good news for homeowners as house prices increase again

[nettlewine]

So the nationwide are reporting that house prices are up this month.

Seriously this isn't good news, even if you own a home as any step up becomes more expensive and even if you don't and have kids its no life to still be living stuck at home in your 20s and 30s!

The vast majority of homeowners in this country couldn't afford their home if they had to buy it now. The system is broken and its wreaking the whole country and the economy. London isn't a place for londners as they can't afford it and all new builds are sold off plan on Malaysia! Arrg every time I hear the thread title quoted I want to scream.

If only house prices were sensible and people could invest in something useful like producing stuff. I can't see this country as a good place for my children to grow up in.

As I said my grandmother afforded a house in brixton on her nurse sallery that now is worth over a million. Affordability has totally changed.

So your advice is to be gifted academically and get a high paid job? What about the other 90%?

morethanpotatoprints well done to your son.

We struggle to get a house because a 2 bed house around here is on average £270,000.

Not because we like material things.

We don't. Our wedding 12 years ago cost £100 and we have never been on holiday.

Annoys me when it is insinuated that we could buy but just have to live in a cheaper area or live with no gas and electric.

I am a teacher of a subject that very rarely gets advertised and so I wouldn't want to move to a cheaper area to be unemployed.

We work hard. We have 2 children. Unfortunately we can't kip on peoples' floors for a few years.

Maybe I shouldn't have spent my 20s living abroad in various countries earning a pittance as a teacher of English. Naughty me

I just think, on two salaries, we should be able to buy a house or flat.

How dare you enjoy yourself in your 20s, you only have yourself to blam.

Have you thought about staying in a friends guarage or shed for a decade or two without any gas or electric to help save a deposit?

Jassy

The high interest rates were the reason we lived like Tom and Barbara it was the only way we could afford the mortgage.
no childcare or family around, we had to live on one wage, it cost too much for us both to work.
We lived out in the stix, we saved loads doing the house up and living frugally.
We were offered a higher mortgage but went for the cheapest house we could find.
We have only ever had one old car at a time and no holidays.
In fact there isn't much that we needed tbh.
A roof, some food and basic needs.
We didn't expect to be able to walk into our forever house and realised you start at the bottom with nothing.

Nettle

I'm sorry if you don't like the way we live or what values we have decided to pass onto our children, but with respect after initially mentioning my ds2 house, all I have done is answer questions about how it was achieved.
Of course everybody doesn't want to live like this, or make those type of sacrifices, but for some people it works, obviously, otherwise I wouldn't be posting about it.
I don't think we could have managed a couple of decades in a shed, but thanks for the vote of confidence.
Our nice 4 bedroom cottage surrounded by the most beautiful countryside in a lovely little village, was enough.

Well yes... you make choices and live with consequences. There are things that work in helping people buy houses. People may not want to do that it takes but that's their choice.

There is no human right under English law to a particular kind of house. Of course people might vote in the next election based on housing policy of their particular preferred party - therein lies an element of choice.

Some countries house everyone just about free - North Korea. Cuba did. To an extent the UK does as we even have hostels for the homeless and plenty of countries don't house people at all.

How can teachers earn more to afford a £270k place? My children's father worked in school holidays. he worked all day Saturdays doing extra teaching. He played the organ for pay on Sunday mornings. I worked a full time job, took 2 week maternity leaves, did extra work outside of my full time job. Obviously most people aren't prepared to work as hard and we also moved hundreds of miles from family for work. Difficult choices but they resulted in our buying a place.

2 bed house at £270k, assuming someone can save up a 5% deposit id £13,500 = £6750 for each in the couple.... two teachers on £30k each might be allowed to borrow that much. I am not saying it's easy but not impossible.

We were offered a higher mortgage but went for the cheapest house we could find.
We have only ever had one old car at a time and no holidays.
In fact there isn't much that we needed tbh.
A roof, some food and basic needs.
We didn't expect to be able to walk into our forever house and realised you start at the bottom with nothing

Yes.A great way to save money and pay the mortgage.

But people nowadays struggle in much of the country to pay the mortgage even if they did all that. And that is when interest rates are incredibly low.

I remember when interest rates shot up to 15%. I think many many many people would struggle if interest rates went to 5 or 6% now.

