How far will house prices fall [volume 4]

[jonah35]

alfaman said:

jonah35 said:

I’m surprised more younger people aren’t emigrating

Absolutely - being a slave for a huge mortgage for a shoe box in Sutton would be quite depressing.

I haven’t worked in the UK for 7+ years ..... a very Long hours / high pressure job based in Hounslow was a grim life : stty weather / Long hours / high tax / crap commute ... so I left th UK.

Whenever I go out in a commuter town or somewhere near London if I’m staying over to buy a car or something mid week I go out for beers and it’s a bit weird as it feels like everyone is just living to work in those type of places and they’re so quiet at night

The pressure and long hours and Ill health people are subjecting themselves to just to get up at 7am and get home at 7pm to do a job is crazy. If house prices fell and people’s graft in their 20s and 30s went down the pan because they lost their equity and they realised they’d have been better off being a chilled out lifeguard in Ibiza or something would leave many 45 year old men wanting to kill themselves

[jonah35]

okgo said:

I'd have left the planet, via my own hands if I had to spend time in Hounslow tbf!

I know lots of folk that have gone over to various places, but they all miss the UK, from Aus, to UAE, to San Fran, to NY.

Trouble is San Fran and NY etc have high house prices too
I know people emigrating to say Portugal or Thailand where it’s cheaper to live so they can just relax exercise and have a beer etc and they’re happier
I don’t begrudge anyone’s lifestyle choice but I do feel some of these people don’t ever stop to think

[tannhauser]

p1stonhead said:

ashleyman said:

We have a combined income of £60,000, with a deposit of £30,000 and according to Barclays we can borrow £118,544. Natwest says £224,000

This cant be right unless you have massive outgoings.

£300k (5x combined income) should be easy.

Be that as it may, it is fking ridiculous.

[alfaman]

okgo said:

I'd have left the planet, via my own hands if I had to spend time in Hounslow tbf!

I know lots of folk that have gone over to various places, but they all miss the UK, from Aus, to UAE, to San Fran, to NY.

LOL - Hounslow really is fking awful - makes Luton look salubrious.

I’ve spent most of the past year in Bahrain ... and did miss the UK at times and outdoor sports a lot ... but 0% tax / 50p per litre petrol / massive swanky apartment and a ‘shooting fish in a barrel’ dating scene for middle aged bachelors does go some way to compensating for the lack of hill walking

Edited by alfaman on Tuesday 17th July 16:38

Edited by alfaman on Tuesday 17th July 16:48

[okgo]

tannhauser said:

Be that as it may, it is fking ridiculous.

Is it?

And 50% deposit is the minimum of what you need? Garbage.

[hyphen]

ashleyman said:

So, I enquired about these new 2 bed new builds being built in Sutton.

https://www.zoopla.co.uk/new-homes/details/4798377...

They start at £350,000 for a 1 bed and range up to £550,000 for a large 3 bed 'penthouse'.

Sample kitchen and bathroom were very nice. Show flats aren't finished yet so can't see any sizes but can't get over the initial cost + maintenance fees. I asked about parking and they said I could buy a space in the underground car park for a one time fee of £15,000.

A smallish 2 bed flat was £385,000.

I genuinely do not understand how normal people can afford this stuff. We have a combined income of £60,000, with a deposit of £30,000 and according to Barclays we can borrow £118,544. Natwest says £224,000

OK, so lets get Help2Buy. As the property is in Greater London thats a 40% equity loan of £154,000 that we'd still need to pay back in addition to the mortgage.

So deposit £30,000 + Help 2 Buy £154,000 means we'd still need a mortgage of £201,000.

Do we just have a rubbish combined income or is this normal?

I can't understand how people are affording to pay the mortgage payments + their help to buy loan + actually have cash free to spend.

I still think a house is a better buy than those swanky flats tho.

If help2buy wasn't around, that flat would probably be priced lower, plus premium as new and shiny.

£385k for a flat in Sutton seems very ambitious, but again depends on how much everywhere else is- how much are flats in other areas around there?

60k combined is probably normal outside more professional jobs I would imagine, how much do teachers and nurses earn nowadays?

I had a look around there when I was doing my own buying, north Sutton had streets with very tiny terraced houses with no front gardens, south Sutton was a bit better. Cheam nearby seemed well regarded too.

As you say, it's the maintenance fees you have to watch out for with these flats.

With regards to the amounts you can borrow, is that the affordability calculators on the websites, Or have you been in and spoken to them/gotten an AIP?

[ashleyman]

okgo said:

You could easily borrow £300k assuming you don't have a st load of outgoings etc. And yes, the income is barely above country avg and you're buying in one of the most expensive cities in the world (albeit on the outskirts)...

Why anyone would pay nearly 400k for a 2 bed to live in Sutton, I have no idea!

p1stonhead said:

This cant be right unless you have massive outgoings.

£300k (5x combined income) should be easy.

