MSE News: Guest Comment - Glimmer of hope for first time buyers

michaelvintner

FATBALLZ wrote: »

As a FTB I'm quite happy for mortgages to continue to be restricted thanks. So I'm not competing for properties with financial incompetents who have never saved more than a couple of quid and therefore are willing to bid higher and higher for properties since they don't understand the vast extra debt burden they are putting on themselves.

And long may you continue to eat beans on toast for every meal and walk 15 miles to work everyday. Wear the same pair of trousers for 5 years and change your shoes only when they fall off your feet.

There is more to life than saving every single penny.

Jimmy_31

Jonathandb1972 wrote: »

Jimmy_31 wrote: »

I can easily afford to get a mortgage and buy my first home now, this is due to me giving up luxuries and saving up a 40% deposit.

I am not yet willing to buy my first home because housing in my area is still overpriced.

Therefore some people are not saying housing is overpriced just because they cant afford to buy, some people are saying housing is overpriced because quite simply its overpriced.
QUOTE]

Well done Jimmy for your prudence in saving. However I can't help feeling that your caution has gone too far. I don't live in your part of the country but I do know that most areas are bouyant and rising in cost. You indicated in an earlier message that you have the skills to develop run down property. Had you started this several years ago you could now be well on the way to mortage free living and the price of housing would be irrelavent.

Please accept this comment Jimmy, not as critisism, but as an urge to buy a house and be closer in your repayments to owning it outright.

I thank you for your concern but i am of the mind that theres no point coming this far and giving up at the last hurdle, plus i didnt have anywhere near enough deposit to buy a home a few years ago so it would have been too much risk for me to take on.

Jimmy_31

milliebear00001 wrote: »

Can I ask what you mean by 'overpriced'. Is it based on any comparison?

I base it on the fact that the house prices are still high due to having a boom not long ago and everybdy still wants to get a boom price for their home.

If what you are trying to say is that houses are not overpriced then see the article attached to this thread.

brit1234

milliebear00001 wrote: »

Can I ask what you mean by 'overpriced'. Is it based on any comparison?

Anything over 3.5 to 4 x salary lending. We had a decade of loose and fraudulent lending that allowed prices to more than double. Those house prices can't be supported without a return to dodgy lending or scam schemes such as shared ownership.

HAMISH_MCTAVISH

milliebear00001 wrote: »

Interestingly, there was an article today that stated it's now, on average, cheaper to have a mortgage on a property in Scotland, than to rent the same one.

I'm not happy about it, but I am inclined to agree that rather than forcing prices down, all that's happening at the moment is sellers sitting tight and holding out for offers close to asking while FTB who really want to buy are prevented from doing so because of the bank's lending criteria (about which I make no comment!)

Properties at the bottom of the market are going to BTL's - people who have the equity to afford them - rather than the FTB they should be going to.

I don't see prices dropping. Not enough distressed sellers. The banks will ease up before the sellers give up. Only way to really reduce house prices is to increase supply. We live on an island where there are too many people chasing too few homes. That will always equal inflated prices.

Absolutely correct.

HAMISH_MCTAVISH

brit1234 wrote: »

Anything over 3.5 to 4 x salary lending. We had a decade of loose and fraudulent lending that allowed prices to more than double. Those house prices can't be supported without a return to dodgy lending or scam schemes such as shared ownership.

False.

The average mortgage for FTB-s never crossed 3.5 times income even at peak.

The average mortgage for 2TB never crossed 3.0 times income even at peak.

Both are lower today.

Turnbull2000

HAMISH_MCTAVISH wrote: »

False.

The average mortgage for FTB-s never crossed 3.5 times income even at peak.

The average mortgage for 2TB never crossed 3.0 times income even at peak.

Both are lower today.

Is that national average salary, or salary of actual buyers? If the latter, what was the salary of these buyers? Are they mid-20's early in their career buying a first flat on £20,000, or mid 30's approaching peak of earnings?

No good claiming all is fine as FTB multiples are 3.5 times income, when the income of these actual buyers are above average and they're much older than they once were.

Graham_Devon

Turnbull2000 wrote: »

Is that national average salary, or salary of actual buyers? If the latter, what was the salary of these buyers? Are they mid-20's early in their career buying a first flat on £20,000, or mid 30's approaching peak of earnings?

No good claiming all is fine as FTB multiples are 3.5 times income, when the income of these actual buyers are above average and they're much older than they once were.

Salary of people who have bought. It's based on dwindling numbers too now, and completely ignores the fact deposits have gone up, therefore mortgage multiple has descreased.

Gone over and over this with him several times. Ignored every time.

HAMISH_MCTAVISH

Turnbull2000 wrote: »

Is that national average salary, or salary of actual buyers?

Salary of actual buyers.

If the latter, what was the salary of these buyers? Are they mid-20's early in their career buying a first flat on £20,000, or mid 30's approaching peak of earnings?

Most people's earnings peak in their mid 50's.

The average salary of house buyers is obviously greater than the average salary of all people.

The CML have the average income of FTB's at around 34K, but this includes joint applicants.

No good claiming all is fine as FTB multiples are 3.5 times income, when the income of these actual buyers are above average and they're much older than they once were.

They're not significantly older than they used to be. The current average age is 32. Which is the same as it was a decade ago.

But my point, that lending amongst FTB-s never crossed 3.5 timnes income even at peak, was in response to this.....

brit1234 wrote: »

Anything over 3.5 to 4 x salary lending. We had a decade of loose and fraudulent lending that allowed prices to more than double. Those house prices can't be supported without a return to dodgy lending or scam schemes such as shared ownership.

.....Which is demonstrably not the case.

FATBALLZ

michaelvintner wrote: »

And long may you continue to eat beans on toast for every meal and walk 15 miles to work everyday. Wear the same pair of trousers for 5 years and change your shoes only when they fall off your feet.

There is more to life than saving every single penny.

So in your world, you have two choices, save every penny or blow every last penny you have on a house?

Glad I don't live there.