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cupidstunt

Borrowing At Record High For First-time Buyers

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These record levels of borrowing - the previous high of £105,000 was reached in December last year - are forcing many first-time buyers to borrow close to maximum lending limits, typically just under four times salary, to purchase their first home.
The greater levels of borrowing coincide with predictions of higher arrears and repossessions. Last week the CML said it expected 130,000 mortgages to be in arrears of more than three months by the end of 2007, up from its previous expectations of 120,000. It is expecting 15,000 repossessions in both 2006 and 2007, up from its previous forecast of 12,000.

http://news.ft.com/cms/s/facca41a-fb42-11d...00779e2340.html

Edited by cupidstunt

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They also reckon FTBers are borrowing an average of 3.21x their earnings. to buy a house :blink:

I have not met a FTBer for about 8 years that has only borrowed 3.21x their earnings. Maybe my friends are all a bunch of losers. They only earn above the average wage, so will have to borrow at least 4-5x their earnings to buy a crappy 1 bed flat to bring up their families in.

Figures are being fiddled somewhere, me thinks!

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loan-to-income multiples for first-time buyers averaged 3.21 in April, the highest multiples ever recorded. A decade ago first-time buyer loans averaged less than £40,000 on loan-to-income multiples of less than 2.4 times.

3.21 multiple

I wish I could find somewhere that only required 3.21 x Salary

These FTB's must be earning £33k - doesn't sound like an average FTB wage to me

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3.21 multiple

I wish I could find somewhere that only required 3.21 x Salary

These FTB's must be earning £33k - doesn't sound like an average FTB wage to me

3.21 X £33k = £105.93k

Let me see, what can you buy for that?

Crack den anyone?

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I was a first time buyer one year ago, I borrowed 80k which is about 2.5x earnings. Its still possible, you just need to lower your expectations on the kind of place you can get.

If I was doing it with a partner it would be even easier. FTB'ers are by no means all priced out.

I really dont get why people complain about first time buyers not being able to afford things, that has always been the case, and expectations are just so much higher these days, probably fueled by all those programs you see on tv.

Edited by zag2me

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It looks like the credit and loan junkies now drowning in debt are being prepared for interest rate rises in the near future. Having been suckered into the house price pyramid selling scam they now have a lifetime of debt slavery to the banks to look forward to.

This is an abbreviated net version of a longer article on page 3 of today's Daily Mail ............

First-time mortgages hit record size

Daily Mail

14 June 2006

FIRST-TIME buyers are being forced to take out the biggest mortgages since records began, according to figures released yesterday.

Would-be homeowners face taking on a debt of typically £106,400 to make their first step on the housing ladder.

That is nearly £12,000 more than they would have needed to borrow a year ago.

The average first mortgage was typically 3.2 times salary - the biggest 'income multiple' since figures were first collected in 1973.

Rapidly-rising house prices are also putting pressure on those who already own property.

Their average mortgage stands at £123,350, again the highest figure ever. The average house costs £200,000 nationally and as much as £280,000 in London.

The figures, from the Council of Mortgage Lenders, suggest that families are under massive financial pressure even in the face of threatened interest rate rises.

Simon Tyler, of Chase de Vere Mortgage Management, said: 'Consumers have been bingeing on cheap credit for several years. But now they are being forced to think about how they will cope if rates rise.'

He said rates were 'historically incredibly low' after averaging 9% in the 1990s.

Daily Mail

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3.21 multiple

I wish I could find somewhere that only required 3.21 x Salary

These FTB's must be earning £33k - doesn't sound like an average FTB wage to me

Me too. I'm on more than what you qouted and I couldn't even buy my old house for 3.21x my salary

and its a 2 bed terrace. Hardly an average house either!

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I was a first time buyer one year ago, I borrowed 80k which is about 2.5x earnings. Its still possible, you just need to lower your expectations on the kind of place you can get.

If I was doing it with a partner it would be even easier. FTB'ers are by no means all priced out.

I really dont get why people complain about first time buyers not being able to afford things, that has always been the case, and expectations are just so much higher these days, probably fueled by all those programs you see on tv.

:lol::lol::lol::blink::blink:

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I was a first time buyer one year ago, I borrowed 80k which is about 2.5x earnings. Its still possible, you just need to lower your expectations on the kind of place you can get.

I hope you had an enormous deposit, otherwise you must be living in a right sh!t hole!!!

As for lowering expectations. Why should I live next door to the local ASBO family and be working to pay of the debt until I drop for the pleasure. I don't think so! I'm emminently qualified, educated, intelligent and earn twice the national average salary by working twice as hard. I think I deserve better than to have to be satisfied with living in the local council estate overspill

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I was a first time buyer one year ago, I borrowed 80k which is about 2.5x earnings. Its still possible, you just need to lower your expectations on the kind of place you can get.

You mean like this?

DSCN7104-old-shed_800x600.JPG

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3.21 multiple

I wish I could find somewhere that only required 3.21 x Salary

These FTB's must be earning £33k - doesn't sound like an average FTB wage to me

You're forgetting that mum & dad will have MEW'd to provide a deposit of 100K... <_<

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I was a first time buyer one year ago, I borrowed 80k which is about 2.5x earnings. Its still possible, you just need to lower your expectations on the kind of place you can get.

