I've noticed a lot of developers seem to be pushing co-ownership, and I guess it's tempting to own -- at least a percentage -- of a home for just over £100 a week, as the ads promise. It's undoubtedly targeted at FTBs as a means of getting on the ladder, and I guess, in turn, keeping the market churning.
I've noticed that when you go for it though and want to increase your share, they sell it to you at its new current price based on their valuation. I've heard it said that a property is only worth what someone is willing to pay, so this seems a bit suspect. Also, what happens if house prices fall 15% when I go to increase my share? What about when I sell?
Any thoughts on co-ownership would be appreciated.
Thanks.
Full Version: Co-ownership - Yay Or Nay?
QUOTE (Wilco @ Jan 25 2008, 07:38 PM) 
I've noticed a lot of developers seem to be pushing co-ownership, and I guess it's tempting to own -- at least a percentage -- of a home for just over £100 a week, as the ads promise. It's undoubtedly targeted at FTBs as a means of getting on the ladder, and I guess, in turn, keeping the market churning.
I've noticed that when you go for it though and want to increase your share, they sell it to you at its new current price based on their valuation. I've heard it said that a property is only worth what someone is willing to pay, so this seems a bit suspect. Also, what happens if house prices fall 15% when I go to increase my share? What about when I sell?
Any thoughts on co-ownership would be appreciated.
Thanks.
I've noticed that when you go for it though and want to increase your share, they sell it to you at its new current price based on their valuation. I've heard it said that a property is only worth what someone is willing to pay, so this seems a bit suspect. Also, what happens if house prices fall 15% when I go to increase my share? What about when I sell?
Any thoughts on co-ownership would be appreciated.
Thanks.
Nay
It says on average people are getting 85k and appears around a 1000 houses bought last year throught it in NI. I would be interested to see what the average price of the houses bought were. I think it is wrong as it is putting money into developers pockets and blurring the lines between private and social housing. If one can't afford a house they shouldn't buy then! It just keeps prices higher then they should be and means there is greater competition at a higher price. I think there should be greater rights for tenants as well.
QUOTE
Assembly announces extra funding for Co-Ownership
Tuesday 15 January 2008
Responding to today's Ministerial announcement of an additional £19m in 2007/08 from the December monitoring round, Alan Crowe, Co-Ownership Housing's Chief Executive, says
“This is a welcome and much needed boost for Co-Ownership buyers and should deliver an extra 200 homes over the next 3 months. We are the only show in town at the moment for many people trying to get onto the housing ladder, and the £19m reflects the continuing high demand for our services.”
“As a result, we are operating at twice the level of government targets for 2007/08” explains Alan. “Over 700 homes have already been occupied through Co-Ownership in the nine months from April to December 2007, over 300 more have been agreed for purchase and are awaiting completion dates, and applications for a further 125 homes are being processed as I speak.”
““We are backing local buyers with an average of £85,000 per property at this time. The £19m is a response to our request for extra funding this year to meet the surge in demand.”
“This surge in people taking up Co-Ownership reflects that the average home in Northern Ireland is still unaffordable for many people. Although interest is strong right across the range of starter shares we offer (from 40% to 75%) there is a lot of interest in the lowest share of 40%. That’s because the lower the share option the more affordable the property becomes. Currently 1 in 5 of the buyers we are working with are opting for the lowest possible starter share, and that’s down to affordability – it’s as much as they can afford.”
"We are also actively in discussion with government about funding from April onwards, as no let up in demand is expected."
Tuesday 15 January 2008
Responding to today's Ministerial announcement of an additional £19m in 2007/08 from the December monitoring round, Alan Crowe, Co-Ownership Housing's Chief Executive, says
“This is a welcome and much needed boost for Co-Ownership buyers and should deliver an extra 200 homes over the next 3 months. We are the only show in town at the moment for many people trying to get onto the housing ladder, and the £19m reflects the continuing high demand for our services.”
“As a result, we are operating at twice the level of government targets for 2007/08” explains Alan. “Over 700 homes have already been occupied through Co-Ownership in the nine months from April to December 2007, over 300 more have been agreed for purchase and are awaiting completion dates, and applications for a further 125 homes are being processed as I speak.”
““We are backing local buyers with an average of £85,000 per property at this time. The £19m is a response to our request for extra funding this year to meet the surge in demand.”
