speedking

@f1sh4u #49: You will be competing against couples who earn £44k and can afford a £164k mortgage. I know who I'd sell my house to. Is that unfair?

MikeCardiff

iTrader: (2)

It does make me wonder about the motives of some of these FTB looking to buy now ??? do they just really want to own their own place, or are they hoping to make a big profit thinking prices will rocket again within the next few years ?

Consider that buying a house is THE biggest financial commitment you'll ever make ( well, maybe apart from getting divorced ! ), and also the one that has the worst consequences if you f?!k it up, a lot of people just seem to rush into it with no real understanding of what the costs and risks are.

How do you think your parents bought their first house ? most will have been stuck living with parents ( even when married ) for a couple of years while they saved the deposit, then when they bought the house they lived off baked beans for another couple of years to furnish it and pay the bills.

Why do a lot of young people now think they should automatically qualify to move into a luxury house with a new car on the drive and two foreign holidays a year ?

If you are thinking of buying now, if you cant afford to pay rent and save up a deposit in two years, you cant afford a repayment mortgage on anything that isnt a shoebox or on the local sink estate.

Two choices, wait until you earn more money or wait until prices drop to a level you can afford without greasing up and bending over in front of the mortgage lender.

I'm sure people who have read my posts on this and similar threads will realise I do tend to err on the side of caution, but there is a good reason for this - if you either borrow sensibly, or wait and save up, you arent ever likely to risk losing your house, even if interest rates go up, one of you gets laid off etc....

I know people who had houses repossessed, mostly through their own faults of over borrowing against equity or securing loans on the house, and they are now in their mid to late 40's and will more than likely never own their own house again.

For the sake of waiting a few years, is it really worth taking that sort of risk ?. Buying a house for you to live in ( as opposed to speculating on the property market, which is a gamble ) should never be risky, and if you stick to the simple rules of save deposit, get mortgage for 3.5x income or wait then it needn't be.

OllyK

I'd sell to whoever can raise the agreed amount of cash first. Their ability to service their debt once they have exchanged contracts is not my concern.

davegtt

But when someone wants to buy your house generally you dont have a clue who earns what, you will sell aslong as they can raise the funds....

davegtt

Not exactly, it shows you that the market has levelled off to a stable position. Houses going on the market and theyre bargaining to sell, its the normal way of buying and selling things. Nobody pays asking price for things unless you have more money than sence.

davegtt

Estate Agent saw me coming because I saw a house I wanted, I could afford to buy it so I went and enquired. I sorted my own morgage out, always have done and always will, so nobody fixed me up with stupid rates, granted my original fixed rate wasnt brilliant but if I hung around waiting to save I would have been priced out of the market. Made good sence to me to buy with a 105% morgage at the time, even if you think not.

My first house only cost me £52k you go work out a 105% morgage, I took out an extra £1040 to pay for fees. Not exactly put me bad position and giving me "credit to the hilt". Today my morgage is about 60% of the house value. does really mean much but again as house values mean nothing when you own a house to live in it.

I dont see why you think you have a high horse to climb upon, you have entered the thread just to throw insults around? There are words for prats like you.

Henrik

iTrader: (5)

If house prices sold for 100% of asking prices last year, and this year they are selling for 92% of asking prices, assuming that asking prices have not increased by 100/92, are the absolute house prices not lower (i.e. the actual sold price)?

MikeCardiff

iTrader: (2)

Have to agree with the post above - when the market was really rocketing, houses were selling for the the asking price with no haggling ( and some were selling for more ) - it was a sellers market, so if a seller had a few buyers showing an interest they could safely turn down any offers under the asking price knowing they'd get the price they wanted in the end.

Now those same sellers are having to accept lower offers if they want to sell, which means in real terms house prices have dropped as the actual sale price is less than it would have been 12 months ago.

The fact estate agents are still valuing houses at the same rate as they were 12 months ago is slightly worrying though - especially when these houses sit around for months without selling, or only sell when the price is dropped ( 'price reduced for quick sale' is becoming quite common on a lot of the agents boards I see now ).

