First time buyers giving up hope

It's hardly surprising, but the National Association of Estate Agents recently posted the figures from a survey aimed at first time buyers which revealed that across the country, almost 7 in 10 people have given up hope of ever owning there own home. Quite a striking result, but I think 'ever' is a bit extreme.

I've also heard speculation that millions of Brits are looking for jobs abroad rather than sit and weather out the storm over here, but I don't know if there is any truth in that.

I think I'm doing the right thing in weathering out the storm here, and doing all I can do right now is build up a deposit for when things settle :) Judging from the contradictory news stories popping up all over the place at the moment, the housing market is extremely turbulent at the moment, and hopefully this will sink houses prices across the country!

House prices close to stabilising

Of course they're not!

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, has said that he expects house prices to stabilise from the middle of this year. He also stated that the widely expected 45% overall decline in prices is overly-pessimistic, and that it is more likely to be around 20%.

What an idiot. Thank god we're not in the early phases of a recession, and facing rising unemployment. Oh wait, we are. Reading through an online article written on the subject of the above statement, one reader had this to say: "And in the latest news, turkeys state that Christmas is definitely not coming this year. Sorry, Cancelled... just like the House Price Crash." Couldn't have put it better myself :) Simon Rubinsohns job depends on houses selling, this is obvious, so why do the newspapers print this tosh?!

Like many people I'm a first time buyer trying to get my own home to settle in, and these fat cats are squandering everything with there lies. Who am I supposed to believe, and where am I supposed to obtain REAL advice? All I can do for now is keep saving a deposit up so I can get a mortgage if a time comes when I can actually feel confident that the prices are at there lowest!

A quick update...

I've just been reading through various mortgage article, and caugh a snippet talking about how Lloyds TSB has launched a mortgage product which allows first time buyers to borrow an otherwise impossibly hard to come by 95% of a property's value... providing a friend or relative locks away a further 20% of the value in a savings account for 42 months.
This is forward thinking in difficult times, and I applaud them for that, but surely the returns on this 20% would be a hell of a lot higher for the friend/family member if they simply put it down as a deposit for them. Aren't they effectively saying that they expect house prices to continue to fall for 42 months? If it was me I'd use the 20% for the deposit, unless I am missing the point?

Time to start saving!

I’ve decided its time to start making a serious attempt to put more money aside each month for a deposit. I really need to get a more substantial amount together if I am ever going to get myself a mortgage! I don’t want to approach family members for help with a deposit, even though it has been offered, until I can prove to them and to myself that I am completely on top of my finances.

As a small family, living in what could be considered hard times, we are actually living quite comfortably at the moment. So, there are a few ways we could quickly increase the amount of ‘available cash’ left in our accounts each month. I’m in the processes of working this out properly, but some examples of ways we could save fairly considerable chunks include cutting our Sky+ HD subscription, our mobile phone contracts and me and my fiancés gym membership. This amounts to around £140 a month, or £1680 a year. Quite a chunk on top of what we could save anyway! I really need to get my head around whether these ‘luxury’ items are more important to me than having my own home… I don’t think they are.

Wish me luck!

Government fails to honour student loan promise

It was announced today that those who took their loans out from 1998-onwards will pay a 0% interest rate on their outstanding balances during the next academic year, whilst those who took out a loan pre-1998 will see interest rates reduced to a minus 0.4% rate.

The Government has always said that the student loan rate for each academic year will follow the previous March’s Retail Prices Index (RPI) inflation figures (or be cheaper). This March it stood at minus 0.4%, yet Westminster has now invoked invoked a law allowing a 0% interest rate to be set for 1998-onward loans! This represents a massive U-turn by the goverment, and breaks one of the founding principles set out in the contracts of around 2.35 million students.

The Student Loans Company has made the following statement (...and they seem to be forgetting that the 2.35 million people this affects are tax payers themselves):
"The decision (on 1998-onward loans) has been taken because loans are already well subsidised, and it would be difficult to justify to taxpayers a situation whereby students take out loans in 2009/10 and their balances are immediately reduced."

A petition has been set-up in order to give the goverment the chance to do the right thing before these changes take effect in September. Please sign it here: DecreaseLoans

Mortgage approvals up by almost 30%

It has just been reported by the Council of Mortgage Lenders that more than 30000 mortgages were approved for purchases in March. However, this news comes as buyers with small deposits are still very much facing an uphill struggle, with the hill being incredibly steep and made from loose sand!

The number of first time buyers taking out loans was up by 36%, and this accounts for the largest share of the market since April 2005 with 40% of approvals. Despite this, the absolute number of first-time buyers remains low and is well down on the 17800 who took out mortgages in March last year.

So, what does this mean for me? Well, given the falling interest rates and house prices the cost of repaying a mortgage would be at its lowest level since 2004, at around 15.1% of my monthly income needed to make the monthly payments, if I could raise a big enough deposit to get a Mortgage in the first place. Time to call in the big guns I think.... my rich uncles! Well, desperate times call for desperate measures... begging relatives for cash.

One thing I haven't mentioned is that I am currently renting a small house from my uncle, so I am essentially paying off his mortgage for him. On the one hand its nice keeping the money in the family, but on the other it's quite sickening!

I believe that if I can pull a big deposit together within the next 12-18 months, I'll be able to lock in on a fixed rate mortgage before everything starts going up again. Wish me luck.

Grey area

The housing market seems to be a very grey area at the moment. Conflicting articles have been popping up over the last few weeks, some saying prices are on the rise again and some saying prices are still on the decrease.

Those articles saying house prices are on the increase are surely being written as some hopeless attempt to pull the wool over our eyes, and can't actually be true. The only question on my mind right now is 'How much will they fall?'.

I saw a housing programme last night on BBC2, where a couple were looking to buy their first home, and the presenters managed to find 5 properties, all quite spacious with 3 bedrooms and a garden, and all in the region of £60'000. Quite sickening really, and I was waiting for the blurb to appear, which it did, that announced "House Prices correct as of Winter 2002". If only.

Luckily I am from a big family, so I probably will be able to scrape a deposit together in the next 12 months with which to get my first Mortgage. However, like the couple mentioned earlier I really need a 3 bedroom house with a garden, but unfortunately £100'000+ seems way outside my budget at this moment in time, yet that is the average price in my area...