consider the housing ladder we cannot see how we are going to be able to take the step up later.

hmm. I could, in accordance with current lending practises, obtain a mortgage that would get me somewhere reasonable. Whether or not I could actually *afford* to pay the money back is another matter. 25-40years is a long punt on IRs not going up by much.

And what's more - as you have said, making the second step would be nigh on impossible once you're locked in - prices up? Unbridgable gap to surmount. Prices down? Negative equity!

I may have missed the boat before this particular bout of rampant house price inflation, but there is another one in the harbour now that does not look sea worthy, nobody seems to know where it is going and the tickets are too expensive. Still I see others desperate to board this boat of unknown destination before it sets sail, which is imminent.

Could I afford to board? Maybe, but I could only afford to go in the hold and have no access to the life rafts. I would not feel safe so I'll wait for the next one.

Bluechutes

well put. I was contemplating writing something similar in response to the VI spring assault on here which seems to contradict earlier jibes that we have "missed the boat" as we are now being urged to get on the latest "very last boat to financial nirvana"

in the light of what some people here have said about the last crash and VI proclamations on the way down, this is uncannily similar.

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With help from the government (keyworker 50k loan) I could afford a two bed in a grotty-ish part of SE London. I like grotty-ish areas and am perfectly happy to live there. However, I have two children - boy and a girl - so will need a 3 bed within the next five years as they can't share a room forever. I don't want to be stuck in an unsuitably small property, especially as I would have been able to buy a small 3 bed terrace without ANY taxpayer help 4 years ago.

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Your first sentence makes complete sense. The second one is odd, given the first. Care to explain why you are definitely buying next year (outside pressure?)

As with all these things the reasons are legion. In no order of preference:

I am buying next year because:

a) getting married in Feb and like the idea of owning somewhere (I am fairly materialistic and houseproud)

B ) have been saving for ages and have a hefty deposit that I am prepared to take a knock on

c) the area I am looking in and will buy in has a limited amount of property

d) having delayed buyijng for 2.5 years am fed up with waiting for the HPC, even though I suspect one is coming

e) am expecting windfalls of cash for myself and partner in 2-3 years which will help us with a deposit for the next rung on the ladder

f) refuse to compromise on area and want a 2 bed so parents/friends can stay over. renting a 2 bed would be too expensive.

g) despite the fact prices are very high have looked at the figures and feel comfortable that I can overpay the mortgage and save money on the side to make full use of isa contribution.

There's probably other reasons too.

Edited by DonnieDarker

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I'm a FTB in SW london and am in an interesting situation at the moment and would value some opinions.

Been renting a house in Battersea for 2 years (I say house, there is a basement flat underneath us, but front door onto the street is all ours as is the back garden), its just a standard 2up 2down, decent sized rooms (both bedrooms are good size also) in a very nice area. It needs new everything, kitchin, bathroom, bit of a replaster and new carpets throughout, although is clearly comfortably liveable already. Not much change from 25k I'd guess to do it up nicely.

Anyway, my landlord is selling and offered it to me at what is a pretty decent price (avoiding agents fees etc), certainly reflecting the work that needs doing. I've got a deposit and remaining mortgage would be 3.5x times salary leaving enough to do the work required. So do I now buy into the market I know is overpriced because of this opportunity or stick to my guns and look for somewhere else to rent??

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I'm a FTB in SW london and am in an interesting situation at the moment and would value some opinions.

Been renting a house in Battersea for 2 years (I say house, there is a basement flat underneath us, but front door onto the street is all ours as is the back garden), its just a standard 2up 2down, decent sized rooms (both bedrooms are good size also) in a very nice area. It needs new everything, kitchin, bathroom, bit of a replaster and new carpets throughout, although is clearly comfortably liveable already. Not much change from 25k I'd guess to do it up nicely.

Anyway, my landlord is selling and offered it to me at what is a pretty decent price (avoiding agents fees etc), certainly reflecting the work that needs doing. I've got a deposit and remaining mortgage would be 3.5x times salary leaving enough to do the work required. So do I now buy into the market I know is overpriced because of this opportunity or stick to my guns and look for somewhere else to rent??

Without a detailed breakdown of your financial situation (savings, investments) and the cost of the property, the size of the deposit I dont believe anyone here/anywhere can sensibly answer this for you. Sorry.

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As with all these things the reasons are legion. In no order of preference:

I am buying next year because:

a) getting married in Feb and like the idea of owning somewhere (I am fairly materialistic and houseproud)

B ) have been saving for ages and have a hefty deposit that I am prepared to take a knock on

c) the area I am looking in and will buy in has a limited amount of property

d) having delayed buyijng for 2.5 years am fed up with waiting for the HPC, even though I suspect one is coming

e) am expecting windfalls of cash for myself and partner in 2-3 years which will help us with a deposit for the next rung on the ladder

f) refuse to compromise on area and want a 2 bed so parents/friends can stay over. renting a 2 bed would be too expensive.

g) despite the fact prices are very high have looked at the figures and feel comfortable that I can overpay the mortgage and save money on the side to make full use of isa contribution.

There's probably other reasons too.

Thanks, very informative. Good luck next year too! :)

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I'm a FTB in SW london and am in an interesting situation at the moment and would value some opinions.

