Some facts for a change, instead of speculation......

ruggedtoast

Ability to pay Jules, you've gone off half cocked again eh.

Edit - I would be interested to hear why you think houses arent products by the way?

purch

< .thud. >

Emy1501

HAMISH_MCTAVISH wrote: »

Right then, so that is an increase in demand.



Actually, according to the CML, the average deposit is not greatly higher than it was in 2007. And there is a marked increase in mortgages available at 15% deposits now. This trend is increasing, as increased liquidity in the markets provides more funding to lend at higher LTV's. 90% mortgages will be the next sector to see increases in availability, although I suspect it will end there for now. 100% mortgages will not be common for many years to come.



Around 70% of purchasers this year are mortgage purchasers. The number of STR's is tiny. The bank of mum and dad had about a 20 year supply left in it at current rates of drawdown, last time I looked.;)



See above. There is no shortage of buyers at current levels of mortgage availability and deposit requitements. All the funding made available is taken, and there is a demand for more.



On the contrary. Banks cannot afford to flood the market and sell at depressed prices, as doing so would adversely impact their balance sheets, which they have struggled to rebuild.

We are already seeing the banks create wholly owned shell companies for commercial property reposessions, so they can keep them on the books at high values til the market recovers. There can be little doubt that the current aversion to reposessing residential property is motivated by similar issues.

FTB deposits are still higher. Most people who STR still need a mortgage. Ask most estate agents especially in the SE who their typical buyer is now and most will either be in rented or FTB's using money from parent.

The governments forced banks to stop repossessing properties theres lots of evidence of that even their own bank NR had major complaints about their practises.

There are no shortage of buyers because many properties that would be for sale are being rented by accidental landlords and builders who cannot sell. These people cannot afford to rent for ever. There are also lots of empty building site which will not remain empty for much longer now.

Even the biggest private BLT landlords the Wilsons have come to terms with the fact that house prices do not double every 7 years and are trying to get out.

Most young people in this counrty are just constantly rolling over their debt and borrowing more just like the banks have done. The government cannot keep bailing the country out for ever and at sometime whether its next year or in 5 years time we are going to have the feel the pain.

julieq

Graham_Devon wrote: »

I bet you couldn't even explain what "basics" i'm struggling with, in reference to your quote, even if you tried.

As per usual.

Easier to just attack over and over, as Julie did above with the drivel she came up with in response to my question to her.

Oh !!!!!! Graham.

You asked one question "Where does the money come from to sustain rises". I answered the question "from future earnings based on multiples of salary". You then missed the point of the answer completely (fine, not your fault necessarily, it was a brief note but you complain if I use lots of long words and I was on the point of going to bed) and changed the question to one about how you personally can buy a house if prices rise. Then when I explained in more detail you called what I wrote "drivel". Which it isn't, it's an explanation addressing the questions you asked (specifically of me as it happens).

If you don't want answers, don't ask questions. It's pretty simple.

Really2

ruggedtoast wrote: »

Ability to pay Jules, you've gone off half cocked again eh.

High affordability= High demand
Low affordability= Low demand.

Low Mortgage Payments = Low Supply (now)
High Mortgage Payments = High supply (end of 2007)

Easy credit = High Demand (2006)
Hard to credit = Low Demand (2008)

Am I missing where any of this does not effect supply and demand

julieq

ruggedtoast wrote: »

Ability to pay Jules, you've gone off half cocked again eh.

Edit - I would be interested to hear why you think houses arent products by the way?

Ability to pay is part of demand. That is why it's used to calculate demand. There is only supply and demand as determinants of prices, all other factors, including pricing expectation acts on supply and demand.

And I did cover product lifecycle as it relates to houses earlier. There may be fashions in particular types of houses which make them into products - new builds could be an example with particular features, en suite bedrooms - in a narrow sense so they'll have a competitive advantage over other types of houses. But houses as a whole, average houses, are essentially commodities and have no particular lifecycle. Or it's a particularly long lifecycle starting with caves and ending with extinction.

ruggedtoast

Really2 wrote: »

High affordability= High demand
Low affordability= Low demand.

