Bottom Called

mewbie_2

adr0ck wrote: »

is that link or lick?

tbh adrock I'm out of my depth here. I can't remember if you are a bull or a bear, and whether I should even be talking to you. I don't normally use the @rse word, it's Cleaver who set me up for a bottom joke and I tried to be cleverer than him, and now I just look like a fool. A reputation trashed in a couple of careless posts. And after all the effort I've put in over the last few months.

Back to topic: Bottom, my @rse.

MrMuttley

OK given that this guy seems to be the sage of housing according to a couple of you I will come back to this thread in three months time (probably) and post either "OMG the dude was right" or "Ner Ner Not right this time matey"

I still think the latter is more likely.

edgex

guess theyre getting even more desperate to shore up the daft prices on new-builds.

Median wage in UK
~£18k
3x mortgage = £54k
@90% = £60k property price

so i would expect a single person to be able to get a 1-bed flat in an ok'ish area, probably in a city, for that £60k

a couple, I would be looking at ~£90k for a small 2-bed

In Birmingham, for those sort of prices, thats 20% off current asking price.


When things are falling, they usually go past their 'normal' point, & then bounce back up. Quite a bit further to go still.

MrMuttley

edgex wrote: »

guess theyre getting even more desperate to shore up the daft prices on new-builds.

Median wage in UK
~£18k
3x mortgage = £54k
@90% = £60k property price

so i would expect a single person to be able to get a 1-bed flat in an ok'ish area, probably in a city, for that £60k

a couple, I would be looking at ~£90k for a small 2-bed

In Birmingham, for those sort of prices, thats 20% off current asking price.


When things are falling, they usually go past their 'normal' point, & then bounce back up. Quite a bit further to go still.

Yep thats the kind of thinking that led me to stop looking to buy about 5 years ago. I admit i was way too early in thinking that the housing market would fall but the maths remains the same no matter.

Take a minimum wage of £11k x 2 for a couple and thats £22k x 3 is £66 and 10% deposit is £73k

£73k where I live in Exeter gets you a reasonable studio flat or a park home or a retirement flat. There are a couple of one beds around but you either dont want to live in those flats because they are rubbish or they are slightly less rubbish in really poor areas.

I cant see why any couple would buy a studio rather than rent a 1 bed.

Generali

We will be in sight of a bottom to the housing market when:

- unemployment stops increasing
- GDP stops falling
and
- mortgage lending starts rising at 5%+ pa

All three conditions must be met for a bottom to be reached. Even then the actual bottom on Haliwide would probably come 3-4 months later and on LR 6-8 months later.

But...........................................

There's the pensions thing. If people need to sell their houses to provide the pension that's been stuffed up by the past few years of bad economy, that could prolong the bottom by up to 10 or 20 years.

I guess most people subscribe to the former pov when they think about it - people need to feel secure about the economy and have money to buy if house prices are going to rise.

I'm apocalyptic on pensions. I don't see many people working on defined benefit pension plans now receiving what's been promised in full.

kennyboy66_2

Generali wrote: »

We will be in sight of a bottom to the housing market when:

- unemployment stops increasing
- GDP stops falling
and
- mortgage lending starts rising at 5%+ pa

All three conditions must be met for a bottom to be reached. Even then the actual bottom on Haliwide would probably come 3-4 months later and on LR 6-8 months later.

Unemployment will stop rising several years after GDP stops falling, so I personally would not be looking at GDP growth to have much immediate impact on house prices. What people should realise is that we will bump along a "bottom" give or take 5% for several years.

Generali wrote: »

But...........................................

There's the pensions thing. If people need to sell their houses to provide the pension that's been stuffed up by the past few years of bad economy, that could prolong the bottom by up to 10 or 20 years.

I guess most people subscribe to the former pov when they think about it - people need to feel secure about the economy and have money to buy if house prices are going to rise.

I'm apocalyptic on pensions. I don't see many people working on defined benefit pension plans now receiving what's been promised in full.

While I am hardly sanguine on defined benefit pensions and Govt pensions, I don't think that we will see massive effect from people selling to provide a pension for themselves. People tend to trade down from family homes anyway post retirement - the decision is usually made from a health & house maintenance POV.

People with money purchase pensions may also be in a bind. If you were aged between 45-50 in 1999 and had a pot of £100k then, you were probably fairly optimistic about your retirement. They are now 55-60 and there pot even after chipping in over the last 10 years is probably not significantly higher.
In normal circumstance they would be moving out of equities into Gilts to protect themselves at just about the worse time imaginable.

The only real answer is for people to bite the bullet and work a bit longer.

Someone (male) who is 64 and earning £20k and has say a private pension worth £4k per year at 65 is not massively worse off if they can get a part-time job paying say £5k per year. (state pension plus private pension plus part time job plus no national insurance payments).

Generali

kennyboy66 wrote: »

While I am hardly sanguine on defined benefit pensions and Govt pensions, I don't think that we will see massive effect from people selling to provide a pension for themselves. People tend to trade down from family homes anyway post retirement - the decision is usually made from a health & house maintenance POV.

My experience is that they don't trade down on retirement right now. They hold on to the family home so they can have the grandkids over to stay and all that good stuff.

They trade down when it becomes necessary because of ailing health, say in the early-mid 70s.

I think people will try to trade down because of financial necessity in their mid-60s in the near future. Maybe even earlier than that because it's hard to get a new job if you're in your 50s.

edgex

Id based my figures on median wage, not the 'average' so its more accurate. The £24k avg wage is just plain daft.

Its not just the purchase price people have got to look at, but also service charges, council tax, utility bills etc


Those that bought 'retirement apartments' are going to be the ones with the shock
paying house prices for 1-bed flats, with ridiculous service charges, & a very limited market to sell it into when they have to move out.

adr0ck

kennyboy66 wrote: »

What people should realise is that we will bump along a "bottom" give or take 5% for several years.

thanks kenny

its good to see someone actually reading what this post is about

adr0ck

MrMuttley wrote: »

OK given that this guy seems to be the sage of housing according to a couple of you I will come back to this thread in three months time (probably) and post either "OMG the dude was right" or "Ner Ner Not right this time matey"

I still think the latter is more likely.

you hav'nt read the original post then