[Closed] Property market - renting & buying. Madness!

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5 years ago,... for £650 a month...That exact same house is back on at £800 a month.

4.25% per year, thats better than inflation but not huge. Probably realised they asked too little last time too.

If I could find a 100% remote role, I'd be up in Scotland right away.

Compare...

https://www.rightmove.co.uk/properties/69534640#/ Arran.

https://www.rightmove.co.uk/properties/104595074#/ Maidstone (nice area)

4.25% per year, thats better than inflation but not huge. Probably realised they asked too little last time too.

Yeah I agree that place isn't too bad for the price rise, but it was probably under valued last time judging by the amount of viewers.

I genuinely feel guilty sometimes that I have a mortgage. I live on a nice street in Huddersfield in a big (for 2 people) house and the mortgage I pay is probably half what I’d pay in rent. Which I couldn’t afford if I had to rent.
My house is an Edwardian 3 bed semi, so nothing too special but it’s the sort of house a family with a kid should have as their first home but I can’t think of many young families that would be able to afford the rent on it and where would they get the £25k deposit they would need to buy it?
We got on the housing market by the skin of our teeth back in the early 2000’s - literally a month or two more during that boom and we couldn’t have purchased a house and that was at £53k.

I can’t really do anything to help people apart from sell my home cheap to someone but then I’d be in the same position!!

Makes me sad all these poor quality new houses springing up which are mainly 3/4 detached houses going for big money, with very little in the way of affordable housing being made available.

Just over a year ago we considered moving and the agent came round and said 'hmm £195k max' which was at the time a little disappointing given what we had put into it. Anyway last month a house around the corner (exact same) went up for £250k and went in a fortnight, and now they are popping up on our estate for similar amounts. Can't get my head around the increase, supply and demand I guess but seems a crazy jump.

My daughter rents a house in Clapham with 3 other mates and it costs them £3.3k per month between them.

Makes me sad all these poor quality new houses springing up which are mainly 3/4 detached houses going for big money, with very little in the way of affordable housing being made available.

Yep - got a whole load of those going up around us right now. And the developer has just put a big sign up saying 'Stop Being Generation Rent, Become Generation Buy' with an offer of 5% towards the £500k – £600k asking price. Fair enough, that is a large amount of money (albeit for over-priced houses in the first place), but there are no 2-bed semis which is what most first time buyers can actually afford!

a nice street in Huddersfield

Every day is a schoolday 😉

We moved up to Sheffield at the start of the year and the rental market was utter madness. One house we liked had 45 people asking for viewings - we failed to even get a look in! Thankfully it didn't seem to effect prices too much.

We've just moved, and when we were looking in December we viewed a place that was up for £525k. We didn't particularly like it, fair enough, but also really didn't think it was worth £525k regardless given it's size/position/location/garden etc. Anyway, it fell off the market for a bit, we assumed it had had an offer, but now it's reappeared. For £575k... Bonkers.

To make things worse, I worked out that in 5 years time at age 45 (so really, the last chance at buying a house I'll have), earning 45k a year with a 40k deposit, I'd be only in a slightly better position that I am now with 10k deposit and 10k a year less salary, that's even with the 20% equity loan taking the deposit up to £110k on a 350k house (equity loan is only on new builds), so I'd have to borrow 240k, which is 5.3x a 45k salary. Not going to happen, even with a 30% deposit.

So, buying on my own, I'd still be looking at a £220k normal house (which gets you nothing now...) or shared ownership but in a better position...

Makes me sad all these poor quality new houses springing up which are mainly 3/4 detached houses going for big money, with very little in the way of affordable housing being made available.

It's the same around here. There are a few new developments. All are detached 3/4 bed 'Executive' homes. The prices are absolutely insane. All half a million, upwards.

Who on earth is buying these houses?

@IHN - you have to share the link to the £575k house!

I live in Kent so it’s never going to be ‘cheap’

and we didn’t listen to everyone claiming a massive crash was on the way!)