“This surge in people taking up Co-Ownership reflects that the average home in Northern Ireland is still unaffordable for many people. Although interest is strong right across the range of starter shares we offer (from 40% to 75%) there is a lot of interest in the lowest share of 40%. That’s because the lower the share option the more affordable the property becomes. Currently 1 in 5 of the buyers we are working with are opting for the lowest possible starter share, and that’s down to affordability – it’s as much as they can afford.”
"We are also actively in discussion with government about funding from April onwards, as no let up in demand is expected."
http://www.co-ownership.org/news/49/
£100 a week for mortgage...THEN you have to rent the rest off the co-ownership company...400 a month....NAY!!!!! more like 700+ a month all in
QUOTE (subby @ Jan 25 2008, 08:37 PM)
£100 a week for mortgage...THEN you have to rent the rest off the co-ownership company...400 a month....NAY!!!!! more like 700+ a month all in
And all the adverts that i see seem to base the cost per a month on a 40% share with a Interest only mortgage! So if the 500 pounds (roughly) they all seem to quote is all you can afford then you have to earn more to even think about paying off any of the 40% of the actual house never mind the remaining 60%!
Nay to the whole concept. Fundamentally it harms the individual doing it because it enables the property to be purchased at the current (inflated) price. In the absence of such schemes, prices would have to come down to accomodate people. Basically, the only real winner in co-ownership is the one providing the 'silent' finances.
FECK NO!
A guy at work bought with co-ownership in the 1980's and moved up the ladder in in mid-90's. He made feck all on the deal. It was just a government deal to stop the market collapsing!
If you want to support the housing market, then go ahead. NOTHING is going to stop it crashing this time.
Good luck.
DYOR or live to regret it
A guy at work bought with co-ownership in the 1980's and moved up the ladder in in mid-90's. He made feck all on the deal. It was just a government deal to stop the market collapsing!
If you want to support the housing market, then go ahead. NOTHING is going to stop it crashing this time.
Good luck.
DYOR or live to regret it
A big fat nay from me too. You only own half yet you are responsible for 100% of the maintenance!!
Wouldn't touch it.
Wouldn't touch it.
QUOTE (tara747 @ Jan 28 2008, 12:26 PM)
A big fat nay from me too. You only own half yet you are responsible for 100% of the maintenance!!
Wouldn't touch it.
Wouldn't touch it.
Does anyone know what the number of transactions of residential property over the last number of years were as given that around a 1000 home were purchased thru this method last year I wonder what effect this has on the figures/prices in NI given these transactions were effectivley subsidised to the tune of 85k on average?
For example say 5000 house sales occurred then it would be a fifth of all transactions. What will next years effect be given that they have been given more money in the recent budget?
Co-ownership should not use public funds to subsidise FTBers purchases.
What you have in some cases is an interest free-loan from the government and/or subsidies being paid to mortgage lenders from the government.
What this means is that those who are paying taxed - the young generally - are subsidising those who want to buy property (suckers) - but hte real beneficary is the home owners - the old.
Co-ownership makes no sense in NI when if you buy 50% of a property you will end up paying twice as much as if you rented.
given that house prices are falling - you have a recipy whereby poor people are caught in the property trap.
Nay from me.
What you have in some cases is an interest free-loan from the government and/or subsidies being paid to mortgage lenders from the government.
What this means is that those who are paying taxed - the young generally - are subsidising those who want to buy property (suckers) - but hte real beneficary is the home owners - the old.
Co-ownership makes no sense in NI when if you buy 50% of a property you will end up paying twice as much as if you rented.
given that house prices are falling - you have a recipy whereby poor people are caught in the property trap.
Nay from me.
QUOTE (maxdiver @ Jan 28 2008, 12:47 PM)
but hte real beneficary is the home owners - the old.
Including the specuvestors - who certainly deserve public support!
QUOTE (tara747 @ Jan 28 2008, 12:26 PM)
A big fat nay from me too. You only own half yet you are responsible for 100% of the maintenance!!
Wouldn't touch it.
Wouldn't touch it.
