FTB expectations too high?

chrisandanne

It will not matter what people's expectations are, they will be told by the bank what they can borrow (and it won't be x6 their wage) and then go out and look for the best they can get in that price range....if they want something better than that they will have to save up more of their own money...that's how it was and that's how it will be again. Hopefully.

A

mewbie_2

Surely average wage x average multiple should = mortgage on average house? Better than average wage = better than average house. And so on.

Oh yes, sorry - plus deposit of course. 10%.

lynzpower

30 Years ago it was good enough for a first time buyer and most 'average' wage earners would have been very happy to have the flat but it seems people think they should have more nowdays for being in the same boat people were in 30 years ago?

is it through easy credit and not having to pay in real money that peoples expectations have got so high?

incorrect. IMO. but i think its through easy credit that house prices are so high.

30 years ago my parents had just had me Very average couple in very average manchester suburbs. . My mum didnt work, and my dad was a kitchen porter and laterly sous chef. They bought a 2 bed terrace in manchester with a garden, on my dads income alone, (and it was low. kitchen porters wages are low, even today) There is no way a couple in thier early 20s could replicate that today!! ( as my dad changed profession & mum started working we moved house a lot after that)

30 years ago most conventional people , and people were more conventional then, many had almost completed thier families at 30. So had bought thier family homes and were in a job set for life . times are different now.

When OH buy ( if!) we will want a family home. Im 32 this year, so we dont have long to start a family. And why should we have to move and throw money away on fees etc to move up the ladder.

brummybloke

mewbie wrote: »

Surely average wage x average multiple should = mortgage on average house? Better than average wage = better than average house. And so on.

Oh yes, sorry - plus deposit of course. 10%.

but it depends on what is an average house?
a 2 or 3 bed terrace is actually what i would say is an average house, a house that the majority of the population of workers can afford.

the national wage average is how much? apparently it is £480 per week?

well i dont know many shop workers, nhs staff, council workers or other day to day jobs, where they earn this sort of money.

should people expect to get a bmw for the same price as a ford ka just because some people want the bmw but dont want to pay more for it?

[Deleted User]

Im a FTB and earning just above average salary, i have saved what i would consider a fairly large deposit, personally though i consider a flat as a rental property so my ideal first buy would be a simple two bed terraced/semi. Surely thats not too high of an expectation?

Pretty much any FTB now knows prices are dropping so you cant blame them for aiming a little higher than an overpriced shoebox. Its hardly fair to say FTBs expect too much when Mr and Mrs Average borrowed 6 times their salary and "Invested" in BTL's quickly inflating the market and pricing out the younger generations.

beingjdc

brummybloke wrote: »

i have highlighted this bit because this is partially the problem.

a 34 year old may not WANT to live in a 1 bed flat, however if that is what is affordable then that is what there is.

But the fact they can't afford it is evidence of prices being too high, not of expectations being too high.

30 Years ago it was good enough for a first time buyer and most 'average' wage earners would have been very happy to have the flat but it seems people think they should have more nowdays for being in the same boat people were in 30 years ago?

Are you seriously saying that in 1979 the average 34-year old wage earner would have been happy to live in a 1-bedroom flat? When at that time the average 34 year old was married with two children?

I am thinking of people I know from my parents' generation, and what they had by their mid-thirties. They all had substantially more than a 1-bed flat - whether bought or council.

is it through easy credit and not having to pay in real money that peoples expectations have got so high?

No, exactly the opposite. It's through easy credit that it has proven impossible for prudent people to meet those expectations.

beingjdc

Just think it through. If the average family can't afford the average house, how can everyone live? There would have to be several families living in the smallest houses, and the biggest houses would have to be empty!

[Deleted User]

I'm certain it's all due to the average age of buyers rising - here's a report by natwest.. http://www.nationwide.co.uk/mediacentre/PDF/affordability_report190606.pdf

40% of house purchase transactions are by FTBers
10 years ago, 30% were aged 20-24
Now - it's 20%
Less than 10% of 22-29 year olds can overcome lending income multiple constraints

So the main problem is house prices have outstripped the trend of salaries.

Unfortunately, life still marches on. You might hit thirty and realise your parents were on to their 2nd or 3rd home by that age. I know my parents were at the 'life stage' I am at now (28, married, small home + pregnant wife) when they were 24. I count myself lucky to have got where I have (and its been by borrowing a bit more than I should have).

We've grown up with baby boomers as parents, thinking that we want the same as they had. I don't think its unreasonable for people in their 30s who have good jobs to want a nice home - and not the bottom rung of the ladder

mewbie_2

ringo_24601 wrote: »

I don't think its unreasonable for people in their 30s who have good jobs to want a nice home - and not the bottom rung of the ladder

Absolutely - in fact it's essential!!! Because we need couples, families with children, living in stable decent homes where their parents have a bit of time, and a little bit of spare money in order to actually live a life. As well as living in a reasonable property.

!!!!!! - it's really not too much to hope for. And that is what is wrong with the house price bubble, BTL speculation, and rip off banks operating a giant fraud on people.

mvengemvenge

chrisandanne wrote: »

It's brainwashing......you are what you own mentality. You can hear it on this forum all the time from some posters...the worst one was....'you have nothing, you are nothing'.

Who said that? Name names!

I think that FTB have unrealistic expectations, but equally, so do many sellers. I know so many people who are stubbornly holding out for unrealistic prices because they just can't accept that they won't rise inexorably. There may be some who just can't afford to drop the price, but that can't apply to everyone.