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Housing market

I got a letter through the letter box a couple of weeks ago from a couple living about seven miles away who wanted to buy my house. Hand written and personalised so I doubt they did many. I will be leaving this property in a box.
Mother in law has had two of these in last 3 or so weeks, not sure if they are genuine individuals looking to buy, or from a company hiding behind the apparent hand written letters.
 
It's interesting to look at some mortgage figures vs interest rates.

A £250k repayment loan over 25 years @2.3% may cost £1,100 pm
@5% it'll be £1,460pm

Is that difference of £360pm enough to cause a crash? Maybe with energy costs added in...more possibly, it would be a lull.

What puzzles me is the amount of normal people on a regular wage living in 250k+ houses, banks only lend so much so I can only assuming they're managing to put together a big deposit.

That is my only hope of owning, a huge deposit. Sadly the rate at which I can acquire it is offset by the speed at which house prices are going up!
 
What puzzles me is the amount of normal people on a regular wage living in 250k+ houses, banks only lend so much so I can only assuming they're managing to put together a big deposit.

That is my only hope of owning, a huge deposit. Sadly the rate at which I can acquire it is offset by the speed at which house prices are going up!

A friend of mine in England is of the opinion that alot of people have had a big lift in funds coming from early inheritance due to the amount of fatalities caused by Covid.
 
What puzzles me is the amount of normal people on a regular wage living in 250k+ houses, banks only lend so much so I can only assuming they're managing to put together a big deposit.

That is my only hope of owning, a huge deposit. Sadly the rate at which I can acquire it is offset by the speed at which house prices are going up!

Could be a "loan" from the bank of mum and dad ?
 
What puzzles me is the amount of normal people on a regular wage living in 250k+ houses, banks only lend so much so I can only assuming they're managing to put together a big deposit.

That is my only hope of owning, a huge deposit. Sadly the rate at which I can acquire it is offset by the speed at which house prices are going up!
What’s a regular wage?
 
The housing market seems really patchy at the moment. In some areas it is quiet and in others, it is going crazy. I am heading towards signing contracts on move and I sold fairly easily but buying about 5 miles away was really difficult. I kept losing out to cash buyers. like you got very disheartened but eventually got somewhere. So my advice is to hang in there, you will find somewhere, maybe looking at property types or areas you didn't include in your initial wish list, I did this, looked in a slightly different area and found a lovely place. Good luck with your search.
 
What puzzles me is the amount of normal people on a regular wage living in 250k+ houses, banks only lend so much so I can only assuming they're managing to put together a big deposit.

We've had our house for 25 years now and a few of my neighbours have commented that they couldn't really have afforded to buy their house if doing so now, as they've gone up by about 4x in value over that period when income hasn't increased by anything like as much.

The thing that puzzles me is that where I live on the edge of Edinburgh there are quite few houses at around £1.3M that have just been built and there is waiting list for them. Not only do the buyers need to fund the house purchase they also need to find about £115K for stamp duty and that a lot of cash!
 
We've had our house for 25 years now and a few of my neighbours have commented that they couldn't really have afforded to buy their house if doing so now, as they've gone up by about 4x in value over that period when income hasn't increased by anything like as much.

The thing that puzzles me is that where I live on the edge of Edinburgh there are quite few houses at around £1.3M that have just been built and there is waiting list for them. Not only do the buyers need to fund the house purchase they also need to find about £115K for stamp duty and that a lot of cash!
And yet in Edinburgh suburbs are places like Uphall where a 5 bed detached is less than £300K
 
Easy to say, a lot harder in practice. If you lose your home because you can't pay the mortgage, you probably don't have any cash reserves left, which means you probably don't have the deposit for a rental property and, because of the default, you can't get a loan to cover it either. So there's a very real prospect of homelessness from a mortgage foreclosure situation.

Indeed. Negative equity followed by bankruptcy was often the pattern in Thatcher’s boom/bust and north/south divide. I saw friends go through it. A truly devastating time for many folk.
 
Indeed. Negative equity followed by bankruptcy was often the pattern in Thatcher’s boom/bust and north/south divide. I saw friends go through it. A truly devastating time for many folk.
Can’t like that post, but I saw it for myself in Thatcher’s first recession, too.

