FTB expectations too high?

thegibdog

IveSeenTheLight wrote: »

My point is, two couple in mid thirties, one first bought 8 years earlier and may be now looking to upgrade, the other is starting with their first property.
Do you believe all being equal the second couple should be able to jump straight to the upgraded level of property without having previously been paying down a mortgage (unless as you point out that they have been putting away the equivalent capital outlayed in the mortgage, which let me remind you will not be the average FTBer)

Your point seems to be based on the assumption that, all being equal, the 2nd couple would have just squandered their money whereas the 1st couple will have paid down their mortgage. Which is probably not the best assumption in the world and renders your point pretty much irrelevant as far as I can see.

IveSeenTheLight

izzybusy23 wrote: »

Erm... divorce which led to debt (because I was the one who left the matrimonial home to get away from my ex) at a time when HPI was in full swing, which led to renting, then fell pregnant and thought a baby at 33 years of age was more important than paying out ridiculous money for an overpriced shoebox, after all, my baby would have a roof over its head whether mortgaged or rented.... so to answer you question I actually once was a home owner, but unfortunately situations and circumstances dictated the direction of my life. I cannot see why me wanting something better than a 2 bed flat should be questioned? Ideally I would like a 3 bed house... nothing wrong with that and I am prepared to sit and wait it out for the right time and house when our wages will buy something worthwhile. In the meantime, I am happy to rent.. seems to be the safer option in this present climate.

Any more questions?? :rolleyes:

Please don't think I am being judgemental. I'm certainly not attempting to be.

Your situation is something I can relate to.

My mother and step father, both were divorced, had debts to settle, new children etc. They did however re-start their lives by living in a 2 bed flat, then moving to a 3 bed semi-detached and now are in a 4 bed detached.
I will ask them, but I think they realised they could not jump straight into the ideal family home and needed to have sacrifices and time in order to achieve it.

I also know of a female friend who was married and in a nice 4 bedroomed family home before divorce and leaving her husband in the home. She too has re-started and bought a 2 bed flat and is now considering changing to a family home again.

My point is, trying not to be condescending, is that while I understand everyone may have personal reasons that delays or re-starts their property purchase, why do FTBers expect that they should be able to jump straight onto a family home without having either saved [EMAIL="d@mn"]d@mn[/EMAIL] hard or come in to money in order to have a sizeable deposit and be able to afford that family home?

IveSeenTheLight

thegibdog wrote: »

Your point seems to be based on the assumption that, all being equal, the 2nd couple would have just squandered their money whereas the 1st couple will have paid down their mortgage. Which is probably not the best assumption in the world and renders your point pretty much irrelevant as far as I can see.

On the contrary, I believe that in general, those that delayed buying for whatever reason would not have been saving up such a deposit for property, especially given the rapid rise in house prices everyone was aware of.

Of course, there will be people to the exception and I think that is great.

If you believe that the general is that generally, people have been valiantly saving up their deposit in preperation to buy, this would suggest there will be a high demand when the cycle turns, which may turn out to be the case in either scenario

sarastark86

SandC wrote: »

That is, bar the monstrosity of luxury apartments built near the centre of our small town - they are ridiculously expensive but whaddya know, loads of them up for rent (you could guarantee if you wanted to rent an apartment there would be a choice in that building at any time) and I don't think the developer ever sold all of them. In this town most of us know a rip off when we see it.

I don't suppose you're talking about the ridiculous block of flats built in the shape of a fin above the bus station in Chelmsford?? LOL

Anna72

lynzpower wrote: »

but surely this is another symptom of the over inflated bubble this country has found itself in? When OH and I are buyers of course the mortgage will be high. We wont have the money to pay trademen to make places nice. My parents bought wrecks, but they both didnt HAVE to work full time to meet the mortgage payments so they could repair & decorate it all themselves.

this is the problem, because houses cost too much for so many FTBs they simply dont have the money, time or skills to repair a flat or house.

When OH and I bought our first house 11 years ago it was completely run down. Had had tennents in it for 10 years, no central heating, broken windows and had to be literally emptied from top to toe of everything bar a couple of kitchen cupboards, the loo and the bath and sink. We paid under asking price obviously but it was still a lot to us back then as we didn't have the bigest income. We moved in in the winter and lived in one room with one elelctric heater and saved for the first winter whilst keeping warm by stripping all the rooms. In the spring we had saved enough to pay for central heating - we didn't go out drinking, eating out etc - we wanted to spend money on our HOME. We had bubble wrap still at the broken windows. Two years later we had decorated the front room, the dining room had a whitewash and stripped floors and we could afford to replace the two windows that had broken panes. We were still living with a kitchen with a cement floor and cupboard that I would not put any utensils into as they were so disgusting. A year later we could afford to do the bathroom. I learnt to tile. After 5 years we could afford a kitchen made from an mdf kitchen top, which I tiled, with a sink dropped into it, free standing shelves for a larder and basic appliances. We have worked our way through the house room by room and had it just about done by the time we had our first child -the nursery was carpetted when I was ready to pop. We then had the loft converted as child number 2 arrived, extending our mortgage. We now have a beautiful 4 bedroom, 2 bathroom house that it has taken us 11 years to make. We both had full time jobs in the beginning, whilst more recently I work part time and am a mother. ALL the work on the house was done in the evenings or weekends. At the moment we are redecorating our daughter's bedroom - after work, once the kids are in bed.

