Will the plan work to turn generation rent into buy?

[anonymous-user]

Lloyds, NatWest, Santander, Barclays, HSBC UK and Virgin Money all announce 5% government backed mortgages.

https://www.dailymail.co.uk/news/article-9471187/M...

Wonder what the interest rate is going to be?

[anonymous-user]

Joey Deacon said:

Lloyds, NatWest, Santander, Barclays, HSBC UK and Virgin Money all announce 5% government backed mortgages.

https://www.dailymail.co.uk/news/article-9471187/M...

Wonder what the interest rate is going to be?

Would be interesting to see because they have been given free reign to set the interest. My guess is anywhere from 3-4%. Optimistic I know.

[Sycamore]

Super_G said:

Joey Deacon said:

Lloyds, NatWest, Santander, Barclays, HSBC UK and Virgin Money all announce 5% government backed mortgages.

https://www.dailymail.co.uk/news/article-9471187/M...

Wonder what the interest rate is going to be?

Would be interesting to see because they have been given free reign to set the interest. My guess is anywhere from 3-4%. Optimistic I know.

Can't be any worse than the (few) 5% mortgages already available however surely?

Just a cursory look at 5% mortgages currently available (which doesn't yet include the big lenders mentioned above), the rate looks to be hovering around ~4%, although that's for me right at the very bottom end of the market so I'd assume it'd be much more for those looking at somewhere more pricey.

I wouldn't be wanting the higher interest rates when you're lending much more, but I can see the appeal for a cheap property if you can afford the monthly payments but struggle to save a deposit. Just accept the higher interest on the basis of it stops you renting and at least owning your own home. Have quite a few friends who are looking into a mortgage now who otherwise wouldn't have been, as a 5% dep is a fair size less needed to save, although they are the types who won't accept a very cheap house and instead want something shiny, which looks to have been the subject of most of this thread

[Bacon Is Proof]

Sycamore said:

although they are the types who won't accept a very cheap house and instead want something shiny, which looks to have been the subject of most of this thread

To give some perspective to the plight of the Monty Python Yorkshiremen homeowners on this thread, we've got one who was not only earning enough to get a mortgage on a £220,000 property but then also had a spare £15,000 a year to do it up, and another who not only was earning enough to get a mortgage on a £150,000 property by himself, but prior to that was earning £20,000 per annum more meaning it would have only taken him 18 months to save up his £30,000 deposit.

So in reality, the two vocal examples we have in fact had it very, very easy compared to someone younger earning a more modest wage looking to buy today.

For a laugh I had a look to see what was available 15 miles from my location for cheap.

£25,000 gets you this:



If we up the budget to over £200,000 you not only get somewhere to park, but also a shed to live in!


I've tried searching specifically for uninhabitable dilapidated properties, and you know what? I think demand may outstrip supply...

[Biggy Stardust]

Bacon Is Proof said:

To give some perspective to the plight of the Monty Python Yorkshiremen homeowners on this thread, we've got one who was not only earning enough to get a mortgage on a £220,000 property but then also had a spare £15,000 a year to do it up, and another who not only was earning enough to get a mortgage on a £150,000 property by himself, but prior to that was earning £20,000 per annum more meaning it would have only taken him 18 months to save up his £30,000 deposit.

So in reality, the two vocal examples we have in fact had it very, very easy compared to someone younger earning a more modest wage looking to buy today.

The first was presumably me- I have good earnings because I worked hard to get a good career rather than whingeing that everyone else had better ones. I had the spare 15K because I made scarifices to my lifestyle to afford that, ie no avocado on toast, takeaways, netflix/sky, etc.

The option of working hard & making sacrifices is available to all.

[richardxjr]

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.

[romeogolf]

Biggy Stardust said:

The first was presumably me- I have good earnings because I worked hard to get a good career rather than whingeing that everyone else had better ones. I had the spare 15K because I made scarifices to my lifestyle to afford that, ie no avocado on toast, takeaways, netflix/sky, etc.

The option of working hard & making sacrifices is available to all.

