Mortgage struggles

[cliveb]

It's nearly 30 years ago, but back when I was 24 I don't think I knew anyone my age who owned their own house. We were all in rented places.
I was 29 when I bought my first house and only just got a mortgage then by going financially all-in with MrsA.

"Single, low wage 24-year old unable to get large mortgage" wouldn't have made much of a headline before the internet though.

So that was in the mid 1990s, right? By that time the squeeze had already started.
I was lucky that I got on the property ladder in 1981 (when I was 24, as it happens), before the mid-80s crazyness kicked in.
But it was only a 1-bedroom flat. There was absolutely no way I could aspire to a house at that stage. (And I was on a decent salary - about 7k IIRC)

Look, I have a lot of sympathy with young folks trying to get on the ladder these days. The insane rise in house prices has made it very difficult.
But the kind of article we're discussing here doesn't help their cause. It just appears to be pandering to the currently fashionable victim culture.

 

[GreiginFife]

Reversing the thinking for a moment.

If any bank did lend £200k to someone on sub £30k income, what would be the reactions of the same people?

I'd bank (pun intended) on the lender being branded irresponsible and fingers pointed to the 2008 crash caused by toxic debts and (and caused by) irresponsible lending.

 

[Deleted member 18121]

I have trouble deciding which thread to make this reply on.... This one or the BBC thread, but as many of you have said (and are completely right )the article misses a big dose of realism from the wanna be house hunter, but also doesn't stress enough the salary to mortgage ratio that is in the least bit sustainable. The BBC should take responsibility here to report appropriately.

I'm about to complete/exchange on a house, my first mortgage since since 2011 when I sold my flat and just managed to walk away with £1,000.... The mortgage is absolutely spot on 4x joint salary and is a big financial commitment. I don't understand why anyone would want to stretch it any further.

 

[PJ87]

I have trouble deciding which thread to make this reply on.... This one or the BBC thread, but as many of you have said (and are completely right )the article misses a big dose of realism from the wanna be house hunter, but also doesn't stress enough the salary to mortgage ratio that is in the least bit sustainable. The BBC should take responsibility here to report appropriately.

I'm about to complete/exchange on a house, my first mortgage since since 2011 when I sold my flat and just managed to walk away with £1,000.... The mortgage is absolutely spot on 4x joint salary and is a big financial commitment. I don't understand why anyone would want to stretch it any further.

We borrowed in 2014 on 250k mortgage and back then was 5 times my salary

It was more due to affordability of repayments which helped

Has to be compared to rent tho

Same house would be £200 more pcm at the time

 

[Hobbit]

Whilst some of us might squirm at the size of mortgages these days, it’s about affordability. A £250,000 mortgage might look terrifying but a number of lenders have changed the length of payment term. Some lenders are now offering up to 40 years, not the 25 year max we experienced.

 

[PJ87]

Whilst some of us might squirm at the size of mortgages these days, it’s about affordability. A £250,000 mortgage might look terrifying but a number of lenders have changed the length of payment term. Some lenders are now offering up to 40 years, not the 25 year max we experienced.

250k is low now days aswell

Few of my colleagues have 500k plus mortgages

London prices

We went straight into a 3 bed semi 2 of us

Turned it into a 4 bed now there 5 of us


Forever house tho as don't want more debt

 

[road2ruin]

Whilst some of us might squirm at the size of mortgages these days, it’s about affordability. A £250,000 mortgage might look terrifying but a number of lenders have changed the length of payment term. Some lenders are now offering up to 40 years, not the 25 year max we experienced.

Yep, I would agree with this. When we were looking at places the size of the mortgage wasn't a factor, it was what the monthly payment would be and what that payment could be if interest rates rose to X or Y etc.

 

[Hobbit]

250k is low now days aswell

Few of my colleagues have 500k plus mortgages

London prices

We went straight into a 3 bed semi 2 of us

Turned it into a 4 bed now there 5 of us


Forever house tho as don't want more debt

Daughter #1 bought a 3 bed, converted to a 5 bed terrace overlooking a park in Deptford. Paid £640k for it about 5 years ago. They were offered £680k for it before they moved in. We’d bought a 3 bed detached the year before oop north for £124k.

