Youngsters cannot afford to buy a home?

Callie22

ViolaLass wrote: »

Deposits aren't really a cost though - you can get them back.

Not always ... and you do have to have the cash for the next one before you get the last one back. I agree it's a cost you do get back but you're generally 'out of pocket' by a couple of hundred pounds until the end of your next tenancy.

squeeks

This type of thread is completely daft.

I'd much rather to be trying to buy a house in the 80's than now.

Miras, average wage £6k, average house price 23k, ?8% mortgage interest rates, so repayments around £177

Vs now.

HTB, average wage £26k, average house price 176k, ?2% mortgage interest rate, so repayments around £745

Overpayments are far more effective on a high interest loan, plus you don't have the same risks of rate rises. In 1980 rates could have doubled (and did), the risk is higher now for the rates to increase significantly beyond that. We may still get negative rates ofc....

kiss_me_now9

Nada666 wrote: »

I wish someone would explain why anyone on a reasonable salary cannot save a deposit over three to five years.

If you're on a minimum wage or zero hours you're out - but anyone in a profession or even with a starting salary of 15 to 17K has no excuse. And there are plenty of people starting on more than 20K who also seem to plead they need help. The whingeing simply does not add up.

I could be in a position to buy a house in 3 years time if I saved hard and wanted to do so - however my job contract is fixed term and is renewed for a few months every month before it ends so tell me which mortgage company is going to help me out there?

I live in Greater London as another poster said and my salary, whilst not bad for a starting wage 1 year out of university, is nowhere near enough to have my own place. £375 a month for rent? Omg that would be heaven. You cannot get a hovel in my area for less than £495 a month. A decent one bed room flat is £550 MINIMUM. I take home £1200 a month; £600 of that goes on rent, another £150 on bills (council tax is £85 a month), £60 minimum for petrol as I have to drive for work... Due to a higher cost of living I spend ~£100 on food, and going out here is expensive too. If I save hard and don't spend much on myself in a month after the essentials I can put away maybe £200... sometimes £300 if I've not spent much on myself.

Help to buy is useless for me as they will only give me help on a house that is 4.5 times my salary - which, even with a 10% deposit, is just shy of 90k. Please, please do show me a house in the Greater London area that's close enough to my job for 90k. You can't buy a studio for that here. It is so expensive I am probably going to have to move when my contract ends next time and go for a new job.

MaxTheCat

bigfreddiel wrote: »

I don't believe this is true!

When I was a youngster just starting out it was just as hard and here's what it was like.

Pay £120/month
Interest rate 10% and more peaked at 15+%

Bought a terraced house 2up 1down, no ch, no garden, miles from work.

Al my pay went on mortgage, rates water electricity and food, not much left over for entertainment, meals out and so om

Fast forward to now, kids want it all, new house, new furniture, near to work and so on. Must have an iPhone, Netflix, sky TV, new car, house with wow factor.

We'll you need to prioritise, is keeping your FB status up to date, your opinion via twitter more important than buying your own home more important? Is driving a new car and having Netflix so important?

We'll if yes don't moan you can't afford a house.

Right now you have it so easy, lowest interest rates ever, help to buy schemes, 20% discount all paid for you by the taxpayer - basically youngsters have never had it so good

My advice, dump the gadgets, dump the new car, dump the wow factor house, get what you can afford in an affordable area, make some sacrifices, buy second hand stuff, save

Cheers fj

While I take your point about prioritizing saving over spending, young peoples inability to purchase a house has far more to do with an over inflated asset bubble based on cheap credit and a 20+ year assault on salaries and job security. For example my house was sold for around £40k back in the mid to late 80's but it's now valued at in excess of £700k. Even a cretin such as yourself should be able to see that having sky or an iPhone will have almost literally no effect on the savings required to make this kind of purchase because the asset has risen vastly ahead of purchasing power.

