Boomers at my work boasting of property wealth

lisyloo

4 times salary today for a professional doing the same job in IT would be 4 times 40K = 160K, so a similar house is more or less still affordable as a starter home.

Where do you get a 4 x salary mortgage today?
Credit is very tight right now.

lisyloo

Where I've been investing around the M25 I envisage a lot more capital growth yet as more and more people are defaulting to these cheaper regions which is fast pushing up prices.

I do agree that there will be certain areas where prices rise out of line with the rest of the country.
But that's a one-trick pony isn't is?
Once those areas aren't cheaper any more then people won't want to move there in great numbers.

In general I don't see the scope for massive rises when wages and opportunities are very constrained.

Cyberman60

lisyloo wrote: »

Where do you get a 4 x salary mortgage today?
Credit is very tight right now.

I didn't. I saved 7.5K while living with my parents and borrowed 30K. My argument though is on the affordability of a house, not the availability of a mortgage. Also, interest rates are the lowest virtually in history so buyers are very lucky compared to my average 7-9%.

lisyloo

My argument though is on the affordability of a house, not the availability of a mortgage.

I'm sure plenty of renters would agree with you.
They can afford the house but they can't get the mortgage. Often they are paying similar amounts in rent so they KNOW they can afford to pay monthly, but that doesn't mean a bank with lend to them.
Rates are indeed very low, however mortgage lenders take account of them going up in their affordability calculations, so depsite low raets, credit is very tight.

Conrad

lisyloo wrote: »

I do agree that there will be certain areas where prices rise out of line with the rest of the country.
But that's a one-trick pony isn't is?
Once those areas aren't cheaper any more then people won't want to move there in great numbers.

In general I don't see the scope for massive rises when wages and opportunities are very constrained.

lisy I'm 48 now and time and again over the last 3 decades people have said as you do, and yet time and again I meet folk that just got stuck in and invested heavily and sure enough they end up very well off, not one I've known has come unstuck.


A 5 bed detached in my area was £5k in 1970 on land reg records. These days that's £700k minimum, and that's despite OPEC crisis, IRA, Recessions, 3 days weeks and everything else we've been through.


So no, it's not a 1 trick pony.
In any event I buy for monthly profits, capital growth is a bonus.


I can well imagine these little studios aqnd 1 beds that were £90k 2 years ago here being £300k in 10/15 years time.


Mates of mine bought £70k - £100k flats 12 /15 years ago in places like Bethnall Green and Harringey. Everyone said these were !!!!! holes. Now those little flats are fetching £350k and more.




Was talking to a Dentist yesterday. Her adult kids bought a big old house in Clapham a while back for £700k, it's now worth £3m and they are letting it as rooms for about £4k pm and they are buying other places in cheaper areas now such as Waltham Cross and Plumstead.


Another mate spent the last year buying old council houses in Cambridge which he then lets as rooms VERY easily. He will in 20 years be one of these that others wonder at how on earth he got so wealthy.


I was once a FTB facing the daunting seemingly impossible task of buying a home. I used to be envious of my older bosses who all had lots of equity and thought I'd never get there, but even today many are starting out and 30 years from now the next generation will wonder that they could ever hope to pull off the same feat.

[Deleted User]

Those affordability criteria, in hindsight, are going to prevent people from getting repossessed when rates go up

Conrad

lisyloo wrote: »

They can afford the house but they can't get the mortgage. Often they are paying similar amounts in rent so they KNOW they can afford to pay monthly, but that doesn't mean a bank with lend to them.

lisyloo you ever heard the expression 'behind every millionaire is a fraud'?


People such as relatively new migrants DO get mortgages with a bit of ermmm, imagination. Oh the horror, I know, but it's the way the world works.

When I first bought a place in 1991 work colleagues got the boss to say they earned more than they did to get the mortgage. Terrible fraud eh! Not really, it's just the game of life, and sometimes you have to do whats needed rather than winge about rules.


Peter Mandleson was caught out doing this (Chelsea BS I think) but was let off with a slapped wrist.


Read the biographies of a lot of famous people such as Anita Roddick. This stuff has always gone on.

Cyberman60

lisyloo wrote: »

I'm sure plenty of renters would agree with you.
They can afford the house but they can't get the mortgage. Often they are paying similar amounts in rent so they KNOW they can afford to pay monthly, but that doesn't mean a bank with lend to them.
Rates are indeed very low, however mortgage lenders take account of them going up in their affordability calculations, so depsite low raets, credit is very tight.

That's the price that we've had to pay thanks to Labour wrecking the economy and nationalising and shutting down the biggest lender, Northern Rock, when all it really needed was a temporary bridging loan of a few billions, which ironically they later allowed to all the other banks.

Credit should have been tightened well before the crash by Labour as I was suggesting to my colleagues in 2006/7 when lending was totally out of control, and we would not now have the need for such stringent lending controls.

The current controls are a result of the previous government's policies and I hope people will recognise that before voting them in again, or we can expect more of the same economic madness.

Conrad

ringo_24601 wrote: »

Those affordability criteria, in hindsight, are going to prevent people from getting repossessed when rates go up

They are overly strict given that even in the teeth of the worst recessions only around 0.2% of owners get repossessed. The downside to the current lending regime is that many that could sustain a home are forced into the sickly embrace of the landlord. Most people would at least like to be given the chance of ownership knowing there is an overwhelming likelihood they will sustain the mortgage.


Overly stiff regulations as ever have many downsides.

greenface

I hate braggers . In fact I was saying this only last weekend at the Lamborghini owners club. x . I think only 2 of my close friends know I own my house . Even 2 of my brothers don't know . You lot know more about me than the people I work and live with. I like it like that.