She‘s mortgage free now but has just taken out a bank loan for new windows - must be Edwardian sash style.

 

[PJ87]

Daughter #1 bought a 3 bed, converted to a 5 bed terrace overlooking a park in Deptford. Paid £640k for it about 5 years ago. They were offered £680k for it before they moved in. We’d bought a 3 bed detached the year before oop north for £124k.

She‘s mortgage free now but has just taken out a bank loan for new windows - must be Edwardian sash style.

Ouch for the windows , kicker.

We borrowed a further 60k after 4 years just to do the loft and bathroom.. but cheaper than moving to a 4 bed .. worked out well with twins

Took out 15 for the solar but that's only 10 year mortgage so will be paid soon

Other than that I'm now doing as much overtime as her in doors will clear me for .. with rates so high I want to get the kia saved for so I can purchase one second hand when the Corsa goes back. Determined not to borrow.. might end up with a small amount on my credit card for a few months but aiming to do it.

Mortgage free at 58 is dream and retire with 40 years in my pension but let's see what they try to do to that

 

[larmen]

"Single, low wage 24-year old unable to get large mortgage" wouldn't have made much of a headline before the internet though.

I don't know anything about publishing, bu printing stuff costs money, web article generate money. Newsquality can only go one way.


Just over 2 years ago we were offered 1.5% on 5 years or a little less even for 2 years. The difference wasn't worth only fixing for 2 years, so currently we are lucky until well into 2025.
My hope is that it peaks now and comes down a little in late 2024/early 2025.
Are trackers still a thing? Maybe get a tracker when it is high to ride it down before fixing low again?

 

[PJ87]

I don't know anything about publishing, bu printing stuff costs money, web article generate money. Newsquality can only go one way.


Just over 2 years ago we were offered 1.5% on 5 years or a little less even for 2 years. The difference wasn't worth only fixing for 2 years, so currently we are lucky until well into 2025.
My hope is that it peaks now and comes down a little in late 2024/early 2025.
Are trackers still a thing? Maybe get a tracker when it is high to ride it down before fixing low again?

I honestly believe this will be a rebalance of interest rates

I reckon they will "settle" around 3-4% long term rather than drop right down again

 

[Bunkermagnet]

Daughter #1 bought a 3 bed, converted to a 5 bed terrace overlooking a park in Deptford. Paid £640k for it about 5 years ago. They were offered £680k for it before they moved in. We’d bought a 3 bed detached the year before oop north for £124k.

She‘s mortgage free now but has just taken out a bank loan for new windows - must be Edwardian sash style.

And that just shows the arguement against the "why buy in a shite area".
Deptford used to be a dump, along with the like of Peckham, Brixton, Streatham but they have all had people move in and improve their lot and their houses so now they are saught after areas.

 

[Deleted member 18121]

I honestly believe this will be a rebalance of interest rates

I reckon they will "settle" around 3-4% long term rather than drop right down again

I'm of same opinion as you, rates as low as they were was never long term sustainable and somewhere in the region you mention will be where they finish.

I hope savers finally get their reward.

 

[PJ87]

I'm of same opinion as you, rates as low as they were was never long term sustainable and somewhere in the region you mention will be where they finish.

I hope savers finally get their reward.

Have to admit for first time in my life I've paid attention to interest rates. Moved all the money I've saved for my girls out of premium bonds and found some fixed rate bonds paying 4.5% for 7 years

I figure might aswell make them some more money .. never no they might be able to afford a buy a shoe box to live in lol

 

[Fade and Die]

The BBC story is just a typical MSM non story that fits their agenda to knock the country, the “everything’s broken and you know whose fault it is” diatribe.

As demonstrated on here It doesn’t stand up to even a slight scrutiny, what the headline should be is Buyer cannot Cut Cloth accordingly… everyone who has ever bought a house has had to make compromises, that’s why I live in Hornchurch and not Emerson Park, every episode of Location Location Location shows the unrealistic expectations of buyers, you always have to make compromises…

Not saying it’s easy now because it isn’t, the price of houses is ridiculous, blokes I work with have £500,000 mortgages over 35 years! The whole property market needs a major reset, it probably won’t happen though as uniquely in this country very high property prices are welcomed by a large portion of the population and the Banks.

