Budget day

[Oakey]

anonymous said:

[redacted]

I think you may be being a little harsh, kids leaving school at the end of the 90s / early 2000s couldn't have predicted house prices would rise to the ridiculous levels they did in the last decade.

[Du1point8]

Oakey said:

Du1point8 said:

but £60k join income is £200k morgage so that is £40k (20%) over 5 years or £666 per month... fk me, my mortgage for £280k is only £900, really is going to fk them up...

And how will they stop this being abused?

How will they stop people with a bit of money thinking "Hmmm, interest free loan for five years? yes please" and buying up property in their kids names, etc?

Proving the income and being a first time buyer...

Excuse me whilst I hatch a plan with the GF and some of her mates that would never buy a flat... I can feel my property portfoilo expanding as we speak...

[ralphrj]

okgo said:

So the average house price in the uk is £232,628 at the minute. Average salary is what? £25k...

Anyone know what these figures would have been in 1990 for instance?

http://news.bbc.co.uk/1/hi/business/593477.stm

http://www.housepricecrash.co.uk/indices-nationwid...

1990 Average Salary £13,760

1990 Average House Price between £55-60k (average prices fell from about £60k to £55k during 1990).

[TonyHetherington]

ralphrj said:

http://news.bbc.co.uk/1/hi/business/593477.stm

http://www.housepricecrash.co.uk/indices-nationwid...

1990 Average Salary £13,760

1990 Average House Price between £55-60k (average prices fell from about £60k to £55k during 1990).

So, roughly, in 1990 house prices were 5 times the average salary, now (2011) they're 10 times the average salary.

[NoelWatson]

ralphrj said:

okgo said:

So the average house price in the uk is £232,628 at the minute. Average salary is what? £25k...

Anyone know what these figures would have been in 1990 for instance?

http://news.bbc.co.uk/1/hi/business/593477.stm

http://www.housepricecrash.co.uk/indices-nationwid...

1990 Average Salary £13,760

1990 Average House Price between £55-60k (average prices fell from about £60k to £55k during 1990).

We are still way above last peak, despite propertaay now being "cheap"

[BoRED S2upid]

TonyHetherington said:

I disagree. You dind't need to save hard even just 5-10yrs ago. You could get away with a 100% mortage or just a 5-10k deposit. Fairly easily done for most people. Now you're looking at 20k which is far from easily done, especially at the first time buyer end of the salary range.

Thats the thing there Tony you could get away with a 100% mortgage or a low deposit thus loads of people straight into negative equity as soon as house prices fall.

25% should always be a rule of thumb IMO.

[NoelWatson]

anonymous said:

[redacted]

They went up broadly in line with earnings until ~2000

[Shaw Tarse]

The Chancellor can drink whatever he likes during the budget speech (useless information)

[TonyHetherington]

BoRED S2upid said:

TonyHetherington said:

I disagree. You dind't need to save hard even just 5-10yrs ago. You could get away with a 100% mortage or just a 5-10k deposit. Fairly easily done for most people. Now you're looking at 20k which is far from easily done, especially at the first time buyer end of the salary range.

Thats the thing there Tony you could get away with a 100% mortgage or a low deposit thus loads of people straight into negative equity as soon as house prices fall.

25% should always be a rule of thumb IMO.

Indeed you're right - but with a graph like the house prices one a few posts above, it's not surprising people continued to allow (and buy) 100% / 95% mortgages. It's only these past 4 yrs out of the last 50 that would have been a problem. 25% deposits are all well and good, and the logic is sound, but how many young first time buyers do you think can afford £30k ( ). We'd end up where we are which is many people buying lower end property to rent.

[Oakey]

anonymous said:

[redacted]

Maybe so, but certainly nothing like the levels they rose betwween 1998 and 2008. There's an increase of around £120k there!

[The_Burg]

anonymous said:

[redacted]

Be interesting to see average plotted on the same graph.

[Oakey]

The_Burg said:

Be interesting to see average plotted on the same graph.

Average what? Wage?

ETA:

Best I've found so far, will look for better

Edited by Oakey on Wednesday 23 March 12:33

[Shaw Tarse]

Mrs mumsnet on ITV, switches over!

[F i F]

anonymous said:

[redacted]

I bet we bought our first houses at about the same time, as that was the deal then, and the mortgage interest rate was 13.74% at the time too.

iirc the rule was that you had to go on a waiting list to gain an interview with the Building society or bank that you'd been saving with in order for the interviewer to approve you going on a waiting list to allow you make a mortgage application.

We were lucky, we had a 20% dep and that coupled with my occupation meant that we qualified for EEC funds for a few thousand at very low rates compared to the normal %, but even those rates would look high today.

Again iirc the rule was that these funds had to come through the Halifax, and it was fortunate that this was the BS that we'd been saving with for sodding years so qualified automatically and thus applied immediately before the funds ran out being lucky to be approved.

This meant we could afford somewhere reasonable as opposed to falling down terrace. Even then it was years before we had any decent furniture / a stair carpet despite the rampant inflation which helped in wages vs mortgage payments thankfully.

Today's FTB don't even get that working on their side.

[NoelWatson]

TonyHetherington said:

It's only these past 4 yrs out of the last 50 that would have been a problem

You need to recheck your data.

TonyHetherington said:

25% deposits are all well and good, and the logic is sound, but how many young first time buyers do you think can afford £30k

The same ones that will need to service and pay off the debt (was that a trick question?)

[NoelWatson]

We are off

[okgo]

Mental.

I hope that parents could see this, as them keep pestering me to buy a place despite me saying how hard it is, really need to see that graph.

Just out of interest, Noel, when did you buy your house??

[NoelWatson]

okgo said:

Just out of interest, Noel, when did you buy your house??

At the national (but not local) peak! I am unique on PH

[anonymous-user]

NoelWatson said:

And why do you think that is?

Why don't you tell me, rather than asking patronising questions, o clever one?

[NoelWatson]

Opulent said:

NoelWatson said:

And why do you think that is?

Why don't you tell me, rather than asking patronising questions, o clever one?

Because we've been through an unprecendented debt binge, where people could get rich by buying and selling properataay to each other, getting useful tips from shows such as Krusty and Phil. Money could then be extracted from the piggybank/house and spent on X5s, spray tans and Spanish holiday homes. As propertaaay always goes up, the more you bought, the more than could be spent on tans, so people bought BTLs.
This was always going to burst, with property coming down to "fair value" and undershooting. Merv has managed to temporarily halt this, so we now find ourselves in limbo land.
Quite why an average FTB wants to buy now is beyond me.