I bought a house in my mid 30's at the peak of the market... Arent I a clever boy 😆
a-a,If you bought a home rather than an investment then you've lost nothing.
As an example, if I was to buy the property where I have lived as a private tennant for the last 5 years, my monthly mortgage repayments would be 60% higher than my rent.
really? jesus where do you live? Or do you share with a number of people?
a-a,If you bought a home rather than an investment then you've lost nothing.
As long as we can afford to move then we are fine, its the people looking to downsize that are stuffed.
The Evening Standard have worked out, based on an average London salary (around £27,000), that if you save 10% of your total (not take home) salary, for 19.6 years then you should be able to afford your first home. Based on 25% deposit and borrowing 6x annual salary. That £200,000 will get you a small 1 bed flat in zone 2, or maybe a 2 bed if its ex Local Authority housing. If you want the £300,000 for a 2/3 bed flat, maybe even a small house in the less desirable parts of zone 2/zone 3, then on the £27,000 salary you need about £150,000 up front, which would take about 60 years to save at 10%. Its important to note when considering the 10% saving, that in London you will be paying £7-8000 a year for rent on one room in a shared flat.
Unfortunately loads of 'property developers' bought houses while they were cheap, and while mortgages were easy to come by. Now they have a captive audience who can't afford to buy and are forced to rent, so they can charge silly money. That keeps prices high because property developers buy up everything, particularly at the lower end of the market, since they have other properties to remortgage and hence get much better rates.
Realistically our generation is going to be renting for most of our lives, maybe all of them if our parents homes go to pay for their care. People in their mid-twenties and below who didn't get onto the property market before 2008 just have to accept that they are going to be much worse off than their parents, and that significant proportions of their income (in rent) will go to making a few people much better off.
Me and my gf bought our first house when I was 30, we'd been together for 7 years and had been saving for 4 of those. We too were spending about 1/3 of income on rent, we then put around the same in savings and the rest we spent, it was no great hardship and we could have saved more if we needed/wanted to. Yes, we missed out on some holidays (though not many!) and yes we ate cheap but, for us at least, it was worth it.
I guess what I'm saying is yes, it can feel a but rubbish out there but with a bit of hard work and sacrifice it can be done
Many of my friends are now buying houses/flats, but I don’t know a single one of them who has come out of a normal living situation to buy a flat. Everyone I know who is buying has had help with their deposits, either by living at home until their mid twenties never having moved out, or by having a loan/handout to cover a deposit.
Too many people my age (29) moan about never being able to afford a home, but have either spent their 20's traveling/spending rather than saving, and/or are too proud to move back in with their parents. If you want a home badly enough, then you'll find a way to buy one - but if you've reached a certain point in your life, have nothing in the way of savings, then tough, it's your own fault.
I rented for a few years, realised I would never be able to buy, and so swallowed my pride and moved back with my parents for 3 years. Worked my ass off, saved up a pretty large deposit, and then bought a place.
Too many people seem to think it's their right to own their own house - it's not - you have to work for these things. If you're not in a situation where you can buy, then think about how you can change it, instead of just moaning that it's unfair.
Look:
http://www.rightmove.co.uk/property-for-sale/property-35406064.html
Almost everyone can afford to buy a house 😉
Something I struggle with - there are many BTL landlords around who bought lots of cheap properties and rent them out.
One day these landlords will need to sell them all and realise capital.
Who are they going to sell them to if mortgages stay as they (rightly) are now and require 20%+ deposits?
Am I missing something??
Am I missing something??
Yes, that this assumption may not be correct:
One day these landlords will need to sell them all and realise capital.
Why invest if you don't then release cash from the investment?!
jet26 - a lot of people (my parents included) recently bought additional properties to rent out simply as they don't trust the banking system at the moment - property is a lot safer than leaving that amount of cash in an account earning very little interest (and at risk of a banking crash and/or inflation wiping out their savings' value) - not sure why people would want to pull money out of property at the moment (other than due to deaths etc)
Why invest if you don't then release cash from the investment?!
Because it provides you with an income?
I don't mean now. I mean 5, 10, 20 whenever years. They all stil have to sell to someone!
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Some people prefer the steady income of the rental income, over the lump sum of selling up, particularlly if the mortgage is low or paid off. TBH, what else would they do with cash if not re-invest it?
jet26: Not really - if the properties are providing an income, which will then allow them to buy more properties - property is a relatively safe investment for which in an overpopulated small island there will always be a demand for.