As you say, foreclosure - eviction - bankruptcy was the usual trajectory. Followed, often as not, by homelessness. The lucky ones got social housing, usually in sink areas where nobody wanted to go, because they daren’t refuse the offer.
 
What puzzles me is the amount of normal people on a regular wage living in 250k+ houses, banks only lend so much so I can only assuming they're managing to put together a big deposit.

That is my only hope of owning, a huge deposit. Sadly the rate at which I can acquire it is offset by the speed at which house prices are going up!

I once spoke to an estate agent about this, because the question puzzled me too. He said they do it in small steps, often starting with a shared ownership arrangement and then selling on, taking advantage of property inflation and low interest rates, and their own increasing income. Anyway he felt the real key is at the start, because as you say the deposit is a problem, and a shared ownership of a small flat makes it realistic.

London is a huge problem I know. Young couples both teachers who want to stay here, and who are earning good money, find it hard to buy a house big enough for a family with two or three kids - despite decent income and a stable job.

By the way, the rentals market in London is crazy at the moment. I’ve never known it like this, at least not as far as I remember. It’s a very bad time to be looking to move to a new rental here.
 
I once spoke to an estate agent about this, because the question puzzled me too. He said they do it in small steps, often starting with a shared ownership arrangement and then selling on, taking advantage of property inflation and low interest rates, and their own increasing income. Anyway he felt the real key is at the start, because as you say the deposit is a problem, and a shared ownership of a small flat makes it realistic.

London is a huge problem I know. Young couples both teachers who want to stay here, and who are earning mu money, find it hard to buy a house big enough for a family with two or three kids - despite decent income and a stable job.

By the way, the rentals market in London is crazy at the moment. I’ve never known it like this. It’s a very bad time to be looking to move to a new rental here.

I think a lot are like as @SteveG said, living in houses they now couldn't afford to buy.
 
And yet in Edinburgh suburbs are places like Uphall where a 5 bed detached is less than £300K

Is that really the case? There aren't any 5-bedrooms in Uphall at the moment - the nearest is new-builds in East Calder and they're £435K.

BTW not all 5-beds in Balerno are £1.3M - there is a decent one on the market at offers over £430K at the moment although I expect that'll make a good bit more than the list price.
 
Indeed. Negative equity followed by bankruptcy was often the pattern in Thatcher’s boom/bust and north/south divide. I saw friends go through it. A truly devastating time for many folk.

When you sign up for a mortgage you're basically doing a deal with the Devil.

Make sure your position is solid as a rock is my advice.
 
When you sign up for a mortgage you're basically doing a deal with the Devil.

Make sure your position is solid as a rock is my advice.

Agree entirely. I’ve always been hugely debt-adverse. It’s a result of having been poor and seeing others go down hard. As such once I eventually did get a mortgage I GTFO as soon as the property boomed/bubbled and bought my current dump outright with the equity. A far less prestigious home and a move some people’s snobbery wouldn’t allow them to make (I went from a prime city centre loft apartment to an end-terrace in a mill town), but I own it and owe no one anything, plus have cash in the bank. By far the best place to be. I figured out a long time ago that if one slashes ones outgoings it is possible to live very comfortably on comparatively little.
 
And still have a bloody great debt against their name. And private renters at the mo' are typically paying more than the mortgage costs.

Easy to say, a lot harder in practice. If you lose your home because you can't pay the mortgage, you probably don't have any cash reserves left, which means you probably don't have the deposit for a rental property and, because of the default, you can't get a loan to cover it either. So there's a very real prospect of homelessness from a mortgage foreclosure situation.

And don’t forget as our resident landlords made clear they credit check all potential letters. Those with their head just above water now would drown and be rendered homeless.
 
And don’t forget as our resident landlords made clear they credit check all potential letters. Those with their head just above water now would drown and be rendered homeless.
Yes, quite. And with much less social housing available than in the Thatcher era (wonder how that happened…?) there’s not much more than a spell of sofa surfing between such people and a shop doorway.
 
Agree entirely. I’ve always been hugely debt-adverse. It’s a result of having been poor and seeing others go down hard.

What is bizarre is that this mindset (and I'm the same) has been extremely unsuccessful for the past 20 years. My net worth would be MUCH higher now if I'd mortgaged myself to the eyeballs instead of buying only as much house as I needed at the time.

I think there's a whole generation of people who think that maximum leverage is the ordained path to financial well being.
 


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