Trying to buy a house in this area is near impossible

[Jeremy]

fluffy Wrote:

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> Is anyone seriously suggesting that a person on

> ?100k plus isn't rich? London housing is actually

> insane, could easily rent a house elsewhere for

> the price of a room in a London flatshare!

Rich... debatable. Definitely not super-rich. The super rich don't need to work (but may choose to do so in order to increase their wealth/power/influence). They certainly don't live in terrace houses in SE London and catch the number 40 every morning.

[lane lover]

The latest figures show the average salary in London is around ?42k. Probably higher once the final 2013 figures are assessed.

Therefore, is someone earning 2.4x the average deemed "super rich"? "Well off" maybe, but I think super rich is a bit OTT.

As other posters have said - its all relative. If you have owned a house during this recent increase in prices, then you are making money every day by just having the investment.

You dont necessarily need to have a big salary to own a ?500k+ home. Salary is one form of income, but some sensible investing can earn much more in a bull market. The key is getting on the property ladder and paying down the mortgage - especially while interest rates are low.

It will be interesting to see what happens when interest rates start to rise in the next 12-18 months.

[SteveUK1978]

** Arming flame thrower **

Worldwiser:

Surely a lawyer will charge extra for an escrow - you would need documentation (even if the escrow agreement is standard) and admin by the law firm to manage it. That would be an ancillary service for UK conveyancing lawyers surely?

Anyway, I don't have an issue with additional security this method provides in a transaction...but my sense in this market, it is sellers who tend to shaft the buyers - not the other way around. All well and good asking your buyers to put money is escrow, but back to my original question, as a seller do you offer exclusivity to them when you demand the deposit and if so, do you repay the buyers costs if you then pull out?

I would say that sellers don't need that much protection in this market.

[MrBen]

SteveUK - I think you're right in this market which is driven by desperation and fear. People are trampling over each other to buy now in case prices rise further. Supply of stock coming onto the market is also low increasing demand. It's already horrible for buyers.

But in a buyers market it all swings the other way and whilst rather unconventional I see nothing wrong at all with Worldwisers escrow suggestion to weed out the serious from the timewasters. It's commercially creative and reduces risk. It would cost under ?500 for a conveyancing lawyer to draft a letter of terms and hold funds.

[MrBen]

I'm guessing the escrow would be applied after survey but before exchange. Asking for it before survey would kill it's effectiveness as the buyer is already laying out survey fees etc and deserves to be able to check it out first.

[LondonMix]

At which point you have to ask what on earth you are gaining. I mean how many buyers after going throught he survey and negotiating any of the points that come up then pull out of the transaction. Once you have spent that much time and money you have already demonstrated you are serious. By that point you have spent a lot of money on legal fees, searches, survey fees and non-refundable mortgage application fees.

Also, the median income in London is 30k (the average is very distorted by the very few who earn a lot at the top).

[indiepanda]

MrBen Wrote:

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> You have a point though poppet27. It's all

> relative - to someone struggling on benefits or

> off radar completely and unemployed, anyone on

> ?100k plus IS super rich.

In relative terms yes. But I would say the super rich aren't generally salaried workers - they are those who have inherited wealth, run successful businesses or have been mega successful in the arts etc.

?100k pa income doesn't buy you a house in ED these days unless you have a serious deposit. And to me, the super rich live in large houses or mega apartments the other side of the river, not modest terraces in ED.

[ultraburner]

100k between two successful pro's is not unusual really, and if either have owned property over the last ten years the deposit may will be there.

Mega apartments and nice houses north of the river go for a lot more than a terrace in ED.

[Twirly]

Ultraburner, you must live in a different world to most of us then. If only 2% of the population earn ?100k, how can that be "not unusual"? It may not be unusual in certain sectors of the population, but it is unusual for the other 98%!

[ultraburner]

No Twirly, I'm skint myself and I can't fathom the numbers either.

2% of what? People who live in central London and may be making a killing in banking/media/whatever is that? Or do you mean the whole country......

[indiepanda]

Twirly Wrote:

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> Ultraburner, you must live in a different world to

> most of us then. If only 2% of the population earn

> ?100k, how can that be "not unusual"? It may not

> be unusual in certain sectors of the population,

> but it is unusual for the other 98%!

I think Ultraburner meant two people earning ?100k jointly - i.e. average of ?50k each, which I guess is more common.

I don't think everyone buying round here is buying on income anyway. When I was looking around the estate agent had cash buyers in their twenties looking at similar properties to me - bank of Mum and Dad buying them their first home. How the other half live...

[Twirly]

I googled, and came up with this article: http://www.bbc.co.uk/news/magazine-11382591 So, the general population, but I would assume that many are concentrated in Central London. But yes, ?100k between 2 is probably more common. Even then, you're still going to struggle around here now to buy a 2 bed flat with a mortgage, unless you've got a huge deposit.

