Will the plan work to turn generation rent into buy?

[Oakey]

So, just to recap; Stitched, at the age of 46, paid £150k for a rundown property on a salary of circa £50kp.a. In order to get that mortgage he had to take another job which reduced his earning by £20kp.a, so assumedly he was on £70kp.a. prior to buying this house? He then "spent £70k over the next couple of years" doing it up whilst nipping over to his inlaws to make use of their utilities and, finally, was fortunate enough to receive a half share in his mother's property when she died. I don't think any of that is representative of your average person.

[98elise]

Jimbo. said:

stitched said:

I wasn't suggesting any of the above.
Just pointing out that it could be done 20 years ago, I know because I did it.
That it could be done 3 years ago, as above.
It requires willpower and sacrifice, and I in no way denigrate the skills I learned first time around.
Owning a house is not a right, I still say it is attainable in the current market.

20 years ago things were VERY different, as you well know. If wages had kept pace with house prices and lending criteria, supply of houses etc remained the same, perhaps it could be done as easily as 20 years ago. But that’s not what’s happened.

You don't have to go back 20 years. 10 years ago I was buying 2 or 3 bed modern (1970's) houses for £130k in the south east for BTL. I was never short of options.

Best buy was a house like this for 108k. 2 bed, garage and drive, and in a Close so on street parking as well.




It just needed a new kitchen and bathroom, which I did myself.

Its still occupied by the first tenants.

[JagLover]

richardxjr said:

Park homes are mad round here too, seen them up to 300k, and you could buy a proper house for that. You couldn't pay me etc etc.

Probably requires special mortgage too.

Well this is a little off topic but as far as I am aware they can make sense if used in the correct way and properly priced.

You often see them in "retirement parks" with a minimum age of 50 to live there. So lets look at a typical example someone who has a fully paid off house, in their sixties, and wants to downsize to a park home in the countryside. They sell their house for, say, £350K and then buy a park home for £200k and then live on the remainder.

This might make financial sense, though remembering you have to factor in site fees each year.

As to whether you would want to live in one well that probably depends on when it was built. A brand spanking new one will likely be well insulated (they are covered by insulation standards now) and will see you out if you move in when you are in your sixties. Older ones can be more problematic from what I hear, particularly those built before 2005.

[Oakey]

Take this with a pinch of salt but a guy I know, his mother lives on one of these sites. Apparently it was recently purchased by a very wealthy traveller and my pal says they're now putting the squeeze on his mum to sell up, offering her "the best price she'll get". Apparently that best price is circa £3k. She paid £90k originally!

[andy43]

Nico Adie said:

mikewilliams79 said:

Sounds horrendous

Thank you.

I can see where you went wrong - the Civic was the Executive. Sunroof, leather trimmed wheel, flash git
You'd be in a 9 bedroomed mansion by now if you'd gone for an SE.

Wouldn't touch a park home - I'd guess (and I have no experience) they'd be as easy to sell as retirement flats. 3k back from 90k is painful.

Near me - NW England - 3 bed family houses, parking (this is PH) -
Oldham - https://www.rightmove.co.uk/properties/90716659#/ - huge 3 bed split level semi with a garage. Big house, outlook is crap but it's cheap. 130k. Garage!
Buxton - https://www.rightmove.co.uk/properties/88184089#/ - 3 bed modern semi, parking, gardens etc. Use as is. Outdoor life and hills! 135k.
Oldham - https://www.rightmove.co.uk/properties/90657376#/ - 3 bed corner plot semi bungalow - needs work. 170k.
Go down to 2 bed and include terraces and street parking and 150 gives you loads of choice.
200k gets you a better area/schools and so on.
Not shared ownership or auction sales, not charcoal-windowed silver-carpetted show homes - they're half-decent solid houses within commuting distance of a functioning economy.

[Oakey]

That one in Buxton, looking at Rightmove it appears that when they were newly built in 2007, pre-GFC they were sold for £182k. In 2009, post-GFC they sold off a load of the same properties for £107k. Got to feel for whoever bought them at the time!

No. 27;

£182k in July 2007, sold for £88k in May 2012. Yikes!

Edited by Oakey on Saturday 17th April 12:19

[Electro1980]

Oakey said:

So, just to recap; Stitched, at the age of 46, paid £150k for a rundown property on a salary of circa £50kp.a. In order to get that mortgage he had to take another job which reduced his earning by £20kp.a, so assumedly he was on £70kp.a. prior to buying this house? He then "spent £70k over the next couple of years" doing it up whilst nipping over to his inlaws to make use of their utilities and, finally, was fortunate enough to receive a half share in his mother's property when she died. I don't think any of that is representative of your average person.

You forgot the bit where a middle aged man with a good job, skills and a deposit this means every 20something or 30somethinng is being lazy if they can’t do the same .

[anarki]

alock said:

romeogolf said:

Okay, let's turn this around. At what point, how many multiples of the average pay, would it take for you to accept that house prices have outstripped the average person's ability to buy one?

There is still a huge number of people who buy a house as a working couple. Therefore the market has calibrated itself to double salary households.

If the banks offer 4 times joint income, then by definition 8 times a single income is sustainable. This is about where we are now.

If the banks offer larger income multiples then prices can easily continue to rise.

There are loads of props that can be employed to keep the prices high.

It wouldn't surprise me to see intergenerational mortgages being introduced, 100 year mortgage terms where the debt gets paid off by 3 generations within the family.

Or 100% mortgages, help to buy MK3, part buy part rent at any ratio, etc.

They haven't even really begun digging through the bag to find more schemes yet.

[mikewilliams79]

Nico Adie said:

Thank you.

For what

[Biggy Stardust]

romeogolf said:

Your first three words tell us everything we need to know. You don't actually know what you're talking about.

