House Prices - Radio 4 Program Money Box

lostinrates

Kreator wrote: »

I would not dream of taking on more than 2.5x a joint income or 3.5x one, whether the bank said I could or not, to do so could open you up to be a debt slave if only minor circumstances in your life change.

I'm quoting this post rather than any others on the subject..for no reason really. I feel very different kreator, I think that as well as being aware of over leveraging (a point I think depends on more than straightforward mulitples) other costs have a ''bearing'' . e.g. some people have, quite rightly pointed out the costs of servicing debt, but also, there are costs of living (and taxes). My feeling is these are pretty hard -or even totally impossible-to predict over 25 years or so, so thats why we tend to focus on the multiple thing.

wageslave

Dan: wrote: »

6-7 times normal salaries?? You must earn a crap wage? If so, can I suggest to get yourself a bird and buy together?

That's your solution to over inflated house prices, get yourself a bird?

Dan:_4

Kreator wrote: »

I guess this is the train of thought for many people, I would absolutely want an income of at least 50k to be safe in the knowledge that a 180k mortgage would be affordable against any IR issues or dubious government tax policies. What the bank say I can afford and what I believe to be a sensible level of debt to take on in my circumstances seems to be different.

I would not dream of taking on more than 2.5x a joint income or 3.5x one, whether the bank said I could or not, to do so could open you up to be a debt slave if only minor circumstances in your life change.

Thats fair enough, at the end of the day it's personal choice. No one forces you to take on any debt.

180k over 25 years is very doable starting with a 35k salary. Long term your salary will rise, and your house will rise.

People on here are very risk adverse, which is fine, but in reality people don't really worry that much.

Dan:_4

wageslave wrote: »

That's your solution to over inflated house prices, get yourself a bird?

If you can't afford to buy on your own, then buy with your partner. It's what most people do anyay.

mewbie_2

Dan: wrote: »

Thats fair enough, at the end of the day it's personal choice. No one forces you to take on any debt.

180k over 25 years is very doable starting with a 35k salary. Long term your salary will rise, and your house will rise.

People on here are very risk adverse, which is fine, but in reality people don't really worry that much.

I'd worry Dan. 180k would depress me. I know you big shots on here think its just spare change.

wageslave

Dan: wrote: »

Thats fair enough, at the end of the day it's personal choice. No one forces you to take on any debt.

180k over 25 years is very doable starting with a 35k salary. Long term your salary will rise, and your house will rise.

People on here are very risk adverse, which is fine, but in reality people don't really worry that much.

Hasn't it crossed your mind that is exactly why we are in this mess.

lostinrates

Badger2000 wrote: »

There are 1 bedroom flats in London for around £100,000, there are also 2 bed places that are around £120,000 upwards.

Either you are setting your standards too high but still complaining that you want a luxury house but can't afford one or you don't really know what you're talking about like your 0.5% mortgage rates.

Dh's colleague (whose salary I know) recently bought a ex LA 2 bd flat in a dodgy zone two area. Top of lendabilty, 10% deposit. Fine, no problem, he (on his almost 6 figure salary) is fine. But the people for whom the necessity of that flat was envisaged when it was built might be strugling, I imagine.

shakerbaby

lostinrates wrote: »

Dh's collegaue (whose salary I know) recently bought a ex LA 2 bd flat in a dodgy zone two area. Top of lendabilty, 10% deposit. Fine, no problem, he (on his almost 6 figure salary) is fine. But the people for whom the necessity of that flat was envisaged when it was built might be strugling, I imagine.

I don't know what is more insane, the fact that someone on nearly 100,000 can just afford a 2 bedder or the bulls who blindly believe that this is sustainable. :eek:

Pobby

shakerbaby wrote: »

I don't know what is more insane, the fact that someone on nearly 100,000 can just afford a 2 bedder or the bulls who blindly believe that this is sustainable. :eek:

Totally agree. It`s the work of the economic mad house. Wales I visit a fair bit. 10 years ago or so a cottage could be bought for a little under £20k in the valleys.

When they hit £65k for a 3 bedder, friends, who live there, thought it completely bonkers. At peak they were about £100k. I just love some of the posts from the bulls. Never, ever heard an point that has convinced me that this degree of HPI is normal or indeed sustainable.

StevieJ

shakerbaby wrote: »

I don't know what is more insane, the fact that someone on nearly 100,000 can just afford a 2 bedder or the bulls who blindly believe that this is sustainable. :eek:

This board is like getting a cross line on the telephone, I think someone on 100k could buy a touch more than a 2 bedder where I live