To just be so upset about house prices

[spuddy56]

We started looking in December after scrimping and saving for years and its got more and more out of reach with every passing week since then. We've had two sales fall through due to downvaluations, so not only did we need the huge deposit we had saved up for years, we needed 10k on top of that which is impossible for us. We are paying rent and have no family help. We viewed a tiny house that we love and has been on the market since beginning of April with no offers but the seller won't budge on the price. Based on one year of sold prices in the area its about 40k too much, even taking into account the 10% rises over the last 12 months. Theres just no way a mortgage company would lend that much. Been to view another one and it's tiny, has had no offers and is worth a lot less but agents don't think they will go lower. We've had to adjust our expectations down and down despite being what we thought were healthy earners. How are first time buyers managing to buy right now without help?! I'm so so upset at not having somewhere to settle and call a permanent home.

The point that you’re spectacularly missing is that you have absolutely no control over Elon musk or anybody else super riches decision-making process and their logic may not be in most people‘s best interests, imagine that eh ?
so you can control what you can control and what I can control is my projects success which equates to the employment of the other people within my organisation. So sure inflation is an issue we have actually given them pay rise to cushion them from some of it. The important thing is we remain positive, frankly we keep spending money otherwise it’s a self-fulfilling prophecy as I think I’ve said four times on this thread now.

The media can and will talk us into recession as they have them previously.

and as per every other recession the likes of elon musk will be utterly unaffected.
What I learnt from the 2008 experience is the world will keep on turning and everybody will be fine.

Yep even at 340 its exactly the same as rent. And we save at least 800 a month anyway. Surely this has got to be possible!

Fingers crossed OP, I hope this is finally the one!

You will be fine somebody someone that will lend you the money it’s the terms and conditions that might not be fantastic but you will get it

Yes, I know. Doesn't mean that a lender won't decide they'd only get £340k for it if they repossessed and lend accordingly. Or, in fact, £290k. Anyone accepting a very high offer from people who need a mortgage is taking a risk.

Also, the whole "mortgage is less than I pay in rent each month" objection may apply now while rates are cheap. 12 years ago my mortgage was 6.99% and £200 per month more than the rental next door. Mortgage lenders look at what it would cost you at 2%, 5%, 9%...

Yes but rent can go up too? And is going up in many cases. If our landlord decides they didn't want us anymore we would easily be having to pay an extra 200 in this area, maybe more. We are lucky that this house is in such poor condition. So either way there's no certainty that we can all be paying for somewhere to live. Might as well be trying to pay off our own mortgage rather than somebody else's for the same amount of money.

Best of luck with the viewing today.

No, it is not wrong. As @DashboardConfessional notes, the fact that your rent costs more than a mortgage at current ultra-low rates doesn’t mean that this will always be the case. Even if rates revert to average for the past 30-40 years (around 5%) it will make a mortgage much more expensive than it is now.

Can you see that arguing to be lent more money when it may not be affordable is one of the things pushing more money into the market and hence inflating prices? Exactly the outcome you don’t want. If the average person on an average salary were able to borrow £1m, what do you think the average house price would be? Go on, guess.

Exactly.

When renting, you the tenant decide (usually) if you can afford it and if you can't then you eventually get evicted. If you can't afford an annual rent increase, you move on. Landlords have insurance if you don't pay and they initially sign you up for a year.

Banks are offering to buy a house with you and tie themselves to you for approx 25 years (or 35 or 40!). Home ownership also has additional costs such as buildings insurance, roof repairs, boiler replacement.

In the years gone by that might of been the case for actually there’s been affordability calculations attached to renting for a number of years now. Additionally when somebody acts as a guarantor for you their salary is put into a multiples calculator to decide whether or not they could afford to guarantee the debt.

and actually the cost of maintenance boilers etc is included in the inflated rent versus the mortgage payments. Most people when they move into their own home find their mortgage payment cheaper than their rental.

And if they've been paying this extortionate rent that still costs more than a mortgage while saving for an extortionate deposit i think they will cope!

@SlightlyGeordieJohn

"And why is it a problem that someone unable to earn the average wage can't afford to buy a house. It seems a perfectly reasonable state of affairs".

