Property affordability - What is "affordable"?

PasturesNew

For me, affordable means no more than £350/month to rent and to own it'd have to be £300 because of other costs (and I would be prepared to stretch myself to own).

This is true affordability. Anybody can afford to pay this much back, even in hard times.

davilown

strictwithmoney wrote: »

.

IMHO, nowadays, people getting into a lot of debt and the rule should change. The monthly mortgage should not exceed 30% of your take home pay.

The fixed costs*** after buying a house, besides mortgage, are council tax and utilities (gas+elec+water). These bills will take up a big chunk of your take home pay, before paying for home insurance, phone, internet, tv, food, petrol, debts and etc........... it is really scary :eek:

*** just to put a roof over your head

But why 30%? Why not 50%? should the % not be linked to earnings?
I my disposable income was £3k after food, utilities, petrol and various insurances, why could I not spend £2k on a mortgage?
Itt would leave me with £1k for problems surely?

treliac

HAMISH_MCTAVISH wrote: »

If you can afford the mortgage payments with a bit built in for a safety margin, it's affordable.

Most people can find a place they can afford in most markets.

Many people however, wish they could afford more, hence the obsession with claiming house prices are "unnafordable".

It's probably more affordable in Aberdeen than in most places.

strictwithmoney

davilown wrote: »

But why 30%? Why not 50%? should the % not be linked to earnings?
I my disposable income was £3k after food, utilities, petrol and various insurances, why could I not spend £2k on a mortgage?
Itt would leave me with £1k for problems surely?

IMHO it is just to safeguard the unforseen or additional outgoing expenses like :
child care
car maint
medical
clothing
holidays
emergency repairs
vet
pregnancy
presents (birthday/wedding/xmas)
od charges
.................................... the list can go on and on:eek:

It is just a prudent way of giving ourselves enough breathing space in our income.

strictwithmoney

strictwithmoney wrote: »

IMHO it is just to safeguard the unforseen or additional outgoing expenses like :
child care
car maint
medical
clothing
holidays
emergency repairs
vet
pregnancy
presents (birthday/wedding/xmas)
od charges
.................................... the list can go on and on:eek:

It is just a prudent way of giving ourselves enough breathing space in our income.

Having said that I still have not take into consideration life crisis such as sudden illness, redundancy, relationship breakdowns. Most of us do not have enough cushions to see us through and any one of these events could bring us to the verge of homelessness or bankruptcy.

In our household :
Mortgage/council tax/utilities = 44% of income
Outgoing expenses = 41% of income
The balance of the income will be use to clear our cc debt

Sorry, I can't link my SOA on DFW because I'm new here.

C_Mababejive

Its land you see. They rent making any more of it and most of the UK landmass has already been purloined by some big players like the Duke of westminster, Duchy of Cronwall and many others. Unless you have space then what gets built on the restricted land available costs a premium. So you either..

Create more land (reclamation)
Build vertically--flats and apartments
Reduce demand>cut immigration/encourage people to leave
Encourage communal living

kriss_boy

Affordable is being able to pay the mortgage whilst absorbing lifes expensive curb-balls.

Get cars through their MOTs, going on the odd holiday etc. Things like that should in no way jeopardise your ability to pay your mortgage.

Thrugelmir

If you lost your job could you afford the repayments for 6 - 9 months out of savings?

If you split with your partner would you be in negative equity if you sold up today?

If interest rates rose 3% could you still afford the repayments?

Does your Company pay long term sick pay other than SSP?


Events quickly change situations. Life is full of uncertainies.

strictwithmoney

Thrugelmir wrote: »

If you lost your job could you afford the repayments for 6 - 9 months out of savings?

If you split with your partner would you be in negative equity if you sold up today?

If interest rates rose 3% could you still afford the repayments?

Does your Company pay long term sick pay other than SSP?


Events quickly change situations. Life is full of uncertainies.

In my voluntary work, I see a lot of desperate people depressed over their finances because of sudden change in circumstances. It is heartbreaking because sometimes the events happened are not within their control.

PasturesNew

strictwithmoney wrote: »

Sorry, I can't link my SOA on DFW because I'm new here.

http://forums.moneysavingexpert.com/showthread.html?t=2269123&highlight=