I'm 20 and I own my own £250000 4 bed house
letap73
Posts: 1,608
http://www.bbc.co.uk/newsbeat/article/34804311/im-20-and-i-own-a-250000-four-bed-house
The above link was the headline on my bbc home page. I clicked on it possibly expecting some 20 year old who had possibly started his own business and raised a significant deposit. I didn't finish reading it because the article was so wrong on many levels
The above link was the headline on my bbc home page. I clicked on it possibly expecting some 20 year old who had possibly started his own business and raised a significant deposit. I didn't finish reading it because the article was so wrong on many levels
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Comments
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I am puzzled as to why it is so wrong
Having briefly read the article, it appears that a young couple raised a large chunk of cash, not by being given it but by saving £500 a month each for 2 years whilst living at home. They then used that as a deposit, with the government's Help To Buy scheme lending the rest of the deposit (25%). So, they now live in their own house and have their payments going towards paying off the mortgage/loan rather than paying a landlord dead money. In addition, being part of the HTB scheme means it had to be a new build so they have also helped the building trade.
The reporting was fair and the couple appear to be very reasonable and want to work their way up in the world.
Am I completely missing your point of flagging it up, apart from to say "Good on 'em"??0 -
Its an advert for a start not news. They raised most of the deposit -via the governments help to buy scheme -which means you have to buy a potentially overpriced new build. They saved the money living with their parents so possibly not paying market rent or any sort of rent -they are now saddled with a mortgage of £187500 and the £50000 from the government which they have to pay back. Rather than renting from a landlord they are effectively renting from the bank and paying the bills for any repairs. I won't even go into the salary mulitples with regards to their salary but suffice to say a significant fraction of their salary will have to pay for their mortgage. There are so many potentially what ifs - What if they split up, What if interest rates go up, What if there is a recession etc. It will only take very litte to go wrong and they will possibly have to be bailed out by BOMAD .0
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It is a good advert for getting lured into the debt trap.
I am sure I posted this earlier.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
...and yet people regularly post about landlords and how one might cap rents as that market just keeps going in one direction? OK, I appreciate the concerns about lending and overstretching but these two seem sensible (some might successfully argue as dull) and saved hard instead of piffing the money away.
I think we all would have liked a bank (preferably someone elses
) to go under last time round as that would have taught valuable lessons about reckless lending instead of just reinforcing the belief that when times are good, bankers earn a fortune...err, and when times are bad they still earn a fortune but the taxpayer foots the bill. 0 -
Whilst its not a news story, fair play to them, house prices only go one way and how else would they buy one?
they were fortunate enough to live rent free with parents, nowt wrong with that, they wernt pi$$ up their wages and saving up for a desposit, pity more young people dont follow their example.
All mortages are debt, cant be avoided in most cases, but these schemes are really using our money to get (try) around super hi rents, that stop people being able to save.
i went to SA and Namibia for 2 years to get enough money to buy a house, xxxx working for just a desposit
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I just think "good for them" They saved their money and they've bought a house. The "What ifs" apply to life in general. What if inflation takes off and they are paying the same mortgage in 5 years while their mates rent has doubled or tripled. If they split up they will have an equal share of any equity in the property. If they were renting they would have sod all.
New builds come with 10 years guarantees as to quality, so not likely to have to face the costs of renovations and redecorating that you get with an old house - eg stripping wallpaper and finding you have to replaster a whole room, as I did in my last house.0 -
They can't win; renting is evil, mortgages are a trap, what if this or that happens tomorrow, yadda yadda.
Good on them. They seem (overly) sensible so I suspect they've mitigated some of life's risks with a fixed term mortgage/life insurance etc.0 -
Its an advert for a start not news.
It's a NewsBeat story, aimed at teenagers who listen to radio one. It's a refreshing alternative to the doom and gloom about how young couples starting out today will never get a foot on the housing ladder.0 -
Its an advert for a start not news.
