Fantasists?

MobileSaver

mi-key said:

BobT36 said:

Not sure how anyone will be able to afford a house, with how it's going.
Normal "houses" (not mini-mansions) around a third to half-a-million quid now. Salaries have NOT risen accordingly. 

Just where is the money coming from to buy these? It used to be that a house was 3x the household salary, now it's over 10x..

Part of the problem is people expecting to buy an average family home as their first house. In the 'olden days' you would get a cheap 1 bed flat, then maybe a 2 bed, on to a small house and wouldn't be looking at a nice 3 bed semi in a decent area until you were into your mid 30s or early 40s.

^ This, all day long.

Too many FTBs wouldn't even consider buying a doer-upper in a less-than-ideal location, completely oblivious to how their parents and many of us here started out, and instead just moan prices are too high!

[Deleted User] said:

aoleks said:

BobT36 said:

Not sure how anyone will be able to afford a house, with how it's going.

if you want to generalise, average salary in UK is £38k, in a household of 2 average salaries that’s £76k household income.

the average house is £315000 in England (going with the highest value in the UK to prove a point), that’s just over 4 times the household income (or just under if you have a 10% deposit).

Averages are of little use here, because they are distorted by the UK's unusually high income inequality. It also assumes that every buyer will have two full time incomes, so anyone without a partner in full time employment is stuffed.

You can't have it both ways. If averages are of little use because not everyone has a partner in full time employment then common sense tells you that those people may not be able to afford an "average" house and may have to instead buy a cheaper, worse than average house.

aoleks

[Deleted User] said:

aoleks said:

BobT36 said:

Not sure how anyone will be able to afford a house, with how it's going.
Normal "houses" (not mini-mansions) around a third to half-a-million quid now. Salaries have NOT risen accordingly. 

Just where is the money coming from to buy these? It used to be that a house was 3x the household salary, now it's over 10x..

No, it’s not…

if you want to generalise, average salary in UK is £38k, in a household of 2 average salaries that’s £76k household income.

the average house is £315000 in England (going with the highest value in the UK to prove a point), that’s just over 4 times the household income (or just under if you have a 10% deposit).

Averages are of little use here, because they are distorted by the UK's unusually high income inequality. It also assumes that every buyer will have two full time incomes, so anyone without a partner in full time employment is stuffed.

Besides, if we want to compare like-for-like then back in the day houses were 1.5-2x average income of two people, so still a massive difference.

Don't make be bring out the graph. I will, I'll post it.

Here's another interesting stat for you. Back in 2021 the average parental contribution to an FTB's deposit was 32.5k. That's not including inheritance. 64% of parents helped their children buy their first homes, and many of them helped with rent and mortgage payments too.

1. this is why we're talking averages. just like salaries are distorted by high earners, average house prices are distorted by extremely expensive investment properties, for example in central London. However, let's take the median, which is more representative, sitting at £33k. That's a £66k income per household. Take away a 10% deposit on an average house and we're still looking at just over 4x multiplier, in line with what's the norm over the last decades.

2. there are plenty of countries with much lower salaries overall, yet with house prices in the hundreds of thousands, completely normal. the notion that you should be able to pay off a house from one average salary anywhere in the country is just flawed. I'll say it again, you're buying a finite resource: LAND! this is not the 70s, when there was plenty of it for everyone, population went through the roof (hint: it's not a UK phenomenon, but a worldwide one). house prices are not going down anytime soon.

3. a "like-for-like" comparison with back in the day is completely irrelevant. different population, different demand, different interest rates. the whole argument about costs being n multiples of an income is just stupid. I have said it before, I'd rather borrow half a million at 1% than borrow £200000 at 10% (or more, as was usual decades ago).

4. oh no, please don't bring out the graph. anything but THE GRAPH!!!

5. I don't see what parents gifting their children money to start in life has to do with things or how it proves/disproves a point.

peterhjohnson

jimbog said:

Usual practice is to offer the asking price and then if a bidding war ensues then a buyer would offer more 

Yes, it is usual practice which is why in certain circumstances, it's a great ploy to knock out the competition

SingleSue

MobileSaver said:

mi-key said:

BobT36 said:

Not sure how anyone will be able to afford a house, with how it's going.
Normal "houses" (not mini-mansions) around a third to half-a-million quid now. Salaries have NOT risen accordingly. 

Just where is the money coming from to buy these? It used to be that a house was 3x the household salary, now it's over 10x..

Part of the problem is people expecting to buy an average family home as their first house. In the 'olden days' you would get a cheap 1 bed flat, then maybe a 2 bed, on to a small house and wouldn't be looking at a nice 3 bed semi in a decent area until you were into your mid 30s or early 40s.

