We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

Debate House Prices


In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

The Affordability scam explained

15791011

Comments

  • chucky
    chucky Posts: 15,170 Forumite
    10,000 Posts Combo Breaker
    edited 23 August 2009 at 6:38PM
    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...;)
    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
    kriss_boy Posts: 2,131 Forumite
    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
    mewbie_2 Posts: 6,058 Forumite
    1,000 Posts Combo Breaker
    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.
  • 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
    nearlynew Posts: 3,800 Forumite

    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.
    "The problem with quotes on the internet is that you never know whether they are genuine or not" -
    Albert Einstein
  • chucky
    chucky Posts: 15,170 Forumite
    10,000 Posts Combo Breaker
    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
  • 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
    kabayiri Posts: 22,740 Forumite
    Part of the Furniture 10,000 Posts
    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
    chucky Posts: 15,170 Forumite
    10,000 Posts Combo Breaker
    Were you a copper then chucky?

    no i wasn't
    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.
    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
    mewbie_2 Posts: 6,058 Forumite
    1,000 Posts Combo Breaker
    Maybe the new affordability is based on Mr Brown, his son, plus grandchildren all living in the same one bed studio flat.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 352.1K Banking & Borrowing
  • 253.5K Reduce Debt & Boost Income
  • 454.2K Spending & Discounts
  • 245.1K Work, Benefits & Business
  • 600.7K Mortgages, Homes & Bills
  • 177.4K Life & Family
  • 258.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.