Do agree with davegtt in one way, a 105% mortgage on a £52K house isnt too much of a risk, I wonder if you'd take out the same tomorrow on a £200K house though ?

Dream Weaver

Manchester doesnt have to mean South Manc though.

We're only 30-45 minutes away from Manc, and plenty of low price towns in this area - Rawtenstall, Haslingden, Burnley, Nelson, Harle Syke, Padiham, Accrington, all commuting distance to Manc, not that rough in the good bits, and decent houses still available for circa £50k.

The main problem here is that the Manchester workers have cottoned on, and are moving this way so prices are still shooting up for terraced's etc.

davegtt

Henrik, the asking price is just that... something theyre asking for... houses only sold last year for the 100% because we were going through a boom phase. thats stopped and now we're back to a normal stable market where nothing ever sells for the asking price. You can argue all you like about it being a falling market, I will believe it too be a falling market when I see a house lowering the asking price just to get interest. Granted we have seen this with a few places with people who are desperate to sell but at the minute the majority are sitting tight.

Mike, the signs that say 'price reduced for quick sale' are not yet anywhere from the midlands and north bound. You can argue everybody follows the SE but we'll see, things are happening slowly.

Im not arguing either way, I have always said there will be a downturn, I predict it to be about 12-18 months away, I dont think it'll be a crash like many others have predicted and still do. For some reason people seem to be trying to debate with me against something Ive not denied.

MikeCardiff

iTrader: (2)

This is exactly what happened in Cardiff, the house prices went mad, so people who would normally have bought here couldnt afford to, and started moving up to the valleys ( between 10 and 20 miles up the A470 ).

This drove the prices up there - terrace houses that were struggling to sell for £20K one month suddenly went up to over £70K - and now the people who have lived there all their lives cant afford to buy houses in their own village anymore.

Sounds like the same thing is happening up North, and it'll only get worse before getting better.

I think this is one of the things that gives a slightly skewed perspective of the market - while there are still a few places like that left where the prices are going up, it offsets the price drops in places where they reached their peak 12 months ago, and sellers are seeing real drops of up to 10% on traditional family homes already.

OllyK

I suspect that assumption is where things go wrong! Below is a list of the comparable houses that have sold recently on my street:

No 88 - £130,000
Semi-Detached
08-Aug-2005

No 29 - £110,000
Semi-Detached
29-Jul-2005

No 57 - £83,000
Semi-Detached
11-Jul-2005

No 117 - £79,000
Semi-Detached
24-Jun-2005

This is the actual price paid. The trend seems to be in one direction, quite rapidly and it isn't down. The last one may overly skew the figures as the houses with even numbers do have larger gardens.

MikeCardiff

iTrader: (2)

Dave, I reckon quite possibly 12-18 months in the North, mainly because prices up there didnt start to go up until 12-18 months after they did in the South.

The places where the prices went up first will be the first place to see the drops, and while nothing drastic has happened yet, the market generally has stalled down here ( rather than levelled out ) for long enough for the first effects to start coming through.

MikeCardiff

iTrader: (2)

Those figures seem a bit odd, they say that in your street house prices rose by £27K in just over a fortnight ???

OllyK

That's what "house price info" says, yes.

bren.wright

Today young people seem to be earning a lot more money than they ever have done previously, allowing them to buy all sorts of nice stuff, go on nice holidays, buy nice cars etc etc.

The prices of general everyday living seem to have risen steadily with inflation over the years, but house prices seem to have rocketed to silly levels, especially down south, but the north is still as bad in some areas.

That means that people like me who earn a very good wage for may age still cannot get onto the propery ladder?! You have to see it from our point of view, it's totally frustrating that 6-7 years ago I would of been able to afford a very nice house in a very nice area. Present day I would not be able to afford an house in any area. Of course you can argue that 6-7 years ago I would not be earning what I am doing now, but I am guessing that it would not be that far off.

