Question for the would be house-buyers

neverdespairgirl

Chris2685 wrote: »

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

In my area, we can't really play your game - there are no semis, 3 bed or otherwise! There are terraces, but these are generally massive, Georgian, and several million quid. SO i'm going for a 3 bed flat instead.

Area: WC1
Average price for a decent quality house that you would actually want to buy: £600,000
Price I could pay: £450,000
Drop required to live in that area: £150,000
Percentage: -25%

Cat695

Defo a nice 2 bed house for me (I'm single) but they will need to drop another 40% here in salisbury before i can actually comfortably afford to buy one.....I really don't want to pay anymore that 90k for one (i should have about 30/40k to put down next year)

I could possible afford more on my wages (in a very safe job) but I'm learning a lesson from this credit crunch

beingjdc

SE16 but I wouldn't want to live here long term. By your maths I could afford around 140k (in reality at that rate I'd have much more than a 15% deposit already, and I'm reconciled to borrowing more than 3x salary anyway).

There's a 3-bed ex-council flat on for £200k and I am absolutely certain they would take £175, so would take a further 20% drop over that. There's a 3-bed repo terrace on available for £226k (an offer of £225k has been accepted but not completed), but open market the cheapest 3-bed semi (well, end terrace) is on at an asking of £385k.

nightwatchman

In Birmingham (B16) the asking price for a three bed terrace £145k.
I assume that I could negotiate it down to £130k (?)
£30k saved insofar.
£19k salary x 3 = £57k mortgage.
So… £30k + £57k = £87k.
Therefore a 33% drop needed in my area.

Chris2685

Thanks for all the responses. It seems that we are going to need to see at least 30% drops then for pretty much everyone above to be able to buy a place that they want to... I wonder if that will affect the levels of drops that we see.
One thing is for sure, house/flat prices are way out of whack with what people are actually able to afford!

GDB2222

neverdespairgirl wrote: »

In my area, we can't really play your game - there are no semis, 3 bed or otherwise! There are terraces, but these are generally massive, Georgian, and several million quid. SO i'm going for a 3 bed flat instead.

Area: WC1
Average price for a decent quality house that you would actually want to buy: £600,000
Price I could pay: £450,000
Drop required to live in that area: £150,000
Percentage: -25%

At your age, I was settled (or so I thought) in a nice 20-year house. As it happens, we moved 4 times since then (including renting for a year), but mainly through force of circumstance.

Am I right in thinking that you would have bought and been settled by now if prices had been more sensible?

GDB2222

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

This is just a complicated way of saying that your target value is 3.53 times income.

Nationally, the average house is around 5.1 times average income (if the HBOS stats are to be believed), so that requires a fall of 31%. The price/income ratios are available broken down into different areas of the country.

the_worried_one

Chris2685 wrote: »

Area: Mid South Coast
Average price for a decent quality house that you would actually want to buy: £220,000
Price I could pay: £120,000
Drop required to live in that area: £100,000
Percentage: -45%

Not sure on the percentage! I seem to have had a mind blank on how to work it out?

I have worked out our max amount as 3x income and deposit of £20k. We are lucky in that prices are just about affordable to us now as we have a larger amount for deposit due to inheritance, and also that we are looking in a quite specific area which is deemed undesirable by many, although its perfect for us, but houses are generally £190-£200k, rather than the £220k town average.

LittleMissAspie

I don't want a 3-bed semi, I want a nice 2-bed semi.

Area: Cambridge
Average price for decent 2-bed house: £160,000
Price I could pay: £12k saved so far plus 3x boyfriend's earnings* = £102,000
Drop required: £58,000 or 36%

*I am in work too but 3x our highest income is my level of prudence. I need to know that I can pay all the bills by myself, should my boyfriend end up ill or redundant.

neverdespairgirl

GDB2222 wrote: »

At your age, I was settled (or so I thought) in a nice 20-year house. As it happens, we moved 4 times since then (including renting for a year), but mainly through force of circumstance.

Am I right in thinking that you would have bought and been settled by now if prices had been more sensible?

Yes, we would have done. We looked at buying once our careers were settled and we had a deposit, in 2005, but decided it was too much like a bubble for our liking, and signed a new 3 year AST instead.