We bought 10 years ago. There was a gadge on here was looking at the same time . Don't see him any more. He harped on for about 3 years a massive crash was coming and that buying was silly

It hasn't. Yes my house isn't worth any more (for location reasons) but at the same time I've spent less over 10 yearsthan I would have on rent and have equity.

Covids about the closest we have had to a Correction and it hasn't happened. The UK needs mass population reduction /removal(emigration etc) to correct the housing market as house builders are never going to saturate the market enough to bring prices down too many fingers in that pie

All are massive, detached 3/4 bed ‘Executive’ homes.

Well you say 'massive' but they are not really - it's just clever use of space so they can say 'kitchen/diner, en-suite, four double bedrooms (but three of them are only just big enough for a double bed), office, garage, etc, etc'. And the gardens are invariably tiny and overlook the neighbours garden with very little space around them.

I'm looking at a modern (12 yo) 2 bed house at the minute as a buy-to-let. £100k, to be rented at £600pcm or so. It's grim up north.

And the gardens are invariably tiny and overlook the neighbours garden with very little space around them.

Interestingly we had a conversation along these lines on Saturday passing a row of new builds with a slab path between them.

Although detatched they are potentially closer than me and my mate are to our respective neighbours due to there being fire places on both sides of the party wall.

All are detached 3/4 bed ‘Executive’ homes. The prices are absolutely insane

To be fair though there is an abundance of quality 2 bed starter homes in the area, not always in nice locations but terraces in the north are fairly ubiquitous. Also a 3/4 bed exec home is really 2/3 bed plus storage cupboard. Despite everything we're still in a position where demand out strips supply and people would rather live in a 'good' postcode in a new box rather than a 100 year terrace that needs a bit of work. Without building our way out of this (which wouldn't work, NIMBYs, people wanting to live in nice locations while whole streets of terraces rot etc.) the only option is to limit borrowing levels to more sustainable levels, would crash the market so won't happen.

I can’t really do anything to help people apart from sell my home cheap to someone

In the process of selling our old flat. Went on the market last Thursday and had 6 viewings booked up until this Wednesday. Had it valued at £100-£110 . I had work priced up to bring it up to scratch (total rewire / bit of plumbing / a couple of ceilings need replacing and general decoration). I reckoned on around £7-8k to do a nice job.
First guy (first time buyer) who viewed it on Saturday put in an offer of £105K yesterday. Discussed it with the wife and we agreed to sell it to him as we would rather it went to someone to get on the ladder than someone to make money from it.
Phoned the EA to be told there was a same value cash offer from one of their regular buyers and that we could probably push for more as they are buying up property in the area.
We are sticking with the first guy.

All are massive, detached 3/4 bed ‘Executive’ homes.

Well you say ‘massive’ but they are not really – it’s just clever use of space so they can say ‘kitchen/diner, en-suite, four double bedrooms (but three of them are only just big enough for a double bed), office, garage, etc, etc’. And the gardens are invariably tiny and overlook the neighbours garden with very little space around them.

You're absolutely right. I've removed the word 'massive'. They seem to get a plot then see how many houses they can shoe-horn in.

Which makes the price even more inexplicable. I just can't see who has that kind of money around this neck of the woods. Or have lenders returned to lending bonkers, unpayable' sums again?

These developers must be making absolutely enormous margins on these boxes. Its not difficult to see how the Chief Exec of Persimmon homes can pay himself a bonus of £75 million quid

Phoned the EA to be told there was a same value cash offer from one of their regular buyers and that we could probably push for more as they are buying up property in the area.
We are sticking with the first guy.

Very noble of you - I tried to do that when I sold my last place (single mother, seemed lovely and despite having more interest and higher offers we wanted to stick with her). Further down the line she couldn't get a mortgage.

^^^ yeah as above, hopefully doesn’t bite you on the arse! There’s no way I’d turn down a cash offer for a FTB who needs a mortgage, been burnt before!

