OT : A helping hand....

First.Aspect

I can see both sides. I bought my shoe box near the peak of the market, for info. No matter what you paid and what you have, if a developer pops up, buys a field and halves the value of your nearby house, its a crap situation believe me.

What gets me is that we have pretty much run out of land in the UK and our green space is progressively less enjoyable because it is fragmented and congested. In every city I've been to, there are significant areas of brown field land. This is where we should be building, not expanding every further into what is left of the countryside. But the costs are higher, the construction industry is in tatters and this government wants to free up planning law and reduce the emphasis on redeveloping brownfield sites.

jedster

I don't know about percentages but I suspect most of my mates whose parents had some capital have received some kind of help. I don't think many of those parents will have remortgaged to find the cash.

I'm 40 and bought my first place in 1997 when houses were cheap so I've not had the rough deal that faces people 10 years younger. I didnt get any help with the first place (bit of saving and a 95% mortgage did the trick) but when I got married my in-laws gave us some money on the basis that we used it to buy a better place than we could otherwise afford and that the money would be more use now thean when they were dead. Very generous of them.

My own view is that house prices will be cheaper in real terms in 10 years than they are now. I'd not advise people to stretch themselves to buy unless the security of home ownersip is very important to them.

bails87

First Aspect wrote:

I can see both sides.

Me too, I was just playing devil's advocate

I bought my shoe box near the peak of the market, for info. No matter what you paid and what you have, if a developer pops up, buys a field and halves the value of your nearby house, its a crap situation believe me.

But should we see property as a place to live rather than an investment?

What gets me is that we have pretty much run out of land in the UK and our green space is progressively less enjoyable because it is fragmented and congested. In every city I've been to, there are significant areas of brown field land. This is where we should be building, not expanding every further into what is left of the countryside. But the costs are higher, the construction industry is in tatters and this government wants to free up planning law and reduce the emphasis on redeveloping brownfield sites.

Hmmm, now I'd say once you get out of the middle of London/Birmingham/Manchester etc, there's actually an awful lot of space left, green and brown.

dhope

jedster wrote:

My own view is that house prices will be cheaper in real terms in 10 years than they are now. I'd not advise people to stretch themselves to buy unless the security of home ownersip is very important to them.

Maybe, but whether they're so much cheaper that it makes sense to pay someone else's mortgage for those 10 years is unlikely I'd have thought.

Confusedboy

First Aspect wrote:

None as yet. I'm trying to persuade my father to pass away 7 or more years after assigning his assets to his offspring, but no luck as yet. He's completely on board with any way to avoid tax, but isn't sure he'll be dead soon.

I had a group of friends down south in the 90's and of the 5 of us, 4 had substantial assistance, at least along the lines of your friends. And that at the time when you could buy a house, wait 6 months and have a 20% deposit on your next one. Similar story for the children of middle class parents we have met up here, but a little less prevelant I think.

I heard a commentator on r4 the other day referring to our parents' generation (assuming you are 30 something like me) as the generation who had everything. Double housing boom, 20 years of falling cost of living, good interest rates for both saving and borrowing and possibly most importantly, the last of the "good" pensions to cover excessively long retirements. There were a few blips along the way, but nothing like the current situation.

We however are screwed. That's why I will inherit my father's field, and it will be divided in two between myself and my brother.

I was born in the UK '52, and have always reckoned that that was the best time and place to be born in the entire history of humanity so far. As well as the economic advantages the r4 guy referred to, we had the benefits of sexual freedom before AIDS spoiled it, some of the best music ever, proper publicly funded education including higher education, major advances in medical science, an increasingly libertarian society, no wars, no rationing, and national service had finished by the time we were old enough.

You 30somethings are, however, totally screwed despite also benefitting from most of the above, er, benefits. I blame 80's monetarism, but you are definitely screwed and I see no hope of improvement for at least the next 50 years, and you are going to have to stump up for our pensions as well. For that reason I reckon your parents should help out as much as they are able, although mine took the view that self reliance would be good for me* at a time in the early 70s when many of my peers had houses bought outright for them, usually as wedding presents, by thier parents.