 

[SwingsitlikeHogan]

I think that for many there has to be a move in thinking from 25yr mortgages to say 40yr mortgages. I felt an almost rather smug and hubristic ‘kudos’ around saying ‘I’ve paid off my mortgage‘ (and hear it from others) when in fact paying a mortgage payment until you retire (or indeed beyond) is surely no bad thing if the lower monthly payment makes living easier, better and more enjoyable.

Indeed we have taken out an interest only mortgage in retirement (having paid off what we had maybe 5yrs ago) as we are lucky enough to have pensions that can support an interest-only mortgage. And I am not really that bothered if we never pay it off - though if and when we move in next 5-10 years we might clear it then. If we don’t move and we live in the house for as long…our children can pay it off once we’re gone, and just on that the capital repayment is pre inheritance tax calculations so no big deal.

 

[PJ87]

I think that for many there has to be a move in thinking from 25yr mortgages to say 40yr mortgages. I felt an almost rather smug and hubristic ‘kudos’ around saying ‘I’ve paid off my mortgage‘ (and hear it from others) when in fact paying a mortgage payment until you retire is surely no bad thing if the lower monthly payment makes living easier, better and more enjoyable.

Indeed we have taken out an interest only mortgage in retirement (having paid off what we had maybe 5yrs ago) as we are lucky enough to have pensions that can support it. And I am not really that bothered if we never pay it off - though if and when we move in next 5-10 years we might clear it then. If we don’t move and we live in the house for as long…our children can pay it off once we’re gone, and just on that the capital repayment is pre inheritance tax calculations so no big deal.

My parents couldn't understand why I went got 35 year over 25 years as yes I will pay more for this house

However overpayments bring it down and if I didn't own it would be renting forever.. so I'm happy to pay 35 years until I retire and then the drop off in mortgage payments makes up for the drop in earnings from drawing a pension (hopefully)

 

[Deleted member 25172]

The BBC story is just a typical MSM non story that fits their agenda to knock the country, the “everything’s broken and you know whose fault it is” diatribe.

As demonstrated on here It doesn’t stand up to even a slight scrutiny, what the headline should be is Buyer cannot Cut Cloth accordingly… everyone who has ever bought a house has had to make compromises, that’s why I live in Hornchurch and not Emerson Park, every episode of Location Location Location shows the unrealistic expectations of buyers, you always have to make compromises…

Not saying it’s easy now because it isn’t, the price of houses is ridiculous, blokes I work with have £500,000 mortgages over 35 years! The whole property market needs a major reset, it probably won’t happen though as uniquely in this country very high property prices are welcomed by a large portion of the population and the Banks.

This is what infuriates me. It quite literally takes 10 seconds to go on rightmove, add in Cardiff, the budget and voila, their bleeding heart between the lines article headline goes from "Poor 24 year old hard working independent woman can't get on the ladder" to "24 year old single who wants a specific accommodation she don't have a budget for goes to the press", in other news - no news.

There's thousands of other cases where the situation is actually something that has national interest when it comes to the housing market and the difficulties that surrounds it. But this is not the one. This is a proper example of the journalists behind the "story" having an agenda.

On a personal note when it comes to the interest rate, I'm glad we're on a fixed rate of 1.64% until January 2027.

 

[Crazyface]

I'm a bit late to this, but from what I can see round here people are in masshooosive new cars. Affording petrol to feed them at a price I thought I'd never see. Not seen a reduction of people in the local coffee shops or local restaurants and food pubs. And don't get me going on mobile phones the size of tellys and one each for every member of the family. Nope, no sympathy here until I see a reduction in these things.

 

[PJ87]

I'm a bit late to this, but from what I can see round here people are in masshooosive new cars. Affording petrol to feed them at a price I thought I'd never see. Not seen a reduction of people in the local coffee shops or local restaurants and food pubs. And don't get me going on mobile phones the size of tellys and one each for every member of the family. Nope, no sympathy here until I see a reduction in these things.

Are you going into everyone's house counting the tellies up?

Are they buying a telly a month....

What would reducing having tellies do if they are already paid for?

How many are company phones and cars?

Do you check the log book incase