It is getting harder--not easier--for first time buyers
Fraser Nelson 12:51pm
I’d like to quickly scotch this myth that softening in average fixed-rate mortgage rates means it’s now easier for first-time buyers to buy houses, which I hear the Treasury is now punting in the hope that journalists start to repeat it. Moneyfacts has joined the number of dotcom setups getting great publicity by saying the average fixed rate is 6.59%, only just above 6.56% it was in August 2007. This has allowed headlines such as “Mortgage rates back at 2007 levels”. But one must treat these figures with care. First, consider the deposit now required. The Council of Mortgage Lenders says the average laid down by first-time buyers soared to £17,300 in June – half the average first time buyer (FTB) salary. In August 2007 it was just £13,160. Next, the average mortgage rate charged to first time buyers was 5.93% in June, up from 5.73% a year ago. Only by putting these factors together do you have the full picture. The real cost - mortgage payments plus deposit - hit 69% of income in June. Low? No, Prime Minister. This 69% rate is the highest since data began in 1974.
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Bernard from Horsham
August 23rd, 2008 1:07pm Report this commentAnother Brownie!
Robert D
August 23rd, 2008 5:15pm Report this commentIn addition the administration charges that are levied have also increased substantially, effectively adding a best part of another half a percent on the interest rate
mitch
August 23rd, 2008 6:48pm Report this commentBut this tractor has metallic paint and alloy wheels,The sad thing is that nobody believes a word the government says any more they have zero to minus credibility.
carol42
August 23rd, 2008 10:38pm Report this commentAfter four house sale breakdowns I have given up. I had to move and thought my house was sold when I did then the credit crunch started with unbelievable speed and buyers just can't get mortgages. I reduced the price by 10% and the final sale collapsed last week. I am fortunate that I am not forced to sell but instead of repaying the smallish mortgage I have I will have to increase it. However I am not prepared to reduce the price any more and I simply couldn't stand the stress I have been through the past six months. I will let my house and sit it out for the next few years. This is the truth of the housing market today whatever this incompetent government says. There comes a point where sellers will just sit tight rather than reduce the price. any further. Combined with the frozen first time buyers market and it looks like we will be stuck for a long time yet.
Mike Stallard
August 24th, 2008 9:23am Report this commentI am 70. When I got married in the 60s, I had a lifetime job as a teacher in a pleasant school, a lovely wife with, very soon, two lovely children, a decent house which I could afford and a mortgage which I could repay easily. In addition, I had a fear of debt and a sound bank balance.
It was cold, yes, and I needed an allotment to provide food, but we had lots of friends and a working Church in our village.
I am working with a teaching student today. She is thousands of pounds in debt and is going to live abroad. She has no hope of marriage, buying a house or starting a family for ten years and is determined to live where she can afford a life.
Frank Pulley
August 25th, 2008 12:54pm Report this commentThis particular thread sounds more like an Islington Dinner Party, than a Johnsonian Coffee House. What's happening to the price of Chianti in Waitrose, Justin?
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