Just my 2p...

speedking

@f1sh4u #49: You will be competing against couples who earn £44k and can afford a £164k mortgage. I know who I'd sell my house to. Is that unfair?

Exactly. I price my house at £164k which is affordable to couples, so of course a single person waving £82k at me will not get a look in.

davegtt

Why not? Wouldnt give a **** who I sold it too aslong as I got what was owed to me. None of my business who can afford what. How do you know the single person doesnt earn £50k a year and the couple only have a combined income of £40k a year...

Petem95

I dont think its down to earning more, its just that credit is so available. You dont save up to buying something anymore, you just go out and buy it on a credit card or store card.

Young people are starting employment with ever-increasing debts (student loans etc - average debt for someone leaving uni is something like 15k) - they certainly arent earning more - competition for graduate jobs is very tight.

Dream Weaver

Its the same for everyone at whatever time though.

When we bought our first house I was on about £9k a year, and the Mrs was on a similar wage, both of us doing naff admin jobs.

We could barely afford the house we bought, and in fact after fuel for getting to work, all I had left pretty much paid for mortgage/food, so we had 12-24 months of being hard up.

But then we got better jobs, progressed ourselves and were fine.

speedking

davegtt, I think you're reading what you want to see, rather than what I'm writing. I shall try to explain. I would rather sell my house for £164k than £82k. What the purchaser earns is irrelevant. The fact is that couples on average earn more, and the original poster was bemoaning the fact that on a single salary he can't afford to buy a house, I am trying to demonstrate one of the reasons why that is the case.

(PS we're talking about averages,not the extremes that you stated.)

davegtt

ok.No need to get funny. Fine I missunderstood what you was trying to say, which was basically people will sell for what they can get for their property and dont give a **** what anyone else can afford....

Why didnt you just say that

SimonGawthorpe

Olly,

The last house on your list sold on 8th August 2005. I think that was just about the time that houses stopped selling around here. It is now nearly 6 months later and a lot has changed. We are now into that magical time when sellers are expecting their houses to start selling because thats what the nice estate agent told them!! But surprise surprise no-one wants to pay the over inflated prices anymore!!
I know nothing about the street or the area but I would predict that you can wipe at least 10% off that top price for the same house today.

Simon

SimonGawthorpe

Its is now plain for everyone to see that prices are on the way down. The problem for me as an FTB is-

1) How quickly will they fall?

2) At what level will they stop falling?

3) When is the best time for me to buy during thefall?

If anybody could answer these questions for me I would buy them a pint!!

Simon

richardg

[If anybody could answer these questions for me I would buy them a pint!![/quote]

and so, i suspect would all of the financial press, journalists, mp's, property developers, banks, building societies, mortgage funds etc

you will never get "answers" - only opinions

davegtt

As Richard says, and as Ive said a few times on the thread already, you just never know, its all guess work. If your buying to live in it and you can comfortably afford to live with the cost of the house then there is no better time to buy than when you feel ready.

IMO off course

MikeCardiff

iTrader: (2)

I dont think young people are really earning more than before, OK , some might but there are an awful lot still doing crappy jobs for little money - as pointed out, the difference now is that banks, credit cards etc... will lend these people money now, whereas in the past they wouldnt have.

All that is happening is young people have no concept of debt, won't save up for things, and believe this media supported BS that everyone has to have a new car, flash holidays, eat out all the time and a house full of the latest gadgets.

bren.wright

I can see where you are coming from, but the point I am trying to get across is I am in a good job earning lots of money yet still cannot afford to buy an house. If I cannot afford an house, what the hell are the thousands of people going to do who still do admin jobs on 12k per year. They don't stand any chance at all with the way house prices currently are.

borich

was wondering if anyone has any info on buying part of a house off an housing assocation?

http://www.housingcorp.gov.uk/yourhome/shared.htm

would I as a town planner working in a local authority quality for shared home?

Borich