If I was doing it with a partner it would be even easier. FTB'ers are by no means all priced out.

I really dont get why people complain about first time buyers not being able to afford things, that has always been the case, and expectations are just so much higher these days, probably fueled by all those programs you see on tv.

I wonder whether you would feel the same if you were a first time buyer now ?

As a first-time buyer, having rented in house shares, bedsits, and now a 1-bedroom flat, i would like to buy a house for my expanding family. My expectation is for 2 bedrooms, and a bit of garden - thank you for letting me know why my expectation is so much higher than those of yester-year.

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I really dont get why people complain about first time buyers not being able to afford things, that has always been the case

How many more times do we need to debunk this nonsense? My parents and my brothers and sisters all bought decent-sized houses or flats as FTBs, and most will retire in their FTB property... the two who won't got married, sold up and moved in with their spouse.

So as far as they're concerned, they skipped the entire 'housing ladder' and bought the kind of place they wanted to live in for the rest of their lives. Why should today's FTBs have to settle for a crappy flat over a crack den in the hope that one day they'll be able to 'move up the ladder' to a two-bed terrace, particularly when they're paying much more for it, both in absolute terms and relative to income?

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We would be probably classified as a first time buyer, aged 30 and 38 and earning 5 times the average wage so that disorts the figures.

Surely you're only a FTB if you have never purchased a property before, so don't think this will alter the figures.

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Not sure. I was told by my mortgage company (or my solicitor - can't remember) that after being an STR and a period of renting you are classed as an FTB. In fact many of the microscopic number of FTBs remaining might just be people who had a period in renting, for STR purposes or simply because they didn't find the right house.

It makes the inverted pyramid look even more precarious.

Never heard that one before - always thought a first time buyer was exactly that!! someone buying for the first time!! :)

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Never heard that one before - always thought a first time buyer was exactly that!! someone buying for the first time!! :)

When I've bought in the past, no one asked if I'd bought previously. So how would someone be logged as an actual FTBer?

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I was a first time buyer one year ago, I borrowed 80k which is about 2.5x earnings. Its still possible, you just need to lower your expectations on the kind of place you can get.

If I was doing it with a partner it would be even easier. FTB'ers are by no means all priced out.

I really dont get why people complain about first time buyers not being able to afford things, that has always been the case, and expectations are just so much higher these days, probably fueled by all those programs you see on tv.

Boring. Yawn.

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I was a first time buyer one year ago, I borrowed 80k which is about 2.5x earnings. Its still possible, you just need to lower your expectations on the kind of place you can get.

If I was doing it with a partner it would be even easier. FTB'ers are by no means all priced out.

I really dont get why people complain about first time buyers not being able to afford things, that has always been the case, and expectations are just so much higher these days, probably fueled by all those programs you see on tv.

"lower your expectations", "that has always been the case"

I smell the last desperate attempts by a vi bull to eek the last out of a dying market

I am not propping up a sick economy by living fugally :P

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I was a first time buyer one year ago, I borrowed 80k which is about 2.5x earnings. Its still possible, you just need to lower your expectations on the kind of place you can get.

If I was doing it with a partner it would be even easier. FTB'ers are by no means all priced out.

I really dont get why people complain about first time buyers not being able to afford things, that has always been the case, and expectations are just so much higher these days, probably fueled by all those programs you see on tv.

If I were a MOD you would earn troll status for this. Especially that last bit. One thing has been fueled by these property programs but it certainly isnt peoples expectations.

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I was a first time buyer one year ago, I borrowed 80k which is about 2.5x earnings. Its still possible, you just need to lower your expectations on the kind of place you can get.

If I was doing it with a partner it would be even easier. FTB'ers are by no means all priced out.

I really dont get why people complain about first time buyers not being able to afford things, that has always been the case, and expectations are just so much higher these days, probably fueled by all those programs you see on tv.

So how is life in Iran these days? Keeping yourself out of mischief?

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Guest

Mate at work, 26yo, 5x salary. Announced this lunch.

"When was the last time we had a crash? Early 90s, right? But we had unemployment then."

Do I say anything? I think he hasn't completed yet.

Also, european chap at work, totally on the ball about the british obsession. Immediately pointed out that HPI makes home OWNERS poorer for moving up. Christ, wish some of my mates were this clued up.

Edited by megaflop

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Mate at work, 26yo, 5x salary. Announced this lunch.

"When was the last time we had a crash? Early 90s, right? But we had unemployment then."

Do I say anything? I think he hasn't completed yet.

Also, european chap at work, totally on the ball about the british obsession. Immediately pointed out that HPI makes home OWNERS poorer for moving up. Christ, wish some of my mates were this clued up.

Oh dear,

If he doesn't understand the economic situation now and then and takes advice solely from VI's then your never going to win an argument

Just be a 'friend' when he loses his home?

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  • 337 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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