Do you ever think 100% mortgages will come back?

[peebles32]

Talking to my grown up children and the thought of owning a house does not cross their mind.
They just presume it won't be a possibility.
Not in a position to save as paying extortionate rent in an expensive city.

Do you even think 100% mortgages will come back?

We gifted our oldest son £40k deposit, just enough for a one bed flat but of course, you then have to factor in solicitor and mortgage broker fees so in the end it was nearer £50k.

100% mortgages just keep house prices artificially high.

There is no incentive for prices to move with the economy/ wages. They just add to the debt crisis.

They're not necessarily a bad thing IMO. We had one which allowed us to buy straight after university rather than get trapped paying rent.
We moved 3 years later and the house price had only increased enough to cover our stamp duty and legal fees but we had enough equity after 3 years of repayments to give us a deposit for the next house. If we had rented we would have had nothing.

I more than tripled my deposit in 2 years. Noughties. Bought £55k with £2750 deposit. Sold exactly 24 months later for £65k. So had £12k deposit for £120k flat.

In my mid 20s.

I don't think these opportunities should be denied to gen z.

We bought our first house in 2002 on a 110% mortgage but prices were going up so fast that by the time we completed 6 months later the LTV was actually <100%. They would have lent us 125% if we'd wanted it.

I hope they don’t.

We’re saving for DD deposit, she’s 8. I do believe you can save if you live at home until mid /late twenties. Depending where you want to buy and what.

A friend lives in Denmark and renting is the norm there, she doesn’t understand the obsession we have with buying something.

Did you two compare notes on renting?

I have lived in Western Europe (and I have a friend in Denmark, so know it is the same there).
Tenancies are secure - you will not get kicked out until you choose to move.
Rent rises, if they exist at all, are reasonable and never more frequent than annual. Renting also tends to be cheaper than buying.
You have a complete right to privacy and will not be subject to inspections as if you're a teenager still living at home with mum and dad.
You can do to the home whatever you want as long as you put it back in the exact state you got it in. Nails in walls, painting, new flooring, hell, even removing (non-carrying) walls - all no issue as long as you put it all back again when you leave.
Homes are a good size and have quality insulation, including sound insulation.

Renting in the UK is the complete opposite and the reason why so many people are desperate to own.

@Elendel @RickyGervaislovesdogs

I agree - it’s misguided when people compare us to Europe and talk about how “obsessed” we are with owning our own homes. Renting in this country generally puts you in substandard accommodation that you cannot improve (or are disincentivised to as you could be kicked out at any time) and forces you to live a protracted adolescence where you are subject to inspections and have to ask someone to help every time something needs fixing or sorting.

I am immensely grateful to have bought my house in 2021 when prices were high but before they went nuts middle of 2022 (friend over the road bought same house as us 10 months later for £55k more) fixed for 5 years at 1.5%.

It’s never really a home in the UK when you rent.

@Elendel No we didn’t. Some landlords let you do up the property? (but in experience then sell it!)

My parents bought all three of their places in the London commuter belt on 100% mortgages back when a mortgage was 3 times your salary. It would be great to go back to when property was that affordable!

My son bought a one bed in a cheap south east area when he was 20 and then with his girlfriend this year they bought a 4 bed (they are both working in good jobs and are 22 now) - neither been to uni but they are both grafters and spend everything on the house at the moment and budget themselves very tightly. He had some help from family (very small) purchasing the initial property, and since then everything has been paid for by the two of them.

A single person on 50K a year buying a 150K house on a 100% mortgage is better than a couple on £80K buying a £400K house on a standard 90% mortgage. While gut reaction is 'I hope not', ultimately it depends on the size of the mortgage and its affordability for those involved.

But you still had to stump up the 10% over in cash. Exactly like a deposit.

So I bought my first flat for 60k. The report valued it at 54k so I borrowed 100% which was 54k. I still had to find the other 6k in cash to make up the difference between what the mortgage Co would lend and the price the sellers wanted. Its how it works in Scotland...offers over.

26k is what 1.8k a month not including pension. 40k over 4 years is 900ish a month. Your going to struggle to find a room even in the shittiest of houses for less than £600 a month in Croydon. Leaving 300 a month for food, bills, transport. That's not really doable in todays terms. Plus you contributed a significant amount of cash

Buying a house is definitely possible. I'm in my late 20s and 80% of my friends have bought. But I wish people wouldn't post silly stories. Most people of 26k are not going to be able to save enough for a deposit on a 200k flat over 4 years

@RickyGervaislovesdogs

I don't wish to sound impolite, but I don't feel you have a good grasp of what many people face.

Most people do not have parents who can afford to save a home deposit for them from the age of 8, of those who can prioritise it. You only have to look at posts on here to see the many who don't have their own pensions and savings, let alone those for children's future homes.

And your comments about renting;
Most people who rent privately in the UK have to agree to short term tenancies with very limited security and very limited rights on changes they can make. Imagine being given 2 months notice on your home, and your 8 year old daughter having to move schools due to sky high rents and lack of enough stock, that is the reality,

I feel you are making comments from a little bit of an ivory tower.

I doubt they will come back. They only make business sense when house prices are growing so rapidly that 12 months after buying with a 100% mortgage you already have 10% equity with no effort at all. When the housing market is more unpredictable it's too much of a risk.

In a healthy market there has to be a steady supply of First Time Buyers or house prices collapse, so prices do stabilise at a level that at least some FTBs can afford. The current market isn't stable because there aren't controls on investment, buytolet and buytoleaveempty purchasers. There should be a licence required to be purchased from the council for any home that is not the designated primary residence of the owner, with councils responsible for limiting the numbers of such licences and pricing them appropriately high so that non-resident owners subsidise the communities their property-hogging is damaging.

100% mortgages basically means the first few people get a house they otherwise wouldn't have. After that housing prices rise to reflect the more money can get.

I hope they don't.

No. They caused a housing crash in the 80s and people lost their homes and money due to negative equity. They should never come back.

But that’s the thing, you’re a single parent on a teachers wage probably renting a flat or house and have child related outgoings to cover - of course you can’t afford to save a deposit, especially if you want to live in the South East or London. My niece and her boyfriend saved 45k for a deposit, they are 26 and on average wages but have been living in a room in an HMO for 5 years. Had they been renting a private flat or house it wouldn’t have been possible. Much of it is due to circumstance and unfortunately being a single parent on an average wage doesn’t allow this, I don’t think anyone’s saying you are lazy.

If the property was 250k
and he bought 50 percent on SO he would only need a mortgage of 100k

50 percent of 250
125
minus 25k deposit
100k mortgage
rent payable on the other 50 percent

perfectly doable on 30k a year