These people are having a laugh no?

[Pantone363]

£220000

Vaguely looking at the market but happy renting at the moment (and for the next few years if need be). But £220000?! The bathroom looks grubby and a tiny living room.

New to looking and £220000 is our max purchase, is this what we can expect for that kind of money?!

I love the kitchen.
That would cost about £100,000 less here (NI)

That money would probably get you a two-bedroom ex-council flat in the most undesirable part of town (unfashionable new town in the SE).

Houses do cost £££ to maintain, but once you have 'bought' the house, the mortgage repayments are fairly predictable (apart from changes in interest rates).

Rents will increase with the value of the property, so as house prices rise then so do rents.

One 'good' thing about inflation (if there ever is such a thing) is that it eventually erodes the cost of mortgage repayments compared with wages. OK, you have to go through the pain of austerity, wage caps, falling incomes in real terms etc., but the end result is better for owners with a mortgage than renters who always pay market rates.

hitting only wage inflation erodes the cost of mortgage payments: general inflation (without wage inflation) actually makes them harder. In the 70s and 80s general inflation would prompt wage inflation - but in the post-1980s economy, without union power or collective bargaining and in the context of globalisation, wage inflation is unlikely.

What we've seen in the past few years is wage deflation in real terms, whilst general inflation has been quite high. This doesn't look likely to change any time soon. Where are the pressures that would increase wages in real terms? Employers have become far too used and able to keeping wages down. Even the CBI has started calling for wage inflation (!) but where would it come from?

goldencrowns, there has been wage deflation in real terms, but wages have still increased (albeit modestly) over the last 5 years. They have not kept pace with inflation, but any increase in wages will erode the proportion of income going on mortgage payments on the assumption that interest rates stay constant. Over the life of a 25 year mortgage, it is likely that wage inflation - even if it is still lower than general inflation - will be significant. Rents, on the other hand, will follow the housing market. This inflation can be significant in the long term.

That's pretty much what you'd get for your money here in Wiltshire.

Hitting - that only happens if wages increase or stay the same in real terms: if wage inflation is below general inflation then they decrease in real terms, and there is an increase in the proportion of mortgage payments to wages. It's the real terms increase or decrease that matters, not the nominal increase or decrease.

That house looks fine to me. Our house was £160k but was an absolute shit hole when we bought it.

Better value than where we are, south of London. Our two bed, Victorian terrace in need of a new kitchen (&ideally, roof!) has jut been valued at £220k and our garden is only a fraction of the size!

While we're delighted to have potentially made nearly £30k in two years, most of the houses we have viewed in the 350k bracket aren't much better than the one you have found.

OK, goldencrowns I am obviously missing something. I am not an economist, but there must be something wrong with my maths. Assuming someone takes up a mortgage with a 25 year fixed interest rate with repayments of 500.00 a month. So, repayments will be 500.00 for 25 years (assuming the very unlikely event of never remortgaging for anything).

Year 1
Household monthly income = 3000.00
Other expenses (not mortgage) = 1500.00
Mortgage payment = 500.00
% of household income on other expenses = 50%
% of household income after expenses on mortgage = 33%

Year in the distant future
Household monthly income = 6000.00
Other expenses (not mortgage) = 4000.00
Mortgage payment = 500.00
% of household income on other expenses = 66%
% of household income after expenses on mortgage = 25%

What am I missing?

That is a nice house.!

I think it's a lovely house. This is all you get for £220,000 round here
www.rightmove.co.uk/property-for-sale/property-30900765.html?premiumA=true

OK, goldencrowns I am obviously missing something. I am not an economist, but there must be something wrong with my maths. Assuming someone takes up a mortgage with a 25 year fixed interest rate with repayments of 500.00 a month.

Are you in the UK, hitting? The missing thing is that 25-yr fixed rates are nearly unknown here (and would certainly not be available to an FTB) - nearly all UK mortgages are short fixes, and the available interest rates (SVR or not) are related in some way to central bank rates. So if the central bank interest rate rose, mortgage rates would soon reflect that.

