MSE Leaders' Debate: First Time Buyer Mortgages

barrybarryr

uberteeb wrote: »

So do I stay at home with my mother, save up a deposit, get a mortgae and buy a flat towards the end of this callender year or do I go rent somewhere now, save approx half of what I can staying at home and wait until the housing market crashes?

What would you do?

Staying at home saving what I am at the momment for a few years is not an option, I want out of here, I'm already too old to be here at 26.

I would stay at home, grin and bear it for a while save a deposit and then make a decision.

Nobody knows if the housing market will or will not crash. It was supposed to have been crashing for the past two years.

Once you have a deposit you can make the decision. You can stay at home, you just choose not to want to.

leveller2911

barrybarryr wrote: »

If you have 36k deposit and houses cost £167k then depending on your salaries you can afford to buy.

We had £21k on a £140k house and we could afford to buy. The banks would have lent us up to £160k and you have £15k more deposit than we had. You would need to borrow £130k.

So (assuming your salary would allow) you can get on the ladder if you wanted to. You just want it to be cheaper for you.

We can afford a mortgage of around £87k, the banks would lend us £115 k .Even if they would lend us £150k I still wouldn't accept it.It has nothing to do with me wanting "a cheaper house" its down to affordability.Your missing my point entirely.By the way we have no debts whatsoever and a clean credit history.

Fact is interest rates can't get any lower, IMO you did right if your fixed for 5yrs.



What area do you live in? What are your saleries? children? plans to have children? all relavent questions .Is your affordability based on 2 wages?.

uberteeb

barrybarryr wrote: »

I would stay at home, grin and bear it for a while save a deposit and then make a decision.

Nobody knows if the housing market will or will not crash. It was supposed to have been crashing for the past two years.

Once you have a deposit you can make the decision. You can stay at home, you just choose not to want to.

Yes I know that, I intend to be out of here before the end of the year.

My question is do I do that by buying a flat or do I go and rent if the consensus is property prices will reduce significantly.

I'm also aware "nobody knows if the housing market will or will not crash", however by the very nature of this website there are people on here who know more than a FTB novice like me. Hence the questions.

leveller2911

barrybarryr wrote: »

Nobody knows if the housing market will or will not crash. It was supposed to have been crashing for the past two years.

I agree but the only reason it hasn't is because the Government printed money to prop up the market.The state of the market at the moment is not an accurate one.

The latest Nationwide survey I think stated in its opinion house prices in the last 12 months have had a double digit price rise.Not In East Sussex they haven't, perhaps areas of London maybe.

But like I said QE HAS distorted the market currently.The true picture will be seen in 12-18 months time IMO


Getting a bit off topic here.

mjh421

leveller2911 wrote: »

mjh421 wrote: »

I note that none of the respondents seem to understand that house prices rise because people are prepared to pay the asking value.


Sorry not true at all......People are like children in a sweet shop, If given the chance they would clear the shop out.

The mortgage industry under Labour has been just the same.Whoever came up with the idea of 125% mortgages wants shooting.It was all down to greed ,its easy to spend money thats not yours and people wanted to keep up with the Jones.

In my area since 1994 house prices have risen by nearly 300%:eek: whilst wage rises have gone up by around 40%, given the current LTV required it all tells me house prices will go down.

There is hope for FTB but only through a correction......

Its not sustainable and a market correction is going to happen,I would also say we NEED more Social Housing and to Labours shame they were found wanting and preferred to ride the HPI bubble instead.

What are people like yourself saying? Oh look I cannot afford to buy a house, It must be the Governments fault. For people like myself I get angry because when I and many like me campaigned against Thatchers sell off of council housing and lies about the benefits of private ownership, you are now witnessing what we predicted all those years ago. Thatchers popular idea of discounting the value of council houses in order to sell them,
bribed people to vote for her, and created the kind of Millstone Society that has wrecked the British economy, ie., reduced disposable income at the lower end of the income bracket.

I am well aware of the sweety complex within British society, the me, me attitude of the shall I say the English voter demonstrates only to clearly that voters look at their own personal benefit rather than the good of society at large.

The point that you all seem to miss is that at some point or other in the future house prices will inevitably stabilise as the ratio between owners and buyers is reduced, that is to say in the days when we had council housing , people renting were between 60%and 70% of the population, now private housing is in the region of 70% of the population, therefore demand will inevitably reduce meaning that fairly soon those that buy at the top end of the price bubble will see their asset fall in value and could end up in negative equity which may never recover.

The problem is you all seem to be chasing rainbows and are adamant that you should buy a house without considering the consequences in the future.

Anybody who tells you that bricks and mortar are a sound investment are conning you and by now it should not need the likes of me to have to point this out as it should be obvious.

Politicians realise that the Thatcher doctrine of the "home owning democracy" appeals to peoples vanity and is therefore a potent political weapon. If you allow yourselves to be seduced into committing yourselves to this doctrine at this point in time you may well suffer from the downside to the home ownership policy.