^^^ yeah as above, hopefully doesn’t bite you on the arse! There’s no way I’d turn down a cash offer for a FTB who needs a mortgage, been burnt before!

Yeah, fingers crossed. Fortunately we are not in a chain so if it does go tits up then i'll learn from it. As long as it sells in the next 24 months, then i can get a refund on the stamp duty I paid for the place we are in now.

Phoned the EA to be told there was a same value cash offer from one of their regular buyers and that we could probably push for more as they are buying up property in the area.
We are sticking with the first guy.

To be fair our last house, a nice 2 bed terrace, had a lot of interest. We had quite a few people who were “buying it for their kids to live in” but I reckon they were going to rent it out as an investment. We then had a young couple who came with one of their dads who was a builder and we had a good chat and found they were buying their first house. I was really glad to sell it to them, as far as I know they did some work to it - the work we wanted to do - and are still living there as I met the guy a few times working in a supermarket which is really nice. I might have got a few quid more if I had held out but really liked them.

I'm glad we managed to buy when we did in Dec 2019, it was a slog, not short of 10 years of saving / planning and even then we needed an inheritance and home buyers isa bonus to scrape together 5% deposit. A few people said we should aim for 10% to avoid the silly interest of the 95% LTV mortgage, but in reality we were being out-paced by house price inflation. It's daft really.

This is going to sound like one of those things dickheads in the early 2000s said for a bit of a brag, but it's more a damming tale of how ****ed up things are. We supposedly 'bought' well but I don't know, it was a bit rough looking but structurally sound and we tried to be as smart as we could, for exmaple replacing blown window units and washing the frames rather than replacing them all on the never-never and doing as much of the decorating as we could ourselves but we still ended up spending £10k. In the 18th months we've lived here, we've paid £9k off the mortgage, added £10k to the value just bringing the maintenance up to date (best guess) and some how that all pales because it's risen £40k in value through a pandemic and massive deep recession.

We bought 10 years ago. There was a gadge on here was looking at the same time . Don’t see him any more. He harped on for about 3 years a massive crash was coming and that buying was silly

I'd have probably sung the same song, it makes no sense really. When Blackrock fell we suddenly and terribly realised that the market had been driven by a lot of people being a bit silly with all this 105% self-cert mortgage nonsense and in reality, they couldn't afford their homes, the only sensible outcome was that the market would correct back to pre-boom pricing, but it just never happened, there was a short contraction for a few quarters and we went right back to over-inflation price rises. The whole thing feels like a kind of ponzi scheme that's going to collapse at some point, but I've learnt there's really no point trying to swim against the tide.

Noble or Naive?

Nice that you're doing it - but there's a lot of risk (and potential expense) there.

Anyway. I have no idea why anyone lives down south. It's madness and, frankly, other than London being a nice occasional playground (yes, hotbed for jobs) but at what cost?

Few years back a colleague was spending £550k on a two up two down in Brighton. On street parking. Long commute into London.

I was living in a 3 bed semi in Nottingham with a garage and front and back garden for less than a third of the price. If we were doing the same job he'd have maybe got 10k london weighting. Instead I spanked my spare cash into a rental.

We moved to Wales. 3 bed detached house, 7 acres of land, outbuildings. Paid about the average house price for the UK.

If I have to go to London for meetings I'll hop on a train, spend a couple of nights in a hotel. If the company isn't picking it up then I'll still be quids in because I'll not be paying an extra £1000+/month on a "living down south" mortgage - and I'll be retiring a decade earlier than the other bloke.

The moral of the story is - you don't have to live down south and you're mad if you do. It's far from grim up North.

but you're in Wales ?

I was planning on selling our 3 bed terrace next year after we've paid some big loans off.

We live on a main road and I dislike the area and not fond of the house. Due to the prices and we needed to fix our mortgage again this year, we decided to stay put for the time being due to mad prices.

