Nationwide +1.3 (-6.2 YoY)

IveSeenTheLight

Graham_Devon wrote: »

It just made me think....how much wage inflation would we need to make houses in general affordable? Or...if stagnation took hold today, how long in real terms would it take for wages to catch up?

Would the already priced out for 10 years generation, be priced out for another ten years while wage inflation catches up?

There could be some serious problems on the horizon if people are 35-45 years old before taking on a 25 year mortgage.

Your are hitting the nail on the head here Graham.
The UK already has the highest Owner Occupiership in recorded history.
In context of Europe, I seem to recall the UK has a much higher percentage of OO than renters when compared to other countries.

Whether as a society you like it or not, it's possible that houses may never be available on a wider general available level than we have seen in recent years.

Unfortunately, it's possible that a sense of realism is needed and accept that either you are in a position to buy, can change your circumstances to buy or that you may never be able to afford to buy.

ad9898_3

mitchaa wrote: »

Watch those interest rates, stabilization may just give the BOE an excuse to start upping interest rates;)

Ironically, that's what I'm hoping for. Savings are in a fixed rate bond at 6.5%, if mortgage rates go up, savings are likely to follow, hopefully just as my bond ends.:D

Mortgage rates aren't relevant to me, I hope not to borrow anything, but if I do it will be a smallish amount that would have little effect even if rates were 15%, prudence and patience are the name of the game.

chucky

so let me get this right... the average Nationwide House price is £158,871 minus a 10% deposit = £142,983 so the average income for a homeowner is £47,661.

if we use a 25% deposit the average income is £39,717...

it's starting to tell a story now...

julieq

ad9898 wrote: »

Mortgage rates aren't relevant to me, I hope not to borrow anything, but if I do it will be a smallish amount that would have little effect even if rates were 15%, prudence and patience are the name of the game.

Prudence is a rich, ugly old maid courted by Incapacity (William Blake)

ad9898_3

mitchaa wrote: »

Ad, i agree.

This is only just 1 index, Halifax and LR need to duplicate to make it hold more water.

I disagree mitchaa, for these figures to hold water they have to be on a sound fundamental footing. Put it this way, if this were happening to the housing market when unemployment was reducing, taxes were reducing and IR's were high and reducing and lastly the government finances were in order and we had respectable levels of debt for investment, then I would be buying right now...... today, in fact I'd be on the phone to the EA as we speak, the simple fact is they aren't.

And until we see the real picture instead of a charade we won't really have any idea, the first whammy will be coming at the end of the year, at least 2.5%, and possibly upto 5% on everything you buy except food and childrens clothes, in the form of VAT, and that is only the beginning.

Graham_Devon

IveSeenTheLight wrote: »

Your are hitting the nail on the head here Graham.
The UK already has the highest Owner Occupiership in recorded history.
In context of Europe, I seem to recall the UK has a much higher percentage of OO than renters when compared to other countries.

Whether as a society you like it or not, it's possible that houses may never be available on a wider general available level than we have seen in recent years.

Unfortunately, it's possible that a sense of realism is needed and accept that either you are in a position to buy, can change your circumstances to buy or that you may never be able to afford to buy.

Something we may just agree on

I do think we have now entered a new era. This happened a while back when in general, more women started working, meaning more income was available, meaning house prices could rise.

Maybe this last decade and boom has now given the go ahead to a new era. And era where less of the population can afford to buy a home, BUT, an era where many many people have got very wealthy through recent HPI which has effectively paid off their mortgages and paid their pensions in one, meaning they are free to sell up and move around.

I'm loathe to describe this as the "haves" and "haves nots". But it appears to be panning out that way....where you have on one side of the coin, those ages 30 and below who have little chance in general and those aged above 30 who have secured wealth through HPI as they were able to buy a house at more affordable levels which allowed them to ride the HPI wave and gain further houses and further wealth.

So maybe all bears predictions and thoughts ARE wrong, maybe the last 5-8 years have seen a shift into a new era, one where loads are left behind with the possibility of never owning houses, and others are left with the prospect of enjoying the equity cushion and the benefits this has bought them in terms of further investments.

Maybe, just maybe, houses now, are affordable on a different level, to a new set of people, but impossible for their children.

I'm loathe to talk about fairness, as I don't believe that exists, and I will come across as a sandle wearing tofu munching fool. But I am a little saddended that for my generation, the glimmer of hope to be able to enjoy homes, the same was as our parents and elders did, is slowly but surely, flickering away, and acceptance of owning percentages and living on "mixed community" mini estates has to take place.

For me personally though, the biggest gripe is something I don't talk about often. People on benefits are better off than most people of my working age, and have a bigger house, with bigger rooms etc far quicker than workers raising families of my age can even hope for.

I could accept a shift in era's, and could accept that my generation are destined to rabbit hutches, flats and massive payments. But what I cannot accept is my generation are also expected to pay for the collosal debts this is being held up on. I just cannot get my head around how any of this artificial stimulus can ever be paid back, let alone continued.

IveSeenTheLight

Graham_Devon wrote: »

Maybe, just maybe, houses now, are affordable on a different level, to a new set of people, but impossible for their children.

House will always be affordable to a percentage of the population, so a percentage of the children will be able to afford in the future

It's a market like anything else and properties will be bought and sold forever.
Supply and Demand is the key and in some ways will help to control the market.
Too much supply, prices will drop, to much demand prices will rise.

Graham_Devon wrote: »

For me personally though, the biggest gripe is something I don't talk about often. People on benefits are better off than most people of my working age, and have a bigger house, with bigger rooms etc far quicker than workers raising families of my age can even hope for.

This truly is wrong with our society.
While I understand the community spirit in ensuring that we all have a safe place to live, it really should be an incentive for people to go out and work to better themselves.
It should not be a case of having children and being supported by the state.

Graham_Devon

IveSeenTheLight wrote: »

This truly is wrong with our society.
While I understand the community spirit in ensuring that we all have a safe place to live, it really should be an incentive for people to go out and work to better themselves.
It should not be a case of having children and being supported by the state.

I don't see many other options at the moment though.

A bigger majority of my generation cannot afford a home, than those who can. So what do they do when wanting a family? Never have one? Struggle for another 10 years to save each month while paying huge rents?

Or have that baby and get state support.

There is no middle road really. As I said on another thread, wages simply will not support living at the moment.

Seems you either need a very very good wage, or no wage to have the same standard of living. Anything inbetween that and it's extremely difficult to get anywhere at the moment.

ruggedtoast

The UK is massively in debt, suffering from soaring unemployment, and has the albatross of a moribund banking system hung round its neck.

Every day there are more people out of work, more people in arrears with their debts, and the level of government liability spirals further out of control.

There is certainly a lot of things to worry about, I'm not sure that the prospect of untrammelled real world house price inflation is one of them however.

chucky

http://newsimg.bbc.co.uk/media/images/46130000/gif/_46130953_house_prices_30_jul09.gif