This is bizarre. An interest rate cut is expected soon and houses are not selling...

IveSeenTheLight

SingleSue wrote: »

Wish they would tell my fuel station then! The price of a barrel may be down to 2006 levels but the price at the pump is not yet down to what it was at the start of this year although it is getting closer for petrol, diesel is still plus £1 a litre.

Think I will do a little dance when the litre amount exceeds the pound amount at the pumps instead of the other way around.....the staff will allow it, they know I am weird! :rotfl:

The price at the pump is also down to at least 2006 levels.
Shell and many supermarkets are selling for 94.9p a litre of unleaded.
I remember at least two years ago, maybe more, the furore that the price was on the verge of going above £1

carolt

IveSeenTheLight wrote: »

"unexpectedly high gas/electric bills fall through the door" - Okay, there is a lag, but concensus is that with oil price having halved, gas and electricity is expected to drop.

"Add increasing petrol costs " - This has come down already, back to circa 2006 prices

"higher food prices " - this is also going down now.

"baby number one comes along and drains any last 'savings'. Mum gives up work or goes part-time and the mortgage needs to be paid with just one wage coming in" - Okay agreed, everyone knows that having a baby is a drain on resources. It always has done and always will do. Take your example of a £150k hose being £750 per month. With an average wage of circa £25k, the take home will be approx £1500, so still maintainable to make that mortgage payments. Remember the mum could also be working part time taking in circa £750 per month which pays for the mortgage.

I don't take the baby argument and loss of second earnings. Having a baby is a life changing fact. You have to adapt, both for life with a new baby and from a financial perspective. You can't expect to have a baby and life to go on with no differences.

Life is about choices and what you make with what is available.
It's not about moaning about what you can't have.
If you can't have it and really want it, its up to you to go out and do something about achieving that goal.
If that means you want something that is unaffordable, you have to save up, train and develop to increase your income etc in order to be able to afford it.

Agreed - but having a baby (or 2 or 3) is also a fact of life. The idea that it's somehow a 'special' time to save up for, like Xmas, sort of misses the point. Looking after children, and all the associated costs, doesn't just last for a year or 2 of some woman's working life. If you have a couple of kids, with a few years in between, paying for them can take up most of your working life.

Kids don't just cost when they're tiny and you can't work - they cost when you now need to buy a bigger house or in the catchment area for a school. You will almost certainly be paying for their university education 20 years after they're born, or paying even longer if they go on living at home. And that's without the 18+ years of food, clothing, hobbies, toys, books, bigger car etc etc.

The idea that you - or anyone - could simply save up for this all in advance is just laughable - as you will find when you have kids yourself (soon!).

The fact is, that 'typical couple' described above, were probably just like you, and imagined that they might have to cut back a bit if she got pregnant. The reality is, they would no longer be able to afford the lifestyle they had before they had children, paricularly so in a recession, when job/wage cuts are more likely and it's harder for the main wage earner to just 'get a better job'. And paying the mortgage might well become a step too far.

hethmar

Cor, you are joking, kids only costing you for 20 years?????:)

(I saw a 60 odd year old man in town in the summer, wearing a tee-shirt with the slogan "Money cant buy you happiness, but it does keep the kids in touch)

SingleSue

IveSeenTheLight wrote: »

The price at the pump is also down to at least 2006 levels.
Shell and many supermarkets are selling for 94.9p a litre of unleaded.
I remember at least two years ago, maybe more, the furore that the price was on the verge of going above £1

I would disagree, at the beginning of the year I was paying sub £1 a litre for diesel but diesel is still over the £1 even now (currently £1.08 per litre).

Petrol here is around 98p a litre at present.

Mind you, I must admit it is better than the £1.33 per litre (diesel) it was in the second week of July!

It did hover around the just sub £1 area for quite a while with increases and decreases from 2006 though plus more fuel stations were giving the 3p off a litre thing that they do...and which seem to have made a comeback recently!

baileysbattlebus

neverdespairgirl wrote: »

There are a couple of things you haven't taken into account, though. Firstly, there is an increased tax burden and no MIRAS.

Secondly, a lot of people owe a fortune in student loans

Thirdly, the level of personal debt excl. student loans is much higher.

All those impact on affordability.

Yes you're right I did forget miras.

Miras was worth an average of £85 a month, 1990 it was £41 a month and by 1999 it was £17.71. It was paid on the first £30k of your mortgage interest.

I also forgot the Poll Tax and it's impact on households.

