How much is an FTB property where you live?

Out,_Vile_Jelly

HAMISH_MCTAVISH wrote: »

I would view an FTB property as an entry level place for most people, ususally a wee flat in town, often before they've settled down. Not somewhere you'd keep for having kids in.

Yes, but the problem is that the time required to raise sufficient deposit means FTBs are getting into their mid-thirties and likely thinking about having kids, when a "wee" (pokey) 1 bed in a skank part of town isn't going to be practical.

Buying in a cheap (and almost always rough) area means you have to think about who is going to ever buy/rent it off you, or of being trapped there forever. There are certain parts of London that aren't ever going to get gentrified, except possibly by the use of some sort of nuclear device.

ukcarper

Out,_Vile_Jelly wrote: »

Yes, but the problem is that the time required to raise sufficient deposit means FTBs are getting into their mid-thirties and likely thinking about having kids, when a "wee" (pokey) 1 bed in a skank part of town isn't going to be practical.

Buying in a cheap (and almost always rough) area means you have to think about who is going to ever buy/rent it off you, or of being trapped there forever. There are certain parts of London that aren't ever going to get gentrified, except possibly by the use of some sort of nuclear device.

As it's only been the last couple of years you have needed a big deposit people who are in their 30s but have wanted to buy for a long time would not have been put off buying by requiring a big deposit.

HAMISH_MCTAVISH

Out,_Vile_Jelly wrote: »

Yes, but the problem is that the time required to raise sufficient deposit means FTBs are getting into their mid-thirties and likely thinking about having kids, when a "wee" (pokey) 1 bed in a skank part of town isn't going to be practical.
.

We've already established that as a young FTB, you can get an acceptable place, in an acceptable area, for between 50K and 100K in most parts of the UK.

So the problem is not the prices. It's the length of time to raise a deposit. Most people should be able to save 5K to 10K within a reasonable time. Which is all that would be required with a 10% deposit level.

There is no reason that people should waste a decade of paying someone elses mortgage and wait til they are in their 30's.

The problem is more that people don't want to save, when they are that age they'd rather enjoy life. (and for the last couple of years, that saving a 25% deposit is impractical, but that is changing again now with higher LTV's coming back)

The problem though, is that most young people cannot think long term, and don't realise that they need to save and buy a flat instead of wasting their money on rent. Then they end up in their mid 30's, and wake up to the fact that prices have risen, and then expect a crash to save their bacon. And it won't. As we have seen with this one.

Young people will need to go back to the old values, of buying a small flat as young as they can, and then living on pot noodles and hand me down furniture for the first few years. Because there is no way they'll be able to afford to save enough to keep up with HPI unless they are already in the market and getting the leveraged gains from an FTB property.

chucky

BitterAndTwisted wrote: »

You have to weigh up the "investment" aspect against quality of life. The quality would be poor to ruddy dire in somewhere like East Ham, especially if you're considering raising children at some point in the future. I have a chum who bought in Canning Town as it was "affordable" but he sold up eventually after the third burglary and moved away to rent as the environment and the neighbours were so very sketchy.

realistically i don't think as an FTB people are going to have the opportunity to pick and choose where they want to buy unless you have the finance.

Emy1501

Out,_Vile_Jelly wrote: »

Yes, but the problem is that the time required to raise sufficient deposit means FTBs are getting into their mid-thirties and likely thinking about having kids, when a "wee" (pokey) 1 bed in a skank part of town isn't going to be practical.

Buying in a cheap (and almost always rough) area means you have to think about who is going to ever buy/rent it off you, or of being trapped there forever. There are certain parts of London that aren't ever going to get gentrified, except possibly by the use of some sort of nuclear device.

Also in my area flat prices in many areas are no real different to 5 years ago. A property in my old block recently went under offer with a asking price of £1500 more than I sold for. I suspect it actually sold for less.

Therefore no real HPI for many flat owners I suspect

Emy1501

HAMISH_MCTAVISH wrote: »

We've already established that as a young FTB, you can get an acceptable place, in an acceptable area, for between 50K and 100K in most parts of the UK.

So the problem is not the prices. It's the length of time to raise a deposit. Most people should be able to save 5K to 10K within a reasonable time. Which is all that would be required with a 10% deposit level.

There is no reason that people should waste a decade of paying someone elses mortgage and wait til they are in their 30's.

The problem is more that people don't want to save, when they are that age they'd rather enjoy life. (and for the last couple of years, that saving a 25% deposit is impractical, but that is changing again now with higher LTV's coming back)

The problem though, is that most young people cannot think long term, and don't realise that they need to save and buy a flat instead of wasting their money on rent. Then they end up in their mid 30's, and wake up to the fact that prices have risen, and then expect a crash to save their bacon. And it won't. As we have seen with this one.

