Where is this all going to end?

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  • jpkeates
    replied
    Originally posted by kelbol View Post
    That's what people said a decade ago.

    I'm not up to date at all on the requirements when buying now but I would have thought it would be easier to ssecure a mortgage now and at very low interest compared to 10 years back when we were emerging from the credit crunch and banks had to be very strict when lending.
    You'd have to date it quite precisely, then.
    Part of the cause of the credit crunch was ludicrously easy to borrow loans (which tightened up remarkably slowly considering).
    The banks had new, much tighter controls imposed in the decade that followed.

    Pre-crash, from memory, Northern Rock were doing mortgages that offered 120% of the value of a property,
    First time buyers by definition never have much credit history, this has never changed.
    But the controls on bank risk imposed by regulators now make their approach to risk very different.
    Affordabilty tests are very much more stringent and credit history really matters, when a few years ago it wasn't that much of an issue.
    You could essentially put whatever you fancied on a mortgage application and no-one really checked.

    I used to pay £563 a month rent in London for 5 years approximately. That's nearly £34k. For me, I'd rather pay the bank £34k in mortgage (plus more) and have a house at the end of it than have nothing to show. More than half my income was going in rent. Yet I still managed to save.
    Good for you.
    But for a £65k house in the north now (assuming they exist), you'd need a 20% deposit.
    Saving £13k while paying £563 rent, which is more than half your income, would be a challenge.

    And I'd guess the rent and property have increased massively in the intervening years while incomes haven't.
    So the rent would be even more of your income now.

    I moved out of London because it was madly and impossibly expensive to live.
    Best decision I've ever made (apart from marriage, just in case!).

    Leave a comment:


  • kelbol
    replied
    Yes agreed, it's not nice having to uproot to buy a house elsewhere and put down roots all over again. But you have to make choices...

    Another story, about London prices.

    I knew someone who moved to London from abroad with his large family in the early 60s. He started work in a factory, of which there were plenty then. A few years later (3?), he managed to buy a 5 bedroom house in London for around £5k.

    I can't imagine anyone these days moving to London from abroad, having a modest job and buying a big house. Even the Brits in the rest of the country with a good job wouldn't be able to do that.

    Leave a comment:


  • ExpertInAField
    replied
    I've always hated the idea of someone having to move to a different area just because they want to buy a house.

    Not everyone would be able to do this. It's not down to a lack of desire, okay for some it will be, but not as many as you would think. They may have ties to the area, maybe they have to look after relatives, they have their support system in place. Not everyone can move because there are neither enough places, nor enough careers up there. Maybe the career type you are on isn't available in the area you want to go to. Prior to this, I worked in stocks and shares. Theres only 3 companies that do what my career was in and they are based in London, Bristol and Leeds. If I wanted to continue in my career, I have only those places to choose from.

    I'll agree about London prices being ridiculous. I think that you are right in saying that foreign investors are using it as a store of cash.

    Furniture is a weird one for me. I don't tend to buy second hand, but I do use whatever I get for as long as possible, probably longer than I should. I also like to do my research on what I am buying so I don't tend to buy rubbish.

    My vice is technology. I didn't have to buy a Tesla, but I wanted one despite there likely being better options out there.

    Leave a comment:


  • jpucng62
    replied
    Originally posted by kelbol View Post


    I still buy second hand furniture. It's hard to get rid of old habits.
    A lifetime of looking for offers and bargains is impossible to shake even though I no longer need to do it! It has become a game that I love to play instead

    Leave a comment:


  • kelbol
    replied
    Originally posted by Lesney Park View Post

    you didn't get where you are by eschewing a smartphone, please
    I certainly did, though mostly as a figure of speech meaning it was my lifestyle and I was cutting back spend on everything i could.

    Leave a comment:


  • kelbol
    replied
    Originally posted by Jon66 View Post

    Perhaps they could move to an affordable area, which is what I did when I bought my first property at 20. Funnily enough I didn't have a car either, I cycled the 10 miles a day to and from work. Couldnt afford to switch the heating on for a good couple of years. We never went out, except birthdays, and I waited 6 years until I could comfortably afford a horse and a child. Oh, and always bought 2nd hand furniture, when we could afford it, and I never borrowed money for anything except a mortgage.

    The reality for some people who say they can't afford a house is really they can't afford a house on their terms.
    That's what I was going to say - they can always move.
    But prices in London are indeed ridiculous and I would never have been able to buy anything there. I think the prices are artificially high because of wealthy foreign buyers rather than the locals. The foreigners are looking for a place to stash their cash.

    How many horses do you have now?

    I still buy second hand furniture. It's hard to get rid of old habits. Anyway, the brand new mdf stuff is crap and doesn't last.

    Leave a comment:


  • kelbol
    replied
    Originally posted by jpkeates View Post
    You can't compare buying a property a decade ago with buying one now.
    That's what people said a decade ago.

    I'm not up to date at all on the requirements when buying now but I would have thought it would be easier to ssecure a mortgage now and at very low interest compared to 10 years back when we were emerging from the credit crunch and banks had to be very strict when lending.