I'm with Tara and everyone else on this matter. A big fat Nay. The whole concept of shared/Co ownership in the UK started in London where housing associations were developed to support key workers (nurses, teachers etc) get a foot on the property ladder and keep these essential employees living and working in London with a decent roof over their head. It didn't seem that successful a scheme when I lived in London and I reckon quite a few people had sussed it out that it wasn't all that it was cracked up to be. There's no saving if you are paying rent and a mortgage on a fraction of a property so there is no economic argument to support the scheme IMHO. If I were thinking of a co-ownership scheme then I'd be looking to buy with a family member or a partner (and even that could potentially be fraught with danger when time comes to move on and sell up as the other side either has to buy the other one out, or both have to move out and sell up lock stock).
I wouldn't go near Co-Ownership with the proverbial 40 foot barge pole.
Co-ownership to help public sector workers get on the housing ladder.
Could they not be paid more then?
Could they not be paid more then?
QUOTE (Wilco @ Jan 25 2008, 07:38 PM)
I've noticed a lot of developers seem to be pushing co-ownership, and I guess it's tempting to own -- at least a percentage -- of a home for just over £100 a week, as the ads promise. It's undoubtedly targeted at FTBs as a means of getting on the ladder, and I guess, in turn, keeping the market churning.
I've noticed that when you go for it though and want to increase your share, they sell it to you at its new current price based on their valuation. I've heard it said that a property is only worth what someone is willing to pay, so this seems a bit suspect. Also, what happens if house prices fall 15% when I go to increase my share? What about when I sell?
Any thoughts on co-ownership would be appreciated.
Thanks.
I've noticed that when you go for it though and want to increase your share, they sell it to you at its new current price based on their valuation. I've heard it said that a property is only worth what someone is willing to pay, so this seems a bit suspect. Also, what happens if house prices fall 15% when I go to increase my share? What about when I sell?
Any thoughts on co-ownership would be appreciated.
Thanks.
As co-ownership may be the only route for many FTB onto the property market for FTB looking to buy in 2008, can anyone answer:
If say, the majority of properties are £180,000 properties in a DECENT area or are the only price bracket available to FTB due to the area, how will FTB ever afford these properties even if they only drop 10-15% max (approx £153,000-£62,000) this year and next year?
Also can anyone answer Wilcos situation above:
What happens if house prices fall 15% when I go to increase my share? What about when I sell?
QUOTE (First Time Buyer 2008 @ Feb 11 2008, 06:24 PM)
As co-ownership may be the only route for many FTB onto the property market for FTB looking to buy in 2008, can anyone answer:
If say, the majority of properties are £180,000 properties in a DECENT area or are the only price bracket available to FTB due to the area, how will FTB ever afford these properties even if they only drop 10-15% max (approx £153,000-£62,000) this year and next year?
Also can anyone answer Wilcos situation above:
What happens if house prices fall 15% when I go to increase my share? What about when I sell?
If say, the majority of properties are £180,000 properties in a DECENT area or are the only price bracket available to FTB due to the area, how will FTB ever afford these properties even if they only drop 10-15% max (approx £153,000-£62,000) this year and next year?
Also can anyone answer Wilcos situation above:
What happens if house prices fall 15% when I go to increase my share? What about when I sell?
Co-ownership is a last ditch attempt to get a few more into the bottom of the pyramid. It makes about as much sense as asking a rottweiler to babysit your kids.
Making a co-ownership purchase shouldn't be confused with buying your own home yourself, you will be tied into a strict agreement. You will have to make your choice very carefully and they are very fussy indeed. Two friends of mine had bother because the properties were old and weren't quite bang up to date. I've also heard that they can take an age to deal with their paperwork. For developers this is probably an easy way for them to promote brand spanking new property, a different matter altogether. However, in my opinion bringing in another party to buy with you like a friend or a parent is maybe a better and more flexible alternative.
Hi again,
I'm sorry to drag this co-ownership discussion up again. I've been thinking about it recently, partly due to a work collegue being able to buy a really nice house through it, but cannot really see how it is that bad.
Yes I agree the current adverts are misleading as costs are based on 40% share with a IO mortgage, but if you were sensible and got a repayment mort. on a house that already has some significant drops, surely then you are still able to buy [part of] a house. And should prices decrease further you will be able to "staircase" and buy a bigger share at the cheaper price? Based on equity valuation rather than market valuation.
So the way i see it you can start to pay for a house now, then if prices continue to fall you can still buy the rest at lower price, but also if the unlikely happens and prices increase again you can continue to rent? Almostly like hedging your bets?
I admit I could be missing something here, and thats why i'm asking.
