Housing Affordability has peaked, now decreasing

HAMISH_MCTAVISH

Thrugelmir wrote: »

Different times. Different market.

BP was still a nationalised industry back then.......

Look ahead at the wider picture.

250,000 additional households a year being created, 80,000 houses a year being built.

The picture is clear.

Graham_Devon

Deleted_User wrote: »

But what if your house was valued at £100k and you got offered say, £100k by a young family on modest income and offered 200k by someone older with lots of disposable income that just had their heart set on our house. Would you have the courage of your convictions?

Well, it's a very hypothetical question this, as I can't see this happening really with a bog standard house. Maybe 5 grand over, but 100? I'm happy to discuss things when they have a little context

Absolutely no!!! But I've not heard anyone that wants house prices to rise try to pretend it's out of concern for the youngsters. We want house prices to rise so that we make more money.

That's because no person wanting high prices has concern for the youngsters, bar their own kids, of whom they are hoping other peoples kids will be priced out so that they rent their places, which in turn, gives a future to their own children.

Of course it's about the money.

I don't think it's an irrelevant, pointless question. It's a question that highlights the fact that we're all really on the same side - looking after our own interests! Some of us are at a stage in life where house prices going up would benefit us. Others are at a stage in life where house prices going down would benefit us. Whatever happens some people will gain and some will loose out. Some are trying to take the moral high ground and fool us into thinking that they aren't out for themselves but simply concerned about the youngsters. I don't buy it - sorry.

I disagree here. I think it is a pointless question, especially used in the context of doubling the price of the house.

You don't have to buy it, but i have consistently said I am mortgaged, and have consistently said I would like prices to fall. I have consistently said that I am already in negative equity (probably not anymore) and have never moaned about that fact.

What have I got to gain from wanting house prices to fall but being in negative equity? Nothing. Apart from I'm prepared for the eventuality and I think in the long run, it will do not only me some good looking to the future, but the whole of my generation.

I'm not too sure what you are getting from asking Emy the same silly question btw

Graham_Devon

Deleted_User wrote: »

Because unless large numbers of people are willing to take that stand I don't see house prices going down. Too many people and too few houses - that'll push prices up even if a large percentage of the population can't afford to buy.

So why did they fall and why are they falling in area's now and flattening out elsewhere if this is the case?

[Deleted User]

As I said, I don't think it's a silly question. I found both of your responses to be interesting and I appreciate you taking the time to give such a lengthly response to something you found silly. Thank you

What have I got to gain from wanting house prices to fall but being in negative equity? Nothing. Apart from I'm prepared for the eventuality and I think in the long run, it will do not only me some good looking to the future, but the whole of my generation.

If you think that it will be in your best interests in the future for house prices to fall then I think you'd need your bumps felt if you were wishing they'd rise! I think you're very sensible to take a long-term view.

But I think you're wrong to tar everyone in a given generation with the same brush. I don't know how old you are, but I'm simply not seeing a pattern of the young not being able to afford property. Plenty do manage it.

Take for example the house I've just moved into. It's out in the sticks. A 7 year old bungalow on a 1/3 acre plot backing onto open countryside. It's a little paradise - a river running along the bottom of the garden and just minutes from the coast. It's my dream house - I never thought I'd be able to aford something like this.

The people I purchased from are a young couple in their late 20's with two young children. They met when they lived in small flats next door to each other and when they married bought this house in the country for about 70k - it had 3 bedrooms back then. A couple of years ago they had it beautifully extended and it's now a four bedroom house with 2 large lounges and an en-suite with a large free standing bath. It's beautiful. They also put a lovely raised deck along the back of the house and all the rooms at the back have patio doors opening onto it.

We bought it for more than twice they paid for it. They loved the house but had to make a big sacrifice and move to a much smaller house in an area where the kids can go to the best schools and have better opportunities. They'll now be hoping for house prices to go up rapidly as the area that they've moved to is a much better investment. Once the kids grow up they can sell up and move back to the country - with cash to spare.

If you can get onto the property ladder in a sensible way (i.e. without getting into rediculous debt) then it's a fanstastic thing that can let you live a far better life than you ever could in life-long rented accomodation. Some people get lucky and some people have to work their butts off to get started. Other people work their butts off and get unlucky.

But how would you feel if your kids scrimped and saved to get onto the property ladder and property prices started going down. Now that would be awful for them! So many people from traditionally working class families with modest incomes have managed to do very well in later life through property. And they've been able to get their own kids off to a much better start.

I don't think any part of me wants to see house prices fall. Too many people would suffer. I think the best thing would be to see more shared ownership schemes and that type of thing so that more people could get onto the property ladder and reap the rewards.

