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Debate House Prices
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More houses needed, says Government adviser
Comments
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I don't agree at all. Your simplistic spreadsheet doesn't account for the increase in one or two person units over the last decade. You cannot cite "affordability" based on the fact that people can now afford to buy a one bedroom flat for what they used to be able to buy a three bedroom house for in terms of "affordability"oh ok - so you've agreed that affordability is ok and it's due lack of credit that people that can't buy property... they are two different things...
Well add in the number of people that have gone part time and the number of people carefully removed from the figures such as students and those not claiming but out of work and we are way over that figureunemployment is an issue. not sure about shed jobs being shed left, right and centre. unemployment is currently at around 7.5% - that would mean a 92.5% employment rate of people that can work. apparently you need 10% plus unemployment to start to have a serious impact on house prices.
That's right it also affects people wanting to BUY houses, which they can't afford, if they haven't got a job, or credit. However, if they have both of those they might be able to get a poxy 1 bed in a grotty area of town. Hurrah for demand!also unemployment isn't exclusive to just homeowners?0 -
it's not my simplistic spreadsheet - it's produced by the Halifax. it's actually quite interesting how they produce it.I don't agree at all. Your simplistic spreadsheet doesn't account for the increase in one or two person units over the last decade. You cannot cite "affordability" based on the fact that people can now afford to buy a one bedroom flat for what they use to be able to buy a three bedroom house for.
you're point about the increase in one or two person units is due to an extra rung being put into the housing ladder. unfortunate but this has changed over the last generation.
not everyone can buy a house - the average salary for a home owner will be higher than the average uk salary. unfortunate but fact.
do you know how many people this is? i'd be intrigued to know how many these are.Well add in the number of people that have gone part time and the number of people carefully removed from the figures such as students and we are way over that figure
students or part timers can't buy a house, that would be silly - we should take these out of this if you want to see the impact of unemployment on house prices. otherwise you would be distorting the figures.That's right it also affects people wanting to BUY houses, which they can't afford, if they haven't got a job, or credit. However, if they have both of those they might be able to get a poxy 1 bed in a grotty area of town. Hurrah for demand!
again not every one is able to afford to buy a house. the last 20 years have changed the make up of the housing ladder, to live in a city the first rung is now a one bed flat instead of the traditional 2 up 2 down. this was never there before. either people accept it or rent - this cannot be changed in 18 months of a HPC.0 -
Few people can afford to buy a house, but I'm glad we're getting to some agreement regarding "demand"it's not my simplistic spreadsheet - it's produced by the Halifax. it's actually quite interesting how they produce it.
you're point about the increase in one or two person units is due to an extra rung being put into the housing ladder. unfortunate but this has changed over the last generation.
not everyone can buy a house - the average salary for a home owner will be higher than the average uk salary. unfortunate but fact.
So would I, however, the Government likes to skew things, which is why when you quote unemployment stats they're guaranteed to be in favour of what the Government wants us to believedo you know how many people this is? i'd be intrigued to know how many these are.
Many have done so in recent years. But yes, many can't afford one nowstudents can't buy a house - we should take these out of this if you want to see the impact of unemployment on house prices. they would distort the figures. Again, I'm glad we're reaching convergence in terms of the demand that's been flushed out of the system.
Oh but people ARE renting something that fits their requirements because of the lack of credit to be able to afford something that fits their requirements.again not every one is able to afford to buy a house. the last 20 years have changed the make up of the housing ladder, to live in a city the first rung is now a one bed flat instead of the traditional 2 up 2 down . this was never there before. either people accept it or rent - this cannot be changed in 18 months of a HPC.
This is why there is a lack of demand.0 -
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When my dad bought his first house, aged 40, it cost him 3x his salary alone.
To buy that house now he'd need to be earning £100k/year for the same to be true.
In reality, if he were still working at that level today he'd be on about £30k.0 -
Few people can afford to buy a house, but I'm glad we're getting to some agreement regarding "demand"
So would I, however, the Government likes to skew things, which is why when you quote unemployment stats they're guaranteed to be in favour of what the Government wants us to believe
Many have done so in recent years. But yes, many can't afford one now Again, I'm glad we're reaching convergence in terms of the demand that's been flushed out of the system.
i've never disputed the demand issue just the affordability - whilst lending volumes are low and lending criteria is strict amongst the question marks about unemployment demand may be low. unless these worsen dramatically i can't see them affecting house prices downwards.
i believe that affordability is not the biggest issue here - that's why i quoted the Halifax that is obviously an average and is generalised to a degree but does give you an idea where we are.Oh but people ARE renting.
This is why there is a lack of demand.
i agree - and that's why maybe investing in property may be a good idea if you can get property at a good discount from peak prices and a low mortgage rate as there will be a good rental demand.The idea is to provide thousands of homes for the private mid and lower level rental markets, which are currently dominated by amateur landlords and buy-to-let investors.
Andrew Appleyard, head of UK specialist property funds for Aviva Investors, said: "We are looking to do something here that has not been done before. We feel the economics are right given where the market is heading. There is appetite for renting that hasn't been there before."
http://www.ftadviser.com/FTAdviser/Investments/Products/InvestmentTrusts/News/article/20090727/76f182c0-7a90-11de-a313-0015171400aa/Aviva-to-launch-1bn-fund-for-rental-market.jsp0 -
PasturesNew wrote: »When my dad bought his first house, aged 40, it cost him 3x his salary alone.
To buy that house now he'd need to be earning £100k/year for the same to be true.
In reality, if he were still working at that level today he'd be on about £30k.
as we know this is due to lots of different factors amongst being able to borrow more
just as a a comparison - i would bet that the interest on the mortgage wouldn't be that different at both points in time.0 -
i agree - and that's why maybe investing in property may be a good idea if you can get property at a good discount from peak prices and a low mortgage rate as there will be a good rental demand.
Well, I can get property at a discount without a mortgage. Would I touch an illiquid deprecating asset which comes with a ton of responsibility in terms of upkeep, management and looking after tenants? Not on your nelly. I'd rather take my guaranteed 3% hassle free or buy land.
As for the article you've just cited
A good reason why being an amateur landlord is going to become a whole lot more difficult - we should see a lot of BTL rush for the exit which WILL bring the price of property down.0 -
Well, I can get property at a discount without a mortgage. Would I touch an illiquid deprecating asset which comes with a ton of responsibility in terms of upkeep, management and looking after tenants? Not on your nelly. I'd rather take my guaranteed 3% hassle free or buy land.
if i was Hamish i would be quoting you buying in Feb 2009 it's an appreciating asset.
you could then say buying in August 2007 to today - then yes it;s depreciating.
so i'm not sure about the depreciating asset comment - it all depends on how what period of time that you use.A good reason why being an amateur landlord is going to become a whole lot more difficult - we should see a lot of BTL rush for the exit which WILL bring the price of property down.
Very true but not sure about rush to the exit they will sell over time and if people like Aviva start entering the market and buying that means increased demand so that slightly contradicts your demand theory.0 -
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