It's a NewsBeat story, aimed at teenagers who listen to radio one. It's a refreshing alternative to the doom and gloom about how young couples starting out today will never get a foot on the housing ladder.
In which case that makes it doubly irresponsible. Buying a house is possibly the most serious fianancial transaction that most people take. I would expect the Newsbeat story to actually highlight the possible downsides of buying a house to teenagers who generally are quite poor on fiscal matters.
Why do you think there is so much doom and gloom with regards the financial difficulties young people face these days - might this be down to actual realities?0 -
I am puzzled as to why it is so wrong
Some might say that they don't really own the house until they've paid that massive mortgage off.
Plus, he's an estate agent. Reading about an estate agent doing well is like knowing that the tapeworm inside your intestine is warm, comfortable and well-nourished.0 -
Let me clarify.They can't win; renting is evil, mortgages are a trap, what if this or that happens tomorrow, yadda yadda.
Good on them. They seem (overly) sensible so I suspect they've mitigated some of life's risks with a fixed term mortgage/life insurance etc.
They are on the housing ladder, great.
But at what cost?
They have sacrificed their youth and will probably be in debt the rest of their days.
Financially sound, but a sad existence in my opinion.
Each to their own but FWIW all 3 of my stepsons have bought houses in the past 5 years at 3x joint annual income and 20% down.
That is the way to do it.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
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Let me clarify.They can't win; renting is evil, mortgages are a trap, what if this or that happens tomorrow, yadda yadda.
Good on them. They seem (overly) sensible so I suspect they've mitigated some of life's risks with a fixed term mortgage/life insurance etc.
They are on the housing ladder, great.
But at what cost?
They have sacrificed their youth and will probably be in debt the rest of their days.
Financially sound, but a sad existence in my opinion.
Each to their own but FWIW all 3 of my stepsons have bought houses in the past 5 years at 3x joint annual income and 20% down.
That is the way to do it.
I concur, personally wouldn't swap the years of pissing it up the wall (aka Uni) for a mortgage but if that's what they want then good on em.0 -
I am puzzled as to why it is so wrong
Some might say that they don't really own the house until they've paid that massive mortgage off.
I was looking to see if this was pointed out.
How on earth is this qualified as news? It's just a couple with a mortgage like thousands of other people. Baffling.0 -
Past performance does not indicate that the future will play out in exactly the same way. We are in an era where interest rates are held at record lows and a lot of people would struggle if interest rates move upwards. Since 2008 Government debt has increased hugely as a % of GDP primarily due to back stopping the banks - so forgive me for not trusting them fully in how they sell their mortgages. Private sector debt in the Uk is even more eye watering as a % of GDP.
There was a time when 4 times the main salary was perceived as risky when undertaking a mortgage - as in the above example it seems the fashion now is to contemplate 6-10 times the main salary.
I most certainly not having a go at the young wanting to buy property - I am questioning how affordable property is. My father as a 20 year, many moons ago bought a house and paid off the mortgage in one year - how times have changed!0 -
Germans appear to have a different perspective to renting:
http://www.telegraph.co.uk/expat/expatlife/11417359/Germany-the-country-where-renting-is-a-dream.html
The graph in this article is very interesting:
http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/0 -
The lack of economic literacy here beggars belief, and explains much of why we're in the state we're in. The country is £3Tr in DEBT. We're in a worse state than 2008. The country is BANKRUPT. And more children like these are being fed to the wolves.
"their own house" - no. It's owned by the Govt and the bank. They are in a highly leveraged speculative pile of bricks.
"Help To Buy". That's MY money. My taxes. If they can really "afford" a house they'd be using their own money not mine.
"Reporting was fair". You're kidding right? It was pure propaganda. Where was the analysis? Nowhere. Where was other side of the coin? That these children will NEVER pay off that debt. It's arithmetically impossible.
"house prices only go one way". Oh dear oh dear oh dear. Remember 1991? Remember 2008? You have a very short, selective, memory you silly little man.
"how else would they buy one". And there you have it. THEY CAN'T.
