The First Time Buyer - How do they have it really?

ukcarper

martinsurrey wrote: »

I havent missed that point.

My point is that the original anaylsis is based on a single person in thier early 30's and the assumption that they are representative of FTB's.

all thiis shows is that its not that simple and by limiting the data to this narrow band of people the OP's sweeping conculsion that FTB's have it easy is simply wrong.

AS an example here are some figures for Rushmoor in Hampshire

30 percentile full time Male earnings £24k Female £19k joint take home income £2900

1 bed flat rent £625 Minimum income standard for couple £1100 leaves £1175 an month.

3 bed house £200k 10% deposit £20k 17 months to save. 4x joint income only £172k so would need to save extra £8k another 7 months making total of 24 months.

chewmylegoff

ringo_24601 wrote: »

Isn't the most obvious way of seeing if it's easier to be a FTB, looking at how many FTBers there are?


So i took the data from figure 1 of http://www.ons.gov.uk/ons/dcp171766_259965.pdf and popped it onto a chart of FTBer rates since the mid-70

If we work on the basis of 'more FTBers getting mortgages=easier to be a FTBer' then we're now in a stage which is as bad as the mid-70s.#

So, ironically, it was pretty hard to get a mortgage back when the baby boomers were buying their first houses too...

Glad I wasn't a wannabe FTB in 1978!

Loughton_Monkey

chewmylegoff wrote: »

Glad I wasn't a wannabe FTB in 1978!

Being a boomer, I was around at the time (buying my third mid 1978 as it happens).

But as you can see from the chart, not a single mortgage was given in 1978, but take it from me, it didn't stop FTB's. In fact there were hundreds of thousand of them, but when told no mortgages were available, they all said "Oh !!!!!!, I'll pay cash for it then..."

Us boomers were so rich then, we could do that sort of thing. It's because we financially screwed our children, and stole the legacy of our grandchildren. Quite a conspiracy, really.

Still, in 1978 I did my bit for the economy. I'd saved up and bought our very first television [previously had rented Black & White one]. A Sony Triniton colour, from John Lewis, for £309.50 exactly. In terms of average earnings inflation, that's about £2,300 in today's values. And they say we had it easy.......

IveSeenTheLight

ringo_24601 wrote: »

Isn't the most obvious way of seeing if it's easier to be a FTB, looking at how many FTBers there are?

Just looking at quantity does not consider the overall quantity of buyers.

By your method of reflection, it's harder for everyone.

Looking at the CML, they state that: -

First-time buyers lending at highest level since 2007

Lending to first-time buyers has hit its largest quarterly total since 2007 with 68,200 purchasing their first home in the second quarter of 2013, according to new figures released by the CML today.

This increase, along with growth in lending to home movers, has resulted in a jump in total house purchase lending. Remortgage lending dipped back in June compared to May, although continues to trend above levels earlier this year.

First-time buyers

Our data shows that 25,300 loans were advanced to first-time buyers in June, a 30% increase on the 19,400 loans advanced in June last year. Following the strength in first-time buyer activity in May and June, quarterly lending to first-time buyers was at its highest since 2007.

First-time buyers continued to increase the amount they borrowed – with an average loan size of £117,000 in June up from £112,500 in May. As a result of this there has been a stronger growth in the value of loans advanced to first-time buyers which totaled £3.5bn – an increase of 9% in value compared to May and 40% on June last year.

This is likely to be associated with the growth in house prices in recent months - in June 34% bought a home less than £125k, down from 37% in May.

While first-time buyers borrowed more in June, an increase in income, along with falling interest rates mean that there has been no deterioration in the affordability of these loans as typical first-time buyers mortgage payments consumed 19.3% of first-time buyers' income – unchanged from May.

We have previously noted a small increase in the average LTV ratio for loans advanced to first-time buyers – the latest figures show this to have dropped back to 80%. However the average for the second quarter, which will be less affected by monthly fluctuations, has increased slightly – up to 81% from 80% in previous quarters.

