r/Glasgow Tools

Title
Author	Divola
Comment	I disagree. The reason we're saying housing is unaffordable is not the valuations themselves. Ok, bumping up the interest rate might well decrease the valuation of the property I'm interested in from £140k to £100k let's say, so ok that's £4k less you need to put on a 10% deposit. But 4k is what - 3-5 months extra saving for a person on a decent salary? Certainly not the end of the world and certainly not something we need to put millions into potential negative equity to avert. Not to mention that whatever you're saving in deposit costs you're probably more than making up in increased monthly mortgage payments. The issue is the bidding over valuation part and the insane amounts of cash you need to stash in order to be successful at it. It's that the flat in Paisley you're looking at might be valued at £45k and should theoretically be within reach for everyone earning minimum wage but in order to secure it you need to bid like £30k over - money no bank will be willing to lend you and you'll just have to have there sitting in cash. And that bidding over valuation part will be just as insane under higher interest rates because you will still have some people who will be flush with cash and many others that will struggle to raise the required amount.
Reddit Link	https://www.reddit.com/r/glasgow/comments/qlcyua/off_my_chest_housing_market/hj4xjmy/
Created	Wed 3rd Nov 2021 11:50am
Status	normal ()

I disagree. The reason we're saying housing is unaffordable is not the valuations themselves. Ok, bumping up the interest rate might well decrease the valuation of the property I'm interested in from £140k to £100k let's say, so ok that's £4k less you need to put on a 10% deposit. But 4k is what - 3-5 months extra saving for a person on a decent salary? Certainly not the end of the world and certainly not something we need to put millions into potential negative equity to avert. Not to mention that whatever you're saving in deposit costs you're probably more than making up in increased monthly mortgage payments.

The issue is the bidding over valuation part and the insane amounts of cash you need to stash in order to be successful at it. It's that the flat in Paisley you're looking at might be valued at £45k and should theoretically be within reach for everyone earning minimum wage but in order to secure it you need to bid like £30k over - money no bank will be willing to lend you and you'll just have to have there sitting in cash. And that bidding over valuation part will be just as insane under higher interest rates because you will still have some people who will be flush with cash and many others that will struggle to raise the required amount.