Money for Property......

simonfr

Call me stupid..... but.....

The house prices are stupid just now, as we all know, and ppl are talking on this place about buying property for 200k this and 400k that... now, where do these ppl get the money??!!?? Look in the estate agents at the property prices. Im in Scotland, where the prices arent as inflated, but i still cant see how this works....
Now, say if the national average is about 27k, and a good wage is, say, 40k. With maximum multiples of 5x, this is only 200k mortgage, at maximum 100% loan available, then you need say, 100k - 200k deposit to put down.... is this the norm?? Am i really this naive??

Now im on a good wage, and have two properties, one which i rent, and i still cant afford the home of my dreams!! What am i doing wrong???
Am i too honest??

Simonfr

Ian_W

Hi Stupid [soreee, couldn't resist!!],

Now im on a good wage, and have two properties, one which i rent, and i still cant afford the home of my dreams!! What am i doing wrong???

Dunno mate, sounds like quite a hard luck story to me, if you want cheering up try THIS SITE.

Or maybe you're just "A young loner" who is spending far too much time " on a crusade to champion the cause of the innocent, the helpless, the powerless, in a world of criminals who operate above the law" instead of making loads a wonga!!.

simonfr

Gee thanks for the link... i'll keep that for future reference. Maybe they know more than you.

So much for asking a sensible question.........

JanCee

Love the above post Ian W really made me laugh this morning.

People who can afford to pay 200k to 400k for houses are usually on their 2nd, 3rd or 4th move and are lucky enough to have equity in their existing property which they then use to fund the next one. Either that or they are on salaries that the rest of us can only dream about!

GreenB_2

Maybe you have too high expectations?
We all want "dream" homes but very few of us achieve it.
For 200k in most parts of the country (outside the center of major citys) this would get you a 3 bed house - is that not sufficient for the "average" person?
Some would say that you are part of the cause of high house prices (I don't go for that one) as you have in effect a second house you don't need.

rchddap1

Your points are the very reasons why some people are saying that house prices have to fall. I'd love to get another house, but at the moment finances just don't allow. Like you I will have to continue dreaming and saving for the time being. i do have a bit of equity in my shared ownership house, but nowhere near enough.

simonfr

Im on my third property, with a bit of equity, but not thinking about moving. Especially in this climate.
But obviously the housing market is overinflated, so how are they getting the money??
Have all lending safeguards gone out of the window? Now, if the property market is to have a 'soft landing', then the current level of prices still puts the current raft of nice houses out of reach.....

Roll on a property crash.....

GreenB_2

What sort of property are you after?
Why not sell both the properties you own and buy one?
If prices crash then surely you will be no better off as the value of the properties you have will decrease (perhaps to a negitive equity state) and chances are jobs will go etc so you may find you have no income to be able to buy a house if you are uneployed.

simonfr

Im not after a new property, i am if the price is right, but the market isnt. If the market crashes, yes i get less, but the more expensive properties will see a larger downturn than my smaller ones...... it will make the ones outwith my reach, within my reach.

Looking at the market here, three years ago, for example, 2 bed upper flat - around £48000, now £90000. Three bed detached cottage around £160000, now £240000.
Obviously peoples equity have risen, but only if your trading down do you make anything of this market and come out smiling at the end of the day.
You may get more money for your property, but have to shell out even more to get the next one up the ladder......

So are banks going mad giving anyone and everyone money? Are all the properties now mini communes with 10 FTB's in them with their little stake? How is the market being sustained?

Woby_Tide

the average wage is £27k because lots of people earn £10k per year and not so lots earn £3m per year, inheritance money, inheriting property, lottery winners, pools winners, casino winners, savvy investors, property developers, entrepeneurs, self made millionnaires

I'd say your being naive in fairness, I doubt many people will ever own their REAL 'dream home'(without a lottery win), but I'd imagine most will eventually get to(or closeto) a realistic 'dream home', it's all about expectations.

Ian_W

Simon,
Sorry you didn't like the reply and those people do know more than me, trust me on that.

So much for asking a sensible question.........

Can't usually understand most Jocks when they're having a verbal rant [no offence intended North of the border] but I couldn't understand yours in writing! "I've a good salary, own 2 houses one of which I rent out but I'm a failure cos I can't afford my dream house?" - some would say you're doing very well for yourself already, better than the vast majority!

But a question for you, If you could afford your "Dream House" would it stll be your dream house? Wouldn't your dream house then be the £1m one someone else can afford?

Enough phsycobabble for this time in the morning. Roll-on the property crash and we can all be poor, miserable, homeless & jobless together - but equal [if you really think so - you really do need those people who know more than me!!].

Or as someone wiser than me said, " Go placidly amid the noise haste.....
With all it's sham, drudgery and broken dreams it is still a beautiful world....
Be cheerful....
Strive to be happy."

So stop beating yourself up for being such a failure - Life's a Sh*t but ... then you die!