A-a, Just re-checked my figures 'cos I hadn't looked for a while.
It's me and my wife in a 2 bed flat paying £850 rent per month total.
There's a flat in the same block available for £260000, so taking a 10% deposit of 26000 and a interest rate of 4.5% the monthly mortgage payments would be £1315.
I was wrong first guess, it's actually 55% not 60% but it's been a while since I checked. Pretty sure the flats were going for £290000 a couple of years ago.
Might be better to check sold prices, rather than for sale.
Your rent also seems extremely low for the housing value- we've a house letting at 1500 per month in South London that's worth around 260000.
Heh, i'm 25 with a £24k salay and there's no way i can afford to buy my own place. Hell, after pension payments, student loan deductions and the like, a mortgage payment of £525 is 40pc of my takehome! Renting just seems like throwing my money away.
Property prices are stupid, and i'm sick of having to live with my parents still. But to get anywhere i'm going to have to save for a big deposit these days, which is going to take years.
I don't mean now. I mean 5, 10, 20 whenever years. They all stil have to sell to someone!
No they don't. Keeping adding properties, keep increasing rental income. Eventually pass it on to the children. Unless there is a serious downturn in the property market on the horizon, then selling property, if you can afford not to, is generally a bad idea.
Simple solution to get the housing market moving
remove the council tax exemption given to empty properties - then the mortgage and property companies that have shed loads of empty properties that have been repossessed or people have handed the keys back will not be able to keep kicking the can down the road through unrealistic reserves (a rolling loan gathers no loss) but will be losing money on them every month, and be stimulated to either sell them, or rent them out.
Renting just seems like throwing my money away.
In the same way buying a train ticket or a bus pass is throwing money away? How about VED on a car? I can't understand why anybody chooses to travel.
But to get anywhere i'm going to have to save for a big deposit these days, which is going to take years.
You're not owed anything in life kid, work for it. Others have.
[i]Might be better to check ...[/i] No thanks. I'm right. 😉
Z-11, that makes sense.
I wonder how may people on here moan about saving for a deposit but ride around on a £2k bike with a steady stream of new bling and servicing costs.
I am 33 and on my second house / saving for another move. The most I have ever paid for a bike is £600.
+1, My good bikes are either 50% off in the sale or second hand, but I'm just about to move to my 4th house at 36. People need to get their priorities sorted and get a plan
To make the OP feel a bit better, I've owned for about 4 years and the equity paid off is a few k more than what I've spent on the place but it's not much, plus I'm much more tied to an area/job.
The work harder brigade have a point, but the numbers make it pretty clear to me that it's harder to buy now. Nothing you can do about that, but you can put yourself in the best possible position by living frugally and building up those savings.
"But to get anywhere i'm going to have to save for a big deposit these days, which is going to take years. "
I gave up competitive MTB racing to get my deposit(was quick enough when i wanted to be but was never going to make any money at it)--- working on oilrigs abroad these days - got my deposit in 3 years and working on paying it off/ modernising the house now.
I just ride for fun now and have other hobbys to fill in the times when im home and am too knackered to ride (cant do the same ammount of riding due to lack of training when im away)
Was it worth it to try and get set up for having a family - i think so. Im not misrable im learning new stuff , amassing lots of knowledge , experiance and seeing the arsehole cities of the world. For now i am still happy - im 26 , i can always pick up my racing again when i get an office job.
I still get to ride my bike and commute to the office when i aint working abroad.
As said above - the world owes us nothing , we make our own. Its all about what you want in life. I sure as hell dont intend to be moving every few years - we bought a 3bed ex council house with potential to expand and a decent sized plot of land for this reason.
At least with renting you are not having to make provision in terms of time and money for maintaining your (read: the lender's) property (which it technically is if your equity is less than 51%).
When you rent, you are not directly paying the lender VAST amounts of interest over 25years (or whatever your term is). Add up the mortgage repayments over the term and then try to figure what the property will be worth at the point in time...
When you rent you have a greater degree of geographical mobility.
When you rent you are not subject to very probable future interest rate increases (anyone remember the late 80's? Sorry, some of you weren't yet twinkles, they went steadily and surely to 16%!!!!! My £32k mortgage then was costing me 1.2x my monthly take home AND then the prices crashed by up to 30% in the area...).
