Oh dear - not again please

BobProperty

http://www.24dash.com/news/1/12118/index.htm

So no problem for first time buyers earning £60k a year then.

I just get the feeling that in a lending bank, someone, somewhere will suggest 9.5 x joint earnings mortgages to support this price level. :rotfl:

morg_monster

You just know someone will offer that, won't they, and some mugs will go for it. Maybe they'll invent a "half-the-interest mortgage" to go with it...

They say that FTBs have kept buying when it was predicted they wouldn't be able to partly because of help from parents with a deposit - but even in these circs at least they can afford to make repayments on their own. If prices do what this report says, this will surely end, because a lump gift/loan for a deposit is one thing, but continual monthly help when your kids are in their mid to late 20s is another thing entirely.

As a 25 year old London renter on a public sector income I look forward to settling down in a few years, moving out of the capital to somewhere we might have a shot at buying. At least with Martin's wise words on that Tonight with Trevor program last week, I'm not so worried as I was about getting on the property ladder. (Cheers Martin!)

going2die_rich

BobProperty wrote:

http://www.24dash.com/news/1/12118/index.htm

So no problem for first time buyers earning £60k a year then.

I just get the feeling that in a lending bank, someone, somewhere will suggest 9.5 x joint earnings mortgages to support this price level. :rotfl:

Well it's up to the Bank to assess the risk. if you are stupid enough to borrow out of your depth then you can't expect much sympathy when you spend the rest of your life paying for it.

MascaraMinx

That is a worrying report, it is hard enough now.

It's all very well to comment on people being "stupid enough to borrow out of their depth" but when you are in the position that you are in your late twenties/ early thirties, work in London - not on a bad wage but not earning £70k+ either, and you're wanting to settle down, what do you do???

We have taken a big gamble recently by taking a 100% mortgage as it was the only way my partner and I could buy a property (in the Home Counties) we want to settle in. The reason for no savings?? Mostly due to paying for our own education, and trying to live in a city like London where transport costs, council tax and every other type of essential cost are ridiculously high. And neither of us have parents in the position to hand us over a wedge of cash either.

So before you label people "stupid" please think of individual's circumstances and don't write-off a whole generation with a sweeping statement.

BobProperty

The 9.5 was a guess but I'll work the figures:

Salary £50,000
Net monthly income: £2913.90

Borrow 9.5 x £50,000 = £475000
Interest rate say 6%
Repayment = £3060.43 pcm
IO = £2375 pcm

:rotfl:

seven-day-weekend

My husband was a teacher and I was a Local Government Officer until we took early retirement in 2004.

Our joint salary was around £40,000.

So how are ordinary people ever going to afford a home in the capital? Even if they can, they'll never be able to have any children.

On 3 x joint income, my husband and I not quite be able to afford our terraced house in the Midlands that we bought in 1976, unless we had £40,000 deposit..

F_T_Buyer

This report is rubbish, not for what it claims. But the fact they don't support there claims. Try finding out how they came to that conclusion. I'll tell you were to start, Oxford Economic Forecasting, they told me to subscribe to their service. So, they release a report which no one can look into without paying...

The first thing that comes to my mind with this report, is that if it were true who would do all the low paid jobs in the future? When will the ceiling of affordability be met?

IMHO, this is just a Housing Association wanting more funds from the government.

meanmachine_2

Yeah, it's a nonsense prediction.

People claim that, "oh well the Poles will rent all of these places", but how, given that rents would be so much higher, in order to cover these much higher mortgages?

Something doesn't add up. Either property prices drop, or wages soar. And that won't happen without IRs going through the roof, bringing prices down etc etc

Alleycat

The only way those sort of prices can possibly be supported is if the general wage is increased dramatically. The article talks of a typical property. There cannot possibly be enough people earning the massive salaries required to be able to even live on a basic level to enable prices to increase by such a large amount.

I can believe that London's population will continue to rise (we will be adding to it in the very near future), but there are only so many high paying jobs. Maybe I am naive but I don't believe it.

ManAtHome

At the bottom of the article...

"The federation is calling on the Government to make housing a priority in its 2007 Comprehensive Spending Review."

My reasearch indicates that it's highly likely the entire populations of Bulgaria and Romania will take Polish citizenship before moving to the UK, forcing the average house price up to £364,281.96 by 17th May 2009.

chirpy007

If prices do rise by that amount they wont stay there for long because no-one will be able to afford them so the price will fall.