An interesting app on the BBC website showing how much of the UK is affordable for you. I entered a deposit of £15,000 with a monthly mortgage payment of £1500 for a 3 bed house and it appears that I can only afford to live in 44% of the UK.
http://www.bbc.co.uk/news/business-23234033
Eddie
Whole chunks of my life come under the heading "it seemed like a good idea at the time".
It's pretty depressing. All good if you already own - but for those trying to get on the ladder it makes a huge difference. Figures suggest that rental income is going to increase markedly over the next 5-10 years,a s more and more people are pushed out of buying their own homes.
It's just a matter of time...
I can, but if I lived elsewhere I'd have much more disposable income (or a bigger pension pot, probably the latter).
Spare room with use of the toilet, no food included £800 per month bargain!
According to the app, I can't afford to live where I do.........I knew I was going wrong somewhere!!
It is a bit depressing indeed, but maybe a 3 bed house is not the best way to get on the property ladder.
£1500 monthly payment is also quite a sum if you're just getting on the market: if you can afford that you're better off renting a small dwelling for a year and double your deposit.
'Against stupidity, the gods themselves struggle in vain' - Schiller.
Getting on the property ladder is not impossible providing you don't expect to start with a 3 bed apartment off Sloane Square, it seems the trend is trying to encourage people to buy new build with fancy dubious Government backed schemes, its a shame that similar schemes are not available on older run down less expensive properties in less desirable areas, for many years people started with smaller older houses, did them up, then moved on up, am I right in thinking that New builds don't attract VAT on materials, where as refurbs do?
"Once is happenstance. Twice is coincidence. The third time it's enemy action."
'Populism, the last refuge of a Tory scoundrel'.
For many it's the notion that in paying so much compared to the amount their parents paid young people are expecting a much higher standard of first time buy.
I entered in the numbers we paid in deposit and mortgage in 1981 and I can't afford any property in the UK at all today.
Eddie
Whole chunks of my life come under the heading "it seemed like a good idea at the time".
Were your figures adjusted for inflation?Originally Posted by swanbourne
Yep but a lot of that is because of the deposit value you've entered - the app limits the total mortgage to 10 * deposit so the max you'll get on your figures is £150k (and you aren't going to need £1500 p/m to service a £135k loan!!). So for the desired 3 bed house that is going to cut of most of the South as you don't get a 3 bed house for under £150k down here.
Drop you're expectations to a 2 bed and suddenly 64% of the country is affordable, or up the deposit to £25k which is more in line market expectations for a 3 bed house and you get 85%
Property market is a bubble that needs to burst. Where we live I could not get a one bedroom flat for the outlay we made on our 5 bedroom bought 19 years ago. My children have no chance of getting on the ladder in our area. This cannot be sustainable in the long term. People will need to rent or part buy, but rental will eventually reach a ceiling compared to earnings. Homes should be lived in and not seen as investments the sooner this gets sorted the better, I would welcome a housing crash to get some proportion for the upcoming generation.
Last edited by Martin123; 15th July 2013 at 12:10.
Something has to give- everyone is stuck wherever they are are on the ladder (if they're on it at all!). I bought a small flat 5 years ago when i was 23 and can't move- the decline in value of the property has wiped out most of my original deposit, not to mention the cash I spent on the property. If I could move on then my flat would be (and was) perfect for a first time buyer
Obviously the prices are stupid. I paid £15,750 for a 2-bed semi in the early '80s. It's now over £100k. The build costs have not risen proportionately. Yet I still had to pay a third of my take-home to service a 95% mortgage, interest rates being 15% at the time.
Your correct new builds are 0% VAT.
The scheme starting in the new year that will increase the number of 5% mortgages is available to all houses but wont actually sort the major problem which is a massive shortage of houses in the Uk. The latest paper I read said that by 2030 we will be 1.1 million homes short simple supply and demand shows what will happen to the prices. We need to incentivize the bringing back into the market unused property and start building 60,000 extra new houses a year just to keep up with demand.
At the risk of sounding contrarian, we do seem to have arrived at the fervent belief that buying your own home is somehow a human right. It's only over the last 25-odd years that house buying became widespread at all. But the truth is it's ALWAYS been hard to get on the property ladder. It's never been affordable. Back in the day, even if you could get a deposit together, there was no guarantee that you'd get through the mortgage interview with your bank manager.
I bought a house in Notting Hill for £190,000. Could I buy the same house today? No, I wouldn't even get close. But my parents bought a farm with two houses on it for £11,000 30 years earlier. And they'd laugh at you if you suggested they buy it back today.
This is nothing new.
However what is new is that everyone feels that unless they have a detached house with a garden and a garage they have somehow been disenfranchised.
We have instilled a culture were peoples' expectations are out of line with reality, and consequently people feel that they are hard done by.
But I don't remember anyone talking like that in 1983 when it was still very difficult to get on the housing ladder.
Ah, a bit of misinformation here is that there isn't a shortage of housing stock, but there is a shortage of houses where the jobs are IE the South East.
