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munimula

Simple Ftb Calculation

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Just put a quick email together for my sister as she's looking at houses in Bristol to buy this weekend :o

It went like this;

Might be worth making a realistic budget of what your costs would actually be per month

Broken down like this;

(assuming £190K mortgage)

mortgage: £1125 (no point getting interest only mortgage as you are better off renting. interest = rent, you aren't paying for the house and renting you don't have the repair costs.Interest only is £800 so you would have to compare what you could rent for this - much nicer place I would guess)

council tax: £100(?)

gas: £50

elec: £50

water: £25

phone: £20

repairs: £100 (at least)

So your house costs would be £1470 per month. These are costs that you can't cut down on or avoid. £100 towards repairs is a minimum considering boilers and major repairs that might come along. And what about money for furniture etc?

You have to consider how the rest of your budget breaks down - food, travel etc. Basically though you would need £17,600 per year for your house costs alone, about £22-£24K salary to pay JUST for your house costs.

It's just worth thinking about this in terms of what your plans are for the future.

..and it really made me realise how bad things are. This is for a small bottom of the pile 2/3 bed house in Windmill Hill, not the best are by a long shot. The prices start at around £190K and they have probably only enough savings to cover buying costs, in fact the boyfriend still has uni debts

How can anyone be going into these purchases - I mean a £22K salary just to pay for the housing costs FFS :o

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That is shocking. Glad we're looking to be cutting our renting costs soon - we lose a bit in terms of privacy, but get two bedrooms and less rent.

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It does look stark when written down on paper like that doesn't it?

It would be useful to know what that is in terms of a % of her actual salary. If she's on £25k I'd suggest it's a bit tight, but if she's on £75k then affordability isn't really an issue is it?

Also, why does this "prove 1000s are comitting financial suicide"?

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Also, why does this "prove 1000s are comitting financial suicide"?

If interest rates go up and energy prices go up, not a lot of money left (if any)!!

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It does look stark when written down on paper like that doesn't it?

It would be useful to know what that is in terms of a % of her actual salary. If she's on £25k I'd suggest it's a bit tight, but if she's on £75k then affordability isn't really an issue is it?

Also, why does this "prove 1000s are comitting financial suicide"?

They are both on approx £25K although he 'should' qualify as a solicitor which would turn things around a bit.

However he is now 35 and she is approaching 30.

They are fed up renting and looking for somewhere to rent and just seem to manager to hoover up the VI spin material and probably like most don't have the ability to look at things in detail and understand nothing of economics, cycles etc etc.

My point to them is what will they do if they want to start a family, which they do. How can they manage on 1 wage - even if he is a solicitor by then?

This is my major concern with prices now - those buying are probably restricting themselves to never having kids, they just don't know that yet.

Also, why does this "prove 1000s are comitting financial suicide"?

Because so much of their money will have to go on housing costs.

neither has a pension and if they buy then they won't even be thinking about that.

He's 35, she's 30 - no pension!

Also, it's financial suicide because it will dictate what they do in the future. She'll have to work even if she wants a break to have kids, they'll be restricted to how many kids they can have. He'd like 4 !!

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They are both on approx £25K although he 'should' qualify as a solicitor which would turn things around a bit.

However he is now 35 and she is approaching 30.

They are fed up renting and looking for somewhere to rent and just seem to manager to hoover up the VI spin material and probably like most don't have the ability to look at things in detail and understand nothing of economics, cycles etc etc.

My point to them is what will they do if they want to start a family, which they do. How can they manage on 1 wage - even if he is a solicitor by then?

This is my major concern with prices now - those buying are probably restricting themselves to never having kids, they just don't know that yet.

Because so much of their money will have to go on housing costs.

neither has a pension and if they buy then they won't even be thinking about that.

He's 35, she's 30 - no pension!

Also, it's financial suicide because it will dictate what they do in the future. She'll have to work even if she wants a break to have kids, they'll be restricted to how many kids they can have. He'd like 4 !!

