House prices - Loadsamoney
- Thread starter blossomchris
- Start date
Tony Lockhart
Avoiding Stress, at Every Opportunity
I'm sure we've all seen the reluctant, overpriced property that just doesn't sell. After a year, taken off the market, change of agent and lower price: sold. Maybe in a market of rapidly increasing prices and demand an agent can push prices up a bit, but mostly punters just ain't that desperate.
kennyh
pfm Member
A saying I'd never heard but one that smacked home instantly.
Brian
Eating fat, staying slim
Snufkin
pfm Member
I suppose it depends on what you term 'cheap'. I suspect that the young folk you know who are doing well are in a minority. Housing in this country is a disgrace. Its small, often poor quality and hideously overpriced; its not like we have a shortage of land.
notaclue
pfm Member
And it's getting worse.
In the past, we built houses and gardens. Now it's more and more flats. Usually with one living room/kitchen combined. Small second bedrooms. Annual service charges will be four figures.
The only way they're better off than the past is you often get an extra toilet. That's progress: an extra toilet in a flat for about '5 x your salary' more than the house with a garden you could have got a few decades ago.
mjroe
pfm Member
I'm not sure where these kinds of myths originate, but they are really not helpful. So in light of all the 'false' news stories being talked about at the moment let's use real figures and not just rhetoric:
Wages have been static for many people for the last 8 years. I have not had a rate rise for 5 years, and my wife is a nurse so the cost of living increases have been 0%, due to austerity apparently - yet the hospitals get busier and the staff work harder. Also, my dad retired in 2012 from a senior management position. He hadn't had a pay increase for at least 4 years when he left. He is still in contact with his colleagues and they haven't had a pay rise in the last 4 years either. So that's 8 years all told. Of course dad's pension has had a nice annual rise since he left...
The last statistics (2012/13) show that the average wage is £21k - so we can assume that these are appropriate for today.
Now - if we are to be generous then let's assume that a first time home buyer is earning £20k, this would be generous for where I live (East Devon). Using all the sensible metrics (and the same that my parents had when they bought their house) you would get a mortgage for 4 times your salary with a 5% deposit.
So let's assume a mortgage or £80k and a deposit of £4k meaning that you could afford a home costing £84k.
My wife and I bought a house in Axminster in 2014. The cheapest home on the development was a 2 bedroom coachhouse flat - these went for £130-140k. The starter 3 bedroom houses went for around £160k.
Unaffordable using sensible metrics.
Lyme Regis is in desperate need of affordable housing. A recent development has been built with the developers proudly announcing that 34% of the stock would be affordable homes, these started £345k. How is this allowed to be called an affordable home? because the definition is based on the average/most expensive house on the scheme - and there are houses priced at £900k - so £345k is allowed to be called affordable. Understandably the locals were outraged - yet nothing was done.
I don't know anyone in their 20s or 30s around here who earns £80k to afford one of these 'affordable' homes.
All the homes on our development have sold - if you would like to by a Bovis home over the road you'll need£185k to buy a coachhouse flat and around £190-200k to get a house. Why so much price increase you ask? Because the Bovis shareholders want to make more money. They proudly proclaimed a few years ago that they had put their house prices up by something like 15% in one year - surprisingly they made bumper profits.
Our house (4 bed townhouse) was listed at £195k - had we used help to buy we would not have been able to buy the house as we could not raise a mortgage for the asking price - the buying price is not allowed to be discounted under the scheme's terms. My dad stepped in a provide the 25% deposit. We bought the house for £180k - something that would have been impossible with help to buy.
I know of no-one amongst my piers who has bought their own home without help from their parents and/or some inheritance. Most people need two wages to pay the mortgage.
I realise that it's not a right to own a home, but renting shouldn't cost more than buying. Our house type is typically rented for around £825-900 pcm, our mortgage is £634 - and people ask why you can't save for a deposit...
Regarding the 'younger' generation not 'going without' and simply saving up - the problem is this: a house seems unattainable - so people give up. In a sane world you should be able to buy flats for £60-70k and starter homes for £80k. These would require a deposit of £4k or less - that would require saving for a year or two. With deposits of at least £10k+ needed these days it can seem like a unsurmountable mountain - especially when the security deposit for the house you are renting is £1500 and you have had to pay two months rent in advance...
It's only the reality and competition shows on TV that stop the masses revolting.
London Lad
pfm Member
Not a myth at all, its just what I am seeing around me in real life.
