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A Friend's Capitulation

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It's a familiar story of a priced out professional in London. Met up with a friend in London the other night and he told me he was going to buy.

He's buying because he's 32, earns 27k and is utterly pissed off with living in scummy HMOs on 6 month leases. What other choice does the average earner have?

Well, you can buy a 3rd of a new build in Elephant. He's borrowing 5k for a deposit and sharing with a mate. He's getting an IO mortgage because he can't afford a repayment. He is well aware that it is like renting from the bank and that unless he gets a large pay rise (unlikely) then he will never own the flat. He is also aware that house prices may not continue to rise and it might not be a 'good investment'. He's buying because he feels he has no other choice.

It's times like that you realise the extent of the housing crisis in Britain in 2006.

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What happens when one of the three owners:

1. wants to move and rents out the room to someone random to cover his mortgage?

2. defaults on the mortgage payments, stuffing the other two?

Your friend has an interesting way of committing financial and social sucide!

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If your friend realises all the pitfalls why is the idiot buying now?

I might go and borrow some money to buy a lamborghini because I've got no choice and i'm sick and tired of just driving a rover 214

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Well it's better than my Ford soon to be out of Business Escort.

What are they gonna run on - psuedo / phantom oil? I wonder what will be next generation car.

And I believe that's why Ford, G.M. V.W, Rover, NIssan, etc have lost staff. Off topic rant I know.

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What happens when one of the three owners:

1. wants to move and rents out the room to someone random to cover his mortgage?

2. defaults on the mortgage payments, stuffing the other two?

Your friend has an interesting way of committing financial and social sucide!

The other two have very small mortgages, they had a flat to sell. Why then are they moving on to shared ownership? Because they believe it's a 'good investment', afterall they were sharing before and they 'made' loads of money so of cause house prices can only go up! :rolleyes:

It does however highlight the myth that if you start by sharing you will eventually be able to afford your own place. They're getting a 3rd sharer. Madness!

Renting a room to a random person is probably out of the question. It would be ironic if he ended up in a HMO that he had 'owned'.

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If your friend realises all the pitfalls why is the idiot buying now?

I might go and borrow some money to buy a lamborghini because I've got no choice and i'm sick and tired of just driving a rover 214

You are correct, it's bloody stupid and it's about expectations, but you have to understand the nightmare this guy's had in HMOs. He's been unlucky with antisocial flatmates, the stories he has to tell are very funny (if they haven't happend to you!). He's basically thrown in the towel, speaking to him, he has the attitude that you see with posters on here sometimes - the "I don't give a shit anymore" attitude.

To be fair 27k is not a bad wage. You would have thought that someone on an average wage like that should be able to afford a modest flat to live in, even renting.

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I actually sympathise with him... 6 month leases suck.

Over here in Belgium the standard lease is 3 years and the penalties are quite stiff if you break it before then, however obviously there are always some nice landlords who are far more flexible. It does mean that when you find somewhere nice you know you can't be kicked out and you move on when you're ready to. :) I rented a beautiful 3 bed converted mill house for 440 quid a month which I gave up after 2.5 years to buy my own house and my landlord did NOT stiff me - that's got to be a first right? :P

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£27K goes nowhere nowadays thanks to 'real' inflation

I don't know how people on £13K survive?

I agree, I couldn't live on 27k these days (I have 'surivied' on a lot less in my time though).

50% of people in this country earn less than 19k so I don't know how 50% of the UK have any standard of living at all. I think the answer is that you have to be old enough to have bought before the boom. It's a graphic illustration of the economic marginisation of the younger generation.

The housing crisis is reducing the standard of living of many in the UK and the government continue to do nothing. Shame on them.

People on 13k survive on benefits I think.

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£27K goes nowhere nowadays thanks to 'real' inflation

I don't know how people on £13K survive?

Last year grossed about £14,800 so I can give you two tips on how to survive.

a) Don`t buy anything, and

B) Errr... that`s it

Limpet.

By the way I`m not really complaining as I have the best job in the world, and it is basically a life style choice. :)

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Last year grossed about £14,800 so I can give you two tips on how to survive.

a) Don`t buy anything, and

B) Errr... that`s it

Limpet.

By the way I`m not really complaining as I have the best job in the world, and it is basically a life style choice. :)

What band are you in?

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People on 13k survive on benefits I think.

IIRC this is call centre/IT support territory

The housing crisis is reducing the standard of living of many in the UK and the government continue to do nothing. Shame on them.

