If It Looks Like a Bubble...

I just saw this. Pretty nifty, eh? Rising house prices in over half of the country, and up 1.1% per month in London. But let's all consider the closing sentence:

"But he said the rising pressure was not blocking new buyers from the property market because of higher loan-to-value (LTV) lending."

I'll tell you all something - he's talking shit. Ok we might be able to get a 95% LTV mortgage, but let's suppose we're trying to buy a 3-bed mid-terraced house in Cam, for £250k (which I've well established is what all the non-crappy places are advertised at at a minimum, and you can check out this lovely stats page for all the housing options. Top tip; you can't afford a detached house, so don't even look). So we just need a £12,500 for a deposit. Woo! Yay, tick we've got that. Let's go ask a bank if they'll lend us £237,500.

Well first we'll do a bit of averaging of earnings. According to the ONS, for our age bracket we should be both earning £412 per week*, and supposing that holds for 52 weeks of the year, we'll put that at annual salaries of £21,424 each (ignoring that women still typically earn less, but that's for a whole other blog).

Plug the numbers into, oh let's go with the Nationwide's mortgage calculator (because they're "On Your Side" after all), and they'd be willing to lend us a grand total of... £187,100!

Just a £50k deficit, which is not enough to be covered by the government's Help to Buy scheme. So how are Jo and Joe Average going to get their dream (and by dream I mean it's roughly in the city, has some walls and windows and no major structural defects) 3-bed house to start a family. Cause yeah, wait, that £187,100 you can borrow is dependent on you not having any other outgoings except student loans. Don't you dare think you could get a mortgage like that if you have children!

*taken from here which I realise is a year out of date, but who's honestly had a substantial pay rise since then.

Fail Number 2

Our offer was the second highest by noon today, beaten only by a few grand (less than 5 and more than 1 according to the agent). We were asked for our "best and final offer" by 1 hour afterwards, which we put forth, and we just found out that we've been beaten again, hence have not secured the house. Yet another win for "more than £15k over the asking price". I think the house did go to some FTBs at least which is nice to know... Hoping they can't get a mortgage though! Always a faithful back up...

In fairness, the sellers were very nice (particularly if they did sell the place to FTBs) and the agents were mostly helpful, aside from not being contactable for the entirety of the weekend.

Offer!

We put in an offer yesterday on a nice 3-bed mid-terraced place. It already had the asking price, so we bid higher... Seems to be the kind of thing to do given our experience. If we don't get it with this we'll seriously have to consider what the hell we have to do because bids are going mental everywhere. Sigh. 

The estate agents was closed Saturday afternoon through to Monday morning, so we'll have to wait until tomorrow to hear anything back, or even to hear that they've received our offer. Seems kinda stupid to have a day full of viewings, but then be closed for nearly 48 hours so you can't take formal offers, although I bet that's tactical so it allows load of people to put in bids and then we can all fight it out later. Boy am I not looking forward to that.