House prices down to at least 115K... Thans FSA! 3X here we come!

chucky

lostinrates wrote: »

May I have a stab at an answer? Its affordabilty. Its considering other debts you have or don't have, and considering a 'living wage' from what you earn decreases in proportion from wage as the wage goes up.

People have differnt priorities in spending, even if all treated the same. Lots of people are happy to live in small houses, and consider their house 'somewhere to sleep at night'and instead want to put a higher percentage of income on something else...holidays, technology, cars whatever. some people prioritise education and children. Some can aford to do it all and STILL over pay a 4 or 5 x mortgage. To restrict people on a purely 3 x wage means that some people are still overstretched if their other outgoings and lifestyle isn't commited (and I question if for some buying is the right optuion for them) and that some people are paying less than they could for housing. These lucky people would have increased spending power in other places, but then people will complain they have too much disposable income after paying their mortgage and this too is unfair.

thank you LIR - it's been said a few times on this thread already.
however Graham is choosing not to accept that is the case or not reading the posts

Graham_Devon

lostinrates wrote: »

May I have a stab at an answer? Its affordabilty. Its considering other debts you have or don't have, and considering a 'living wage' from what you earn decreases in proportion from wage as the wage goes up.

This is all already done, and already in place. they already take any commitments and write the amount down. They already credit reference you.

People have differnt priorities in spending, even if all treated the same. Lots of people are happy to live in small houses, and consider their house 'somewhere to sleep at night'and instead want to put a higher percentage of income on something else...holidays, technology, cars whatever. some people prioritise education and children. Some can aford to do it all and STILL over pay a 4 or 5 x mortgage. To restrict people on a purely 3 x wage means that some people are still overstretched if their other outgoings and lifestyle isn't commited (and I question if for some buying is the right optuion for them) and that some people are paying less than they could for housing. These lucky people would have increased spending power in other places, but then people will complain they have too much disposable income after paying their mortgage and this too is unfair.

How could you seriously administer a system such as this?

It sounds good, I'll agree. I totally agree with what you are saying. But how would the mortgage lender know what MY habits were? What would stop me simply lying?

I'm just saying, although it sounds good, it is practically impossible.

What's to stop me, wanting a house, ringing and saying "yes, I do not go out ever, I knit my own boxers out of used herbal tea bags and and I promise you, i will never ever replace my freezer before it packs up on a credit card sir".

Then getting the mortgage and buying all this nice new lovely furniture on a credit card then on the way home spying a car I like in the showroom and signing up to a credit deal?

Seriously. How would you administer such a "totally unique" product?

Everything comes back to the one thing, every time. If these people are doing so well with the money, and really don't spend a penny, then they will be able to save a bigger deposit, and do THEMSELVES what they aim to do....buy a more expensive place with the larger deposit. If they can do all this, why would they need a 5x mortgage? Why can't they save a bit more of alarger deposit?

piggeh

lostinrates wrote: »

May I have a stab at an answer? Its affordabilty. Its considering other debts you have or don't have, and considering a 'living wage' from what you earn decreases in proportion from wage as the wage goes up.

People have differnt priorities in spending, even if all treated the same. Lots of people are happy to live in small houses, and consider their house 'somewhere to sleep at night'and instead want to put a higher percentage of income on something else...holidays, technology, cars whatever. some people prioritise education and children. Some can aford to do it all and STILL over pay a 4 or 5 x mortgage. To restrict people on a purely 3 x wage means that some people are still overstretched if their other outgoings and lifestyle isn't commited (and I question if for some buying is the right optuion for them) and that some people are paying less than they could for housing. These lucky people would have increased spending power in other places, but then people will complain they have too much disposable income after paying their mortgage and this too is unfair.

The houses that these people are looking at are probably 4 or 5x their wage now right? Surely if these rules come in, then ALL houses will be affected, and the houses they are looking at will also come down to a 3x multiplier value? Surely it would be more beneficial for this group of wage earners to have a higher disposable income after the mortgage is paid? I don't see why you all want to pay more?!

lostinrates

chucky wrote: »

thank you LIR - it's been said a few times on this thread already.
however Graham is choosing not to accept that is the case or not reading the posts

Sometimes things need to be phrased differently, by someone not classed as an opponant to be expressed properly though. ;) Not a reflection poorly to any of the parties invloved here and Graham_Devon is perfectly entitled to disagree with the POV...many do.

When I first started in the forum I agreed with the multiple thingy too, more rigidly than now. And I still think its a good starting point for looking at affordablity, but not the be all and end all. Is that because its easier to justify things that suit oneself? Possibly. But I still hold a fifty percent drop in prices would suit be more than access to a huge mortgage.:o (both maybe similarly unlikely, who the dickens knows!)

