Average House Price Now about £300K
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I haven't really been following house prices but saw that. I think the last time I looked it was £240k. The average mortgage multiplier is 4x so you need a gross wage of £75k to be considered for a mortgage. Some lenders will go to 4.5x and for joint mortgages go lower like 3-3.5x. Obviously all people's financial commitments will be considered when applying for a mortgage. There has been a huge reduction in disposable income recently with big increases in costs of many things so it feels like more people will be excluded from owning their own home and denied mortgages.
However with that said 1/3rd of house purchases are cash purchases, bought outright without a mortgage. Perhaps landlords who have stored up capital and looking to increase their portfolio of property to rent.
There has been a huge reduction in council houses and housing association property available too so many are forced to rent homes from private landlords at higher prices meaning less chance of saving for your own home. The government is looking to build more council houses but its unlikely to be anymore than 6000 and other homes being built will be commercial so will eleviate the housing supply problem a bit but will not provide affordable homes.
It's a horrible situation for many, they can't save because they are renting and they can't buy to avoid these ever increasing rental costs because they can't save. This is the same situation now in many other countries including Canada, Australia, much of Europe and of course the UK. China has the opposite problem, a huge surplus of housing that they are struggling to sell with huge sections of towns and cities with skyscrapers unoccupied.
Of course this increase in the cost of homes will work its way through meaning big rises in rent costs for many. It's something like a 4-5% increase in value over a year although varies by location. So I guess a rental increase of 4-5% within the next 12 months is expected.
House rental in my area for small houses seems to be between £1100 and 1500 a month. I thought I saw something for £725 as it advertised a full house details but then saw the wording 'house share' so guess if 6 bedrooms you would be sharing with 5 other people? So they are getting over £4k a month in rent for that property?
What is the housing situation where you live. My house is pretty tatty and needs some work but at least it is mine and I currently pay about £300 a month mortgage.
This is our second house. It has 3 bedrooms, 3 bathrooms, a garage and large back garden. It is in a great neighbourhood too. Our mortgage is £350 a month.
MrsCraig Sounds like a lovely house, I wonder what the rental charge would be for a similar house in your area?
BonzoBanana it is a lovely house, we love living here. There was a house on our street, same as ours, for rent recently and it was £1000 a month. That is pretty average for our area. There are obviously cheaper rents in other parts of town but for where we are £1000-£1350 depending on number of bedrooms is average.
MrsCraig I'm guessing you haven't got the chronic undersupply of housing that goes on in England especially the south east which puts so much pressure on house and rent prices as £1000 sounds quite reasonable. There is getting on 6,000 people per square kilometre in London and looking at figures from 2020 Scotland only has a eighth of the population density of England overall. There is also quite a high migration figure of about 10% of Scottish people who live outside Scotland in the rest of the UK. I encounter quite a lot of people with a scottish accent down in the south west. That takes housing supply pressure off Scotland I would of thought. I've only looked at the data at surface level there maybe other factors. Definitely feels like house prices and rents are more reasonable in Scotland compared to many other places in the UK though.
BonzoBanana it depends on the part of Scotland you are in. We used to live just outside Edinburgh, for a house like the one we live in now, it would cost £450k in the area where we were, more if it was in Edinburgh itself. Same as in Glasgow and surrounding areas. We live in a smaller town, there has been a lot of houses built here recently so we don't really have a shortage where we are but in bigger towns, like Aberdeen etc house prices are much higher than where we are, same with the rents and there can be a shortage of affordable rents. But yes not as bad as in England.
The house nextdoor is currently being rented at £2K per month and up for sale £900,000. I think that’s an extortionate amount.
Pjran If the house is worth £900K and the rent is £2k that actually sounds good value. Here in Yeovil I see houses worth perhaps £250-300K have rent of £1500 so the rental of that house seems much better value.
