Housing at its most AFFORDABLE level for more then six years

kennyboy66_2

ad9898 wrote: »

I haven't had chance to read it yet, but if this 'affordability' has anything to do with the current interest level, then I would say it's largely irrelevant. It is not possible to take a 25 year loan and base it on today's artificial interest rates, unless of course you get yourself a 25 year fix, and I bet a hefty sum that if such deals exist in the current climate, they will be way over 6%, with punitive charges if you wish to pull out of it.

If the article has nothing to do with the current interest rates, then forgive me Dan.

This affordability index is house price divided by average earnings.

However - this index was below 3.5 for the period 1993 - 2001.

The average since 1982 is 4.01, hovever if we looked at the period from 1983 - 2001 Q4 the average would only be 3.63.

Why would we exclude the last 7 years ? - well the down cycle still has some way to run.

I'm no doomster but a ratio of somewhere between 3.5 - 4.0 feels about right.

ukcarper

Surely you can't just take the average when prices were low you must take the average over a complete cycle.

FoxtonsRIP

Dan: wrote: »

Home affordability for potential first-time buyers (FTBs) has reached its lowest level in more than six years.

Please stop it Desperate Dan. You're truly the King of Rampers :T

drc

Dan: wrote: »

Home affordability for potential first-time buyers (FTBs) has reached its lowest level in more than six years.

According to the latest Halifax FTB Affordability Review, the house price to earnings ratio - a key affordability measure - is lower now than it has been for more than six years.

Furthermore, the house price to average earnings ratio has declined from a peak of 5.84 in July 2007 to an estimated 4.34 in March this year - a fall of 26 per cent.

http://www.ftadviser.com/FTAdviser/Mortgages/Products/FirstTimeBuyers/News/article/20090505/02d45522-3952-11de-9d95-00144f2af8e8/Housing-at-its-most-affordable-level-for-more-than-six-years.jsp

Not in London it hasn't :rolleyes: Still about 10 x income.

davilown

Dan: wrote: »

Maybe the poor b@stards should think about re-training in something, instead of praying for house price falls?

Oh come on!

I earn 35k, meaning I can get a mortgage of 122,500. with a 10% deposit
average wage in UK can get 87,500
- house prices have to come down.

BTW, I have an MSc and BSc and earn well abve the national average.

Stop spouting rubbish just for once Dan.

Mr_Mumble

Dan: wrote: »

Home affordability for potential first-time buyers (FTBs) has reached its lowest level in more than six years.

Surely that should be highest level?

chucky

davilown wrote: »

Oh come on!

I earn 35k, meaning I can get a mortgage of 122,500. with a 10% deposit
average wage in UK can get 87,500
- house prices have to come down.

BTW, I have an MSc and BSc and earn well abve the national average.

Stop spouting rubbish just for once Dan.

well done on the degree and the masters.

house prices in certain areas do need to come down but what has average wages and average house prices go to do with buying a house? is that what the average person buys?

FoxtonsRIP

davilown wrote: »

BTW, I have an MSc and BSc and earn well abve the national average.

Stop spouting rubbish just for once Dan.

Dan has a GCSE in woodwork so sorry Buddy you lose.

abaxas

"Ferarri affordability for potential first-time buyers (FTBs) has reached its lowest level in more than six years."

etc etc

ukcarper

davilown wrote: »

Oh come on!

I earn 35k, meaning I can get a mortgage of 122,500. with a 10% deposit
average wage in UK can get 87,500
- house prices have to come down.

BTW, I have an MSc and BSc and earn well abve the national average.

Stop spouting rubbish just for once Dan.

A FTB doesn’t normally buy an average house. With a reasonable deposit they’re not far of a two-bed terrace.