[Buying] How do people afford offers over asking price?

Sunsaru

Greymug said:

Marvel1 said:

Maybe look at cheaper properties to offer over.

This.

The problem I've found with people in general is their tendency to wanting to live beyond their means.

If, for example, they have a 50k deposit and say a 50k yearly salary, they say "ok great I can afford a house costing £275k" (deposit plus 4.5 times the salary) or even worse their brokers tell them that. And then off they go bidding on houses listed in the 250-275k range. Obviously they get outbid each and every time.

What they should be doing instead is being extremely realistic and honest with themselves and start looking at houses in the 200-230k, which will give them some wiggle room to place offers over home report valuation and not get outbid.

This with bells on. That's the approach I took when I bought. It also meant that if I have to go onto SVR for whatever reason in the future it won't be as painful.

SallyDucati

To me, generally, the idea of a 'starter home' to get on the housing ladder seems to have disappeared.   Work out what you can afford and look in appropriate areas.  Then as life moves on, move up as able to etc.

I understand that in some specific parts of the country this still doesn't work (I can never get my head round how average people can afford to live in London!) but for most parts it will.

[Deleted User]

Gavin83 said:

Everyone wants a nice house in a nice area near good schools with a small commute on a modest salary. This’ll never be possible and ultimately people either need to adjust their criteria or increase their income.

Houses such as the above are, for obvious reasons popular and therefore expensive.

When people say they can’t afford a suitable house I do often wonder what their idea of a suitable house is. I expect in a lot of cases they could actually afford a suitable house, just not their idea of suitable.

It's perfectly possible, just not in the UK.

[Deleted User]

lookstraightahead said:

[Deleted User] said:

lookstraightahead said:

[Deleted User] said:

It's a nightmare for FTBs at the moment. Prices rising faster than people can save, anywhere with jobs is unaffordable.

You can either hang on and hope prices crash back down down to something you can afford, but who knows if that will happen. Or you can press on, keep making offers, and maybe you will get lucky.

Oh, there is one other option. If you have any elderly relatives try to get in their good books. You might be able to inherit some money or property.

 I'm sure most people would rather have their loved ones than any inheritance. What a horrid thing to say.

Why is the market worse for FTB? What about those who get divorced etc. I'm presuming your suggesting everyone else had equity. Simply not true.

It is horrible, but that's the country we live in. These days the majority of FTBs either inherited or got help from their parents.

Now we are at the point where young people's parents already got the inheritance and used it for their house, and don't have money to help their kids out.

It's awful but not something people can afford to overlook. Especially in these difficult times there are opportunities.

I can't think of any FTB who bought with an inheritance, how do you work that out?

as for help from parents, that happened years ago, nothings changed. There might have been more debt then with 100% mortgages and high interest rates and negative equity.

Everyone I still know from school and university either inherited or in one case for £30k from their parents.

Not a single one was able to do it alone. These are people with degrees and decent jobs.

[Deleted User]

Greymug said:

Marvel1 said:

Maybe look at cheaper properties to offer over.

This.

The problem I've found with people in general is their tendency to wanting to live beyond their means.

If, for example, they have a 50k deposit and say a 50k yearly salary, they say "ok great I can afford a house costing £275k" (deposit plus 4.5 times the salary) or even worse their brokers tell them that. And then off they go bidding on houses listed in the 250-275k range. Obviously they get outbid each and every time.

What they should be doing instead is being extremely realistic and honest with themselves and start looking at houses in the 200-230k, which will give them some wiggle room to place offers over home report valuation and not get outbid.

Which is fine if there are houses in the 200-230k range.

[Deleted User]

SallyDucati said:

To me, generally, the idea of a 'starter home' to get on the housing ladder seems to have disappeared.   Work out what you can afford and look in appropriate areas.  Then as life moves on, move up as able to etc.

I understand that in some specific parts of the country this still doesn't work (I can never get my head round how average people can afford to live in London!) but for most parts it will.

The other problem with this idea is that a lot of people are only getting in the ladder in their late 30s or early 40s due to it taking so long to save up a deposit.

That limits the term length on a mortgage and makes moving up the ladder difficult.

eidand

with cash, obviously

lookstraightahead

[Deleted User] said:

lookstraightahead said:

[Deleted User] said:

lookstraightahead said:

[Deleted User] said:

It's a nightmare for FTBs at the moment. Prices rising faster than people can save, anywhere with jobs is unaffordable.

You can either hang on and hope prices crash back down down to something you can afford, but who knows if that will happen. Or you can press on, keep making offers, and maybe you will get lucky.

Oh, there is one other option. If you have any elderly relatives try to get in their good books. You might be able to inherit some money or property.

 I'm sure most people would rather have their loved ones than any inheritance. What a horrid thing to say.

Why is the market worse for FTB? What about those who get divorced etc. I'm presuming your suggesting everyone else had equity. Simply not true.

It is horrible, but that's the country we live in. These days the majority of FTBs either inherited or got help from their parents.

Now we are at the point where young people's parents already got the inheritance and used it for their house, and don't have money to help their kids out.

It's awful but not something people can afford to overlook. Especially in these difficult times there are opportunities.

I can't think of any FTB who bought with an inheritance, how do you work that out?

as for help from parents, that happened years ago, nothings changed. There might have been more debt then with 100% mortgages and high interest rates and negative equity.

Everyone I still know from school and university either inherited or in one case for £30k from their parents.

Not a single one was able to do it alone. These are people with degrees and decent jobs.

What ages are you looking at? A FTB usually isn't in the position for an inheritance. 

No one could afford it on their own years ago, there usually needed to be two of you. Abs the generation before that has to buy outright.
All my family from two generations ago were in council and mining houses. All the offspring have their own properties. (Except those in twenties who are building up their careers) 

strawb_shortcake

I know one person that bought a house with an inheritance from their grandfather at quite a young age. However (as a couple) they also used to spend more than £100 a week on eating out and take aways. Usually 2 trips away abroad each year, one car on HP and used to buy themselves the latest consoles, fancy smartwatches and Dyson hair tools

Had they have been so minded, 2 years of savings would have provided them with the same deposit that they put on their house. 

These aren't people with degrees or high earners either. 

But I've known far more FTB's that have begged and borrowed from families to scrape a deposit together as they'd put more emphasis on having fun than thinking about where they might live in 5 years time - those examples typically come from higher earners with degrees

[Deleted User]

annabanana82 said:

I know one person that bought a house with an inheritance from their grandfather at quite a young age. However (as a couple) they also used to spend more than £100 a week on eating out and take aways. Usually 2 trips away abroad each year, one car on HP and used to buy themselves the latest consoles, fancy smartwatches and Dyson hair tools

Had they have been so minded, 2 years of savings would have provided them with the same deposit that they put on their house. 

These aren't people with degrees or high earners either. 

But I've known far more FTB's that have begged and borrowed from families to scrape a deposit together as they'd put more emphasis on having fun than thinking about where they might live in 5 years time - those examples typically come from higher earners with degrees

Anecdotes are not data. Look up the stats on how many FTBs had assistance from parents or inheritance.