ETA: this is not to say I now am a bull. I am neither bull nr bear, nor poacher turned game keeper. Nor that I like to run with hare and hunt with hounds. I am lostinrates, but foundinindividual outlook.

lostinrates

Graham_Devon wrote: »

How could you seriously administer a system such as this?

Unpopular and flawed, but maybe look at price breaks....multiples increased for bigger earners. Very unlikely under a labour govenment I would suggest.

Maybe look at age too...altghough probably outlawed now.

What's to stop me, wanting a house, ringing and saying "yes, I do not go out ever, I knit my own boxers out of used herbal tea bags and and I promise you, i will never ever replace my freezer before it packs up on a credit card sir".

Perhaps looking at spending patterns in the past and size of deposit.I'm sure someone clever than me, if given the task could come up with something more sensible than recent lending and less restrictive than a knee jerk rejection.


Everything comes back to the one thing, every time. If these people are doing so well with the money, and really don't spend a penny, then they will be able to save a bigger deposit, and do THEMSELVES what they aim to do....buy a more expensive place with the larger deposit. If they can do all this, why would they need a 5x mortgage? Why can't they save a bit more of alarger deposit?

I like to think this is what we have done. We have now a healthy six figure house deposit and some other assets. we could buy a house tomorrow and hop on a ladder. However, for many reasons this is not practical or desirable for us, nor is our prefered outcome unaffordable for us.

StevieJ

mbga9pgf wrote: »

:beer:

http://www.propertyweek.com/story.asp?sectioncode=297&storycode=3136243&c=1




Taking the bulls imaginary average wage of 36K (Yeah, right....)
plus the 5% deposit, prices WILL crash to at least 115,000 average... this is before the effects of any recession (depression) are factored in.

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

before we start to go on about the same stuff repeated THIS IS NEW!!!!!


Everyone dance along with bowie now...

http://www.youtube.com/watch?v=30AVhf-ZLwM

Is that 3 times joint i.e. 3 X 72k, 216k wow I can't see the govt saying to the female half that their salary doesn't count

lostinrates

piggeh wrote: »

The houses that these people are looking at are probably 4 or 5x their wage now right? Surely if these rules come in, then ALL houses will be affected, and the houses they are looking at will also come down to a 3x multiplier value? Surely it would be more beneficial for this group of wage earners to have a higher disposable income after the mortgage is paid? I don't see why you all want to pay more?!

I didn't see this but my reply to Chucky in the post below yours answers this I think?

Time2Go_25

piggeh wrote: »

The houses that these people are looking at are probably 4 or 5x their wage now right? Surely if these rules come in, then ALL houses will be affected, and the houses they are looking at will also come down to a 3x multiplier value? Surely it would be more beneficial for this group of wage earners to have a higher disposable income after the mortgage is paid? I don't see why you all want to pay more?!

I'm sure most people don't want to pay more than they need to, however a 3x rule is over restrictive, it needs to be down to affordability now and in the future.

I know you can never be certain of your job security, but when I bought my first house, I stretched myself to buy the "best" house I could manage and then had a crap couple of years until my salary caught up and we're down down to a 2x joint.

Graham_Devon

lostinrates wrote: »

Perhaps looking at spending patterns in the past and size of deposit.I'm sure someone clever than me, if given the task could come up with something more sensible than recent lending and less restrictive than a knee jerk rejection.

Practically impossible isnt it? Without looking through years of bank and credit card statements? Of course, if a lender looked through years of my statements before I bought a house, they would have probably said on your nelly, as I was out and about, withdrawing loads from cash machines for the pub each night as I had loads of free cash to burn.

So if they HAD looked at my spending patterns, I wouldn't have got a house. But because circumstances change, people change. My spending patterns changed.

Like I said, it's nice to think these things could be done, but they are just not practical. That don't mean I'm a marxist or a plonker. It's just pretty damn impossible to carry out what people are actually suggesting.

All it's doing is encouraging people to live on debt....again.

lostinrates

Graham_Devon wrote: »

Practically impossible isnt it? Without looking through years of bank and credit card statements? Of course, if a lender looked through years of my statements before I bought a house, they would have probably said on your nelly, as I was out and about, withdrawing loads from cash machines for the pub each night as I had loads of free cash to burn.

So if they HAD looked at my spending patterns, I wouldn't have got a house. But because circumstances change, people change. My spending patterns changed.

Like I said, it's nice to think these things could be done, but they are just not practical. That don't mean I'm a marxist or a plonker. It's just pretty damn impossible to carry out what people are actually suggesting.

But this is fine: use the mulitple as a starting point, and then only revert to the more cmplicated and obviously more expensive to applicant...methods for people wanting some thing 'not norm'. Expect to show a pattern of spend/earning for three years perhaps.

Some people don't change much. We don't. Thats a contributary for why climing an inane 'property ladder' isnt really ofany interest to us.

Thank you for a well reasoned responce though