£100,000 mortgage, 2% ,25 years is £430 pcm

Increase that to 5% and it's £590 pcm

And that's "only" a £100,000 mortgage

www.bbc.co.uk/homes/property/mortgagecalculator.shtml

I hate to think how many people are living on the edge.

two teachers on £30k each might be allowed to borrow that much. I am not saying it's easy but not impossible

£250k for 25 yrs 3% = £1200 pcm

Increase to 5% and that's £1500 pcm

Obviously the higher the mortgage, the more effect an interest rate change has. Then you have childcare costs and that £1500 pcm is a significant amount of money. Of course, you could return to work but then you've got childcare to pay for....

Morethan - and I know many who do that now. But they need a vastly higher deposit than was the average when you bought, relative to their income, and the repayments arenas much different by the same measure - with no promise of relief. The anomalous repayment years were no doubt tough, but not permanent, as I showed upthread, while high repayments (in historical terms) based on capital rather than interest repayments are a forever burden. Combined with a system that is preferential to BTL buyers and rising prices with greater price differentials as you move up sizes and types of housing, getting off the bottom rung is much more difficult now than in the past. For many, that first dump may well be their forever home, and they know it.

I apologise to all for trying to keep referring to data and facts in this discussion. I know it detracts from people feeling they've done better because they are in some way superior, rather than things having objectively changed signifucantly in the last three decades.

I apologise to all for trying to keep referring to data and facts in this discussion

I know. Facts, data,they just get in the way, don't they.

Earnings have not kept up with house prices.

Those people who have done well will pass their wealth and this incredible capital gain down to their children / grandchildren. That's what my Dad's done. It's not fair but I get to buy a flat. That beats renting.

There are going to be people in the future who will only be able to get a house because of their parents. The others can only dream of a stable place to call home where they can only be evicted by the bank and not by a landlord.

we all want the facts.

Some earnings have kept up. I was asked to write an article comparing when I was first buying with my daughter now - same career. My salary was £7500 (x 2 as two of us) and hers £40k (same job). House we bought £40k. That house then (about 5 years ago £300k

So 3x that joint salary was £45k and today 3 x £80k is £240k . However today she can borrow a higher multiple and she is paying more like 3% interest not 12% and basic rate tax is lower.

People can probably find other examples where it is different.

I certainly agree that there is more a need for a higher deposit nowadays unless you are in the 5% right to buy scheme which I think is time limited. Also the 2014 mortgage criteria changes have not helped at all and made it much harder for many people like the self employed to borrow. They only apply to 5 year loans and shorter so some people might want to see if a lender will lend them for 5 years 3 months fixed by the way which is worth a try.

Prices have not risen all over and where I live in London they are steadily falling.

30 years ago most of the teachers at my children's father's school (outer London) could not afford to buy by the way which is why it offered school flats. We were unusual in buying and were able to as we had two salaries including mine. Those who did buy often have to buy miles away with 30 minute or more commutes.

Aaand we're right back to anecdote.

The overall picture has changed dramatically. I've posted authoritative statistics demonstrating how things have changed for the majority.

I know that doesn't sit comfortably with your personal narrative - but let's not pretend that one person experience from a position of not-quite-admitted privilege is equivalent in evidence terms to a 30 year collection of national statistics, shall we?

More data and statistics

www.theguardian.com/business/2015/may/04/first-time-buyers-need-to-earn-77000-a-year-to-live-in-london

"The financial challenges facing would-be home owners will be laid bare on Monday by new research showing that a first-time buyer now needs to earn £77,000 a year to get on the housing ladder in London.

Across the UK, a first-time buyer needs a minimum income of £41,000, according to the report from KPMG. It also shows that affordable housing has become an issue for all but the above-average earners and those coming into inheritances."

Given the parlous state our economy is already in then when the current house price bubble bursts we're going to be royally screwed.

Which of course makes it even harder for those without parental help

Exactly. It is a world of haves and have nots.

I keep hearing prices have gone up but our house, which we bought ten years ago, is worth only 2-3k more than we paid. So I think a lot of it is just guff to get nationwide (etc) into the press.

I think in some areas, house prices peaked in 2007/8. Then some of them haven't increased as much compared to say London.

But even back then, house prices were expensive.

This website gives an idea of regional house price changes
www.lloydsbankinggroup.com/media/economic-insight/regional-house-prices/

Does it say in the Guardian what they mean by a first time buyer property?