I've no idea what qualified solicitors earn in Bristol, but it does appear they are having a HUGE punt on his future earnings.

Sorry about the "proving" bit, maybe I'm being pedantic, but to prove 1000s are commtting financial suicide, you need to show 1000s are taking on such a burden with a low affordability ratio leaving little wriggle room when rates and utilities rise.

Finally, on the pensions bit, well in your sisters case I think you may have proved it. Jesus.

I remember when I was at Uni seeing a Money Programme show about Pensions. (This is around 10 years ago, before the recognition of the timebomb). They had a young family - mid 30s, couple of kids, no real provision made. They asked the guy when he wanted to retire (60) and what he wanted as a pension (very modest). They then told him he'd have to put half his take home pay away for the rest of his working life. He was absolutely gutted. They should keep that programme and show it in schools.

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My point to them is what will they do if they want to start a family, which they do. How can they manage on 1 wage - even if he is a solicitor by then?

neither has a pension and if they buy then they won't even be thinking about that.

He's 35, she's 30 - no pension!

With respect, a trainee solicitor on £25K (which is what I assume he is) will be on £40K out of the box NQ in a decent firm (I am assuming in a decent city because nowhere else pays trainees £25K) will soon be on £50K plus healthcare, pension etc. a 2-3year qualified in the City at a solid firm is on £70K plus bonus.

He's 35, so presumably on second career, will fast track to partnership and will then be on 6 figures in most of the country in a decent firm -and well over that in almost any City or West End practice (which to pay a trainee £25K it must be) - so where's the problem with that ? His pension will also be stitched up a treat as almost all firms match AVCs up to a level and bang in 5% for you anyway.

If she's got any sense, she'll be going permanent somewhere and using the full lot of maternity pay and holiday then going back to work and going on the long term sick with stress (so they keep on paying) (don't kid yourself about just how many people do it) and then being offered money to leave - in effect so long as he does not get struck off they'll be fine....

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With respect, a trainee solicitor on £25K

If she's got any sense, she'll be going permanent somewhere and using the full lot of maternity pay and holiday then going back to work and going on the long term sick with stress (so they keep on paying) (don't kid yourself about just how many people do it) and then being offered money to leave - in effect so long as he does not get struck off they'll be fine....

He's not a trainee solicitor - he's a legal exec or something. He hope to be taken on as a trainee if he doesn't manage to do it through some direct route with the Law Society or something.

Basically, agree they will be fine but him qualifying is not a cert and I personally think they should at least wait until they know before they buy something.

the illustration however of the costs is as much to show what average FTBers must be faced with now

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There are many newly qualified solicitors out there that are finding it impossible to obtain work at present, especially those hoping to get into conveyancing, surprise, surprise.

For those still studying, training contracts are becoming as rare as hen's teeth unless you have good contacts in the profession. Many existing conveyancing solicitors are now looking to move into other areas of law, family, criminal and litigation seem to be the most obvious choices.

Legal Execs and admin staff are also the ones sitting closest to the door...

Aside from that, I doubt very much that your average ftb has anywhere near the earning potential of a solicitor and there lies the crux of the problem.

A friend of mine just got a job as a trainee solicitor. There were 350 applicants. She has applied for over 100 of these jobs over the past 2.5 years with zero success until now. If you leave it more than 3 years since Uni to get a trainee job, you cant and have to go back to Uni to re qualify again.

This guys future earnings are far from guaranteed.

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its the way of the workd today, and the exact trap that im in...

can't believe how much worse off I am now earning 3 times more money than I was when I was 19 and a student, with two crappy part time jobs, talk about Inflation.

for example... socialising...

Like 4 like comparison 1998 2006

Taxi £5 £13

Beer £2.00 £3.70

Car insurance £400 £1000

New citreon Car £5,500 £9,500

Fuel £0.60 £1.00

I could go on... but surely someone tell me this isn't an illustration of what the government call CPI inflation at 2% pa???