Do you even hear yourself? Do you have any idea how many months of open sandwiches and television access are required for £15k? I say this as a home owner with two BTLs and a household income over comfortably into six figures who has had it very very easy compared to most. If I looked at our household spending on the items listed (eating out, Netflix, iPhone plans) it was £3,070 in 2021. That's for two of us living a very extravagant lifestyle compared with most people and it would still take 5 years to save a deposit on that. Never mind factoring in stamp duty, moving costs, legal fees, and 5 rent increases while we saved...

Think about this seriously. The median UK salary is around £30k, the average house price more than eight times that figure. EIGHT. How can you seriously argue that "not working harder" is the problem here? Perhaps we should just tell all 20-somethings that they need to get married as well because they've got absolutely no chance of buying a home by themselves?

"Don't like your wife? No problem - I toughed it out and that's how I bought my place! You need to learn how to live with someone you don't love..."

The oft repeated line is about iPhones as though they're a luxury item. A smart phone is a lifeline to the modern world. Without access to an email account and Whatsapp most people can't get jobs and communicate with the people they need to. Many of the people in that situation are delivery drivers who need a reasonable phone just to operate their employer's app which tells them what work to do.

People who genuinely can't make ends meet aren't buying £1200 handsets - they're buying the refurbished two-year-old model for a fraction of the cost.

I know this reply it a rambling mess, but I can't even put in to words how frustrating it is to see people so utterly out of touch with the real world.

[Biggy Stardust]

romeogolf said:

Do you even hear yourself? .........................

.............. I can't even put in to words how frustrating it is to see people so utterly out of touch with the real world.

I pretty sure that was the real world for me- worked hard, did without stuff, obtained better house than those who didn't work as hard or sacrifice as much. I'm fairly sure I didn't imagine it all.

Your real world might differ but that was certainly mine.

[InitialDave]

Biggy Stardust said:

The option of working hard & making sacrifices is available to all.

The rewards for doing so may not be.

Your logic is, you saved £15k by working hard and sacrificing. Therefore, anyone who works hard and sacrifices can save £15k. Anyone who has not managed to save £15k clearly has not worked hard or sacrificed.

This is bks. Some people can save tens of thousands while being lazy, feckless arses. Some people bust themselves raw every day just to cover their basic outgoings.

Also, the "something something avocado on toast" guff is laughable at this point. An avocado is maybe £1. An entire loaf of bread is £2 even for the nice multiseeded stuff.

[NRS]

Biggy Stardust said:

romeogolf said:

Do you even hear yourself? .........................

.............. I can't even put in to words how frustrating it is to see people so utterly out of touch with the real world.

I pretty sure that was the real world for me- worked hard, did without stuff, obtained better house than those who didn't work as hard or sacrifice as much. I'm fairly sure I didn't imagine it all.

Your real world might differ but that was certainly mine.

You didn't even read a word he wrote, did you? He seems to be better off than you - i.e. it is not his world. He DOES recognise it is not the same for everyone when you look at the statistics for society.

It's someone like Musk saying anyone who isn't a billionaire is just lazy and they have the same opportunities to become a billionaire like him. Technically yes, but it's impossible for it to actually happen across society given the real world statistics.

[Biggy Stardust]

InitialDave said:

Your logic is, you saved £15k by working hard and sacrificing. Therefore, anyone who works hard and sacrifices can save £15k. Anyone who has not managed to save £15k clearly has not worked hard or sacrificed.

The first is correct- the next bits are speculation on your part rather than logic on mine.

InitialDave said:

This is bks.

I was going to say exactly this but decided to not be rude to you.

InitialDave said:

Also, the "something something avocado on toast" guff is laughable at this point. An avocado is maybe £1. An entire loaf of bread is £2 even for the nice multiseeded stuff.

I wouldn't know- I've never bothered with it. Tell me that certain people don't spend huge sums on stuff that they could easily forego & I'll disagree with you, though.

[austinsmirk]

Bacon Is Proof said:

To give some perspective to the plight of the Monty Python Yorkshiremen homeowners on this thread, we've got one who was not only earning enough to get a mortgage on a £220,000 property but then also had a spare £15,000 a year to do it up, and another who not only was earning enough to get a mortgage on a £150,000 property by himself, but prior to that was earning £20,000 per annum more meaning it would have only taken him 18 months to save up his £30,000 deposit.

So in reality, the two vocal examples we have in fact had it very, very easy compared to someone younger earning a more modest wage looking to buy today.

For a laugh I had a look to see what was available 15 miles from my location for cheap.

