Question for the would be house-buyers

Chris2685

I suppose a hypothetical version of this question is answerable by people who already own a home too.

How much would property prices have to fall in your local area (can be as big as you like depending on where you want to live) for you to be able to afford to buy and get a mortgage on a standard 3 bedroom semi-detached house? Please fill out the details of your own local circumstances below. It would be interesting to see how it is different for various people.

Assume that you will only be able to borrow 3x your income and will have a 15% deposit.

Area: South Buckinghamshire
Average price for a decent quality house that you would actually want to buy: £300,000
Price I could pay: £100,000
Drop required to live in that area: £200,000
Percentage: -66%

There are homes in the area for less than £300,000. They start at around £230,000 asking price, but there were 493 available, and page 10 (property 100 of 493) was listed at £299,950, so I hardly think it is out of the ordinary. I also only took my own income (above national average, below local average) into account and not my partners.

So, a 66% drop would be needed to buy in this area... Quite insane.

This was the most expensive 3 bed Semi I found in a 3 mile distance of the area I was searching: http://www.rightmove.co.uk/viewdetails-8690673.rsp?pa_n=49&tr_t=buy
Seer Green is a bloody lovely area, and the house is bigger than your average 3 bed, but near enough £1,000,000 for a 3 bed semi? Crazy...

In the interests of fairness, you can get a 3 bed semi in Rickmansworth (actually classed as Hertfordshire) for £200,000. This was the lowest priced 3 bed semi in my search radius

Not very nice looking though is it... http://www.rightmove.co.uk/viewdetails-19358890.rsp?pa_n=1&tr_t=buy

Just interesting to see how crazily priced all of the housing stock in the South Bucks area actually is.


So please discuss the flaws of my not-so-scientific methods and please post info about your own local area

Edit: Just as a side note, there are plenty of properties listed at around £215k-£250k around this area (and maybe slightly wider than the search I did, making some compromise for commuting and family closeness, etc). Even so, that would require drops of over 50%.

lostinrates

would like to play, but not really relevant. Will play anyway if someone tells me how to choose only semis on right move.

Found it. Chose another town, with a twenty mile radius as 'local' to me. SW/Wessex. Most expensive, 3 bed semi is £675,000, cheapest is a staggaringly affordable £79, 950 (described as in need of updating but looks rundown rather than scary) Intersetingly I looked at a nicer place in the same town as the cheapest (Frome) some 6 years ago which was a lovely 3 bed 1930s semi that had not been touched since built and that was ITRO £135,000 then- but this laciking thre charm that one had!

Could buy and probably refurbish this outright with no loan now. Can't work out the average!

Working it out to London (where our income comes from) might be more relevant and scarier.

moanymoany

For us to buy the retirement home we want in geriatrica-on-sea - with a specific sum of money left in the bank to give an additional income to pensions - house prices would have to fall 40%

Realy

A point about this is that you may never be able to afford the house you want in the area you want to live.

I lived in a pretty market town and a 3 bed semi could cost you up to £220K
I have now moved 12 Miles down the road and you can buy a 4 bed house in a very good area for the same money.

I live in the country side and the problem with small desirable towns is that they really do not have enough propertys so prices will always remain higher than other larger towns.

Good luck on getting a house in the area you want but you may need backup areas.

But where I live now I could afford house prices to rise 10% on my income, or by 30% if you included my wife.
But I do not think a 3 bed semi is a FTB home generaly (but I did by a 3bed semi as a FTB so am an hypocrite)

mr.broderick

Realy wrote: »

A point about this is that you may never be able to afford the house you want in the area you want to live.

I lived in a pretty market town and a 3 bed semi could cost you up to £220K
I have now moved 12 Miles down the road and you can buy a 4 bed house in a very good area for the same money.

I live in the country side and the problem with small desirable towns is that they really do not have enough propertys so prices will always remain higher than other larger towns.

Good luck on getting a house in the area you want but you may need backup areas.

But where I live now I could afford house prices to rise 10% on my income, or by 30% if you included my wife.
But I do not think a 3 bed semi is a FTB home generaly (but I did by a 3bed semi as a FTB so am an hypocrite)

Definitely the best point you've made in a while.

Chris2685

A 3 bed home is not a FTB house? Surely an FTB is traditionally the couple getting married and starting a family, will they not need want a 3 bed house? I would much rather buy a 3 bed house right away rather than a 2 bed and have to move 2 years later. But I do see your point, of course there are many influencing factors which makes my example above a little bit unscientific, but if we all stick to the same method of calculation, then it should still give a general indication.

Just to put this into perspective, we are currently living with my girlfriends parents in a house valued at £575,000 last year (3 bed semi with large garden). Her dad earns less than I do, and I imagine earnt even less (not counting inflation) when they bought.

mr.broderick

Chris2685 wrote: »

A 3 bed home is not a FTB house? Surely an FTB is traditionally the couple getting married and starting a family, will they not need want a 3 bed house? I would much rather buy a 3 bed house right away rather than a 2 bed and have to move 2 years later. But I do see your point, of course there are many influencing factors which makes my example above a little bit unscientific, but if we all stick to the same method of calculation, then it should still give a general indication.

Just to put this into perspective, we are currently living with my girlfriends parents in a house valued at £575,000 last year (3 bed semi with large garden). Her dad earns less than I do, and I imagine earnt even less (not counting inflation) when they bought.

Maybe we should start a thread showing everyones first house, how long ago, how much etc...Mine was over 10 years ago, 30 odd k, crippled me at the time but a 3 bed semi it wasn't.

Realy

Chris2685 wrote: »

A 3 bed home is not a FTB house? Surely an FTB is traditionally the couple getting married and starting a family, will they not need want a 3 bed house? I would much rather buy a 3 bed house right away rather than a 2 bed and have to move 2 years later. But I do see your point, of course there are many influencing factors which makes my example above a little bit unscientific, but if we all stick to the same method of calculation, then it should still give a general indication.

I agree for a couple, but not every FTB is a couple but a 2 bed house would suit quiet a few couples not all can or will want children etc so they may look to move after a few years if they did.

Realy

7 years ago £96K is what we purchased our firs house for it was a 3 bed semi.

Woby_Tide

2 bed flat 10 years ago, wouldn't have even considered a house in fairness as a FTB in this town let alone a 3 bed semi

how times and expectations change

(I'd still consider 3 bed semis within my 'options' even now as a 3rd time buyer let alone first)

neverdespairgirl

Woby_Tide wrote: »

2 bed flat 10 years ago, wouldn't have even considered a house in fairness as a FTB in this town let alone a 3 bed semi

how times and expectations change

There are a lot of FTBs now who are in a different position, though.

When we buy, it will be a 4 bed place (probably a flat) because we are already aged 30 and 31, with a 3 year old.