My own life is an ongoing monetary carcrash, but I can hardly blame society for that; it is all my own fault.


*Not as good as spending less than £1k on a terraced house to get me onto the property ladder would have been.

First.Aspect

jedster wrote:

I don't know about percentages but I suspect most of my mates whose parents had some capital have received some kind of help. I don't think many of those parents will have remortgaged to find the cash.

I'm 40 and bought my first place in 1997 when houses were cheap so I've not had the rough deal that faces people 10 years younger. I didnt get any help with the first place (bit of saving and a 95% mortgage did the trick) but when I got married my in-laws gave us some money on the basis that we used it to buy a better place than we could otherwise afford and that the money would be more use now thean when they were dead. Very generous of them.

My own view is that house prices will be cheaper in real terms in 10 years than they are now. I'd not advise people to stretch themselves to buy unless the security of home ownersip is very important to them.

In a roughly flat market, with rents comparable to mortgages, I think the real consideration should be whether you are paying off the capital faster or slower than the real or real terms depreciation. In that casen, not only do you have a place to live, but your "rent" slowly builds up a "deposit" on the next house. I honestly don't know if mortgages are more or less expensive than renting just now. New mortgages probably are, in which case -> look at the silly monkey. You must acquit.

davis

I'm 29, bought my own place in February/March this year. It was hard (I wasn't really working then) by myself, and I didn't take any money from my parents. I wouldn't want to, either; they've raised 4 other kids (2 still dependent) and they've got their own things to buy that they've worked hard for, and I think it's time they spent their money on themselves.

They did give me 250 quid when I bought my first car though.

First.Aspect

Confusedboy wrote:

My own life is an ongoing monetary carcrash, but I can hardly blame society for that; it is all my own fault..

You spent most of your money on women and drugs and wasted the rest?

Clever Pun

I've noticed as well (in london) a lot of people wont move a little further out, this means more money and less opportunities to save.

The same can be said for buying, I spread the net a little and this enabled me to buy a much nicer place than if I'd gone for the centre of town.

First.Aspect

bails87 wrote:

Hmmm, now I'd say once you get out of the middle of London/Birmingham/Manchester etc, there's actually an awful lot of space left, green and brown.

Depends whether you want any quality of life for people in those cities. The green areas are not sitting there doing nothing - they perform a very important function. Whereas brownfield sites are pretty much useless to everyone unless they are turned into a recreational, commerial or residential facility. Yet we build on greenbelt land and encroach on city park land. Once its gone, its gone.

gtvlusso

I feel very sorry for kids now trying to start their adult life - buy a house, settle down.

Costs are ever increasing and I myself and my family are just about making it every month (to be honest, no matter how much I earned we would spend it!).

I employed 2 students on my team in their gap year - business experience kinda thing. We paid them £12,000 per annum. That figure has not changed for at least 10 years in my office, this trend also suggests that wages have not increased by any significance without promotion. I think the average last years was a 1% increase - if you were lucky to get a payrise, an awful lot of people did not get anything.

As people are 'having' to live further out, I can only imagine the expense to go anywhere or do anything increases due to transportation costs.

I have heard of Firefighters working in Reading, but unable to afford to live there or anywhere nearby - so they commute 70 odd miles to their job each way.

RowCycle

I got a bit of money to help towards a deposit, but probably only a couple of grand (a lot - but not compared to the original posters mates who were given tens of thousands of pounds).

spen666

rubertoe wrote:

House prices are ridiculous -

we paid near 200k for our 2 bed flat in North london and that was a really good price (just over 8 months ago) - and only because the sellor wanted a quick sale and we wernt part of a chain!

i'd imagine that most people these days will need some sort of help as saving for a deposit can take a long time and a lot of sacrifices.