When you have 2 working arms, legs, eyes, ears, healthy internal organs, food on your table, roof over your head and a will to extend yourself for both you and others around you AND a bike to ride... remember to be grateful. 😀
Tamazepam is good for short term sleeplessness, try a feather pillow with a lavender bag, and dream about tents....
Haha!
+1 to Rudebwoy
opportunism and greed
Welcome to Earth. Step up, or step off.
but I'm just about to move to my 4th house at 36
Yeah but that means you probably got on the housing market at just the right time ie late 90s.
Im 32 brought my first house a couple of years ago.
I got some money at 18 (linked to my dad been killed during work when I was young).
I did nt buy a house then because I was going to uni, then did PhD, postdoc involved moving to a rubbish area of London (got very cheap rent). Generally was careful with my money, got a good job, pays alright, now doing research into fuels.
But almost certainly I'd have been financially better off buying a house in 1998 renting the spare rooms and generally just looking after the house and sorting rents and not getting a "proper" job. Maybe even just staying at my mums and renting the full house out till I'd paid the mortgage. The money I'd received at 18 would almost certainly have tripled. Have wages tripled in that time ?
Maybe long term my education will be better for me financially maybe not.
Simple - your aspirations are too high for your current income. You could probably easily find a flat for £300 per month in a less desirable area.
Are there cars, fancy bikes, expensive holidays etc that could be cut back on? Or silly credit card debts you ran up on shit you didn't need? if not (and its your own fault if there are) I'd bet you could put £5k in a savings account within 12 months if you both [i]really[/i] wanted to. Keep that going and you'd be well on your way to a deposit for a flat that is proportionate to your income. If you have grand aspirations then better find a higher source of income.
When you start out houses always seem incredibly expensive, then 20 years later, when you've paid off the mortgage, you wonder what all the fuss was about. I lived with my parents for several years in my 20s to save enough for a deposit - big sacrifice at the time, but long term it paid off.
[quote=poly ]Simple - your aspirations are too high for your current income. You could probably easily find a flat for £300 per month in a less desirable area.
Are there cars, fancy bikes, expensive holidays etc that could be cut back on? Or silly credit card debts you ran up on shit you didn't need? if not (and its your own fault if there are) I'd bet you could put £5k in a savings account within 12 months if you both really wanted to. Keep that going and you'd be well on your way to a deposit for a flat that is proportionate to your income. If you have grand aspirations then better find a higher source of income.
+1... and I think that applies to lots of folk. Expectations seem to be that buying lots of luxury items and spending on motoring and foreign holidays is part of everyday life at the same time as thinking that everyone should be able to afford a mortgage on whatever they have left over. "Our" parents and grandparents seem to have had a different set of priorities.
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Hi GW - * waves *
When I was saving for a deposit, that was all I did with my money, no toys, no gadgets, no expensive holidays, just eat, sleep, work and save.
Yeah but that means you probably got on the housing market at just the right time ie late 90s.
Actually not really. I bought a house in Leeds 2001 and sold a year later, made a modest amount, enought to manage to together a deposit on a flat in London, but the market had stagnated then, I had to save for my next house deposit.
Its actually in the last 12 months that most of the capital appreciation seems to have happened for me. I've just sold my house for 20% more than it was valued for 12 months ago.
all i am going to say is don't get some savings then get made redundant...and then have to spend them on living costs.... dont get evicted from your rental property every 9 months with the associated costs of moving...
as for comments about moving back home.... i guess that might work for some, but if you want a job sometimes you haven't got much choice, and what about if your parents don't want you moving back home? Why should anyone expect to be living at home when they are 35-40-50etc.
What is the average commute these days? what is the state of public transport? you can try and blame the first time buyer but house prices are out of kilter with earnings. The banks have got cold feet lending the multiples they have been. Prices as they are going no where fast, unless the economy really goes tits up.
Actually not really. I bought a house in Leeds 2001 and sold a year later, made a modest amount, enought to manage to together a deposit on a flat in London, but the market had stagnated then, I had to save for my next house deposit.
You got on before 2008, which is when it became really really hard for first time buyers.
Prices now are broadly similar to what they were then, but mortgages are much harder to get. Leads to much longer trying to pay rent AND save a deposit, rather than just paying off a mortgage.