Our mortgage is £350 a month but it’s actually completing next month. We have been here since 2000 and it was just over 10 years old when we bought it (just out of certificate). We also had to put an extra £5k after accepting original offer which we were pretty cheesed off about. Decided to go the extra because we’d been searching over 2 years at that point and this was the only property that really suited at the time. I was lucky I managed to save a good deposit in those days and also my parents could help with the extra. (They offered and wanted to help, I wouldn’t have asked). Even though it’s completing we have got so much maintenance repairs to do as it’s quite tired and old. Nearly everything needs replacing. We only have a modest average income as I only work part time and husband average office salary. So it wasn’t easy for us but it’s even harder for young people now. My niece and nephew are 27 and 24 still live at home. They do both work and save but for now they get independence by working away and travelling short breaks here and there but not leaving home yet. I moved out and shared first rented flat at 23 with then boyfriend now husband. Rent wasn’t as high then as now.
JLouM That will be a fantastic feeling when your mortgage finishes and you are £350 a month better off. That is quite an increase in disposable income and should make your life more comfortable although with the constant increase in prices maybe that won't last for long.
BonzoBanana Yes looking forward to it but most will go on maintenance. I also have other financial shortfalls in my state pension which is an awful lot so not as good as it sounds but definitely a help.
Oh crumbs! The future looks bleak for me...I've worked all my life since leaving school at sixteen, have rented rooms and a lovely one bed flat, but at 60 next birthday and at the moment a live-in pa, I'm gonna be stuck when the bedbound gentleman l look after passes as he's landlord says he wants me out within a week...homeless & jobless, oh the joy
Pinkspirit Oh that’s a bit mean he’s not giving you time to find something. Can you get help somewhere? Maybe citizens advice.
JLouM l will try but I'm not one for asking for help, he's landlord would probably rent the property to me as lve looked after it for the last seven years but l would have to find a great job to be able to afford the £1500 a month before any bills
Pinkspirit £1500 a month is such a huge figure. That is £18k a year and it feels like you would need a £40k job just to break even and be able to live to afford that rent. £40k would be about £32k after tax and national insurance and then you have council tax etc which could be £200 a month I guess. It's frightening the cost of rent nowadays. The big issue in the UK is immigration is still ridiculously high so huge demand for housing but the economy is in a dire state needing major restructuring etc which isn't happening so we will be getting progressively poorer. We now need to think about much smaller homes to tackle the issue same as Japan had to resort to.
Pinkspirit There are always options at different price points. House share, small studio flats etc. The cheapest I can find in Yeovil is a house share for £68 per week. So about £300 a month.
www.spareroom.co.uk/flatshare/somerset/yeovil/17591911
I've no idea how that compares to elsewhere and that is the cheapest option I can see locally to me. Maybe similar pricing elsewhere. Here £1500 a month would enable you to rent a full house with a garage I think. £1500 seems a lot for a flat.
Paid cash for ours, no mortgage, I hate banks, I rent my mum's old house out quite cheap compared to others £100 a week, I could ask more but as long as someone is living in it and looking after it I'm happy, it's sentimental to me, 10 years ago it was worth £90,000 I could easily get £170/80 now, prices are so ridiculously high, I'd never sell it though
martinlufc5637 You are a thoughtful person who is not money obsessed. I wish more landlords would do the same. My cousin who lives in London pays more than £1,300 per month in rent alone for a shared house.
jam45 it's was empty for quite a while, I was never going to sell it, renting was the sensible option, I took into account not having to pay council tax on it ect.. that's why I kept the rent low
martinlufc5637 If your current renters ever move out expect to see a dust storm on the horizon as a thousand families are running towards you trying to secure the rental of that home. That rent sounds well below market value.
BonzoBanana it's not about the money and not a greedy person, average rental in the area is around £185 a week for a 3 bed, I'd rather have someone living in it than being empty and costing me money
Interesting news report here that states only the richest 10% in England can afford to buy the average priced home in England.
The figures aren't as bad elsewhere in the UK as their population densities are much lower so less demand on housing. Horrific statistic for England though and shows the madness of both Conservative and Labour policies over the last decades. 90% of the people of England excluded from buying an average size and average value home. Some might be able to afford cheap property like a small flat or maybe property in a distressed state but the vast majority will never have the ability to buy their own home. There is no reason to think this statistic won't get worse either.
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