I'm sorry to drag this co-ownership discussion up again. I've been thinking about it recently, partly due to a work collegue being able to buy a really nice house through it, but cannot really see how it is that bad.
Yes I agree the current adverts are misleading as costs are based on 40% share with a IO mortgage, but if you were sensible and got a repayment mort. on a house that already has some significant drops, surely then you are still able to buy [part of] a house. And should prices decrease further you will be able to "staircase" and buy a bigger share at the cheaper price? Based on equity valuation rather than market valuation.
So the way i see it you can start to pay for a house now, then if prices continue to fall you can still buy the rest at lower price, but also if the unlikely happens and prices increase again you can continue to rent? Almostly like hedging your bets?
I admit I could be missing something here, and thats why i'm asking.
your friend will be paying a mortgage payment, insurance, rates etc....AND has to pay rent for the other part of the house he doesn't own.
basically he's paying the same for part of a house than he would be if he owned the whole thing due to having to pay the "rent" to the co-ownership scheme as well as his own mortgage payment
not worth it at all. may have been when prices went up but going down he'll be negative equity for a part owned house...dam that's even worse then negative equaty for a whole owned home
basically he's paying the same for part of a house than he would be if he owned the whole thing due to having to pay the "rent" to the co-ownership scheme as well as his own mortgage payment
not worth it at all. may have been when prices went up but going down he'll be negative equity for a part owned house...dam that's even worse then negative equaty for a whole owned home
QUOTE (House ACA @ Feb 13 2008, 01:18 PM)
And should prices decrease further you will be able to "staircase" and buy a bigger share at the cheaper price? Based on equity valuation rather than market valuation.
Not sure that this is the case, can anyone confirm? I can't see the govt willingly 'losing' equity! I think you have to 'staircase' at the original value or higher.
QUOTE (subby @ Feb 13 2008, 01:35 PM)
your friend will be paying a mortgage payment, insurance, rates etc....AND has to pay rent for the other part of the house he doesn't own.
basically he's paying the same for part of a house than he would be if he owned the whole thing due to having to pay the "rent" to the co-ownership scheme as well as his own mortgage payment
not worth it at all. may have been when prices went up but going down he'll be negative equity for a part owned house...dam that's even worse then negative equaty for a whole owned home
basically he's paying the same for part of a house than he would be if he owned the whole thing due to having to pay the "rent" to the co-ownership scheme as well as his own mortgage payment
not worth it at all. may have been when prices went up but going down he'll be negative equity for a part owned house...dam that's even worse then negative equaty for a whole owned home
Hear hear.
QUOTE (subby @ Feb 13 2008, 01:35 PM)
your friend will be paying a mortgage payment, insurance, rates etc....AND has to pay rent for the other part of the house he doesn't own.
basically he's paying the same for part of a house than he would be if he owned the whole thing due to having to pay the "rent" to the co-ownership scheme as well as his own mortgage payment
basically he's paying the same for part of a house than he would be if he owned the whole thing due to having to pay the "rent" to the co-ownership scheme as well as his own mortgage payment
Thats a point I never really thought about- ie having to pay insurance and rates for part of house you dont own. And im sure if the classic boiler ever blew up, there'd be no sharing of costs.
Is it normal then when renting to not have to pay rates?
QUOTE (House ACA @ Feb 13 2008, 03:38 PM)
Thats a point I never really thought about- ie having to pay insurance and rates for part of house you dont own. And im sure if the classic boiler ever blew up, there'd be no sharing of costs.
Is it normal then when renting to not have to pay rates?
Is it normal then when renting to not have to pay rates?
I've noticed a lot of ads say rates included in monthly rate. I pay 390 per month including rates.Incidentally I would pay about 150 per month for rates in Scotland for a similar house.
QUOTE (House ACA @ Feb 13 2008, 01:18 PM)
Hi again,
I'm sorry to drag this co-ownership discussion up again. I've been thinking about it recently, partly due to a work collegue being able to buy a really nice house through it, but cannot really see how it is that bad.
Yes I agree the current adverts are misleading as costs are based on 40% share with a IO mortgage, but if you were sensible and got a repayment mort. on a house that already has some significant drops, surely then you are still able to buy [part of] a house. And should prices decrease further you will be able to "staircase" and buy a bigger share at the cheaper price? Based on equity valuation rather than market valuation.