@poly- The only way I can find a place for -£300 a month would be to rent 1 bedroom in a shared house in the very dregs of this town. However, it's rare to find somewhere for less than £350-£400.
A colleague went to see one in a [u]really[/u] shit part of town last night (he's living by himself at the moment). For a small room in this shared house they want £350 a month. Even house shares aren't that cheap any more!
Anyway, aside from the rent I don't live a lavish lifestyle. We have a car between us (10yr old fiesta) which doesn't get used much, but the inconvenience of not having it vs how much we could sell it for, it's not worth selling. I cycle to work pretty much every day (only use the car if the weather's truly terrible) so it costs virtually bugger all to run.
Our TV (a fairly decent, large one) was a donation from my dad, as a 10% strip down the side of the screen doesn't work. Make do and mend 😀
Bike parts are the only thing I do spend money on, and even then that's been cut back drastically of late. I had to spend £20 on a tyre for my commuter bike yesterday, as I'd worn through the last one.
I almost never go out drinking. I don't think I have since I moved here 4 months ago.
Any furniture we have has been bought from 2nd hand/charity shops.
I didn't intend to make this rant about my own situation, rather about the stupid amounts of money involved in property. I'm aware I don't lead a perfect super-scrimper lifestyle, and I think you'd struggle to find anyone who can honestly say they do. I don't particularly want to go into any more detail as it's unnecessary, however I have divulged the above information in answer to comments such as:
"Too many people are buying must have items like every Apple product under the sun, travelling the world etc. and not saving."
"Kids want everything handed to them on a plate these days" though I'm aware this could just be trolling...
I honestly resent these kind of idle [i]daily mail[/i]-esque comments. They are completely unnecessary, judgmental and unfounded.
My current situation is my own problem, and I will find a way round/over/through it. I said in my original post that I wasn't looking for suggestions of ways to get a house, and I certainly wasn't looking to be told in so many words that I'm some sort of terrible person with a horrendous sense of self-entitlement. I'm many things, but I'm not that!
I honestly resent these kind of idle daily mail-esque comments. They are completely unnecessary, judgmental and unfounded.
It's worth remembering where you're posting, Pinetree. There's a lot of money floating around certain parts of these forums, and a lot of very comfortable people.
Were I enjoying such levels of comfort in this age and climate where so many are starting to really struggle, I too would find comfort in any logic allowing me to blame the poor for their own misfortune so as to make me feel better about my fortune.
Anyway, aside from the rent I don't live a lavish lifestyle...
So where the heck is the other £1500 a month going if you can't afford to save? If you don't know, then have you considered doing accounts of what you spend so you can keep track - I used to do that back when I was really struggling for money.
Trying not to go all Daily-Mail on you - I appreciate that by complete random chance I managed to buy at the right time (and admittedly was also fortunate enough to have some inheritance - but that just means I have a bigger house, not that I have one). But plenty of us currently comfortable people did go through a period of scrimping and saving and not spending too much money, and it's the suggestion that you can't afford to save on your income which leads to the comments (nowadays I have 2 kids and living off my redundancy payment, so knowing how not to spend money comes in handy - oh and our TV is 15 years old).
Why invest if you don't then release cash from the investment?!
I have 3.25 properties [1 shared] mortgage free now
1.25 bring in a good income
I have no intention of releasing any cash and plan to sign them over to the kids when I reach 65
They may of course decide to release money by selling a couple of them but I hope not
Were I enjoying such levels of comfort in this age and climate where so many are starting to really struggle, I too would find comfort in any logic allowing me to blame the poor for their own misfortune so as to make me feel better about my fortune.
and you'd not be alone, you have the media lapping up and re-regurgitating Tory propaganda telling us all that the poor are poor due to their own idleness.
"Too many people are buying must have items like every Apple product under the sun, travelling the world etc. and not saving.""Kids want everything handed to them on a plate these days" though I'm aware this could just be trolling...
I honestly resent these kind of idle daily mail-esque comments. They are completely unnecessary, judgmental and unfounded.
Why do you resent them? They weren't aimed as you per say but more comments about consumerism today I say. Something that may be backed up by the amount of credit card debt that a reasonably large chunk of the population has.
As said above...if you don't spend anything on socialising or transport where's the other £1500 of your salary going each month after household bills & food?
