Housing at its most AFFORDABLE level for more then six years

JayScottGreenspan

Dan: wrote: »

Buying a house as a FTBer is not going to be easy, and it never has been.

There have been easier times, though.

The Halifax's mortgage payments to earnings index moves about a fair bit, and dropped a lot after the 79-82 and 89-93 recessions.

If interest rates stay low, house prices have another 10-15% to fall IMO.

mbga9pgf

I have an explanation for this if anyone is interested...

mbga9pgf

Clue is FTB Salaries used by ONS != solely FTB salaries for real...

the_ash_and_the_oak

Dan: wrote: »

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

Not really sure what this is about imo. Unless you mean every single one should re-train not sure how they would be able to support current prices in significant enough numbers

Graham_Devon

Dan: wrote: »

So, the average house price to average earnings ratio has came down from almost 6 to just over 4.

Almost back to some peoples expectations of 3.5x

Not having a pop here. But how can a 20% fall mean that 6 has turned to 4? Or veven, just over?

If at peak they were 6x average earnings, and they have fallen 20%, they are now 4.8x average earnings.

To get from 6 to 4, thats a fall of roughly 32%.

Plus, the average earnings is not quite right. I know you will have probably calculated it based on 2 incomes, and not one. But in terms of what you are saying, that does not work.

As 27k was the average earnings in 2008 roughly, if we take that as the basic figure for 2007, the average house price was actually around 7.2x average earnings.

So, the 6x to 4x figure makes no sense.

Neither does the 6x figure.

And thats me, confused. Feel I'm missing how the calculation has actually been made here.

Edit - jeez, theres 3 pages, should have read past post 2 before i replied!!

Edit again - Oh I see, FTB home. What exactly is a FTB home?! Sorry, desperado journalism. Love how all of a sudden the average first time buyer has higher than average wages, to buy the lower than average house. Brilliant, the economy is fixed!!

mbga9pgf

I contacted the ONS about this topic, 6 months ago when looking into dubious salaries.

They confirmed what I believed, that local communities and government confirm FTB salaries from recent sales.

Unfortunately for FTBs, this means (at that time) 'around' 20% (they couldnt confirm exact figures) of those purchasing as 'First time buyers' are none of the sort; unbelievably, FTBs are also classed as those who have sold to rent for something in the region of 6 months, in other words, sell to rent for 6 months, next house purchase you are classed as a FTB.

Ask yourself this; at a time like this, ballooning unemployment, lots of young types with lots of student and credit card debt outstanding, who really has the required deposit to buy a house? I tell you who. Those STRs that have been re-classed as First time buyers with whacking great deposits. That is why I believe the affordability index is talking complete and utter @r$e.

The average salary, I guarantee, has been pushed through the roof due to statistics. Check this.

http://www.lloydsbankinggroup.com/media/excel/24_04_09historicdata.xls

According to Halifax, despite the worst economic contraction since WW2 and despite reports that wages are falling between 5-10% nationally as an average, Average salaries mysteriously are ignoring the economic carnage and still following their march up to infinity.

Graham_Devon

mbga9pgf wrote: »

I contacted the ONS about this topic, 6 months ago when looking into dubious salaries.

They confirmed what I believed, that local communities and government confirm FTB salaries from recent sales.

Unfortunately for FTBs, this means around 20% of those purchasing as 'First time buyers' are none of the sort; unbelievably, FTBs are also classed as those who have sold to rent for something in the region of 6 months, in other words, sell to rent for 6 months, next house purchase you are classed as a FTB.

Ask yourself this; at a time like this, ballooning unemployment, lots of young types with lots of student and credit card debt outstanding, who really has the required deposit to buy a house? I tell you who. Those STRs that have been re-classed as First time buyers with whacking great deposits. That is why I believe the affordability index is talking complete and utter @r$e.

The average salary, I guarantee, has been pushed through the roof due to statistics.

Ahh, makes sense now, just twisted figures to suit. Thanks!

System

I agree, I mean who doesn't know hundreds of people who have sold to rent and who are now looking to buy again.

the_ash_and_the_oak

Joeskeppi wrote: »

I agree, I mean who doesn't know hundreds of people who have sold to rent and who are now looking to buy again.

don't really know hundreds of people tbh but of the few that have done that who I know I'd say none. Purely anecdotal tho tbf

mbga9pgf

the_ash_and_the_oak wrote: »

don't really know hundreds of people tbh but of the few that have done that who I know I'd say none. Purely anecdotal tho tbf

The ONS stated 20% was their best guess.

1 in 5 isnt insignificant when you consider deposit sizes and salaries IMO.