Is it really that hard?

ukcarper

ukcarper wrote: »

Gravesend to zone 1 £3900 Acton to zone 1 £1500 difference £2400, £200 a month Average FTB mortgage rate 3.1% monthly repayments of £40k at 3.1% £195 a month.

Graham_Devon wrote: »

:shocked: ................

Not sure what point you are trying to make with all those references.

Samsonite1

Graham_Devon wrote: »

You are making out it's all ever so easy, but you don't appear to be taking any of the issues into account. If you sat down and put yourself in the position and, instead of looking at a BBC map, tried to plan it yourself, you'd be doing anything you could to back out of your easy solution.

I think the important thing is that there probably is a solution for most people, but it is probably not easy or without compromise. More importantly there is not a blanket solution that can apply to everyone.

Personally, I started out finishing university and getting £16k in South Wales as a software developer - this was gutting as I was getting paid more before I went to university!

The key for me (or so I thought) was to get onto the property ladder as soon as I could - not easy on £16k with a big overdraft and student loans, etc. So how did I manage? Well I considered buying a house with one good friend and in my case my girlfriend (still together a decade later!). This enabled us to buy a little 2 bed house. Over 4 or 5 years we overpaid on the mortgage with every bonus and pay increase to build up capital, then we sold the house and had a decent deposit to be able to get better paid jobs and a house outside of South Wales.

It is more an anecdote than useful information, but there is no denying that 2 incomes made all the difference. I had considered buying with a sibling also - people warn you about buying a house with someone - of course if your relationship went wrong, it could be bad but that is obvious and you have to be the judge there.

Some people do not have a friend or family member who they could buy a house with, but if you do it could work out well.

ukcarper

Samsonite1 wrote: »

I think individual statistics do not work too well. I assume you are doing ok, rather than trending with statistics?

In any case, having checked right now, it turns out my parents' old house is worth about £600k, so I was a bit low on my estimates. Let's say that a junior project manager outside of London was on £60k (not possible, but whatever) - that is still 10x property price of today. My folks got the same house for less than 2x salary of £25k or as someone mentioned 3x their £15k salary.

However you slice it and use the most convenient figures for your argument, the difference is massive.

A couple of figures for you average weekly earnings 1998 £260, 2014 £402, from ONS 1998 earliest in series.


Average house price London 1986 £57k now £409k. South East £43k now £235k figures from Nationwide.

Cornucopia

Quick quiz:-

When people buy a property, where do the funds come from?

princeofpounds

Gravesend to zone 1 £3900 Acton to zone 1 £1500 difference £2400, £200 a month Average FTB mortgage rate 3.1% monthly repayments of £40k at 3.1% £195 a month.

Yes, you can come up with various scenarios that make it more or less expensive, it will depend on the individual circumstances. The point is not that Gravesend is somehow more expensive, just that the supposed savings from commuting are often less than people think and have to be weighed up against the sacrifices involved.

Samsonite1

ukcarper wrote: »

A couple of figures for you average weekly earnings 1998 £260, 2014 £402, from ONS 1998 earliest in series.

Average house price London 1986 £57k now £409k. South East £43k now £235k figures from Nationwide.

Those are good stats - averages obviously look a lot flatter than picking specific areas, but those differences are pretty huge as far as averages go. I cannot find 1986 info for the area I lived with my parents, but I know they paid £48k. I can see a neighbouring house sold last year for £628k so pretty jaw-dropping! Unfortunately my parents sold that house way before the prices went up that high and lost out relatively by buying a place somewhere else.

Samsonite1

Cornucopia wrote: »

Quick quiz:-

When people buy a property, where do the funds come from?

It probably depends on your circumstances. I was always fairly "standard". First house was savings as a deposit and mortgage - it was all handled via the bank. Second house was a large deposit from the capital of the first house and another mortgage.

I am sure other people have much more interesting methods but that is all I know!

ukcarper

Samsonite1 wrote: »

Those are good stats - averages obviously look a lot flatter than picking specific areas, but those differences are pretty huge as far as averages go. I cannot find 1986 info for the area I lived with my parents, but I know they paid £48k. I can see a neighbouring house sold last year for £628k so pretty jaw-dropping! Unfortunately my parents sold that house way before the prices went up that high and lost out relatively by buying a place somewhere else.

There can be a lot of things that can increase prices more or less than average. But as a region London increased the most over that period. the figures are on Nationwide House Price data downloads.


You can find isolated properties to show that prices have increased more or less but that does not show the overall situation.


As I said a house similar to the one I bought for £60k in 1985 has just sold for £350k an in increase of 5.8x I thought I'd check the one I sold for £43.6k in 1985 and a similar one has just gone under offer a £285k an increase of 6.5x assuming they obtain asking price.

Samsonite1

ukcarper wrote: »

There can be a lot of things that can increase prices more or less than average. But as a region London increased the most over that period. the figures are on Nationwide House Price data downloads.


You can find isolated properties to show that prices have increased more or less but that does not show the overall situation.


As I said a house similar to the one I bought for £60k in 1985 has just sold for £350k an in increase of 5.8x I thought I'd check the one I sold for £43.6k in 1985 and a similar one has just gone under offer a £285k an increase of 6.5x assuming they obtain asking price.

Thanks, I downloaded that. I was looking at a particular area of Bristol actually - South West is a bit general because Cities are very different to the surrounding parts. South West comes up as 6.7x from 1986 to 2015 on the data download. Pretty high as an average increase. The following is a neighbouring house, although I am sure my parents' old house could be worth this much, but maybe it emphasises the issues that some areas have with increases:

http://www.zoopla.co.uk/property/25-alexandra-park/redland/bristol/bs6-6qb/2668533

ukcarper

Samsonite1 wrote: »

Thanks, I downloaded that. I was looking at a particular area of Bristol actually - South West is a bit general because Cities are very different to the surrounding parts. South West comes up as 6.7x from 1986 to 2015 on the data download. Pretty high as an average increase. The following is a neighbouring house, although I am sure my parents' old house could be worth this much, but maybe it emphasises the issues that some areas have with increases:

http://www.zoopla.co.uk/property/25-alexandra-park/redland/bristol/bs6-6qb/2668533

The whole thing is general some areas improve some deteriorate so you might have to pay 10x what somebody paid to live in a particular road but within easy commuting distance you might only have to pay 5x.

The properties I used as examples are in reasonable areas with good links into London so as far as I can see you need to pay about 6x what I did in 1985.

Also 1986 was a pretty good time to buy the earnings to house price ratio being 3.5x compared to the long term average of 4.2