    Originally posted by jpkeates View Post
    first time buyers are particularly hit, because they generally don't have much credit history
    First time buyers by definition never have much credit history, this has never changed.

    Originally posted by jpkeates View Post
    And you have to ask how much suffering is worth the benefits of being on the property "ladder" that can be more like a treadmill.
    I used to pay £563 a month rent in London for 5 years approximately. That's nearly £34k. For me, I'd rather pay the bank £34k in mortgage (plus more) and have a house at the end of it than have nothing to show. More than half my income was going in rent. Yet I still managed to save.

    Leave a comment:


  • Codger
    replied
    I accept alexr s point but it can go the other way when block management improves. This is what we are doing now after I bought the freehold so these flats can go up in value once we get better behaved residents.
    It helps a lot if the new owners participate in block management, rather than sniping at the people trying to improve theblock.

    Leave a comment:


  • jpkeates
    replied
    Originally posted by jpucng62 View Post
    Given the difficulty of securing a rental at the moment & the rate of increase in rent, being on the property ladder / treadmill looks increasing attractive to me!
    I'm probably over cynical.
    When I was first in the market for property it was the 1980s and mortgages were very expensive, and it probably colours my views.
    Right now, money is so cheap to borrow that, if you can, it's almost daft not to.

    Leave a comment:


  • AlexR
    replied
    Originally posted by Codger View Post
    I have seen amortgage valuation that refused to lend on a good value flat because too many of the flats in the block were rented. There are a lot of reasonable flats in the midlands below 100k but are harder to finance tha n a newbuild at twice the price.
    We should campaign for ex rental starter homes to be easier to sell so the property ladder can start with cheaper homes.
    The lenders will be aware that if a block of flats becomes untidy , graffiti etc then the value will plummet and experience will tell them this will be more likely with tenants than owner occupiers. There are cases in the news where flat owners are looking at their flats being worth half what they paid for it due to insulation issues etc and are virtually unsaleable. It's no wonder the lenders are very shy.

    Leave a comment:


  • Codger
    replied
    I have seen amortgage valuation that refused to lend on a good value flat because too many of the flats in the block were rented. There are a lot of reasonable flats in the midlands below 100k but are harder to finance tha n a newbuild at twice the price.
    We should campaign for ex rental starter homes to be easier to sell so the property ladder can start with cheaper homes.

    Leave a comment:


  • jpucng62
    replied
    Given the difficulty of securing a rental at the moment & the rate of increase in rent, being on the property ladder / treadmill looks increasing attractive to me!

    Leave a comment:


  • jpkeates
    replied
    Is "latte drinking" the new "large flat screen TV", the marker of indolence / financial foolishness?

    You can't compare buying a property a decade ago with buying one now.

    The affordability criteria are completely different (although they're softening a bit now as the market is getting tighter for lenders).
    And first time buyers are particularly hit, because they generally don't have much credit history, so they need a higher deposit and pay more interest.

    Outside government schemes, people are looking for deposits of 15-20% for first time buyers - that's an average of nearly £20k in most areas, have a look - https://www.which.co.uk/money/mortga...e-acs1c3t6f9r0

    And you have to ask how much suffering is worth the benefits of being on the property "ladder" that can be more like a treadmill.

    Leave a comment:


  • Jon66
    replied
    Originally posted by Lesney Park View Post

    Cool story bro

    Whilst I agree with some of what you're saying, well done you got a payrise in an appreciating property market in one of the cheapest areas in the country. Not everyone can just make that happen, so please don't belittle people with the avocado on toast rant, maybe lay of the daily mail for a bit. My tenants (they happen to be in SE London, not the most expensive bit of London) are hardworking couples

    They live sensibly as you appear to have done but you didn't get where you are by eschewing a smartphone, please
    Perhaps they could move to an affordable area, which is what I did when I bought my first property at 20. Funnily enough I didn't have a car either, I cycled the 10 miles a day to and from work. Couldnt afford to switch the heating on for a good couple of years. We never went out, except birthdays, and I waited 6 years until I could comfortably afford a horse and a child. Oh, and always bought 2nd hand furniture, when we could afford it, and I never borrowed money for anything except a mortgage.

    The reality for some people who say they can't afford a house is really they can't afford a house on their terms.

    Leave a comment:


  • landlord-man
    replied
    I can't remember exactly when now but I had cause to look at IVAs for my mothers partner (looong story for another time)

    Anyway, on a forum I found, there was (probably still is) much discussion on what you can write down under the Monthly Expenses category.

    There was more than 1 person who successfully declared their HORSE (not house its not a typo) as being an essential expense.

    And that - as mentioned by kelbol is the problem.

    By all means have a stable full of horses if you can pay for them, but if you cannot meet other financial obligations then the horse, netflix etc has to go - sadly, that thought process is not shared by those in debt who seem to have the only voice being heard.

    ....and all that takes me back to my point about social housing - provide the very bare basics to encourage people to do better and move on.

    Leave a comment:

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