"any equity in the property". What makes you so sure there will be any? You're a clairvoyant right? Remember negative equity eh? We're in a massive bubble of bricks. And they are on the hook for ALL THE LOSSES. The Govt and bank don't give a toss - they will re-possess.
Oh, and it's a HOUSE not a "property". All posters here using the P word are hereby outed as estate agents. To be honest I stopped reading the "story" when I read the words "Rory is an estate agent". AWWOOOOOOGGA!!!! Propaganda!
Reg.dedicated avoider of fashion0 -
Blimey, you're a cup half-empty man aren't you 0
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Hello Reg - congratulations on your 4th post in 8 years. Your posting style is very much like the posters on hpc?0
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"It is very unusual to lose out once you are in a property for five or more years." FACTS and FIGURES please.
"paying the same mortgage in 5 years". They won't be they'll be paying FAR MORE. a/ Interest rates WILL go up. b/ at the end of the "free government money" period their I/R to the bank will ratchet up ABOVE INFLATION - go and read the HtB small print.
"mates rent has doubled or tripled". FACTS and FIGURES please. My rent has stayed the same for four years now. My landlady knows that if I bail out she'll likely have a "void" headache. And why should she put the rent up - her mortgage payments have gone DOWN over the past four years so if she tries to put my rent up it will be "F* off".
"10 years guarantees". Housing developer are you? Come round and look at the shoeboxes behind me here - wood rotten after 2 years, plastic stained, cracks in the walls. Some new builds are fine, others are lashed up in ten minutes. My nice Victorian rental has been here 120-odd years. It's got some character, LOTS OF SPACE AND STORAGE AREAS, and no damp.
"refreshing alternative". I would say that the "doom and gloom" is REALITY. You have an emperor's-new-clothes naivety like much of the population. Youngsters are stuffed - no pensions, unaffordable housing, zero hours jobs, £9k student loans on rising interest rates, sold-off public utilities, massive hidden debts (PFI "contracts" etc etc).
"renting dead money"? Ha ha. On the contrary, I have financial freedom. I have physical freedom. I have savings to spend on having fun (and to desperately try and get this forum back on topic - spent on MOUNTAIN BIKING :-)).
Reg
PS> Yes of course I'm on HPC letap73!
PPS> Noggibob: cup half empty? You misread me of course, the cup is TOTALLY empty! And about to be dropped on the floor and break into numerous small pieces.dedicated avoider of fashion0 -
Steady on Reg - you've gone too far by mentioning Mount@in biking - that counts as abusive language in these parts!0
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"Reporting was fair". You're kidding right? It was pure propaganda. Where was the analysis? Nowhere. Where was other side of the coin? That these children will NEVER pay off that debt. It's arithmetically impossible.
"house prices only go one way". Oh dear oh dear oh dear. Remember 1991? Remember 2008? You have a very short, selective, memory you silly little man.
"how else would they buy one". And there you have it. THEY CAN'T.
Reg.
jeez you are the original Mr Angry! dare anyone hold a different opinion to you
i just dont agree with much that you say, with some luck they ll be mortgage free in 25years, interest rates go up, well they will of course but so will his earnings and with 4 bedrooms, they can rent out a room or 2 if things get tough.
Drops in house prices only matter if you have to sell, otherwise they are irrelevant and oer the course of 25years, they only go one way or am i imagining my parents selling a house in Penge for £9000 in 1973, i wonder how much that is worth now, mmm guess at £6000 ????
And the bottom line is they ve parents who will by the looks of things, bail them out if it all goes west, maybe his dad owns the estate agency? we dont know do we?
of course its not a news story and they are very young to take on a such a committment but your response is abit OTT oh btw i m 1.83m so i m not a little man, infact i might be a rather tall and shapely female for all you know :oops:0 -
Houisng values generally go up and, yes, I do remember the housing bubble and price crash of 1991. It meant people couldn't sell there houses for several years and people who were speculating and buyings and selling houses quickly lost out. It coincided with the ERM crisis which put interest rates up by 7.5% over two days in a desperate attempting to keep sterling tied to the virtual euro.
