Lack of supply pushing up prices

the_ash_and_the_oak

chucky wrote: »

it's not for me - a 40% rise is 7% each year. i can't see that.
some areas might do 20%/30% quite easily but not 40% across the board in the 5 years.

as a London average i would hazard a guess that they will be at around 15%/20% more.

what do you think?

Well as you know I'm bearish about this (more so about London than elsewhere actually - tho this is admittedly because I am less familiar with other places).

While the rises of the 00s were managed without wage inflation can't personally see how it can really be repeated without wage inflation in the 10s.

feel a bit of a fencesitter now I'm on the spot, my gut feeling is 0-10% lower than today but its a little far out to put that much weight behind that opinion and it really depends what happens inbetween. Logically it feels like there shouldn't be too much movement between now and then but it really wouldn't surprise me if there was a large movement in one direction with an equal correction in the other either now

the_ash_and_the_oak

The thing thats interesting is that imo there are a lot of unknowns that I'm really not sure how will impact.

A big one is the rise in flat-ownership - really don't know how this is going to pan out. Not sure at all about the quality of these - or the resaleability of many. This could act as a massive downward drag on the overall figures but otoh its also possible that many of them simply won't resell at all and those who have them are going to have to like them a lot longer than they might have planned

edit: (extra bit) I know chucky disagrees on this but imo far from convinced this recent extra rung on the ladder is a permanent one - or about the long term viability of market reliance on two-mortgage buying on a large scale as society becomes increasingly made up of single parenting

Sir_Humphrey

ruggedtoast wrote: »

And what have you done Hamish - what single solitary thing have you actually done in your life except for buy a house in Aberdeen in 1974, and then spend 8 hours a day on here squeaking about it in 2009?

I could have taken the time to explain to Hamish that for me studying was an objective in itself, that I genuinely don't care about getting rich, or that as a twenty-something I enjoy work that regularly takes me to places like the UN. I could go on.

But sadly, he just wouldn't get it. He thinks there is nothing more to life than living in a house. Fair play to him, I just find the narrowness of his horizons rather sad. The saddest part is that he just doesn't realise that narrowness.

Really2

lostinrates wrote: »

Which should nicely cover th time it takes to commute to and from work!

It may be, but it is still 15 hours of child care the parents do not need to pay for.

Out,_Vile_Jelly

the_ash_and_the_oak wrote: »

The thing thats interesting is that imo there are a lot of unknowns that I'm really not sure how will impact.

A big one is the rise in flat-ownership - really don't know how this is going to pan out. Not sure at all about the quality of these - or the resaleability of many. This could act as a massive downward drag on the overall figures but otoh its also possible that many of them simply won't resell at all and those who have them are going to have to like them a lot longer than they might have planned

edit: (extra bit) I know chucky disagrees on this but imo far from convinced this recent extra rung on the ladder is a permanent one - or about the long term viability of market reliance on two-mortgage buying on a large scale as society becomes increasingly made up of single parenting

London is such a massive patchwork of a market, with a real variety of properties and a sprawling geography of dumps right next to desirable areas (thinking of East Dulwich as an island in a sea of surrounding effluent). The rise and rise of "luxury" appartment blocks is very interesting. The ones in the nicer areas are surely destined to serve mainly as rental properties, esp in SW where there is a large community of S African and Antipodean transient workers. The ones in "up and coming" (ie gangland hellhole) areas are destined to be the slums of the future IMO.

For many Londoners who aren't in a couple and who aren't on an above average salary, the only option for home ownership is one of these identikit 1 bed newbuilds. I'd like to think that this isn't an appealing option to a discerning buyer, but I may well be wrong. Certainly not a tempting option for me.

Nikkster

Only becuase it covers some ground mentioned in this thread (e.g. London, multiples of income etc.)... and because I'm too scared of you lot to start a new thread (!):

http://newsvote.bbc.co.uk/1/hi/england/london/8306120.stm


"First-time buyers in London must earn £93,000-a-year to afford an average home in the city, a report has claimed. The research by the National Housing Federation, which represents 1,200 housing associations, puts the average house price in London at £362,000.
A single buyer would require the near-six-figure income to get a 90% mortgage at 3.5 times their salary.
The average wage in London is £26,000, while overcrowding rates are 2.5 times the national rate, the report said."

P.s. Sorry if someone's already linked this - couldn't see it anywhere

lostinrates

Nikkster wrote: »

Only becuase it covers some ground mentioned in this thread (e.g. London, multiples of income etc.)... and because I'm too scared of you lot to start a new thread (!):

Welcome, well done, and we don't all bite

the_ash_and_the_oak

Nikkster wrote: »

Only becuase it covers some ground mentioned in this thread (e.g. London, multiples of income etc.)... and because I'm too scared of you lot to start a new thread (!):

http://newsvote.bbc.co.uk/1/hi/england/london/8306120.stm


"First-time buyers in London must earn £93,000-a-year to afford an average home in the city, a report has claimed. The research by the National Housing Federation, which represents 1,200 housing associations, puts the average house price in London at £362,000.
A single buyer would require the near-six-figure income to get a 90% mortgage at 3.5 times their salary.
The average wage in London is £26,000, while overcrowding rates are 2.5 times the national rate, the report said."

P.s. Sorry if someone's already linked this - couldn't see it anywhere

The only thing about this is that its comparing the ave first-time buyer with the ave overall property (ie leaving out non-ftbs).

Its also (extremely) disputed what the ave London wage is!

Really2

Nikkster wrote: »

The average wage in London is £26,000, while overcrowding rates are 2.5 times the national rate, the report said."

P.s. Sorry if someone's already linked this - couldn't see it anywhere

I think they have got the average wage figure wrong I think that is for the UK.

http://www.independent.co.uk/news/uk/home-news/acircpound58980--the-average-salary-for-workers-in-the-city-602963.html
From 2002.

At £58,980, average salaries in London's financial district are the highest in Britain, according to the Office for National Statistics. The average salary in Britain is £24,603. Across London the figure is £34,762,

Sir_Humphrey

the_ash_and_the_oak wrote: »

The only thing about this is that its comparing the ave first-time buyer with the ave overall property (ie leaving out non-ftbs).

Its also (extremely) disputed what the ave London wage is!

But the average figure is way out of whack even taking into account these factors.

The average first time buyer would be in his 20s/30s and not be at peak earning potential, so that point also cuts both ways.

Personally, I think you need to do this comparison borough-by-borough as there is a huge variation in incomes across London.