First Time Buyers - Enough is Enough!

meanmachine_2

dougk wrote:

Nelly.

It won't necc. be the case unless you are very wasteful and you don't have a career and ambitions.

where has the 6x salary thing come from? we were talking 4x earlier - which IS affordable.

Yes, 4x is affordable. But if you're on an average salary of around £26K, with few propsects, what does that buy you at the moment? Diddly squat.

meanmachine_2

Woby_Tide wrote:

so from house prices rising dramatically to forecasting a huge crash nelly, now house prices, interest rates and wages are about to stay fixed for 25 years, interesting point

Well, at the moment, wages are rising by 4.5%.

House prices, to date, have risen 7% in the last year.

And IR rates have risen, and are due to rise further.

Even if property prices only rise at the same rate as wages, 4.5% of £25K is nowhere near 4.5% of £180K, so affordability is only going to get worse.

Unless...

Woby_Tide

thats the point, given none of those variables are constant for even a couple of years to make a statement that for the next 25 years of house ownership your situation wouldn't change is a bit rash is it not?

dougk_2

I think the big misconception here is household income.

Back in the 70's and even the 80's Household income was much less as however sexist it may sound many women did not work or those that did were part-time.

Many females now work full time so household income is higher, therefore affordability is greater. Even after having children many women return to work. True if you are single buying a house is more difficult than if you are a couple.

Jointly if two people are earning circa £25k then 200k is only 4 x salary. I think lenders are now realising that the old rules of 3.5x + 1x are a bit out of touch with society.

From your figures you are assuming people get just a basic salary increase. Some of us wish to work on a career ladder so as well as pay rises we get promotion too. So 25k now may mean we earn 40k after promotion in 5 years time.

What about inheritence as well? What about bonuses? What about other investments?

JanCee

meanmachine wrote:

So when the property bubble finally bursts and your assets plunge in value, a poor kid in Africa is going to be the first to suffer? Correct?

Shameful.

No, I was merely trying to live up to the label of "the new scum of society" which you have kindly given me.

When the property bubble bursts (I've never heard anyone so gleeful about people getting into financial difficulties) why should it make any difference to me? I'm not selling, I've lived in the same house for 20 years and despite property prices rising or falling rents have remained the same. Your arguments are complete nonsense, where I live there is plenty of property for sale a large proportion of it is still affordable the point is that not everyone wants to buy and they still have to have somewhere to live. I have'nt seen any local authority housing being built in this area for about 30 years. Where are people supposed to live?

meanmachine_2

dougk wrote:

Some of us wish to work on a career ladder so as well as pay rises we get promotion too. So 25k now may mean we earn 40k after promotion in 5 years time.

What about inheritence as well? What about bonuses? What about other investments?

I have no inheritance prospects, and there is no career ladder. No bonuses.

BTLers have thrown me off the ladder, and now wish to portray themselves as knights in shining armour. Forgive me if I reject the analogy. I see them as vultures. Once a new piece of flesh appears on the investment horizon, they'll swoop off and feed on that too.

That's my opinion and I think I'm entitled to it.

deemy2004

The BTL mania is a direct result of the stocks and pensions bear market....

Prices have been bid up to ridiculously high levels that will likely fall by something like 10 to 15% over the next 3 years, which is enough to re-rate the earnings / property % to more sustainable and achievable levels (given that earnings rise by 4.5% per year)

Many of the later, less experienced BTL's will have financiaul problems as their mortgages payments will be greater than their rents as interest rates rise to at least 6% to attempt to control inflation, this will add more supply to the housing market which will likely ensure that house prices remained depressed for far longer than they would otherwise have done.. maybe the slump may last 5 years ?, 6 years... unknown..

But that I am pretty sure on, is that the bull run in housing market is over for the forseable future, and it is going to be painful for investers, even ordinary house owners to experience a drop in house prices in real terms, as they the asset will for some years NOT keep pace with inflation and may infact drop in price.

JanCee

meanmachine wrote:

I have no inheritance prospects, and there is no career ladder. No bonuses.

BTLers have thrown me off the ladder, and now wish to portray themselves as knights in shining armour. Forgive me if I reject the analogy. I see them as vultures. Once a new piece of flesh appears on the investment horizon, they'll swoop off and feed on that too.

That's my opinion and I think I'm entitled to it.

Having read some of your other posts you have made it clear that you are hoping for a huge crash in property prices so that you can then pick up a property at a knock down price. I think we all know who the vulture is.

nelly_2

Yer can all say what yer like. They have got too, and have started going down baybee.

slater14

Dougk,

I dont mean to be argumentative but a couple of points you raised concern me -

1. "Where has this 6x salary come from" Answer - average UK salary 23.5k average UK house price 185k - 190k
2. "3.5 + 1 times multiple are old fashioned" Answer - Good God man! is this really coming from a regualr saver! How can it be 'old fashioned'? the scale wasnt invented in tudor times and just rolled through the years like the changing of the guard. IT IS A SOUND ECONOMIC PRINCIPAL OF LENDING AND BORROWING. It is talk like this that lead us into the last crash. shame on you.