Pixie5740

Nada666 wrote: »

Eh? Where are you getting £75 from?

£325 for rent, (that is a high rent, not low) and £400 for other bills. (£100 household bills, £200 for food, £100 allowance for sundries.)

And, yes, I'm talking about a shared house. How terrible.

Washing machines and other appliances are not necessarily the responsibility of the LL. They can put a clause making the appliances the responsibility of the tenant. Then there's the retaliatory Section 21 for tenants who want repairs done.

Newlyboughthouse wrote: »

Jesus 2k to move?? I've moved about 10 times and it was always pretty much free? Probably because I moved myself without a removal firm and never used letting agents (thieving toerags).

It's not just high LA fees when moving. Many LA bully T into paying fees every 6 or 12 months for signing a new fixed term contract instead of letting the tenancy become periodic and if the T refuses, Section 21. The T can always try appealing directly to the LL but all too often the LL is a total ignoramus who can't tell their !!!! from their elbow and just goes along with whatever the LA decides.

Yes people can save but they'd be able to save even more if their tenancies were more secure and long term that an AST. In fact if people could get secure tenancies then we might not be a nation obsessed with home ownership. However, there aren't many secure tenancies available these days thanks to previous generations exercising their right to buy with a tax payer funded, whopping big discount.

MisterB1959

I wonder how different the situation would be if the right to buy initiative hadn't been introduced and local councils would have continued investing in new housing stock?


I am surprised that no political party is suggesting ending the right to buy scheme if they win the election. if they explained why and showed how the system has over inflated housing prices then I am sure it could be a vote winner, assuming they see it through of course!

TonyMMM

One big factor has been the growth of the BTL market - cheap finance has allowed those who probably already own a property, often from the baby boomer generation, to use their equity to fund the purchase of additional properties to rent out.

This has added demand to the market , (which is already short of houses) and pushed the prices ever higher whilst forcing those who can't afford to buy into rental keeping the that market high as well.

A win/win for those who own the properties - a disaster for those who don't.

A friend of mine was moaning the other day about his graduate daughter who was in a well paid job not being able to afford a flat of her own and still living at home - 10 minutes later he was proudly telling us about the rental yield and capital growth he was getting from his 5 BTL properties, and how he was thinking of buying another.

He couldn't see the connection..........

Baxter100

Yeah it seems the only sector of society that benefits from rising house prices are those who own more than one property. Like the chap I spoke to the other day who bought a BTL house in Wembley for £180,000 five years ago, and it's now worth approx. £300,000!

Ideally it needs some kind of attitude shift towards a house not being a financial asset, but instead being somewhere to live.

S024

TonyMMM wrote: »

One big factor has been the growth of the BTL market - cheap finance has allowed those who probably already own a property, often from the baby boomer generation, to use their equity to fund the purchase of additional properties to rent out.

This has added demand to the market , (which is already short of houses) and pushed the prices ever higher whilst forcing those who can't afford to buy into rental keeping the that market high as well.

A win/win for those who own the properties - a disaster for those who don't.

A friend of mine was moaning the other day about his graduate daughter who was in a well paid job not being able to afford a flat of her own and still living at home - 10 minutes later he was proudly telling us about the rental yield and capital growth he was getting from his 5 BTL properties, and how he was thinking of buying another.

He couldn't see the connection..........

I agree. The growth of the Buy To Let market has a lot to do with pricing out First Time Buyers and I recently had first hand experience of this. I am currently in the process of buying my first home with my partner, one of the houses we were looking at was slightly over our budget and in our opinion slightly overpriced. We were considering putting in an offer under the asking price but were told it was Sold Subject to Contact by the EA. As the house is close to my parents we have driven past it often enough to see the For Let sign go up after completion and quickly come down again now a tenant is in the property.

This is a scenario that is happening more often around the country, it pushes out First Time Buyers as the demand for these properties increases their value which makes them no longer affordable to buy and forces many people to rent.