Just a joke, Im just glad my wages have reflected the increases, otherwise I would be in trouble.

But are we just writing off all the students out there?

how can they (students) afford a property on the crap wages they will achieve after UNI, and with all the debt... I really see no motivatiion for the youth of today to do anything other than get up the duff, have afew babies and sponge off councils for the luxury apartments that are remaining.

As for the workers and the people willing to get an education... HOMELESS/ramshackled with a bunch of immigrants... great motivation.

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It does look stark when written down on paper like that doesn't it?

It would be useful to know what that is in terms of a % of her actual salary. If she's on £25k I'd suggest it's a bit tight, but if she's on £75k then affordability isn't really an issue is it?

Also, why does this "prove 1000s are comitting financial suicide"?

Ifs she on £75000 - and she would be a first time buyer then???

How many people do you know on £75000???

Lol, i know loads of solicitors and none of them get £100k

Obviously you must live in london or something

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Ifs she on £75000 - and she would be a first time buyer then???

75k on a 4x salary mortgage wouldn't even buy you an 'executive apartment' in a nice area around here. 3.5x would get you a two-bed terrace in the local chav-zone, which would certainly be appropriate housing for someone on three times the national average salary.

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He's not a trainee solicitor - he's a legal exec or something. He hope to be taken on as a trainee if he doesn't manage to do it through some direct route with the Law Society or something.

Basically, agree they will be fine but him qualifying is not a cert and I personally think they should at least wait until they know before they buy something.

the illustration however of the costs is as much to show what average FTBers must be faced with now

Ah, Bristol.

I hope he's reaslistic - the only two legal execs I know personally who made it as solicitors via ILEX both had great legs and the guy who hired them has a certain reputation. It certainly was not their legal ability. It can be done, but there is a great deal of institutional bias against them being solicitors at that firm (IME) - ILEX can qualify you quicker but it's a very rare ILEX who makes into a highly paid area of law, I'll tell you that much - your concern may be well placed (though I don't know him and he may be the next Rainmaker). The numbers I gave are probably optimistic if he's ILEX - as others are telling, there's a lot of talent out there and if a 2:1 from a top 10 university can't get in then what chance does a lowly 'ILEX' have in anything remunerative...

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Ifs she on £75000 - and she would be a first time buyer then???

How many people do you know on £75000???

Lol, i know loads of solicitors and none of them get £100k

Obviously you must live in london or something

Does the phrase "for illustrative purposes" mean anything to you? The average % of housing costs to salary in the UK is around 33%, so if the cost is calculated at £25k, then you would need to be on £75k

The point I was making is that we had not been provided with all of the information.

I do live in London. It says it below my username.

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Just put a quick email together for my sister as she's looking at houses in Bristol to buy this weekend :o

It went like this;

..and it really made me realise how bad things are. This is for a small bottom of the pile 2/3 bed house in Windmill Hill, not the best are by a long shot. The prices start at around £190K and they have probably only enough savings to cover buying costs, in fact the boyfriend still has uni debts

How can anyone be going into these purchases - I mean a £22K salary just to pay for the housing costs FFS :o

If they are going to do it, they might be better considering buying somewhere outside of Bristol like Chippenham. It's much cheaper and has the M4 right next door. Ok, so they have a 25 mile drive in and out. Then again they will be 30 grand better off.

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If they are going to do it, they might be better considering buying somewhere outside of Bristol like Chippenham. It's much cheaper and has the M4 right next door. Ok, so they have a 25 mile drive in and out. Then again they will be 30 grand better off.

Good schools in Chippenham. I went to one of them.

Can commute to Bristol centre by train as well, my Dad used to do it and in fact my Mum did 6 months working in London, as it's only 1hr 10mins to Paddington.

Edited by LivingTheDream-JustLikeLeedsUtd

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I live in London.

