House Prices to rise by 25%

IveSeenTheLight

franklee wrote: »

Average house price 222,621. Average income (based on home address) 19,822. House prices cost 11.2 times incomes last year! ... First time buyers will need to raise more than 100% of their annual take home pay for deposits and fees ...

So the question is, if prices are going to rise by 25% over the next five years who will be buying and how will they afford it?

The report makes no mention of inflation other than house price inflation but I'm guessing that it predicts high wage inflation to make things affordable, but that leads to high interest rates

So, how will buyers be paying the alleged ever higher prices

Be careful when looking at average figures, these do not break down into specific areas and can be skewed by other properties.

As an example, if there are 1 off 100k property, 5 off 200k properties and 1 off 1,000k property, then the average of these 7 properties is 300k.
6 out of 7 properties suddenly seem far more expensive (or unaffordable) while 1 becomes extremely cheap (affordable)

Here are a couple of links to affordability in the UK. The figures are different owing to the area examples and statistics utilised

http://www.hbosplc.com/economy/includes/25_07_08Affordability.xls

http://www.cml.org.uk/cml/statistics or more specifically for FTBers http://www.cml.org.uk/cml/filegrab/2ML2.xls?ref=4624

HBOS has the UK earnings to house price ratio as 5.31.
CML has it as 3.3 for FTB and 2.96 for movers.

I think the difference is due again how the figures are calculated. One is on average prices and wages (HBOS), while the other is completed mortgage deals (CML)

You can determine from the CML website the percentage advanced and therefore the percentage of deposit

carolt

Premier wrote: »

...and the grand total of the "many, many other reports that come out daily" on which you have posted today is...one :eek:

and that relates to America, not the UK, and appears to be a duplicate of what someone posted the day before. Oh dear, are you really struggling that hard to find reports in an attempt to substantiate your unfounded beliefs.:D

Prices have increased on average by 0.1% over the last year ending June 2008. Fact. Source: Land Registry website.

How will you ever guess the bottom of that market you have been searching for for so long? You'll only know it's the bottom when prices start to show an increase and then it'll be too late...again! Remember that the prices reflect the completions - those registered with the land registry. These are about 2 months or more after the price was originally agreed.

Why are you so interested in whether I'm a LL? You seem almost obsessed by the the notion. Are you stalking me or something?

Perhaps I am a landlord, but then why would I have a vested interest in prices going up? See post#59 (not mine, btw, posted by another MSE'er)

Perhaps I'm not a landlord, but then why would I be interested in prices going up? That surely would be contrary to your opinion.

As I've already told you I have no vested interest, and that I don't think whatever I post on MSE will affect the price of houses accross the UK, why would someone like you, with a university education, spend time posting on MSE hoping by doing so you will somehow affect the UK housing market and then trying in vain to guess the bottom of the market?

So it's pretty clear you are a landlord.

Thanks. That explains your bizarre obsession with this one report.

Unfortunately, for people who sought to make a quick buck out of rising house prices, the news from Nationwide today:

http://news.bbc.co.uk/1/hi/business/7534052.stm

will mean substantial losses very soon.

(I would have started a thread on this, but had no need to, as mystic trev clearly gets up earlier than me!)

Nationwide figures, unlike your amusing article, are fact, not speculation.

So if prices have already fallen 8.1% in a year, where does that leave the figures in your article???

What a joke. :rotfl::rotfl::rotfl:

byrneand

Carolt/Premier - pack it in. You both have divergent views. Get over it.

Carolt - From the chart above I would suggest that over the mid-long term >5yrs (e.g through-cycle) the trend would be for price appreciation. This has been driven by a combination of further urbanisation, combing with social factors (divorce, later marriages... etc) and a lack of supply. These are trends that show no sign of abatement.

Premier - I think its fair to suggest you could see a short term pull back in prices due to the macro credit environment and confidence.

Can the pair of you please start acting your age...

Premier_2

carolt wrote: »

So it's pretty clear you are a landlord.

Kepp saying that to yourself and it might come true, just like you think telling yourself house prices will come down will happen if you keep telling people that

carolt wrote:

Unfortunately, for people who sought to make a quick buck out of rising house prices, the news from Nationwide today:

http://news.bbc.co.uk/1/hi/business/7534052.stm

will mean substantial losses very soon.

(I would have started a thread on this, but had no need to, as mystic trev clearly gets up earlier than me!)

Nationwide figures, unlike your amusing article, are fact, not speculation.

So if prices have already fallen 8.1% in a year, where does that leave the figures in your article???

What a joke. :rotfl::rotfl::rotfl:

That BBC report even includes 'my amusing article' :

But the National Housing Federation said that it was expecting house prices in England to rise by 25% by 2013.

:rotfl: :rotfl: :rotfl:

Premier_2

byrneand wrote: »

...
Premier - I think its fair to suggest you could see a short term pull back in prices due to the macro credit environment and confidence...

If you mean prices have fallen in the last month, yes , I've not denied that. I even accepted the initial 2 links posted by carolt in her post on that. The report I refer to also sees prices falling by about 2-3% in 2009 (can't remember the exact figure)

But as I said to carolt, please don't try and judge the bottom of the market, because you'll end up missing it. Also don't invest for the short term. And don't forget, a house is not just an investment, it's a home, one where you make the ruiles rather than some LL and one you can't be kicked out of because the LL wants you out.

...and when prices are expected to rise by 25% over the next 5 years, why not buy one?

byrneand

Premier wrote: »

But as I said to carolt, please don't try and judge the bottom of the market, because you'll end up missing it. Also don't invest for the short term. And don't forget, a house is not just an investment, it's a home, one where you make the ruiles rather than some LL and one you can't be kicked out of because the LL wants you out.

...and when prices are expected to rise by 25% over the next 5 years, why not buy one?

... unless you are btl and it is an investment.

.... a long term one and so I do agree with what your saying.

vigesimal

Premier wrote: »

...and when prices are expected to rise by 25% over the next 5 years, why not buy one?

:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

Premier_2

brit1234 wrote: »

The report you have shown is flawed. It takes no account of lending conditions which is one of the most important factors determining price.

It also doesn't take into account that property prices were deeply overvalued before which even this so called shortage couldn't solely attribute to.

We have a massive housing bubble now, a 25% increase on that is pure lunacy. With banks reducing lending no property would be affordable.:huh:

http://forums.moneysavingexpert.com/showpost.html?p=12980485&postcount=38

I believe they have included the 2 issues you say they haven't

Current lending conditions:
"The credit crunch is preventing affordability from improving for first time buyers, even as house prices fall."


Property prices overvalued:
"House prices cost 11.2 times incomes last year, compared to 10.7 times in 2006."

Ivan_Konstantinov

Premier wrote: »

http://www.express.co.uk/posts/view/54301/House-prices-to-rise-by-25-

why you want to read the express toilet paper?they are useless journalists!!