Yes, bank of mum and dad, plus City bonuses I suspect is helping cash buyers.

[MrBen]

Read my post again. I said ?200k combined (?100k each or ?150k + 50k?whatever) not ?100k joint.

?100k between two IS fairly common in these parts and that plus say ?250k equity still doesn't get close to buying you a decent 3 bed terrace in SE22 now given they're ?750k+.

Typical incoming couple is now say 30 something pair of accountants/lawyers/Accenture slavebots trading up from a flat in Clapham, carrying forward ?100-?200k equity and on ?150-?200k joint. There's enough of them in London to create the current market.

Edit to say Twirly is right.

[LondonMix]

There are only just over 400,000 people in the entire country who make more than 100k per annum. The idea that most people in London make a killing in the city is ludicrous. London alone has 7m people and the median salary in London is only 30k (which is a better measure of typical salary). The vast majority of people, even in London, earn no where no these incomes.

A six-figure income makes you much better off than the vast majority, even in London. Do a right move search of London for 3 bed terraces and of the 1,200 or so on the market, only 285 cost 800k or more (current asking for a large decent 3 bed in ED). The house prices here are much higher than the great majority of the capital.

Just sayin...

[StraferJack]

An eloquent, informed poster like londonmix signing off with "just saying"

* shudder *

[brunorator]

If you have money to buy a single room in London then your wealthy enough to buy a 1 bedroom apartment outside London city.

[LondonMix]

Haha SJ!

Just keepin' it real

[Mick Mac]

Jeremy Wrote:

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The

> super rich don't need to work

They certainly don't live

> in terrace houses in SE London and catch the

> number 40 every morning.

Bummer, that rules me out then.

[Earl Aelfheah]

If you're interested in where you are in terms of the income distribution of the UK, The Institute of Fiscal Studies have this handy tool to tell you: http://www.ifs.org.uk/wheredoyoufitin/

[Otta]

worldwiser Wrote:

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> I've never sold a property without getting some

> money up front from the buyer - it's perfectly

> acceptable and I honestly don't understand why it

> isn't done as a matter of course. Nothing huge,

> just a grand or two. No honest buyer can possibly

> have a problem with this and the seller is

> compensated appropriately if they walk away for a

> frivolous or non-critical reason.

>

> Stamp duty alone is responsible for a huge

> component of price inflation. If I buy a house and

> have to hand over 10k to the government, my

> property immediately has to be valued at 10k more

> than I bought it for if I'm not to be out of

> pocket when selling.

As a buyer, I'd happily put a couple of thousand in a bond, if the seller did the same. As far as I can see, it is very much a seller's market, and they can just as easily walk away from it BEFORE contracts are complete, but AFTER the buyer has spent well over ?1k on a survey and various fees.

I think it would be a very sensible thing for both parties to put some money in a pot, and forfeit it if they walk away from the deal. But for just one side to be asked to do this is not fair at all IMO.

[LondonMix]

How's the flat search going Otta?

[pinecone]

otta, completely agree. the housing market in this country is completely tilted in the favour of the seller. in the USA, for example they have "buyer's agents" https://www.google.co.uk/search?q=buyer%27s+agent for example.

it's ripe for disruption.

[poppet27]

Agree, and what are agents actually doing for their fee? If properties are selling themselves, an estate agent's life must be a walk in the park in the current climate.

[Twirly]

I think it depends on the state of the market at the time as to whether buyer or seller has it best - seller probably at the moment. We've just done both and it was pretty stressful from both sides. But I can see the point of trying to get some commitment out of the seller once an offer is made. In Scotland of course, it's legally binding once the offer has been made and accepted (with no bonds required!), and our relatively recent experience of selling a flat up there (admittedly chain free on both sides) was a walk in the park compared to down here. I don't pretend to understand the system (it was a bit confusing since we seemed to go through very similar stages), but up north does seem more straightforward.

When we were selling here, I decided to behave with integrity. I had an offer I was happy with and simply told the estate agent not to market the flat anymore, and that even if someone tried to gazump, I wasn't interested (I'd already been told that our buyer had lost out on a couple of properties). Luckily for us, our seller did the exact same thing to us. If only all buyers and sellers would do the same, it would be much better, but people think "ooh, I can get just a little bit more..." and keep on marketing after they've accepted an offer.

[Mick Mac]

Twirly Wrote:

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I can get just a

> little bit more..." and keep on marketing after

> they've accepted an offer.

Likewise a buyer can offer the asking price immediately to secure "exclusivity" and then further down the line start to eat away at the offered price when the survey comes up with relatively minor issues.