They've definately lost touch (that was clear during the last fuel crisis) and should be kicked out next time round

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He's buying because he's 32, earns 27k and is utterly pissed off with living in scummy HMOs on 6 month leases. What other choice does the average earner have?

If I were he I'd move out of London - changing my place of work and taking a pay cut if necessary.

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It's a familiar story of a priced out professional in London. Met up with a friend in London the other night and he told me he was going to buy.

He's buying because he's 32, earns 27k and is utterly pissed off with living in scummy HMOs on 6 month leases. What other choice does the average earner have?

Well, you can buy a 3rd of a new build in Elephant. He's borrowing 5k for a deposit and sharing with a mate. He's getting an IO mortgage because he can't afford a repayment. He is well aware that it is like renting from the bank and that unless he gets a large pay rise (unlikely) then he will never own the flat. He is also aware that house prices may not continue to rise and it might not be a 'good investment'. He's buying because he feels he has no other choice.

It's times like that you realise the extent of the housing crisis in Britain in 2006.

If, at the age of 32, he has to borrow 5k for a deposit, then it doesn't bode well for his ability to repay the mortgage and pay for trhose unexpected repair bills!

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If I were he I'd move out of London - changing my place of work and taking a pay cut if necessary.

You took the words out of my mouth.

Of course I feel sorry for the OP's mate, but he seems to be suffering from the same inertia as half the people on this forum who seem to have forgotten that they can make bold choices and change their lives. If he wants to buy a property then very clearly, London is not the place to do it. We don't know what his circumstances are but it sounds to me like he needs to take a long hard look at what he wants out of life.Would it be so bad to take a paycut and move to somewhere more affordable?

If an I/O one third ownership of a flat at the Elephant & Castle is the answer, then it must be one hell of a question.

Think outside the box, people.

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.Would it be so bad to take a paycut and move to somewhere more affordable?

If an I/O one third ownership of a flat at the Elephant & Castle is the answer, then it must be one hell of a question.

Think outside the box, people.

Why is everyone living in London and trying to hop on the property ladder there? Because there are fewer proper jobs with actual opportunities outside of London. The chances are that if you move out of London you take a pay cut and have zero career prospects. If you stay there you have career prospects AND you benefit from rising property prices, if you can get on the ladder somehow. Its nothing new to have to share in London - in the old days people used to share squats, or HMO's.

By the way whats wrong with the Elephant and Castle? Its not some shitty suburb on the edge of nowhereville, its right in the centre of the city.

This whole website is full of people moaning on about prices in the hope of getting a free ride somehow.

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Why is everyone living in London and trying to hop on the property ladder there? Because there are fewer proper jobs with actual opportunities outside of London. The chances are that if you move out of London you take a pay cut and have zero career prospects.

LOL! i forgot..the world revolves around London and anyone who doesn't live there is a peasant living in a mudhut!!

get real, there are plenty of cities outside of London which have plenty of jobs and prospects! Granted you earn less but that's because living outside London is cheaper.

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Why is everyone living in London and trying to hop on the property ladder there? Because there are fewer proper jobs with actual opportunities outside of London. The chances are that if you move out of London you take a pay cut and have zero career prospects. If you stay there you have career prospects AND you benefit from rising property prices, if you can get on the ladder somehow. Its nothing new to have to share in London - in the old days people used to share squats, or HMO's.

By the way whats wrong with the Elephant and Castle? Its not some shitty suburb on the edge of nowhereville, its right in the centre of the city.

This whole website is full of people moaning on about prices in the hope of getting a free ride somehow.

Open your eyes. That's a pathetic view of the world. I've lived in Manchester, Leeds and London in the last 10 years and can assure you that there really is a world outside London.

Or why not do as I do now? I work in London but live in the home counties (Bucks), in a very nice village. We bought a house here (with great garden) for the same price I suspect as that apartment at the Elephant would cost. My quality of life is much higher than it would be in the inner city. As for travel time, it takes me just over an hour to be at my office - barely more than when I lived in Tooting a few years back.

Challenge your prejudices. Re-examine your assumptions.

(On the subject of which, re: the Elephant, perhaps it's come up in the world but when I used to socialise in that whole area - Elephant, Kennington etc, it was awful. Maybe it's been gentrified now. Apologies to the residents if I got that wrong.)

One other thing.... property price inflation has been relatively stable over the past few years in London and the SE. It's the rest of the country that has seen massive rises in recent times. So you're wrong about that as well.