£25,000 gets you this:



If we up the budget to over £200,000 you not only get somewhere to park, but also a shed to live in!


I've tried searching specifically for uninhabitable dilapidated properties, and you know what? I think demand may outstrip supply...

What location are we looking at ? So we can all look at rightmove and see what’s available

[InitialDave]

Biggy Stardust said:

InitialDave said:

This is bks.

I was going to say exactly this but decided to not be rude to you.

That's not even close to my being rude.

[romeogolf]

Biggy Stardust said:

I wouldn't know- I've never bothered with it. Tell me that certain people don't spend huge sums on stuff that they could easily forego & I'll disagree with you, though.

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?

How many years of curtailed social lives and outdated technology are appropriate before, actually, we need to fix this?

[Nico Adie]

Joey Deacon said:

Lloyds, NatWest, Santander, Barclays, HSBC UK and Virgin Money all announce 5% government backed mortgages.

https://www.dailymail.co.uk/news/article-9471187/M...

Wonder what the interest rate is going to be?

I'm 37. I bought my first flat (1 bed, repossession, no boiler, leaky roof but within 25 minutes of Edinburgh) in 2011 for £51k, and paid a 5% deposit. Salary at the time was £19k a year. Spent the best part of a year fixing the bits that I could and paying for the bits that I couldn't on a credit card. The interest rate on the mortgage was 6.7%, I took a 2 year fixed term. After the 2 years I remortgaged at (I think) 4.1%, again 2 year fixed, but I overpaid so that I was still paying the same monthly payment as I was before. After those 2 years I remortgaged again, again 2 year fixed, this time 3.4%, still paying the same as initially via overpayment. I sold in March 2017 for £74k and made approx £37k profit. Paid off the credit card, then bought a 3 bed ex-council semi for £105k. Then got married. Sold that one for £125k last year. Current house (3 bed, C-listed sandstone bungalow built in 1874) cost £240k which I wouldn't have been able to afford on my own but my wife and I's combined salaries could comfortably afford. Deposit was essentially all dealt and paid for with the money made from my first property.

It's really not difficult in anywhere other than the SE/London, and if I lived there and wanted my own property then I'd just move.

ETA - I went 2 years without broadband and central heating because I couldn't afford them, and got them when I could afford them. I still managed to go on holiday during that time and ran a 2002 Honda Civic 1.6 Executive.

Edited by Nico Adie on Friday 16th April 16:31

[ben_h100]

a311 said:

It's not just house prices, I've heard what those living down south have to pay in child care. My mother never worked when we were kids then went back as we got older part and then full time. My wife wanted to work post kids which is good, and she has a good education and is well qualified which has allowed her the choice of working part time for what most would class as a good full time equivalent salary. If she didn't work we'd still have a decent life style, probably less holidays and so on. We pay ~£5 and hour for childcare, and similar for after school clubs.

This is a huge issue. Not only will young people want to save to get on the housing ladder, but when they eventually manage to scrape together a deposit and get a mortgage and think about starting a family, they have exorbitant childcare costs to budget for. Considering that the mortgage is often sourced based upon 2 full time earners, then both have to work. I can see people putting off/not bothering having kids which is another issue we are storing up for the future.

[okgo]

That’s why they move. Pointless staying on less than a lot of HHI.

[p1stonhead]

ben_h100 said:

a311 said:

It's not just house prices, I've heard what those living down south have to pay in child care. My mother never worked when we were kids then went back as we got older part and then full time. My wife wanted to work post kids which is good, and she has a good education and is well qualified which has allowed her the choice of working part time for what most would class as a good full time equivalent salary. If she didn't work we'd still have a decent life style, probably less holidays and so on. We pay ~£5 and hour for childcare, and similar for after school clubs.

This is a huge issue. Not only will young people want to save to get on the housing ladder, but when they eventually manage to scrape together a deposit and get a mortgage and think about starting a family, they have exorbitant childcare costs to budget for. Considering that the mortgage is often sourced based upon 2 full time earners, then both have to work. I can see people putting off/not bothering having kids which is another issue we are storing up for the future.

Friends of mine pay nearly £2k a month for their two in nursery fees.

[okgo]

Sounds reasonable. 3 is more usual for z2/3

[alock]

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.