Crazy amounts of mortgage offered - does this contribute to crazy house prices ?

[LethargeMarg]

We currently pay £600 a month for a mortgage and are looking to move, I was hoping to not pay too much more which means we are looking at property of a similar value but in better nick - out of interest I looked to see what we could borrow and it's crazy how much we could technically borrow and how much that would actually cost - we currently owe £100,000 on a £160,000 loan (house cost just under 200,000 ten years ago) but could now borrow over £300,000 which would cost about £2000 a month which would be 50% of our monthly income . To me that seems so irresponsible as a manageable loan but also explains the high property prices round here . I'm sure when we last moved it was much less what we were offered . I thought big loans were a thing of the past ?

But it’s perfectly possible to live off £2000/month.
if you’re paying car loans/nursery fees/big commute costs/other expenses then it would be tight but otherwise saying ~ £400/month bills leaves £200/week each for food and other costs - that’s not that tight?

Our household utilities come to far more than £400 a month. Council tax alone is over £360.

Back to OP, I don’t really have an answer!

Our household bills, insurances, car tax and council tax etc are about 1k a month.

1k for everything else including holidays and savings would be tight.

I think these levels of lending are all that is fuelling the house price rise right now.

What is your gross joint income?
What bank was it?
What term was it (likely to be around 15/16 years based on a mp of £2k a month)
What was the interest rate?

l think these levels of lending are all that is fuelling the house price rise right now

But how can my ds who is trying to buy his own house afford a house without this? He can’t buy one anywhere near me, and even cheaper areas of the city are going for 180 and sealed bids.

Its not the lenders, it’s a combination of shortage of stock and investors pushing up prices. If we got rid of all the buy to let landlords profiteering out of the housing shortage then there would be a lot more stock available to actually purchase by normal people.

When l bought my first house a mortgage was cheaper than renting, and now it’s the other way round.

it probably doesn’t help matters but ultimately demand exceeds supply and that’s why prices are high.

Agree with this.

I live in a terrace of about 15 Victorian 2 up 2 downs. I think mine and 1 other are owned and the rest are rentals. In the past these were the houses that people getting on the ladder would have bought. Now they are all snapped up by BTL landlords.

Our household utilities come to far more than £400 a month. Council tax alone is over £360.

where the * do you live?? I’m guessing you’re top band and either you’re in a freakishly expensive area or you’re not averaging the payments over 12 months. In our area the most expensive council tax band is £231/month over a year. A 400 k house would be ~ band B which is £90/month. Band D is £116/month.

Wow, just put mine and DHs salary into a mortgage rough guide calculator and it reckons we could borrow up to £500,000 which would be crazy in my opinion.

We were very fortunate and bought a house 12 years ago for £83,000, technically a deprived area but right near several Good rated schools, easy access to public transport and everyone is either really friendly or ignores your existence completely which works for me.

The idea of going from a tiny mortgage payment each month to half our salaries is scary.