Low Mortgage Payments = Low Supply (now)
High Mortgage Payments = High supply (end of 2007)

Easy credit = High Demand (2006)
Hard to credit = Low Demand (2008)

Am I missing where any of this does not effect supply and demand

Yes - because I could go out tomorrow and buy a handful of magic beans on my credit card for £15000. But I'm not going to. My ability to pay and my desire to pay are separate things.

This is the elephant in the rooms that bulls cannot bear to look at. Much of the hpi of the last bubble was down to banks lending billions of pounds to, for want of a better word, numpties.

We're talking BTL investors who spunked their life savings on flats they'd never seen in cities they'd never been to, to rent to young professionals who didnt exist.

We're talking people on benefits who were talked into buying their council houses on interest only mortgages even though they were worse off at the end of the month, and would never pay back the principal.

We're talking student landlords who walked into Northern Rock on October 1st with their loan cheques as collateral, and a week later paid three times more than any house had ever sold for in their street, for a falling down semi in Pontypridd to rent to their mates.

And then there were the army of normal working people of small means, desperate to have somewhere to live, terrified into buying unsuitable property at a price never before heard of - who had to take on mortgage debts that made their heads spin because in the space of a few years an absurd , venal and utterly capricious marketing machine comprised of two faced vested interests, convinced them of the horrifying and completely fallacious assertion that houses were about to run out.

This is what caused the boom, this is what caused the bust, and it isnt coming back in our lifetime.

Graham_Devon

julieq wrote: »

Oh !!!!!! Graham.

You asked one question "Where does the money come from to sustain rises". I answered the question "from future earnings based on multiples of salary". You then missed the point of the answer completely (fine, not your fault necessarily, it was a brief note but you complain if I use lots of long words and I was on the point of going to bed) and changed the question to one about how you personally can buy a house if prices rise. Then when I explained in more detail you called what I wrote "drivel". Which it isn't, it's an explanation addressing the questions you asked (specifically of me as it happens).

If you don't want answers, don't ask questions. It's pretty simple.

Can you quote the part I did this please. I believe I merely used an anaology.

So a quote would be great, ta

Maybe then, you will see what I was referring to as you spouting drivel.

How long you want to change what was said to make a point Julie? It's a talent you have I must admit. This isn't to do with not wanting answers. This is to do with you yet again changing the context of what was said into something completely irrelevant to point score, or, normally, because you have found yourself stuck.

chucky

julieq wrote: »

Oh !!!!!! Graham.

You asked one question "Where does the money come from to sustain rises". I answered the question "from future earnings based on multiples of salary". You then missed the point of the answer completely (fine, not your fault necessarily, it was a brief note but you complain if I use lots of long words and I was on the point of going to bed) and changed the question to one about how you personally can buy a house if prices rise. Then when I explained in more detail you called what I wrote "drivel". Which it isn't, it's an explanation addressing the questions you asked (specifically of me as it happens).

If you don't want answers, don't ask questions. It's pretty simple.

nice post Julie - there are just some men that you cannot reach out there

it's nice of you to take them by the hand and "take them to school"

Graham_Devon

For you chucky.

julieq wrote: »

The money comes from future earnings at reasonable salary multiples by historical standards.

Graham_Devon wrote: »

Can you explain that a bit further please.

Say I want to buy a house now.

How does my future earnings help please.

The bank will only take into account what I earn now.....not what I may or may not earn in the future. And as you have said this before, I know you are talking 20 years in the future.

I was also talking about stimulus in terms of tax rises, interest rate rises etc.

julieq wrote: »

Erm, Graham, you were asking where the money to sustain prices comes from, you've then changed the question to one about why you personally can't afford to pay the prices on the basis of your earnings.

This could drag on a while.....

Simple analogy taken by Julie, and turned into my own personal finances! Bravo!