We could finish renovations and sell for around £120k (we bought it for 90k 12 years ago) and could come away with a decent chunk of equity, but we'd need to chuck it into a potentially more expensive house.

We're now paying our mortgage that is cheaper than most people's car leases! If I can stick it out in the area a bit longer, it'll give us a chance to build some savings.

I too feel really sorry for anyone on minimum wage trying to get their own place. It's not like renting is a cheaper option these days!

I live in a village on the Northumberland coast.

The property market has gone mad since lockdown.

Anything remotely desirable goes in days.

A 1 bedroom flat, it's tiny, the details had no floor plan or room dimensions. Seaview however.

Asking £250k, gone STC within a week of going on Right Move.

Beautiful 5 bedroom period house, £1.3 million, gone within 4 weeks.

Supposedly two bedroom flats (i.e mine) in my area of Edinburgh have gone up 17% in the last year????
And mine is better finished/maintained than most as not a student let.

Mental.

@ElShalimo - yeah - it's rubbish here.

MTB, kayaking, running, swimming, beaches, mountains all on the doorstep. I don't have to go and see my mates or family because they're queuing up to come here instead.

Or I could live in a flat polluted concrete jungle for twice the price.

I'm not disputing it's lovely...it's your grasp of geography that worries me.
Mind you most people in the SE think "the North" starts somewhere near the Stevenage badlands

@IHN – you have to share the link to the £575k house!

Bloody 'ell, it's sold!

https://www.rightmove.co.uk/properties/72121437#/

@ElShalimo - it's my grasp of geography that made me move here 🙂

I'm done living in a place because of closeness to work. If anything the last year has taught us that if you've got the right skillset then you can work from a camper van in Khazakstan if you've got an internet connection.

We just moved and the only way we managed to get this place was because we know the estate agent and were able to view the house before they'd even taken pictures, and were able to make a cash offer at asking price.

Lost count of the number of times we had viewings booked on other places but the sellers had accepted an offer before we could even view. It is madness.

Bloody ‘ell, it’s sold!

https://www.rightmove.co.uk/properties/72121437#//blockquote >

I don't think that there are any windows in that house that the average person would be able to see out of (without a step ladder).

That would be a horrible way to live.

 

Private landlord buy to let should be made almost impossible as its one of the main drivers of why the OP can't afford to buy. Renting out an existing property you own for a short period whilst circumstances change before you are legally obliged to sell would be fine. All rental property should be dealt with by not for profit housing associations. Second homes should be abolished too. Only when all that is in place will the housing madness end.

I think its disgusting that people view a 'buy to let' as a pension option when its somebody elses life basically put on hold. Those cash buyer types that rush in and buy up 'all the property in the area' would be first against the wall in my revolution but there are plenty of little old couples who are holding a gun to the heads of a whole generation abeit with an apologetic smile.....'

Crazy and needs sorting before all the long term renters try and retire. Property market supply is fixed and demand stoked by stamp duty holiday, so prices spike.

Older generation won't move out of larger homes suitable for families as stamp duty is so much.

Buy to let capital gains will be taxed as income soon so they won't get sold.

Then Jeremy Corbyn started saying he would give long term tenants the right to buy at a discount, look what happened to him. Everybody went with Boris s slogan.

Now we have been warned of negative interest interest rates so anyone with the cash is buying starter properties.

It's a uk thing, Spain and Germany have stable prices, my friends just sold a nice villa for what they paid 20 years ago. They enjoyed living in it, did not want a profit, hopefully the new owner will do the same.

Not for for profit and charities will end up rinsing more out of people than private landlords ever did. Just attracts the wrong sort of people who are either incompetent, or wolves hiding behind the facade. Ask anyone normal you may know that has been unfortunate enough to work at a large corporate brand charity.

The only way out is oversupply of housing or an interest rate rise. Just when you think it will never happen and feel really safe is when it will happen. Remember quite a few friends parents losing houses back in day. If interest alone only the normal / poor / comfortably poor will lose out. Some private equity co will swoop in and buy at scale.

