Homes in the UK still very cheap/affordable

CLAPTON

cells wrote: »

France also has a comparable migration scale yet they are able to more than meet housing needs by building close to 400k units ~120sqm average. The UK is closer to 180k units at ~75sqm. The migrants dont write the planning rules and regs its an issue down to the uk government

as I've explained many times; I am a pragmatic person and at the present time, immigration is a major problem in the SE/London.
A foreign population of 40-45% in London puts emormous pressure on housing and on the UK citizens.
The people of the UK would have a better life with far fewer immigrants.

westernpromise

hildosaver wrote: »

Personally I find it really strange how people even consider paying half a million quid on a tiny flat in London - even if you have a very good salary working in London, the mortgage payments on a property in london would probably mean the money you are left to live on is probably about the same or less than what you could have it you lived out of the south east on a lower paid job - plus you wouldnt have an absolutely enormous mortgage hanging over you for the rest of your life.


I find it truely baffling.

You don't have "an absolutely enormous mortgage hanging over you for the rest of your life" - you have it for 25 to 30 years, and its gross size only ever reduces versus the level you took it out at. At current rates it diminishes very fast. You pay off 15% in the first five years.

If you rent, in contrast, you certainly do have an enormous debt "hanging over you for the rest of your life", in the shape of all the future rents you'll be paying till you die.

The advantage of spending a big London salary on a pricey London property is that when you retire, you can flog it, bank the inflation, downsize into the sticks and live on a pension based on the contributions you and your employer made. The bigger the salary, the bigger the contributions they made and the bigger the pension even if no longer final salary.

You are objectively better off earning £5000 a month and spending £3000 on a London mortgage than earning £3000 a month, and spending £750 a month on the mortgage in the sticks and £250 a month on the commute. Either way you've got £2k a month left over, but in the former case you end up owning a property worth probably 4x as much as in the latter, plus you can flog the London house and live in the cheap one while trousering the price difference, plus your pension's going to be based on contributions of x% of £5k a month rather than x% of £3k. If at any point you get bored of working you can probably retire earlier as well.

The thing is to think intergenerationally. What best amasses and preserves the family capital? I want my children to be prosperous, my grandchildren to be wealthy and my great-grand-children to be filthy rich. All of this starts here and now.

Thrugelmir

westernpromise wrote: »

You pay off 15% in the first five years.

You still owe over 25% after 20 years of a 25 year mortgage.

westernpromise

Thrugelmir wrote: »

You still owe over 25% after 20 years of a 25 year mortgage.

I'd call a debt of 25% of the 1996 price of my house a pretty good deal compared to the alternative, which is to have paid 20 years' rent already with the prospect of 30 more years of paying rent.

It is people's failure to understand this that results in hapless folk like Crashy having a BCR of 130%.

Prothet_of_Doom

Cheap if interest rates stay at 2.5% then.

I once paid my mortgage at 15.5%.

How many people would be repossessed at that level ?

Jack_Johnson_the_acorn

Prothet_of_Doom wrote: »

Cheap if interest rates stay at 2.5% then.

I once paid my mortgage at 15.5%.

How many people would be repossessed at that level ?

Couldn't happen in today's economic environment.

pop_gun

If house prices were cheap or affordable, you wouldn't need a thread to highlight the fact. Neither would mortgage owners have to wait approximately 12 months, to find a buyer.

worried_jim

ringo_24601 wrote: »

Terrace? Hell, in North Manchester you can pick-up a 2 bed semi-detached for £100k - http://www.rightmove.co.uk/property-for-sale/property-60332543.html

I do love to play the game of 'what could I buy in the North if I sold my house in the South'

It's quite amazing the range of house prices in the UK

I know! My Brighton flat has now cracked £250k, more than double what I paid 13 years ago. I am moving back north to buy a house, a place in the Sun and a Porsche!

wotsthat

Prothet_of_Doom wrote: »

Cheap if interest rates stay at 2.5% then.

I once paid my mortgage at 15.5%.

How many people would be repossessed at that level ?

Yes, a house may be affordable at current MMR rates but not 15.5%. You can insure against this by renting forever.

I wish anyone who can currently afford a house but rents to avoid a future 15.5% mortgage nothing but the best of luck.

Presumably these people also avoid crossing roads.

ukcarper

pop_gun wrote: »

If house prices were cheap or affordable, you wouldn't need a thread to highlight the fact. Neither would mortgage owners have to wait approximately 12 months, to find a buyer.

Funny thing about that is that in the expensive areas houses sell very quickly.