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bomberbrown

A Year's Pay Needed For A Home Deposit

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http://www.metro.co.uk/money/article.html?...p;in_page_id=36

Now are falling prices a good thing or a bad thing, make your effing minds up! :angry:

Young homebuyers need to save their entire year's earnings just to get a foot on the property ladder, a new report shows.

= not such a good thing

And another gloomy report showed the prices of homes sold at auction have slumped by 17 per cent in a year.

= not such a good thing apparently.......but surely is for young homebuyers?

Also, don't forget to vote (it's just a click)

http://www.metro.co.uk/polls/index.html?in...mp;in_page_id=1

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Even if house prices halved from the peak, a lot of FTBs will find buying much more difficult. £200K house on 100% mortgage in 2007 - no deposit needed.

£100K house on 90% mortgage in 2008 - £10,000 deposit needed. How long does it take an average couple to save £10,000? And when you've saved the £10.000, are you likely to spend it on a deposit on a house that's still falling in price so that a 10% fall wipes out your equity?

Edited by blankster

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I am sure the average couple can save over 30k per year if they put their minds to it, its not exactly hard when the average wage is a staggering 23k before taxes.

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Even if house prices halved from the peak, a lot of FTBs will find buying much more difficult. £200K house on 100% mortgage in 2007 - no deposit needed.

£100K house on 90% mortgage in 2008 - £10,000 deposit needed. How long does it take an average couple to save £10,000? And when you've saved the £10.000, are you likely to spend it on a deposit on a house that's still falling in price so that a 10% fall wipes out your equity?

Saving £10,000 isn't that hard, maybe two and a half years of saving for a couple with fairly decent salaries. I'm not saying it is easy but if you actually push yourself to save and don't waste money on things then it is quite possible. If the price falls a bit more I wouldn't be that bothered provided I got a house at a decent price, the equity is irrelevant provided you can pay the SVR and don't need to move.

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Do this young couple save this £10k deposit before or after they have paid off their £30-40K student deposit, existing unsecured debts, etc ?

That is the growing reality for many.

Hence why the 100%+ mortgage was so popular in the first place - no skin in the game as they had already been skinned.

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Just had a row about this at work. Bloke in the office thought this meant falling house prices wouldn't help first time buyers. Had to point out that now banks have essentially priced themselves out of the house buying process prices are due to fall horrendously. Repeat after me:

Someone always has to sell.

Banks don't want to lend.

So if buyers have to pay with their savings, houses are going to be very, very cheap.

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Even if house prices halved from the peak, a lot of FTBs will find buying much more difficult. £200K house on 100% mortgage in 2007 - no deposit needed.

£100K house on 90% mortgage in 2008 - £10,000 deposit needed. How long does it take an average couple to save £10,000? And when you've saved the £10.000, are you likely to spend it on a deposit on a house that's still falling in price so that a 10% fall wipes out your equity?

When house prices bottom it is highly likely the 10% requiremnet will disappear as banks will be looking to expand lending again. The higher deposit is protecting the bank which will be reduced when prices have fallen to realistic levels.

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When house prices bottom it is highly likely the 10% requiremnet will disappear as banks will be looking to expand lending again. The higher deposit is protecting the bank which will be reduced when prices have fallen to realistic levels.

10% IS NOT A HIGH DEPOSIT!!!!

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am i right in thinking all these 'businessmen' who bought a string of btl shit had 10% cash deposits for each property ?

or did they just juggle figures around ?

im sooooooooo sick of this place and the bullsh1t lifestyle, the weather and the pigs in charge.

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Saving £10,000 isn't that hard, maybe two and a half years of saving for a couple with fairly decent salaries. I'm not saying it is easy but if you actually push yourself to save and don't waste money on things then it is quite possible. If the price falls a bit more I wouldn't be that bothered provided I got a house at a decent price, the equity is irrelevant provided you can pay the SVR and don't need to move.

Heres how to do it:

1. Buy a campervan at a discounted price (nobody is buying at the moment due to high fuel costs)

2. Travel to where there is casual work - preferably in a sunny location where you can park for free. France summer

Spain/Portugal winter.

3. Live on what you are able to source from local farmers in part payment for work or meals in cafes/bars in winter.

4. Save 1000 per month (more if you are prepared to work hard)

5. Return to UK in 2 years when prices have fallen by 40%

or

Plan B

Step 1 above+

Buy a ruin in France with land for next to nothing and grow your own food + step 5 above.

Edited by campervanman

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When house prices bottom it is highly likely the 10% requiremnet will disappear as banks will be looking to expand lending again. The higher deposit is protecting the bank which will be reduced when prices have fallen to realistic levels.

Why do you think that banks will return to residential property lending after the crash? A couple of decades ago they lost heavily after lending in South America. They haven't returned to doing that. If (when) their losses are realised in the UK housing market, they could pull out of it for generations.

p-o-p

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Why do you think that banks will return to residential property lending after the crash? A couple of decades ago they lost heavily after lending in South America. They haven't returned to doing that. If (when) their losses are realised in the UK housing market, they could pull out of it for generations.

p-o-p

Banks never really learn with property. There have been many residential and commercial property crash since the war and the banks have always returned to the market. In addition housing at sensible multiples and yileds is a relatively safe lending option. It is only when property reaches ridiculous multiples that it is risky. Compare this to lending in South America which is still risky many years on.

