Homes for FTB's at most affordable in 10 years

yertiz_2

IveSeenTheLight wrote: »

Council Homes are contracting.
There just simply is not the sufficient supply of council houses to supply the required demand.


Statistically it's true, largely due to lower mortgage rates.
However getting a deposit together would appear to be the main issue with getting the access to credit in order to afford the mortgage



Let's first look at the student debt, for me that seems quite a high amount (possibly could have done something differently to reduce the debt in the first place), however to tackle it going forward, I believe the policy is that it doesn;t need to be repaid unless you are earning over £21,000, so you don't need to offset any earnings for that debt at the moment and it should be on a low rate (although I would always recommend to reduce your debt at the earliest opportunity

Next, he needs a car for his work. Can I ask why and if so are the company expensing the need?
If it is simple travelling to and from work, then potentially he doesn;t need a car and could use public transport like many others do. He moved away from home, so he could live quite near to the work if he wanted to.

What's his degree? Is he on a good salary progression path?
If he has moved away from home, possibly there is better options for employment and career.

We don't know the location, so it's hard to discuss without knowing the local variables.
Rent, could he rent a cheaper room? For £450 pcm I reckon you could get a single bed flat in many areas of the country.

On £18k, with £450pcm rent, it would still leave circa £550 per month.
Sure there's other bills to pay, but I'm sure there would be lots of opportunities to reduce that (check out all the MSE pages on this;))


I'm sure you could see that there are many variables and it will depend on your son's focus, determination and will-power to succeed in his goal.
In the 10 years from when I was 18, my salary doubled.
Different times maybe, but there are still industries and opportunities out there for those with a desire to succeed.

Best of luck to your son and his other siblings.

Thanks for taking the time re your comments. Without going in to too much detail, he has a degree in English Lit from what is considered by times Good Uni guide as in the top 20 in UK. He is working as a Sales Rep so needs a car for work. He used some of his Student Loan plus working part time which he saved to buy the car. He was offered this job and took it rather than wait around for something 'better' which pays more. Many of his friends are still looking for work. He is in an area in the SE where house prices and rents are high hence the £450 pm. He has never been shy of work having had part time jobs since he was 16.
However we do try to encourage him that the outlook is not all doom and gloom; youngsters today need to take the opportunities when they came their way.

chewmylegoff

IveSeenTheLight wrote: »

Statistically it's true, largely due to lower mortgage rates.
However getting a deposit together would appear to be the main issue with getting the access to credit in order to afford the mortgage

yes, so statistically, mortgage payments are at their most affordable for ages, but in order to qualify to a mortgage you need a big deposit.

simply looking at the cost of repayng a mortgage and declaring that to be an indicator of affordability, whilst completely ignoring that, in deposit terms, mortgages are at their least affordable for ages, is a bit silly in my view. you can argue that the deposit requirements amount to "mortgage rationing" if you want, but that doesn't change the fact that deposit requirements are the limiting factor in the affordability stakes and are completely ignored for the purposes of the title of this thread.

Graham_Devon

Increase deposits to 80% and mortgage payments will become even less of the average salray....therefore, houses will be even more affordable.

Simple to make them more "affordable" on paper this way.

I don't know why some stick to these facts, but as this thread suggests...they do, and won't be budged. If the statistics say something that suits, the statistics are right and that's the end of that.

These statistics are flawed anyway, as with 125% loans, the 25% was never taken into consideration and added to the total amount of income used to buy the house.

The 25% was a personal loan, and therefore not considered for this great set of statistics. Same way that shared equity works. The loan will look a lot more affordable in the statistics than reality.

ukcarper

Graham_Devon wrote: »

Increase deposits to 80% and mortgage payments will become even less of the average salray....therefore, houses will be even more affordable.

Simple to make them more "affordable" on paper this way.

I don't know why some stick to these facts, but as this thread suggests...they do, and won't be budged. If the statistics say something that suits, the statistics are right and that's the end of that.

These statistics are flawed anyway, as with 125% loans, the 25% was never taken into consideration and added to the total amount of income used to buy the house.

The 25% was a personal loan, and therefore not considered for this great set of statistics. Same way that shared equity works. The loan will look a lot more affordable in the statistics than reality.

It has nothing to do with deposits all they did was multiple the average salary x4 and if the average price paid by a FTB was less than that it was considered affordable. Can you not see what average earnings they are using doesn’t matter if they are using the same one in all years .

Graham_Devon

ukcarper wrote: »

It has nothing to do with deposits all they did was multiple the average salary x4 and if the average price paid by a FTB was less than that it was considered affordable. Can you not see what average earnings they are using doesn’t matter if they are using the same one in all years .

Fine, we'll go with this.

Therefore the average salary is £41,250 a year. Just £200 off the higher rate tax bracket!

Righty-o.

ukcarper

Graham_Devon wrote: »

Fine, we'll go with this.

Therefore the average salary is £41,250 a year. Just £200 off the higher rate tax bracket!

Righty-o.

how do you reach that conclusion don't say average house price divided by 4

I’ll give you a clue average terrace house may Lancashire £62k divided by 4 £15.5k

Graham_Devon

ukcarper wrote: »

how do you reach that conclusion don't say average house price divided by 4

I’ll give you a clue average terrace house may Lancashire £62k divided by 4 £15.5k

Errr, this is average over the country.

Whichever way you possibly try to look at it, it's average price (country wide) vs average salaray (country wide), which in this case ends up around 41k. Massaging the figures to suit above does nothing to get around this. What you have said will be true, but it doesn't make any difference to the total average.

ukcarper

Graham_Devon wrote: »

Errr, this is average over the country.

Whichever way you possibly try to look at it, it's average price (country wide) vs average salaray (country wide), which in this case ends up around 41k. Massaging the figures to suit above does nothing to get around this. What you have said will be true, but it doesn't make any difference to the total average.

You really don’t understand or are being obtuse. First you are assuming ftb buy average house which they obviously don’t. and secondly I believe they use male full time and if they used that in 2002 and now it shows houses are as affordable as they were in 2002.

chewmylegoff

Graham_Devon wrote: »

Errr, this is average over the country.

Whichever way you possibly try to look at it, it's average price (country wide) vs average salaray (country wide), which in this case ends up around 41k. Massaging the figures to suit above does nothing to get around this. What you have said will be true, but it doesn't make any difference to the total average.

i thought ukcarper was suggesting that it was average price paid by a FTB vs. local average salary. so a nationwide average would be £26k x 4 = ~£100k - suggesting the average FTB property costs <£100k (not the average house price, which is of course something different).

i am not saying that comparing average salary in an area to average FTB property in an area is a valid comparison, just that that is what the comparison is (not average salary to average house price).

Graham_Devon

ukcarper wrote: »

You really don’t understand or are being obtuse. First you are assuming ftb buy average house which they obviously don’t. and secondly I believe they use male full time and if they used that in 2002 and now it shows houses are as affordable as they were in 2002.

I'm not being obtuse, you simply cannot look at one area of the country (it being the lowest) to explain an overall average.

I would fully agree with you that the salary used will be the highest average they can use.

At the end of the day though, the statistics can say whatever they like. Clearly the real world completely disagrees, and thats all there is to it really.