So you fuel market by paying silly prices.

Property prices are only what people will pay


~You say they are ridiculous and then say it was a good price

[/quote]

gtvlusso

spen666 wrote:

rubertoe wrote:

House prices are ridiculous -

we paid near 200k for our 2 bed flat in North london and that was a really good price (just over 8 months ago) - and only because the sellor wanted a quick sale and we wernt part of a chain!

i'd imagine that most people these days will need some sort of help as saving for a deposit can take a long time and a lot of sacrifices.

So you fuel market by paying silly prices.

Property prices are only what people will pay


~You say they are ridiculous and then say it was a good price

[/quote]

So, the world according to Spen is that we all live in caves, right?

There will always be a desire to own your home - it is endemic in our culture and if you don't buy it at 'x' price, someone else will - it *may* gain in value and you will kick yourself for not buying.....people are scared of not owning nowadays and the market is always expected to bounce back.

I made a fecking huge mistake a number of years ago.

I was offered ridiculous mortgages - upto £500k from my bank as I had such a good credit history and big deposit. The mortgage would have skinted me, but in theory I could have managed (assuming no rate increases). I did a silly thing and went with a mortgage company that would offer me a professional rate mortgage (wife being barrister) and based our borrowing only on one salary - this limited our buying power, but the mortgae was very affordable and the rate was good. As such, I now have a smaller house than I need, with not much equity and not much savings after refurb. Because the market collapsed and mortgages changed, even though I did the 'right' thing and only bought what I could easily afford, I am now unable to move because of the lack of equity - I cannot aford what the mortgage company would want as a deposit on the type of property we are looking at and I cannot afford the stamp duty.

What I should have done is take the fecking huge mortgage, buy the bigger house and wing it, like everyone else!

unixnerd

I bought my first house in 1991 when I was 23. It was a flat in a good part of Aberdeen and cost 32,600, my deposit was about 3.5k. When I sold it a few years ago the guy who bought it had to put 20k down, that was before the credit crunch!

In Scotland the mortgage is only on the valuation. If you bid 10% over (I've seen as high as 30%+) all of that has to paid up front in addition to the mortgage deposit. I feel really sorry for today's kids.

First.Aspect

unixnerd wrote:

I bought my first house in 1991 when I was 23. It was a flat in a good part of Aberdeen and cost 32,600, my deposit was about 3.5k. When I sold it a few years ago the guy who bought it had to put 20k down, that was before the credit crunch!

In Scotland the mortgage is only on the valuation. If you bid 10% over (I've seen as high as 30%+) all of that has to paid up front in addition to the mortgage deposit. I feel really sorry for today's kids.

That's not quite right - when I bought a house up here, they decided whether or not I'd made a reasonable offer, but it wasn't capped at their surveyor's valuation. Otherwise the offers over system wouldn't have worked. Might be less flexible now that the seller has to get a survey done.

Stone Glider

My dad lent me £250 for one month at no interest. It was July 1973 and it made my current account swell just enough to allow the GLC 100% mortgage on a valuation of £9,000 cover the purchase price of £9,250. That was then, it always has been tough to buy your first home if you are an ordinary person.

First.Aspect

spen666 wrote:

So you fuel market by paying silly prices.

Property prices are only what people will pay


~You say they are ridiculous and then say it was a good price

I'm sorry but this is rather trite, and for once not protected by the impenetrable shield of legal expertise.

What are your thoughts on petrol or electricity prices? What about rent? Do you pay the going rate or do you just get cold in winter as you walk around looking for somewhere to sleep?

daviesee

First Aspect wrote:

unixnerd wrote:

I bought my first house in 1991 when I was 23. It was a flat in a good part of Aberdeen and cost 32,600, my deposit was about 3.5k. When I sold it a few years ago the guy who bought it had to put 20k down, that was before the credit crunch!

In Scotland the mortgage is only on the valuation. If you bid 10% over (I've seen as high as 30%+) all of that has to paid up front in addition to the mortgage deposit. I feel really sorry for today's kids.

