NewBuild Homebuy schemes in London - actually any help to first time buyers?

ukcarper

twistedmoosie wrote: »

Thought I'd open a little debate thread up here.

Seems to me there's a fair few of us in London who are destined not to reach the property ladder until our late 30's, whether we decide to stay in the city or not. If the 'bank of mum and dad' have nothing to give you, your job continues to not pay any bonuses while the economy is down, you are busily paying back your share of debt as part of the 'debt generation' in their twenties, and you are all the while paying extortionate private rent, where is there any opportunity to save for a deposit?

The NewBuild Homebuy scheme has been recommended to me by countless people, and I've even been accepted for it, but it seems to me there is still a massive gap where a deposit of at least £15k is required that I don't have the opportunity to save for.

So, debate open. Are such schemes worthwhile when there are many who don't even have a deposit?

You can rent a room in London for £100 a week if you’re on £25k you should take home about £370 a week should be able to save on that.

vaporate

Cleaver wrote: »

How come you don't have the opportunity to save for it?

Average earnings in London are about £33,300 (source) so you'd earn about £2,200 a month net. I'm sure most people, with a bit of focus, could save around 20% of their income most months. On that basis you could save £15,000 in less than three years. Before anyone starts shouting at me that actually the average wage is £4.36 an hour and that average is actually only their because of Roman Abramovich, I think a lot of people save for houses as a couple and actually most people could save a lot more than 20% of their income when saving for a deposit. I remember when we really decided to save hard for three years and we managed to save anywhere between 30% and 65% of our net income each month.

Sorry to be harsh, but you seem to have run up quite a lot of credit card debt, so maybe your spending habits are stopping you thinking that you can save?

Is that a Joke?

the_flying_pig

vaporate wrote: »

Is [Average earnings in London are about £33,300] a Joke?

not really [NB that's average full time only].

it seems like a weirdly high average when you consider that most people obviously get considerably less. the average is dragged up basically by people earning really big bucks.

e.g. see table 3.11 [towards the end for London] at http://www.hmrc.gov.uk/stats/income_distribution/menu-by-year.htm

PasturesNew

the_flying_pig wrote: »

not really [NB that's average full time only].

it seems like a weirdly high average when you consider that most people obviously get considerably less. the average is dragged up basically by people earning really big bucks.

e.g. see table 3.11 [towards the end for London] at http://www.hmrc.gov.uk/stats/income_distribution/menu-by-year.htm

Table 3.14 http://www.hmrc.gov.uk/stats/income_distribution/table-3-14-feb2010.xls

Kensington & Chelsea mean from self-employment £205k, but median of £11.5k. For employment a mean of £117k and a median of £29,100. Westminster's a similar scenario.

Let's all move to Kensington.... it's worth getting two sets of triple bunk beds and buying a broom cupboard between six people to put them in for a couple of years of that

Cleaver

Cleaver wrote: »

Average earnings in London are about £33,300 (source)

vaporate wrote: »

Is that a Joke?

No. It's just the median average London wage from the ONS.

the_flying_pig wrote: »

it seems like a weirdly high average when you consider that most people obviously get considerably less. the average is dragged up basically by people earning really big bucks.

Oh God, not this again. Most people don't get considerably less, exactly half of full-time workers earn less than £33k and exactly half of full time workers earn more than £33k. From the ONS website:

Median full-time weekly earnings in London were £627

Median is the middle figure, it can't be dragged up and down.

This article suggests that he average wage in London is £46,000, which I imagine is the mean average (pushed up by high earners, as you've pointed out.

the_flying_pig

Cleaver wrote: »

...Oh God, not this again. Most people don't get considerably less, exactly half of full-time workers earn less than £33k and exactly half of full time workers earn more than £33k. From the ONS website:

Median is the middle figure, it can't be dragged up and down...

sorry, yes, i was being imprecise. it was late at night.

the £33k median figure is dragged up by missing out part time workers, all of whom exist and many of whom would prefer to work FT.

any mean/average figure [of which the £33k is not an example] is dragged up by very high earners.

Cleaver

the_flying_pig wrote: »

sorry, yes, i was being imprecise. it was late at night.

the £33k median figure is dragged up by missing out part time workers, all of whom exist and many of whom would prefer to work FT.

We could argue about this for hours, couldn't we? I know a lot of part time workers want full time and a lot of part time workers won't want full time. A lot of part time workers will earn pro rata what full time workers earn, some of them won't.

But at the end of the day, the average median wage in London is about £33k, isn't it? Don't worry, I'm not going to force you to say that this means houses there are affordable, because they're obviously not. But let's just stop splitting hairs and agree that the average wage in London is probably around the £33k mark. For every part time, disgruntalled £20k earner in London there's probably a plumber earning £60k who doesn't declare income. The average from ONS is probably as close as we'll get to an answer.

Out,_Vile_Jelly

Cleaver wrote: »

Let's say you earn £30k. Setting aside the OPs homebuy scheme, and the fact that I'm about to write a post that completely contradicts my last one, how would a person realistically live in London on £30k and realistically save for a deposit for a starter property in London? I know that theortically you could, but I'm not sure anyone in their right mind on £30k a year in London could be bothered to save 40% of their income for years and years and years to get themselves a 1-bed flat for £180K somewhere. And that's if someone would actually lend them the money once they'd save dthe deposit.

It probably depends what kind of career you're in and how old you are when you're earning £30k. And if you're paying off a student loan. And whereabouts in London you live will affect how much of your take-home gets eaten up by travel costs.

If I multiply my salary by 3, add my deposit and put it into Rightmove for London it does not make for cheerful reading. The Standard's property supplement, with its ads for new build schemes, does make me chuckle however.

Linton

Cleaver wrote: »

Let's say you earn £30k. Setting aside the OPs homebuy scheme, and the fact that I'm about to write a post that completely contradicts my last one, how would a person realistically live in London on £30k and realistically save for a deposit for a starter property in London? I know that theortically you could, but I'm not sure anyone in their right mind on £30k a year in London could be bothered to save 40% of their income for years and years and years to get themselves a 1-bed flat for £180K somewhere. And that's if someone would actually lend them the money once they'd save dthe deposit.

Surely the answer is that broadly in general, and historically, single people dont buy houses. Its something you do when you are ready to settle down both personally and financially.

A couple on the median salary should be able to get something acceptable.

the_flying_pig

Cleaver wrote: »

We could argue about this for hours, couldn't we? I know a lot of part time workers want full time and a lot of part time workers won't want full time. A lot of part time workers will earn pro rata what full time workers earn, some of them won't.

But at the end of the day, the average median wage in London is about £33k, isn't it? Don't worry, I'm not going to force you to say that this means houses there are affordable, because they're obviously not. But let's just stop splitting hairs and agree that the average wage in London is probably around the £33k mark. For every part time, disgruntalled £20k earner in London there's probably a plumber earning £60k who doesn't declare income. The average from ONS is probably as close as we'll get to an answer.

Yeah, I dunno. The median full-time wage is £33k, probably best to leave it at that. This figure no doubt misses out the very lowest earners such as the immigrant cleaners who are on £5 an hour part-time [often cash in hand] just as it does some of the very highest earners, such as those city folk who aren't taxed in the normal way.

The average London pwoperdee price is circa £300k. Go figure.