FTB expectations too high?

mbga9pgf

Not worried, especiall once everyone is...

mbga9pgf

But you are trying to enter at the higher end because of your wage which is understandable, but had you been able to purchase a samller house a few years ago when on a lower wage you may have been able to do that.

Thanks for the advice.
Unfortunately I wasnt in a position to buy before I started saving anyway.

Really2

mbga9pgf wrote: »

Thanks for the advice.
Unfortunately I wasnt in a position to buy before I started saving anyway.

No I understand that and that is not your fault or anybody elses. I am just saying trying to aim at the higher end of the market will not give you as good a value a house as say someone in their mid 30's who traded up.

But when you are in your mid 30's you may be able to get an even bigger house than them.
Does that make sense.

Dont forget some one purchased 7 years ago should have cleared a bit of mortgage also so that is also why it may seem a bit un fair as even though they are on a lowere wage they still may have the same buying power over a 25 year term.

mbga9pgf

Sorry, I dont necessarily agree with that. Anyone who has owned sits on a fair whack of equity, granted, but the house they will be moving up to will just have appreciated as much as what theirs has, assuming a similar location. thus the rungs have got further apart.

If I saved and stayed in rented I would be mortgage free in 6 years. I only plan to buy when it suits me. I would really prefer not to save that long and would prefer to buy a house instead of saving hard. I think aiming as far up as you possibly can is the best plan as you dont have recurring stamp duty/arrangement fees /EA fees to contend with.

Also that doesnt take into account the fact that it is nigh on impossible to keep a chain together at the mo.

Still, thanks for the advice!

neas

In response to OPs original post.

Im 25, have a reasonable job my wife is 28.... we are renting a 1 bedroom flat at the moment, I consider this 'the first rung'.

My parents bought their 'first rung', a 2 bedroom house with an attic conversion (so a 3 bedroom at a push) back in 1976, aged 20. They then traded for there current house 7 years later, aged 27 (a proper 3 bedroom house) and thats where they stayed.

So by the age of 27 they had a 3 bedroom house, a nice family home for them and there 2 children.

Im almost 26 and partner is almost 29... so we are of similar age to my parents... we have 0 children, and could get a 3 bedroom house now similar to theirs (for alot more debt however i might add).

I believe your comparisons are flawed, most people 'back in the good ol days' bought considerably younger than us lot ... i.e 6-7 yers before most people buy now... and that 6-7 years is exactly the same time they would 'jump' rungs of the ladders.

Im skipping a saving alot, being savvy, and got a well paid job (ish) so I can catch up with my manual, factory labourered mother and fathers opportunities..... sad that it took two degree educated higher paid individuals to match low income (mother) and medium income (father) individuals...

And its not a ladder, why do people call it that? Its a almost a game, a competition. You can increase your 'score' by being clever, savvy, prudent or determined.... and alot of the screwed other potential FTBers are doing just that, saving so they will comfortably afford a 3 bedroom and get back what their parents similarly had at their age.

If its a ladder... its now a property snake... as getting on now like the snakes and ladders game would send you shooting downwards rather than upwards.

So if you gonna call it a ladder.. please call it by its proper name, the property snake.

Really2

neas wrote: »

In response to OPs original post.

Im 25, have a reasonable job my wife is 28.... we are renting a 1 bedroom flat at the moment, I consider this 'the first rung'.
.

one thing is different population as increased by 6 million but biths have decreased.
That is most probably 7 million adults more than 1976 have we bulit 3.5M more homes to acomodate them?

I don't know how we are going to stop the boom bust cycle with such a massive amounts of adults on one little island.
There is just to much competition in the good times for it not to happen again.

mitchaa

mbga9pgf wrote: »

Yes I have as with the Median calculation. 3X joint salary +10% As I have said time and time again, mean figures mean nothing. you have to use the median figures to determine realistic value.

I live in Wiltshire. 50K is most definitely not the mean wage round here.

What is with the use of the median figure? When talking averages you generally look at the mean figure unless stated otherwise.

A few facts for you....

The average salary in the UK is £26,020, this is for both males and female.
The average salary for a male in FT work in the UK (So yes you) is £35,122

If you want to speak median here so 50% above, 50% below the average salary of a male in FT work is £27,500

Evidence here..

http://www.statistics.gov.uk/downloads/theme_labour/ASHE_2008/2008_work_la.pdf

Table 7.7, and over 20m employees analysed.

What happens when we take Mr average and Mrs average both on £26,020pa and multiply this by 3x +10%, you will find an average home for the average couple should be priced at around £175,000.

If you want to use the median (I suspect you will ) ...

Male in FTW = £27,500, Female in FTW = £21,447, combined income = £48,947 average house should be £163,000

Now, that is assuming both are in FT work and many woman are not due to raising children. The average annual household income is reported to be £37k which gives a house price of £123,000

Then i suppose you could argue that this does not depict a genuine average couple as the income is different to a true average couple (£52,040)

Mean figures are just as useful as median figures, mean figures take into account low % high salaries but median also takes into account high % low salaries of those in PT employment.

We should be comparing FT male and female and if you want to remain on the median average, this is clearly shown to be £48,947

So giving this figure is just an average for a FT in work couple, you could argue that if your GF/Wife takes time out to have a child that your £50k income is just an average income.

You could of course argue black is white and dispute the 20m+ review carried out by the ONS

Really2

mbga9pgf wrote: »

Sorry, I dont necessarily agree with that. Anyone who has owned sits on a fair whack of equity, granted, but the house they will be moving up to will just have appreciated as much as what theirs has, assuming a similar location. thus the rungs have got further apart.


!

They usualy start again putting down £XX,XXX and resetting to 25 years.

mbga9pgf

Really2 wrote: »

one thing is different population as increased by 6 million but biths have decreased.
That is most probably 7 million adults more than 1976 have we bulit 3.5M more homes to acomodate them?

I don't know how we are going to stop the boom bust cycle with such a massive amounts of adults on one little island.
There is just to much competition in the good times for it not to happen again.

dannymccann

It all depends on where you are in the country doesnt it?

Where I am, when I start working out of uni we will be on a combined £30kp/a (2 x 21 y/o), with a deposit of about £8000 ish - giving a £100k budget.

Based on this we have got a HUGE selection of properties ranging from

1 bed S/O terraces -> 4 bed detached houses (although these are grotty at this price).

Therefore we have decided to look in the middle at 2/3 bed semi's, which are on the market between £75k - £95k with a view to offering much less to start with.

No reason why we shouldnt start here....we rent a 2 bed terrace now so have done that bit, and if its affordable then why not?