I believe it is time to wake up to the pitfalls of this policy, and what young people should be demanding today is high standard cheap rented accommodation, the quality of private housing today leaves a great deal to desired, and recent reports talk of individual space having been reduced to unreasonable levels, just look at the size of gardens and rooms in houses built today.

leveller2911

mjh421 wrote: »

leveller2911 wrote: »

What are people like yourself saying? Oh look I cannot afford to buy a house, It must be the Governments fault. For people like myself I get angry because when I and many like me campaigned against Thatchers sell off of council housing and lies about the benefits of private ownership, you are now witnessing what we predicted all those years ago. Thatchers popular idea of discounting the value of council houses in order to sell them,
bribed people to vote for her, and created the kind of Millstone Society that has wrecked the British economy, ie., reduced disposable income at the lower end of the income bracket.

I agree that selling off the Council House stock was not a good idea,unless they had a clear plan of creating modern Social Housing stock.Many Council homes dated back to post ww2 and needed modernising on a grand scale.Its too late now but IMO all ex-council housing stock should have had covenants placed on them to limit future profits on point of sale and IMO helping to keep HPI down.



The point that you all seem to miss is that at some point or other in the future house prices will inevitably stabilise as the ratio between owners and buyers is reduced, that is to say in the days when we had council housing , people renting were between 60%and 70% of the population, now private housing is in the region of 70% of the population, therefore demand will inevitably reduce meaning that fairly soon those that buy at the top end of the price bubble will see their asset fall in value and could end up in negative equity which may never recover.

For the last 30 yrs or so we have had a cycle of boom n bust and I see no reason for this to change.Some poeple will always make money and some will lose.The difference we have seen in the last 10 yrs is the rediculous LTV ratios lent,100%, 125 % that together with a boon in personal unsecured debt will bite .



The problem is you all seem to be chasing rainbows and are adamant that you should buy a house without considering the consequences in the future.

I'm not thats why I keep saving, zero debt and A1 credit rating.

Anybody who tells you that bricks and mortar are a sound investment are conning you and by now it should not need the likes of me to have to point this out as it should be obvious.


Thats a very sweeping statemen,think it depends on too many variables to be sure of that,like future planning policies,economy,location etc.


I believe it is time to wake up to the pitfalls of this policy, and what young people should be demanding today is high standard cheap rented accommodation, the quality of private housing today leaves a great deal to desired, and recent reports talk of individual space having been reduced to unreasonable levels, just look at the size of gardens and rooms in houses built today.

For the last 25yrs or more people have woken up to the fact of the lack of good rental housing but nothing has changed.IMO one of the biggest problems has been the growth of the amatuer Landlords with their "Portfolios" of BTL.There are good landlords i'm not denying that but many don't have a clue.
Something else that I think is wrong is I know a AL who have 20 houses who borrowd to buy them all.They are now going Bankrupt(personal) but because they have little or no equity in their portfolio thay have been allowed to keep them.Now in the next few year prices will rise and they will probably make a mint....No Justice.

brit1234

mjh421 wrote: »

What are people like yourself saying? Oh look I cannot afford to buy a house, It must be the Governments fault.

Well it is, clearly, or have you been in a cocoon the last 13 years.

Reasons it was Labours fault.

1, When giving the Bank of England independance, they changed the inflation measure from RPI to CPI. CPI did not cover house prices unlike RPI and when house price inflation went crazy interest rates were not risen to counter this like with RPI.

2, Labour also gave tax breaks to buy to let investors, combined with the rapidly rissing and unchecked housing inflation, they generated mass housing speculation with a new breed of investors. Pricing out first time buyers.

3, Rather than work to contain house price inflation they found new ways to increase it through shared ownership and homebuy schemes. This allowed builders to main tain high prices even when the economic bubble started to burst.

4, They were warned by experts that this wrong and chose to ignore it. This included multiple letters from Fred Harrison and speaches from Vince cable.

5, Gordon brown has now got rid of the BOE independance on interest rates and is keeping them low despite CPI now way above target. It amkes me sick that he promissed none political interference on interest rates 13 years ago and now is abussing them to the detriment of the country to stay in power.

First time buyers DON'T vote for more of the same with Labour.

uberteeb

So to buy or not to buy this year, anyone care to answer?

brit1234

uberteeb wrote: »

So to buy or not to buy this year, anyone care to answer?

Depends what happens after election, most of us ftbs are holding off till then.

What we do know is housing is still very overvalued compaired to historical norms. We also know this economic crisis is far from over and has just been delayed with low interest rates and stimulas. There will be a correction but when that happens no one can be sure.

In Greece they are trying hard to hold things together but when that defaults Spain and Portugaul will go down as well. That could be the next trigger for the UK which will have a negative affect on house prices and other stuff.

Personally I would keep saving that deposit as it will give you a better interest rate and try not to be tempted by the poison chalice homebuy/shared ownership schemes.

barrybarryr

Whilst I agree with some of the things that you say, presumably you realise that the entire economy isn't based around house prices and there are other good reasons why the interest rates are and were being kept low?