Average Deposit now 66K !

HAMISH_MCTAVISH

MacMickster wrote: »

Are you suffering from short-term memory loss?

Yesterday you quoted from a report which included:

Different reports seem to calculate it in different ways, with different results.

But whether it's 54K or 66K makes not a lot of difference. It's still utterly absurd either way.

HAMISH_MCTAVISH

hallmark wrote: »

If banks are demanding 25% deposits it means they think prices might drop by 25%.

A very bearish outlook from the people who's opinion is actually relevant.

Don't be so daft....:rotfl:

They're rationing mortgages by increasing deposit requirements until the pool of borrowers shrink to meet the available pool of funding.

hallmark

Rubbish. Deposits are to guard against banks making a loss when when house prices fall, nothing more, nothing less, regardless of how you'd like to spin it.

Banks want and need to lend money, it's their business. What they don't want is to lend someone £200k to buy a house that might be worth £150K down the line.

lilac_lady

Do first time buyers think about buying a small flat (not in London) and then hopefully being able to climb the property ladder like we did in the 60s/70s or is £60,000 the deposit on a new, larger house?

AD9898_2

I think decent size deposits aren't a bad thing, what's making it worse is the ridiculous price of housing in general and the fact that average joe can't buy anymore, or you have to buy jointly etc, which wasn't the case back 15 years or so ago.

I feel for anyone these days who is an FTBr, unlike most things in life which get better has time passes, the housing situation is worse, much worse, with a minority of tw@ts making huge money while up and coming generations get screwed.

Jimmy_31

StevieJ wrote: »

Why, don't renters pay any bills?

Im sure they do.

Graham_Devon

HAMISH_MCTAVISH wrote: »

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/8769113/House-prices-average-deposit-now-66000.html

A generation forced to enrich landlords thanks to absurdly high deposit requirements far worse than they were in the 1960's, 1970's, 1980's, 1990's and 2000's.

Despite the percentage of income required to service a mortgage, even with 5% interest rates, being well below the long term average.

Very sad.

Then look at the boom that caused it.

Even the very first sentence right after the initial "deposits have reached £66,000" states it's due to property prices.

Research from bank first direct found that the average deposit has leapt from £6,600 to £66,000 since 1990 due to increasing house prices, and a reduction in mortgage levels. The average household income has risen 2.3 times in the same period, meaning that people must save for far longer to buy a home.

You just simply will not look at the problem will you...

The average house price is 6.3 times the average household income, and the average deposit is 1.7 times the average income.

Graham_Devon

HAMISH_MCTAVISH wrote: »

When even the worst loans from the most aggressive of UK lenders like Northern Rock make nearly a third of a billion pounds profit in just a year, how much more freaking evidence do you need to understand this? :rotfl:

You do realise you are using Northern Rock, as evidence that high ratio mortgages work and make profit...don't you?

Thats Northern Rock...

The bank that was nationalised...

That bank...

claire16c

lilac_lady wrote: »

Do first time buyers think about buying a small flat (not in London) and then hopefully being able to climb the property ladder like we did in the 60s/70s or is £60,000 the deposit on a new, larger house?

By the time I have been able to save a deposit, I will be at an age where a small flat is no longer suitable. This is similar for most of my friends who are currently living in rented accomodation.

Most of us will be able to buy when we are in are 30s, and therefore by that time lots will have kids.

And I dont live in London but the price of a small flat would still be around 150k anyway.

macaque_2

HAMISH_MCTAVISH wrote: »

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/8769113/House-prices-average-deposit-now-66000.html
A generation forced to enrich landlords thanks to absurdly high deposit requirements far worse than they were in the 1960's, 1970's, 1980's, 1990's and 2000's.
Despite the percentage of income required to service a mortgage, even with 5% interest rates, being well below the long term average.
Very sad.

Hamish, the clue to the problem lies within the article:

The average house price is 6.3 times the average household income

When house prices return to affordable levels, the risk will go down and 90% mortgages will become available again. Lower prices + lower percentages = much lower deposits and more buyers.

The solution lies with the house sellers who are still wildly overpricing property. You must stop blaming the lenders. I know you wouldn't lend money on such risks.