Student loans - personally I don't agree with them - but on the other hand they are quite a cheap way of borrowing money. Interest is pegged at RPI for the year and payments are earnings related, payable on income over £15k, it used to be 5%. So if a new graduate earns £20k he will pay 5% of £5k back.
I don't know how much debt students accumulate now.

Personal debt - a personal choice surely. Its part of the "I've to get it and I've got to get it now" mentality that seems endemic amongst people. People have high expectations often without the income you need to fulfill them, and don't expect to have to wait for anything, be it a house, a car, or new phone. They want the next gadget as soon as it comes out. For me that is a personal choice, yes it does impact on affordability.

I'm not saying it isn't tough for people, it is tough and it will become tougher, but some people think it is only this generation who have gone through tough times, when that isn't the case. People had it tough 20 years ago too. Even if they did have miras.

If I learnt one lesson from then - it was don't over extend your finances, only take on what you know you will be able to afford, because you don't know what is round the corner. For us that meant waiting for the new car, only buying a house we knew we would be able to afford if the mortgage doubled because it almost doubled at one point.

IveSeenTheLight

carolt, I agree with most of your post, but on the following points

carolt wrote: »

The idea that you - or anyone - could simply save up for this all in advance is just laughable - as you will find when you have kids yourself (soon!).

I never abdocated that you can save up in advance before having kids, but you can reduce your debts and outgoings before hand.
My wife and I bought into property approx 8 years ago, starting out in a 2 bed flat.
We had moved into a 4 bed house since then and moved abroad after that.

We now have two UK BTL's with tenants and an overseas property that my company pays an allowance for and which covers more than the mortgages, so fortunately we are in effect mortgage free.

If we were to decide to sell up and move back to the UK, we would effectively have a 4 bed mortgage free property in time for our new baby to arrive (Don't bore me with IF I could sell as its not in my plans)

In all our property lifetime, we have ploghed spare money into the property, reducing the debt, to effectively be mortgage free in just over 8 years.
As is it is, our plans (without any increase in spending) will be that we have 3 mortgage free properties in a further 8 years time.

The fact that we have always ploughed extra money into the property means that we can stop that now and re-allocate finances to other area i.e the baby.

So while I don't advocate you can save up in advance, you can live within your means, reduce your mortgage and then start a family such that there is little difference to the monthly financial status

carolt wrote: »

The fact is, that 'typical couple' described above, were probably just like you, and imagined that they might have to cut back a bit if she got pregnant. The reality is, they would no longer be able to afford the lifestyle they had before they had children, paricularly so in a recession, when job/wage cuts are more likely and it's harder for the main wage earner to just 'get a better job'. And paying the mortgage might well become a step too far.

As I said above, forward planning and living within your means can mean there is little difference in lifestyle after the children come along.

Of course if pre-children you utilised the finances differently ,then that is completely your choice and can mean that post baby arrval lifestyle does change.

We all choose how we live our lives

Gangstabird

HankMcSpank wrote: »

Let me get this straight - you've had a flat repossessed previously & now you're offering the forum property buying advice? :rolleyes:

The others have summed it up nicely...it's not just about interest rates. It's a combination of the cost of the property (way higher now than then) multiplied by the cost of borrowing.

Get Lost Mr McSpank. I would like to know exactly where I offered advice. I was merely musing over it all. I was very very young when this happened and actually learnt lessons over this as did many other people. I am a bit more grow up now and do NOT have a mortgage 4 times my salary, nowhere near;)

carolt

IveSeenTheLight wrote: »

carolt, I agree with most of your post, but on the following points

I never abdocated that you can save up in advance before having kids, but you can reduce your debts and outgoings before hand.
My wife and I bought into property approx 8 years ago, starting out in a 2 bed flat.
We had moved into a 4 bed house since then and moved abroad after that.

We now have two UK BTL's with tenants and an overseas property that my company pays an allowance for and which covers more than the mortgages, so fortunately we are in effect mortgage free.

If we were to decide to sell up and move back to the UK, we would effectively have a 4 bed mortgage free property in time for our new baby to arrive (Don't bore me with IF I could sell as its not in my plans)

In all our property lifetime, we have ploghed spare money into the property, reducing the debt, to effectively be mortgage free in just over 8 years.
As is it is, our plans (without any increase in spending) will be that we have 3 mortgage free properties in a further 8 years time.

The fact that we have always ploughed extra money into the property means that we can stop that now and re-allocate finances to other area i.e the baby.

So while I don't advocate you can save up in advance, you can live within your means, reduce your mortgage and then start a family such that there is little difference to the monthly financial status



As I said above, forward planning and living within your means can mean there is little difference in lifestyle after the children come along.