Graham_Devon

Deleted_User wrote: »

But how would you feel if your kids scrimped and saved to get onto the property ladder and property prices started going down. Now that would be awful for them! So many people from traditionally working class families with modest incomes have managed to do very well in later life through property. And they've been able to get their own kids off to a much better start.

I don't think any part of me wants to see house prices fall. Too many people would suffer. I think the best thing would be to see more shared ownership schemes and that type of thing so that more people could get onto the property ladder and reap the rewards.

Well if my kids had scrimped and saved and house prices came down, I'd say that was par of the course. Just like I did with myself. Just like my dad did to me.

Because, well, it is.

Your second paragrph annoyed me somewhat, as it became a "class" post. The only way some "middle class" have been able to help their own kids through unearned property wealth is at the expense of other kids.

I'm far from a socialist, I believe if you work hard, earn your money, fair do's. But to start making it a class thing at the expense of a lower class grates me a little.

Your post said "me me me". It's not a dig, but society, which is what we are and what you are relying on for your HPI profit, cannot work on me me me.

[Deleted User]

Graham_Devon wrote: »

Well if my kids had scrimped and saved and house prices came down, I'd say that was par of the course. Just like I did with myself. Just like my dad did to me.

Because, well, it is.

So you're saying you teach your kids they have to take the good with the bad. Some times we get lucky and make a mint out of property and other times we get priced out of the market. It's par for the course. You just do your best to swing things in your favour and if you want it enough and are prepared to make sacrifices there will normally be a way to do it.

I think that's an excellent attitude and I'm sure your kids will land on their feet.

Your second paragrph annoyed me somewhat, as it became a "class" post. The only way some "middle class" have been able to help their own kids through unearned property wealth is at the expense of other kids.

I'm far from a socialist, I believe if you work hard, earn your money, fair do's. But to start making it a class thing at the expense of a lower class grates me a little.

I suspect you WANT to be annoyed so that you can take a 'holier than though' attitude but it simply doesn't wash with me.

I'm working class as were my parents before me. They struggled hard in a time when it wasn't easy to do well if you weren't born into the right family and they succeeded against the odds. For my generation class was no longer a barrier - everyone had the chance to work for what they wanted in life. It was investment in property that really made the difference for a lot of people.

I don't know how you turn that into people doing well at the expense of others. Would you be happier if we still lived in a world where only the middle/upper classes bought property and the vast majority of the population had to rent?

Your post said "me me me". It's not a dig, but society, which is what we are and what you are relying on for your HPI profit, cannot work on me me me.

It is a dig - be man enough to admit it. And yes - when it comes to buying houses it is me, me, me. Like most people I won't take less than I can get for my property to help bring house prices down for others. And I'll pay what I have to pay to buy the house that I want. I've yet to hear from someone that claims that they would do things differently from me.

At the end of the day it doesn't matter what we'd like to see house prices do. It'll suit some of us if prices go down; it'll suit others if prices go up. What matters it what actually happens - which of us are going to be dissapointed. It doesn't matter much either way to me. It'd be nice if they went up but I'm in my 'forever house' now. I won't sell until I'm ready for sheltered housing But for my nieces and nephews I want to see prices go up. They're well established on the property ladder but aiming to go much higher.

What would you advise your children to do in the current situation (assume they're in their early 20's). Would you advise them not to buy because house prices are about to drop? Would you advise them to buy if they can but stay well withing their means? Would you help them to buy? Or would you advise that they rent until prices drop to what you consider to be sensible levels?

Emy1501

HAMISH_MCTAVISH wrote: »

People will ALWAYS find a way to put a roof over their heads.

If you want lower prices, build more houses!!!!!!

But unless we build 250,000 houses a year, every year, for the next few decades, HPI is absolutely inevitable.

Young person can't afford to buy? They'll have to rent and pay a landlords mortgage instead. Can't afford to pay rent? Get a flatmate and use two incomes.

Couples can pay twice as much as singles, people with parents willing to help can pay more again. We only build a third of the houses we need. And when the shortage is that great, only the top earning 35% of households need to afford a house for prices to rise.

25 year mortgage not enough? Get a 30 year, or 40 year, or 50 year product, which will surely become available when the market decides there is a need. Which there will be, if we continue not building enough houses.

House prices will rise by at least 100% in real terms over the next 15-20 year cycle. There is simply no way we can build enough houses in time to see any other outcome.

And that, to quote our resident village idiot, "is 100% guaranteed".

1) If you can't afford to buy because you cannot pay the interest on the mortgage then you are hardly going to be able to pay rent to cover a landlords mortgage unless you see a time where Landlord are are all pretty much cash owners.

2)Mosts people will not be able to afford the interest payments on a mortgage if prices are 100% higher in real terms as you are talking more than 10 times earning therefore what good will a 30/40/50 year mortgage be if you cannot even afford the interest payments?