Your attitude is genuinely disgusting if you don't think that there's something fundamentally broken with the housing market, and that those on low income being unable to buy property is unacceptable in a modern society. The fact you are stealth bragging on this thread about your million pound house says it all, but I hate to break it to you, you did nothing, nothing, to deserve that amount of money. You got lucky. And I say that as someone who got equally lucky with a property in zone 2 London myself. But the difference is I'm not using my unearned property wealth as a reason to put myself on a pedestal, and I'm not piling onto the OP who is busting their arse off trying to get anything to live in. Maybe have some compassion for those who didn't have the benefits you did (but then I'm sure you're going to point out at tedious length about how you did it all yourself and you weren't at all privileged to just be born at a different time).

OP, I'm lucky to have been born earlier than you, but I'm absolutely livid at the state of this country for our younger people.

None of the above negates that mortgages are cheaper now due to interest rates, but that is not likely to be the case long term. It was not my experience when buying a house in either 2008 or 2014. Or that a bank lending someone hundreds of thousands is riskier than an insured landlord offering you a 1 year tenancy.

Firstly the banks are also insured against this risk believe me when they repossess properties it’s not them that loses out.

and secondly, The affordability calculations come to the same conclusion the person can either afford the rent and are paying it regularly without fail therefore has a history of compliance or they don’t. The numbers quite literally speak for themselves over lets say a three year period.

I got my first mortgage in 2003 and paid 5.5% that was a good rate for someone with a small deposit. Obviously house prices were a lot less. The flat I bought for 70k sold for 190 late last year, so paying 5.5% on a mortgage of 63k was a lot less than paying 5.5% on a mortgage of £171k (assuming 10% deposit). I think 5-6% (or thereabouts) mortgage interest is the average over the last 30 years.

Good luck with your viewing, it maybe that as you've been saving each month you won't be as affected by the cost of living as others might be and might be able to get your offer accepted.

Boris is literally making an announcement right now The rental payments will go towards credit track history when it comes to applying for mortgages he’ll be working with lenders I’m sure they’re hanging off his every word

Extending the right to buy to 2.2 million hoising association homes 😳

Which is fine, except when the buyer sells them on the open market they make a huge profit, presumably? Loads of ex council houses in our village are now privately owned and cost £300k+! Or bought by BTL landlords and rented for a lot more than the council tenants ever paid. Affordable housing should be kept as such, replacing like for like won't always work - nowhere in our village where you could build more.

I think rental payments should be included in credit history, like water bills are. If you don't pay your rent and the landlord takes you to court, that's a negative in your credit history, so not sure why good payers aren't getting the positive impact of paying rent on time.

I'm not sure lenders are going to give a fuck what Boris says, especially about using benefits to fund a mortgage. The lenders make commercial decisions, not political ones, so I'm with you on that.

@RagzRebooted

I agree. We need to accept that a section of society will never be able to afford their own home and should provide decent, state funded / subsidised accommodation for them, whether it's on a short term or temporary basis (depending on the reason they can't afford to house themselves). Selling off social / council housing doesn't help with this.

The obscene profits some people make from being on the receiving end of state largesse is disgusting. It's like winning the lottery but a tax payer funded lottery.

To be fair some of what he said I did actually like, it just depends whether it’s going to be applied retrospectively, he suggested that housing benefit doesn’t just need to be paid to landlords be that private or public sector and that housing benefit can be put towards a mortgage which is great providing they don’t slap terms and conditions on it that the house has to be bought from one of his developer friends and it’s a sack of shit that falls down around your ears.

They’ve also promised help more quickly for mortgage payers should they lose their job, which sounds like they’re anticipating that could be a distinct possibility for some/many. Preventing people from losing their homes basically so looks like the house price crash is on ice again.

I'm a bit ignorant on housing benefit - does it not stop when you have x amount of savings? How do you save a deposit?

he suggested that housing benefit doesn’t just need to be paid to landlords be that private or public sector and that housing benefit can be put towards a mortgage which is great

If he gets lenders onside. At the moment, some lenders won't allow landlords to rent to those on benefits (even though the landlord is responsible for paying the mortgage), so I can't see those lenders offering mortgages directly to those on benefits. The government may have to step in as guarantor for those wanting to fund a mortgage from benefits. I think there are lots of things to iron out on this.