Personally never understood Kent. Everything is just average and mid priced.

Now:

If we could all get together and buy a chunk of Syria I hear it’s pretty warm and they have good MTB trails 😂

I don’t think that there are any windows in that house that the average person would be able to see out of (without a step ladder).

That would be a horrible way to live.

Yup, that's pretty much why we didn't buy it.

Ooh I've got a gun against lovely young people's heads. Three years as a deck hand in the North Sea pulling 18 hours shifts bought mine. If you want a job with no sleep, high chance of death or severe injury give us a shout, free pistol if you survive to shoot the unfortunates. Onwards the revolution.

Think I read somewhere in the Week (likely cribbed from elsewhere) that what is needed is a property tax rather than purchase tax - currently downsizing is expensive due to stamp duty (ignoring holiday or not), but if property itself were taxed at similar rates to US (google says between 0.2 & 2%) then it would encourage downsizing and act as dampener on house price inflation.

If we could all get together and buy a chunk of Syria I hear it’s pretty warm and they have good MTB trails 😂

Isn't it the normal way in Syria just to get a load of mates together with Kalashnikovs and RPGs and take what land you fancy! 🙂

currently downsizing is expensive due to stamp duty

Eh? Stamp Duty is paid on a purchase, not a sale.

Eh? Stamp Duty is paid on a purchase, not a sale.

Yes i know a few elderly people living in family houses on their own. They won't move out as the house is full of memories and the stamp duty on downsize say 10k, and they don't know they 'll be alive in 12 months time so why bother.

The govt really do mess things up when they meddle.

A property tax would get things moving but I well remember the poll tax riots.

Remember quite a few friends parents losing houses back in day.

Yep - I very nearly bought in 1991 when a £40k mortgage was £450 a month. Translate the same rates over the same term for a mortgage on the average house price now (£230k) and you'd be looking at something north of £2,700 a month.

unless you’re planning on living out of your car once you downsize, you’ll have to buy another house?

So factor the Stamp Duty in as a cost of purchase, like everyone else does.

There are two reasons for most downsizing:
- practicality (i.e. can't manage a bigger property any more)
- releasing cash

Neither of these is affected by having to pay Stamp Duty (you could say releasing cash is, as you release less as you have to pay the Stamp Duty, but you don't release any if you don't move)

i know a few elderly people living in family houses on their own. They won’t move out as the...

There's a woman up the road from me, lives on her own. She has the audacity to drive around in a car with five seats several times a day, and doesn't even drive for Uber. Worse than that, the car sits empty and unused 23 hours a day. The heartless bitch.

On our street people arrive in their 40s and go out in a box.

A property tax would get things moving but I well remember the poll tax riots.

Careful what you wish for.

Can you afford 2% of property value, serious money.

Despite everything we’re still in a position where demand out strips supply and people would rather live in a ‘good’ postcode in a new box rather than a 100 year terrace that needs a bit of work.

Bought my 1921 terrace for 143k 4 years ago and just finished fixing it up. 1 year of ‘solid’ evening work followed by 3 years of the odd week DIY. I can get to work in 5mins on my bike, walk to Lidl in about 4, Sainsbury’s in 5, most of my mates in walking distance and most importantly trails are a 20min ride away. Mrs walks to work in about 20mins. When my car blew up in January I just laughed and scrapped it

I will have my mortgage (100% loan when I took it out 4 years ago) completely paid off in 7 years thanks to constant overpayment

I would like a more private garden and a garage but the prospect of having no mortgage way before I’m 40 is very attractive

Very glad I didn’t mortgage myself up to the limit on some shitty newbuild or city property to be honest

Ooh I’ve got a gun against lovely young people’s heads. Three years as a deck hand in the North Sea pulling 18 hours shifts bought mine. If you want a job with no sleep, high chance of death or severe injury give us a shou

Paid my dues in West Africa and Former Soviet Union states for mine.

