Housing Affordability has peaked, now decreasing

treliac

nearlynew wrote: »

The "economic cycle" is not a natural phenomenon that just happens.

Thanks nearlynew. However, on a personal level, it does make a difference. We were lucky that we moved house in 1996, at the end of a slump and just before prices started to rocket. That meant we were able to buy a better house than we would have if we'd left it.

I knew prices were starting to rise and, as they go up proportionately, the gap between selling and buying widens if you are trading up (we wanted to accommodate our growing family). The limit on mortgage borrowings remains the same, however...... or it did in the more distant past!

chucky

treliac wrote: »

Thanks nearlynew. However, on a personal level, it does make a difference. We were lucky that we moved house in 1996, at the end of a slump and just before prices started to rocket. That meant we were able to buy a better house than we would have if we'd left it.

I knew prices were starting to rise and, as they go up proportionately, the gap between selling and buying widens if you are trading up (we wanted to accommodate our growing family). The limit on mortgage borrowings remains the same, however...... or it did in the more distant past!

i sort of disagree that HPI is bad for home owners. it's not bad for all of them.

if you had a 1 bed flat it would have benefited more from HPI than a 3 bed house for example. so upgrading from a 1 bed flat to a bigger property was easier than upgrading from a 3 bed to a 5 bed as you had generated more HPI.

in this sense HPI is beneficial for home owners.

Graham_Devon

chucky wrote: »

if you had a 1 bed flat it would have benefited more from HPI than a 3 bed house for example. so upgrading from a 1 bed flat to a bigger property was easier than upgrading from a 3 bed to a 5 bed as you had generated more HPI.

Where are you getting this from?

https://www.home.co.uk

Looks to me in all the counties I have typed in so far that flats, semis and detached all seemed to appriciate at the same pace since April 2000.

treliac

chucky wrote: »

i sort of disagree that HPI is bad for home owners. it's not bad for all of them.

if you had a 1 bed flat it would have benefited more from HPI than a 3 bed house for example. so upgrading from a 1 bed flat to a bigger property was easier than upgrading from a 3 bed to a 5 bed as you had generated more HPI.

in this sense HPI is beneficial for home owners.

If your budget is big enough, maybe, but for most of us - governed by limited mortgage borrowings and unable to save once on the family treadmill, that's definitely not so.

I just noted, looking at my previous post in fact, that house prices actually started to shoot up after we'd elected a labour govt!

chucky

Graham_Devon wrote: »

Where are you getting this from?

www.home.co.uk

Looks to me in all the counties I have typed in so far that flats, semis and detached all seemed to appriciate at the same pace since April 2000.

personal experience... as i said it won't happen for everyone and definitely won't be the case in every area/region

Emy1501

chucky wrote: »

i sort of disagree that HPI is bad for home owners. it's not bad for all of them.

if you had a 1 bed flat it would have benefited more from HPI than a 3 bed house for example. so upgrading from a 1 bed flat to a bigger property was easier than upgrading from a 3 bed to a 5 bed as you had generated more HPI.

in this sense HPI is beneficial for home owners.

I suspect it depends where you live etc. Where I am in South London Flat prices are still around 2004-5 level. I sold one in late 2004 for £180K and there is a similar one in the same road which has recently gone under offer which was on at £179K I suspect it would have gone for £175K with stamp duty. Flat prices only went up about 10% between 2004 and 2007 whilst house prices went up about 20%.

Even when I go back to 1996 when I first bought I would be in a much better position without HPI. I cant imagine many areas to be honest in the South East or in the UK where HPI on a flat has outdone HPI on 3 bedroom house especially when you take into account how many flats have been built over the last 13 years compared to houses.

I also expect over the years to come that HPI on houses will out do flats due to the oversupply of Flats and the lack of interest in BTL these days.

Graham_Devon

chucky wrote: »

personal experience...

Fair enough.

The statistics show somehting different. Though I would imagine 1 bed's in the the very inner of big cities did well.

chucky

Emy1501 wrote: »

I suspect it depends where you live etc. Where I am in South London Flat prices are still around 2004-5 level. I sold one in late 2004 for £180K and there is a similar one in the same road which has recently gone under offer which was on at £179K I suspect it would have gone for £175K with stamp duty. Flat prices only went up about 10% between 2004 and 2007 whilst house prices went up about 20%.

you've summed up my point - it depends where you live and the type of property.

think of it in reverse now - downsizing will suit those in properties that have been least impacted by HPI. so for arguments sake a 4 bed detached maybe have lost less in value than a one bedroom new build flat.

chucky

Graham_Devon wrote: »

Fair enough.

The statistics show somehting different. Though I would imagine 1 bed's in the the very inner of big cities did well.

they did shoot up in value, at a guess it would have been in the cities that had much more going on - London, Manchester, Liverpool.

and to be fair those cities that tagged onto these with loads of new builds now are being held back due to lack of appeal for these properties. i think Dopester has mentioned Leeds is like that.

chucky

Graham_Devon wrote: »

Fair enough.

The statistics show somehting different. Though I would imagine 1 bed's in the the very inner of big cities did well.

have a look at the Household Type breakdown from the Land Registry for London.
the Maisonettes/Flats and Detached have benefited more from HPI than Semis and Terraced properties.


you then look at England & Wales and it's not as clear but Terraced properties seem to have done well.