Homebuyers could be forced to put down a deposit of at least 15 per cent

ukcarper

penguine wrote: »

From this statement:Quote:
The trouble is people want house prices to go back to pre hpi prices but are not prepared to act like people did then.

Didn’t people save hard and put down big deposits like your OH which a lot of people now are not prepared to do now.

Kenny4315

ukcarper wrote: »

Although I agree deposits are important but house prices are linked to salary multiples.
Salary multiples are very crude and don’t take into account interest rates but unfortunately historically that’s the way mortgages have been worked out

That's why we have so many in the negative equity trap. Enforce a minimum deposit of 15% to 20%, and this will 1. stop house prices exploding in the first place 2. significantly slow the downward cycle and allow more time to readjust.
3.Ensure that people who get mortgages have the ability to save and budget, and have some skills at it.

ukcarper

Kenny4315 wrote: »

That's why we have so many in the negative equity trap. Enforce a minimum deposit of 15% to 20%, and this will 1. stop house prices exploding in the first place 2. significantly slow the downward cycle and allow more time to readjust.
3.Ensure that people who get mortgages have the ability to save and budget, and have some skills at it.

I agree with all that.

But if people can only borrow 4x salary instead of 6x it will also keep prices lower

lostinrates

Tygermoth wrote: »

Wow i am on a bit of a downer today... Sorry

It happens to everyone occasionally, I hope its short lived and that an answer for your quandry becomes apparant.

lostinrates

penguine wrote: »

Rubbish.
....................
How you think people are "prepared" to act has nothing to do with it. The previous model was unsustainable and there is now no going back.

I think, to be fair, there are a mixture of attitudes in my generation. Most of the bear crowd here are clued up, have saved in their waiting. I know many of our peers who have not, just grumble about it, if they are more than basically aware of the situation, whereas of course there are many others who fill all shades of grey between.

Out,_Vile_Jelly

ukcarper wrote: »

Someone I know rented a room in a house share and saved very hard for a deposit it can be done if you are prepared to make some sacrifices

True- I could live in a noisy, messy house-share with other people's pubes in the bath, other people's boyfriends' pants hung up to dry everywhere, arguing over utility bills and whose turn it is to buy bog roll, living off Tesco Value everything as I did as a student in order to scrape a deposit on an overpriced shoebox in a rough area of town heading swiftly towards NE, just so I could proudly label myself a home-owner.

I could if I were obsessed about buying property and the social status this apparently entails, and if I allowed myself to be panicked into believing I'd missed some sort of boat.

As I'm not, I'll continue to rent debt-free and save and concentrate on the flexibility this affords me. The day I read one of the part rent/part buy new build ads for "stylish modern living in the heart of East London's regeneration (Dalston)" and think "ooooh, tempting!" is the day I ask my GP for a referral to a psychiatrist.

Kenny4315

Salary does not determine affordability in many cases, it ignores asset wealth. It also ignores that you can lose your salary almost immediately through redundancy, etc. A deposit is 'bought and paid for' it's in the bank and sorted. Many guys at present have 100% or more salary based mortgages and are being made redundant, they have no safety net, they are straight into the Sh8Te, with little prospect of immediately gaining alternative employment.

I'd relax salary caps and tighten deposits, with the risk emphasis being placed on the individual and not the bank/government.

ukcarper

lostinrates wrote: »

I think, to be fair, there are a mixture of attitudes in my generation. Most of the bear crowd here are clued up, have saved in their waiting. I know many of our peers who have not, just grumble about it, if they are more than basically aware of the situation, whereas of course there are many others who fill all shades of grey between.

I'm sure your right but it's never been easy to buy a house and some people on here give the impression that they want prices to fall so far they can put a months salary down and pay next to nothing in replayments. I agree house prices had reached silly levels and needed to fall and personally think that 3.5x average salary + 10 % deposit for a ftbs property is about right.

ukcarper

Kenny4315 wrote: »

Salary does not determine affordability in many cases, it ignores asset wealth. It also ignores that you can lose your salary almost immediately through redundancy, etc. A deposit is 'bought and paid for' it's in the bank and sorted. Many guys at present have 100% or more salary based mortgages and are being made redundant, they have no safety net, they are straight into the Sh8Te, with little prospect of immediately gaining alternative employment.

I'd relax salary caps and tighten deposits, with the risk emphasis being placed on the individual and not the bank/government.

Like I said I agree with most of what you say but surely house prices are goverened by what people can borrow.

if you put down 25% and get a 6x salary mortgage thats what the price will and if you put the same deposit down and get 4x salary house price will be 2x salary less.

lostinrates

ukcarper wrote: »

I'm sure your right but it's never been easy to buy a house and some people on here give the impression that they want prices to fall so far they can put a months salary down and pay next to nothing in replayments. I agree house prices had reached silly levels and needed to fall and personally think that 3.5x average salary + 10 % deposit for a ftbs property is about right.

I probably gloss over posts where people expect to buy a house that easily. The posts I'm thinking of are the people who have saved or sold to rent.