We mortgaged ourselves orginally not on what the bank would lend but on what we could afford to pay each month and still have money left over to pay for holidays, renovation etc. We went house hunting with that value in mind and didn't look at anything above it. We have learnt to tile, wallpaper, put up shelves, etc etc. We have made our home and poured ourselves into it.

Life is about choices. There are lovely terraces around us going for under £100K. 2 or 3 bedrooms with lots of potential. However if you want the dream house straight away that doesn't need any input then yes you will have to pay for it - all on the mortgage. We chose to invest our time and energy into it and not have everything straight away.

Why does everyone think they have to borrow every penny a bank will offer them rather than deciding how much they CAN and WANT to pay and only asking for that much!?

penguine

Anna72 wrote: »

Life is about choices. There are lovely terraces around us going for under £100K. 2 or 3 bedrooms with lots of potential. However if you want the dream house straight away that doesn't need any input then yes you will have to pay for it - all on the mortgage. We chose to invest our time and energy into it and not have everything straight away.

Why does everyone think they have to borrow every penny a bank will offer them rather than deciding how much they CAN and WANT to pay and only asking for that much!?

I wish there were lovely terraces around us for that price. We spent years looking at properties priced around £300k as that was what we felt we could afford (in retrospect it would have seriously stretched our finances though). We live in an unfashionable London suburb, our jobs and family and friends are in this area so we don't want to move. For £300k we were looking at poky cramped houses that made our 2-bed flat seem spacious, and that needed more work than we were going to be able to afford after paying for our mortgage.

As a result, we've been on and off househunters for over 3 years, and are still living in our flat.

daveb975

thegibdog wrote: »

Your point seems to be based on the assumption that, all being equal, the 2nd couple would have just squandered their money whereas the 1st couple will have paid down their mortgage. Which is probably not the best assumption in the world and renders your point pretty much irrelevant as far as I can see.

In a flat market I would agree, but it depends on the level of HPI. Say a couple bought a house on a 100% mortgage for £150k in 1999 and paid £500 off the mortgage a month in addition to the interest element. Another couple don't buy, but choose to save £500 per month.

Fast forward to 2007, and the house is 'worth' £350k. The couple who bought it now owe less than £100k on their mortgage, so own most of the house. The couple that didn't buy have got £50k (plus interest) saved, so would still need a £300k mortgage to buy the house.

You could argue that this evens out in the longer term, but not everyone wants to wait for the exact time in the economic cycle to buy.

daveb975

penguine wrote: »

I wish there were lovely terraces around us for that price. We spent years looking at properties priced around £300k as that was what we felt we could afford (in retrospect it would have seriously stretched our finances though). We live in an unfashionable London suburb, our jobs and family and friends are in this area so we don't want to move. For £300k we were looking at poky cramped houses that made our 2-bed flat seem spacious, and that needed more work than we were going to be able to afford after paying for our mortgage.

As a result, we've been on and off househunters for over 3 years, and are still living in our flat.

As Anna says, it is all about choice, and some people choose location over property size.

We are in a similar situation. We don't want to move out of the mid-range London surburb that we currently live in. In the current market, 2 bed flats are still the best part of £300k, 2 bed terraces £400k and standard 3 bed semis over £500k. These prices are 15-20% off the peak as well.

It is not an expensive area by London standards, but I would not even describe what is available for £1m as a 'dream home' (still very nice, though:D ). Even though we are a couple both on reasonable salaries, we could not make the choice to buy a dream home here even if were prepared to sink every penny we earn into it.

I don't mind too much as I realise that a 2 bed flat in this area is equal in price to a 3 bed detached house a few miles further out.

penguine

daveb975 wrote: »

As Anna says, it is all about choice, and some people choose location over property size.

True, but regardless of location, when flats cost 5-6x the average salary in a particular area, then something's seriously wrong.

daveb975

penguine wrote: »

True, but regardless of location, when flats cost 5-6x the average salary in a particular area, then something's seriously wrong.

I agree 100%. In my area in 1995, it appears that you could buy a good 2 bed flat for £100k (the same type went upto £350k at peak, and are probably £280-£290k now).

Assuming the average salary in the area was £25k at the time, that makes them 4x salary at the bottom of the market. Now, assuming an average salary of £35k, they stand at 8x having been up as high as 10x!!!