I am a solicitor.

I earn £60k plus bonus.

My mrs earns £30k.

We're both in our late 20's.

My employer and I contribute (jointly) around £7,000 to my pension.

The mrs and I rent a flat together for £15,600 per year.

A more or less identical flat 4 doors down the road is being offered for rent at £16,000 per year

The same flat is also on the market at £325k

We could afford to buy it, however, we're one of a very small minority of FTB's who actually could.

But, then again, why on earth would we want to buy?

Assuming a 10% deposit an i/o mortgage, (and yes, we do have the 10% saved), a 90% mortgage would be around £14,625 per year.

So, take into account the transaction costs (say amortised over 5 years) and then work out the cost of buildings insurance, depreciation of white goods, repairs and maintence etc etc. Also take into account the (rather boring and safe) £1500 annual return we currently receive on savings....

Well, it's not even worth adding it all up. Suffice to say I'm going to ignore all rational economic behaviour and follow the advice of Krusty the numpty by jumping on the ladder immediately. London prices are sure to double within 5 years aren't they and if I don't buy now, I'll be "priced out". But, priced out by who I ask?

A BTL investor? Probably, I know I'd kill for that kind of yield.

Anyway, I just wish I'd gone into a better paid profession because if you believe the usual rubbish people spout, clearly you'll very shortly need the buying power of a premiership footballer to buy property in London.

Stan

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Anyway, I just wish I'd gone into a better paid profession because if you believe the usual rubbish people spout, clearly you'll very shortly need the buying power of a premiership footballer to buy property in London.

Stan

Well said that man.

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I'd like to move back to the Westcountry but it would take ages to find a job that isn't some sub-£15 anyone-could-do-it job.

Bristol has the expense of much of Greater London now, but small westcountry salaries.

If you thinks Bristol's salaries are bad you should try Cornwall - average salary 12k average property price - well pick a number :(

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Just put a quick email together for my sister as she's looking at houses in Bristol to buy this weekend :o

It went like this;

..and it really made me realise how bad things are. This is for a small bottom of the pile 2/3 bed house in Windmill Hill, not the best are by a long shot. The prices start at around £190K and they have probably only enough savings to cover buying costs, in fact the boyfriend still has uni debts

How can anyone be going into these purchases - I mean a £22K salary just to pay for the housing costs FFS :o

You forgot to add the insurances.

LIFE INSURANCE - Compulsory

BRICKS & MORTAR - Compulsory

Contents insurance - Optional.

Looking at £50 p.c.m. easy!!

TB

Do they run a car? These costs are high also :(

Edited by teddyboy

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You forgot to add the insurances.

LIFE INSURANCE - Compulsory

BRICKS & MORTAR - Compulsory

Contents insurance - Optional.

Looking at £50 p.c.m. easy!!

TB

Do they run a car? These costs are high also :(

With most mortgage lenders only buildings insurance is compulsory. Not life insurance.

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its the way of the workd today, and the exact trap that im in...

can't believe how much worse off I am now earning 3 times more money than I was when I was 19 and a student, with two crappy part time jobs, talk about Inflation.

for example... socialising...

Like 4 like comparison 1998 2006

Taxi £5 £13

Beer £2.00 £3.70

Car insurance £400 £1000

New citreon Car £5,500 £9,500

Fuel £0.60 £1.00

I could go on... but surely someone tell me this isn't an illustration of what the government call CPI inflation at 2% pa???

Just a joke, Im just glad my wages have reflected the increases, otherwise I would be in trouble.

But are we just writing off all the students out there?

how can they (students) afford a property on the crap wages they will achieve after UNI, and with all the debt... I really see no motivatiion for the youth of today to do anything other than get up the duff, have afew babies and sponge off councils for the luxury apartments that are remaining.

As for the workers and the people willing to get an education... HOMELESS/ramshackled with a bunch of immigrants... great motivation.

Hardly essential items!!

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  • 301 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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