[shark]

Just had a cursory look at the house price data at Nationwide and over the last five years in Yorkshire and Humberside the average price of a terraced house has increased 19.6%, the average semi 13% and the average detached 13% 

Supports my gut feel that terraced housing in Sheffield has gotten proportionately more expensive.

[galpinos]

House prices for bigger houses dont always move in step in % terms as small ones.

Unfortunately, the housing stock in the area is mainly two/three bed terraces so if one wants 4 or more beds, there's quite a lot of competition so prices are even more inflated......

Also the power of leverage means that you can potentially borrow more.

Illustration:

Buy £200K house with 10% deposit of £20K. Price appreciates 10% = £40K equity ie you have doubled your money

Larger house formerly unaffordable worth £350K requiring £35K deposit now worth 10% more at £385K requiring £38.5K deposit which you can afford.   

That is sometimes the case but the "larger" house is still well out of my price range.....

[petejh]

even if our house jumped by 10%, the bigger houses will have have gone up by 10% as well, which is unfortunately, more than we could afford.

House prices for bigger houses dont always move in step in % terms as small ones.

Also the power of leverage means that you can potentially borrow more.

Illustration:

Buy £200K house with 10% deposit of £20K. Price appreciates 10% = £40K equity ie you have doubled your money

Larger house formerly unaffordable worth £350K requiring £35K deposit now worth 10% more at £385K requiring £38.5K deposit which you can afford.   

The value of the original '10% deposit' may have doubled, meaning you may now be able to afford the deposit on a £385k home... but the problem isn't that. The problem is people's wages haven't kept track with the house price inflation in some areas - people living in overheated areas who earn £25-35k per annum, even with this theoretical £40k deposit remaining from the 10% increase in value of their property, simply won't be given a £345k mortage needed to buy a £385k home..

Leverage works on big numbers by them increasing in larger increments than smaller numbers... There comes a point where things disapear, in practical terms, over the horizon.

House price inflation is resulting in people being priced out of the market for houses in areas that would formerly have been within their means. I don't see anything socially progressive in that, unless you're among the ones benefitting.

[shark]

The value of the original '10% deposit' may have doubled, meaning you may now be able to afford the deposit on a £385k home... but the problem isn't that. The problem is people's wages haven't kept track with the house price inflation in some areas - people living in overheated areas who earn £25-35k per annum, even with this theoretical £40k deposit remaining from the 10% increase in value of their property, simply won't be given a £345k mortage needed to buy a £385k home..

Obviously if you stay in a job rather than advance your career and earnings then you are inhibited from moving up the ladder.

The best investment is in your own career not least because it supports your ability to make other investments including your home. 

[abarro81]

I'm pretty sure that the best investment is in being happy and having fun, but hey ho

[cha1n]

On that note, Shark pointed me towards his mortgage advisor and he was bloody brilliant (probably the best bit of the whole process for me). Consider having someone like that on your side as I'm convinced he will likely hold more sway than say yourself.

I'd read about this magician in some past posts actually, I'd appreciate if you or Shark could PM me the details. Can he check all lenders?

GFs old colleague (quit a solicitors job to become a financial adviser) can potentially help us but not sure I trust her as she's out to get every penny she can in life (the FA, not the GF, thankfully). Thanks!

[shark]

I'm pretty sure that the best investment is in being happy and having fun, but hey ho

...and the best climber is the one having the most fun

[shark]

On that note, Shark pointed me towards his mortgage advisor and he was bloody brilliant (probably the best bit of the whole process for me). Consider having someone like that on your side as I'm convinced he will likely hold more sway than say yourself.

I'd read about this magician in some past posts actually, I'd appreciate if you or Shark could PM me the details. Can he check all lenders?

GFs old colleague (quit a solicitors job to become a financial adviser) can potentially help us but not sure I trust her as she's out to get every penny she can in life (the FA, not the GF, thankfully). Thanks!

Sorry he's not active currently

[a dense loner]

Magician? He just sounds like a guy who knows his job.

