HTB - Have you lost/made money?

ScorpiondeRooftrouser

Pixie5740 wrote: »

In answer to the OP's question about whether or not anyone has made or lost any money using HTB I suppose it depends on how you look at it. Firstly until you actually sell you won't have made or lost anything. If you sell the property for more than you bought it for then there's a good chance that the next property you buy will also have gone up in price. For example, you pay £200k for your house now and 5 years down the line sell it for £220k, an increase of 10%. Woo hoo. The house you to upsize to is worth £300k now and in 5 years will cost you 10% more so £330k. You might have made £20k but the next house you want to buy will cost you £30k more so you've not actually made anything at all.

It could of course go the other way but actually that would work out better for you as 1) your HTB loan is based on how much you sell it for, and 2) the house you are upsizing too will cost less.

So it all depends on your view point as to whether you've lost or made money. It's easier just to think of the property as your home.

It's this nonsense about "getting on the ladder" - it's a very misleading concept. People think that their house will increase from £200K to £250K in five years and that will somehow enable them to buy a house that is worth £250K NOW. In fact, they tend to move upwards as their salaries increase and they extend their mortgages, not for any other reason. As you point out, as house prices increase the gap to move up gets larger rather than smaller.

If the market is on an upward trend of course then you need to get into the market, but you can only continue to "move up the ladder" by putting more money in.

ognum

littlegreenfrog wrote: »

This is genuinely something which keeps me awake at night, and snide comments such as yours don't help. I'm not a single mother of eight from "Benefits Street". I'm a 30 year old university educated higher rate taxpayer, and frankly I don't think I should have to worry about whether I can afford to have a child.

Just so you are aware this is not new to your generation. 35 years ago I returned to work when. My child was 8 weeks old as we could not pay the mortgage if I didn't and we fitted your description exactly.
University educated, higher rate tax payers.

We have all worried, there has been no given for any generation.

littlegreenfrog_2

AdrianC wrote: »

You're right, it would be.

But somebody earning £50k/year never NEEDS to struggle to buy a home. They might not be able to buy their dream home straight off, but that is plenty of income to purchase a property, even in London.

Somebody earning that much should be getting take-home pay of around £3,000 per month, excluding any taxable benefits or other deductions. Let's assume they've saved £20,000 - shouldn't be difficult, should it?

Those sorts of figures will get a mortgage of up to about £200,000. With that 10% deposit, how about...?
http://www.rightmove.co.uk/property-for-sale/property-33394374.html
http://www.rightmove.co.uk/property-for-sale/property-57807656.html

As someone who has been looking at properties for the last six months or so, my experience so far is that if something looks too good to be true, it probably is. That flat in South Norwood is underpriced compared to the current market, which tells me that there is almost certainly some kind of problem with it. I might even ring the estate agent and find out. Could be a short lease.

ScorpiondeRooftrouser

ognum wrote: »

Just so you are aware this is not new to your generation. 35 years ago I returned to work when. My child was 8 weeks old as we could not pay the mortgage if I didn't and we fitted your description exactly.
University educated, higher rate tax payers.

We have all worried, there has been no given for any generation.

What sort of house was your mortgage on, and where?

AdrianC

littlegreenfrog wrote: »

As someone who has been looking at properties for the last six months or so, my experience so far is that if something looks too good to be true, it probably is. That flat in South Norwood is underpriced compared to the current market, which tells me that there is almost certainly some kind of problem with it. I might even ring the estate agent and find out. Could be a short lease.

Repo, at a guess.

We have instructions from the vendor that the property must stay on the market until the point of exchange of contracts

ognum

ScorpiondeRooftrouser wrote: »

What sort of house was your mortgage on, and where?

It was on a very small house 2 bedrooms, in a village 5 miles outside Leicester, hardly inner London!

usefulmale

audigex wrote: »

But the fact is that ANY couple both working full time should be able to afford to own a home and raise a couple of children. And I'm talking full time minimum wage, not higher rate taxpayers.

AdrianC wrote: »

Really? Has that EVER been achievable?

In 1992, earning £12.5kpa, I bought a large, ex-council house, 3 bedrooms, large garden, in a decent area, here in Yorkshire for 35 grand.

I worked, my wife stayed at home and looked after the kids. Two modest cars, no SKY subscription, no mobile contracts.

Come 2010, that same house sold for just under 100 grand but was converted to 2 flats, so thats another decent sized family home gone.

It WAS achieveable once. In fact, it was the norm for decades. Dad goes out to work, mum stayed at home and looked after the kids.

AdrianC

It's generally thought of as a good thing that women can enjoy the same career opportunities as men, rather than being tied to the sink and ironing board all their lives.

Person_one

AdrianC wrote: »

Really? Has that EVER been achievable?

Erm, yes!

Minimum wage has existed for less than 20 years. People have been buying their own homes and raising their children in them on modest and low incomes for much much longer than that.

Person_one

Pixie5740 wrote: »

You don't need to be a home owner in order to have children. Mortgages aren't part of the reproductive process. We have an obsession in the UK with buying our homes and seeing rent as "dead money" which it isn't. Perhaps when some people accept that buying is out of their reach or requires too much of a sacrifice then maybe they'll feel liberated and start to focus on the important things in life. Although I suppose it would help if a long term let was more in-line with long term lets on the continent rather than 6 to 12 months, and if our social housing stock wasn't being sold off.

The uncertainty of private renting when you've got children in school must be a nightmare. If a private rented house could really be a true home, where you could relax a bit, I agree that people would probably be less keen to buy. Being able to feel settled in your home is one of 'the important things in life'! Social housing used to provide that for lower earners too, but sadly that's a distant memory for most.

For me, the fact that so few private landlords are willing to accept tenants with multiple dogs means it would never be a satisfactory long term option.