Todays events...Any FTBs feeling poor? I do

Sir_Humphrey

lostinrates wrote: »

I do agree with you, and the points on interest rates, albeit grudgingly , but where I get grumpy is the additional issue of the QE. If the debttors debts are worth less, and my savings are worth less, how does that help my non-growing savings work for me buying a house?

It depends if it works. If it does not (and I doubt it would without a lot of fiscal stimulus) then deflation continues. If inflation looks like spiking (and looking at the MoM figures could give early warning), then the taps would be switched off and IRs raised.

sympatex

nobblyned wrote: »

So your savings have increased effectively by 7% in the year, which is around 10% pre-tax.

And you are saying you are worse off than when the interest rate was 7% and house price inflation was 10%+?

I give up.

Not really this is rubbish.

lets say i have 100k in savings at 7% and i negotiate 7% off a house where as the next day they get out of bed and refuse to reduce it by anything. You are comparing something of fact with something of fiction (house prices).
House prices are determined by peoples ability to pay that has been choked off so "valuations" are compeltely out of sync with FTB's ability to pay.
I am worse off because my target of buying a house has got further away because of the measures taken by the vested interests. that's all this post was about. the gap now between buying a house has been as wide as it has ever been even after saving for 4 years.

HPI hasn't been at 10% in my area at all afaik but yes if it was ofcourse the -
ve HPI makes up for the loss of savings itnerest. Houses were pretty expensive in the first place with no new employment/infrastructure this hasn't been fuelled. lets stay witht he here and now, HPI has been negative for over 18months which is close to half the time i've been saving.

JayScottGreenspan

Alan_M wrote: »

From about 1993 onwards this could possibly be correct (i.e. the bottom of the market after the last crash).

However, we're not at the bottom now are we, we've only just started the slide and it still has a long way to go......then your figures may add up again.

My first house bought in 89 was almost 7x my salary...that was a two bedormm terrace and in quite a mess. Thinngs are not so differnet now as people would have you believe.

Yeah, basically we're still quite close to the peak, and still above 'average' (whatever that is) in terms of affordability.

The comparison wth 89-92 is interesting in that interest rates are so very different. The low rates as the latest bubble formed were a very bad thing IMO as they just pushed house prices to even more unsustainable levels. However, the even lower rates now should help protect a lot of families.

It's a shame that the lifetime cost of all those massive mortgages will be such a big drag on people's lives and the economy for quite a long time.

Max_Headroom_3

sympatex wrote: »

Ok let's not get too hung up on 'what exactly' is purchased, for this post i'll change it to "A 1bed flat in my area is currently 6.5* my average uk salary, a 3bed semi is 8*" (just to fit in to your world of 1bed flats for FTB's)

It doesn't matter what it is b0rker or alan, nothing is affordable to me now due to mortgage criteria and historical norms. A good thing for sure i don't dispute, my original thread was really just a reference at being left out either through rising costs or falling costs it just doesn't matter. After being so close. And now what i've saved for is being 'rewarded' by devaluing.

But don't you see? It's entirely because property bacame unrealisticly priced that it was unsustainable!

Now it's dropping, you should be jumping for joy, not complaining that it is "devaluing".

Would you prefer it was still going up, pricing you further and further out?

sympatex

Max_Headroom wrote: »

But don't you see? It's entirely because property bacame unrealisticly priced that it was unsustainable!

Now it's dropping, you should be jumping for joy, not complaining that it is "devaluing".

Would you prefer it was still going up, pricing you further and further out?

i dont think i meant it like that, i'm glad its devaluing so that the point above by jay is relevant again ie: won't have massive mortgages dragging our whole life down....until the next time.

However as much as its devaluing the credit at which a FTB NEEDS to acquire to buy is still hopelessly short of what current prices are at. This was just a general rant about shifting goal posts and getting close but then being ballsed up because of government / vi.

I haven't been rewarded for being "prudent" something GB goes on about and now i'm being punished for it.

Max_Headroom_3

sympatex wrote: »

However as much as its devaluing the credit at which a FTB NEEDS to acquire to buy is still hopelessly short of what current prices are at.

Yes, that's why house prices are falling. If everyone could "afford" (ie get loans for) them then they wouldn't be.

That's why they went up in the first place, everyone could get these huge loans.

You've been prudent, you've done the right things, and much as I appreciate your frustration that they're not back down to the right price NOW, I'm afraid that's not how it works.

It takes an awful long time to educate Mr & Mrs Homeowner that their house is no longer "worth" the £xxx,xxx that it was last year.

In the meantime, appreciate the fact that you didn't defraud your way into a huge mortgage last year on a house now worth £30K less than your mortgage, bide your time, and keep saving.

nobblyned

Dude, house prices are coming down. If you really can't see that this benefits you more than the loss of the interest on your deposit pot then you need to think a little harder.

Wait. Don't panic. Keep saving. Buy when credit frees up and house prices stabilise. Stop whining.

Austin_Allegro

twirlypinky wrote: »

I'm 27, single and sick to death of people telling me that i can really only expect to buy a bedsit, studio flat or a maisonette. Just because I'm single, why should I. Why the hell should i live somewhere grim just because I've not found "the one". It's bloody daft.

50 years ago my Grandad bought a 3 bed semi in south london for £6.5k. On his wages alone, my nan's wages weren't taken into consideration. So someone please tell me why these days singltons are expected to live in a tiny space?? The ratios are not right anymore, and they haven't been for a long time.

I'm in the situation now where I'm going to have to find a partner or wait for a relative to die before i can buy a home. I think it's a very sad world we live in.

I understand your frustration. I'm single, 37 and last tried to buy a flat in 2001 but gave up because that was when hyperinflation in property set in.

But it's worth remembering that there's never been a 'right' to buy property. The situation 50 years ago was very different.

The problem now is that the ratios, such as they are (if you forget about liar loans and all the other fiddles) is that they are always worked out on joint incomes. In your nan and grandad's day, women's wages were never included hence prices were relatively lower because houses were bought on one salary. (Women's income was considered too high risk to lend on). The revocation of this in the 1970s was part of what led to the boom in that time I believe.

You also have to remember that in your nan's day, if she had been unmarried she would not have had a house. Unless she was able to pay cash down for a house, she would have lived in small rented accommodation or with relatives, because women were not able to get mortgages.

In those days also fewer people bought because reasonable council accommodation was provided. Since that's not being built anymore, this has put pressure on the market.

However, let's hope that if we save hard and prices continue to fall, we'll eventually be able to buy places. If not, I'm off to live on a boat!