London prices are not too hot not too cold

michaels

Do you need a 1-4 travelcard in Lambeth - isn't it zone 2? What about the odd annual bonus or dead granny or bomad to help with the deposit?

Generali

michaels wrote: »

Do you need a 1-4 travelcard in Lambeth - isn't it zone 2? What about the odd annual bonus or dead granny or bomad to help with the deposit?

All are possible ways to raise a deposit.

I chose a 1-4 Travelcard as our crazy duo are going to be house hunting in Zone 4. I suspect that by omitting any utility bills and indeed any life at all that I have built in plenty of wiggle room for travel being over estimated a little.

Even Pastures New puts on the heating sometimes.

cells

If you think saving the deposit too big a problem let's go back to the 10% depsot idea.

Outer London is about £385k average for a terrace with 10% down and a repayment mortgage its £1100

Your post above says £4500 take home so a repayment mortgage is less than 25% of take hone pay. That's is affordable.

And once again this is for the average terrace and the income is for the average median full time wage with no calibration for the 24% of homes that are social

And of course compared to the alternative of renting a one bed flat for £1,600 buying the average terrace on a repayment for £1,100 per month doesn't seem all that bad. The risks of having a kid or losing a job is still there going from renting to buying doesn't remove or create that risk

mwpt

Are we talking average or median salaries here? Going to assume median, and somewhere around £35k each.

How do lenders lend to couples? Do they take combined salary and use lending multiples? That's best case scenario. So, combined salary of £70k. Could get a loan of £315k I guess. Add 10% deposit and gives them a rough purchasing power of £345k.

How much of the housing stock in London is falls at or under £345k? In order for you to say it's affordable, to the median person, don't you need to say that the median house price falls under their affordability? I mean, sure 50% of people combining their salaries can afford up to £345k but what if only 10% of the stock is priced under that? Does that also equate to "London is affordable"? I'd say it merely says they can buy a pretty crummy house in a nondescript area if they really want to. Maybe that's how it has always been, I wasn't around back in the 90s. But I do know that in the early 2000s friends of mine were able to buy actual nice places in non crummy areas on average salaries.

EDIT: Scrap that last comment. I had a think and I don't consider the properties they were buying as "actual nice places", I was more comparing them to what they could buy today. My standards have been so altered that the flat I turned down buying in Wimbledon for £270k in 2006 because it was crummy, now looks nice to me.

I think about the only real conclusion you can draw is that London still has some affordable properties, not that it is affordable or reasonable value overall.

greggymagic

cells wrote: »

If you think saving the deposit too big a problem let's go back to the 10% depsot idea.

Outer London is about £385k average for a terrace with 10% down and a repayment mortgage its £1100

Where's the mortgage that is £1100 a month at a 90% LTV on £346500? Is it with a 35 year term?

yertiz_2

cells wrote: »

Lots of talk about London being far too expensive and overpriced and a bubble but imo London is not that unaffordable with the average terrace costing 6.5x the average full time working couples median wage

London
Median full time employed male wage £38,741
Median full time employed female wage £31,800
Median full time employed couple wage £70,541
Average terrace price £455,911 (Oct 2015)
The average terrace is 6.45 x the average median couples wage

Not much hope then for 2 teachers on a starting salary of c£27000.

MARTYM8`

mwpt wrote: »

Are we talking average or median salaries here? Going to assume median, and somewhere around £35k each.

The median household income in London was £39k in 2013 - and was less than £30k in several boroughs. Given most people don't live alone that suggests that your assumption of £70k being the typical median income for a couple is a bit optimistic.

http://data.london.gov.uk/apps/gla-household-income-estimates/

Even in Knightsbridge and Belgravia ward the median household income is only £88k.

Graham_Devon

cells wrote: »

a huge 24% of London is social housing and their wages should be ignored and a median-not-in-social-housing-wage should be used and that figure would be higher making property even more affordable than when diluting the median wage with 24% social housing tenant wages

Good grief.

I mean, just who are you trying to convince here?

CLAPTON

the simple issue is that, the virtually unlimited immigration
has enormously increased the wealth of the older indigenous (well pre 1990 owners) at the expense of the under 40s people who can't afford a decent family home (doing a like for like comparison with say 20 years ago)

undoubtedly the peripheral benefits of more restaurants, coffee bar, nail and personal care store are very real.
The overall economic benefits to the UK are clearly negative although one assumes the immigrants perceive themselves better off.
And of course, Hamish is grateful the the extra barnett formula benefits his fellow scots receive.

cells

mwpt wrote: »

EDIT: Scrap that last comment. I had a think and I don't consider the properties they were buying as "actual nice places", I was more comparing them to what they could buy today. My standards have been so altered that the flat I turned down buying in Wimbledon for £270k in 2006 because it was crummy, now looks nice to me

This is so true.


Anyway I think my argument has fallen on deaf ears so I will fall back to the argument that prices must be affordable for buyers* as approx 10,000 properties per month in London are changing hands at these and higher prices.

I will however state again that a couple working full time in London on average (median) earns over £70,000 and that the average terrace house price in outer London is 4.5x that combined wage (of course that is the average outer borough so half of them will be cheaper and its the average terrace so half of them will be cheaper). To me 4.5x joint income does not seel unsustainable