That's not quite right - when I bought a house up here, they decided whether or not I'd made a reasonable offer, but it wasn't capped at their surveyor's valuation. Otherwise the offers over system wouldn't have worked. Might be less flexible now that the seller has to get a survey done.

I think he meant that while you could offer an over the valuation bid, your bank would ony give you a mortgage to cover the value of the property. Any deposit and/or excess would come out of your pocket.

mudcow007

we found it really really hard to save for the 12% we needed as a deposit.

our first house was £125,000 so we had to come up with 15,000 as a deposit.

realistically thinking most people wouldnt be able to find that, unless they had saved for years

we had to sell a car an save for months, but we got there in the end

First.Aspect

daviesee wrote:

First Aspect wrote:

unixnerd wrote:

I bought my first house in 1991 when I was 23. It was a flat in a good part of Aberdeen and cost 32,600, my deposit was about 3.5k. When I sold it a few years ago the guy who bought it had to put 20k down, that was before the credit crunch!

In Scotland the mortgage is only on the valuation. If you bid 10% over (I've seen as high as 30%+) all of that has to paid up front in addition to the mortgage deposit. I feel really sorry for today's kids.

That's not quite right - when I bought a house up here, they decided whether or not I'd made a reasonable offer, but it wasn't capped at their surveyor's valuation. Otherwise the offers over system wouldn't have worked. Might be less flexible now that the seller has to get a survey done.

I think he meant that while you could offer an over the valuation bid, your bank would ony give you a mortgage to cover the value of the property. Any deposit and/or excess would come out of your pocket.

I know - but the "value" of the propery isn't (or wasn't for me) set in stone. They might value it at £150k but give a loan of £160k, for example. You wouldn't have to pay an extra £10k. I'm sure even in England if you offered £200k, you might run into problems, and its the same here.

I thought that was the situation anyway. I'd be really interested to know if that's changed (or if I'm utterly wrong!!).

UndercoverElephant

First Aspect wrote:

daviesee wrote:

First Aspect wrote:

unixnerd wrote:

I bought my first house in 1991 when I was 23. It was a flat in a good part of Aberdeen and cost 32,600, my deposit was about 3.5k. When I sold it a few years ago the guy who bought it had to put 20k down, that was before the credit crunch!

In Scotland the mortgage is only on the valuation. If you bid 10% over (I've seen as high as 30%+) all of that has to paid up front in addition to the mortgage deposit. I feel really sorry for today's kids.

That's not quite right - when I bought a house up here, they decided whether or not I'd made a reasonable offer, but it wasn't capped at their surveyor's valuation. Otherwise the offers over system wouldn't have worked. Might be less flexible now that the seller has to get a survey done.

I think he meant that while you could offer an over the valuation bid, your bank would ony give you a mortgage to cover the value of the property. Any deposit and/or excess would come out of your pocket.

I know - but the "value" of the propery isn't (or wasn't for me) set in stone. They might value it at £150k but give a loan of £160k, for example. You wouldn't have to pay an extra £10k. I'm sure even in England if you offered £200k, you might run into problems, and its the same here.

I thought that was the situation anyway. I'd be really interested to know if that's changed (or if I'm utterly wrong!!).

The value of the property is not always the same as the "Offers over" price. Plenty of solicitors round here put the OO price as about half of what the property is worth. The mortgage company will lend based on what a valuer says it's worth. You then offer based on this amount. Strange system, all things considered.

As for us, Mrs. Elephant's Granddad saved a portion of his meagre pension away for his two Granddaughters and this added up to the deposit on our first house (about 3.5K). He'd apparently always dreamed of owning his own home, but never managed it. We've bought and sold all of our houses at pretty good times since.

sketchley

Never understood the obsession with house prices. Apart from the problem of negative equity, if housing markets drops by 10% then the gap between your house and next one up also drops by 10%. So it makes it more affordable to upgrade.