Your lived experience differs hugely from the average person. As has been pointed out, the average person does not have time - never mind the skills - to buy a derelict house and refurbish it themselves.

Those who can, do. Those who can't moan about how unfair it is that others can.

Those skills are innate- I had to make the effort to learn them.
Time can be made available- it's not compulsory to watch netflix or go to the pub.

[Bacon Is Proof]

Biggy Stardust said:

Those who can, do. Those who can't moan about how unfair it is that others can.

The "kicker":
I own my home.
No mortgage, bought it outright. I can however do maths.
Maybe if you'd worked as hard as me and made as much sacrifice you could have done the same.

ETA: as someone asked, I'm in Cambridge.

[Biggy Stardust]

Bacon Is Proof said:

I own my home.
No mortgage, bought it outright. I can however do maths.
Maybe if you'd worked as hard as me and made as much sacrifice you could have done the same.

I only wish I had.

[Nico Adie]

mikewilliams79 said:

For what

For your valuable and considered contribution to the discussion of course.

[NRS]

Biggy Stardust said:

I only wish I had.

You could have, you just didn't make the sacrifices needed. There's places in Glasgow for £20 000, why didn't you move to one of them?

[stitched]

NRS said:

Biggy Stardust said:

I only wish I had.

You could have, you just didn't make the sacrifices needed. There's places in Glasgow for £20 000, why didn't you move to one of them?

There are places in Manchester for far less, good jobs available there too.
I'm aware of this as my stepdaughter moved there, she is planning to buy there next year.
Before anyone jumps in, I have friends in Manchester, I'm in Stroud at the moment so won't be able to help as much as I'd like.
I will give her, and get for her as much assistance as I can and agree this sort of help is not available to everyone.
Oh and I realise it was a financial help that we sold my mothers house, I'd give back double that to have her still living in it though, previous ten years I'd been no fixed abode, living in cheap digs and travelling all over for work.
She didn't get to see my new place finished.

[mikewilliams79]

stitched said:

There are places in Manchester for far less, good jobs available there too.
I'm aware of this as my stepdaughter moved there, she is planning to buy there next year.
Before anyone jumps in, I have friends in Manchester, I'm in Stroud at the moment so won't be able to help as much as I'd like.
I will give her, and get for her as much assistance as I can and agree this sort of help is not available to everyone.
Oh and I realise it was a financial help that we sold my mothers house, I'd give back double that to have her still living in it though, previous ten years I'd been no fixed abode, living in cheap digs and travelling all over for work.
She didn't get to see my new place finished.

Far less? I can't see any on rightmove... where are all these places?

https://www.rightmove.co.uk/properties/90657385#/ theres this but 8k is just guide price.

[stitched]

Oakey said:

So, just to recap; Stitched, at the age of 46, paid £150k for a rundown property on a salary of circa £50kp.a. In order to get that mortgage he had to take another job which reduced his earning by £20kp.a, so assumedly he was on £70kp.a. prior to buying this house? He then "spent £70k over the next couple of years" doing it up whilst nipping over to his inlaws to make use of their utilities and, finally, was fortunate enough to receive a half share in his mother's property when she died. I don't think any of that is representative of your average person.

Not quite, I won't go into earnings, however your estimates are a bit high.
Also bear in mind a couple of things, I didn't spend anything like £70k doing it up, in fact the garden was the most expensive thing, I was earning good money as I was willing to travel anywhere I was needed and live in digs.
This ups the price you can charge, also I regularly worked 60 hours a week and unsocial hours at that, bank holidays, christmas etc.
Which meant I had a decent amount of spare money when I met my current partner.
I know a lot of people who wouldn't dream of living in places like I often did, stuck in a 9 to 5 crappy job with few prospects for advancement.
Most of them rent.

[Biggy Stardust]

NRS said:

You could have, you just didn't make the sacrifices needed.

I already acknowledged that- why are you trying to capture the same ground a second time?

NRS said:

There's places in Glasgow for £20 000, why didn't you move to one of them?

I worked hard enough & made enough sacrifices to get a better place than that.

[stitched]

mikewilliams79 said:

stitched said:

There are places in Manchester for far less, good jobs available there too.
I'm aware of this as my stepdaughter moved there, she is planning to buy there next year.
Before anyone jumps in, I have friends in Manchester, I'm in Stroud at the moment so won't be able to help as much as I'd like.
I will give her, and get for her as much assistance as I can and agree this sort of help is not available to everyone.
Oh and I realise it was a financial help that we sold my mothers house, I'd give back double that to have her still living in it though, previous ten years I'd been no fixed abode, living in cheap digs and travelling all over for work.
She didn't get to see my new place finished.

Far less? I can't see any on rightmove... where are all these places?

https://www.rightmove.co.uk/properties/90657385#/ theres this but 8k is just guide price.

They're generally are not up for sale, there are derelict streets in Salford and other areas, they wouldn't sell as the areas are too rough and many are used by druggies.
Still quite a few on the outskirts of these areas but admittedly I wouldn't fancy living so close to most of those areas, at my time of life.
I was offered a terraced street in around 2000 for £500 a house, I actually tried to set it up as a gated street, but Manchester Police objected as it would look like they weren't in control, they weren't.

[mikewilliams79]

stitched said:

They're generally are not up for sale, there are derelict streets in Salford and other areas, they wouldn't sell as the areas are too rough and many are used by druggies.
Still quite a few on the outskirts of these areas but admittedly I wouldn't fancy living so close to most of those areas, at my time of life.
I was offered a terraced street in around 2000 for £500 a house, I actually tried to set it up as a gated street, but Manchester Police objected as it would look like they weren't in control, they weren't.

So there are places for less but they're not for sale