Tighter lending rules mean 10-year wait for first-time buyers

Raggs_2

OK, I accept that I live in a foreign country. But OH and I (I have average wage job, she has an exceptional circumstance, but receives only a small amount of cash) are looking to save about 30k in 3/4 years. I earn 15-18k a year (depending on exchange rates) she gets somewhere around 5-6k. But by not extravagantly spending, we're saving well. We have an ancient hand me down tele, a cheap laptop, I eat mostly at work (the free stuff), she eats cheaply. We have a dog and a cat, so have vet bills to pay. We holiday at least once a year to go to England, and have recently made some very large purchases, but by budgeting well, we are still well on track, and should still be on track even with the possibility of little pattering footsteps.

We live well within our means, are both aware that we need to concentrate to be able to save a deposit, and intend to get a good deposit, since our first house will most likely need to be 3 bedroom (and if I want to live nearish parents, in a fairly expensive region), and yet we're still aiming for a 15% deposit.

FTB only need 5% deposit, 10% to be sure. I accept that people living on their own will struggle far more, but then they don't need a 3 bedroom place. Couples/families should be able to do it, but it takes dedication, years before you are even looking at houses to buy. You can't just decide to buy, and then expect for the deposit to magically appear.

chucky

sarkin1 wrote: »

dont forget the 3.5% arrangement fee
val fee £350
Solicitors £695 plus vat and disbursements (stamp duty, searches and stuff)

I make that about £5,500

Oh and my broker fee £495 thankyou

£6000 pounds just in fees

And what is the rental income from a 1 bed flat £550 tops

and if rates go up......

they're getting done up like a kipper paying 3.5% for a mortgage arrangement fee

ultrawomble

Joeskeppi wrote: »

Say you're buying a place for 100k, and you need 25% for a decent rate.

25k deposit needed.

Even if prices fall a massive 20% it's still only going to save £5k on that deposit.

Yep, but you're also going to save £15K on the mortgage.

Raggs_2

And you don't need a decent rate. It's nice, but in reality 95% mortgages are out there, 90% are common.

Graham_Devon

Joeskeppi wrote: »

Even if prices fall a massive 20% it's still only going to save £5k on that deposit.

The only way to get more FTBers is for banks to start offering better rates for 10%ers. Which is NEVER going to happen if prices fall again.

It will also reduce the mortgage from 75k to 60k though.

At a mortgage rate of 5% over 25 years, thats £89 per month saved.

So it's not just 5k that's no longer needed. It's a further £89 a month that's no longer needed to afford a roof. or, a further £89 a month to give leeway for any other costs incurred during the month.

Or to put it another way. A 21k wage needed at 3.5x instead of 25k. Big big differences.

System

I don't dispute that, what I dispute is getting the 20k in the first place.

Graham_Devon

Joeskeppi wrote: »

I don't dispute that, what I dispute is getting the 20k in the first place.

Still tough...but I guess easier to achieve than 25k. The easier it is to achieve, the more liklihood people will be prepared to stick to it and reach it.

For a lot of people, I'd guess 5k is a good 1-2 years saving, or 1-2 years of sacrificing something they would like, or like to do.

Raggs_2

But you don't need 20k for a 100k place. If you're a FTB you need maybe 5k, 10k to be sure. OK, you may lose out on a percent of interest, but this isn't about getting the best mortgage deal, it's about getting your first home.

5k is really not a lot, 10k is perhaps more of a struggle, but even so, 10 years? Come on. That's less than 100 pounds a month saving.

As I said, a deposit isn't something that falls into your lap, you have to think about it years ahead of buying, and if you do, you can get it in a few years. If I was alone here, I suspect I could probably save 10k in 3 years. As it is, we hope to be doing that in about a year and a half.

MoneyMiser

Raggs wrote: »

But you don't need 20k for a 100k place. If you're a FTB you need maybe 5k, 10k to be sure. OK, you may lose out on a percent of interest, but this isn't about getting the best mortgage deal, it's about getting your first home.

5k is really not a lot, 10k is perhaps more of a struggle, but even so, 10 years? Come on. That's less than 100 pounds a month saving.

As I said, a deposit isn't something that falls into your lap, you have to think about it years ahead of buying, and if you do, you can get it in a few years. If I was alone here, I suspect I could probably save 10k in 3 years. As it is, we hope to be doing that in about a year and a half.

Exactly, the Yorkshire Bank is offering a 95% LTV mortgage. The rate is 6.99% for three years which isn't great but FTB's should know that their first home will not be their dream home, mereley a step in the right direction.

As a FTB myself, this is what I am looking at doing the the near future.

MM

IveSeenTheLight

Raggs wrote: »

But you don't need 20k for a 100k place. If you're a FTB you need maybe 5k, 10k to be sure. OK, you may lose out on a percent of interest, but this isn't about getting the best mortgage deal, it's about getting your first home.

5k is really not a lot, 10k is perhaps more of a struggle, but even so, 10 years? Come on. That's less than 100 pounds a month saving.

As I said, a deposit isn't something that falls into your lap, you have to think about it years ahead of buying, and if you do, you can get it in a few years. If I was alone here, I suspect I could probably save 10k in 3 years. As it is, we hope to be doing that in about a year and a half.

It's quite refreshing to see a FTBer with such an understanding and realism of what is required tobe a homeowner.

somone who doesn;t just expect it to happen or for it to be handed on a plate to them.

Well Done :T