If single FTB could afford 2-3 bed houses would it cause HPI.

mbga9pgf

No

Disposable income for higher earners will get nailed over the next few years. All this government debt will need to be paid, or at least, the budget will need balancing.

The boom in the 70s was nothing compared to the one we just had.

Really2

Yes

mbga9pgf wrote: »

Disposable income for higher earners will get nailed over the next few years. All this government debt will need to be paid, or at least, the budget will need balancing.

The boom in the 70s was nothing compared to the one we just had.

I agree, i am just pointing out HPI is not only down to mulltiples.

Graham_Devon

No

Really2 wrote: »

I agree, i am just pointing out HPI is not only down to mulltiples.

I'd say multiples were 90% of the factor though.

House prices get higher, multiples get higher, which allows prices to get higher and so on.

Really2

Yes

Graham_Devon wrote: »

I'd say multiples were 90% of the factor though.

House prices get higher, multiples get higher, which allows prices to get higher and so on.

So what happened in the pevious crashes.

Graham_Devon

No

Really2 wrote: »

So what happened in the pevious crashes.

Prices fell

Like has already been said, the previous crashes did not have such a height to fall.

IveSeenTheLight

Yes

For the 11 who do not think that "If single FTB could afford 2-3 bed houses would it cause HPI?", can I ask what a couple getting together with twice the disposable income would be able to afford?

Andy L, Graham_Devon, TD5, Yakubu22, brit1234, chewmylegoff, dopester, drc, mbga9pgf, neas, purch

Or do you think they would only buy the one 2-3 bed property as a FTB and still be able to have new cars, holidays, LED's etc etc etc?

Graham_Devon

No

IveSeenTheLight wrote: »

For the 11 who do not think that "If single FTB could afford 2-3 bed houses would it cause HPI?", can I ask what a couple getting together with twice the disposable income would be able to afford?

Andy L, Graham_Devon, TD5, Yakubu22, brit1234, chewmylegoff, dopester, drc, mbga9pgf, neas, purch

Or do you think they would only buy the one 2-3 bed property as a FTB and still be able to have new cars, holidays, LED's etc etc etc?

Well, my reasoning is this....as I have said many times.

Not everyone wants to pile every last penny into their home. I wouldn't, and as I have explained before, haven't. So I'm the classic case of single buyer, who hasn't spent his max.

Families should also be going on holiday, enjoying days out with each other.

So what would happen? I reckon, and it's just my personal thoughts, we'd see a lot of people buying a home SUITABLE for them. Not the max they can afford. Sure, some would, those who love property programmes etc. But the majority would buy the house which suits their needs.

With the rest of their money, they would be having a nice time. Saving for their children. Looking after parents etc. You know, life stuff.

I honestly don't know that many people who go out and say "well I don't need that, but I will buy it". Again, some did, but based on credit, which is a completely different thing.

In any case. Why would a buyer, having to save a deposit, sit there saving even more of a deposit to buy a bigger house they dont need, when they could just buy a house in a stable market and get on with their lives?

Thrugelmir

Really2 wrote: »

I agree it would set a limit for a minimum wage for ownership.
I don't think personaly HPI can be put done just to a multiple. Many people can aford higher multiples as disposable incomes are higher than the past.

i have no Idea if they will bring in a 3.5X multiple. But it is stil fairly irrelevent to the question as we had a housing boom in the 70's

The requirement to save or otherwise raise the money for a sizable deposit will cap HPI to an extent.

With regards to wage multiples. Lending will be based on the total amount of money to lend not the ability of borrowers to borrow.

Mutual building societies. Yes there are some left. Do not use wholesale money markets. Relying on depositors for funding. Therefore a wage multiple is a way of rationing out available money. Some building societies are reverting back to lending money to buyers in their local area. As they are owned by and for the benefit of their members they in a way provide a community service.

The other lenders, ie commercial banks have no need to advance large sums to individual buyers. As with a limitation of funds to advance most likely wish to spread the risk by lending to more buyers with smaller advances.

If nothing else rising interest rates will cap the amount people are willing to borrow.

chucky

Graham_Devon wrote: »

Prices fell

Like has already been said, the previous crashes did not have such a height to fall.

they fell the same - just not as quickly

chewmylegoff

No

IveSeenTheLight wrote: »

For the 11 who do not think that "If single FTB could afford 2-3 bed houses would it cause HPI?", can I ask what a couple getting together with twice the disposable income would be able to afford?

Andy L, Graham_Devon, TD5, Yakubu22, brit1234, chewmylegoff, dopester, drc, mbga9pgf, neas, purch

Or do you think they would only buy the one 2-3 bed property as a FTB and still be able to have new cars, holidays, LED's etc etc etc?

2-3 bed property is a pretty wide description - it ranges from covers pokey little 2 bed flats with one double and one single and an open plan lounge and kitchen, to 3 double bedroom detached properties with 2 bathrooms, two reception rooms, a separate kitchen and a garden.

so my answer to the question is that a couple would probably buy something better within that bracket, that a single person could not afford.