Of course if pre-children you utilised the finances differently ,then that is completely your choice and can mean that post baby arrval lifestyle does change.

We all choose how we live our lives

But everyone couldn't do what you've done. Your wealth comes from

(a) buying to let 2 other properties - done at at time of cheap prices to buy and then years of steep HPI. You've been very lucky with your timing, but you could hardly claim that any novice wanting to get into BTL now would face the same conditions, or find mortgage lending so favourable, let alone HPI.
Also, one of my main objections to viewing BTL as a productive industry, 'providing' homes - rather than depriving others of homes, as I view it - is that this plan only works if a few people are doing it. If everyone owned 2 BTL's as well as their main residence, then there would, obviously be no people left to rent all these extra houses. BTL ONLY works by monopolising a scarce essential resource - hence my moral objections - which also makes it unsuitable as a get-rich-quick scheme for the majority.

(b) You worked abroad, and so had your firm pay your mortgage and rent simultaneously. Likewise, if all our workforce decamped abroad, it wouldn't do much for the longevity of our country, let alone its economic success.

If you're suggesting that everyone get 3 'regular' jobs at the same time, to save up before they have a baby, I think you're being a tad unrealistic. :rolleyes: I think you have to accept you're not typical of new parents, but a beneficiary of very specific and unusual economic conditions, the like of which we are unlikely to see again for many years, if at all.

Certainly no help for our stereotyped 'typical' couple starting out NOW.

IveSeenTheLight

carolt wrote: »

But everyone couldn't do what you've done. Your wealth comes from

(a) buying to let 2 other properties - done at at time of cheap prices to buy and then years of steep HPI. You've been very lucky with your timing, but you could hardly claim that any novice wanting to get into BTL now would face the same conditions, or find mortgage lending so favourable, let alone HPI.

(b) You worked abroad, and so had your firm pay your mortgage and rent simultaneously. Likewise, if all our workforce decamped abroad, it wouldn't do much for the longevity of our country, let alone its economic success.

I wouldn't say wealth as I am still in mortgage debt and only keep a small emergency savings, puting the rest into that debt.

I bought one of the BTL's in Jan 2007 so have not had "years" of steep HPI.
The second was previously a home I had before I moved abroad. Bought in 2004 and only converted to a BTL 2 years ago.
I moved abroad 2 years ago and my wife gave up her job to join me, reducing our income to one.

I moved abroad, because I was good at my job, achieved better qualifications at the same time and showed an application that I was suited to the role. Certainly achievable by many if they apply themselves in this way.

So in 8 years of buying property only 2 have been utilised as BTL, most of the payment into the mortgages has come from living off one wage and puting the second wage into reducing mortgages, although I do confess that in the last two years, my tenants have helped to reduce the mortgages at an increased rate.
We made the decision to live off one wage knowing it would benefit us in the future by being able to live within the means of one wage and rapidly repaying mortgage debt. It also meant that if / when we went down to one wage, we could manage by on that.

So a typical couple CAN do as we have done and prepare for the future.

The question is if they are prepared to make the same choices and settle down early as we have

baileysbattlebus

IveSeenTheLight wrote: »

I wouldn't say wealth as I am still in mortgage debt and only keep a small emergency savings, puting the rest into that debt.

I bought one of the BTL's in Jan 2007 so have not had "years" of steep HPI.
The second was previously a home I had before I moved abroad. Bought in 2004 and only converted to a BTL 2 years ago.
I moved abroad 2 years ago and my wife gave up her job to join me, reducing our income to one.

I moved abroad, because I was good at my job, achieved better qualifications at the same time and showed an application that I was suited to the role. Certainly achievable by many if they apply themselves in this way.

So in 8 years of buying property only 2 have been utilised as BTL, most of the payment into the mortgages has come from living off one wage and puting the second wage into reducing mortgages, although I do confess that in the last two years, my tenants have helped to reduce the mortgages at an increased rate.
We made the decision to live off one wage knowing it would benefit us in the future by being able to live within the means of one wage and rapidly repaying mortgage debt. It also meant that if / when we went down to one wage, we could manage by on that.

So a typical couple CAN do as we have done and prepare for the future.

The question is if they are prepared to make the same choices and settle down early as we have

My sister and her OH saved her wages and lived off his. Initially, they used to use some of her money for holidays and Xmas, but as time went on they didn't need to. It was saved and allowed her, with no pension provision to retire from work at 45.

Wish we had done the same!!!!