FTB's "Missing Deal Of A Lifetime"

HAMISH_MCTAVISH

First-home buyers missing 'deal of a lifetime'

First-time home buyers are missing out on the deal of a lifetime because banks are restricting mortgage lending while affordability is at a decade high, a top economic consultancy has warned.



By Philip Aldrick
Published: 7:06PM BST 07 Aug 2010




Houses are more undervalued than at any time since the end of 2001, according to a key indicator, but first-time buyers cannot get on the ladder because of the large deposits banks are demanding.


Melissa Kidd, an economist at Lombard Street Research (LSR), said: "Housing affordability is at peak levels, but access to mortgages is restricted compared with the pre-crisis years."



A typical first-time buyer now has to put down a 25pc deposit, compared to 10pc before the financial crisis three years ago. As a result, the number being approved for a mortgage every month has fallen to about 14,000 from 35,000 before the crisis, according to data from the Council of Mortgage Lenders (CML).

The LSR's latest housing affordability index, produced in conjunction with The Sunday Telegraph, shows that houses have been getting less affordable since June 2009, when affordability hit a 14-year high, because of the recovery in prices, but are still at their cheapest relative to disposable incomes than at any time since 2001.

http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/7931837/First-home-buyers-missing-deal-of-a-lifetime.html

Absolutely shocking that FTB's are being penalised by greedy banks profiteering.

boomerangs

HAMISH_MCTAVISH wrote: »

FTB's "Missing Deal Of A Lifetime"

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treliac

HAMISH_MCTAVISH wrote: »

Absolutely shocking that FTB's are being penalised by greedy banks profiteering.

And will contribute to the downwards spiral of house prices.

The relative, I've spoken of before, who has been on the market for months - trying to sell before they get repossessed - has said they're not getting any interest at all. They have a lovely, well decorated, well furnished 4 bed detached (none of it paid for of course). It will have to be sold and the price will have to drop still further for that to happen. It's already been dropped twice.

How can anyone think prices are going to be ever upwards with the raft of pressures building up that must take them down.

Thrugelmir

HAMISH_MCTAVISH wrote: »

Absolutely shocking that FTB's are being penalised by greedy banks profiteering.

Not quite what the article goes on to say.

However, Ms Kidd said: "High affordability is only relevant for existing owners on variable rate mortgages, or buyers with large deposits. Banks' repricing of risk will lead to higher borrowing costs, squeezing groups across the mortgage market: namely first-time buyers, buy-to-let investors, and those with impaired credit histories."

Tut tut.

Bad news day?

Wookster

HAMISH_MCTAVISH wrote: »

Absolutely shocking that FTB's are being penalised by greedy banks profiteering.

Do you ever feel a bit simple hamish?

Dirk_Rambo

house prices are crashing at the minute, shurely its best for buyers to wait and get the hosue cheaper. now isnt a good time to buy,not round where i live anyway

HAMISH_MCTAVISH

House prices are rising at the minute, and have been for the last year or so.

jamespmg44

It's only a "deal of a lifetime" if they can actually genuinely afford it rather than mortgaging themselves to the point that they can't do anything other than pay the bank back.

We'd all like to live in a nice big mansion but realistically not all of us can afford that, same way as realistically not everyone can afford to own a house.

Sibley

I'm sorry but I've got to step in here.

Hamish is actually posting facts. The truth.

Now a lot of people on here are members of House Price Crash website. A band of disenchanted renters on low incomes who want the housing market to crash. They look for these type of articles and posts then pile in with negative comments, in the hope that homeowners will panic and sell them their house with a 90% discount. In fact, I don't believe if prices dropped 90% they have what it takes to be a homeowner. They probably got blacklisted when they didn't pay their Provident loans.

Homeowners aren't really aware of these people and most owners don't worry or care about how much their house is worth until they sell it. Hence these threads seem one sided. You will always get more scavengers who need something rather then normal people just living their lives in their homes.

The big problem with the crashers is the fact they do not have the funds for a house in the first place. They talk about making offers, the house should be priced at 50% less than advertised etc.
It's irrelevant and so sad posters can't be vetted and have a public profile as to what are their earnings and assets. After all, how would a person on here know if a house price crash guru was actually a trolley collector at Asda with a chip on their shoulder?:rotfl:

I laugh at times as they start threads about houses that are TOTALLY out of their league.

For example they will find a Right move advert showing a £500,000 house. Next they will all pile in saying ' Oh that's overpriced, I'm going to ring the estate agent up and offer £80,000'

Next you will have other idiots saying 'Oh £80,000 is too much. I'm ringing up to offer £30,000'

At the end of the day it's a total waste of decent peoples time. We've all seen this type.

You have a car for sale. They turn up, ask loads of questions about your vehicle, kick the tires then tell you they have decided to buy a Bentley instead.:rotfl:

I liberated this post from their website to give you an example of what I'm talking about.

Do you really think these people should be even speaking about expensive houses for sale?

No my point is most people pay 75quid a week all in like this one (300 quid a month, all bills ensuite includes broadband)
http://www.spareroom...=34631611&&
That leaves you will £550 a month for food and anything else, you can live 'well'.. Top mobile contract, 90 quid a week on going out, and loads of food, if you spend it all your spending more than most HPCers who spend less on consumer stuff and put most of there salaries into savings accounts...


I'm not having a go at hardworking first time buyer types who are hoping for a bargain. Good luck to them if they can find one. It's a pretty bad time to sell a house at the moment. I don't see any crashers posting about getting their dream place. With low interest rates it's a good time to own a home. Why on earth would anyone give it away to somebody else. There may be more houses for sale now but the owners certainly are not taking silly offers no matter what the crashers might want you to believe.

Bullfighter

So houses are at "peak affordability" and yet buyers "can't afford to buy them". Clearly that journo has a unique grasp of the supply demand curve.

Anyway, if FTBers are "missing out" then who are going to buy the houses to lead to an increase in the house prices?

Plus if we are in a bull market,surely the peak was 2008?

HAMISH_MCTAVISH

Bullfighter wrote: »

So houses are at "peak affordability" and yet buyers "can't afford to buy them".

Houses are at peak affordability. Absurdly high deposit requirements lock out many potential FTB's from the market.

With a mortgage payment cheaper than rent in 75% of the UK, of course houses are affordable. The limiting factor is the deposit requirement, which is now far too high due to mortgage rationing.

Paying a mortgage is no harder than paying rent. Saving a 40K or 50K deposit whilst you are paying rent that is as high or higher than a mortgage payment, is a ridiculous burden to impose on FTB's.

So investors are replacing FTB's once again, and many FTB's will lose out on their chance of buying.