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

greensalad

ukcarper wrote: »

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.

Firstly, the point is that after an extra 6 months of saving the house price will have increased again. You would have £36k, but then you'd need more.

I'm well aware having £36k is better than having £0k, so we have started saving already. I'm not saying the option is to not save.

What I'm saying is that you'll be constantly saving and putting money in a pot which is never enough for it's intended purpose. So at what point do you give up? Do you just keep limiting and cutting back and saving every penny you can forever? What's the point in that?

Honestly I think that is the argument that a lot of people put forward for buying other things that make them happy (cars, gadgets etc) as if you're never going to get much better than where you are, you might as well enjoy it. Not very MSE so not a popular opinion here. But I can definitely see why it's some people's view.

I'm on the fence. Save and hope the house prices come down and if/when they don't, use it to enjoy life instead.

dktreesea

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?

Lower your expectations. Why do you need to buy a 2 bedroom property? Maybe you could easily afford a one bedroom property instead. If , after all costs are taken into consideration, the bought property costs you less (in interest portion of the mortgage, extra travel costs and maintenance) than your current accommodation , or what you would rent in your area, then financially at least, you would be ahead.


Or buy a quarter share of somewhere in a nice area, sharing the buying costs with the housing trust and renting the part you can't afford until you can staircase up to full ownership. Or a new build with shared equity. The possibilities are endless. You just need to either lower, or broaden, your expectations.

Dird

Various snippets/views of mine (*hopefully* soon to be FTB) from scanning through this thread:
- some funny comments xD in particular jacko74 ("thank the lord"), ruggedtoast ("arm and a thigh") & chucknorris ("my motivation") all on page 1
- people on the thread are so picky/unwilling to make sacrifice
- unless bus drivers get silly money like underground drivers then the teacher + bus driver should simply move somewhere else, teachers salary won't be anything in London
- people complaining about commuting: Google Maps "Sutton Coldfield". Everyday my former colleague commutes from there to London. 2.5 hours each way. If your London salary can't buy what you want in the city & you're too lazy to commute then find work elsewhere. He gets £450-550/day so he accepts the commute (family is settled here).
- Rent/deposit complainers: shared accomodation either in or near to London.

My personal situation: I saved in uni (student grant & PT work), saved on placement year and have saved since graduating (now 26). I'm effectively in shared accomodation with my mom & sister (rent split 3 ways). If the mortgage company approves I'll be handing over a £45k deposit and moving in.

Either you live frugally or you will never own a house without hand outs from parents (or when they pop their clogs). My parents will never own a house unless they get a lottery win. My sister does not live frugally & has now got up the duff with no plans to abort so she will never own a house as her bf is on/at near minimum wage.

Frugality only goes so far though. Anyone near minimum wage is never going own a house unless they live in areas with £50k houses and live with family for their deposit.

I read somewhere that 40% of families are home owners (mortgage at least) so I don't see any government ever promising to try & reduce property values because it'd be suicide. If someone buys a house for £250k and a few years later its worth £200k because of that party's decisions then I'm guessing they wouldn't be voting for more of the same.

greensalad

dktreesea wrote: »

Lower your expectations. Why do you need to buy a 2 bedroom property? Maybe you could easily afford a one bedroom property instead. If , after all costs are taken into consideration, the bought property costs you less (in interest portion of the mortgage, extra travel costs and maintenance) than your current accommodation , or what you would rent in your area, then financially at least, you would be ahead.

This is what we've decided is our only option. Probably head up North. Sadly that means leaving friends and jobs behind and hoping for the best. It's a shame to down-size before life has even begun though, but I'm learning to accept I will never live in a two-bed again unless I rent it.

dktreesea wrote: »

Or buy a quarter share of somewhere in a nice area, sharing the buying costs with the housing trust and renting the part you can't afford until you can staircase up to full ownership. Or a new build with shared equity. The possibilities are endless. You just need to either lower, or broaden, your expectations.

How exactly can one buy a "quarter share"? I have seen half-shares and we are not eligible.

Have looked into shared equity, very low amount of properties available it seems. As you will have seen from my post earlier in this thread, there were hardly any new-builds spanning across the three counties I was looking at and those that are available are all priced a lot higher than pre-owned, therefore negating the benefit of the 20% equity.

ukcarper

greensalad wrote: »

Firstly, the point is that after an extra 6 months of saving the house price will have increased again. You would have £36k, but then you'd need more.

I'm well aware having £36k is better than having £0k, so we have started saving already. I'm not saying the option is to not save.

What I'm saying is that you'll be constantly saving and putting money in a pot which is never enough for it's intended purpose. So at what point do you give up? Do you just keep limiting and cutting back and saving every penny you can forever? What's the point in that?

Honestly I think that is the argument that a lot of people put forward for buying other things that make them happy (cars, gadgets etc) as if you're never going to get much better than where you are, you might as well enjoy it. Not very MSE so not a popular opinion here. But I can definitely see why it's some people's view.

I'm on the fence. Save and hope the house prices come down and if/when they don't, use it to enjoy life instead.

Between May 2012 and May 2015 prices in Hampshire increased 15% if they increase at the same rate a £220k property would be £253k meaning you would need £25.3k deposit plus your £6k (which I think could be reduced) you would need £31.5k and you would have £36k.

If you are happy to rent and want those things that's up to you but most people who want to buy will have to make sacrifices unless they have rich parents.

lisyloo

But I can definitely see why it's some people's view.

If someone has made a calculated decision that buying is not worth the sacrifices and they've thought it through and accept the responsibility then I think that's perfectly ok.

If they haven't thought through all the consequences then they might regret it.

caronoel

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?

We've been through this before greensalad. You are looking for problems and objections where none exist.

In your specific example, using a 95% FTB mortgage the deposit would only be £11k, plus costs (stamp duty £1,900, with legals mortgage and moving costs of a similar amount)

Total cost would then be well under £15k - this assumes the flat goes for full asking price. If you negotiate 5% off the asking, then the situation is even easier.

You're welcome.

caronoel

Dird wrote: »

I don't see any government ever promising to try & reduce property values because it'd be suicide. If someone buys a house for £250k and a few years later its worth £200k because of that party's decisions then I'm guessing they wouldn't be voting for more of the same.

Sage words indeed for one so young.

The price crash in the early 90s resulted in John Major hanging on by his fingernails, and the 2008 price crash cost Labour its majority.

No British government will ever orchestrate a price reduction. The electorate would not thank them.

ruggedtoast

Renters will thank them.

greensalad

ukcarper wrote: »

plus your £6k (which I think could be reduced) you would need £31.5k and you would have £36k

Just as an aside I got those figures from here, choosing the value halfway in between the lower and higher figures given, and then researched for the stamp duty.