Large Deposit Requirements Exclude a Generation of FTB's

ILW

HAMISH_MCTAVISH wrote: »

I like this thread.

Cannot see why, your original premise that mortgages are harder to get than they have been in the past seems to have been shot down in flames somewhat.

IveSeenTheLight

ILW wrote: »

Cannot see why, your original premise that mortgages are harder to get than they have been in the past seems to have been shot down in flames somewhat.

Must have missed that mortgage and credit availability is easier now.

I do see mortgage rates lowering as the acceptance is that there will be low base rates for a while.

Certainly though the number of products, deposit requirements, arrangement fees certainly seem worse than before.

ILW

IveSeenTheLight wrote: »

Must have missed that mortgage and credit availability is easier now.

I do see mortgage rates lowering as the acceptance is that there will be low base rates for a while.

Certainly though the number of products, deposit requirements,arrangement fees certainly seem worse than before.

I would suggest that if you are saying that it is harder now than over the last decade then you are right. But speaking beyond that period where anyone with a pulse could get a mortgage for stupid income muliples and no deposit, then things have just gone back to the norm.

Cleaver

HAMISH_MCTAVISH wrote: »

Only an idiot thinks falling house prices will help the lost generation of locked out FTB's.

I must be an idiot then, because here's how my logic works.

I'm a FTBer. The house I've decided to buy is a two-bed terrace for £120,000. The lender says I need a 20% deposit, so I need to save around £24,000. I decide that I'm going to save that over the next two years and save £1,000 a month.

At the end of that period I've saved my £24,000 but, lo and behold, house prices in my area have fallen 30%!

This means that the same house will only cost me £84,000. With my deposit I'm going to own nearly a third of my house outright rather than the fifth I would've owned if it hadn't fallen in value.

I probably also get a better mortgage rate because I have a higher deposit and I'm therefore less risk.

I also would have budgeted for higher mortgage payements because I was planning to borrow £100k, not the £60k I ended up borrowing. So I can pay my mortgage off much more quickly if I now chose to overpay.

And lastly, but probably most importantly, I have less debt around my neck. This will generally make me more happy as no one really likes being in debt.

I'm not quite sure what the downside is to this situation when thinking specifically about this particular first time buyer?

ILW

When I forst bought in 1990, lenders required 10% deposit, good credit history, documented proof of income etc, and also were charging around 8% interest ( which then shot up), why do current FTBs feel so hard done by?

Orpheo

ILW wrote: »

When I forst bought in 1990, lenders required 10% deposit, good credit history, documented proof of income etc, and also were charging around 8% interest ( which then shot up), why do current FTBs feel so hard done by?

This is the age of entitlement.

Graham_Devon

ILW wrote: »

When I forst bought in 1990, lenders required 10% deposit, good credit history, documented proof of income etc, and also were charging around 8% interest ( which then shot up), why do current FTBs feel so hard done by?

High house prices, especially compared to wages.

I don't think FTB's feel hard done by when it comes to deposits or mortgage rates. I've yet to come across a FTB in real life, newspaper articles, or forums, moaning over that past few years that they can't afford a home before of mortgage rates.

It's always high house prices.

HAMISH_MCTAVISH

Graham_Devon wrote: »

High house prices, especially compared to wages.

I don't think FTB's feel hard done by when it comes to deposits or mortgage rates. I've yet to come across a FTB in real life, newspaper articles, or forums, moaning over that past few years that they can't afford a home before of mortgage rates.

It's always high house prices.

I've yet to see an FTB in the real world, outside of these forums, complain about high house prices.

With rent being more expensive than mortgage payments in most areas, it's obviously affordable to buy. IF you can get a mortgage, which many can't because of mortgage rationing and absurd deposit requirements.

How is an FTB supposed to save 30K, 40K, 50K for a deposit when rent is more expensive than a mortgage payment? I've yet to hear a good answer....

Cleaver

HAMISH_MCTAVISH wrote: »

I've yet to see an FTB in the real world, outside of these forums, complain about high house prices.

Are you serious? You've never spoken to young people who feel that they can't afford to buy? My office is full of them, rightly or wrongly.

Graham_Devon

HAMISH_MCTAVISH wrote: »

I've yet to see an FTB in the real world, outside of these forums, complain about high house prices.

God damn Hamish. You need to take your blinkers off.

You've never heard of these people, but you link up to HPC, full of these people to mock them, regularly.

You yanking my chain?