Typical wage £20K. Typical house £150K

lostinrates

Stay_tonight_in_a_lie wrote: »

I still haven't found what I am looking for

Oh well, keep looking, Sugar.

carolt

wolvoman wrote: »

You're making up numbers.

How on earth can the fair value of a 3-bed semi in a nice part of Zone 3 London be £100k.

When I was househunting a couple of years ago I thought I was in a very strong position with my single income of high 5 figures. Except I then found out that I was competing for properties with couples. These couples have income levels way over £100k a year.
There are hundreds of thousands of these couples in London and they want these 3-bed properties you describe.
And a couple aearning over £100k sitting on £200/£300k of equity from their FTB flats can easily afford your Dad's house.

That's just the way it is.

No, I'm not making up numbers. I'm applying rather basic maths (3 times table), and some basic addition, to explain that that's what prices should be now, if prices had kept equivalent pace with earnings.

That they haven't done so, is apparent to anyone but an imbecile.

The reasons this is the case are many and various, but include the relaxation of credit rules to an extremely unhealthy extent - such that it caused a worldwide economic crisis.

carolt

chucky wrote: »

you've missed the point tonto

the house was worth £100k - that house isn't and was never worth £500k
the value of the house was made up from posters in lalala land:T

where have you seen 500% HPI in 10 years without wages increasing

I'm deeply flattered, chucky, that you think me so young.

Strangely, my parents did not buy their first house 10 years ago, or - given that I'm their youngest child - I doubt very much I'd be old enough to type this on the computer without assistance, let alone have 3 children of my own.

You also appear to have misunderstood my post entirely - I didn't say it had been worth 100K and was now worth 500K. They actually bought it for 2K, and equivalent ones today would sell for about 500K.

It wasn't this house, but one like this:

http://www.rightmove.co.uk/property-for-sale/property-13542864.html?locationIdentifier=OUTCODE^1681&insId=2&sortByPriceDescending=false&minBedrooms=3&displayPropertyType=houses&oldDisplayPropertyType=houses&includeSSTC=true&_includeSSTC=on&pageNumber=4&fromSummary=true&backToListURL=/property-for-sale/find.html?locationIdentifier=OUTCODE%5E1681&insId=2&sortByPriceDescending=false&minBedrooms=3&displayPropertyType=houses&oldDisplayPropertyType=houses&includeSSTC=true&_includeSSTC=on&index=30

if you'd like to compare.

carolt

the_ash_and_the_oak wrote: »

in your opinion

1) How much was the credit to buy it with
2) Why if houses were cheaper were owner occupany stats lower?

Do yo mean the interest rates for 1? No idea, but I assume it varied over the 25 years of the mortgage. The point is, they experienced such massive inflation that the 2K it cost them very quickly became laughably small. Even with interest added on.

And 2 has a lot to do with sentiment - owner occupation was less desired or expected then, let alone owning one yourself and renting another couple out. But probably more to do with very firm - and as we now all know, deeply sensible - restrictions on credit, which prevented partners' incomes being taken into account, and thus ensured that house prices could not rise to the level where 2 incomes were essential to buy even the scummiest flat, thus ensuring that a whole generation could be brought up only seeing their tired parents for an hour or two at night. :mad: Plus you couldn't get a mortgage in those days without having a sound history of saving with a building socity, and then you still had to go and beg the manager personally, to let you have a mortgage. And produce loads of documentation.

Very sensible.

the_ash_and_the_oak

I know it would have varied over the course of the mortgage (and i'm also aware of the huge wage inflation of the 70s) - the point i was trying to get at was, at that initial stage was it really any cheaper than today (factoring in the interest payments)?

And add in the question of availability - and it seems to me that less people then were able to buy than is the case now (well, up to 2007 anyway) (because less people owned than they do today)

The question we might want to ask, behind that, is... is it desirable to continually increase the proportion of people that own?

carolt

the_ash_and_the_oak wrote: »

I know it would have varied over the course of the mortgage (and i'm also aware of the huge wage inflation of the 70s) - the point i was trying to get at was, at that initial stage was it really any cheaper than today (factoring in the interest payments)?

