Question for the would be house-buyers

Chris2685

One problem I see with house prices at the moment is the reluctance of people to sell at a lower price. Some forced sellers or people who bought 20 or more years ago will probably drop their prices, but I can't see many people who bought in the past 3 or 4 years actually selling unless they are forced too. Many people paid a fortune for flats, and can't stomach selling them for much less than they paid for them.

GracieP

Area: Wimbledon
Average price for a decent quality house that you would actually want to buy: £600,000
Price I would pay: £275,000
Drop required to live in that area: £325,000
Percentage: -54%

I'm choosing the price I'd be willing to pay over the price I can pay. There is a house for sale on the same street as the house I chose for the purpose of this question. The house for rent is in better condition, has a bigger garden, is nearer the station and has a 4th bedroom, yet costs over £1000pm less than house for sale would on a 90% IO mortgage. And you would lose the interest on your deposit money, about £250pm before tax. So I would expect a drop to at least £325k before I'd be willing to buy the 3 bed, as otherwise I'd be better off renting. And that's being generous as the rental house was superior.

If I extend my search into nearby less expensive, but still safe areas that I'd be happy to raise a family in I'd be looking at Raynes Park. I got my figure for what I would pay based on the same calculation as I used for the Wimbledon house.

Area: Raynes Park
Average price for a decent quality house that you would actually want to buy: £430,000
Price I would pay: £175,000
Drop required to live in that area: £255,000
Percentage: -59%

I think that one of the biggest shifts we will see in the next few years is a change in buyers attitudes. There will no longer be a desperation to buy what we can afford, but we will actually assess what the property is worth. I don't think we will see professionals with decent salaries rushing to buy in awful areas. Nor will we see people willing to buy homes which won't suit them long-term as a step on a ladder as the ladder won't exist.

Chris2685 wrote:

One problem I see with house prices at the moment is the reluctance of people to sell at a lower price. Some forced sellers or people who bought 20 or more years ago will probably drop their prices, but I can't see many people who bought in the past 3 or 4 years actually selling unless they are forced too. Many people paid a fortune for flats, and can't stomach selling them for much less than they paid for them.

That is why these things take time, but eventually prices will fall. Many buyers took out loans that they couldn't afford and their houses will end up repossessed. Lots of people who could afford their mortgages will lose their jobs and many will be repossessed. People who bought their houses 10 years ago will want to move. People will die and their families will sell their houses. Eventually this will filter through and anyone who wants to sell will have no choice, because would you buy a house for £200k if you knew a similar house sold for £120k the month before?

Strapped

Not a FTB, but we bought this place (a 3 bed semi ) in Mar 07 for £304k. Not sure how much it's worth now (except something less ) but using it as a ballpark figure gives:

Area: South Hams
Average price for a decent quality house that you would actually want to buy: £300k
Price we (2 salaries) could pay if FTB: £200,000
Drop required to live in that area: £100,000
Percentage: -33%

However, I will qualify that by saying that if we were prepared to move further afield eg to Ivybridge then we could afford a 3 bed semi there (around £175k - £200k) - but still only on 2 salaries if we were FTBers.

andrewmp

I'm a single first time buyer.

Bought a three bedroom semi just under two months ago for £75,000

Still more than 3x my salary though after a 15% deposit though.

1sue23

Our first home was a 2 bed flat good area in Coventry and it cost £8000 husband worked for Nationwide and earned £4,500 per year ,but we did get a cheap mortgage which was the norm then this was in 1977.

ginvzt

Ok, here we go. We would be looking for a 4 bed detached, with a decent garden. We had 3 bed end terrace until July (sold), and in March 07 paid £135k for it. We had a deposit and we only needed 3x single salary, not both. Now we decided to wait and rent - handed in application forms for a new place yesterday, fingers crossed!!!!

Area: PR6/PR7/PR25
Average price for a decent quality house that you would actually want to buy: £275,000
Price I could pay (2 salaries): £190,000
Drop required to live in that area: £85,000
Percentage: ~ -30%

Woby_Tide

neverdespairgirl wrote: »

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

Ah right, didn't people have kids or buy in their 30's in the old days?

I'm not disputing there are exceptions but there has been a definite cultural shift in the past few decades about first homes and the like, if only as evidenced by the number of two bedroom flats being built at the expense of 'family homes' i.e. 2/3beds

wolfman

Been looking in most areas. I've always liked Putney / Wandsworth sort of area, but it's expensive. Even looking further afield to less desirable areas. Streatham I would consider:

Area: SW16
Average price for a decent quality house that you would actually want to buy: £275,000
Price I could pay (1 salary): £150,000
Price I could pay (2 salaries): £225,000
Drop required to live in that area: £50,000
Percentage: 20%

If I looked in a area I preferred, it would be nearer a 30-40% drop I would need. Am not looking for a house, just a 2 bed flat that's a good size.

neverdespairgirl

Woby_Tide wrote: »

Ah right, didn't people have kids or buy in their 30's in the old days?

Of course they did. However, it does seem to me that my friends are, as a group, renting at an age when their parents had bought long ago.

lostinrates

Woby_Tide wrote: »

Ah right, didn't people have kids or buy in their 30's in the old days?

I'm not disputing there are exceptions but there has been a definite cultural shift in the past few decades about first homes and the like, if only as evidenced by the number of two bedroom flats being built at the expense of 'family homes' i.e. 2/3beds

But surely part of the cultural shift has been a huge provision of one bed homes (seemingly vastly overestimated) and the view that climbing aladder is a normal part of life?

really and truly did most people's grandarnts move as much as they have moved? My father's parents lived in London, in the same house from marriage until retirment ( 3 bed terrace). His great grnadparents lived on a second house on the family farm, built for great grandpa's father. Generations of my family didn't move house ever for purpose of 'climbing a ladder', but extended, and built, or bought when they moved away!