Could you afford to buy your own house today?

chewmylegoff

Generali wrote: »

I could not afford to buy the house I am renting.

Purchase price was $970,000 I think.

75% mortgage = $5,300/month which is roughly what I net.

LL gets $1733/month in rent from me.

that's a nice yield he's getting...!

Blacklight

tara747 wrote: »

OMG, that is insane!!!!!!!!! OH and I earn more than that and we would never dream of borrowing that much. :eek: 50% of your income on accommodation costs is waaaaaaay too much.

Oh and the BTL boat has sailed.

It was a hypothetical illustration to demonstrate what could be afforded if you so chose to buy a property in the current market.

In reality I suspect people buying a first home on those wages would chose to spend about 25% of their income and get one nice two bed starter home for around £120k instead of two, or one big house way out of their league for a first home.

Oldernotwiser

tara747 wrote: »

OMG, that is insane!!!!!!!!! OH and I earn more than that and we would never dream of borrowing that much. :eek: 50% of your income on accommodation costs is waaaaaaay too much.

Oh and the BTL boat has sailed.

Having a lodger/sharer in isn't the buy to let market.

pinkteapot

It is also not necessarily insane if the salary increase prospects are good in their chosen industries. When I first bought I owned a place on my own and had a salary of 4.2x my income. By the time I sold it three years later, the mortgage was 2.5x my income, not due to over-payments but due to promotions and salary increases.

Oldernotwiser

Orpheo wrote: »

Which is why I said assuming a 25% deposit. A FTB can enter the property ladder at any rung provided that they have the correct deposit and sufficient income.

Even with a 25% deposit, a FTB isn't normally going to be looking to buy a family home or luxury apartment!

Generali

chewmylegoff wrote: »

that's a nice yield he's getting...!

I make it 2.1%. To be fair he didn't buy the place to be a house rental, he's knocking the place down to build a business when/if he can get finance in place.

As the biggest company in the industry went bust about 18 months ago very publicly, I guess he may have trouble raising the cash. Also he has probably overpaid by about 10-15% for the land (as I say the house has no value) which isn't going to look great for his business credentials!

Orpheo

Oldernotwiser wrote: »

Even with a 25% deposit, a FTB isn't normally going to be looking to buy a family home or luxury apartment!

Says who? Our first house was a family home. I have known numerous colleagues who have bought family homes as their first buy, some with 4 or 5 beds. If you are suggesting that every FTB earns 20K and has a 10K deposit to buy a dingy studio flat then you are simply making things up.

The facts are that first time buyers come with different incomes, different deposits and different requirements. The ladder metaphor is a convenient illusion, but to continue with the illusion, the studio flats and 1 bed slave-box flats are merely the first rung of the ladder that's rotted and fallen off.

Oh. And we don't have apartments in the UK we have flats. Apartments do sound bigger though don't they?

If changing the term FTB to just "buyer" helps you to understand my poll better then why don't you do that in your mind.

Oldernotwiser

Orpheo wrote: »

Says who? Our first house was a family home. I have known numerous colleagues who have bought family homes as their first buy, some with 4 or 5 beds. If you are suggesting that every FTB earns 20K and has a 10K deposit to buy a dingy studio flat then you are simply making things up.

And if you're suggesting that it's normal for FTBs to buy 5 bed houses, you're living in cloud cuckoo land.

damanpunk

When I bought in 2007 it was around 4 x joint salary, now it's around 2 x joint salary. The wife unfortunately took a pay cut or it would have been better.

I guess my post also illustrates that rather than waiting for houses price to come down and improve multiples you can always do it the other way too.

Orpheo

Oldernotwiser wrote: »

And if you're suggesting that it's normal for FTBs to buy 5 bed houses, you're living in cloud cuckoo land.

I didn't suggest anything was normal. You did. In fact I said that all FTBers were different. Read more carefully.

Orpheo
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