Older Colleagues dad did his in South Georgia as a whaler for 2 years.....

There are ways and means but it's sad that it's come to that if you want to put a stable roof over your family's head due to the "ladder" and property only going up.

Phoned the EA to be told there was a same value cash offer from one of their regular buyers and that we could probably push for more as they are buying up property in the area.
We are sticking with the first guy.

We're selling our flat and trying to buy a house at the moment, and for what it's worth it's because of people like you that we are in with any sort of chance at all. We put an offer in on a place that was on the market for all of 3 days, it went to sealed bids and we were up against 2 cash buyers (we have first time buyers lined up behind us as it were), and the impression we got from the agent was that they went for us because they wanted to support a family who are trying to 'do what they did 10 years ago'.

2% property tax would clear me out so even I would join the protests.

The ladies on their own in family houses clearly want to stay, problem is they are family houses on the doorstep of top schools in sw London, and with 3 spare bedrooms each, and people are sleeping on the streets. Clearly there needs to be an incentive to move. They 're well into iht territory but it's too late to downsize and gift the money away as there isn't 7 years left.

That’s the thing, if you’re very old in a family house with no mortgage and a good pension. Could you be bothered with all the hassle of downsizing when you have loads of room for when the family comes and stays?

As above, we’ve been tempted to upsize a few times but resisted and quite happy now we have decided to stay. No extra stress of a larger mortgage and hopefully retirement will come sooner.

I really do not what the answer is. I assume inherited wealth keeps banging up deposits coupled with large mortgages inflates prices.

I’ve thought a crash would come for a while but I don’t think it will as home ownership is a national obsession in this country.

We’re selling our flat and trying to buy a house at the moment, and for what it’s worth it’s because of people like you that we are in with any sort of chance at all. We put an offer in on a place that was on the market for all of 3 days, it went to sealed bids and we were up against 2 cash buyers (we have first time buyers lined up behind us as it were), and the impression we got from the agent was that they went for us because they wanted to support a family who are trying to ‘do what they did 10 years ago’.

I didn’t realise this was a thing and reading the few stories of it on here has kinda given me a nice feeling

Fair play to anyone doing that, what a great thing to do knowing what a hassle buying & selling is

That said, someone working full time and saving a deposit for a roof over their head having to depend on someone’s kindness just to sell them a house is pretty nuts

THINK POSITIVE!

If I could find a 100% remote role, I’d be up in Scotland right away.

Compare…

Comparing somewhere that’s an hour on a train to the centre of london and somewhere that’s a drive to the ferry, an hour on the ferry and an hour on the train to the centre of glasgow, where the last ferry home is 6pm for much of the year (8pm on a summer weekend), is a false argument. Ferry fares every time you travel, overnight stays every time you want to fly somewhere or miss the ferry. Arran has a lot going for it - but comparing to to Maidstone is like comparing Miami to Alaska.

That's also offers over, now I don't know what the market is like in Arran but a year or two in the West end of Glasgow decent flats were going waaaaaaay over the stated offers over price.

I wouldn't be surprised if nice places in the countryside are doing the same now.

Yep – I very nearly bought in 1991 when a £40k mortgage was £450 a month. Translate the same rates over the same term for a mortgage on the average house price now (£230k) and you’d be looking at something north of £2,700 a month.

I just put a 230k mortgage through one of those online calculators and it came out as £1091 p/m

That's also not far off the 1991 mortgage when accounting for inflation.

What am I missing here? Genuine question. No deposit,  25 years.

There are not enough bungalows to downsize. We have a big 4 bed house with only my son left at home who is just about to buy. I have been looking at smaller places but the typical bungalow is almost as expensive as our house so we are more likely to stay put.

I just put a 230k mortgage through one of those online calculators and it came out as £1091 p/m

Your comparing record low interest rates to record high rates.

