What a lousy time to be a first time buyer

[yulesy]

Limited/very little equity, very few starter properties available. Mortgage rates rising every day and house prices still staggeringly high in many areas. I understand rates have been 15% in the past but the crucial difference is that house prices were affordable relative to incomes. How are first time buyers without significant family help going to manage to buy in this period? Or will they just… not? Shared ownership doesn’t bring costs down, just means you need less of a deposit. But what if it’s not the deposit that is the issue, but in fact the eye watering repayments?

Yep, it' been pretty tough for the last few years. You can also add to this the rises in rent too.

I think the prices of houses will have to come down. I just don't see how people can get onto the property ladder otherwise.

Why will they have to come down? What is the percentage of first time buyer homes that are actually owned by first-time buyers as opposed to people with one or more properties that they rent out I wonder.

There are several large corporations, who are literally buying every 2 to 3 bedroom terraced in sight locally. Local people don’t get near these even to rent. I’ve had notes put through the door of my btl that property that happens to be occupied by my kids. Offering me to name my price to sell it. I presume it’s between two of their properties and it’s a bit of a fly in the ointment.

I suppose it's wishful thinking on my part and I don't fully and I don't fully understand the economic situation overall.

The bottom layer of the pyramid scheme has just basically been removed which has made things extra hard for young people, and I have four of them so I’m not without sympathy.

So, if you imagine the bottom layer the biggest layer is the easiest to get onto. You only needed a 5 to 10% deposit, which in theory could be five grand, not insurmountable.

You would then pay off a chunk of that mortgage for three or four years. And move up the ladder with your £20-£25,000 equity. Hopefully your childcare costs have gone by that point and you might of been promoted a couple of times.

Now the first time buyers are jumping straight into 300 K houses which requires 30 grand minimum. Maybe even 60 deposit, requires them to have finished university and had three or four promotions. They are knocking on 30 by this point, and just thinking about having children at the time when that costs for housing at the absolute highest they will ever be.
But if they can manage, they save a fortune in stamp duty and moving costs.

It’s just all that little bit harder for them.

We should have been first time buyers but have given up. We are on 90k in South East with a deposit we spent years saving and the situation is just insane. Absolutely nuts. What is the point in working in this country. We are making an exit plan to carry out over next few years. Partner is thankfully European.

Sold prices are coming down where I am in SE England. Just accepted an offer on my house from FTB for £80,000 less than valued at a year ago. Buying a house at £105,000 under asking in the same period. Asking prices are just wishful thinking. Lots of houses reducing prices.

What percentage is the £80,000 though?

It’s awful that the best choice is literally to move to somewhere else in the world!

Agree

Well no because you also had lower house prices, 3 x single income, and high inflation and MIRA’s so not comparable yet …. Until assistance arrives

True…

It’s impossible any why property developers are disgusting. Taking cheap properties and making them unaffordable for people who would live in them. Just to make a profit.

Houses are homes, not a way to make money.

I agree if you need to buy now, as on this next few months, it's all a bit rubbish, but for the first time I've started to believe my DCs, late teens/early 20s might actually be able to buy something relatively soon.

Maybe I'm wrong, but I can't see how the market won't see a huge correction.

Maybe I'm wrong, but I can't see how the market won't see a huge correction.

I hope you're right (and I'm a homeowner) but people have been saying that for the last decade at least. There have been small fluctuations but overall we've only seen increases.

I really hope you’re right.

Agree. We’re in the north and there’s a new development nearby listing 2 bed homes for 310k. Area isn’t even that nice. That’s half a million pounds in interest over 35 years at current rates. What!!! How can anyone afford that

The market doesn't care about people getting on the property ladder. Only whether a house sells or not.

Not like this I don't think, I certainly haven't been saying it. It's a bit of a "perfect" storm now.

The only thing that will prevent it, imo, is if government goes with the vote winner and either supports mortgage payers, or forces the banks to, artificially preventing it. In which case we'll never get on top of inflation.

They will come down. As sure as night follows day. They’ve already started reducing here.

Coming down to what though, 2020 levels ?

2020 levels weren’t that low. I think they’ll go down more.

I bought a house in 1992 for less than two thirds of the mortgage taken on it 3 years earlier. I don't know if it will be quite that extreme, I suspect government support will prop things up a bit, but I don't think we're talking 5 or 10%