Really depressed by the news about Help to Buy...

HAMISH_MCTAVISH

ILW wrote: »

Does that mean the average male salary in London is close on £100,000?

Nope.

Prices and incomes vary by region, therefore so does the multiple of salary.

Which is why its standard practice in these types of discussion to quote national averages, rather than dozens of local variances, and that is what I'm doing here.

geoffky

I’m forever blowing bubbles,
Pretty bubbles in the air,
They fly so high, nearly reach the sky,
Then like my dreams they fade and die

eviekins

Average house price outside of London is apparently £172,000.
(Can't see us finding anything suitable for that price where we live)

£172,000 / 4.5 = £38,200 as the average mans wage.
How many young men are on 38k Hamish?
My partner and myself don't earn 38k combined!

witchy1066

don't worry eviekins neither do I and I have friends and family in all areas of the UK,
my son and his wife used to be on good combined wages, he has just been made redundant , but no need to worry unemployment is falling and wages are going up , lets all rejoice in this brave new fantasy world :j

Turnbull2000

eviekins wrote: »

Average house price outside of London is apparently £172,000.
(Can't see us finding anything suitable for that price where we live)

£172,000 / 4.5 = £38,200 as the average mans wage.
How many young men are on 38k Hamish?
My partner and myself don't earn 38k combined!

Sigh. Not this nonsense again.

£172,000 - 10% deposit = £153,000 mortgage, or £777 per month at 4.5% interest rate over 30 years. This is entirely affordable on a single salary of £30,000, never mind £38,000.

Secondly, singles tend not to buy property any more. Couples do. So two full-time earners on £23,000 each could easily pay £777 per month.

Furthermore, thanks to Funding for Lending and Help to Buy, typical rates for low deposit buyers should drop to 3-3.5%, so they can now afford a £190,000 property, or £175,000 mortgage after deposit.

Though in reality, that £170,000 starter property will jump in price to £190,000 over the next couple of years, as prices are largely dictated by borrowing costs. Overall house prices should rise 15-20% between now and 2016.

Lalalemon

Personally, HTB has come at the perfect time for us.

My partner and I have worked really hard (I work between 40-50 hours a week, and partner works 40) to save our 5% deposit over the last 12 months.

If we had to save the whole 25% ourselves it would take us at least another 2 years possibly up to 4, which we just don't have, we're both 28 and my bodyclocking is ticking, we want to start a family very soon!

HTB and a little (probably about 2 grand) help from my parents means we can have a house of our own a LOT sooner!

I just can't fathom why people think this scheme is so utterly terrible!

Thrugelmir

Lalalemon wrote: »

I just can't fathom why people think this scheme is so utterly terrible!

There's a fundamental misconception as to the changes in the mortgage market since 2008. The excesses of the early 00's will take many years to unwind.

Tancred

Something_Witty wrote: »

Am I the only aspiring FTB feeling really depressed at the news that Help to buy (for 'buy' read 'sell' in my opinion!) has been brought forward?!

Other half and myself have been saving for years and by the end of next year should have hit 20% deposit...so just as we are beginning to glimpse the light at the end of the tunnel, the government plans to flood the market with potential buyers and push prices out of our reach

I don't begrudge more people being able to buy but it feels like our hard work and careful budgeting will never be rewarded...someone please tell me its not all that bad!

Prices are already rising steadily. There won't be any dramatic instant price rises as a result of this measure, but I suggest you start looking soon.

harrys_dad

Oh look what the Governor of The Bank of England is saying right now @Hamish McTavish

http://www.theguardian.com/business/2013/oct/02/mark-carney-warning-interest-rates

kingstreet

Turnbull2000 wrote: »

Furthermore, thanks to Funding for Lending and Help to Buy, typical rates for low deposit buyers should drop to 3-3.5%

The nearest comparable scheme to HTB - MG is NewBuy, where a typical 95% mortgage is in the 4% to 4.5% range. This has a similar guarantee underpinning it.

I expect NewBuy to disappear in January, when builders see no sense in paying 3% of the value of the property away when there's an alternative.

FLS has had limited impact on rates at high loans to value, as lenders have concentrated on cutting margin at lower rate, better "quality" business. They may decide to offer lower rates on higher LTVs as they approach the day of reckoning in April, where they have to show an increase in their net lending or pay penalties to the Treasury, but that is by no means certain.

Given the implications of the MMR introduction, also in April next year, I don't see any great change in rates, nor underwriting/criteria as a result of HTB - MG. Those who cannot currently get a 95% mortgage from one of the 17 lenders offering them, will, in my opinion, still be unable to do so even with the Government guarantee.