How much do you think you're going to give the FA? You're going to pay someone, anyone, £400 to get you a mortgage or give you some advice, which you pay for when the jobs done. I don't mean to be rude but you obviously have no idea what you're talking about so why not go to someone who does? Thats why they get paid what you think is a lot of money, to stop you spending more by going around in circles.

[a dense loner]

as an aside Barrows has probably got a benefactor, most people who climb hard and say money doesn't matter do. Way of the world unfortunately

[cha1n]

Magician? He just sounds like a guy who knows his job.

How much do you think you're going to give the FA? You're going to pay someone, anyone, £400 to get you a mortgage or give you some advice, which you pay for when the jobs done. I don't mean to be rude but you obviously have no idea what you're talking about so why not go to someone who does? Thats why they get paid what you think is a lot of money, to stop you spending more by going around in circles.

What are you going on about? Are you on crack?

[shark]

as an aside Barrows has probably got a benefactor, most people who climb hard and say money doesn't matter do. Way of the world unfortunately

Sheffield University keep him in kneepads. Three nine is his batman.

[petejh]

The value of the original '10% deposit' may have doubled, meaning you may now be able to afford the deposit on a £385k home... but the problem isn't that. The problem is people's wages haven't kept track with the house price inflation in some areas - people living in overheated areas who earn £25-35k per annum, even with this theoretical £40k deposit remaining from the 10% increase in value of their property, simply won't be given a £345k mortage needed to buy a £385k home..

Obviously if you stay in a job rather than advance your career and earnings then you are inhibited from moving up the ladder.

The best investment is in your own career not least because it supports your ability to make other investments including your home.

I'm pretty sure that the best investment is in being happy and having fun, but hey ho

Simon, so does an amateur landlord growing their portfolio of properties fit your view of career investment/moving up the career pole? Or were you thinking more traditional professions?

I agree with Alex as far as it's possible in the place you find yourself, the problem is that the Uk is increasingly a harsh place to be even a little bit poor. An econ would say money buys opportunites which lead to to a higher probability of happiness, but life's too short to do too much 'career progression' just to keep pace with a lot of people who believe (or have been trapped by) the myth of harder and longer work being a worthwhile pursuit of what looks like a rather hollow end

[rodma]

and some people blame their current situation on those who have held them back (in their opinion), rather than on the choices they have made throughout their life.

[a dense loner]

Yeh, fuckers

[Rocksteady]

Just had a cursory look at the house price data at Nationwide and over the last five years in Yorkshire and Humberside the average price of a terraced house has increased 19.6%, the average semi 13% and the average detached 13% 

Supports my gut feel that terraced housing in Sheffield has gotten proportionately more expensive.

The problem for first time buyers etc is the price to earnings ratio, which is on the last tab of the historical data spreadsheet downloadable from Shark's link.

July 1985: Avg national house price: £33,287: National avg earnings: £9,475. Price:earnings = 3.51:1.
July 1995: Avg national house price: £60,975: National avg earnings: £19,696. Price:earnings = 3.10:1.
July 2005: Avg national house price: £163,445: National avg earnings: £31,774. Price:earnings = 5.14:1.
July 2015: Avg national house price: £198,883: National avg earnings: £38,218. Price:earnings = 5.20:1.

For people who are established in houses they had to put away 1/3rd  of their salary to get together a deposit to get on the ladder. Nowadays you're looking at half your salary. That's quite a big percentage difference and makes it proportionately a lot harder to save, in my opinion.

Not that the average UK house price is any help to me in London, where it seems to be £500k+ to get a 2 bed flat in a dodgy area. 

[shark]

Simon, so does an amateur landlord growing their portfolio of properties fit your view of career investment/moving up the career pole? Or were you thinking more traditional professions?

Amateur landlord by definition is not a career. Can we stop here please - its getting really tedious.