Of course best option is to sell high, rent for a while then buy low. But chances of pulling that off are next to done. I friend of mine waited 7 years for the market to collapse then brought his first house 6 months before it did.

SickAsAParrot

We've been pretty lucky property wise and not needed any hand-outs. Moved in from rented with the missus in 1999 who had a council house 'inherited' from her grandad who had died a few years previously. because she had been living in it as a carer she had the full discount so we bought it a couple of years later for about £19000, minimal deposit required and small mortgage.We did it up properly and sold it at a massive profit a couple of years ago enabling us to get the house we really wanted yay!

rick_chasey

Owning property at inflated prices is overrated.

bdave262000

We bought a flat in a sink estate in Wandsworth in 97 when we were in our early / mid 20's. No help from parents. The place hadn't been touched in years and needed sorting out, we didn't want to spend to much on it as the return would be minimal and it was the first rung of the ladder. Many of our friends wouldn't visit as they were scared of coming into the estate and the rest turned their noses up while they rented nice flats in Clapham.

We lived there for four years, had no problems with anyone, never burgled and became good friends with our neighbours. Within four years our block went from 20% to 80% owner occupied, the equity we made in the sale gave as a significant deposit to buy a house in Kingston.

rick_chasey

bdave262000 wrote:

We bought a flat in a sink estate in Wandsworth in 97 when we were in our early / mid 20's. No help from parents. The place hadn't been touched in years and needed sorting out, we didn't want to spend to much on it as the return would be minimal and it was the first rung of the ladder. Many of our friends wouldn't visit as they were scared of coming into the estate and the rest turned their noses up while they rented nice flats in Clapham.

We lived there for four years, had no problems with anyone, never burgled and became good friends with our neighbours. Within four years our block went from 20% to 80% owner occupied, the equity we made in the sale gave as a significant deposit to buy a house in Kingston.

Try doing that now...!

First.Aspect

Sketchley wrote:

Never understood the obsession with house prices. Apart from the problem of negative equity, if housing markets drops by 10% then the gap between your house and next one up also drops by 10%. So it makes it more affordable to upgrade.

Of course best option is to sell high, rent for a while then buy low. But chances of pulling that off are next to done. I friend of mine waited 7 years for the market to collapse then brought his first house 6 months before it did.

Well, it depends on how much equity you have.

The lower your % equity falls, the worse your interest rate when you remortgage. The amount they will lend you might still be 4x salary or something, but the affordability can change drastically. You might be able to buy more house on what they will lend you, but who ever accused a bank of lending only what anyone can afford to pay back?

If like me you don't really have a significant equity in your house (10% at best at this point) you can't remortgage at all unless you can find a deposit plus stamp duty. Effectively you are like a first time buyer.

rjsterry

Sketchley wrote:

Never understood the obsession with house prices. Apart from the problem of negative equity, if housing markets drops by 10% then the gap between your house and next one up also drops by 10%. So it makes it more affordable to upgrade.

Of course best option is to sell high, rent for a while then buy low. But chances of pulling that off are next to done. I friend of mine waited 7 years for the market to collapse then brought his first house 6 months before it did.

We lived in our flat for 7 years, 2002-2009. In 2002, I remember people warning that the market couldn't keep going up, and a collapse was just around the corner. When prices had continued to rise all the way up to the giddy heights of 2007, you can see how people started to believe that the end would never come.

I did hear a suggestion that inflation might rebalance house prices more painlessly than straightforward price-cutting.

graeme_s-2

When my wife (then girlfriend) and I bought our house in 2005 we got a 100% mortgage, and my stepmother gave us 2 grand to cover fees etc. Now we're buying a bigger house and my in-laws have kindly given us about 8% of the value of the new house, and are loaning us an additional 2%. We've paid down a fair bit on our mortgage, but due to the housing market we're releasing very little equity in selling our house. Were the market higher we would have needed less (or no) help from them.