Deja Vu?

andykn

Pobby wrote: »

Neas and I live in the same city. I read some research which said that it was pretty much slap bang in the middle of " averages " where it came to housing and wages. Overall I don`t agree regarding wages and neas is right in saying that the typical £150,000 needed for a 3 bedder would be pretty hard to fund for many people here.

Outside of the city it gets a whole lot worse with houses with some of the highest prices in the south of the country. Sure must be a few million bankers using their bonuses to buy their second homes there.

But a 3 bedder is not a FTB house. People buying a 3 bedder would have equity in their previous property.

the_ash_and_the_oak

chucky wrote: »

you''ve said this before - i don't really understand why.
if rates are lower when you first take it, overpay now. when rates go up you would have less interest to pay on the outstanding amount and more available to repay capital.

ugh it just ate my long reply

I’m going to use hypothetical figures (otherwise we get into that will/wont happen territory)/ Feel free to use diff figures but I’m trying to illustrate a generic point rather than anything else

Eg1 160k borrowed at 5% = 8k a year interest
Eg2 100k borrowed at 10% = 10k a year interest

My pov is I’d rather borrow in example 2. Why? In a nutshell I’d rather borrow when money is at its most expensive (given I’ll prob borrow it for 25 years but its initial expensiveness is much more likely to reduce than increase) than when money is at its cheapest (given the opposite).

Eg lets say 4 years down the line in both examples rates increase to 7.5%.

In example 1 even though I’ve prob now paid a bit off I might well be paying more than I did a month than when I started. Also if the money to borrow is now more expensive than it was when I started my pov is this will be a downward drag on my houseprice (should I want to move – quite likely if I this is 5 years after buying a 1bed flat – less likely if I’ve bought a country cottage)

In example 2 I’ve prob paid less off because of higher interest, but I’ve got less to pay off in the first place, also I’m now paying less in interest than when I started even if I hardly paid any off, plus the decreasing cost of money would be increasing the value of my house (and equity)

Also when money is most expensive more people are excluded due to lack of wages/savings meaning less competition, when money is cheap every man and his dog is buying (even though houses and flats are most expensive at this time) – this is the irony, that when prices are most expensive more people are able to buy!

Graham_Devon

andykn wrote: »

But a 3 bedder is not a FTB house. People buying a 3 bedder would have equity in their previous property.

As FTB's are increasing in age, the average being 34 years old, I have to disagree with your opinion.

A 3 bedder will more often than not, be not only wanted, but required at that age.

It can't be had both ways, i.e. lock FTB's out until they are nearly middle aged, but then also expect them to buy a 2 bed flat, when they more often than not at that age, have a kid or two.

To expect FTB's to be an average of 34 years old, and expect them to wait a further five years to get a 3 bed, so they can have a family is a bit much IMO.

That's why, and I have said before, this whole "FTB 1-2 bed thing" simply does not work.

neas

true graham this is why we skipping 1/2 bed commodes all together.

Dan:_4

Graham_Devon wrote: »

As FTB's are increasing in age, the average being 34 years old, I have to disagree with your opinion.

A 3 bedder will more often than not, be not only wanted, but required at that age.

It can't be had both ways, i.e. lock FTB's out until they are nearly middle aged, but then also expect them to buy a 2 bed flat, when they more often than not at that age, have a kid or two.

To expect FTB's to be an average of 34 years old, and expect them to wait a further five years to get a 3 bed, so they can have a family is a bit much IMO.

That's why, and I have said before, this whole "FTB 1-2 bed thing" simply does not work.

It does work Graham.

I bought a 1-bed flat aged 19 and most my money went on the repayments. Friends thought I was mad paying a mortgage instead of going out clubbing.

I upgraded to a 2-bed flat aged 23, and then a 3-bed house aged 30. Now looking at a detached 4/5 bedroom as my final house.

My freinds now wish they done the same thing.

andykn

Graham_Devon wrote: »

As FTB's are increasing in age, the average being 34 years old, I have to disagree with your opinion.

A 3 bedder will more often than not, be not only wanted, but required at that age.

It can't be had both ways, i.e. lock FTB's out until they are nearly middle aged, but then also expect them to buy a 2 bed flat, when they more often than not at that age, have a kid or two.

To expect FTB's to be an average of 34 years old, and expect them to wait a further five years to get a 3 bed, so they can have a family is a bit much IMO.

That's why, and I have said before, this whole "FTB 1-2 bed thing" simply does not work.

FTBs are increasing in age because of more couples splitting. Each one then counts as an FTB. I suspect two singles buying their first place as a couple now count as FTB too.

If FTBs don't buy 1 and 2 bed flats, who will?

chucky

neas wrote: »

true graham this is why we skipping 1/2 bed commodes all together.

but not everyone has the deposit you have so have no choice but to buy smaller FTB homes. if they can't they rent or buy shared ownership.

Graham_Devon

Dan: wrote: »

It does work Graham.

I bought a 1-bed flat aged 19 and most my money went on the repayments. Friends thought I was mad paying a mortgage instead of going out clubbing.

I upgraded to a 2-bed flat aged 23, and then a 3-bed house aged 30. Now looking at a detached 4/5 bedroom as my final house.

My freinds now wish they done the same thing.

Then you are not the average. Simple as that!

What was said was simple. Just because YOU did something, it doesnt mean it works.

The average FTB's are still 34. To get that average, some people like you will have had to have bought earlier.

What I am saying is it's not good saying the FTB property should not be a 3 bed when the average FTB probably needs to buy a 3 bed. Why would they buy a 2 bed when they aint gonna fit?!

chucky

Graham_Devon wrote: »

Then you are not the average. Simple as that!

What was said was simple. Just because YOU did something, it doesnt mean it works.

The average FTB's are still 34. To get that average, some people like you will have had to have bought earlier.

What I am saying is it's not good saying the FTB property should not be a 3 bed when the average FTB probably needs to buy a 3 bed. Why would they buy a 2 bed when they aint gonna fit?!

oh dear... it's averages again.... you're agreeing with Dan but just want to argue...

because Dan has done it at 19 it will mean that there will be FTB buyers that are much, much older than 34... it's an average... :rolleyes:

the_ash_and_the_oak

Dan: wrote: »

It does work Graham.

I bought a 1-bed flat aged 19 and most my money went on the repayments. Friends thought I was mad paying a mortgage instead of going out clubbing.

I upgraded to a 2-bed flat aged 23, and then a 3-bed house aged 30. Now looking at a detached 4/5 bedroom as my final house.

My freinds now wish they done the same thing.

tbf to Graham here is talking about 34 year old FTBs today. Think relative to income FTB places were a bit cheaper when you bought. Its not really comparing like with like. Don't think Graham is saying it didn't work in 1994, think he's saying it doesn't work in 2009 (whether he's right or not is a different point of course)