And add in the question of availability - and it seems to me that less people then were able to buy than is the case now (well, up to 2007 anyway) (because less people owned than they do today)

The question we might want to ask, behind that, is... is it desirable to continually increase the proportion of people that own?

The 'initial stage' was only a very short time. Plus wives did and could earn; my mother was a chartered accountant, FGS! but her wages were not allowable in mortgage terms.

Less people were able to buy, absolutely. But then less people needed/wanted to buy - council housing was plentiful, new and more was being built all the time, for those for whom buying would have been hard financially, and people didn't buy a house 'for the pension', because they had...a pension.

IveSeenTheLight

You'll see I have asked a lot of questions in the below post. Questions raised as a result of your belief that times were better in the past and how I presume you believe that it would be better to return to those times (financially wise).

I'm sure you will take the time to give your answers to these questions.
I've placed them in bold for clarity.

carolt wrote: »

Less people were able to buy, absolutely. But then less people needed/wanted to buy - council housing was plentiful, new and more was being built all the time, for those for whom buying would have been hard financially.

Are you advocating a return to a time when less people could become homeowners?

I presume if so, then part of the resolution to our current situation would require the mass increase in social housing from current stock levels.

Do you expect the government to implement this massive social housing building requirement?

How long would you expect it will take to implement this?

How much cost will it take to implement this?

How much of a burden on the tax payer will it be to maintain these properties?

carolt wrote: »

and people didn't buy a house 'for the pension', because they had...a pension.

Why are people investing in property "as a pension"?

Is it because people can see that the pensions that people are receiving are not sufficient to provide a decent retirement?

Is it because they have seen many pensions get plundered by companies then not being able to service the pension?

I think people have adapted to alternative retirement plans because they have seen that pensions are volatile and are worth less than they had perceived.

How do you propose to resolve the issue that people have with pensions such that they do not look to alternative investments?

the_ash_and_the_oak

IveSeenTheLight wrote: »

Are you advocating a return to a time when less people could become homeowners?

I presume if so, then part of the resolution to our current situation would require the mass increase in social housing from current stock levels.

This is a good q imo and one worth asking in general. Is it a social good for owner occupancy to have risen? And would it be one for it to continue to rise? And what would be the optimum level of owner occupancy?
As for an increase in building of social housing being necessary, less than convinced about this, dont think there is a shortage of houses to actually live in imo

IveSeenTheLight

the_ash_and_the_oak wrote: »

This is a good q imo and one worth asking in general. Is it a social good for owner occupancy to have risen? And would it be one for it to continue to rise? And what would be the optimum level of owner occupancy?
As for an increase in building of social housing being necessary, less than convinced about this, dont think there is a shortage of houses to actually live in imo

If you do not believe there is a need to build new social housing, would you believe that the government would need to buy property from owner occupiers in order to facilitate the increased numbers of social housing that would be required in the scenario being depicted?

the_ash_and_the_oak

IveSeenTheLight wrote: »

If you do not believe there is a need to build new social housing, would you believe that the government would need to buy property from owner occupiers in order to facilitate the increased numbers of social housing that would be required in the scenario being depicted?

Well firstly imo we'd have to decide the cause and effect in this scenario. i) increase in rented housing - to facilitate this drop in owner-occupancy, or ii) a drop in owner-occupancy due to credit being less widely available - and a reduced number of people being able to afford to buy

Then we could address the question of how - in a scenario where owner-occupancy dropped - the increase in rented property would be provided, either via the govt - or privately. If it was the govt then yes, they would have to buy from existing oo's (or btl's). Could the govt do this as a way of providing demand? possibly.

More likely imo would be that the increase in rented property would be privately owned - a decrease in owner-occupancy implies imo a reduction in demand (but reduced need to sell if rates remain low for current owners) meaning more likely that a signif % of currently owned homes wouldn't be sold when the need to move arises, they would be let out

The irony of the above scenario is, for future buyers, its a good definition of "missed the boat" imo