^ This, all day long.

Too many FTBs wouldn't even consider buying a doer-upper in a less-than-ideal location, completely oblivious to how their parents and many of us here started out, and instead just moan prices are too high!

[Deleted User] said:

aoleks said:

BobT36 said:

Not sure how anyone will be able to afford a house, with how it's going.

if you want to generalise, average salary in UK is £38k, in a household of 2 average salaries that’s £76k household income.

the average house is £315000 in England (going with the highest value in the UK to prove a point), that’s just over 4 times the household income (or just under if you have a 10% deposit).

Averages are of little use here, because they are distorted by the UK's unusually high income inequality. It also assumes that every buyer will have two full time incomes, so anyone without a partner in full time employment is stuffed.

You can't have it both ways. If averages are of little use because not everyone has a partner in full time employment then common sense tells you that those people may not be able to afford an "average" house and may have to instead buy a cheaper, worse than average house.

My parent's first and only purchased house was a 3 bed semi in a nice area and was in move in condition with no work required. It was purchased with one income as mum was a stay at home mum.

She has great difficulty understanding that to buy that same house now would require two slightly more than average incomes and a hefty deposit (and probably no children - they had one and one on the way at the time) and that it would be completely out of scope for a single earner household first time buyers on a comparable salary to what dad was earning back then. 

Eldest was trying to explain it to her yesterday but all she could say was "Well we did it, we went without" without understanding that he would have to be earning at least 80k a year to buy her house after a 10% deposit had been taken into account.

tooldle

I think 'comparable salary' is a red herring. A mid range job at some time in the past, may not be a mid range job in the present day. It could be a great earner or a poor earner, so working out today's rate for previous years salary can be meaningless.T o add complexity areas change, desirability increases or decreases and the demographic of the area changes. 
My folks bought a 3 bed semi in the early 60's, for just over £2K. It needed work and was sold at auction. Only the male salary was considered for mortgage purposes. It was at that time a street of older persons, many of whom were childless. Nowadays those houses sell for around £250-280K and the street is largely families. Many of the houses have been extended considerably. Back when my folks bought the house, their friendship group with children were all in terraced housing. My folks had kids much later in life. Comparing apples with pears. We all make our choices with the card we have.
No inheritance help here, or for my folks.

jimbog

[Deleted User] said:

jimbog said:

[Deleted User] said:

lookstraightahead said:

RelievedSheff said:

You don't need to trust what a house goes on the market for (whatever that may mean).

It is generally easy enough to compare the asking price with recent sale prices and other similar properties currently on the market.

If a property is already "priced to sell" then you are not going to get a reduction on that. If a property is keenly priced then yes the vendor may accept a lower offer.

ok well maybe it's because most of the houses I've bought have no comparables as they're all different. 

But then the market changes too. And sellers and EA value differently. What are they basing their valuations on? Winning business? Selling a dream?

That's very unusual in the UK, where most houses are identical terraces.

I'm not sure in which country you are based but that is very much not the case

Incorrect. The government has statistics on this: https://www.gov.uk/government/statistics/council-tax-stock-of-properties-2021/council-tax-stock-of-properties-statistical-summary

From your link, terraces make up only 26% and by no means does it say they're 'identical'

edgex

I can give an example of where the seller is being completely unrealistic;

1bed flat, asking for offers over £120k, been on 6 months.
A 2bed flat in the same building, everything the same except a second bedroom, sold last May for £95k.
They're asking for more than the 2bed sold for 13 years ago when new!

mi-key

edgex said:

I can give an example of where the seller is being completely unrealistic;

1bed flat, asking for offers over £120k, been on 6 months.
A 2bed flat in the same building, everything the same except a second bedroom, sold last May for £95k.
They're asking for more than the 2bed sold for 13 years ago when new!

How much is a 2 bed flat selling for now though? The 2 bed sold nearly a year ago

tooldle

edgex said:

I can give an example of where the seller is being completely unrealistic;

1bed flat, asking for offers over £120k, been on 6 months.
A 2bed flat in the same building, everything the same except a second bedroom, sold last May for £95k.
They're asking for more than the 2bed sold for 13 years ago when new!

Is there anything unusual about the 1 bed?

jimbog

edgex said:

I can give an example of where the seller is being completely unrealistic;

1bed flat, asking for offers over £120k, been on 6 months.
A 2bed flat in the same building, everything the same except a second bedroom, sold last May for £95k.
They're asking for more than the 2bed sold for 13 years ago when new!

do you have a Rightmove link?