Lack of supply pushing up prices

the_ash_and_the_oak

chucky wrote: »

this is waht the bearish posters on here seem to struggle to understand and are hoping for. historically houses were bought on single salaries - they expect a return to this. it's not going to happen.

times have changed. property is/was usually being bought with two incomes thus pushing up prices and demand.

the surge in new build one bed room flats is that additional rung put into the housing ladder for those buying on single incomes

This will be interesting too - whether this is a permanent change or not (flats presumably being bought at single income). Given that flats are lived in for a much shorter period overall than houses - and in many areas rent is cheaper than mortgage interest - I'm not sold on the idea of flat-buying at all (unless there is major HPI in near future - which I can't really see)

If owner-occupancy stats do decline in the future it may be in flats where this is most marked imo

Really2

Sir_Humphrey wrote: »

A lot of bulls seem to think that, but they are hopelessly wrong.

Cue tiresome argument about median and means.

http://www.independent.co.uk/news/uk/home-news/acircpound58980--the-average-salary-for-workers-in-the-city-602963.html

Workers in the City of London earn an average of £971 a week (£58,980 PA), up nine per cent on last year and £600 more than the average wage in Cornwall and Devon, figures released yesterday showed.

Working in the city of London 2002. (that was a simple search)

Across London the figure is £34,762

2002 again, whole area of London.

the_ash_and_the_oak

Its also interesting about the ave salary. There is often confusion with people using "average salary" or "average salary of a potential homebuyer" interchangeably. While they are far from being the same thing, as owner-occupancy rates have increased these figures get closer together imo

chucky

Out,_Vile_Jelly wrote: »

Out of interest, do you think singletons should resign themselves to never being able to buy? Actually I think I spy a niche in the market- an online dating site for those wanting to pool resources to obtain a mortgage. No need to upload photos or pretend to be cool or funny- just state your finances and preferred postcode.

you've asked me that before and my answer was No...

Out,_Vile_Jelly wrote: »

And would you seriously consider a 1 bed newbuild flat a sensible purchase?

and a 1 bed new build flat a sensible purchase - it will always depend on your circumstances right?

penguine

chucky wrote: »

this is waht the bearish posters on here seem to struggle to understand and are hoping for. historically houses were bought on single salaries - they expect a return to this. it's not going to happen.

times have changed. property is/was usually being bought with two incomes thus pushing up prices and demand.

Problem is, once that two-income couple have kids and have to start paying for childcare in order to carry on earning two incomes it becomes more difficult to afford to pay for that house that they could only buy if they have two incomes in the first place.

We went into Nationwide a few years ago to find out how much we could borrow. My OH was on a good income, I was on a smallish part-time income, plus we had nursery fees for the 3 days per week I was working. They told us we could borrow £180k. Even though we were already home-owners with a sizeable amount of equity in our flat (due to having bought pre-boom) this was not enough to enable us to buy a cramped 3-bed house in need of a lot of work as these were all selling at close to £300k. Really seriously depressing.

And if I'd gone back to work full-time it wouldn't have made any difference as our nursery fees would have been higher and the Nationwide was taking them into account.

I don't think that mortgages based on two income households are necessarily here to stay. I think they're one of the things that fueled the boom and if a lot of those two-income households end up being unable to make their mortgage payments as unemployment rises I think banks may well reconsider their lending policies.

Bonia77

Conrad wrote: »

So that couple I saw yesterday can't afford London? She's a special needs worker on £26700 and he's a police officer on £33500 with overtime. They are very happy to pay London prices.

But what can they get for this??? Their joint income is around £60K, so the reasonable joint mortgage is X2.5 income. Their morgage will be around £150K, I'm not sure how much deposit they managed to save, but a £150k won't buy you even the laugh-at 1-bedroom flat! Actually in my definietely non-posh part of London 1-bed is around £250k. :cool:

Sir_Humphrey

penguine wrote: »

Problem is, once that two-income couple have kids and have to start paying for childcare in order to carry on earning two incomes it becomes more difficult to afford to pay for that house that they could only buy if they have two incomes in the first place.

Exactly what I was implying before. All these bulls go to show with their drivel is just how divorced from reality they are. :rolleyes:

Really2

Bonia77 wrote: »

But what can they get for this??? Their joint income is around £60K, so the reasonable joint mortgage is X2.5 income. Their morgage will be around £150K,

Can you state when 2.5X joint income was the norm for a joint FTB?

Sir_Humphrey

Really2 wrote: »

http://www.independent.co.uk/news/uk/home-news/acircpound58980--the-average-salary-for-workers-in-the-city-602963.html


Working in the city of London 2002. (that was a simple search) 2002 again, whole area of London.

So two average people on a joint income of 70k. In the current climate they could only expect to get 2.5x joint income. They would need at least a 25% deposit to get a payable rate of interest, which in practise means some sort of gifted deposit.

So they could get a two-up, two-down in a better part of Croydon and barely have enough to raise a kid properly. If one of them ends up unemployed they're screwed.

Why do that when for 2/3rds that income you could buy a semi in Yorkshire? If you have a family it's a no brainer.

Really2

Sir_Humphrey wrote: »

Exactly what I was implying before. All these bulls go to show with their drivel is just how divorced from reality they are. :rolleyes:

We have a child, we had several years of wage inflation before having our child.

Wife works 3 days a week no problem for us. Mortgage is about 3X joint wage.

So you base nothing on real life experience then I take it.

Have you got any figures on how many people have children as soon as they move in together? :rolleyes: