Renters pushed to breaking point as Britain's selfish homeowners gloat their hands

ukcarper

ruggedtoast wrote: »

Well...



And didn't you say you were a Labour voter?

(Did I get the 117 years old thing right?)

I think you will find earning above average is not high and you also have to consider I worked in London where average earnings are a lot higher.

I don't think I have said who I vote for.

No quite although I feel it sometimes.

greensalad

ukcarper wrote: »

Could easily save £1000 a month.

But that's still only £12k a year (£12,166.38 with interest). That's a miniscule amount for a deposit.

A rather pokey but OK 2-bed flat in a village roughly in the commuter belt like this is £220k. So 10% deposit would be £22k. Add on to that an extra £6k for all the fees, legals, moving costs, stamp duty, furniture and you need about £28k.

So you save £28k, it takes you 2.5 years.

In 2.5 years time, that property price has gone up to 15% and now costs £253,500. So now you need £32k.

And on and on it goes. You can keep saving, but the house will continue to increase in value, so you'll never catch up.

What's the solution?

cells

Graham_Devon wrote: »

Yer.

Great - so what happens when they have that child and one parent is either down £125 a week or shelling out similar for childcare?

I guess the obvious thing to suggest is getting down to B&Q and buying enough sand to stick your head into?

Or probably more realistic - suugest they were stupid to have kids and should have thought about it beforehand. I.e. cannot win.

mortgage payments tend to go down with time especially for young couples due to HPI and paying down a portion of the mortgage

lets say a couple one on £30k the other £20k buy a £150k home with a £25k deposit. Lets say the mortgage is a 2.5 year fix on 4% interest

2.5 years later they refinance. The house is worth £160k and they have paid their mortgage down to £110k (from £125k).

So they went from a 85% mortgage LTV to now a 70% LTV. As a result their next 2/3 year fixed mortgage might only be at a 2% interest rate. The lower mortgage costs will hopefully allow them more breathing space plus most people tend to move up in wages with time

and finally a good chunk of new parents will have their own parents as free childcare part of the time

ukcarper

greensalad wrote: »

But that's still only £12k a year (£12,166.38 with interest). That's a miniscule amount for a deposit.

A rather pokey but OK 2-bed flat in a village roughly in the commuter belt like this is £220k. So 10% deposit would be £22k. Add on to that an extra £6k for all the fees, legals, moving costs, stamp duty, furniture and you need about £28k.

So you save £28k, it takes you 2.5 years.

In 2.5 years time, that property price has gone up to 15% and now costs £253,500. So now you need £32k.

And on and on it goes. You can keep saving, but the house will continue to increase in value, so you'll never catch up.

What's the solution?

In my example if you took room you would have over £2000 a month so £1000 is minimum amount and you make assumption prices will go up 15% over 3 years they may not.

When I first bought prices were increasing faster than they are now but I managed to keep up deposit the thing that would have stopped me was the amount I could borrow.

If you fancy a flat 3 stops down line from Woking here's one
http://www.rightmove.co.uk/property-for-sale/property-52315739.html

cells

greensalad wrote: »

But that's still only £12k a year (£12,166.38 with interest). That's a miniscule amount for a deposit.

A rather pokey but OK 2-bed flat in a village roughly in the commuter belt like this is £220k. So 10% deposit would be £22k. Add on to that an extra £6k for all the fees, legals, moving costs, stamp duty, furniture and you need about £28k.

So you save £28k, it takes you 2.5 years.

In 2.5 years time, that property price has gone up to 15% and now costs £253,500. So now you need £32k.

And on and on it goes. You can keep saving, but the house will continue to increase in value, so you'll never catch up.

What's the solution?

the sad fact is that only about 65% of the population can afford to buy a house for various reasons (one of the big ones being that social stock hinders OO levels)

so the solution is to get into that 65% group. That probably means earning above average wages and or having help from mum and dad for a deposit

wotsthat

cells wrote: »

mortgage payments tend to go down with time especially for young couples due to HPI and paying down a portion of the mortgage

The most expensive mortgage payment of most people's home owning journey is the first one. It's compounded by having just shelled out for moving costs, stamp duty and the like.

Unfortunately a perpetual problem of this board is that the most expensive payment is extrapolated as normal for ever.

greensalad

ukcarper wrote: »

you make assumption prices will go up 15% over 3 years they may not.

It's an assumption, true. But we can only look at what we've seen in the past. I can't save for 3 years banking that it's not going to happen. Maybe I save for 3 years and the house price falls and I swoop in and buy, GREAT! Maybe it doesn't. Then what? 3 years down the line and still stuck.

cells wrote: »

the solution is to get into that 65% group. That probably means earning above average wages and or having help from mum and dad for a deposit

Irritatingly I'm well aware my partner and I earn very good wages for our age. But it's still not enough, I think that's the gutting thing. I feel very stuck in the middle.

Unfortunately help from parents is a no-go. Mum doesn't have any money though she wishes she could help. Dad thinks that it's all !!!!-easy and doesn't get why I'm complaining, despite the fact that he moved from parents house (rent free) to his first property with my mother. The deposit was 5% and they earnt (relative to house cost) much more than me and my partner do. He also conveniently forgets that my great-grandmother gave them 50% of the deposit! He likes to not mention that even though I know!

But ya know I'm just a stupid young person so I'm obviously lazy.

dktreesea

ruggedtoast wrote: »

Without knowing what your rent is I can't comment on this. For most people renting is a losing proposition simply because the cost of renting, combined with having to move not infrequently and paying agents fees, is too high.

Too high except where the interest on the mortgage they would need to buy a similar property to what they are renting exceeds the rent they are paying. Or where the combined interest/capital repayment they would need to make on such a mortgage causes them cash flow problems compared to renting.


People usually want to live where they rent, or upgrade to a better area. The reality a lot of people, particularly first home buyers with a small amount of equity, face is that they may only be able to afford a poorer quality property than they currently enjoy in a worse area if they choose to buy rather than to rent.


I live in a property worth just over £330k, based on sales of similar properties in the last year in my area. This is also around the average sales price for this area. Even with a 10% deposit, a mortgage, including capital repayment would cost around £1480 a month from our bank. My rent costs just over half of that. Even the renovated flat, identical to ours, just along the road from us, only costs £960 a month in rent.


Yes, there are certainly places I could live, in Edinburgh, in a similar sized property, buying a quarter share of a new apartment via a housing association, for a combined rent and mortgage cost of around £500 a month. I just don't want to live in the areas where those apartments are.


Or how about this:
http://www.zoopla.co.uk/for-sale/details/36299599?search_identifier=e78a0b688512b3257635694008abaef4#kMZmLGjiIJ2DbBXP.97


This is a similar size property to ours, costing £148 a month for a £35k mortgage over 25 years with a £5k deposit. it's even in better condition that ours. And just as close to the sea front as we are. Good area, 40 minutes drive from Edinburgh, also on the train line. Financially it's a no brainer, i.e. it would make far more sense to buy this and live in it than live where we are. But it's a similar dilemma to what Londoners face. Suddenly, instead of a ten minute walk to work you're looking at a 40min to an hour (allowing for rush hour traffic) trek each way.


The truth is, if you want to stay in the area where you have built your life, your network of friends, children in good schools, close to work, there's a price to pay. I'm from London, but I can't afford to live there, neither to rent nor to buy, and have the amazing quality of life that's available up here in Scotland.

Cornucopia

greensalad wrote: »

It's an assumption, true. But we can only look at what we've seen in the past. I can't save for 3 years banking that it's not going to happen. Maybe I save for 3 years and the house price falls and I swoop in and buy, GREAT! Maybe it doesn't. Then what? 3 years down the line and still stuck.

That's incredibly negative. You may have an alternative in the form of emigration or something similarly radical, but if you actually want to buy here as you say you do, why would you not do the one thing you need to do, even if there is the possibility it may not work?

Irritatingly I'm well aware my partner and I earn very good wages for our age. But it's still not enough, I think that's the gutting thing. I feel very stuck in the middle.

Unfortunately help from parents is a no-go...

But ya know I'm just a stupid young person so I'm obviously lazy.

No, it's not that. It's that you either have to play the hand you've been dealt (is this the hidden meaning of the thread title, I wonder?) OR change your hand.

We've already been round the issue several times - it's about working out which compromises you can live with, and which ones you can't, and seeing where that leaves you. Just complaining about how unfair life is, is not very productive.

ukcarper

greensalad wrote: »

It's an assumption, true. But we can only look at what we've seen in the past. I can't save for 3 years banking that it's not going to happen. Maybe I save for 3 years and the house price falls and I swoop in and buy, GREAT! Maybe it doesn't. Then what? 3 years down the line and still stuck.



Irritatingly I'm well aware my partner and I earn very good wages for our age. But it's still not enough, I think that's the gutting thing. I feel very stuck in the middle.

Unfortunately help from parents is a no-go. Mum doesn't have any money though she wishes she could help. Dad thinks that it's all !!!!-easy and doesn't get why I'm complaining, despite the fact that he moved from parents house (rent free) to his first property with my mother. The deposit was 5% and they earnt (relative to house cost) much more than me and my partner do. He also conveniently forgets that my great-grandmother gave them 50% of the deposit! He likes to not mention that even though I know!

But ya know I'm just a stupid young person so I'm obviously lazy.

In your example you would have £36k after 3 years enough to cover an addition £4k increase above what you have assumed. If you still couldn't buy at least you would have £36k.