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im rejoining the NWC and going back to crime./

this place sucks hairy ass, is boring and working for nothing, the biggest crime of all.

ive been stolen from.

years. money. hopes.

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im rejoining the NWC and going back to crime./

this place sucks hairy ass, is boring and working for nothing, the biggest crime of all.

ive been stolen from.

years. money. hopes.

You're on a bit of a downer today.

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Heres how to do it:

1. Buy a campervan at a discounted price (nobody is buying at the moment due to high fuel costs)

2. Travel to where there is casual work - preferably in a sunny location where you can park for free. France summer

Spain/Portugal winter.

3. Live on what you are able to source from local farmers in part payment for work or meals in cafes/bars in winter.

4. Save 1000 per month (more if you are prepared to work hard)

5. Return to UK in 2 years when prices have fallen by 40%

or

Plan B

Step 1 above+

Buy a ruin in France with land for next to nothing and grow your own food + step 5 above.

Do you have a plan C that works for a family with two kids? :rolleyes:

This is incredibly glib and absolutely unworkable for the majority. The deposit requirement will absolutely kill the housing market dead, to an unimaginable degree simply because the cost of living has left no room for families to save.

Just think, last year having nothing in the bank and earning 50k a year would get you a 250k mortgage. Now earning 50k a year and having nothing in the bank will get you absolutely zilch. Who's buying the £250k houses now?

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Banks never really learn with property. There have been many residential and commercial property crash since the war and the banks have always returned to the market. In addition housing at sensible multiples and yileds is a relatively safe lending option. It is only when property reaches ridiculous multiples that it is risky. Compare this to lending in South America which is still risky many years on.

Pre 1980 the only people I knew with bank mortgages, as distinct from B/S mortgages, were bank employees or the wealthy. I think that they will reduce their UK property exposure until this horrendous episode fades from memory and that could be a very long time. I doubt whether I will be around to see this proven or otherwise.

p-o-p

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You're on a bit of a downer today.

im sick of banging my head against a wall. ive been at it for 4 years and its no better.

this country sucks dick and is mostly full of pricks. i wish i had never come back.

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This is incredibly glib and absolutely unworkable for the majority. The deposit requirement will absolutely kill the housing market dead, to an unimaginable degree simply because the cost of living has left no room for families to save.

Lets also not forget the impact this will have on the money supply. If people have to start saving for a deposit, thats less money to spend on tat from China and meals out at fancy restaurants, so consumer spending will plummet along with the service/leisure economies.

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I have a plan C.........

At the end of the month I'm off to do some project management work in Africa (Southern Sudan). I've been there before so know quite a few people. Wages are good. Tax is zero, and accom is paid for. I even get another $1500 per month for food and beer. All money earned will be going straight into gold bullion (goldmoney.com) the day after pay day each month. Should come back next June with a very well endowed fund for either: Masters degree, business start up, property.

Liklihood is that I'll spend some on doing a Masters degree and will go for setting up a business in 2010 when we are at rock bottom and assets are cheap. (Assuming we don't hit peak food first and all hell breaks loose). :huh:

Downside is pushing a 10 month stint in a malaria ridden, slightly violent frontier town.

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im sick of banging my head against a wall. ive been at it for 4 years and its no better.

this country sucks dick and is mostly full of pricks. i wish i had never come back.

Indeed it does, but i'm not sure that anywhere else is much better, though Scandinavia sounds good. I'm still reckoning we'll have a Mad Max style world by the end of the century, which would make things interesting.

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I have a plan C.........

At the end of the month I'm off to do some project management work in Africa (Southern Sudan). I've been there before so know quite a few people. Wages are good. Tax is zero, and accom is paid for. I even get another $1500 per month for food and beer. All money earned will be going straight into gold bullion (goldmoney.com) the day after pay day each month. Should come back next June with a very well endowed fund for either: Masters degree, business start up, property.

Liklihood is that I'll spend some on doing a Masters degree and will go for setting up a business in 2010 when we are at rock bottom and assets are cheap. (Assuming we don't hit peak food first and all hell breaks loose). :huh:

Downside is pushing a 10 month stint in a malaria ridden, slightly violent frontier town.

And you have a wife and kids?

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Lets also not forget the impact this will have on the money supply. If people have to start saving for a deposit, thats less money to spend on tat from China and meals out at fancy restaurants, so consumer spending will plummet along with the service/leisure economies.

So? welcome back to the 70`s, people need to realise that if you can sing like Tina Turner, act like DeNiro + co, play the guitar like Mark Knopfler or Blackmore you probably are going to become famous and live the "lifestyle", if you are a hairdresser who sings at the local pub and you get chosen from 10 million applicants to be on a TV show designed primarily to make money for it`s creators, you are not. Get over it. We are all equal in God`s eyes anyway. Sales of hair dye is going to plummet, sales of lentils are going to rocket, invest wisely ;)

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  • 395 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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