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?

Practically frothing at the mouth, any decent person would be hoping to be wrong, and delighted to hear of the steps to prevent their predictions coming true.

So that’s based on LTV. How is that of any relevance if people can’t pay their mortgages? It simply means they have more equity to lose. It’s really irresponsible and dishonest of “industry insiders” to say it can’t happen again when we all know these things are cyclical.

The late 80s/early 90s were dreadful and nobody would wish a return to that but, given the state of the UK economy, it sadly looks as if it’s heading that way.

If you really can’t understand the relationship between LTV and affordability then I really give up love😂. Notice you’ve conveniently ignored the part about the hugely increased regulation?

I’m honestly getting so tired of these people gleefully rushing on to say how so many people are going to get repossessed 🙄. This is not the 1990s, the landscape has changed.

Ack I know, these people never listen though! It’s scaremongering and it’s horrible and it’s always from people with no/low mortgage 🙄.

This is not the 1990s, the landscape has changed.

Economics hasn’t.

WTF ? It’s unrecognisable 🤣

A couple of years ago we could easily afford the mortgage repayments but didn't have the deposit. Now we have the deposit, but we can't afford the repayments. We're both above average earners with professional jobs and still renting in our thirties. It's a shit show.

Yes! You sound just like us. And many other posters on here from what I’ve read. I honestly don’t know how this is resolved to be honest.

The number of homes in England grew 1,819,200 between 2010/11 and 2019/20, an increase of 8.0 per cent. Over that same period, England's population grew by 4,090,600. This is why prices won't plummet mid - long term. There's a fundamental supply - demand mismatch.

The big shift Vs the '90's is the affordability tests. Lenders have had to stress test ability to pay mortgages at 6% interest rates. Admittedly those tests didn't factor in inflation at current levels but it should mean the vast majority are cushioned.

This is us too. The repayments on an asking price first time buyer house in our area are absolutely insane at the moment. About a grand more than we are paying in rent for a nicer house. Have even seem some rental reductions on rightmove round here, people just dont have the money.

Landlords are getting rid of lots of properties so that might free up some flats and houses

Is the overall market feeling the same since this post was started? My son is a first time buyer and now seriously considering whether or not now is a good time to buy or wait for interest rates to drop.

Things are so expensive but I read this article today which i found to be very useful and gives hope that things are likely to improve this year:
https://uk-mortgagebroker.co.uk/first-time-buyers-when-right-time-buy/

TIA

At least FTBs know now that the base rate peaked at 5.25% - there were scare stories at the time of the original post about it reaching 6% or higher by the end of 2023. And fixed rate mortgages have come down a little & will presumably fall further when the base rate drops to 5% then further down to around 4.25% by the end of 2024.

Still exceptionally hard for FTBs to get on the property ladder though, especially those without help from the Bank of Mum & Dad.

Bring back MIRAS or at least a form of it. Maybe say for the first 10 years of ownership whether that's one property or spread over a number of properties. I am surprised it hasn't been looked at again.

Yep you're right, now would be an awful time to invest in property, especially as a first time buyer. With interest rates due to come down and settle, they'd be much better off waiting if they can until either interest rates or house prices come down.

If living at home, they should stay there. If they can't, then I'd rent a room somewhere to keep costs down and keep saving.

Very sad situation for young adults :(

My nephew has just bought a flat as a FTB. He actually put the offer in around August and the solicitors have been incredibly slow given that there is no chain. However, they did him a bit of a favour because mortgage rates went down and the broker was able to get a mortgage on better terms for him.

It is stunting young adults moving out from their parents.

Even rentals.

But everyone wants their house price to remain as high as it can.

Once we pay the mortgage off we will be paying as much or more to help our kids move out. We really don't want them under our rules in their 20s that's the life decade to take career opportunities, have a bit of fun before you might settle

Where I am in the South West we are seeing the market really stagnating. Every day there are price drops and properties stay on the market for months even after considerable reductions. Two years ago I sold a bungalow in a market town. At that time there were two bungalows on the market there - today there are 49.

We're also seeing rentals staying on the market despite price reductions. Some of the properties for sale are clearly ex rentals where the landlord is getting out of the market.

Things can't stay like this can they? Prices have to drop considerably and, if lenders want people to buy, then they will have to change tack. I hope things improve for first time buyers.

I've posted this on a thread in the property forum but some people on this thread may also find it interesting

https://inews.co.uk/inews-lifestyle/money/saving-and-banking/interest-rates-fall-how-low-2024-experts-2880146?ito=push-notification&ci=24pJG28G4t&cri=ezP4I38tHR&si=cssdIvAnxCT_&xi=56861e79-4094-4d03-8095-220d61ca36ad&ai=2880146

I live in a cheap area and prices have gone up massively thanks to developers buying up swathes of cheap terraces and turning them into rentals. It's ridiculous.

@PutinSmellsPassItOn Who are these terraces being rented to? Do you see them listed online, so anyone can apply?

Same here. Decently paid job, 50k deposit, but the mortgage repayment would be over 1.2k a month on a two bedroom flat (around 250k in my area). And I'm in my 40s. I don't know if it will ever happen for me, and with rents increasing I can't afford to move to a different rented property either.

I think it's a terrible time for everyone tbh. The only buyers who seem to be winning at the moment are those with 100% cash. We aren't getting a look in on any of the properties we have seen because the vendors say sorry they have to go with the 100% cash offer. Blows my mind. Who are these people with hundreds of thousands of pounds of cash?!