A question for the optimists

System

Graham_Devon wrote: »

- A salary of £36,000, likely with no debts, either joint or singular.
- £16,000 deposit
- £2-10k for fees (dependant on purchases obviously).

So in other words, £20k in the bank is needed really, for the slim chance of getting a 10% deposit mortgage. I recall the average amount of savinsg per person in the country being around £800.

So how much should have a FTBer need to have before buying? Even if they buy a 100k flat they still need a 10k deposit, is that still too much? I can't work out if you think we should have 100% mortgages again or that house prices should be low enough so that the deposit is only a few k.

I'm not sure what the average savings per person has to do with anything. People who are saving to buy a place aren't average.

Edit: I haven't worded this well. It seems you are suggesting the initial cash needed to enter the market is too high, so my 2 questions are. What do you think is realistic, and how do you envisage that figure being possible?

Generali

Joeskeppi wrote: »

People who are saving to buy a place aren't average.

IMO they will be!

Graham_Devon

Joeskeppi wrote: »

So how much should have a FTBer need to have before buying? Even if they buy a 100k flat they still need a 10k deposit, is that still too much? I can't work out if you think we should have 100% mortgages again or that house prices should be low enough so that the deposit is only a few k.

I'm not sure what the average savings per person has to do with anything. People who are saving to buy a place aren't average.

Edit: I haven't worded this well. It seems you are suggesting the initial cash needed to enter the market is too high, so my 2 questions are. What do you think is realistic, and how do you envisage that figure being possible?

I think the whole thing is way to expensive.

As for the rest, well I was kind of asking the question of how all this will be afforded, not suggesting anything really, so hope you don't mind if I don't get taken down this route of how expensive houses "should be"

I'm not so much interested in the prices. I'm more interested in how just 18 months after some serious problems, house prices are rising and it all seems to be good again. I'm wondering what's changed in 18 months which means it's affordable this time, sustainable this time etc.

If prices were double what they were now, but we could see and give reasons why it was sustainable, fine. But the price isn't the issue here, it's how were paying it and how we can carry on paying it?

arcalis

HAMISH_MCTAVISH wrote: »

No, thats not right. Only those that bought in the last few years will have no equity.

If someone bought ten years ago on I/O they'll still have significant equity.

Agreed. Its funny how facts and logic disappear when some people are debating a subject whose side they're already entrenched in.

mewbie_2

Graham_Devon wrote: »

I'm not so much interested in the prices. I'm more interested in how just 18 months after some serious problems, house prices are rising and it all seems to be good again. I'm wondering what's changed in 18 months which means it's affordable this time, sustainable this time etc.

I'll try again, nothing else to do at the mo' anyway.

18 months ago the crash started. Shock horror, end of the world. Prices actually dropped on houses. People staggered. No spring bounce 2008.

This year, some people think it's all over. Some buyers return to market, some have to buy anyway cos .. well they do. Sellers put prices up a little bit, and some buyers pay those prices.

Hooray the crash is over!

Nothing has changed, nothing is different, in many ways it's much worse.

The fundamentals were insufficient to support the market several years ago. Is there a new set of BTL wannabees to come in this time around? I don't think so.

tbh Graham - its difficult to really make the point, because it has all been done so much before. It's almost better just to believe what you believe, and carry on. Certainly easier.

StevieJ

Graham_Devon wrote: »

I believe in 6 months the deposit went from 10.8% on average to 23.4% on average. Theres no way in 6 months someone could just save that much as a percentage.

Why do you say this when the last time average deposit was anywhere near that level for FTB (10.8%) was 1997? (according to those charts)

http://www.communities.gov.uk/documents/housing/xls/141299.xls

ukcarper

Cannon_Fodder wrote: »

About a quarter of mortgages are Interest Only, so have 0 equity....

I have interest only Mort and 80% equity

StevieJ

Generali wrote: »

I guess the question is which will have the bigger impact in the end? I think unemployment will as I believe the UK Government is trashing the UK's national finances. That doesn't make me right of course...!

Even though the govt wil be covering the mortgage interest payments of most the unemployed?

StevieJ

ukcarper wrote: »

I have interest only Mort and 80% equity

I have interest only and 99.8% equity

Generali

StevieJ wrote: »

Even though the govt wil be covering the mortgage interest payments of most the unemployed?

Yes because I think that the UK Government will be forced to re-examine its policies vis-a-vis welfare spending.