House Price Poll

[The Antikythera Mechanism]

There is NO SUCH THING AS A LADDER.

Houses are places to live in, not investments to achieve capital growth.

THE PROPERTY LADDER noun

Definition
a series of stages in owning houses in which you buy a small house or apartment first and then buy a bigger or more expensive house when you have enough money

House prices are so high now it is hard for first-time buyers to get on the property ladder (= buy their first house).

(Definition of the property ladder noun from the Cambridge Advanced Learner's Dictionary)

 

[Triggaaar]

Lenders were lending 100+% mortgages at 5-7 x salaries. You are suggesting that nothing has changed, except for the percentage of mortgage being now lent.

No of course not. You said a couple on 30k + 18k with £35k deposit could only pay £145k for a house, and I'm saying that's not correct.

Banks are protecting buyers against negative equity, but that is in the banks' interest, not in the buyers.

Well we agree that the banks are protecting themselves, the rest is just wording - ie, buyers are being protected from negative equity as a consequence of the banks actions, not the sole reason.

Been there, done that in the early 1990s. They have learned a lesson from that. And that was at a time when mortgage rates went as high as 17% and when the value of our house dropped by 30%, leaving us in negative equity from which it took 10 years to emerge.

I remember it well.

As to the buy-to-let, I'm writing only what I was told and the impression I got was that as long as the rent was much higher (125% as you say) than than the mortgage payment, and you had a fat deposit, then the amount of the actual loan was more or less irrelevant.

Yes I largely agree with that, and can't see a problem with it, as long as it allows for a rise in interest rates.

 

[Triggaaar]

But interest rates are only low if you have a whacking great deposit. Which few people have. House prices are far too high.

Too high for what? Too high for us all to be pleased with the way things are, yes. But too high for the market to sustain, no (although I voted -5%).

Not read all the thread, so excuse me for butting in, but ..... you're on very dodgy ground if your repayments are 1k a month and you've only allowed for an increase to £1100. When rates do rise, they'll be going up my more than 10%. Also, I don't think many people are offering mortgages of 4 to 5 times salary any more.

The 10% increase was from a current fixed rate deal (not a great deal, one that already allows for some rate increase) to a variable deal once rates rise. Mortgage example was £215k - 6% rate with no capital repayment would be £1075 a month. If you paid £1100 every month, in good times and bad, there's a good chance that'll see you through. Hopefully by the time the base rate gets to 4%, banks will have reduced their margin to closer to historical levels. But that's just the guide I've worked with, you can use your own, say 7 or 8%. It's not like rent is a lot cheaper.

 

[The Antikythera Mechanism]

I've just put a house on the market in BN1. The Agent says I should get £590k-£600k. I'll report back with the selling price when and if I get a buyer.