Deposit vrs. Salary

System

Joeskeppi wrote: »

Even a 50% drop in prices would still leave you needing 8k, how much is a realistic amount to save do you think?

I knew this would get ignored again. It seems to be that house prices aren't your concern, more the inability to save a deposit.

Perhaps you should start by selling your sports car?

Cleaver

Joeskeppi wrote: »

Perhaps you should start by selling your sports car?

We sold our sports car earlier this year, bought a much cheaper car and invested the resulting money in a variety of funds, including emerging markets, corporate bonds and index-linked thingymabobs.

If that's not rock and roll then I really don't know what is.

bernard_shaw

mitchaa wrote: »

Of course but then quality of life comes into question.

Take care not to conflate "quality of life" with "standard of living". The two are quite different.

Cleaver

bernard_shaw wrote: »

Take care not to conflate "quality of life" with "standard of living". The two are quite different.

Indeed.

I'd also put forward the theory that your quality of life does not follow in line with the amount of money you have. You can spend very little and still have a great quality of life. There's obviously fine lines with this one, but I'm basically saying that some people (and arguably it should be everyone) can have as much 'fun' on a cheapy camping holiday as much as a five star trip to New York. If you're with the right people and have the right outlook on life then both can be equably enjoyable experiences.

kabayiri

I sort of did what mbga is talking about during the last housing recession. I took a hit on a property and then tried to leverage a hefty deposit with an ability to move quickly to pick up a good value property at a decent price.

It all sounded logical, but you know what? I found myself bidding against people buying with cash, driving off in their fancy 4x4s. It proved challenging.

I'm not knocking the plan, its just you find you are up against others with similar ideas. If you are flexible on house type/location you can of couse fish from a bigger pool.

Graham_Devon

Joeskeppi wrote: »

I knew this would get ignored again. It seems to be that house prices aren't your concern, more the inability to save a deposit.

Perhaps you should start by selling your sports car?

Sorry Joe, wasn't purposely ignoring it.

I would say 8k would be "fair" (cant think of another word to describe it!). Would be at an achieveable level for those willing to sacrifice some other things in life.

The trouble with the saving target being too high is that, like with other things, it puts people off right from the start as it looks unachieveable, and, to be frank, is unachieveable other than saving over a number of years, by which point, things will have drastically changed in all of our lives anyway.

As with everything, if we set the bar from the start way to high to begin with, people will simply look to other avenues. Could be called laziness, lack of disclipline, or could blame it on needing the latest £150 reebok trainers.

But the bar being too high has created a mass of people reliant on other means. Mainly, the state, to house them.

I can't really say what is "right" for the market in terms of how much a deposit should be, all I can say is that, to me, 8k sounds a reasonable balance between the need to show you are indeed determined and disciplined, and giving up from the start.

To be honest, stagnation and todays deposit figures would be ok. As long as HPI isn't overtaking the ability to save.

As for the car, I don't have a sports car as far as I am aware!

System

Does anyone have a chart of average deposits, going back a fair bit?

undetterred

Cleaver.....respect:T

leveller2911

Personally speaking I have £35k saved up, you can't buy a small house in my area for under £160k(need to be within a 20 mile radius for work) .

Given the above and the best rate offered on a FTB mortgage with our deposit is 5.95% (repayment fixed for 3-5 years) I know I still can't afford to buy.I can afford to pay back a mortgage of around £85k anything over that and I know I will struggle so Im pretty chilled about it and if it happends it happends if it don't then Im happy to carry on renting.

Oh one final thing its got nothing to do with not "having balls " to buy (its easy having balls with other peoples money,thats what caused our current mess).Its down to common sense and living within our means.

DaddyBear

HAMISH_MCTAVISH wrote: »

I would generally agree that people should have to show they can save up 10% before they are given a mortgage. And for most people, in most areas, this should not be all that difficult. Although I can understand the frustration of not wanting to waste a few years of rent paying someone elses mortgage whilst doing so, this has traditionally been just one of those things that has to be done.

But this is much more difficult for those who are living in areas where rent is higher than a mortgage would be.....

Those people are already proving they can pay a mortgage payment, in fact, more than a mortgage payment, and there may be a case to say they should be able to get a mortgage with a smaller deposit.

Likewise for those who live in very expensive areas like London but who have relatively secure jobs, such as essential services workers, policemen, firemen, teachers, nurses, etc..... They may have to save up 25K or 30K for deposit and fees, which could take many years extra, all the while they are wasting money on rent.

So I don't think a one size fits all approach is right, there should be exceptions, but in general saving 10% is a good idea.

There is still an element of the banks protecting themselves. There is a high chance that house prices will begin to drop again in the new year. with the future so uncertain it would be crazy for banks to start giving out mortgages on less than 10% deposits. Of course this is assuming that the banks have learned from past mistakes, which is questionable.