Two bedroom stone Victorian cottage, GCH, DG, private garden, 5 mins M1/M62 £60k ono, complete with slow broadband, and less than average public transport links, has been for sale for over a year, one of two houses in a pretty row for sale in a row of 10 houses.
Last edited by number2; 15th July 2013 at 14:06.
"Once is happenstance. Twice is coincidence. The third time it's enemy action."
'Populism, the last refuge of a Tory scoundrel'.
I'm not sure I agree. It's 'always' been aspirational to own your own house. It was only in the last 25 years that it's become more realistic to do so. Unscrupulous landlords like that monster in the '50s* gave renting a bad name (not much has changed - renting other than in a posh place - is still the lesser option). With the melting of the upper working class into the lower middle then owning became their aim.
*http://notting-hill.london.myvillage.../peter-rachman
Who's that other monster I can't quite remember the name of?
Nicholas van Hoogstraten
"Once is happenstance. Twice is coincidence. The third time it's enemy action."
'Populism, the last refuge of a Tory scoundrel'.
Thank you, he's certainly one, but wasn't there another who gave his name to an adjective that described the worst of landlords? Other than Rachmanism, of course.
Knew him quite well back in 70's in Brighton. He was a shite then and certainly hasn't improved.
Ok a shortage of useful housing stock, the fact is that they will need to build new houses where the demand is. This is not just a SE problem either the central belt in Scotland is in the same predicament ( though lower house pricees) with several hundred thousands of houses needed (500,000 shortfall over 20 years)
Also this is not just an issue for buying a home but the rental costs are increasing much faster than the increase in income pricing even middle earners out of large areas of the UK.
In huge swathes of the UK there remain plenty of empty housing stock for sale or rent at reasonable rates, I believe at the last count in 2010 empty houses stood at c784,000 unfortunately so many of this useful empty housing stock is nowhere near the centres of employment, of course we can continue to move our working population ever South, driving up rents and prices ever further, or we could look at spreading the wealth of the nation more evenly,
"Once is happenstance. Twice is coincidence. The third time it's enemy action."
'Populism, the last refuge of a Tory scoundrel'.
Between 1995 and 2007 the UK population increased by 5%, the housing stock increased by 10% and house prices increased by 350%, meanwhile mortgage lending by banks increased by 630%. Which of these figures is more likely to have led to a 350% rise in house prices: a 5% rise in population growth which is matched by an increase in supply of housing; or an unprecedented increase in mortgage lending from the banks?
http://blogs.independent.co.uk/2012/...-so-expensive/
Houses have gone up in price cause of a massive credit expansion bubble as noted above there are somewhere between 600-800,000 empty houses in the UK.
Buying a house for over 95% of people depends on how much one can borrow for a mortgage as the data above shows mortgage debt lending has grown hugely since 2000 - If it wasnt for banks lending more and more money how would people buy more and more expensive houses?
The government has intervened in the market to prevent the bubble from collapsing through ZIRP,(lowest i/r ever) , government guaranteed lending schemes, Quantitate easing, lending huge sums of money to mortgage markets, 5% deposits for new builds and now the 20% despot guarantee scheme thats coming out in January.
The government has thrown the war chest at keeping house prices propped up and is now trying to prop up prices even further create another boom (based on debt )
I dont get how a countries prosperity can be through ever increasing houses prices and ever increasing debt , yes it works in the short term as an economic boast but in the long term its a disaster as you cant keep pursing the policy as debts spiral out of control.
Agreed, both political parties seem to suggest that the way out of recession is to build more houses, whilst tempting buyers with ever increasing novelty purchase schemes, however this can only ever be a short term fix, leading to another boom and bust scenario.
"Once is happenstance. Twice is coincidence. The third time it's enemy action."
'Populism, the last refuge of a Tory scoundrel'.
I can't afford Guernsey, I only rent.
I pay a four figure sum in rent (you don't get cheaper than £800 a month) so the mortgage payment isn't a problem, the huge deposit sum required is a problem.
The average house price is £445,326.
You can find a one bedroom bedsit or 1 bedroom flat for £200k + but no parking, outside space and in the undesirable old quarter of the main town.
I certainly don't feel hardone by as if I sold everything and saved for 5-10 years and went without holidays, days/meals out it could be done but I don't want to. More realistically I will probably move back to England again and purchase at a sensible price and deposit.
The excess of empty houses coupled with excess new builds and inflated values/debts happened in Spain too. Thát is what caused the current and still deepening crisis. At present the banks have hundreds of thousands of reposessed houses mortgaged at triple the current real value. They are dumping them on the market to save their liquidity, causing a further drop of the market with the former owners being left with more and more mortgage deficit.Agreed, both political parties seem to suggest that the way out of recession is to build more houses, whilst tempting buyers with ever increasing novelty purchase schemes, however this can only ever be a short term fix, leading to another boom and bust scenario.
The moral being; rént!!!
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