To worry about falling house prices

[Ll81]

They say prices in central London have been falling for a while and this is rippling out to the rest of the country. Also lots of talk about raising interest rates and they could also be another downward pressure on prices along with lots of EU nationals leaving.

Anyone else worried that falling prices may mean many that have bought in the last few years maybe stuck in ne?

Interest only mortgages do take into account income, assets, etc.

Mine hasn’t.

It’s been calculated purely on house value and £ the property can be let for

And I’m not a BTLetter with an empire. I’m in the process of setting up a let to buy agreement.

I got an interest only mortgage with barely any deposit when I earned 25k & was able to borrow 5.5x my salary when I was younger & luckily I made 120k on that flat which allowed me to move to a bigger flat. Those days are gone.

How much is the property worth Poppy?

I don’t really know what you want me to say. Interest only mortgage lending has tightened up, maybe not for you but in general it has.

Is it your current house or a 2nd property?

I don’t think there can be any doubt that Interest only mortgages used to be far easier to get. I remember in the late naughties you could swap to IO just by calling the bank- maybe for maternity leave or similar- we swapped in 2008 after losing our jobs in the financial crash. You
Couldn’t do that now, although a quick google shows the are still technically available (I imagine it’s hard to qualify for them though, the ones I looked required a very low LTV)

Incidentally most of the accidental landlords I know stay on residential mortgages (as have we in the past) and many people who were interest only have had to
Fix at some point in the last 10,15 years due to moving house etc. Life is very different from 2005

The estate agents round here are pricing everything at massively inflated prices, nothing is selling at all. The house round the corner has gone up for £140k more than one across the road sold for at the end of last year. They are pretty much identical. Different agent put another one up in January for £60k more than it was sold for 18months about and nothing had been done to it. Another has been up for 6 months and the price dropped again recently by 20k. The agents are really trying their luck and it’s meaning nothing is moving at all.

Some places near me have been on sale for 2 yrs. They are priced far too high. I looked at a property that needed work in 2014 but I wasn’t ready for the challenge. A developer bought it & probably spent 200k on loft/back extension. Sold it for 1m more than he paid in 2016. My biggest regret as it could have been my forever home 😩

Always amazed at people unable to get on the ladder. Obviously families with one working person on min wage can’t afford to buy but could they have done before prices rose?

2 working on 25k each hardly mega salaries. £3200 a month after tax. Rent a shitty house in a shitty area or a room in a shitty house in a shitty area if you’re a couple. Save £1000 a month for 3 years, shouldn’t be too hard if you forgo luxuries. then you have £36k, get a 90% LTV mortgage that are plentiful for £360k costing £1.3k a month in a 5 year fix for 30 years. Or half this if you’re in the north, save for 18 months. Or save £500 a month for 3 years?

Plenty enough to buy a starter home in many areas even outskirts of the mighty London

As many have said outside of a London this will buy a great house

What’s the problem, do first time buyers expect to be able to live in a huge property in the best area or something

Do they still do 90% LTV?

I can’t save £1k a month and earn six figures are you taking the piss? I don’t think I’ve ever had a time in my life where I could save that much monthly actually.

Yes

Cherrycokewinning

I can’t save £1k a month and earn six figures hmm are you taking the piss?

Sorry are you taking the piss!!?? What a load of old falafel!

Samantha77hat

What banks will lend 6 x the 50k salary to afford a 350k property?

Well no. I have, you know, expenses

Well cut some of them

I don’t need to. What’s your point?

I thought it was more like 5 or less. Why would you borrow more than that, it would be like 45% if your salary.

OP the property market crashed in Ireland from 2007-2008.
It's still not back to pre 2007 levels.
Many people lost their homes, became homeless, are still in negative equity. Lovely estates were built with only a few houses bought/occupied and the other houses left to go to rack and ruin.
Ghost estates were left dotted around the country.
We have a huge housing problem here.
Rents are getting astronomically high.
Vulture funds have come in and acquired loans - you can imagine what happens then.
It's so sad.

GardenGeek well the 50k wont enable to you to get the 350k with your calculations will it?

Cherry you must have a very unusual situation or be terrible at budgeting if you feel it wouldn’t be possible to save £1k a month on a net income of c. £5500 a month! Oh dear.