Rightmove: FTB-s identify raising a deposit as biggest problem with buying

Graham_Devon

IveSeenTheLight wrote: »

As for affordability, statistic show that the mortgage interest as a percentage of take home pay is at a long term 30+ year low.
Mortgages are demonstrably affordable in the current climate.

This is for people currently paying mortgages.

There is absolutely no point stating that a house with a market value of 200k is affordable, because the owners who bought it for 50k 10 years ago can afford to pay the mortgage. (which is what is being done). The affordability of the mortgage is also averaged out to include deposits of anything from 0 to 99.9%. That's a mathematical farce.

The affordability of the mortgage needs to be based on the market value of the house at the point of buying. It needs to be done on a set LTV...not based on various LTV's across the mortgage market based upon every different homebuyer.

You may aswell just say ferrari's are proven to be affordable, because ferrari owners can afford to pay the loan payments, or high grade diamonds are affordable because diamond buyers are buying them.

IveSeenTheLight

Graham_Devon wrote: »

This is for people currently paying mortgages.

Graham,
Of course it people paying mortgages and their affordability.
That's what the topic was on and I responded to a post relating the house prices and their affordability.

The 30+ year statistic is measuring the same during that time, why would you want it to measure something differently?

Currently it's showing it's more affordable than ever, largerly down to the lower mortgage rates

Graham_Devon wrote: »

You may aswell just say ferrari's are proven to be affordable, because ferrari owners can afford to pay the loan payments, or high grade diamonds are affordable because diamond buyers are buying them

Sorry, but what a load of waffle.
Your diverting the topic away from affordability for home owners to a need for it to be more affordble to a greater percentage of the population.
We've had this conversation many times which I've answered many times.
In summary, unfortunately the owner occupancy levels are likely to retract further, meaning fewer of the population have the opportunity to buy a property.
The solution to your idea that property should be affordable for more is to supply more than the demand, meaning there are more opportunities and less competition.

That's the only way your really and sustainably reduce house prices to meet the population requirements

Carl31

IveSeenTheLight wrote: »

The first hurdle is getting a deposit together and post 2 showed increased levels of optimism and expectation for FTBers buying in the next 12 months.

Deposits have been an issued as regularly reported in here, people have been able to save up and more now are expecting to be buying soon than in previous years.

As for affordability, statistic show that the mortgage interest as a percentage of take home pay is at a long term 30+ year low.
Mortgages are demonstrably affordable in the current climate.

mortgage interest being at a 30 year low is not a good thing for an FTB though? especially one that takes out a low deposit, high value mortgage.

Theres only really one way that mortgage interest will go in the future, and anyone taking on a high mortgage is just asking for trouble, how likely is it that a FTB taking out a mortgage now will benefit from current rates for the next 25/30 years?

The safest ans most sensible way, is a larger deposit on a lower priced house, which is what the current market will provide in time

Graham_Devon

IveSeenTheLight wrote: »

Currently it's showing it's more affordable than ever, largerly down to the lower mortgage rates

The nub of the point ISTL...

Do you actually believe this?

Do you believe houses are currently more affordable than ever to a buyer?

Will you be willing to state you believe this is the case? If you were a buyer today, houses have never been more affordable?

Graham_Devon

wotsthat wrote: »

That's what an average is.

A new (non-average) affordability ratio would show exactly what you expect i.e. mortgages are usually at their most expensive at the start. What's been gained?

Yes I know that wotsthat. You are simply telling me what I have already described, so not sure what your point is really.

Were talking context here.

ISTL appears to be stating houses are more affordable than ever in response to someone suggesting they could fall and become affordable.

I'm asking him specifically if he believes what he is attempting to put across.

IveSeenTheLight

Graham_Devon wrote: »

The nub of the point ISTL...

Do you actually believe this?

Do you believe houses are currently more affordable than ever to a buyer?

Will you be willing to state you believe this is the case? If you were a buyer today, houses have never been more affordable?

With mortgage rates as they are, then yes: -

• we can show house prices are more affordable in terms of mortgage interest as a percentage of take home pay.
• As an investor (including recent aquisition), I can show that I have increased profitability than ever.

I also have the option to fix at anytime, should I have concerns about a dramatic change to the mortgage rates, as does any potential buyer.

Remember, the topic is about the identifying the problem area, which was identified as raising the deposit, NOT the affordability of a mortgage once the deposit was raised.

Graham_Devon

IveSeenTheLight wrote: »

With mortgage rates as they are, then: -

• yes, we can show house prices are more affordable in terms of mortgage interest as a percentage of take home pay.
• As an investor (including recent aquisition), I can show that I have increased profitability than ever.

I also have the option to fix at anytime, should I have concerns about a dramatic change to the mortgage rates, as does any potential buyer.

Remember, the topic is about the identifying the problem area, which was identified as raising the deposit, NOT the affordability of a mortgage once the deposit was raised.

So you do actually believe houses are more affordable to a buyer today than at any other point in documented history? Even when challenged?

Blimey. I'm lost for what to say really.

ukcarper

Graham_Devon wrote: »

This is for people currently paying mortgages.

There is absolutely no point stating that a house with a market value of 200k is affordable, because the owners who bought it for 50k 10 years ago can afford to pay the mortgage. (which is what is being done). The affordability of the mortgage is also averaged out to include deposits of anything from 0 to 99.9%. That's a mathematical farce.

The affordability of the mortgage needs to be based on the market value of the house at the point of buying. It needs to be done on a set LTV...not based on various LTV's across the mortgage market based upon every different homebuyer.

You may aswell just say ferrari's are proven to be affordable, because ferrari owners can afford to pay the loan payments, or high grade diamonds are affordable because diamond buyers are buying them.

A 25-year mortgage of £144k average house less 10% deposit is £768. To get that £144k you would need a joint income of £36k worst case 1 person earning takes home pay £2251, mortgage 34% of income a more typical case 1 earning 24K & 1 earning £12k (£1571+£891) 31%.

IveSeenTheLight

Graham_Devon wrote: »

So you do actually believe houses are more affordable to a buyer today than at any other point in documented history? Even when challenged?

Blimey. I'm lost for what to say really.

Graham, may I refer you to post 2 of this thread.
Or alternatively try this link
http://www.moneysavingexpert.com//news/mortgages/2012/07/more-first-time-buyers-planning-on-entering-the-market

It seems there is an increased optimism for FTBer's to enter the market in the next 12 months.
It seems, they believe they will overcome the deposit requirement.

abaxas

Hmmmm,

Lots of houses in the North east for 10-50k. Not that hard to get 5% = £500-£2500. Why are they not selling to FTBs, BTLers or infact anyone else?

Rightmove: FTB-s identify raising a deposit (for a house where any human wants to live) is biggest problem with buying.