His point was the average house price today at 1991 mortgage rates would be crippling.....as it was back then

Our house story is a little different to the norm...

Met MrsRNP when she was renting an awesome converted industrial building (The Garage) off a mutual friend, ended up moving in with her after awhile and absolutely loved living there for a few years until mutual friend came back from his travels.
I was starting to work overseas which helped us save for a mortgage deposit. Rented a house in the meantime. After a year or so the landlord wanted to sell and offered it us cheap as sitting tenants. This was 2000 and cost us £52k (£10k undervalue).
Renovated it and sold it 2016 for £163k.

Long story short but rented a house and dumped our money into buying cheap commercial properties which we cleaned up and flipped on to developers over a few years for a decent gain.

Last week, after 25years of waiting we bought for cash 'The Garage' where we first met.

I appreciate that graft in shithole 3rd world countries for months on end, luck, kindness and listening to MrsRNP and having a leap of faith got us where we are.

I have had many sleepless nights though.

I live in a new “Executive” home. Agree it’s not particularly big, but we picked a house that would suit our lifestyle. It’s a 4 bed, size wise, yeah could be better. The below isn’t my town but it’s the same house about 15 miles away.
https://bloorhomes.com/developments/buckinghamshire/winslow/winslow-grange/the-berrington/plot-124
I’d have preferred an older property. But price, availability and location made us buy the new build. It’s easy to say “who buys these homes”, but I have to live where I live. As an example, here’s a 3 bedroom older home in my town.

https://www.rightmove.co.uk/properties/74716431#/

My gran downsized. Went from a 4 bedroom house with big garden to a wee 2 bedroom. She was 90 though and couldn't keep up with the big house. My grandad had died too.

New house was literally 20 yards away, across the street! The lady who stayed there had spent shitloads doing up the kitchen and installing a wetroom in the previous 12 months then got ill and had had to go into care sadly. Meant my grany already knew her new neighbours!

I believe it was revenue neutral to move.

As I was saying before, my flat in Edinburgh has supposedly gone up 17% this year. Was bought in 2000 for £72k and was valued around £235k last year, so would be about £260k now? Absolutely insane! And I've only ever put £10k into it, redoing the bathroom and kitchen and a new boiler - that's in 20 years. No big repair bills and have made plenty cash renting the second bedroom out over that time.
Brilliant for me, but totally unsustainable on a society wide level.

Your comparing record low interest rates to record high rates.

His point was the average house price today at 1991 mortgage rates would be crippling…..as it was back then

Exactly - the rates back then were eye watering.

Your comparing record low interest rates to record high rates

But that's where we are. One of the reasons for spiralling house prices is low interest rates. The headline price of a house is much higher but the monthly cost is not miles away.

But that’s where we are. One of the reasons for spiralling house prices is low interest rates. The headline price of a house is much higher but the monthly cost is not miles away.

But even modest interest rate increases will make many mortgage repayments very difficult, just like in the late 80s/early 90s

I live on a nice street in Huddersfield

Every nice street in Huddersfield has a really shit one approximately two streets away though. I grew up around there so I’m allowed to slag it off 😀

Last week, after 25years of waiting we bought for cash ‘The Garage’ where we first met.

I don’t know why but this has really cheered me up. You old romantic RNP. Good on you

Your comparing record low interest rates to record high rates

But that’s where we are. One of the reasons for spiralling house prices is low interest rates. The headline price of a house is much higher but the monthly cost is not miles away

I think it’s worse now.

Looking back and comparing, the monthly cost may be comparable. that’s one way to look at it.

But back then there may have been 14% interest but there was also 14% inflation which was diminishing the effective size of your loan. It was ‘short’ term pain, and riches galore* a decade later.

Now the monthly cost is still hard to bear, but it’ll be like that for 30 years. And if you’re saving you get below inflation returns on your savings. So you get further behind.

It was bad then. It’s worse now.

