At what point will the Houseprice reversal stop?

m00m00

what average is that ?
mean or median ?

mitchaa

2006

Median is around £19,500 (50% below, 50% above)
Mean is around £25,000

mitchaa

2006

thegibdog wrote: »

What??? You need to check your definition of inflationary, I'll think you'll find that all of the above get below inflation increases. That's lower wages in real terms for those of us who live in the real world.

I think you'll find the armed forces were awarded a 3.6% payrise based on the CPI figure + x% as of April 08 (I believe CPI as of March was around 2.5%)

NHS got around a 2.75% rise. Police i believe were wanting 2.5% but settled for around 1.9% and no idea about the fire service although i would imagine they would have got at least a CPI rise otherwise we would have seen the return of the fire strikes

Petrol tanker drivers got 14% (Over 2 yrs though)

The numbers of the people in the above employments take up a good % of the work force meaning a lot of people have gained.

I simply would not stand for a non inflation based salary as you are correct, it would be in effect taking a pay cut.

Lotus-eater

2002

mitchaa wrote: »

That figure is surely rubbish seeing as the average single wage is £25k?

Why on earth is the fact that the average family income is £33k, is rubbish according to you?
Two facts, average wage £25k, average family income £33k, get used to it

mitchaa

2006

Lotus-eater wrote: »

Why on earth is the fact that the average family income is £33k, is rubbish according to you?
Two facts, average wage £25k, average family income £33k, get used to it

Like i said, average to me means Mr average meets Mrs average. With £33k, this is clearly not the case.

But then that's just my way of thinking, yes i know women have children and are on maternity leave for 9mths but a lot do go back to work FT also.

I just think the £33k figure is quite a low figure. I would think it has probably taken into account the unemployed/benefit brigade at the bottom who survive solely on state handouts and obviously bringing down the figure.

m00m00

there's also an age bias in averages too as far as wages go

and first time buyers are generally on the left hand side of both curves.

dannyboycey

2000 or earlier!

Snooze wrote: »

:huh: :huh:

What a confusing poll. Took me a full 5 mins to figure !!!!!! the thread starter was on about. I was convinced it was a thread originally started in 1999 or something from looking at the poll options. :rolleyes:

Silly thread.

Rob

Agreed. A simple "What percentage?" would have been clearer.

bankinsider

2002

..and then stay flat for another 18 months.

I work as a freelance consultant, advising major banks on credit - very busy at the moment, mainly modeling this very topic.

1) Every single valuation technique, other than free market offer/accept, has pointed to an overheating of the house market for the last 3-5 years.
2) Only full employment and freely available credit has lept it going, particulalry sub-prime lending and relaxation of sensible lending criteria.
3) Buy-to-let (particulalry flats and most especially new builds) have pushed prices to unrealistic levels, having an inflationary effect on houses, all the way through to detached mansions. (not the only factor, but one of them)
4) You only make loss if you have to liquidate - so as long as you don't then there will be no problem.
5) Point 4 becomes a problem if A) you can no longer support the monthly payments (including coming off a fixed rate and having no other option but an SVR), you lose your job and have to sell up to move to a new job in a new area (lots of this in the late 80's), C) You purchased the property as an investment and repayment had an assumption of rising prices/rolling refinancing.

Expectation is that unemployment will rise over the next 12 months (gently), the buy-to-let market will pretty much crash, and finally it will take a further 12 months to "out" the very last of the bank-to-bank liquiduty issues that currently curtail lending.

If everyone can afford to sit tight, (i.e, NOBODY sells) then only those with an exposure to transaction volumes (estate agents, decorators, removal firms) will suffer. Prices will remain flat until earnings inflation catches up. However this is NOT going to happen. Unemployment is going to rise, liquidity will remain tight and confidence low.

Those who have 50% equity and a safe job are sitting pretty. Anyone with a fixed rate expiration coming up and does not have 80% LTV is in for a serious reduction in standard of living.

Anyone with money to invest - stick it in Butlins, discount retailers and alcohol producers.

bankinsider

2002

..and then stay flat for another 18 months.

I work as a freelance consultant, advising major banks on credit - very busy at the moment, mainly modelling this very topic. Here's my 2p worth.

1) Every single valuation technique, other than free market offer/accept, has pointed to an overheating of the house market for the last 3-5 years.
2) Only full employment and freely available credit has lept it going, particulalry sub-prime lending and relaxation of sensible lending criteria.
3) Buy-to-let (particulalry flats and most especially new builds) have pushed prices to unrealistic levels, having an inflationary effect on all houses, all the way through to detached mansions. (not the only factor, but one of them)
4) You only make loss if you have to liquidate - so as long as you don't then there will be no problem.
5) Point 4 becomes a problem if A) you can no longer support the monthly payments (including coming off a fixed rate and having no other option but an SVR), you lose your job and have to sell up to move to a new job in a new area (lots of this in the late 80's), C) You purchased the property as an investment and repayment had an assumption of rising prices/rolling refinancing.

Expectation is that unemployment will rise over the next 12 months (gently), the buy-to-let market will pretty much crash, and finally it will take a further 12 months to "out" the very last of the bank-to-bank liquiduty issues that currently curtail lending.

If everyone can afford to sit tight, (i.e, NOBODY sells) then only those with an exposure to transaction volumes (estate agents, decorators, removal firms) will suffer. Prices could remain flat until earnings inflation catches up

Banks would also suffer as they are required by law and convention to "mark to market", i.e recalculate the value of their debt security (i.e. your house). If this goes down, they need to increase their capital, or reduce their lending.

However there can be little dougbt that unemployment is going to rise, liquidity will remain tight and confidence low.

Those who have 50% equity and a safe job are sitting pretty. Anyone with a fixed rate expiration coming up and does not have 80% LTV is in for a serious reduction in standard of living. And don't be smug just because you live in the South East (I do) and think you're immune. Historically SE homes lead the rise and tail the downturn. This makes the swing a little less, but this is offset by the increased liquidity exposure of those on very high salaries (with very high fixed outgoings) if they are out of a job for any time (average betwen jobs is a whopping 6 months at the moment, for professional and managerial staff).

Anyone with money to invest - stick it in Butlins, discount retailers and alcohol producers.

jamescredmond

2003

a quality post from an insider.

at last.