Where do you see house prices 2 years from now?

mr.broderick

GDB2222 wrote: »

It's just a bit of fun. It explains a few things, like why the bulls get shouted down by the bears, simply because the bears vastly outnumber the bulls - 90% of the votes cast are negative.

Obviously because the bears are here willing it all to come down...Be careful what you wish for..

justpurchased

GDB2222 wrote: »

It's just a bit of fun. It explains a few things, like why the bulls get shouted down by the bears, simply because the bears vastly outnumber the bulls - 90% of the votes cast are negative.

Good shout. But i think 23% on top of current drops could be about right.

fc123

I put 0 - 10 % down as I figured we are already down 30% . So, overall 40%

mitchaa

Chris2685 wrote: »

According to my slightly fudged calculation Median household income is roughly 26k (I can't find any exact figures for this anywhere).
3x income = 78k
15% deposit = 11.7k
Average house price should be 89.7k by those estimates...

So you believe a household income of £26k deserves to buy an average priced/sized home? So a household on double that can buy a mansion or 2 average homes and then a couple on £100k pa could buy a castle or 4 homes

The average salary for a British citizen is £25k pa so i struggle to see how the average household income is only £1k more at £26k

Average income of a British PERSON = £25k, but 1 person does not need an average priced/sized home, he/she only needs a 1 bed flat. A 1 bed flat obviously being cheaper than an average sized home.

If you take 2 averages, i.e Mr Average and Mrs Average, then the combined income is £50k and 3 x this = a mortgage amount of £150k. Add on the 15% deposit and the average house price should be around £176,000.

Lets take Mr average, and Mrs less average, £25k and min wage £12k.
£37k x 3 = £111,000 mortgage. Add on the 15% deposit and house prices should be around £131,000

But then you can argue, because Mrs is less than average why should she be able to afford an average home?? Surely that should only be available if she was a true average (£25k)

Why do people think average wage of a singular person should be enough to afford an average sized/priced property No, it shouldn't, it should be 2 x average people;) Average wage of 1 person should be able to afford a 1 bed flat, not a 3bed average home.

I would say the £37k figure is more to the truth rather than the 2 x £25k average scenario due to the usual nature of mothers being in PT work due to childcare etc

I think £145-£150k would be an affordable figure of an average home going on todays average salaries.

And that's the level they will drop to in the next year or so before stagnation. (My theory anyway;) )

As to where we will be in 2 yrs, i would say exactly where we are now so voted for the 0%. They will drop, stagnate and then rise within the next 24 months. Drop for 8, stagnate for 8, slow rise for 8

carolt

But presumably that's the average salary of a British working person. Don't think the figure includes children. Does it include the unemployed/retired? Doubt it.

So lots of people who have to live somewhere, but don't earn anything, or earn much less than national average.

The average household, even if it includes only 1 working person, probably includes at least 1 non-earner. Don't know average British household size, but it's certainly not 1!

In most families with young children, there is 1 full-time worker and possibly 1 (usually poorly paid) part-time worker as well. Plus non-earning children.

Are you suggesting they ought to all squash up in one bed flats???

mitchaa

carolt wrote: »

But presumably that's the average salary of a British working person. Don't think the figure includes children. Does it include the unemployed/retired? Doubt it.

So lots of people who have to live somewhere, but don't earn anything, or earn much less than national average.

The average household, even if it includes only 1 working person, probably includes at least 1 non-earner. Don't know average British household size, but it's certainly not 1!

In most families with young children, there is 1 full-time worker and possibly 1 (usually poorly paid) part-time worker as well. Plus non-earning children.

Are you suggesting they ought to all squash up in one bed flats???

Forget the unemployed and the needy as 99.9% of the time they get social care.

My point was about the working mortgage market.

Average income x 2 (IMO) should buy an average 3 bed semi detached property yes. If you have a full average and half an average, i.e male on £25k and female on £12k then they should in reality not be able to afford an average priced home, they should instead opt to buy a 2 bed terrace;)

But then if you look at it that £37k is the average working income for household allowing the PT mum, childcare scenario then yes £37k should be used for the average priced home scenario.