So it was a double whammy, people couldn't afford their mortgages and couldn't afford to sell their house as the mortgage was greater than it's value. It's. A double whammy that is unlikely to happen on that scale again as we are not joining the euro for the forseeable future.
I chose the five year figure as even with the 1991 bubble, prices were not set back more than than three or four years. If you can point to a time when house prices fell to a five year low, then do so.0 -
derbyram59 wrote:Oh, and it's a HOUSE not a "property"
When you live in it it's a house, when you sell it it's a property0 -
That's an anomaly.derbyram59 wrote:Oh, and it's a HOUSE not a "property"
When you live in it it's a house, when you sell it it's a property
It's really only your property if you have paid it off in full.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
That's an anomaly.derbyram59 wrote:Oh, and it's a HOUSE not a "property"
When you live in it it's a house, when you sell it it's a property
It's really only your property if you have paid it off in full.
Nitpicker.
It may not be my property, but it IS a property.0 -
Apologies for linking to the daily mail, however, payday loans are very much a recent phenomena - the article is at least an indicator of how indebted a lot of people are - many of these are likely to be home owners:
http://www.dailymail.co.uk/news/article-2838643/More-1-4million-fund-Christmas-using-payday-loans-Figures-average-adult-spends-530-festive-season.html
A large number of householders have interest only mortgages - a greater fraction than in the past. I know anecdotally a numble of people do not understand that with such a mortgage you do not pay off the principal:
http://www.theguardian.com/money/2015/sep/04/million-interest-only-mortgage-repossession-citizens-advice0 -
Apologies for linking to the daily mail, however, payday loans are very much a recent phenomena - the article is at least an indicator of how indebted a lot of people are - many of these are likely to be home owners:
http://www.dailymail.co.uk/news/article-2838643/More-1-4million-fund-Christmas-using-payday-loans-Figures-average-adult-spends-530-festive-season.html
A large number of householders have interest only mortgages - a greater fraction than in the past. I know anecdotally a numble of people do not understand that with such a mortgage you do not pay off the principal:
http://www.theguardian.com/money/2015/sep/04/million-interest-only-mortgage-repossession-citizens-advice
One Daily Mail quote and one Guardian quote. Do you work for the BBC?
My first mortgage was a interest only plus endowment, biggest financial mistake I ever made. And I speak (type) as someone who later had a famously toxic Northern Rock 120% mortgage.0 -
No they were the first two articles that came up from my google search - besides if I worked for the bbc they would both have been Guardian articles
Financial advisors always have a clause saying that past performance is not an indicator of future performance - though they always advertise by refering to past performance. I genuinely believe that circumstances are very different to the last 40 years and that we are heading for interesting times - although I do not ascribe to the complete collapse of the west occuring overnight.0 -
The thing is there are different types of debt. Payday loans are at the worst end and mortgages at the least worst end. The couple in this this article are boringly sensible, and the risks inhernt is their £250k debt are less likely to get them into trouble than the family getting a pay day loan for £500 for Christmas.
Car loans and Cycle to work loans are somewhere in the middle.
The UK has more per capita private debt than most EU countires. The BBC "More or Less" stats program looked at this a few years back and noted that this is because we have more mortgages than other EU countries, so our debt vs. assetts balance actually made us less indebted than other europeans.
While it's true that house prices can crash, they are far more likely to increase in value than a car, bike or Christmas tat.
My mortgage is a 20yr term, my younger friends are getting 30yr term mortgage. Scary, yes, but whatever we do for the next 20 or 30 years, we will need a place to live and will need to pay for it. I fully expect to py off my mortgage 10 years before I retire as, despite moving three times as a home owner to evermore expensive homes, my mortgage paymnets have reduced year to year as a percentage of income, and I am increasingly in a position to overpay without foregoing many pleasures in life. While it was hard at the start, especially when the kids came along, it has been a sensible long term decision0