People assume wage inflation must necessarily follow general inflation because that's what happened in the late 20th century. However, it's perfectly possible that wages could slowly decrease in real terms whilst general inflation rises (in fact, that's exactly what's been happening since the financial crisis). Central banks have pushed mortgage rates artificially low (and used QE) so that some groups of voters see their mortgage payments reduce, primarily because they are a big voting bloc. But in the medium term there is no particular reason why we should see an uptick in wage inflation - in fact it is far more likely in the long term that we won't, as Eastern globalised markets start exporting price inflation to us whilst they experience wage inflation.

So far globalisation has been kind to the West, but we don't produce very much, unions have little power, and employers can now relocate away from our labour markets very quickly, so there is no real driver for real terms wage rises here. Whereas central bank rates (and mortgage rates) are unlikely to stay at their current historic lows forever. Some might say (and do say) that we are almost certain to have a period where we get poorer compared to the global average, particularly given that the average postwar Westerner enjoyed huge (and often largely unearned and undeserved) prosperity compared to the global average. Our economies also have a massive demographic burden of pensions coming up and little productive industry to support that (we have relied on using credit expansion to sell the same houses to each other over and over again at increasing prices in the last three decades to give the illusion of prosperity, but how is our economy geared up to support that in the future?)

I think that looks like a brilliant house and not too much to finish it off.

Now this beaut on the other hand... www.rightmove.co.uk/property-for-sale/property-48483413.html Sorry folks but it's been snapped up already. And, this isn't really a great area either...

The premise of 500 per. Month o for 25 years does not work because 500 a month is going to get you maybe a 100,000 mortgage so not realistic most of the country and hardly going to get a family house.... so reality is as household income goes up then there us a move to larger hpuse and larger mortgage. So 25 year fixed rate and assuming no hpuse. Move for 500 per month is totally unrealistic except in v few parts uk where it is unlike that the household income matches 3000 per month and u can buy family home for 100k. Where is this place ?

Go 20 miles up the road to ipswich and you could get similar for about £50k less.

I've never heard anyone say a good word about Ipswich. I've never been, but over the years just heard derogatory comments from diverse sources.

(Whereas everybody praises Norwich.)

Would have to pay at least £75000 for that in my part of North London. Bog-standard 3/4 bed semis in my road are going for a £million

ChristmasPies. I think you mean £750,000 . If not, I'm moving!!

I'm in the SE, but Central, not near the coast or London (yes, not much going for it!!) and you'd get a nice flat for that money or a teeny, tiny 1 bedroom terrace. The 'after thought' on a new development. You certainly wouldn't get 3 bedrooms, nice kitchen diner, or a garden.

You sound very young.

Blimey, it just needs re-grouting, decorating and new carpets. The kitchen is lovely. You don't need a big living room when you have a multi-purpose live-in kitchen like that, you can just make a nice snug lounging space by putting the TV on the wall, shelves in the alcove and sticking in an L-shaped sofa.

In your position I would be jumping at it!

Yes I get that lots of smaller property is more expensive in London/SE.

Chipping, no not 'quite young' at all

£220000. My point was they are marketing that house for 220k when you/I could get this (looks much cleaner, in need of no work, much nicer location and has a concerted garage) for the same money!

Maybe you just need to go and view them both then?

Sometimes photos can be deceiving and it may well be that one is smaller than the other in terms of floor space/footprint.

You don't know until you stand inside a place.

And LOL at 'cleaner'. Dirt does come off you know!

I went to Ipswich once dirty weekend with the DH.

Crap place. Wouldn't want to live there.

Norwich is awesome.

If I were OP I'd be looking at Wivenhoe, because it is one of my most favourite places in the world. Every time we go something truly odd is happening in one place and the rest of the town/village is asleep. Brilliant. This it is more expensive than Colchester though as it's more on par with my neck of the woods.

LOVE Wivenhoe

It's very very close to where we live at the moment

at Ipswich

don't dismiss a property because 'it looks grubby' - don't you watch some of the property programmes on TV? tbh I think the house looks rather nice - bathrooms do get mouldy eventually if that's what you are worried about - and in the scheme of things doesn't take much to put right.

The important thing when buying is to h ave the right number of rooms you need and the layout that can work for you (or will if you knock a wall down) if it is grubby then just plan to get cleaners in on the day you move in and get the whole thing scrubbed. A little elbow grease is a lot cheaper than buying a house the same size that is in pristine condition - it will probably ad £5K to £10K to the price!!

That would be cheap to about right here (Fife).