I will admit that young people in Suffolk where I live now seem much more resilient, determined, hard working and grounded that in some other places I have lived.
I get the distinct feeling that people are fed up with the 'powers that be' theorising over figures, stats and forecasts when they are clearly not representative of what they see going on around them. I strongly suspect that this is one of the reasons they voted to leave the EU and for Donald Trump.
London Lad
pfm Member
Out of interest I just searched right move for property within 40 miles of my home post code under £150k and got 2700 results. I did the same for my old post code in Essex, 4200 results.
Taking the price down to £100k produces 1200 and 2000 respectively.
Taking the price down to £100k produces 1200 and 2000 respectively.
notaclue
pfm Member
Let's take the whole of Essex and say we want a house, not a flat.
Houses For Sale in Essex, up to £150,000, don't show retirement, shared ownership = 107 results
Most seem to be in Harwich and Clacton. I'm guessing they are grim.
A couple in Jaywick, which usually tops the list of the most deprived towns in the UK.
Edit: Is 107, not 170.
blossomchris
I feel better than James Brown
Sure I have seen overpriced property on the market a while back, not now round these parts, SE, where exactly is this happening now?
Punters ain't desperate, your 'avin' a larf squire.
Bloss
Tony Lockhart
Avoiding Stress, at Every Opportunity
The place we've just moved into was on sale with the first agent for six months, 2 viewings only, no offers. The next agent dropped the price by £30k and we were in like a shot, with another buyer on our heels. We've seen plenty of properties appear, disappear and reappear over the last year with ridiculous prices, and some are still for sale. This is mid-Suffolk. Perhaps people are more stoopid elsewhere.
mjroe
pfm Member
That's just rubbish - I suggest you are believing what you want to believe - viewer bias. Everyone needs somewhere to live - everybody does their best to earn their way. Everyone I know has a job, does not claim benefits and generally 'hustles'. Most people round here run their own business or are self employed due to the lack of large employers.
40 miles may seem OK in the SE, but round here 10 miles is more appropriate.
Within 10 miles there are 4 homes available under £100k - still unaffordable if you are earning the average wage of £20k. 41 homes are available under £150k.
If you need a 3 bedroom house in Axminster (we do - need to walk to station) then there is 1 house available under £160k. Still unaffordable using sensible metrics.
I was replying to your myth that house builders are building loads of affordable starter homes - we have loads of housebuilding going on around us - but I wouldn't call it affordable. In the mid 2000s starter flats were always sold for around £100-120k in these parts. Wages have not increased in real terms in the last 10 years, but these flats now cost £160-190k. Greed helps no-one.
From my experience house builders are so in-efficient they literally just burn money when building houses - there is no incentive for them to build in a cost effective manner. So houses could be built cheaper and the land price is purely speculative, I think that the land that our development was built on was held in our developer's land bank for at least a decade.
I don't doubt your views - but from where I live they are simply a myth and no-one I know holds your opinion - from people aged 25 to 80.
Most if of the larger homes in this area are owned by retired people who have moved into the area. I probably know around 15-20 retired couples who live locally and a high proportion own at least 4 bedroom houses and most have moved into the area on retirement. They all attribute their ability to afford their current house due to the increases they saw in their younger years.
mjroe
pfm Member
The right kind of house are very much in demand around here. Our next door neighbours retired to this area and their only option was a new build due to the lack of supply. Another friend wanted to move/buy locally and houses disappeared as soon as they were listed - he ended up moving more inland to a house that needed renovation to find something suitable - only possible as he did not need a mortgage.
Another couple I know were rather surprised their house sold within 8 hours. The agent didn't post any pictures but just a picture of the view - over Lyme Bay. The house sold for £800k+, it had gone up in value more than 4 times from when they bought it. They sold as they needed the money to help their children.
notaclue
pfm Member
Just today we have "The number of affordable homes built in England in 2015-16 fell to its lowest level for 24 years" http://www.bbc.co.uk/news/education-38015368
And that's before we start on 'affordable' having lost its meaning.
The days of 'affordable' as in 3.5 x one average local wage and a 10% deposit buying something half-way decent are long gone.
And that's before we start on 'affordable' having lost its meaning.
The days of 'affordable' as in 3.5 x one average local wage and a 10% deposit buying something half-way decent are long gone.
London Lad
pfm Member
What's wrong with a flat or shared ownership for first time buyers?? I see 1200 results searching Essex under £150k
Tony Lockhart
Avoiding Stress, at Every Opportunity
You'd need more than that just for Chelmsford, that's what.