House prices

[Champagne]

The housing market is said to be slowing, following a 229% price increase in the past 10 years. With average prices as at Feb 2006 being �185k, how are first-time buyers supposed to get onto the property ladder?

I'm 33 years old and have still never owned my own home, despite renting since I was 17 and probably paying out more in rent every month than a mortgage would set me back. Unless I buy with a partner, I will have to continue to rent until my dying days at this rate!

How did you manage to get onto the ladder? Or are you in the same boat as me?

[buildersmate]

Its a interesting social problem, because the people with the houses (myself included) are progressively dying out and Gordon is clobbering them for inheritance tax based on their house value - a tax that was never originally intended to hit the average man/woman in the street. I'm contemplating giving money to my son who is in much the same position as yourself. Its better then Gordon taking it. The only other practical alternative I can see is trying to use the Governement's 1st Time buyer scheme. Afterall it isn't that houses cost that much to build, its that there is an imbalance between demand and supply which progressively drives up prices. This gets reflected in the value of the land - the base commodity that no-one is making any more of. Government is trying to use land without planning permission (value say �10k per acre max), get planning on it and build mixed communities including 1st time buyers and Key Workers.

[Ethel]

Just be grateful that interest rates are low. At the end of the 1970s interest rates were running at over 15% making house buying impossible and many people were repossessed as their mortgage repayments rocketed.

I do sympathise however.

[chazza]

I bought my first home last year at the age of 26. High Street Banks are offering higher multiples of your income now to enable you to buy a house. At the time, my mortgage was 4.5 times my salary, and almost every high st bank was offering this much.

My friend is buying now, a year later, and she has been told that a bank will lend her up to 7 times her salary to enable her to get on the property ladder, although this is not advised as the repayments are too big.

The mortgage I have is interest only for 2 years, then repayment after that, which means that by the time I am ready to repay, I will have the house at the lower price to repay than if i had simply waited 2 years to buy. Check this out with lenders before committing to a repayment right away.

There are also schemes in place where you can buy a percentage of the house and rent the rest until you can afford to buy the rest, although I dont know much about these schemes

[jake-the-peg]

I think the "unless I buy with a partner" bit is the key phrase.

With the maths as you point out it's very difficult for a single person to buy without a sizable deposit.

The fact that house prices are still high shows that you are competing with people who can afford current prices -often because they are a couple.

Some people are able to buy and rent out some of the rooms to help pay for the mortgage.

Is that something you could do perhaps?

[Champagne]

Very interesting responses. Thank you.

Jake, I am actually moving in with my boyfriend next month. It's his house, but it will give me the opportunity to save (for the first time in years!) so I will certainly be looking into house-buying options in the future. Of course, this will have to be after I get a full-time job. I'm temping at the moment so no lender will be willing to give me money!!

[gouldc]

Just bought my first house at the grand old age of 27 this year. I live in South Wales, and the average 3 bedroom terrace was only �30000 5 years ago when I started saing for a deposit. Then prices went crazy - just paid �60000 for the type of house that was half that five years ago. I live 20 minutes from Swansea, which is also about 1 hour from Cardiff, so am pretty centralised, but I do live in the sticks with sod all public transport.

The main problem is the worry of negative equity when the bubble bursts and interest prices go through the sky - I put the blame on the greedy barstewards who have artifically increased house prices and priced us poor people out of the market.

Mind you, I also blame the stupid barstewards who will pay the outrageous prices for these houses because they're in prime locations - learn to commute!!!!!!!

[gessoo]

We bought our first house in 1972 for �7,000. If we had bought only four months earlier we would have paid �3,000 for the same house!!!! The house was a two bedroom terrace which needed loads of work. Prices were rocketing and gazzumping was rife! My income was �1,100 pa in those days, so my house was seven times my income!

This would equate to someone earning �14,000-�20000 pa today(av. salary of the job I do nowadays), Trying to buy a house for �98.000-�140,000 at todays prices. Fortunately my partner earned �2,000 so we were were able to get a mortgage! I would never have managed it on my own.

What I am trying to say is is this so very different from today? Perhaps more single people are looking to buy nowadays than they were in 1972. The average young person then would not have dreamed of buying a house alone unless they were earning an extremely good salary or had help from family.

[Lonnie]

it definately will once these buyers packs come in, can you imagine, you buy one now, to sell your house, its a bit slow going, two months down the line, a prospective buyer demands to see an upto date one?, not a two months old one.

[jake-the-peg]

Just because you're temping doesn't mean you can't get a mortgage.

Self Certification mortgages don't require proof of income but are based on your credit history. They can be a bit more expensive.

Why don't you rephrase this question in Money and finance and see if anybody there can help

[smurfchops]

Kirsty and Phil always say buy in an up and coming area, where there are plenty of coffee shops and building societies opening up and flats being built, on the fringes of a town. Trouble is, you have to be psychic ! Good luck.