Young people will need to go back to the old values, of buying a small flat as young as they can, and then living on pot noodles and hand me down furniture for the first few years. Because there is no way they'll be able to afford to save enough to keep up with HPI unless they are already in the market and getting the leveraged gains from an FTB property.

But flat prices in some areas are not any different than they were 5 years ago.

rictus123

I know what you mean Hamish but it is a first time buy and thats what the main question is. Basically your asking for the cheapest price of a little run down 1 bed flat in my area. And it doesnt matter if iv linked the most expensive town, where about do you live? Some people just cant afford to move away from there as there job and life is there. Im 18 now and i think il be at home until im at least 22-23 to get the money required for my HALF of a deposit and costs of furnishing a house that will go down on a home not somewhere to live. Whats the point in slumming it in a little flat at £80k for 2 or 3 years when we could go straight to the 125k mark,house that we would take alot of pride in, id get to do lots of diy on and really make a place of our own. Id look around another town around here(not the one iv posted my example from) And if i could get somewhere there, decent sized at least 2 bed, a good enoughed size garden that we could do any extensions if we wanted, a little conservatory or garage for example, at a cost of under £125k id snap it up asap.

HAMISH_MCTAVISH

rictus123 wrote: »

I know what you mean Hamish but it is a first time buy and thats what the main question is. Basically your asking for the cheapest price of a little run down 1 bed flat in my area.
And it doesnt matter if iv linked the most expensive town, where about do you live? Some people just cant afford to move away from there as there job and life is there.

Well technically, I asked for the cheapest entry level flats for FTB's, either where you live, or within a reasonable commuting range of 45 minutes.

You responded with a house, in an expensive area.

As I live in Aberdeen, I know for a fact that there are far cheaper places within 45 minutes of there.

Im 18 now and i think il be at home until im at least 22-23 to get the money required for my HALF of a deposit and costs of furnishing a house that will go down on a home not somewhere to live. Whats the point in slumming it in a little flat at £80k for 2 or 3 years when we could go straight to the 125k mark,house that we would take alot of pride in, id get to do lots of diy on and really make a place of our own.

No point at all. If you have a good job, and can get in a better place, a house, within a few years, then well done and good for you.

But lets take a random example here..... You are 18 now, and are planning on saving up half the deposit over 5 years. Lets say your G/F (presuming thats who is saving the other half) decides to break up with you after 5 years. You are then left with half the deposit you need. In the meantime, that house has risen in price by 20%. AS have the flats that you didn't buy.

So if we assume you managed to save a 10% deposit for a 140K house, thats 14K.

But you've missed out on 20% appreciation on the 80K flat, which is 16K.

And of course in the meantime, the house price has risen by 28K, and the flat by 16K, so now your 14K savings just puts you further behind.

Other than the few years of a crash, which we have just had, you can't beat HPI through savings.

Id look around another town around here(not the one iv posted my example from) And if i could get somewhere there, decent sized at least 2 bed, a good enoughed size garden that we could do any extensions if we wanted, a little conservatory or garage for example, at a cost of under £125k id snap it up asap.

Most people don't settle down and have kids until the age of 30 or so these days. Therefore most people don't need a house until they get to that age.

If you bought a flat at 18, you'd already have 40% appreciation on the flat, PLUS the equity you pay down off the mortgage, by that age. And all paid for by the money you would waste in rent instead.

(I know, kids living at home with parents don't spend as much in rent, but for most people it holds true)

HAMISH_MCTAVISH

Emy1501 wrote: »

But flat prices in some areas are not any different than they were 5 years ago.

Which is what you'd expect after the biggest crash in decades.

That won't be the case for the next 5 years though......

Or 10 years if we're talking about a person settling down at 30 so buying a bigger house then, but buying the cheapest place they can at 20 to build equity.

Not to mention they have built some equity even in 5 years, particularly with rates as low as they are today, and thats even if prices don't rise at all. (obviously not if I/O)

And of course, it's not everywhere. Flat prices up here are still at least 50% higher than they were 5 years ago.

rictus123

Good post Hamish, i see all of your points. Buying somewhere little and cheap to start with would have be ideal to me, i just couldnt find somewhere near here(maybe im looking in the wrong places) That scenario you described would have been perfect for me if i could actually find somewhere id like to stay in to get me on the ladder, not just buying for the sake of having somewhere.

I dont know much in the way of mortgages but if i had a £15k or so deposit on a place thats say £80k(i cant find much at this price to be honest) So a £65k mortgage,id look to be clearing that in just a few years then save a deposit for a house, with the rental income from the flat making up at least half the mortgage payments on the house surely?

Do you think im living in dreamland?

Thats what would be ideal for me.