So the way i see it you can start to pay for a house now, then if prices continue to fall you can still buy the rest at lower price, but also if the unlikely happens and prices increase again you can continue to rent? Almostly like hedging your bets?
I admit I could be missing something here, and thats why i'm asking.
I'm sorry to drag this co-ownership discussion up again. I've been thinking about it recently, partly due to a work collegue being able to buy a really nice house through it, but cannot really see how it is that bad.
Yes I agree the current adverts are misleading as costs are based on 40% share with a IO mortgage, but if you were sensible and got a repayment mort. on a house that already has some significant drops, surely then you are still able to buy [part of] a house. And should prices decrease further you will be able to "staircase" and buy a bigger share at the cheaper price? Based on equity valuation rather than market valuation.
So the way i see it you can start to pay for a house now, then if prices continue to fall you can still buy the rest at lower price, but also if the unlikely happens and prices increase again you can continue to rent? Almostly like hedging your bets?
I admit I could be missing something here, and thats why i'm asking.
I purchased my first house back in 1989 when the interest rates were approx 14% through co-ownership with IO mortgage. We purchased the remaining equity back off co-ownership within 2.5 years. The valuations for the property equity were below the market asking prices at the time. Its easier to buy back the equity once your living in the house and have become use to managing your income. The banks at the time were keener to lend you to purchase the equity because you have proven you can make your payments and manage a house budget, which first time buyers lack until they have run a house hold budget ( thats not supposed to sound patronising but thats how the banks think ).
In my opinion I think its a good idea.
Buying a property is about affording to pay for it. The example everyone seems to focus on is 10.5 x £21,000.00 average income = £220,000.00 average house price.
Is it not the case that usually 2 people (couple) buy a house together £21,000.00 x 2 = £42,000.00 joint average income x 5.25 = £220,000.00 average house price.
Therefore the average house become more affordable the the first time buyers.
Good Luck
QUOTE (statinstoinker @ Feb 13 2008, 04:39 PM)
I purchased my first house back in 1989 when the interest rates were approx 14% through co-ownership with IO mortgage. We purchased the remaining equity back off co-ownership within 2.5 years. The valuations for the property equity were below the market asking prices at the time. Its easier to buy back the equity once your living in the house and have become use to managing your income. The banks at the time were keener to lend you to purchase the equity because you have proven you can make your payments and manage a house budget, which first time buyers lack until they have run a house hold budget ( thats not supposed to sound patronising but thats how the banks think ).
In my opinion I think its a good idea.
Buying a property is about affording to pay for it. The example everyone seems to focus on is 10.5 x £21,000.00 average income = £220,000.00 average house price.
Is it not the case that usually 2 people (couple) buy a house together £21,000.00 x 2 = £42,000.00 joint average income x 5.25 = £220,000.00 average house price.
Therefore the average house become more affordable the the first time buyers.
Good Luck
In my opinion I think its a good idea.
Buying a property is about affording to pay for it. The example everyone seems to focus on is 10.5 x £21,000.00 average income = £220,000.00 average house price.
Is it not the case that usually 2 people (couple) buy a house together £21,000.00 x 2 = £42,000.00 joint average income x 5.25 = £220,000.00 average house price.
Therefore the average house become more affordable the the first time buyers.
Good Luck
I don't think two incomes make houses cheaper. They make houses more expensive and have encouraged lenders to be more lax. My father was able to buy a fantastic house on one salary. My mother only went to work part-time for her own self-interest after 10 years of rearing us full-time.
This is a scam forcing more people to work to increase GDP, raising asset prices in competitive bidding wars and depriving families of a choice to have one parent to stay at home.
What happened to the fun in life? The pursuit of happiness? Cue an article that is well worth reading
http://www.spectator.co.uk/the-magazine/fe...happiness.thtml
QUOTE (Vespasian @ Feb 13 2008, 07:27 PM)
I don't think two incomes make houses cheaper. They make houses more expensive and have encouraged lenders to be more lax. My father was able to buy a fantastic house on one salary. My mother only went to work part-time for her own self-interest after 10 years of rearing us full-time.
This is a scam forcing more people to work to increase GDP, raising asset prices in competitive bidding wars and depriving families of a choice to have one parent to stay at home.
