Affordability is at the highest. So is now the best time to buy?
Each week I report on the market and what I find interesting, I read some reports by “This is Money” which indicated that the average single or Joint earnings of first time buyers who can buy their first property is far greater than the median Wage of the UK. In 2002 the average First time buyers wage was £23,000 growing steadily within a Ten year period to £33,000.
This reflects an increase of 43% in average Wages for First Time buyers making properties in over half (54%) of all local authority districts in the UK affordable by mortgage standards, up from 40% a year ago (research by Zoopla)
According to the report, the number of FTBs has also risen over the past year, albeit from a historically low level, helped by the improvement in affordability.
The data estimates that there were approximately 114,000 FTBs in the first half of 2012, up by just over a third (34%) from the same period in 2011 (85,600), but less than half the number a decade ago (244,700).
Patrick Voong, Residential Sales. Frasers & Co, said :
” After a slow 2011, it is Promising to find out Wages are gradually catching up with house prices, hopefully we shall we more movement in the markets this year”
“The problem is we are still seeing house prices at 5 times the earning ratio. It just means the more affordable parts of the UK will see an increase in First time Buyers”
“We work in jobs we hate, to buy things we don’t need, to impress people we don’t like”
I thought I take the opportunity to share with you over the next few weeks the difference of how a property investor thinks and the average person. I have spent many years with successful investors who have made a fortune from doing one thing differently and that is, they make money work for them. The rest of us trade our valuable time for money.
We are stuck in the life we live due to the limitations that we set for ourselves.
The job we hate, the friends we envy, the bills that take us into the over draft every month, we don’t do anything different from anyone else because of two main emotions. Fear and desire; the fear of losing the security of our monthly wage stops many people from considering investments and other sources of income.
The desire to keep up appearances via buying expensive clothes or cars pushes expenses so high that people have no choice but to stay focused on their jobs to maintain their lifestyle.
The investors I meet are focused on ways of creating residual money through Property investments, generating rental income and capital appreciation that increases even if you don’t work, rather than waiting for the next job with a pay raise.
All our lives we have been conditioned to think a certain way, we typically spend 15 years of our live’s in education to fortify our minds and to make us specialists in a field of work . Working, striving, struggling, hoping one day to get a promotion to improve our life styles and social status but always spending the majority of our wages covering the growing living expenses no matter the increase in income.
To fully understand what I’m talking about we must break down all the of the programming instilled in us and accept the simple truth which is, we live in a monitory system that perpetually enslaves us into a specific role in society, so subtle and intrinsic we can not fathom the idea that money, or rather the lack of it is the root of our unhappiness.
Think about it, what would make you happy? Some would say
” I wish I had more time”
” I would like to have more money”
“I want to travel more”
” I want to be respected”
These are the trappings of a normal person who does not understand the freedom investing in property offers.
Financial freedom and the Rat race.
There are The Rich and there are the Wealthy. The Rich earn vast amounts of Money through highly paid jobs.
The Wealthy have the ability to survive a prolonged amount of time without having to work and still maintain a very high standard of living.
Essentially the distinction is one trades his/her time for money. The other owns Income producing Assets such as Shares, Bonds or property.
We have a finite amount of time a day and depending what we have specialised in; we get paid a set amount every hour. There is a problem with this; no matter if you are a doctor or well-paid lawyer you can only do so much in a day.
The ideology behind this is that you are limited in what you can earn by the number of hours available. The wealthy have mastered the principles of making money work for them and this is done through assets ownership that produces a return to allow them to live off the investments and cover all expenses.
From studying my investors, the easiest way to become wealthy is to focus on buying high yielding investment property in good areas to benefit from solid Capital growth. This is important as the Capital growth can be used to release equity and reinvest in more income producing rental properties. This can take several years but sometimes much less if you build in equity from the start by buying at discount.
Only 1% of the population can be truly considered wealthy, this small minority focuses on constantly increasing asset ownership, the other 99% focus on increasing wages through pay rises.
If you want to make a difference in your life, you have to ask yourself are you doing what everyone else is doing?