3 times salary! How ridiculous!

angela110660

Going back about 30 years here but we got 2.5 of one salary and 1 of the 2nd salary. You had to save for a couple of years with a BS too before they would even consider you for a mortgage - how things have changed. Even so we still had to struggle to get our deposit together and find a place to buy. We got a 1 bed flat though - not a 3 bed house!

m_13

racheyg wrote: »

Hiya - yes but I would only get a mortgage on one of them, and my partner has two jobs (complicated, I know, we have just started a couple of companies). We bring in over £6,000 a month, plus I get child maintenance, but we could only get a 'normal' mortgage of £180, that's 3 x our bread and and butter jobs.

On £6,000 a month you should be able to save a large deposit in no time! If you have a large deposit then they may go above 3 x salary as the LTV on the property will be lower and reduce their risk.

poppysarah

But was there really anything wrong with having to save up for a while?

I also think business loans should require a big long proper business plan to. None of this fag packet "i'm going to buy an house like they have on homes under the hammer"

barnaby-bear

clk299 wrote: »

Well, I earn at the top of my profession for my level, inner London, and have a 30k deposit, and I would still only be able to afford to buy somewhere at about £110k allowing for fees and furniture. Which would buy me a studio flat in an undesirable area, if it were to be within acceptable distance of work...

So you ean 80k divided by 3, just under 27k - below average for London - imagine you buy that little studio and meet a boy who earns above average and has a 1-bed flat - then together you buy a two bed - a few years down the line pay rises, a bit of overpayment, an inheritence etc and you're into average property zone.... single FTB will always on average be restricted to the smallest most modest properties

barnaby-bear

prowla wrote: »

Yes, it is ridiculous - 3x salary is too much!

I think 3xjoint salary is unwise - the headline 3xsalary doesn't really say what they plan to do about couples - a lot of couples change circumstances (i.e. make babies) so effectively do lose a big proportion of income down the line.... 2.5xfirst salary plus 1xsecond used to be the norm....

leveller2911

I checked property prices in my area on www.ourproperty.co.uk which covers prices from 1997-onwards it was interesting to see the average house price consistantly rose 300% over the last 10yrs.
Given that wage rises rose around 25% in 10yrs its no wonder we are in so much trouble.Its was unsustainable and couldn't last.

Oh and this isn't spam, the link has been posted on here endless times.:D

slopemaster

3x my salary would only get me around 50% of the price of a 1-bed flat here!
Fortunately I have a sizable deposit, and been offered up to 5x my salary. for me it is still quite affordable, i don't spend much.
So 3x rule does not take enough account of circumstances.

Geenie

barnaby-bear wrote: »

I think 3xjoint salary is unwise - the headline 3xsalary doesn't really say what they plan to do about couples - a lot of couples change circumstances (i.e. make babies) so effectively do lose a big proportion of income down the line.... 2.5xfirst salary plus 1xsecond used to be the norm....

I agree. When OH and I bought our first home, we only took out a mortgage that was based on his salary. Even though I was earning good money at age 29, we knew at some stage we planned a family and that my income could not be a certainty in the future. As it happened, I was pregnant a year later and stopped working when the baby was born.

That said, I don't know how far the difference between wages and house prices are now, compared to the 80's when we were buying, and this must be a big factor in what is achievable.

poppysarah

slopemaster wrote: »

3x my salary would only get me around 50% of the price of a 1-bed flat here!
Fortunately I have a sizable deposit, and been offered up to 5x my salary. for me it is still quite affordable, i don't spend much.
So 3x rule does not take enough account of circumstances.

You're looking at it the wrong way round.

If you can only buy half a 1bed flat on 3X your salary it means the propertys are TOO EXPENSIVE

go look up what house prices used to be on the streets you'd like to live on.

Average wage hasn't gone up much in the last few years was about 22k in 2003 I think- but property was sensibly priced back then.

besonders1

slopemaster wrote: »

3x my salary would only get me around 50% of the price of a 1-bed flat here!

That might be a clue onto what the price correction might be then once banks revert back.

I can't see how anyone on earth wouldn't mind paying high prices with 6X multiples over the traditional 3X wages for the same house when it was more affordable.