What happened to the fun in life? The pursuit of happiness? Cue an article that is well worth reading
http://www.spectator.co.uk/the-magazine/fe...happiness.thtml
This is a scam forcing more people to work to increase GDP, raising asset prices in competitive bidding wars and depriving families of a choice to have one parent to stay at home.
What happened to the fun in life? The pursuit of happiness? Cue an article that is well worth reading
http://www.spectator.co.uk/the-magazine/fe...happiness.thtml
In 1989 when I bought my first house all my friends and I could not afford a home on 1 income. I am an average working class bloke. My point was today is no different than in 1989. It appears to me that if you want a house, a second car and a holiday a year you need 2 incomes.
QUOTE (statinstoinker @ Feb 13 2008, 07:53 PM)
In 1989 when I bought my first house all my friends and I could not afford a home on 1 income. I am an average working class bloke. My point was today is no different than in 1989. It appears to me that if you want a house, a second car and a holiday a year you need 2 incomes.
That's the point I have made from day one. Like it or love it two income has been the norm in the UK since 1989 forward. Nationwide ONS is no longer used by them. Primarily it failed on the interest rate and propensity to afford argument. This may have been relevant in the past, i.e. four times income when (i) rates were 12%+ and (ii) UK had a majority of stay at home mothers. Woman’s liberalisation has been a good thing - ask my other half, and the boutiques of Belfast. Ask my wallet too...
Btw my first mortgage had a 12.5% rate. The banks margin difference to Libor was of over 1.35%. Anyone see in the today's Indo. ROI wealth is now valued over £1trillion for the first time. Second richest country on the planet. Average household debt €135k per household, and it had the highest saving per capita in 2007. Charlie Mc Creevy’s 25% bonus to savers was a blinding success. That is if you invested £100 to a max of £400 per month in equity or interest only account, the end sum interest had an extra 25% given by the state [after 60 months - tax free]. Encouraged a saving culture during extreme consumerism. Could be a good idea in the NI context towards wealth creation - maybe useful to "buy-out" other proportion of property, sometime in the future. Don't know much about the scheme though...county councils in ROI had something similar...??
QUOTE (statinstoinker @ Feb 13 2008, 07:53 PM)
In 1989 when I bought my first house all my friends and I could not afford a home on 1 income. I am an average working class bloke. My point was today is no different than in 1989. It appears to me that if you want a house, a second car and a holiday a year you need 2 incomes.
QUOTE (md23040 @ Feb 13 2008, 08:12 PM)
That's the point I have made from day one. Like it or love it two income has been the norm in the UK since 1989 forward.
Hmmm... I think the following post is more relevant to the situation people find themselves in today...
QUOTE (Austin Allegro @ Feb 13 2008, 01:37 PM)
Is it really possible the huge wealth that appears to exist in the UK is an illusion?
I've forgotten the author but there was an article on here a few weeks ago which postulated that people are no better off in real terms than they were in 1970, but have evolved 'coping strategies' which appear to make them wealthier. The three strategies were:
- Two breadwinner per family instead of one
- Working longer hours/two jobs/commuting further
- Buying on credit
The article proposed that we have 'maxed out' on these strategies and thus have no further ways of hiding the fact we are not really that wealthy at all in monetary terms.
I've forgotten the author but there was an article on here a few weeks ago which postulated that people are no better off in real terms than they were in 1970, but have evolved 'coping strategies' which appear to make them wealthier. The three strategies were:
- Two breadwinner per family instead of one
- Working longer hours/two jobs/commuting further
- Buying on credit
The article proposed that we have 'maxed out' on these strategies and thus have no further ways of hiding the fact we are not really that wealthy at all in monetary terms.
QUOTE (statinstoinker @ Feb 13 2008, 07:53 PM)
In 1989 when I bought my first house all my friends and I could not afford a home on 1 income. I am an average working class bloke. My point was today is no different than in 1989. It appears to me that if you want a house, a second car and a holiday a year you need 2 incomes.
Well, my dad did buy in 1974, even further back.
