UK Affordability still very good

westernpromise

gycraig wrote: »

Also other issue is I can push myself to 135k

You can afford £150k

but if interest rates decide to go up to any extent I'll be homeless in a far quicker period than the time it took me to save the deposit.

That's an argument for never buying. What do you want to do, rent forever? There are 5 and even 10-year fixes.

westernpromise

gycraig wrote: »

http://www.uklocalarea.com/?q=Dn84hu
I'll pass thanks.

In 1988 I paid £85k on a £24k salary to live somewhere that at the time was every bit as bad

http://www.uklocalarea.com/index.php?q=w9+3hy

You want it all, you want it now and you want it cheap => you are not cut out for home-owning. Go rent forever; hope you find a nice landlord.

ukcarper

westernpromise wrote: »

You can afford £150k



That's an argument for never buying. What do you want to do, rent forever? There are 5 and even 10-year fixes.

£135k with 10% deposit will cost £635 out of his £2200 to £2800 take home. I paid almost half my take home pay on mortgage payments when interest rates went through the roof.

GreatApe

There are multiple ways one could determine if house prices are reasonable.

1. Build costs

2. If buying is cheaper than social renting = v.cheap and if buying is less than 30% of take home pay = affordable.

3. Multiples relative to income

On these metrics 8 regions in the UK are cheap and affordable for a single person working the median full time job.

However those are ignored by the crash cheerleader to favour this silly metric. 4 if house prices are higher than they were five years ago = bubble & unaffordable.

Like WP says some people are just wired to be renters as they will fond an excuse not to buy at any price.

But rates are so low its totally destroyed the waiting for a crash idea. you can fix for five years at not much above 2% while renting typically costs 5-6% a year. not buying is foolish as its a bet that house prices will crash by more than 20% over a five year period. Well if a worldwide financial crisis and recession in 2008 only reduced UK house prices by 10% while would anyone expect a crash twice as bad over the next 5 years?

Houses are affordable. Historically waiting for a crash has been foolish and its probably true today too.

economic

as soon as my fixed deal expires im moving to a tracker. my mortgage interest would fall to £330 a month. i get £700 a month from my spare room. its crazy how cheap mortgages are. my ltv is around 50%. the return on my capital is a cool 4%. tax free. how cool is that?

gycraig_2

http://www.rightmove.co.uk/property-for-sale/property-58483135.html

Possibly because iv moved to bigger place but that is what I'd call Affordable where I'm originally from in a decent part of town.

ukcarper

GreatApe wrote: »

There are multiple ways one could determine if house prices are reasonable.

1. Build costs

2. If buying is cheaper than social renting = v.cheap and if buying is less than 30% of take home pay = affordable.

3. Multiples relative to income

On these metrics 8 regions in the UK are cheap and affordable for a single person working the median full time job.

However those are ignored by the crash cheerleader to favour this silly metric. 4 if house prices are higher than they were five years ago = bubble & unaffordable.

Like WP says some people are just wired to be renters as they will fond an excuse not to buy at any price.

But rates are so low its totally destroyed the waiting for a crash idea. you can fix for five years at not much above 2% while renting typically costs 5-6% a year. not buying is foolish as its a bet that house prices will crash by more than 20% over a five year period. Well if a worldwide financial crisis and recession in 2008 only reduced UK house prices by 10% while would anyone expect a crash twice as bad over the next 5 years?

Houses are affordable. Historically waiting for a crash has been foolish and its probably true today too.

I'd start with 4x income for 90% of property price If you can't get a mortgage you can't buy.

Out of interest my first house was 5.3x my gross salary or approx 4x our joint income. If I had not bought then I would not have been able to buy for sometime as that was the maximum mortgage I could get at the time and the price of house increased from £8k to £11 over the next 9 months. My earnings were about average full time earnings for the area.

westernpromise

ukcarper wrote: »

£135k with 10% deposit will cost £635 out of his £2200 to £2800 take home. I paid almost half my take home pay on mortgage payments when interest rates went through the roof.

Yep.

He doesn't want it badly enough.

westernpromise

gycraig wrote: »

http://www.rightmove.co.uk/property-for-sale/property-58483135.html

Possibly because iv moved to bigger place but that is what I'd call Affordable where I'm originally from in a decent part of town.

But it's cheaper because people in Grimsby are poorer, so if you lived there you'd earn less and claim that was unaffordable too.

Crashy_Time

chucknorris wrote: »

I have lived in ex-council flats (they were reasonably decent and I owned them) for over 10 years, because it helped me get where I am today. When I was buying the last one I remember the mortgage broker coming back to me and saying 'they (Mortgage Express) don't believe that you want to live in it, because of that large 3 bed house in Balham that you own, they think that you want to rent it out'. They simply didn't understand that it was much better for me if my tenants bought the expensive house for me, and I made do with the much cheaper flat. Some people seem have no foresight and/or strategy, they want jam today.

How is the portfolio fire sale coming along?