Been renting a house in Battersea for 2 years (I say house, there is a basement flat underneath us, but front door onto the street is all ours as is the back garden), its just a standard 2up 2down, decent sized rooms (both bedrooms are good size also) in a very nice area. It needs new everything, kitchin, bathroom, bit of a replaster and new carpets throughout, although is clearly comfortably liveable already. Not much change from 25k I'd guess to do it up nicely.

Anyway, my landlord is selling and offered it to me at what is a pretty decent price (avoiding agents fees etc), certainly reflecting the work that needs doing. I've got a deposit and remaining mortgage would be 3.5x times salary leaving enough to do the work required. So do I now buy into the market I know is overpriced because of this opportunity or stick to my guns and look for somewhere else to rent??

As donniedarker said, hard to know without knowing all of the specifics (which I wouldn't ever post on here).

What I would say is that it's easy to form an emotional attachment to a property, especially after living in it for two years. I'd definitely get the independent perspective of someone you know and trust to ensure it really is "a pretty decent price"

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I think all the FTB these days have far too high expectations for your first homes. My dad bought a half converted chicken coup for his 1st place, it took all his wage and he couldnt afford to eat for 6 months, scaping food from his work. Nothing has changed, its always going to be hard to get on the ladder, its always been that way.

When could a 1st time buyer ever really expect to buy a 2 bedroom house in a nice area? Seriously!

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Guest Baffled_by_it_all

My folks weren't particularly well off but their first buy was a two bed semi.

Fair enough to your dad for living inside a chicken though...

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My folks weren't particularly well off but their first buy was a two bed semi.

Fair enough to your dad for living inside a chicken though...

Same - my mum and pops got their first place for 3.5x times dads salary in the 70's. They barely had 2 pennies to scrape together but got a small 2 bed semi in Enfield in North London.

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I think all the FTB these days have far too high expectations for your first homes. My dad bought a half converted chicken coup for his 1st place, it took all his wage and he couldnt afford to eat for 6 months, scaping food from his work. Nothing has changed, its always going to be hard to get on the ladder, its always been that way.

When could a 1st time buyer ever really expect to buy a 2 bedroom house in a nice area? Seriously!

I think you're missing the point.

The definition of a FTB has changed radically.

Back in the 70's people in their teens and early 20s were buying 1 or 2 bed flats.

Now it is people in their 30's.

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I think you're missing the point.

The definition of a FTB has changed radically.

Back in the 70's people in their teens and early 20s were buying 1 or 2 bed flats.

Now it is people in their 30's.

Good point and something that most VI's don't seem to understand or refuse to acknowledge.

When your twenty you can afford to buy a small flat in a crappy area and work your way up with equity and salary increases. You would then move to a larger house and start a family.

These days first time buyers do not have the luxery of sitting in their first home for ten years - many of them are already wanting to start a family and thinking about schools/gardens/extra bedrooms.

Gordon Brown has presided over one of the biggest social injustices in this country for a long time.

Do not think it will get better because of anything he does or can do - he is not interested in couples starting families - babies don't work or pay tax - he is only interested in a cheap and flexible labour market and he can import that from Europe.

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I'm just interested what the balance of sentiment is for some other FTB's, priced out or staying out?

A bit of both really.

I could get a house that fulfils my requirements for about £115K. I can raise about £10K, of which £5K might go on the process of purchasing the house. That leaves me with £5K deposit and the need for a £110K mortgage. The best deal I can find right now would be £389.58/month on IO, which I could just about stretch to and still pay my bills, food, etc. I certainly couldn't afford to do it on repayment. So, in theory, I could buy a house as long as I could find a bank that would lend me 6.47 times my salary on 95.6% of the property's value, on interest only. Of course, if I were to lose my income for any reason, I'd have nothing to fall back on and the property may well be worth less than I'd paid for it, given that property is at it's highest ever level relative to incomes and more likely to fall significantly than rise significantly. So I may well find myself in negative equity with no means of paying it off.

Maths says staying out.

Common sense says priced out.

It's an inescapable fact that the average house price always reverts to three times the average salary. Unless I find myself in possession of so much money that I can safely buy an overpriced house without having to worry too much about finding myself on the street, then average house price = three times average salary is my buying signal.

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When could a 1st time buyer ever really expect to buy a 2 bedroom house in a nice area? Seriously!

Indeed. As FTBs in the late 60s my parents had to settle for a four-bed house in a decent area... with my father working in a factory and my mother raising several kids.

Now, on nearly twice the national average salary, with no kids and around 100k saved, I could barely afford to buy the house I grew up in.... whereas if I'd been in that situation ten years ago (probably even five years ago) I could have bought it for cash.

Edited by MarkG

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Indeed. As FTBs in the late 60s my parents had to settle for a four-bed house in a decent area... with my father working in a factory and my mother raising several kids.

Now, on nearly twice the national average salary, with no kids and around 100k saved, I could barely afford to buy the house I grew up in.... whereas if I'd been in that situation ten years ago (probably even five years ago) I could have bought it for cash.

even more shockingly, my folks had to squeeze themselves into a 3bed newbuild semi with gardens front and rear... he was 23 and didn't even have a permanent job (contracting) she was 20 and doing clerical work.

yes they struggled (we're talking about second hand furniture here) but frankly, I'd much rather have it that way - a nice spacious house with nothing in it but scope to grow your home and family within it - rather than a tiny box with all new modcons and fittings but no prospect of anything other than increasing claustrophobia.

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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