Isn't anybody tired of hearing the same old

Scabs

It sounds like everybody on here have been discussing HPC for years and people have taken their own opinions and stuck with them again for years. As a newbie to this site I cannot believe how people will just bury their head in the sand and not listen or take in any of the information posted.
Please if you are thinking of buying take notice of the news and media as they too are slowly coming round to the idea that the current credit crisis is affecting house prices.
People keep posting "if you can afford it then go for it", this is a money saving website so read the info and if you have read whats in the news regarding the current financial conditions then I truly believe you wont buy now.

Lavendyr

gabyjane wrote: »

We have bought now (well 7 months ago!) as we have no intention of moving does it really matter? we are on a long fixed rate term and if the worst should happen then my inheritance will have to pay the house off...

Haven't read the whole thread, but this quote summed the entire first post up for me. If you're lucky enough to have or expect an inheritance, obviously you don't have to worry. Not all of us have that luxury (if you can call the death of a loved one a 'luxury').

I wish you luck with your house, I really do. It sounds like you are in a reasonable situation and as long as you a) don't want to move, b) don't *have* to move, c) have a decent mortgage rate when you come off the fixed-term mortgage and d) don't have any unfortunate incidents such as injury, long-term illness or redundancy, you will be fine. But it doesn't suit us all to buy right now, either.

WTF?_2

teabelly wrote: »

If you borrow 3x salary then to keep pace with HPI you need to have wage rises of approximately 1/3rd of HPI each year. If you are trebling the salary so another 1k will add another 3k to borrowing available. If you borrowed 4x then you'd need to keep up with a 1/4 of annual HPI. If prices rise 300% then you only need 100% wage inflation over the same time to keep pace on the multiples.

Maths clearly isn't your strong point.

Let's say it's year one:
You earn 30k
You see a house you like at 100k
Mortgage is 90% LTV (ie. 10% deposit) with 3x salary limit
You put 10k savings down and borrow 3x salary, ie 90k for the rest


Seven years later:
Your house has trebled in value - 300k
With 90% LTV you'd need to put down 30k
That leaves 270k to borrow
1/3 of 270k is 90k
90k is 3x 30k
Therefore your salary also has to treble in those six years if you only want to borrow at a ratio of 3x your salary

If a typical buyer's salary doesn't treble and instead rises by 1/3 in those seven years - and a 33% rise in the average salary is an extremely generous assumption - then one would need to borrow a whopping 270/35 = 7.71x your salary to buy the same house.

You also need to save almost a complete year's gross wages to put down the deposit!! Highly unlikely you can do that without saving for at least 3 years by which time the price of the house may have risen further if we assume they always go up :rolleyes:


House prices are totally out of whack with what people earn. The only thing that has allowed people to keep buying them is that banks have been lending borrowers ever more and more money with few questions asked and ever more lax lending criteria to boot.

Until now.


Crunch.

Paul_N_4

!!!!!!? wrote: »

...You also need to save almost a complete year's gross wages to put down the deposit!! Highly unlikely you can do that...

Unless you're teabelly with his 240% wage increase. Thanks for laying that out !!!!!!, I thought I'd missed something obvious.

Nenen

Is buying a house really just as 'easy' today or are today's 'youth' just whingers who want everything on a plate straight away? Real life comparison:

In 1983 dh and I were recent graduates earning £8,500 between us. We were on average salaries for recent grads at the time (I was a teacher and dh a psychiatric social worker). We stretched ourselves to the limit and bought our first house on 100% mortgage of 3 times our joint salaries for £25,500. It was a 2-bed victorian terrace in a not particularly great part of SE London. To do this we made do with hand-me-down clothes and furniture and went without a car, holidays, nights out etc etc etc and thought we were really struggling.

Fast forward to 2008 and our ds and his gf... both recent grads (with better degrees than dh and I and in slightly better paid jobs than newly qualified teachers/social workers too!). They earn a joint salary of £44,000 (approximately 5.2 times our salary in 1983). Our first house in London is currently valued at £250,000 (conservative estimate going on others in the area at the moment, is probably nearer to 300K and this is ten times what it was worth in 1983). They would need a mortgage (if they could get one) of 5.7 times their joint salaries to buy the same house! :eek:

...and we thought we were hard up!

nelly_2

gabyjane wrote: »

someone just about to plunge into the biggest financial commitment of their lives might just find debate on the pros and cons of doing so quite useful, what with this being a forum for information on house buying and all...

BUT it's not is it..it's a forum to slate FTB, NEW BUILDS, OVERPRICED HOUSES etc it doesn't always help it just criticises..

Most people with common sense will get an IFA and sit down and work out what they can/can't afford..you have to look ahead and try and guess i suppose at what you think may or may not happen then it's up to you..we have not just bought the 1st house that has popped up because we 'Want a house' or 'Can currently afford one' we have looked ahead and realise that if things go wrong we have saved for the payments rising (even though we are fixed) etc..maybe i'm with the minority wanting a house to live in not for an investment..how many FTB will buy to try and re sell a few months down the line..worry about it when it happens i know i will...i don't really care wether ours loses value or not to be quite honest.
Oh and i can say that as i could have written the exact same thing years ago and we are ok and always would have been whatever happens.

pack it in with that blue !!!!!! please its giving me an ulcer

mystic_trev

gabyjane wrote: »

BUT it's not is it..it's a forum to slate FTB, NEW BUILDS, OVERPRICED HOUSES etc it doesn't always help it just criticises..

Most people with common sense will get an IFA and sit down and work out what they can/can't afford..you have to look ahead and try and guess i suppose at what you think may or may not happen then it's up to you..we have not just bought the 1st house that has popped up because we 'Want a house' or 'Can currently afford one' we have looked ahead and realise that if things go wrong we have saved for the payments rising (even though we are fixed) etc..maybe i'm with the minority wanting a house to live in not for an investment..how many FTB will buy to try and re sell a few months down the line..worry about it when it happens i know i will...i don't really care wether ours loses value or not to be quite honest.
Oh and i can say that as i could have written the exact same thing years ago and we are ok and always would have been whatever happens.

Is that better for you Nelly?

mr.broderick

gabyjane wrote: »

Boring 'IF YOUR'E A FTB DON'T BUY NOW'

Seriously we have waited and waited and waited listening to people saying this for the last few years only to be priced out of everything in reach and kick ourselves for listening to them.

Every time we thought about it, it would be 'just another few months you'll see'??? yeah i see that all my friends have their houses that they bought for £1000's less than now and have a nice hefty profit to add!

We now luckily have a S/O house that we love, where we want it..cheap mortgage and rent so we can't complain but could have had our own house far longer and paid more going somehwere than in all our previous landlords pockets..we don't want to move so really don't care if the prices go up or down..actually in our case it would benefit us for them to go down as we can then buy another share easier!

Anyway my outlook is if you can afford it buy, if not or it's going to stretch you then don't..common sense really..seriously all of you saying wait, people have brains and can decide for themselves wether to go for it or not can't they??

No i enjoy it.
Nothing better than reading posts from the likes of !!!!!!,carol etc who constantly give advice on here yet didn't call the market themselves hence are homeless.........

Nenen

gabyjane wrote: »

Most people with common sense will get an IFA and sit down and work out what they can/can't afford.

:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:
Of course the IFA is going to be completely unbiased... just like the one who we spoke to 6 months ago who advised dh and I to take an interest only mortgage at 5x our salary over 25 years (wouldn't pay it off until we are 74)!:eek:

nelly_2

mystic_trev wrote: »

Is that better for you Nelly?

No It just made me contract anal warts!