[abarro81]

as an aside Barrows has probably got a benefactor, most people who climb hard and say money doesn't matter do. Way of the world unfortunately

It's the great British tax payer. My parents funded me through uni but unlike Bob my attempts to convince them to buy me a house have fallen on deaf ears.
#ResearchCouncilsUK #EPSRC #grateful #yousuckerspaymystipend

[petejh]

Simon, so does an amateur landlord growing their portfolio of properties fit your view of career investment/moving up the career pole? Or were you thinking more traditional professions?

Amateur landlord by definition is not a career. Can we stop here please - its getting really tedious.

That wasn't a slight aimed at you - I'm just curious that you appear to believe in a world where moving up the property ladder is as simple as career progression i.e. based on some sort of professional merit. It looks to me like the reality for a lot of people below a certain threshold is it's not like this now, for the reasons mentioned above - the cost to even gaining entry to the property market has grown higher while wages have failed to keep pace and we're now a society where working in what formerly would have been regarded as a good job with a decent wage just doesn't give you the quality of life it once did for e.g. entry onto and progression up the property ladder. Leading on from that I think your mindset that says 'well just work harder' isn't useful advice for people who are probably already working hard enough.

[a dense loner]

What is useful advice if that isn't then? The question was aimed at buying a house, unfortunately you're not going to be able to buy a house on happiness alone. Not only that you're aiming your arrows at the person who's probably in the best position to give advice on the subject matter.

[cha1n]

Off topic, but what's people's opinions of asking parents for help getting a first house? Part of me thinks you shouldn't do it but I think that's mainly jealousy because I was brought up by only my mum and she barely has enough to support herself, so I've not asked her for financial support since I was 13 (obviously she supported me generally but I had paper rounds, so never asked for money to go out to the shops, cinema, etc).

My partner has parents that could lend her money but won't because they're pissed off she moved to Sheffield, so we're on our own. However, I'd like to think that if I was a parent that I'd be able to help my child out if the only way of them getting on the property ladder was to give them some deposit money, etc. It seems crazy that we could easily pay the monthly repayments on houses way more expensive than we can afford with what we've got for a deposit but it's the deposit amount that holds us back. They should sack off deposits!

Slightly more on topic, managed to find out how much one of these houses paid for their loft conversion and it was 2-3K and it's definitely not to building regs. Interesting to know how much it costs as it seems like a good way to get some extra space and not at an unreasonable price.

[moose]

Off topic, but what's people's opinions of asking parents for help getting a first house? Part of me thinks you shouldn't do it but I think that's mainly jealousy because I was brought up by only my mum and she barely has enough to support herself, so I've not asked her for financial support since I was 13

I felt the same way.  I suspect that they would have helped willingly if I had asked but it would just felt wrong to me (that said, I had no compunctions about living with them for a few years at around that time for a pretty nominal rent ).  My dad worked in a job he hated for his entire life (just retired last year, around three years after I bought my house).  Compromising the quality of my parents' retirement for my own convenience would have felt selfish.  That said, at the time I was trying to scrape together a deposit, I had an unexpected payout for a patent I was an inventor of, the timing and sum of which was pretty convenient.  If I had to commute and/or rent somewhere less salubrious than my current spot for a substantial time, I might well have swallowed my pride.

[a dense loner]

 If your mum can afford it/ would like to help get her asked, if you as a grown man think she wouldn't want to do it/ couldn't afford to do it don't ask.

[kelvin]

For people who are established in houses they had to put away 1/3rd  of their salary to get together a deposit to get on the ladder. Nowadays you're looking at half your salary. That's quite a big percentage difference and makes it proportionately a lot harder to save, in my opinion.

Back then other things cost a fortune by today's standards - my first video recorder was £400 (my take home pay was £87.00 a week). Swings and roundabouts.

[moose]

my first video recorder was £400 (my take home pay was £87.00 a week). Swings and roundabouts.

and I bet you still had to spend hours fiddling with the "tracking" to get a watchable picture half the time.... those were the days - groceries cost near double the price (relative to income) and if you wanted a tenner to spend, you had to queue up in the bank.