The Affordability scam explained

chucky

Graham_Devon wrote: »

True actually, right to buy would have had a big impact on the figures.

Can you therefore tell hamish to stop spouting "fact" all the time when he talks about affordability!

hamish is a law to himself...

to be fair to him he does have make very good and interesting points - they are very selective however and some people would call them cherry picked...;)

Graham_Devon wrote: »

It's nothing to do with affordability, it's to do with schemes providing access and ever higher lending providing access.

he sort of does have a point - because it is affordable to buy in many areas in a two income household. when i say affordable, you can buy on a 3.5 income with a 15%/20% deposit and the debt can be serviced. the size of the deposit is the bit that we would struggle to agree on here.

however, what hamish doesn't say is that for a single FTB - it's extremely hard to buy on anything less than 5 times average salary.
he's making a general statement about affordability. houses are not affordable to all.

kriss_boy

It is strange hearing guys at work, our roadworkers etc saying how theyve got a matter of years left to pay and thats them. Guys some of which are very early 40s.

Im 26 and I cant see how Ill have mine paid off that young, and I earn more than them.

mewbie_2

kriss_boy wrote: »

It is strange hearing guys at work, our roadworkers etc saying how theyve got a matter of years left to pay and thats them. Guys some of which are very early 40s.

Im 26 and I cant see how Ill have mine paid off that young, and I earn more than them.

Now that's the sort of commonsense fact that blows all this affordability stuff out the window. Mr. Brown could buy a house 20 years ago on his wage as a widget maker. Mr. Browns son cannot. A price correction is needed to return to normality.

CluelessJock

mewbie wrote: »

Now that's the sort of commonsense fact that blows all this affordability stuff out the window. Mr. Brown could buy a house 20 years ago on his wage as a widget maker. Mr. Browns son cannot. A price correction is needed to return to normality.

It's even simpler than that: to use Hamish's FTB multiple of 3 and say a salary of £20K Mr Widget makers son earns he has to find a property at around £75K, if you allow for a 20% deposit. There aint too many decent properties at that price in my area!

The other point Hamish seems to overlook (as far as I can see) is that for most of his early years he would have the benefit of MIRAS, not that it halfed mortgage rates, but it helped the afforability factor pre 2000, as did the stamp duty levels (before recent increases).

Anyone remember MIRAS?

nearlynew

CluelessJock wrote: »

Anyone remember MIRAS?

Yes. I do.

And back then the announcement of its planned removal was the last throw of the HPI dice to get people to pile into property.

Months later, the whole thing crashed.

chucky

CluelessJock wrote: »

It's even simpler than that: to use Hamish's FTB multiple of 3 and say a salary of £20K Mr Widget makers son earns he has to find a property at around £75K, if you allow for a 20% deposit. There aint too many decent properties at that price in my area!

The other point Hamish seems to overlook (as far as I can see) is that for most of his early years he would have the benefit of MIRAS, not that it halfed mortgage rates, but it helped the afforability factor pre 2000, as did the stamp duty levels (before recent increases).

Anyone remember MIRAS?

you're 100% right when looking at a single salary.
how does this apply with two average salary people buying a house?

another point that Hamish has sort of got a point and hasn't realised is that average salary vs average mortgage is cheaper now than it would have been in the 1980s or even early 1990s.

and yes i remember Miras - it was a nice touch...
i also remember a mortgage subisidy my employer gave me too - another nice touch

CluelessJock

chucky wrote:

i also remember a mortgage subisidy my employer gave me too - another nice touch

Were you a copper then chucky?

Not quite sure what difference you refer to between one and two salaries now and in the 70's?

I think for direct affordability comparisons you have to compare like with like, I don't think you can compare afforability on one salary in the 70/80's with two now. Indeed if we are to believe those in the know there are more single mortgage holders now than in the past.

kabayiri

HAMISH_MCTAVISH wrote: »

Theres a lot of people trying to revise history around here...

Rubbish !

Exam season is over, no more history revision for now

But, they could be trying to rewrite history?

chucky

CluelessJock wrote: »

Were you a copper then chucky?

no i wasn't

CluelessJock wrote: »

Not quite sure what difference you refer to between one and two salaries now and in the 70's?

i was trying to ask to compare what an average mortgage payment would have been in the 1980s or early 1990s to now.

CluelessJock wrote: »

I think for direct affordability comparisons you have to compare like with like, I don't think you can compare afforability on one salary in the 70/80's with two now. Indeed if we are to believe those in the know there are more single mortgage holders now than in the past.

no i meant now and was asking was how the local affordability you mentioned compared when you have two salaries not just one.

mewbie_2

Maybe the new affordability is based on Mr Brown, his son, plus grandchildren all living in the same one bed studio flat.