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

IveSeenTheLight

ukcarper wrote: »

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%.

But, but, but it's not affordable for housing to cost 31% of take home pay.
People can't afford to pay £768 of their £2461 monthly take home pay (typical case 1 earning 24K & 1 earning £12k (£1571+£891) 31%.)

**NOTE** I have not verified your figures, just replicated your point.

wotsthat

Graham_Devon wrote: »

ISTL appears to be stating houses are more affordable than ever, and translating that to a new buyer also.

I think you'd have to go back to the nineties to find such a decent market for new buyers. Based on the survey FTB's certainly seem way more concerned with getting a deposit than being able to afford a mortgage or worries about house prices.

Only 10% of FTB's cite mortgage affordability as their biggest worry. They are much much more worried about deposit requirements and the lack of suitable properties.

Graham_Devon

ukcarper wrote: »

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%.

Yep. I see you have used a 4% interest rate for a 90% LTV loan, on average wages on averages house prices.

You've then revereted to the very best mortgage product out there, wiped 0.19% off the interest rate, ignored the fee's and concluded those will be the payments?

Really, to be fair, you'd need to use an average mortgage rate against average house prices and average wages, which is more like 5.5% for such a deposit.

Including a fee off £1000, and a rate of 5.5%, suddenly your payment has shot up to £900.80 taking it to 40% of income. And that's without any increases in base rate after the initial period.

IveSeenTheLight

Graham_Devon wrote: »

Yep. I see you have used a 4% interest rate for a 90% LTV loan, and have excluded fee's.

You've then revereted to the very best mortgage product out there, wiped 0.19% off the interest rate, ignored the fee's and concluded those will be the payments?

Graham,
Why don't you come back with your set of figures and work out the percentage?
Although not ideal, many FTBers opt to add the fees to their mortgage, so why nat add them in as well.
Remember, that most people do tend to go with the better mortgage options available.

I'm interested to see if you think it's affordable with the current mortgage interest rates and household disposable income.

shortchanged_2

wotsthat wrote: »

I think you'd have to go back to the nineties to find such a decent market for new buyers. Based on the survey FTB's certainly seem way more concerned with getting a deposit than being able to afford a mortgage or worries about house prices.

Only 10% of FTB's cite mortgage affordability as their biggest worry. They are much much more worried about deposit requirements and the lack of suitable properties.

Very dangerous short term view. Why is it that people forget that interest are at record lows and will not remain this low forever.

ukcarper

Graham_Devon wrote: »

Yep. I see you have used a 4% interest rate for a 90% LTV loan, on average wages on averages house prices.

You've then revereted to the very best mortgage product out there, wiped 0.19% off the interest rate, ignored the fee's and concluded those will be the payments?

Really, to be fair, you'd need to use an average mortgage rate against average house prices and average wages, which is more like 5.5% for such a deposit.

Including a fee off £1000, and a rate of 5.5%, suddenly your payment has shot up to £900.80 taking it to 40% of income. And that's without any increases in base rate after the initial period.

If you use the more typical two earner figures your £900 works out at 36%. You should save fees not add them to mortgage.

wotsthat

Graham_Devon wrote: »

Including a fee off £1000, and a rate of 5.5%, suddenly your payment has shot up to £900.80 taking it to 40% of income. And that's without any increases in base rate after the initial period.

Ask yourself what you've proven here.

You're trying to demonstrate that whilst, on average, mortgages are as affordable as ever somehow new entrants aren't benefitting from this trend.

What you've shown is that houses are relatively more expensive for FTB's. However, that's all you've shown. How would this 40% compare with an FTB in 2011, 2010, 2000, nineties, 70's etc?

IveSeenTheLight

shortchanged wrote: »

Very dangerous short term view. Why is it that people forget that interest are at record lows and will not remain this low forever.

Have you considered that there is an option to fix the mortgage for up to 10 years?

Many people are holding off from fixing for the time being and benefiting form the low rates which many envisage will be around for some time untilthe economy shows signs of sustainable recovery and growth.

Graham_Devon

IveSeenTheLight wrote: »

Graham,
Why don't you come back with your set of figures and work out the percentage?
Although not ideal, many FTBers opt to add the fees to their mortgage, so why nat add them in as well.
Remember, that most people do tend to go with the better mortgage options available.

I'm interested to see if you think it's affordable with the current mortgage interest rates and household disposable income.

Erm, I did.

HAMISH_MCTAVISH

Graham_Devon wrote: »

This is for people currently paying mortgages.

No, no, no.

Graham, how many times do we have to pull you up on the same thing?

It's for new buyers, FTB-s specifically, and it shows affordability is at near record cheap levels for FTB-s taking on a new mortgage today.