What Chance do you have ?

What chance do a young couple have of buying there own home these days ? With the average house price in my area at £130.000 and the fact that most people can only get a mortgage for around £70.000 how the heck are you suposed to do it ?

House prices are set to rise again in the news - http://news.bbc.co.uk/1/hi/business/3592453.stm

We noticed some starter homes in our area last week and went to have a look. There were 750 flats built on an old factory site. 80% of them were purchased before 1 brick was laid They start at £110.000 How are these starter homes ??? The sales lady at the complex told me that all the flats have been sold. We drove back down the road to have a look at them and suprise suprise nearly every block had " to let " boards all over them....

Could it be the buy to rent landlords that are putting the prices up ?

[Ramrod]

That and the fact that people are allowed to self certify mortgages

Something needs to be done about buy to let. Surely there has to be some law passed that insists that a certain percentage of properties on a site had to be bought as buy to live in rather than buy to let.

Originally Posted by gary_580

Something needs to be done about buy to let. Surely there has to be some law passed that insists that a certain percentage of properties on a site had to be bought as buy to live in rather than buy to let.

I agree - I was paying £625 a month in my last place. The mortgage cant have been more then £400 a month max... They are making a huge profit. Multiply that figure by say 300 properties and you have a lot of money coming in !

I could not believe the amount of flats that had been bought for the purpose of letting out !! How is it that they can buy startet homes ?

These flats were supposed to be for " Luton residents or people that work in luton "

[Nugget]

When I moved just before Christmas, we could have bought any number of houses in fairly dodgy areas but decided to wait until there was firstly a nice house and secondly in a nice area. Just going on my wages (which are, it has to be said, pitiful ), we managed to get the one house in Grimsby that we could afford (and that was basically because the woman who was selling took pity on us ).

On the flip side, my brother (who lives just outside Birmingham) is married to a nurse and, taking into account both of their wages, they can't afford to buy anything at the minute .

I don't think that house prices are going to come down, but I just hope that, at some point soon, they either slow down or stop rising so that people can at least get their 'foot on the ladder'

[Jerrek]

*frown* Why the high prices?

On the flip side, that is a business opportunity. If I had money I'd be buying houses, as many as I can, and renting it out. It is a good business.

Housing costs surged here too, but not on that scale. Our neighbor bought his house two years ago for £130,000 (this is considered upper middle-class, roughly 3,000 sq. ft. including basement), and sold it for £180,000 a few weeks ago. New houses still in the neighborhood still start at £140,000. I guess some people want to buy house that has been lived in a bit to make sure all the problems are sorted out.

I've never bothered to look at mortages though. What is the limit that you can get usually? And what is the interest rate in the UK right now?

[bob_a_builder]

Statement #1 " : If I had money I'd be buying houses, as many as I can, and renting it out. It is a good business.

Statement #2 " : *frown* Why the high prices?

Spot the connection !!!

[Jerrek]

I don't see the connection. If everyone is renting out, I'd just drop my price lower. Et cetera.

Originally Posted by Jerrek

I don't see the connection. If everyone is renting out, I'd just drop my price lower. Et cetera.

Sadly that wont happen

They want to pay the mortgage and make a tidy profit to !

[Ramrod]

Renting out a house is a worrysome business. We did it for a few years. You have to have safety certificates for this, that and the other.....everything needs to be safe--glass etc so that you cannot be sued. There is always something going wrong that needs fixing/replacing. frankly the returns aren't worth the effort unless you are making a business out of it and devoting all your time to a portfolio of properties. When you sell, you are liable to tax on the profit and you are of course taxed on any income as well.

[danielf]

Originally Posted by Stuartbe

I agree - I was paying £625 a month in my last place. The mortgage cant have been more then £400 a month max... They are making a huge profit. Multiply that figure by say 300 properties and you have a lot of money coming in !

I could not believe the amount of flats that had been bought for the purpose of letting out !! How is it that they can buy startet homes ?

These flats were supposed to be for " Luton residents or people that work in luton "

Hm, I'm all with you, but say 300 properties at 100k each. That's £30 million. If I had 30 million quid or even half that, I'd be doing other things than renting out houses.

[bob_a_builder]

Spot the connection

I meant between the high level of buy to rent and the high/increasing house prices rather then level of rents
Landords seem/tend have better access to funds compared to 1st/2nd time buyers and so can easily shut them out of the market

[bob_a_builder]

I'd be doing other things than renting out houses

They ususally are, just get their staff to do the donkey work

[Ramrod]

Originally Posted by bob_a_builder

I meant between the high level of buy to rent and the high/increasing house prices rather then level of rents
Landords seem/tend have better access to funds compared to 1st/2nd time buyers and so can easily shut them out of the market

Yes and no. they have better access to funds but they also have to get the property at the lowest possible price as they want to make profit on it. For that reason a private buyer will usually beat an investor at auction or in the estate agents.

[Ignition]

To be honest I am a top rate tax payer and can't afford to buy a reasonable size home of any description here, which is why I'm in the process of emmigrating in Jerrek's general direction.

Main reasons for house prices being so high are simply lack of supply due to our crazy planning regulations and the 'not in our back yard' brigade preventing house building, and the lack of Government house building. Demand outstrips supply, so as with any market prices go up.

Thanks to this of course it's next to impossible to get onto the first rung of the property ladder - relatively easy once you're there! Buy to let certainly isn't helping!