We're currently renting so excluding rent + service charge our council tax, utilities basically all our monthly outgoings including food, phones, internet, tv etc... total £725 a month. We don't have car finance, we have zero debt, no overdrafts, zero balances on credit cards, no loans, nothing on the monthly finance.

jonah35 said:

But you have to question if you really want to put up with working flat out for 30 years and commuting etc to eventually own a 2 bed flat
I’m surprised more younger people aren’t emigrating
If and when the next crunch comes some people will really be screwed

jonah35 said:

Ps regardless of what you could be allowed to borrow what about actually sense checking it?
Borrowing £300k means paying back interest and the mortgage and service charge and bills and so on
What about if one of you needs time off work for children etc
I personally feel that you would be signing your life away and almost being like a slave for that

I know each to their own etc but wow

I appreciate and understand what you're both saying but what do you suggest we do instead?

If we continue to rent our 2 bed flat in Sutton for £1000 a month + service charge we're basically paying our landlords mortgage for her. If we continue renting until retirement and never buy where will we live when we retire and how do we pay for it. At least if we owned something we wouldn't need to find/spend such a huge wedge of cash every month when we're old.

We can't move away as my mums health has suddenly gone down hill and my wife would probably have a breakdown if she was more than half hour from her parents. We're actually thinking of ditching our current rental to move in with my mum, help out a bit whilst she's recovering whilst also being able to boost our savings due to not having to pay for anything except food!

Neither of our parents can offer us any financial assistance so it's on us to make it on our own.

hyphen said:

If help2buy wasn't around, that flat would probably be priced lower, plus premium as new and shiny.

£385k for a flat in Sutton seems very ambitious, but again depends on how much everywhere else is- how much are flats in other areas around there?

60k combined is probably normal outside more professional jobs I would imagine, how much do teachers and nurses earn nowadays?

I had a look around there when I was doing my own buying, north Sutton had streets with very tiny terraced houses with no front gardens, south Sutton was a bit better. Cheam nearby seemed well regarded too.

As you say, it's the maintenance fees you have to watch out for with these flats.

With regards to the amounts you can borrow, is that the affordability calculators on the websites, Or have you been in and spoken to them/gotten an AIP?

Yep. Exactly. Other 2 bed flats in the area range from £300,000-£375,000. So without H2B we can't afford them pushing us to the more expensive one.

My wife is a Teaching Assistant in a local school on one of the higher pay bands whilst also receiving a bit more per month based on courses and qualifications she holds. She gets just shy of £21k. My wife reckons a teacher in her school earns between 25-28k.

We're currently renting in South Sutton, a large 2 bed flat with a short walk to the station and off road parking and if we wanted to buy it, it would be at least £350,000 based on what sold near us recently.

Borrowing has just been calculated on websites. Did speak to an independent mortgage advisor and his advice was to ask a family member to borrow some money. Have another I can speak too but don't like wasting peoples time.

Edited by ashleyman on Tuesday 17th July 17:10

[z4RRSchris]

if your misses is a TA cant you get affordable? you are a key worker.

[p1stonhead]

tannhauser said:

p1stonhead said:

ashleyman said:

We have a combined income of £60,000, with a deposit of £30,000 and according to Barclays we can borrow £118,544. Natwest says £224,000

This cant be right unless you have massive outgoings.

£300k (5x combined income) should be easy.

Be that as it may, it is fking ridiculous.

Why?

It’s about £1300 on a take home of £4k. Assuming all other bills total up to say £700, this leaves two grand a month spare.

Times and interest rates change of course, but at the moment, the numbers are affordable easily.

Edited by p1stonhead on Tuesday 17th July 17:26

[ashleyman]

z4RRSchris said:

if your misses is a TA cant you get affordable? you are a key worker.

TA's don't qualify as Key Workers. It's only Teachers & Nursery Nurses.

[ooid]

ashleyman said:

We're actually thinking of ditching our current rental to move in with my mum, help out a bit whilst she's recovering whilst also being able to boost our savings due to not having to pay for anything except food!

That's perfect. Help your parents + save for more deposit. A colleague of mine did this with his fiancée until they get married. All was good, and managed to get a pretty nice flat.

[tannhauser]

okgo said:

tannhauser said:

Be that as it may, it is fking ridiculous.

Is it?

And 50% deposit is the minimum of what you need? Garbage.

Yes it is.

And yes, a couple earning 60k combined should be able to put together a fairly decent deposit - in a sane world. Garbage yourself.

p1stonhead said:

tannhauser said:

p1stonhead said:

ashleyman said:

We have a combined income of £60,000, with a deposit of £30,000 and according to Barclays we can borrow £118,544. Natwest says £224,000

This cant be right unless you have massive outgoings.

£300k (5x combined income) should be easy.

Be that as it may, it is fking ridiculous.

Why?

It’s about £1300 on a take home of £4k. Assuming all other bills total up to say £700, this leaves two grand a month spare.

Times and interest rates change of course, but at the moment, the numbers are affordable easily.

Because it is. 5x combined is crazy! And yes, interest rates can/do change!

"Affordable easily" - what a shortsighted way of thinking. Pretty much the same as most sheeple today.

ETA: Maybe Barclays and Nationwide are actually reigning in their previously senile lending?!