However in 1989 average income was 10k, average house price 32k (BoE rate 12%). Rates were high to lower inflation
In 2007 average income 21k, average house price 250k (BoE rate 5.5%) Rates are low with inflation taking off
The point is borrowing 3.5 times an average salary in 1989 bought an average house, rates had been 7.5% in 1988, and once inflation was licked, they most likely would be lowered again (35k repaying at 12% is 340quid a month)
In 2007, borrowing 12 times average salary bought an average house, rates were 5.5% (250k at 5.5% is 1553quid a month) If rates go to 8% to fight inflation, you're screwed - not that you can afford to pay the mortgage anyway
QUOTE (Belfast Boy @ Feb 13 2008, 09:15 PM)
Hmmm... I think the following post is more relevant to the situation people find themselves in today...
You may be referring to the case of the average American in 2000 compared to 1980's/1970's. The journalist Bill Bonner referred to it extensively in an article a few weeks ago. Consumerism in the modern age. Maybe he posts on here. In brief, today we spend 15% of our "average household disposable income" on food whilst in the 1970's it was 45%. Luxury or discretionary expenditure accounts for 40% of total expenditure today, compared to 0% in the 1970's. Consumerism has brought many benefits but equally caused strain of aspiration and affordability. Destructive consumerism of spend binging IMO will become a thing of the past, and again people will become more circumspect... [1500 tones of clothes dumped per year in landfill]
American consumerism took off in the early 1950's [20 years ahead of the UK]; probably in many ways was a better era. The travel writer, humorist Bill Bryson writes about it wonderfully in "The Life and Times of the Thunderbolt Kid", great read but sometimes nostalgia can be seen through rosy eyes, and he relates to the good and bad in a wonderful and funny manner.
If you are from the time or not, it is still easy candy to read.
QUOTE (md23040 @ Feb 13 2008, 08:12 PM)
Woman’s liberalisation has been a good thing - ask my other half, and the boutiques of Belfast. Ask my wallet too...
But don't ask today's teenagers who were dumped into nurseries from the age of 6 months onwards and are now self harming themselves in record numbers. The 'wallet' has come at a terrible price - the abandonment of care towards our children.
QUOTE (Vespasian @ Feb 13 2008, 09:15 PM)
However in 1989 average income was 10k, average house price 32k (BoE rate 12%). Rates were high to lower inflation. In 2007 average income 21k, average house price 250k (BoE rate 5.5%) Rates are low with inflation taking off. The point is borrowing 3.5 times an average salary in 1989 bought an average house, rates had been 7.5% in 1988, and once inflation was licked, they most likely would be lowered again (35k repaying at 12% is 340quid a month)
Northern Ireland in 1989 is a different place compared to what it is now, some nineteen years later. Then a whole society was terrorised and a war of terrorism was in full swing. The reason prices were cheap had principally something to do with this aspect. On the flip of this, one of the wealthiest neighborhoods in Baghdad was around Abd al Wasid [near the airport], now the houses are worthless.
I agree with you that two incomes working has made marginal gains to wealth and has attributed a lot of social costs too. But as a proportion of household income, two salaries which is now the norm remains the same percent as that eluded to in the 1989 example. Mortgage payment on £222k average, is the same if not less as a proportion. No less a con of sorts but that's modern society. Btw your calculations are a bit wrong, slightly, its £354 per month. Excel formulae.
=-PMT(EXP(LN(1+12%)/12)-1,25*12,35000,0) = £354.
QUOTE (House ACA @ Feb 13 2008, 03:38 PM)
Thats a point I never really thought about- ie having to pay insurance and rates for part of house you dont own. And im sure if the classic boiler ever blew up, there'd be no sharing of costs.
Is it normal then when renting to not have to pay rates?
Is it normal then when renting to not have to pay rates?
Yes, I've never paid them while renting. So your actual rental payment is even lower than you think!
QUOTE (statinstoinker @ Feb 13 2008, 04:39 PM)
Buying a property is about affording to pay for it. The example everyone seems to focus on is 10.5 x £21,000.00 average income = £220,000.00 average house price.
Is it not the case that usually 2 people (couple) buy a house together £21,000.00 x 2 = £42,000.00 joint average income x 5.25 = £220,000.00 average house price.
Therefore the average house become more affordable the the first time buyers.
Good Luck
Is it not the case that usually 2 people (couple) buy a house together £21,000.00 x 2 = £42,000.00 joint average income x 5.25 = £220,000.00 average house price.
Therefore the average house become more affordable the the first time buyers.
Good Luck
Oh yes, it's fine as long as they never want to let either half give up work to look after children for a few years! The cost of living is rising and the standard of living is falling, people are running to stand still. Not sustainable.
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