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They have a point though, if you get a place for £750k on a £100k mortgage you're borrowing 7.5 times your income. That's not really good practice I'm not a financial expert but you only need to do the maths.
I think as a rule of thumb you should borrow up to about 3.5 times your income, obviously a bit more if there's two of you. But I don't know if I'm missing your point.
Where I live you can get a semi detatched house for ~ £80k :d
I didn't say that, you idiot. Not in the slightest. I was pointing out, quite clearly, that in some areas, £750k - £1 million isn't going to get you a lot.
Well done you! :yeees:
The only way you will get a £750k mortgage on £100k is if you have a huge amount of equity in a property already. If you have got a couple of hundred grand laying around in that respect, then all good. Not everybody does.
Oh, get off your high horse. Nobody said that.
Some will do, but I defy you to disagree with the simple fact that a family who are not on the property ladder already are going to find it nigh on impossible to get on it if they only bring in £40-50k... and that goes for almost anywhere in London!
THIS is the point people are making.
Errr - who the FUCK makes £400k on a two bed apartment? Stop talking out of your arse. You will have had to have bought many MANY years ago to get even close, and even then, you will have to own in one of those super-expensive areas you were ranting about people just being greedy bastards to want to live in to even make the kind of selling price you are dreaming of.
Which planet are you living on!? It would seem it is YOUR maths that is flawed, as your figures are just completely unrealistic.
I will agree with you that a mortgage of 4-4.5x is really quite manageable though.
That is a little higher than I would be comfortable taking, personally... As long as you're comfortable with the payments though, I'm sure it's cool.
I own a property up North which I bought on a 1.7x multiplier (£170k), interest only. It's rented out (to family) and just about pays for itself, so that's all good.
Glad we got that cleared up
Yes, I honestly do, especially in this market.
Think about it, mate. It's not the payments that they won't be able to afford, but the deposit and just getting the mortgage. Few families have vast amounts of savings (children are expensive!!) and they're going to need something with 3 bedrooms (most likely). I've lived in Zones 2/3/4, and they really aren't as cheap as you would think!
£250k is not going to buy you much at all, and that would be at a 5x multiplier AND at least a £25k deposit.
£300k, well, you can do the maths, and you're really looking upwards of this for something nice.
Maybe a couple of years ago, especially with your fellas, Norther Rock, they may have been able to get mortgage with such a high multiplier, but it would have been a stretch! Nowadays, honestly? It is going to be soooo hard for them, even if they are lucky enough to have saved up a suitable deposit.
Shit times.
Just to pick up on this point a bit more. It may be more than the average Londoner makes, but then, the average Londoner lives in a rented house-share with a few pals, simply because they can't afford to buy.
Again, unless you were lucky enough to buy a few years ago when the prices were a bit more.... reasonable, then buying now is tough.
3 bed flat in Putney, SW15 - http://www.foxtons.co.uk/search?bedrooms_from=3&price_from=175000&price_to=250000&prop_type=houses&property_id=634496&search_form=keyword&search_type=SS&submit_type=search
3 bed house in Bishops Grove - http://www.foxtons.co.uk/search?bedrooms_from=3&price_from=175000&price_to=250000&prop_type=houses&property_id=654541&search_form=keyword&search_type=SS&submit_type=search
Excellent 3 bed house in Bushby Grove - a bit far out but still on the tube - http://www.foxtons.co.uk/search?bedrooms_from=3&price_from=175000&price_to=250000&prop_type=houses&property_id=659135&search_form=keyword&search_type=SS&submit_type=search
3 bed house in Pinner - http://www.foxtons.co.uk/search?bedrooms_from=3&price_from=175000&price_to=250000&prop_type=houses&property_id=619163&search_form=keyword&search_type=SS&submit_type=search
Some perfectly fine 3 bedroom houses, a bit far out but still accessible on the tube, 45min-1hr commute in, like most Londoners deal with. We're currently going through the shittest times ever and it won't be long before things get back to relative normality and getting a mortgage isn't that impossible again...
I don't deny that there are houses available at those prices, but the fact is that people are still going to be unable to actually GET a mortgage without a 10-20% deposit! This simply means they are unable to buy!
I disagree completely. I think it will be a LONG time before we see anything like the mortgage offers of the last few years, if we see them again at all!
To be honest, the last few years were the exception to the norm, and what we are experiencing now is the norm. It used to be tough getting a mortgage as you had to save for the deposit (hence proving you could manage your finances) etc. They then started throwing money around and things went down the shitter. You see what I mean?
Lol - aye, and again you've shifted the goalposts a bit.
£40-50k for YOU is a lot, and your expenses will be far lower. Factor in a couple of kids (as in, the family we have been discussing), possible only one parent working, and you've a different kettle of fish. £2500 doesn't go quite as far when you have three, four or even five people living off it, certainly not enough to save a large chunk every month.
Another point is you said yourself that £40-50k is way above average, which is true. What about the average joe, earning much less, which is what another focus was on when I last checked.
You simply can't use something outside the norm to say that everybody should be able to do that. It just doesn't work!
But they're massively subsidised by the wealthy. If they had to pay for their own health care, education, roads, etc they'd be a lot worse off. The wealthy pay a lot more in taxes and massively subsidise the rest of us. If we tax the wealthy too high, you kill the cash cow.
Still, lets not pretend this argument is anything to do with helping the poor or moderately off, it's the old 'hate the rich' argument dressed up in pretty clothes.
You can think about it a bit deeper though, in regards to the 'wealthy' and 'non wealthy' or proletariat and bourgeoisie as having a co dependent relationship. All this 'wealth' is created by the people lower down the chain for the people higher up the chain (consider that no employer would ever hire anybody unless they made a profit off that person - so by definition any employer is underpaying the value their staff gives - profit) and this is a good thing because profit goes back into circulation and we all get richer. The rich wouldn't be rich if it wasn't for the working class (that includes pretty much everyone except the top 5% with money to invest though so doesn't imply 'poorness') and part of this co-dependent relationship means this upper class whatever you like to call it should put back into social schemes to look after the working class.
There is a good history of philanthropists giving back, but for the ones who are profit greedy and can only measure their own success by the margins of profit they give the rest a bad name. Taxation is just a way to make sure the balance is there and the working class isn't being exploited.
Or, at least, that's one theory. One I happen to like over the radical marxist everyone with power / money will only seek to exploit everyone else in order to preserve their own estates (I mean, everyone is selfish at the end of the day aren't they?) which is why a capitalist system is fundamentally broken.
I think of it more like a more sophisticated trade and barter system with these 'owning class' being a necessesity in order to organise collaboration of efforts, things like that.
Yes, but chances are they are a fair bit older, live nowhere near bloody London, bought property years ago (when it was cheaper, yes, cheaper) etc, etc, etc.
Getting bored with repeating this now.
For young families, in and around London especially, not yet on the property ladder, things are going to be fucking tough, if not impossible to get on the property ladder, for at least the next few years.