[p1stonhead]

tannhauser said:

okgo said:

tannhauser said:

Be that as it may, it is fking ridiculous.

Is it?

And 50% deposit is the minimum of what you need? Garbage.

Yes it is.

And yes, a couple earning 60k combined should be able to put together a fairly decent deposit - in a sane world. Garbage yourself.

p1stonhead said:

tannhauser said:

p1stonhead said:

ashleyman said:

We have a combined income of £60,000, with a deposit of £30,000 and according to Barclays we can borrow £118,544. Natwest says £224,000

This cant be right unless you have massive outgoings.

£300k (5x combined income) should be easy.

Be that as it may, it is fking ridiculous.

Why?

It’s about £1300 on a take home of £4k. Assuming all other bills total up to say £700, this leaves two grand a month spare.

Times and interest rates change of course, but at the moment, the numbers are affordable easily.

Because it is. 5x combined is crazy! And yes, interest rates can/do change!

"Affordable easily" - what a shortsighted way of thinking. Pretty much the same as most sheeple today.

bks. You do what you have to. People want to move on with their lives. If that means getting a big mortgage then so be it. I’ve done 5x combined before when starting out. If I hadn’t I would never have even got somewhere. Needs must.

[tannhauser]

p1stonhead said:

bks. You do what you have to. People want to move on with their lives. If that means getting a big mortgage then so be it. I’ve done 5x combined before when starting out. If I hadn’t I would never have even got somewhere. Needs must.

Stupid, reckless bury your head in the sand mentality, which is sure to burn lots of people at some point in the future. And serves them right too.

[p1stonhead]

tannhauser said:

Stupid, reckless bury your head in the sand mentality, which is sure to burn lots of people at some point in the future. And serves them right too.

May do. May not. Benefitted me hugely. Others perhaps not.

I did it to buy an absolute st hole and then saved for another year to make it livable. It’s all we could get at the time even maxed out.

That flat I bought back only 8 years ago for £175k and sold for a bit more 6 years ago is now worth £340k. Wages haven’t moved.

As I said, people do what they have to.

[Sheepshanks]

anonymous said:

[redacted]

None of which will help pay the mortgage. Indeed it makes things worse as pension and student loan repayments are going to take 15%+ of their salary.

Although it's still not a lot, it doesn't take much to get into the mid-to-high 30's though.

[stuckmojo]

tannhauser said:

Stupid, reckless bury your head in the sand mentality, which is sure to burn lots of people at some point in the future. And serves them right too.

Agreed. But that's the herd mentality that governs the UK real estate market. If you applied logic to it, it would indeed look reckless and stupid.

[loafer123]

stuckmojo said:

Agreed. But that's the herd mentality that governs the UK real estate market. If you applied logic to it, it would indeed look reckless and stupid.

I don’t think I agree with that.

In the wider country it is perfectly possible to save up and buy a decent house.

Take Nottingham. £275psf buys a decent house. A young couple can easily pay for that with some savings and average incomes.

London and the SE are a different matter. They have gone nuts due to foreign investors buying centrally and the value ripples working their way out.

London will suffer badly as it resets to domestic buyer metrics, which implies prices down at £750psf in places like Nine Elms.

[tannhauser]

loafer123 said:

stuckmojo said:

Agreed. But that's the herd mentality that governs the UK real estate market. If you applied logic to it, it would indeed look reckless and stupid.

I don’t think I agree with that.

In the wider country it is perfectly possible to save up and buy a decent house.

Take Nottingham. £275psf buys a decent house. A young couple can easily pay for that with some savings and average incomes.

London and the SE are a different matter. They have gone nuts due to foreign investors buying centrally and the value ripples working their way out.

London will suffer badly as it resets to domestic buyer metrics, which implies prices down at £750psf in places like Nine Elms.

When will people get it into their thick heads, that the interest rates of today are phenomenally low and are unusually so?!

[p1stonhead]

tannhauser said:

loafer123 said:

stuckmojo said:

Agreed. But that's the herd mentality that governs the UK real estate market. If you applied logic to it, it would indeed look reckless and stupid.

I don’t think I agree with that.

In the wider country it is perfectly possible to save up and buy a decent house.

Take Nottingham. £275psf buys a decent house. A young couple can easily pay for that with some savings and average incomes.

London and the SE are a different matter. They have gone nuts due to foreign investors buying centrally and the value ripples working their way out.

London will suffer badly as it resets to domestic buyer metrics, which implies prices down at £750psf in places like Nine Elms.

When will people get it into their thick heads, that the interest rates of today are phenomenally low and are unusually so?!

‘Unusually’ low for over ten years. If I hadn’t moved I’d be half way through my mortgage at these ‘unusual’ rates.

This is normal for now. I think it’ll remain so for some time.

The days of ten percent are a long long way off. It could be ten years off, it may never happen. It certainly won’t happen any time soon.

People in their twenties have had these ‘usually low’ rates for half their lives in total or the whole of their lives as adults.

They may change and screw everyone. They may not.

Edited by p1stonhead on Tuesday 17th July 22:22