First-time buyers accounted for 46% of all house purchase loans in June, which was up from 44% in May and considerably higher than the 38% seen on average since 2007.

chucky

IveSeenTheLight wrote: »

First-time buyers accounted for 46% of all house purchase loans in June, which was up from 44% in May and considerably higher than the 38% seen on average since 2007.

It seems that many have missed and will miss the proverbial boats that set sail. They prefer to moan about high house prices on a random forum on the Internet instead of making the most of opportunities in their lives.

[Deleted User]

IveSeenTheLight wrote: »

Just looking at quantity does not consider the overall quantity of buyers.

By your method of reflection, it's harder for everyone.

ok firstly, there was no 1978 data..

And yes, i don't think this is an issue for just first time buyers, i think it effects people trying to move up the ladder too.

I think boomers didn't have it easy - BUT, we've now seen the end of 30 years of 'easier' circumstances. That's the problem as I see it.

(and if we think the modern youth waste money on gadgets - just remember the money people use to pour into radio rentals, spending hundreds on VCRs, early PCs, walkmans, TVs.. these are all now comparatively much cheaper)

IveSeenTheLight

ringo_24601 wrote: »

I think boomers didn't have it easy - BUT, we've now seen the end of 30 years of 'easier' circumstances. That's the problem as I see it.

I agree.
I've often said that the last 30 years was the anomaly where the opportunity to become a homeowner was easier than previously.

During this 30 years of eas(y/ier) credit, we saw home ownership level peak and unfortunately as credit dries up, were likely to see a contraction of home ownership percentage

dryhat

Even the daily mail readers' comments are starting to reflect a changing mood among the population as they realise that rapidly rising prices are a bad thing ....

http://www.dailymail.co.uk/news/article-2392421/RUTH-SUNDERLAND-A-new-boom-thing-Britain-needs-Why-house-price-increases-inflict-feel-bad-factor-time-buyers.html?ico=home^editors_choice

Loughton_Monkey

ringo_24601 wrote: »

.....(and if we think the modern youth waste money on gadgets - just remember the money people use to pour into radio rentals, spending hundreds on VCRs, early PCs, walkmans, TVs.. these are all now comparatively much cheaper)

A fair point on the 'gadget' itself, but you need to add in the £45 a month 'contract' for mobile, or £50 for Sky, all the MP3 downloads, subscriptions to 'meet another nerd' dating agencies......

But seriously, it's not really about any particular gadget or luxury. It's much, much, more about common sense and choices - or discipline. Capital Goods: Save up before buying? Or buy on credit and lock yourself into unavoidable monthly cost. Outgoings: Fix at what you can afford easily? Or choose to surround yourself with monthly outgoings = 99% of net monthly income and then gripe because you can't save for a new car, deposit, or those 15th generation 3D octaphonic bluetooth headphones with built-in i-Kindle, i-Pod, i-Pad, i-Phone, i-Toilet, P-Diddy......

[Deleted User]

Loughton_Monkey wrote: »

A fair point on the 'gadget' itself, but you need to add in the £45 a month 'contract' for mobile, or £50 for Sky, all the MP3 downloads, subscriptions to 'meet another nerd' dating agencies......

But seriously, it's not really about any particular gadget or luxury. It's much, much, more about common sense and choices - or discipline. Capital Goods: Save up before buying? Or buy on credit and lock yourself into unavoidable monthly cost. Outgoings: Fix at what you can afford easily? Or choose to surround yourself with monthly outgoings = 99% of net monthly income and then gripe because you can't save for a new car, deposit, or those 15th generation 3D octaphonic bluetooth headphones with built-in i-Kindle, i-Pod, i-Pad, i-Phone, i-Toilet, P-Diddy......

You must remember that there's a key difference between 'boomers' and 'millennials'

Boomers had parents who lived through the war. They new how to be frugal, as there were no other choices. There was a limited amount of credit available, and product marketing was unsophisticated. The 'cult of celebrity' was limited.

'Millennials' grew up with parents who had seen the good times. They saw no issue with borrowing money for any reason. Marketing became sophisticated in the 80s/90s, targeting younger and younger markets, and it all became far more aspirational. We had seen 40 years of growth. Then it all hit a cliff.