I don’t know why but this has really cheered me up. You old romantic RNP. Good on you

Thanks!
This building does mean a lot to us and one of the reasons 'our mutual friend' sold it to us along with a million other planets falling into alignment.

Sockpuppet +1. House price inflation has outstripped wage inflation for many years now. Ultra low interest rates, increasing lending multiples from historic x 3 main earner wage, increase in mortgage terms to 30+ years; these are all just tools to try and keep the monthly payments affordable. Logically at some point these measures will run out of steam, but there have been people saying that for a long time, it hasn’t happened yet.

Your comparing record low interest rates to record high rates.

His point was the average house price today at 1991 mortgage rates would be crippling…..as it was back then

That'll be it

but there have been people saying that for a long time, it hasn’t happened yet.

I can remember people saying exactly that in the mid/late 90s. On the one hand, it doesn't seem like it can be sustainable. On the other hand, if you wait until you are in a healthy position to buy and prices had corrected to what seems reasonable.  I'd not have bought yet and be in a far worse position.

But even modest interest rate increases will make many mortgage repayments very difficult, just like in the late 80s/early 90s

But you can get a 10 year fixed rate mortgage. By then you'll have paid off a chunk of capital. Even if rates go up that doesn't mean your monthly outgoing will.

I think it’s worse now.

Looking back and comparing, the monthly cost may be comparable. that’s one way to look at it.

Yes there are many different ways to measure it. I believe as proportion of outgoings its actually cheaper now than 10 years ago. And going back 30 years things were far more volatile so just as likely to get worse, not better.

I suppose my point is there have always been issues with the housing market and if you are considering buying putting it off until things improves isn't a great plan. There has been an interest rate rise and a house price crash predicted by some for more than 10 years yet here we are

Another route but I'm not sure how viable it is nowadays is the interest only mortgage and adding equity. A work colleague and friend bought a £300k do-er-upperer and has grafted his absolute arse off for 15+ years. He had it valued at £850-900k leaving them with £400k ish for a final 'forever' mortgage free home.

Either way houses require graft - you either work hard to pay the mortgage or work hard to add equity/value

Property tax forget the fact that properties (and areas) change in value, or people add value by working on their property or there income changes. Its an incredibly unfair tax. The value in your property you live is meaningless, you have a house, a place to live, that is its value. Realising its value means selling the property.

Houses are expensive, but this is not a UK unique problem. Its pretty common in most parts of the developed world outside rural areas. I think there should be more long term rental options, lots more local authority housing (the selling off with out replacing of LA housing was one of the biggest mistakes in housing).

Other side of it, is because everyone is moving to Kent, Wales etc; my brother and his BF currently live in a 2 bed flat on the 33rd floor of a flash development with views over the London Eye, parliament etc, for £800 pcm less than it would normally rent for, as expensive city centre flats were emptying fast. They had a choice of I think ~25 flats in that development when they moved in September. They have decided to make the most of it whilst the prices are so low, before moving on.

Whereas our house on the rural edge of Leeds looks like it might have gone up £60k in the last 4 years based on the recent sales around us!

Bloody hell. This thread has just prompted me to get an estimate of our house value just out of interest...the mid range estimate that doesn’t even account for the significant redecoration / refurb we’ve done values it at £70k more than we paid. This was our first house as a family (3 bed link detached) but there’s no way I’d have been able to afford today’s price. Madness.

I suppose my point is there have always been issues with the housing market and if you are considering buying putting it off until things improves isn’t a great plan. There has been an interest rate rise and a house price crash predicted by some for more than 10 years yet here we are

+1

I bought my first at 21 and in +35 years have bought/sold half a dozen plus lived in a few rentals when between houses/divorce/working-abroad. TBH I/we have pretty much just ignored the 'market conditions' and bought/rented when we needed to, helped of course that I/we have always had a decent income.

Never actually lost money, in an obvious way, but one house bought in the late 80's sold a decade later for barely more than we paid for it (after +10% interest rates).