But then i would argue what you would call 2 x £25k earners as they would be deemed as 2 x average earners, i.e an average couple;) so how can they be the same as the £37k 'average' couple

All these averages:rotfl:

Anyway my point of the matter is, 1x average salary (£25k) should not be enough to warrant a 3 bed semi detached average priced home otherwise we get to the mansion/castle scenario;)

carolt

From my recall of the last crash, when average houses dropped to low multiples of average earnings, so did desire to buy - after years of prices falling (a) people thought prices might well keep falling or at least not rise and (b) banks had had their fingers burnt and so lending was much tighter. So banks wouldn't lend enough for the average person to buy a street even if they thought they could afford it (or indeed could afford it).

Cannon_Fodder

It could be asked why Bulls are so desperate to try and talk things up in the face of what some commentators have called the worst economic situation since the Great Depression?

How does that help anybody?

To believe that it will go away in the next year, and reverse that year's drop and ADD another 20% in the second year - as 1 voter has done - is truly optimistic.



re mitchaa - I think part of the bubble creation has been the joint income mortgage. do we really want both earners, of whatever salary HAVING to give up a chunk of salary just to own a home?

Shouldn't the second income be for pension/savings/luxuries/holidays...?

If prices drop low enough, joint income mortgages should be outlawed, IMO.

All it achieves is to make mothers go out to work, when often they don't really want to, for half the salary to go on childcare and the other half on the mortage - it doesn't add value to the family finances.

Both parents end up hard-worked, and still have to do the domestic stuff, on top.

(not meaning to be sexist, saying mother, if a father wishes to be house-husband, lower earner/part-time etc, whatever thats fine, down to family choice)

Chris2685

mitchaa wrote: »

So you believe a household income of £26k deserves to buy an average priced/sized home? So a household on double that can buy a mansion or 2 average homes and then a couple on £100k pa could buy a castle or 4 homes

The average salary for a British citizen is £25k pa so i struggle to see how the average household income is only £1k more at £26k

Average income of a British PERSON = £25k, but 1 person does not need an average priced/sized home, he/she only needs a 1 bed flat. A 1 bed flat obviously being cheaper than an average sized home.

If you take 2 averages, i.e Mr Average and Mrs Average, then the combined income is £50k and 3 x this = a mortgage amount of £150k. Add on the 15% deposit and the average house price should be around £176,000.

Lets take Mr average, and Mrs less average, £25k and min wage £12k.
£37k x 3 = £111,000 mortgage. Add on the 15% deposit and house prices should be around £131,000

But then you can argue, because Mrs is less than average why should she be able to afford an average home?? Surely that should only be available if she was a true average (£25k)

Why do people think average wage of a singular person should be enough to afford an average sized/priced property No, it shouldn't, it should be 2 x average people;) Average wage of 1 person should be able to afford a 1 bed flat, not a 3bed average home.

I would say the £37k figure is more to the truth rather than the 2 x £25k average scenario due to the usual nature of mothers being in PT work due to childcare etc

I think £145-£150k would be an affordable figure of an average home going on todays average salaries.

And that's the level they will drop to in the next year or so before stagnation. (My theory anyway;) )

As to where we will be in 2 yrs, i would say exactly where we are now so voted for the 0%. They will drop, stagnate and then rise within the next 24 months. Drop for 8, stagnate for 8, slow rise for 8

That makes much more sense, and makes me feel better actually. I knew my figures were fudged anyway, but I just looked on the national statistics website to get the figure for average income. http://www.statistics.gov.uk/cci/nugget.asp?id=334

It is actually nearer 29k, so not sure why I put 26k... I must have been tired haha.

I must disagree with your point that Mr & Mrs Average should only have an average sized home if they both earn average incomes though, I think it would be much nicer if Mrs Average had the option to stay at home and look after Average Jr. instead of HAVING to go out to work...

GDB2222

Lets take Mr average, and Mrs less average, £25k and min wage £12k.
£37k x 3 = £111,000 mortgage. Add on the 15% deposit and house prices should be around £131,000

The £131k figure is roughly where you get to if you allow for a 25% drop from current prices. You can add on roughly another £10k if NAE is £29k rather than £25k.

That seems to me to be more of a sensible scenario than both partners working full time and earning average wage. It also more or less coincides with the older lending practice of 3 x main salary + 1 x partner's salary. (Bear in mind that this was probably calculated when the partner was on full-time wage, prior to children.)