How do people afford houses in this day and age?

Trumpet

Trumpet

Well-Known Forumite
gk141054 said:
Wonder why its non-mortgageable?
Click to expand...
I looked at a house on Park Avenue when I first moved to Stafford, this too was non-mortgageable due to subsidence. Had I have had a spare £10k or so to have underpinning work carried out I could then have borrowed on it.
Is subsidence a common problem on Park Avenue?
 
Trumpet

Trumpet

Well-Known Forumite
A friend of mine is looking at taking out a mortgage on an interest only basis for a couple of years after which time she is looking to sell the house and hopefully the increase in value of the house will fund a deposit on another house using a conventional repayment mortgage.
Have to say it sounds like a punt to me. Has anyone out there any experience of this.
 
Gramaisc

Gramaisc

Forum O. G.
Subsidence occurred mostly in the northern end of town, but it is possible anywhere for various reasons. A 'history' of subsidence in the area is often enough to make the suits run a mile, even if there is actually no current likelihood of a re-occurrence. A friend of mine has just lost two grand, as the house he was buying turned out to have been involved in a claim from the coal board thirty years ago for a whole £30. In those days they would give away our money just for a quiet life.
 
tek-monkey

tek-monkey

wanna see my snake?
Trumpet said:
A friend of mine is looking at taking out a mortgage on an interest only basis for a couple of years after which time she is looking to sell the house and hopefully the increase in value of the house will fund a deposit on another house using a conventional repayment mortgage.
Have to say it sounds like a punt to me. Has anyone out there any experience of this.
Click to expand...
I wouldn't bet on increases over the next few years, I personally think this is a small bubble and that prices will stagnate for several years. If your friend gets into negative equity do they have any way out other than sit tight and hope prices go up? What about interest rates, only one direction for them to go.

Mind you, if its cheaper than renting and the house is OK, staying put shouldn't be an issue.
 
Gramaisc

Gramaisc

Forum O. G.
A couple of years is not very long. The increase in value, if there is any at all in the near future, has to fund the costs of selling this one and purchasing the next before you have any left over to trade up. There have been periods in the past when this might have been possible, but the timing really has to be fairly good. If people actually knew what they were doing then the market would not work in the way it does. Place your bets, I say.

Oh, and if house values do go up, then so will the price of the next house.
 
Trumpet

Trumpet

Well-Known Forumite
She'll have equity as she's got approx £125k deposit but being self employed cannot get a repayment mortgage big enough for the house she's looking at.
I've already mentioned to her the buying into the same market scenario.
Thanks for input folks.
 
tek-monkey

tek-monkey

wanna see my snake?
Hmm, so expect maybe £1500 to buy now, probably £3000 to trade up (buy + sell). So thats £4500 wiped out immediately. How many years are they talking? If we say 4, the house needs to rise in value by almost £100 a month to meet costs. But then there is maintenance and repair, there is building insurance rather than just contents, there are all manner of things that don't apply when you rent. I'd say double it, you'd need to gain £200/month so in 4 years that house needs to be worth nearly 10k more than it is now, to break even.

That is of course without factoring in the difference in cost between rental and buying. Depends what their rent is, and what the mortgage would be really. Not as safe a bet in my eyes. If we guess with a 150k house, it needs a 6.5% rise in 4 years. Not a lot, but we have just had some of the worst house price rises in history.
 
Gramaisc

Gramaisc

Forum O. G.
There were periods when the 'value' of my house was increasing each month by an amount greater than my monthly pay - or so the papers told me. There are few certainties, particularly as the time period shortens.
 
Trumpet

Trumpet

Well-Known Forumite
Food for thought there, the £125k is equity from her current property, the house she's looking at is a new build so the developers will be paying her fees as an incentive. I've suggested a smaller property but........ Women.
 
tek-monkey

tek-monkey

wanna see my snake?
New build? Forget that rising in price, they're like cars. First person to have it pays a premium, next owner gets a discount because its been soiled.
 
Trumpet

Trumpet

Well-Known Forumite
My thoughts, she reckons a bargain as they've knocked £50k off due to being last one on the development not sold.
My other thought is why has it not sold?
 
Gramaisc

Gramaisc

Forum O. G.
Ask Florence about new-builds. There's only a few things left to fix - five years on. It's all a gamble. Houses are for living in. Mine is worth no more to me than it was when I bought it, it's just that I don't have to pay anyone ( except the Council ) to live in it now. If you want to get money out of a house you have to trade down, or buy two in the first place and sell one, or die and leave it to somebody else.

Women - tell her that size doesn't matter....
 
Florence

Florence

Well-Known Forumite
We actually got quite lucky with the timing on our second house. We bought one on the Lotus estate, part exchanged are two bed semi which had cost £26,250 in 1997 for about £33,000 and bought the 3 bed end terrace for £64,000. This was in 2000. When we moved again to another new build and part exchaged again we got £130,000 for it. That was 2004. It was a crazy time for house prices. We bought our current 4 bed house for £180,000 five years ago, and I doubt it would make that now. Doesn't matter though, because we aren't moving. My next move will be to a nursing home (in maybe a couple of years!!!)
New builds are shite. The builders don't want to know after they have your money. The roof is still leaking five years on. The house itself was built by a work experience 15 year old as far as I can tell. Beezer were better than Westbury, but its all Persimmon now.
 
Gramaisc

Gramaisc

Forum O. G.
tek-monkey said:
New build? Forget that rising in price, they're like cars. First person to have it pays a premium, next owner gets a discount because its been soiled.
Click to expand...
Have you been in Florence's house, then?
 
Chick

Chick

Well-Known Forumite
Things all sort of fell into place at the right time with our house purchases. My husband (boyfriend at the time) bought his parents old council house in Doxey at a pretty reasonable price years before I knew him.

Having moved in together at the start of 2002, we were able to buy a small 4 bed detached house on the Saxonfields development in Baswich for £127,000.

The rise in the house market meant that in 2007 we sold this for £210,000 and that combined with my salary increasing by nearly 3 times during that period meant we could buy a wonderful double fronted 4 bed Victorian house.

We bought when house prices were at their peak meaning we broke the ceiling price of the street but the mortgage payments were within our reach (just) and since the interest rates have plumetted we've been able to overpay too.

All this and I'm still a couple of years off 30!
 
You must log in or register to reply here.
Top