3)Few people who buy or rent now as singletons what are you suggesting that 2 couples start living in a 1 or two bedroom flat? There is only so many people who can live in a small flat you know.

4) The IMF have said another bank bailout will not be allowed in our lifetime so regulation will tie Banks hands regarding how much they can and can't lend.

5) Parents will soon be relying on HPI to fund their retirement. Therefore fewer and fewer will be able to give their children hefty deposits to buy houses. What we may find is more and more following the Indian tradition where a number of generations live in the same house. I bet the boomers will love that!

before_hollywood

i'm sat so far on the fence it could break any minute.

my house is going through renovation, well the bulk of it is done and it has been described by the original surveyor as ''transformed'', i have a few things i want to do (a couple of bits of recarpeting, new kitchen etc) ut its a world away from what i bought earlier this year. i'm young-ish, i'm 28, but down a 15% deposit down on this place on my own, tried the whole lodger thing, that didnt work out, might try it again but going to take my time this time. i dont know if i want prices to go up or down, i dont know what my place is worth, i THINK (or should that be hope?) its worth around 20-30k more than i paid ( house a few doors down is same size but has a garage and is 50k more than i paid (before there was a rewire, new roof etc) and a noticeably smaller house over the road is 30k more than i paid. i wont even look at how much its worth for another 2 years, then i can say to my lender ''right you want this rate and this much a month off me, this is what my house is worth, this is what i owe.....now lets see what deals you have''

maybe its naievety that says i can do that?

Emy1501

Deleted_User wrote: »

So you're saying you teach your kids they have to take the good with the bad. Some times we get lucky and make a mint out of property and other times we get priced out of the market. It's par for the course. You just do your best to swing things in your favour and if you want it enough and are prepared to make sacrifices there will normally be a way to do it.

I think that's an excellent attitude and I'm sure your kids will land on their feet.



I suspect you WANT to be annoyed so that you can take a 'holier than though' attitude but it simply doesn't wash with me.

I'm working class as were my parents before me. They struggled hard in a time when it wasn't easy to do well if you weren't born into the right family and they succeeded against the odds. For my generation class was no longer a barrier - everyone had the chance to work for what they wanted in life. It was investment in property that really made the difference for a lot of people.

I don't know how you turn that into people doing well at the expense of others. Would you be happier if we still lived in a world where only the middle/upper classes bought property and the vast majority of the population had to rent?



It is a dig - be man enough to admit it. And yes - when it comes to buying houses it is me, me, me. Like most people I won't take less than I can get for my property to help bring house prices down for others. And I'll pay what I have to pay to buy the house that I want. I've yet to hear from someone that claims that they would do things differently from me.

At the end of the day it doesn't matter what we'd like to see house prices do. It'll suit some of us if prices go down; it'll suit others if prices go up. What matters it what actually happens - which of us are going to be dissapointed. It doesn't matter much either way to me. It'd be nice if they went up but I'm in my 'forever house' now. I won't sell until I'm ready for sheltered housing But for my nieces and nephews I want to see prices go up. They're well established on the property ladder but aiming to go much higher.

What would you advise your children to do in the current situation (assume they're in their early 20's). Would you advise them not to buy because house prices are about to drop? Would you advise them to buy if they can but stay well withing their means? Would you help them to buy? Or would you advise that they rent until prices drop to what you consider to be sensible levels?

Why would you want prices to rise for your nieces and nephews if they want to climb the housing ladder? Did they buy using a 100% mortgage and therefore need equity to raise a deposit? Surely if prices rise then the next property up the ladder becomes more expensive unless they are moving to another part of the country which was going to be cheaper or less affected by HPI.

If had kids in their early 20's I would only encourage them to consider buying they could raise a good deposit, were in a very stable job and could afford to fix their mortgage for at least 5 years. If they could not I would suggest waiting till at least after the election when we are likely to find out exactly what mess we are in. I would also make them fully aware that prices can go upas well as down so to prepared for the fact that the price of the property they buy could fall in the short run.

Chrysalis

Emy1501 wrote: »

1) If you can't afford to buy because you cannot pay the interest on the mortgage then you are hardly going to be able to pay rent to cover a landlords mortgage unless you see a time where Landlord are are all pretty much cash owners.

on your point #1 that depends on the level of interest rates, as well as some other factors.

eg. some landlords are happy to take less rent than mortgage costs knowing that at some point they will sell the house for a profit making it up, and of course in theory using your argument everyone should be able to buy a house that rents privately even people on benefits since it will be cheaper. When you buy a house there is other costs involved such as compulsary insurance, legal fees, mortgage broker fees as well as paying your own maintenance costs.

Personally I think interest only mortgages should be banned, people should be able to afford a mortgage at 4-6% with paying of the capital as well or rent.

Of course i also think the rental legislation needs a rehaul giving tenants more long term rights as right now a 6 month tenancy period is a joke.