Edited by brassfarthing

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If an I/O one third ownership of a flat at the Elephant & Castle is the answer, then it must be one hell of a question.

:lol::lol::lol:

I'll remember that one.

Indeed, I think he is mad not moving somewhere else. IMO there is no point in living in London thses days at 32 unless you can earn 50k plus. Anything less is just a battle.

(On the subject of which, re: the Elephant, perhaps it's come up in the world but when I used to socialise in that whole area - Elephant, Kennington etc, it was awful. Maybe it's been gentrified now. Apologies to the residents if I got that wrong.)

They are bulldozing most of the Elephant and it's all going to be sparkling new in a few years apparently.

The only problem is they tried doing that in the 60s as well and look what happened :blink:

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IIRC HPI, esp down south, is impacting wage inflation demands from the indiginous workforce and companies are looking to 'cheaper' employees in the form of immigration and outsourcing

High 'real' inflation and low wage inflation - not good for the future

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What happens when one of the three owners:

2. defaults on the mortgage payments, stuffing the other two?

Your friend has an interesting way of committing financial and social sucide!

I've seen that happen to somebody who worked for me, I advised him not to buy at the peak of the last bull run. But he ignored me, understandable really as he was a FTB'er and had only witnessed a raising market. His co mortgagee then lost his job, so he could not pay his part of the mortgage. And even though the other was keeping up his payments, the mortgage went into arears. Now luckly for my man, his sister was a building society branch manager and managed to get them some breathing space until they managed to sell it for less than they paid for it . [and that was after they had spent time and money doing it up]

If the bank had repossed even my man who had never missed a mortgage payment would have had his credit rating ruined.

Edited by Catch22

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Its nothing new to have to share in London - in the old days people used to share squats, or HMO's.

There is nothing particularly inaccurate or unfair about this view, but the problem is that the balance between maximising career prospects and wanting not to live in a hovel changes as the days of your life go by.

Most people find this balance by commuting from the surrounding counties.

London does not have the monopoly on highly-paid jobs with good prospects. As another thread has shown, for example, it seems that one way forward is to become a local government executive.

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There is nothing particularly inaccurate or unfair about this view, but the problem is that the balance between maximising career prospects and wanting not to live in a hovel changes as the days of your life go by.

Most people find this balance by commuting from the surrounding counties.

London does not have the monopoly on highly-paid jobs with good prospects. As another thread has shown, for example, it seems that one way forward is to become a local government executive.

Yes, it's mainly about expectations. At the moment if one earns 27k, one 'expects' to be able to enjoy a basic standard of living. The fact that due to HPI and the housing crisis you cannot do that makes you feel hard done by, especally as this guy earns more than the people he is sharing with but they are in their early 40s and have been able to take advantage of HPI rather than suffer under it.

However, if you change your expectations and realise that in fact 27k does not afford you a decent standard of living in London, you are left with a couple of options. Either increase your wages or move to somewhere cheaper. This is the situation as is.

The reality is that the only reason 27k doesn't give you a decent standard of living in London is because of accomodation conditions/ costs. If you live in an HMO hovel for £400 a month you have plenty of money left over for luxuaries such as eating out, buying gadgets and going on holiday even saving for the future, however if you want somewhere decent to live (small one bed flat - 200k?) your mortgage would be about £1200 - £1500 per month which means you are poor.

There isn't much in between financally speaking (apart from shared ownership).

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If an I/O one third ownership of a flat at the Elephant & Castle is the answer, then it must be one hell of a question.

Think outside the box, people.

I don't know. Personally I tend to think that if moving out of London is the answer then you've asked the wrong question. :rolleyes: On the other hand I'm not sure the Elephant and Castle is the answer to any reasonable question, no matter what Phil Spencer might say.

There is nothing particularly inaccurate or unfair about this view, but the problem is that the balance between maximising career prospects and wanting not to live in a hovel changes as the days of your life go by.

Most people find this balance by commuting from the surrounding counties.

It's a fair point but recently the surrounding counties have risen by far more than London - so it's become pretty hard to save much by moving out, especially once you take commuting costs into account. Fair enough if you actually want to commute from the home counties, but at this stage it doesn't really work as a solution to HPI.

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If, at the age of 32, he has to borrow 5k for a deposit, then it doesn't bode well for his ability to repay the mortgage and pay for trhose unexpected repair bills!

Er he's 32 and hasnt got a penny to his name so has to borrow £5K for a deposit?

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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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